Exhibit 10.2

LOAN AGREEMENT
Between
KBSII 100-200 CAMPUS DRIVE, LLC,
KBSII ONE MEADOWLANDS, LLC, and
KBSII WILLOW OAKS, LLC,
each a Delaware limited liability company,
as Borrowers,
U.S. BANK NATIONAL ASSOCIATION,
a national banking association,
as Agent, lead arranger and book manager,

TD BANK, N.A.,
a national banking association, as a Lender
and
U.S. BANK NATIONAL ASSOCIATION,
a national banking association,
as a Lender

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TABLE OF CONTENTS
Page
 
 
I. LOAN
20

 
1.1
Principal
20

 
1.2
Interest
20

 
1.3
LIBOR Rate Option
21

 
1.4
Maturity Date; Extension
22

 
1.5
Prepayment
25

 
1.6
Yield Protection
25

 
1.7
Inability to Determine LIBOR
26

 
1.8
Illegality
27

 
1.9
Capital Adequacy
27

 
1.10
Indemnification of Agent and the Lenders
28

 
1.11
Default Rate
29

 
1.12
Late Payment Charge
29

 
1.13
Effective Rate
29

 
1.14
Application of Payments
30

 
1.15
Fees
30

 
1.16
No Waiver by Agent
30

 
II. CONDITIONS OF BORROWING
30

 
2.1
Pre-Closing Requirements
30

 
2.2
Loan Documents
32

 
2.3
Recordation of Deeds of Trust; Title Insurance
33

 
2.4
Opinion of Borrower's Attorneys
33

 
2.5
Fees
33

 
2.6
SNDA's and Estoppels
33

 
2.7
Conditions for Disbursement
34

 
2.8
Borrower Operating Accounts
34

 
2.9
Credit Approval
34

 
2.10
[Intentionally Omitted]
 
 
2.11
First Disbursement Hereunder Shall be Used Only for the Repayment of
the Original One Meadowlands Loan, the Original 100-200 Campus Drive
Loan and the Original Willow Oaks Loan and Other Expenses Reasonably
Approved by Agent
34

 
2.12
Successful Syndication
35

 
III. ADVANCES OF LOAN PROCEEDS
35

 
3.1
General
35

 
3.2
Inspections
36

 
3.3
Responsibility of Agent and the Lenders
36

 
3.4
[Intentionally Declared]
36

 
3.5
Initial Advance and Additional Advances
36

 
3.6
Additional Conditions to Each Disbursement
37

 
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Loan Agreement (KBS REIT II)

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IV. REPRESENTATIONS AND WARRANTIES OF BORROWER
38

 
4.1
Legal Status of Borrower
38

 
4.2
Title
38

 
4.3
No Breach of Applicable Agreements or Laws
38

 
4.4
No Litigation or Defaults
39

 
4.5
Financial and Other Information
39

 
4.6
No Defaults under Loan Documents or Other Agreements
39

 
4.7
Boundary Lines; Conformance with Governmental Requirements and
Restrictions
39

 
4.8
Utilities, Etc.
39

 
4.9
Personal Property
40

 
4.10
Condemnation
40

 
4.11
Governmental Regulations
40

 
4.12
Employee Benefit Plans
40

 
4.13
Brokers
40

 
4.14
Defects and Hazards
40

 
4.15
Permits
40

 
4.16
No Consumer Purpose
40

 
V. COVENANTS OF BORROWER
41

 
5.1
Paying Costs of Property and Loan
41

 
5.2
Using Loan Proceeds
41

 
5.3
Keeping of Records
41

 
5.4
Providing Financial Information
42

 
5.5
Providing Operating Budgets and Operating Statements
42

 
5.6
Providing Leasing Information
42

 
5.7
Maintaining Insurance Coverage
43

 
5.8
Complying with Other Documents
43

 
5.9
Lease Approval Rights
43

 
5.10
Compliance with Laws
43

 
5.11
Ownership of Personal Property
44

 
5.12
Representations and Warranties
44

 
5.13
Trade Names
44

 
5.14
No Distributions
44

 
5.15
Future Development
44

 
5.16
Further Assurances
45

 
5.17
Notice of Litigation, Etc.
45

 
5.18
USA Patriot Act Compliance Covenant
45

 
5.19
Maintenance of Existence
46

 
5.20
Borrower Operating Account
46

 
5.21
Single Purpose Entity Provisions
46

 
5.22
No Other Debt
46

 
5.23
Minimum Required Debt Service Coverage Ratio
46

 
5.24
Affiliate Transactions
47

 
5.25
Borrower and Guarantor Covenants
47

 
5.26
EIN
47

 
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Loan Agreement (KBS REIT II)

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VI. DEFAULTS
47

 
6.1
Event of Default
47

 
6.2
Rights and Remedies
49

 
VII. MISCELLANEOUS
50

 
7.1
Binding Effect; Waivers; Cumulative Rights and Remedies
50

 
7.2
Survival
50

 
7.3
Governing Law; Waiver of Jury Trial
50

 
7.4
Counterparts
50

 
7.5
Notices
50

 
7.6
Agent's Sign
51

 
7.7
No Third Party Reliance
51

 
7.8
Time of the Essence
51

 
7.9
Entire Agreement; No Oral Modifications
52

 
7.10
Captions
52

 
7.11
Joint and Several Liability
52

 
7.12
Borrower's Relationship with Agent and the Lenders
52

 
7.13
Swap Transactions
52

 
7.14
Automatic Deduction and Credit
53

 
7.15
Borrower Waiver
53

 
7.16
Reduction of Committed Amount
53

 
7.17
USA Patriot Act Notice
54

 
7.18
Statute of Frauds
54

 
7.19
Joint Borrower Provisions
54

 
7.20
Possible Increase in the Committed Amount
58

 
7.21
Additional Property Collateral
60

 
7.22
Releases of Properties
65

 
7.23
Collateral Documents
66

 
7.24
[Intentionally Omitted.]
67

 
7.25
Limited Recourse Provision
67

 
7.26
Release of a Borrower
67

 
7.27
The Non-revolving Portion Must Always Constitute at Least Sixty Percent
(60%) of the total Committed Amount
68

 
VIII. AGENCY PROVISIONS
68

 
8.1
Agency
68

 
8.2
Resignation of Agent; Removal
69

 
8.3
Administration
70

 
8.4
Actions by Agent; Required Consents
70

 
8.5
Payments
72

 
8.6
Management of Acquired Collateral
74

 
8.7
Defaulting Lender
75

 
8.8
Representations, Warranties and Acknowledgments
77

 
8.9
Assignments; Participation.
78

 
8.10
Other Business
81

 
8.11
Consents
81

 
8.12
Agent as Lender
81

 
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8.13
Notification of Defaults and Events of Default
81

 
8.14
No Reliance by Borrower
81

 
8.15
Reliance
81

 
8.16
Pledge of Federal Reserve Bank
82

 
8.17
Confidentiality
82

 
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LIST OF EXHIBITS

EXHIBIT A        ‑    Assignment and Assumption Agreement
EXHIBIT B         ‑    Description of Improvements
EXHIBIT C-1    ‑    Legal Description of the KBS 100-200 Campus Drive Land
EXHIBIT C-2    -    Legal Description of the KBS One Meadowlands Land
EXHIBIT C-3    -    Legal Description of the KBS Willow Oaks Land
EXHIBIT D        ‑    Permitted Encumbrances
EXHIBIT E        ‑    [Intentionally Omitted]
EXHIBIT F        ‑    Title Insurance Requirements
EXHIBIT G        ‑    Insurance Requirements
EXHIBIT H        ‑    Notices and Wire Instructions
EXHIBIT I        ‑    Commitments and Commitment Percentages of Lenders
EXHIBIT J        ‑    Form of Draw Request
EXHIBIT K        ‑    Borrower EIN Numbers
EXHIBIT L        ‑    Form of Joinder Agreement

 
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LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of February 27, 2013, by and
between (i) KBSII 100-200 CAMPUS DRIVE, LLC, a Delaware limited liability
company, KBSII ONE MEADOWLANDS, LLC, a Delaware limited liability company, and
KBSII WILLOW OAKS, LLC, a Delaware limited liability company (collectively,
"Initial Borrowers"), (ii) U.S. BANK NATIONAL ASSOCIATION, a national banking
association, as agent, lead arranger and book manager (in such capacity,
"Agent"), and (iii) TD BANK, N.A., a national banking association, as a Lender,
and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as a
Lender, and any other bank that becomes a "Lender" after the Closing Date (each,
a "Lender" and collectively, the "Lenders").
WITNESSETH THAT, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
DEFINITIONS
For the purposes of this Agreement, the following terms shall have the following
respective meanings, unless the context hereof clearly requires otherwise:
Accordion Option: Has the meaning set forth in Section 7.20.
Additional Property: Has the meaning set forth in Section 7.21, and shall be
deemed to include all Land, Improvements, Equipment and other "Trust Estate" or
"Mortgaged Property" described in the Deed of Trust encumbering such property.
Advance: Any portion of the Loan advanced to or for the benefit of Borrower in
accordance with the terms hereof.
Advance Date: Has the meaning set forth in Section 3.5.
Affiliate: Means, as to any Person, (a) any corporation in which such Person or
any partner, shareholder, director, officer, member, or manager of such Person,
at any level, directly or indirectly owns or controls more than ten percent
(10%) of the beneficial interest, (b) any partnership, joint venture or limited
liability company in which such Person or any partner, shareholder, director,
officer, member, or manager of such Person, at any level, is a partner, joint
venturer or member, (c) any trust in which such Person or any partner,
shareholder, director, officer, member or manager of such Person, at any level,
or any individual related by birth, adoption or marriage to such Person, is a
trustee or beneficiary, (d) any entity of any type which is directly or
indirectly owned or controlled by (or is under common control with) such Person
or any partner, shareholder, director, officer, member or manager of such
Person, at any level, (e) any partner, shareholder, director, officer, member,
manager or employee of such Person, or (f) any individual related by birth,
adoption or marriage to any partner, shareholder, director, officer, member,
manager, or employee of such Person. Controls (which includes the correlative
meanings of "controlled by" and "under common control with") means effective
power,

 
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Loan Agreement (KBS REIT II)

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directly or indirectly, to direct or cause the direction of the management and
policies of such Person.
Agent: U.S. Bank National Association, as agent for itself and for other
financial institutions which are now or may in the future become parties to this
Agreement.
Agreement: This Loan Agreement, including any amendments hereof and supplements
hereto executed by Borrower and Agent.
Annualized Net Operating Income: Means annualized Net Operating Income before
payment of debt service from the Properties securing the Loan as of the date of
calculation, calculated by annualizing the Net Operating Income for the
immediately preceding prior two calendar quarters, provided that if the Debt
Service Coverage Ratio is being calculated within 45 days after the end of a
calendar quarter, the Net Operating Income shall be calculated by looking at the
Net Operating Income during the two calendar quarters preceding the immediately
prior calendar quarter; e.g., if the Debt Service Coverage Ratio is being
calculated on January 10, 2014, the two calendar quarter period would be the
period commencing on April 1, 2013 and ending on September 30, 2013 and if the
Debt Service Coverage Ratio is being calculated on February 20, 2014, the two
calendar quarter period would be the period commencing on July 1, 2013, and
ending on December 31, 2013). Notwithstanding the foregoing, if any Property has
been owned by a Borrower for less than the entire applicable foregoing period,
then Net Operating Income for such Property shall be calculated by annualizing
the Net Operating Income for such Property for the portion of such period during
which a Borrower owned such Property. In addition, until an Additional Property
has secured the Loan for one full calendar quarter, the Net Operating Income for
that Property shall be calculated using the Agent's underwritten projected year
one Rental Income and Operating Expenses for such Additional Property based on
the Appraisal obtained for such Additional Property in accordance with
Section 7.21 (e.g., if an Additional Property is added on June 15, 2013, this
sentence would apply to such Additional Property until September 30, 2013).
Applicable Interest Rate: Has the meaning set forth in Section 1.2.
Applicable Margin: Means the applicable percentage set forth below in the
"Applicable Margin" column, based on the Borrowing Base Leverage Ratio
calculated by Agent as of the last day of the immediately preceding calendar
quarter:
Borrowing Base Leverage Ratio
Applicable Margin
≤ 50%
1.75%
> 50%
1.85%

Any change in the Applicable Margin shall result in an immediate change in the
LIBOR Rate applicable to any then outstanding LIBOR Rate Advances and to the
Monthly Reset LIBOR Rate applicable to any then outstanding Monthly Reset LIBOR
Rate Advances.

 
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Loan Agreement (KBS REIT II)

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Appraisal: A written appraisal of each Property prepared by an Appraiser and
requested by or delivered to Agent, in each case in form, content and
methodology satisfactory to Agent and Majority Lenders, each in their reasonable
discretion, and in compliance with all applicable legal and regulatory
requirements (including the requirements of Title XI of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, 12 U.S.C. §§ 3331,
et seq., as amended (or any successor statute thereto), and the regulations
promulgated thereunder); provided, no new appraisals are required to be provided
for any Initial Property or after a Property constitutes an Additional Property
under the Loan except (i) in connection with the extension of the Maturity Date,
(ii) after the occurrence of an Event of Default if required by Agent, (iii) in
connection with the release of any Property from the lien of a Deed of Trust (as
to any Appraisals that are then more than six (6) months old), (iv) in
connection with the exercise of the Accordion Option (as to any Appraisals that
are then more than twelve (12) months old), or (v) as may otherwise be provided
in the Loan Documents and/or as may be expressly requested by Borrower (in its
sole discretion, but not more than once in each six (6) month period; provided
that such limitation shall not apply to any Extension (defined below), partial
releases under Section 7.22 below or adding an Additional Property (defined
below) under Section 7.21 below) under the terms of the Loan Documents.
Appraiser: Any independent appraiser selected by Agent who meets all regulatory
requirements applicable to Agent, who is a member of the Appraisal Institute
with a national practice and who has experience with real estate of the same
type as the Property to be appraised.
Assignee Lender: Has the meaning set forth in Section 8.9.
Assignment and Assumption Agreement: An instrument in the form of Exhibit A,
duly completed and executed and delivered.
Availability Amount: Means the lesser of (a) the Committed Amount (as such
amount may from time-to-time be increased and/or decreased in accordance with
the terms of this Agreement), or (b) the Borrowing Base Amount.
Availability Period: Has the meaning set forth in Section 3.5.
BASF Lease: Means that certain Agreement of Lease between KBSII 100-200 CAMPUS
DRIVE, LLC, a Delaware limited liability, as lessor, and BASF Corporation and
BASF Americas Corporation, as co-tenants and co-obligors, as lessee, dated March
31, 2004 (as amended).
Borrower or Borrowers: Shall mean, individually or collectively as the context
may require, each Initial Borrower and each New Borrower that executes a Joinder
Agreement and thereby becomes a Borrower hereunder pursuant to the provisions of
Section 7.21.
Borrowing Base Amount: Shall mean the Loan balance resulting in a Debt Service
Coverage Ratio equal to the Minimum Borrowing Base DSCR, calculated by dividing
(a) Annualized Net Operating Income for the Properties then securing the Loan by
(b) the product obtained by multiplying (i) the Minimum Borrowing Base DSCR by
(ii) the Borrowing Base Loan Constant.

 
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Loan Agreement (KBS REIT II)

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Borrowing Base Leverage Ratio: Shall mean the ratio, expressed as a percentage,
obtained by dividing the Principal Balance by the Borrowing Base Value.
Borrowing Base Loan Constant: Shall mean the greater of (a) a loan constant of
0.0819 (which is based on an interest rate of seven and one-quarter percent
(7.25%) per annum and principal amortization based on a 30-year amortization
schedule), and (b) a loan constant, expressed as a decimal, based on an interest
rate of two and one-quarter percent (2.25%) per annum in excess of the Treasury
Note Rate as of the date of calculation and principal amortization based on a
30-year amortization schedule, as reasonably determined by Agent.
Borrowing Base Value: Shall mean the aggregate value of the Properties securing
the Loan as of the date of calculation. The value of each Property shall be the
then-current "As-Is" appraised value of the Property, based on the most recent
Appraisal for such Property. Borrower may request (in its sole discretion) that
Agent reappraise any Property and in connection therewith order new Appraisals
from time to time (but in no event more than once in any six-month period).
Borrower shall pay the costs of any and all such Appraisals within ten days of
written demand by Agent. In addition to any of the rights of Agent or Lenders
hereunder to order Appraisals, Agent may at any time and from time to time order
new Appraisals of the Properties during the existence of an Event of Default,
and Borrower shall pay the costs of any and all such Appraisals within ten days
of written demand by Agent.
Business Day: Any day other than a Saturday, a Sunday, or a legal holiday on
which Agent is not open for business.
Change: Has the meaning set forth in Section 1.9.
Closing Date: The date upon which all of the conditions set forth in Section 2
are satisfied and the Deeds of Trust are recorded in the official records of the
counties in which the Initial Properties are located, which date must, in no
event, be later than the Termination Date.
Committed Amount: Shall mean the Revolving Portion plus the Non-revolving
Portion (i.e., $235,000,000 in the aggregate initially, subject to possible
increase upon exercise of the Accordion Option in accordance with Sections 7.20
and 7.21, or decrease in accordance with an extension of the Maturity Date under
Section 1.4 or the release of a Property under Section 7.22, or as set forth in
Section 7.16). The Revolving Portion plus the Non-revolving Portion constitute a
single aggregate commitment equal to the Committed Amount. The Committed Amount
shall always be reduced dollar for dollar with paydowns of the principal amount
of the Term Loan; provided, however, that the foregoing shall not apply in the
event of a reallocation from the Non-revolving Portion to the Revolving Portion
as permitted in Section 7.27 below.
Commitment Percentage: Means, as to each Lender, such Lender's pro rata share of
all right, title and interest in each of the Non-revolving Portion, the
Revolving Portion and the Loan Documents, as set forth on Exhibit I attached
hereto, as amended and modified by unilateral action of Agent from time to time
to reflect the sale or assignment of a portion of the Loan or any exercise of
the Accordion Option. Unless otherwise specified, each Lender's Commitment
Percentage shall be the amount of such Lender's commitment divided by the
aggregate amount of the commitments of all Lenders.

 
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Loan Agreement (KBS REIT II)

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Commitment Resizing Debt Service Coverage Ratio: Shall mean a fraction, the
numerator of which is the projected stabilized net operating income less a
replacement reserve equal to $0.25 per square foot for all of the Improvements
consisting of office space and $0.10 per square foot for any of the Improvements
consisting of industrial space, to the extent not already taken into account in
calculating Net Operating Income, as determined in the most recent Appraisal
approved by Agent, from the Properties then securing the Loan before payment of
debt service for a twelve (12) month period as specified in the Appraisal, and
the denominator of which is an amount equivalent to the sum of (a) an amount, as
reasonably determined by Agent, equivalent to the interest that would accrue on
the Loan (assuming a fully disbursed Committed Amount) during such twelve (12)
month period at a rate of interest which is the greater of (i) seven and
one-quarter percent (7.25%) per annum, or (ii) the rate of two and one-quarter
percent (2.25%) per annum above the Treasury Note Rate (herein defined), and (b)
an amount for such period, as reasonably determined by Agent, equivalent to the
amount of principal (assuming a fully disbursed Committed Amount, as the same
may be decreased by Borrower in accordance with Section 7.16 hereof) that would
be payable during such twelve (12) month period according to a schedule that
would fully amortize the Loan over a thirty year period given the foregoing rate
of interest.
Commitment-to-Value Ratio: Has the meaning set forth in Section 1.4.
Consultants: Third party experts retained by Agent to assist it in connection
with closing, advancing, disbursing or administering the Loan.
Debt Service Coverage Ratio: Shall mean a fraction, the numerator of which is
the Annualized Net Operating Income and the denominator of which is the product
obtained by multiplying (a) the outstanding Principal Balance as of the date of
calculation by (b) the Borrowing Base Loan Constant.
Deed of Trust: Each first priority deed of trust, mortgage or deed to secure
debt (as applicable) executed by a Borrower in favor of Agent, creating a first
lien on a Property and securing the Note and the other obligations specified
therein, to be recorded in the official records of the county in which the
Property is located, including any amendments to such Deed of Trust and
supplements thereto executed by Borrower and Agent.
Default Rate: Has the meaning set forth in Section 1.11.
Defaulting Lender: Any Lender, as determined by the Agent, who for any reason
shall fail or refuse to abide by its obligations under the Loan Documents or
this Agreement within the time periods specified for performance of such
obligation or, if no time frame is specified, if such failure or refusal
continues for a period of five (5) Business Days, including, but not limited to
any Lender that has (a) failed to fund any portion of its Loan within one
Business Day of the date required to be funded by it hereunder, (b) notified the
Borrower, the Agent, or any Lender in writing that it does not intend to comply
with any of its funding obligations under this Agreement or has made a public
statement to the effect that it does not intend to comply with its funding
obligations under this Agreement or under other agreements in which it commits
to extend credit, (c) failed, within one Business Day after request by the
Agent, to confirm that it will comply with the terms of this Agreement relating
to its obligations to fund its prospective

 
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Loan Agreement (KBS REIT II)

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Loan, (d) otherwise failed to pay over to the Agent or any other Lender any
other amount required to be paid by it hereunder within one Business Day of the
date when due, unless the subject of a good faith dispute, or (e) (i) become or
is insolvent or has a parent company that has become or is insolvent or (ii)
become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment or has a parent company that
has become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment. Nothing contained in the
foregoing shall be deemed to constitute a waiver by the Borrower of any of its
rights or remedies (whether in equity or law) against any Lender which fails to
fund any portion of its Loan hereunder at the time or in the amount required to
be funded under the terms of this Agreement.
Draw Request: A written request by Borrower, in the form attached hereto as
Exhibit J, for an advance of Loan proceeds under this Agreement.
Environmental Indemnity: That certain Unsecured Environmental Indemnity of even
date herewith, executed by Borrower in favor of Agent, setting forth certain
indemnification obligations relating to "Hazardous Substances" (as defined
therein), as the same may be amended, modified, replaced or substituted from
time to time.
Environmental Insurance Policy: Means, collectively, the environmental insurance
policy or policies covering any or all of the Properties, in form and substance
reasonably acceptable to Agent, naming Agent (on behalf of Lenders) as
additional insured.
Equipment: All fixtures, equipment and personal property owned by any Borrower
and located or to be located in or on, and used in connection with the
construction, development, management, maintenance or operation of any or all of
the Properties.
Event of Default: Any event set forth in Section 6.1.
Excluded Taxes: Means, in the case of each Lender or applicable Lending
Installation and Agent, taxes imposed on its overall net income, and franchise
taxes imposed on it, by (a) the jurisdiction under the laws of which such Lender
or Agent is incorporated or organized or (b) the jurisdiction in which Agent's
or such Lender's principal executive office or such Lender's applicable Lending
Installation is located.
Federal Funds Rate: As of any date of determination, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such date opposite the caption "Federal Funds
(Effective)". If for any relevant date such rate is not yet published in
H.15(519), the rate for such date will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotation") for such date under the caption "Federal Funds Effective Rate". If
on any relevant date the appropriate rate for such date is not yet

 
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published in either H.15(519) or the Composite 3:30 p.m. Quotation, the rate for
such date will be the arithmetic mean of the rates for the last transaction in
overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on that
date by each of three leading brokers of Federal funds transactions in New York
City selected by Agent.
Fee Letter: That certain Fee Letter between Borrower and U.S. Bank dated as of
February 27, 2013.
GAAP: Generally accepted accounting principles as set forth in the Statement of
Financial Accounting Principles No. 162: The Hierarchy of Generally Accepted
Accounting Principles, as such may be subsequently revised, or in any successor
pronouncement issued by the Financial Accounting Standard Board or Securities
and Exchange Commission.
Governmental Authority: Means any governmental or quasi-governmental entity,
including any court, department, commissions, board, bureau, agency,
administration, service, district or other instrumentality of any governmental
entity.
Governmental Requirements: All laws, statutes, codes, ordinances, and
governmental rules, regulations and requirements applicable to any Borrower,
Agent and/or any Property.
Guarantor: Means Properties REIT.
Guaranty: The Repayment Guaranty of even date herewith executed by Guarantor in
favor of Agent and Lenders, as the same may be amended, modified, replaced or
substituted from time to time.
Improvements: The buildings and other improvements located on one or more of the
Properties, including all sitework, utilities, infrastructure, paving, striping,
signage, curb and gutter, landscaping and installation of all "common area"
improvements required under any covenants encumbering a Property, required by
applicable law, or required by zoning approvals entered into by Borrower, or
improvements required to be constructed by any Borrower pursuant to leases
entered into by such Borrower.
Initial Advance: The first advance of Loan proceeds to be made on or about the
Closing Date in the amount of $141,000,000.
Initial Borrowers: Has the meaning assigned in the opening paragraph of this
Agreement.
Initial Properties: Shall mean, collectively, the KBS 100-200 Campus Drive
Property, the KBS One Meadowlands Property and the KBS Willow Oaks Property.
Interest Differential: That sum equal to the greater of zero (0) or the
financial loss incurred by the Lenders resulting from prepayment, calculated as
the difference between the amount of interest the Lenders would have earned
(from like investments in the Money Markets as of the first day of the LIBOR
Rate Period) had prepayment not occurred and the interest the Lenders will
actually earn (from like investments in the Money Markets as of the date of
prepayment) as a result of the redeployment of funds from the prepayment. The
Interest

 
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Differential shall (i) be calculated by Agent on behalf of Lenders in accordance
with Agent's customary underwriting practices and (ii) not be charged for any
portion of the Loan prepaid that is accruing interest at the Monthly Reset LIBOR
Rate.
Internal Revenue Code: The Internal Revenue Code of 1986, as amended.
Joinder Agreement: Means an Assumption and Joinder Agreement substantially in
the form of Exhibit L hereto, executed by a New Borrower in favor of Agent for
itself and the Lenders, and any amendments, supplements and other modifications
thereto.
KBS 100-200 Campus Drive Improvements: Shall mean the Improvements located on
the KBS 100-200 Campus Drive Land, including without limitation those described
on Exhibit B hereto.
KBS 100-200 Campus Drive Land: Shall mean the land described on Exhibit C-1
hereto.
KBS 100-200 Campus Drive Property: Shall mean the KBS 100-200 Campus Drive Land,
the KBS 100-200 Campus Drive Improvements, the Equipment pertaining thereto and
all other "Trust Estate" or "Mortgaged Property" described in the Deed of Trust
encumbering such property.
KBS One Meadowlands Improvements: Shall mean the buildings and other
improvements located on the KBS One Meadowlands Land, including without
limitation those described on Exhibit B hereto.
KBS One Meadowlands Land: Shall mean the land described on Exhibit C-2 hereto.
KBS One Meadowlands Property: Shall mean the KBS One Meadowlands Land, the KBS
One Meadowlands Improvements, the Equipment pertaining thereto and all other
"Trust Estate" or "Mortgaged Property" described in the Deed of Trust
encumbering such property.
KBS Willow Oaks Improvements: Shall mean the buildings and other improvements
located on the KBS Willow Oaks Land, including without limitation those
described on Exhibit B hereto.
KBS Willow Oaks Land: Shall mean the land described on Exhibit C-3 hereto.
KBS Willow Oaks Property: Shall mean the KBS Willow Oaks Land, the KBS Willow
Oaks Improvements, the Equipment pertaining thereto and all other "Trust Estate"
or "Mortgaged Property" described in the Deed of Trust encumbering such
property.
Land: Shall mean, individually or collectively as the context shall require, the
KBS 100-200 Campus Drive Land, the KBS Willow Oaks Land, the KBS One Meadowlands
Land and, for each Additional Property, the land described in Exhibit A to the
Deed of Trust encumbering such Additional Property.

 
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Leasehold Property: Shall mean any Additional Property in which a Borrower holds
a leasehold interest and which becomes a Property in accordance with
Section 7.21.
Lenders: Each Lender that is a party to this Agreement and which hereafter
becomes party to this Agreement, collectively, and each of their respective
permitted successors and assigns.
Lending Installation: Means, with respect to a Lender or Agent, the office,
branch, subsidiary or affiliate of such Lender or Agent listed on the signature
pages hereof (in the case of Agent) or on its administrative questionnaire (in
the case of a Lender) or otherwise selected by such Lender or Agent.
LIBOR: With respect to each LIBOR Rate Period applicable to any requested LIBOR
Rate Advance, a per annum rate of interest (rounded upward, if necessary, to the
nearest 1/100th of 1%) equal to the rate which appears on the Reuters Screen
LIBOR01 (or any successor or substitute thereto selected by Agent in its sole
discretion) as of 11:00 a.m., London time, two (2) New York Banking Days prior
to the first day of the applicable LIBOR Rate Period selected by Borrower, for
United States dollar deposits having a term coinciding with the LIBOR Rate
Period selected by Borrower, adjusted for any reserve requirements and any
subsequent costs arising from a change in government regulation.
LIBOR Rate: An annual rate of interest equal to the Applicable Margin plus
LIBOR. Agent's internal records of applicable interest rates shall be
determinative in the absence of manifest error.
LIBOR Rate Advance: Any portion of the Principal Balance which bears interest at
a LIBOR Rate; provided, however, that any LIBOR Rate Advance must be in the
aggregate principal amount of at least $1,000,000 and in minimum increments of
$250,000 thereafter.
LIBOR Rate Notice: A written notice from Borrower to Agent, received by Agent
prior to 10:00 o'clock a.m. (California time) on a New York Banking Day at least
two (2) New York Banking Days prior to the commencement date of any LIBOR Rate
Period hereunder referred to therein (or the expiration of a previous LIBOR Rate
Period with respect thereto), whereby Borrower elects to have an advance or a
portion of the principal balance of the Note, as specified in said notice, be a
LIBOR Rate Advance.
LIBOR Rate Period: The period commencing on the date any LIBOR Rate Advance is
made and ending one (1) month, three (3) months, or six (6) months thereafter as
selected by Borrower in its LIBOR Rate Notice pertaining thereto; provided,
however, that (a) if any LIBOR Rate Period would end on a day that is not a
New York Banking Day, such LIBOR Rate Period shall extend to the next New York
Banking Day, unless, in the case of said LIBOR Rate Advance, such New York
Banking Day would fall in the next calendar month, in which event such LIBOR
Rate Period shall end on the immediately preceding New York Banking Day, (b) any
LIBOR Rate Period that begins on the last New York Banking Day of a calendar
month (or a day for which there is no numerically corresponding day in the
calendar month at the end of such LIBOR Rate Period) shall end on the last
New York Banking Day of the calendar month at

 
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the end of such LIBOR Rate Period, and (c) no LIBOR Rate Period shall end later
than the then applicable Maturity Date.
Loan: The loan made hereunder, evidenced by the Note (consisting of both the
Revolving Portion and the Non-revolving Portion), by Agent and the Lenders to
Borrower in advances to be made pursuant to the terms of this Agreement. During
the Availability Period, Borrower may repay principal amounts outstanding under
the Revolving Loans and reborrow them up to the Revolving Portion subject to the
terms and conditions of this Agreement. Amounts borrowed under the Non-revolving
Portion and repaid may not be subsequently reborrowed.
Loan Documents: The documents described in this Agreement, which evidence and
secure the Loan, including, but not limited to, the Note, the Deeds of Trust,
this Agreement, each Joinder Agreement, the Environmental Indemnity, the
Guaranty and including any amendments thereof and supplements thereto executed
by Borrower, Guarantor and/or and Agent.
Majority Lenders: Lenders holding, in the aggregate, not less than sixty-six and
two-thirds of one percent (66 ⅔%) of the Committed Amount or, if no such
principal amount is then outstanding, not less than sixty-six and two-thirds of
one percent (66 ⅔%) of the Commitment Percentages.
Maturity Date: March 1, 2016, as such date may be extended in accordance with
the provisions of Section 1.4.
Maximum Committed Amount Leverage Ratio: Shall mean (a) so long as at least two
(2) Properties are simultaneously securing the Loan, sixty-five percent (65%);
and (b) if only one (1) Property is then securing the Loan, sixty percent (60%).
Minimum Borrowing Base DSCR: Shall mean 1.25 to 1.0.
Money Markets: One or more wholesale funding markets available to Agent and
Lenders, including negotiable certificates of deposit, commercial paper,
eurodollar deposits, bank notes, federal funds and interest rate swaps, or
others.
Monthly Reset LIBOR Rate. Shall mean an annual rate of interest equal to the
Applicable Margin plus the one-month LIBOR rate quoted by Agent from Reuters
Screen LIBOR01 Page or any successor thereto, which shall be that one-month
LIBOR rate in effect two New York Banking Days prior to the beginning of each
calendar month, adjusted for any reserve requirement and any subsequent costs
arising from a change in government regulation, such rate to be reset at the
beginning of each succeeding month. Notwithstanding the immediately preceding
sentence, if on any date for determining the one-month LIBOR rate, Agent shall
determine (which determination shall be conclusive in the absence of manifest
error) that (a) because of circumstances affecting the Money Markets, adequate
and fair means do not exist for ascertaining the one-month LIBOR rate, or (b) it
is unlawful to maintain any advance of the Loan at a rate based on the one-month
LIBOR rate, Agent shall promptly give to Borrower telephonic notice (confirmed
as soon as practicable in writing) of the nature and effect of such
circumstances and/or illegality. After receipt of such notice and during the
existence of such circumstances and/or illegality, the interest rate shall be
determined based upon an alternate

 
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index selected by Agent, in its sole discretion, reasonably comparable to that
of one-month LIBOR, intended to generate a return substantially the same as that
generated by the one-month LIBOR rate, and all references in the Loan Documents
to the one-month LIBOR rate shall be deemed to be references to such alternate
rate while such rate is in effect.
Monthly Reset LIBOR Rate Advance. Any portion of the Principal Balance which
bears interest at a Monthly Reset LIBOR Rate.
Net Operating Income: Shall mean the amount of (a) Rental Income for the
applicable period of time in question, less (b) the amount of Operating Expenses
for such period of time, less (c) a replacement reserve equal to $0.25 per
square foot for all of the Improvements consisting of office buildings and $0.10
per square foot for all Improvements consisting of industrial buildings. In
calculating Net Operating Income, Agent shall include in Rental Income the base
rent payable under any lease which is then in a free rent period, subject to the
following conditions: (i) the tenant under such lease is not in default, (ii)
Agent has approved the terms of the lease in its reasonable discretion, and
(iii) Agent shall make such adjustment to Rental Income for the lesser of the
free rent period under the lease or six (6) months prior to the date rent
commences under such lease, after which the actual collections with respect to
such lease shall be measured. The preceding sentence shall not be deemed to
modify Section 5.9 hereof and shall provide Agent with approval rights only with
respect to including base rent payable under leases in a "free-rent" period in
the calculation of Net Operating Income. With respect to the calculation of Net
Operating Income, beginning March 31, 2016, and continuing at all times
thereafter, any rents or other income attributable to the BASF Lease shall be
excluded from the calculation of Net Operating Income if Borrower has not
released the space applicable thereto (or renewed the existing BASF Lease)
pursuant to a lease which satisfies the requirements of Section 5.9 hereof.
Net Worth: Has the meaning set forth in the Guaranty.
New Borrower: Has the meaning set forth in Section 7.21.
New York Banking Day: A Business Day which is also a day on which commercial
banks are open for international business (including dealings in dollar
deposits) in New York, New York and London, England.
Non-revolving Portion. Shall mean the non-revolving portion of the Loan in the
amount of $141,000,000.00, subject to possible increase or decrease in
accordance with an increase or decrease in the Committed Amount, or a
reallocation of the Committed Amount from the Non-revolving Portion to the
Revolving Portion under Section 7.27 hereof.
Note: The Promissory Note(s) executed and delivered by Borrower to the order of
a Lender in the aggregate maximum principal amount of up to the Committed
Amount, to evidence the Loan, as the same may be amended, modified, replaced or
substituted from time to time (including any replacements or substitutions
pursuant to Section 8.9(b) hereof, and including any additional or new Notes
executed in connection with any increase in the Committed Amount and/or the
addition of Lenders in accordance with the provisions of Section 7.20 or other
applicable provisions hereof).

 
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Obligations: The obligations of Borrower to Agent and the Lenders described in
the Loan Documents or arising under or in connection with any Swap Transaction
between Borrower (or its Affiliate) and any one or more of the Lenders (or their
respective Affiliates) in connection with the Loan, including any termination or
breakage fees, or other amounts owing, in connection with any termination of a
Swap Contract.
Operating Budget: A detailed listing of all anticipated annual income and
expenses from and for managing, maintaining and operating each Property,
prepared by Borrower or its agent and in form and substance acceptable to Agent.
Operating Expenses: Shall mean any and all costs and expenses incurred in
connection with the Properties then remaining encumbered by the Deeds of Trust
during the applicable time period in question, including without limitation
(a) taxes and assessments imposed upon the Property payable by Borrower which
are reasonably allocable to such time period, (b) bond assessments which are
reasonably allocable to such time period, (c) insurance premiums for casualty
insurance and liability insurance carried in connection with the Property which
are reasonably allocable to such time period, and (d) operating expenses
incurred by Borrower for the management, operation, cleaning, leasing,
maintenance and repair of the Property which are reasonably allocable to such
time period. Operating Expenses shall not include any interest, principal, loan
fees, extension fees or other payments on the Loan or capital expenditures (such
as building improvements, tenant improvements or leasing costs).
Operating Statement: A current, detailed statement of income and expenses from
and for managing, maintaining and operating each Property, in form and substance
acceptable to Agent, certified as true, correct and complete by the Borrower's
advisor's account controller or any other authorized agent, and expressly
showing all variations from the Operating Budget for the period covered thereby.
Original 100-200 Campus Drive Loan: Means the loan in the original committed
amount of $64,600,000 made by U.S. Bank and TD Bank, as lenders, to KBS II
100-200 Campus Drive, LLC, as borrower, pursuant to the Original 100-200 Campus
Drive Loan Agreement.
Original 100-200 Campus Drive Loan Agreement: Means that certain Loan Agreement
dated as of February 26, 2010, by and between KBSII 100-200 Campus Drive, LLC,
as borrower, TD Bank, as agent, and the other "Lenders" described therein,
pursuant to which the Original 100-200 Campus Drive Loan was made.
Original 100-200 Campus Drive Loan Documents: Means the "Loan Documents" as that
term is defined in the Original 100-200 Campus Drive Loan Agreement.
Original One Meadowlands Loan: Means the loan in the original committed amount
of $65,000,000 made by U.S. Bank and TD Bank, as lenders, to KBSII One
Meadowlands, LLC, as borrower, pursuant to the Original One Meadowlands Loan
Agreement.

 
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Original One Meadowlands Loan Agreement: Means that certain Loan Agreement dated
as of December 13, 2011, by and between KBSII One Meadowlands, LLC, as borrower,
U.S. Bank, as agent, and the other "Lenders" described therein, pursuant to
which the Original One Meadowlands Loan was made.
Original One Meadlowlands Loan Documents: Means the "Loan Documents" as that
term is defined in the Original One Meadowlands Loan Agreement.
Original Willow Oaks Loan: Means the loan in the original committed amount of
$65,000,000 made by U.S. Bank and TD Bank, as lenders, to KBSII Willow Oaks,
LLC, as borrower, pursuant to the Original Willow Oaks Loan Agreement.
Original Willow Oaks Loan Agreement: Means that certain Loan Agreement dated as
of July 20, 2010, by and between KBSII Willow Oaks, LLC, as borrower, U.S. Bank,
as agent, and the other "Lenders" described therein, pursuant to which the
Original Willow Oaks Loan was made.
Original Willow Oaks Loan Documents: Means the "Loan Documents" as that term is
defined in the Original Willow Oaks Loan Agreement.
Other Taxes: Means any present or future stamp or documentary taxes and any
other excise or property taxes, charges or similar levies which arise from any
payment made hereunder or under any Note or from the execution or delivery of,
or otherwise with respect to, this Agreement or any Note.
Parent REIT: KBS Real Estate Investment Trust II, Inc., a Maryland corporation.
Permitted Encumbrances: The liens, charges and encumbrances on title to the
Property listed on Exhibit D hereto, if any.
Person: Any natural person, corporation, limited liability company, partnership
(general or limited), limited liability partnership, joint venture, firm,
association, trust, unincorporated organization, government or governmental
agency or political subdivision or any other entity, whether acting in an
individual, fiduciary or other capacity.
Principal Balance: The outstanding principal balance of the Loan that has been
advanced and remains unpaid from time to time.
Properties REIT: KBS REIT Properties II, LLC, a Delaware limited liability
company.
Properties: Shall mean, collectively, the Initial Properties and all Additional
Properties.
Protective Advances: Any amount advanced or expended by the Agent and/or the
Lenders to preserve or protect the Lenders' rights with respect to the Loan, or
the Property or other collateral for the Loan.
Regulation D: Regulation D (or any substitute regulations) of the Board of
Governors of the Federal Reserve System (or any successor thereto), together
with all amendments from time to time thereto.
Rental Income: Shall mean the rental income received by Borrower for the
applicable period of time in question from the tenant leases of the Improvements
which are then in effect (and as to which the tenants thereunder are paying
rent).

 
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Revolving Portion: Shall mean the revolving portion of the Loan in the amount of
$94,000,000.00, subject to possible increase or decrease in accordance with an
increase or decrease in the Committed Amount, or a reallocation of the Committed
Amount from the Non-revolving Portion to the Revolving Portion under Section
7.27 hereof.
Revolving Loans: Shall mean the aggregate of the Advances made at any one time
by the Lenders under the Revolving Portion.
Swap Contract: Means any agreement, whether or not in writing, relating to any
Swap Transaction, including, unless the context otherwise clearly requires, any
form of master agreement (the "Master Agreement") published by the International
Swaps and Derivatives Association, Inc., or any other master agreement, entered
into between Swap Counterparty and Borrower (or its Affiliate) in connection
with the Loan, together with any related schedule and confirmation, as amended,
supplemented, superseded or replaced from time to time, relating to or governing
any Swap Transaction.
Swap Counterparty: Means any of the Lenders or an Affiliate of any of the
Lenders, in its capacity as counterparty under any Swap Contract, in each case
subject to Agent's reasonable approval.
Swap Transaction: Means (a) any and all rate swap transactions, basis swaps,
forward rate transactions, commodity swaps, commodity options, forward commodity
contracts, equity or equity index swaps or options, bond or bond price or bond
index swaps or options or forward bond or forward bond price or forward bond
index transactions, interest rate options, forward foreign exchange
transactions, cap transactions, floor transactions, collar transactions,
currency swap transactions, cross-currency rate swap transactions, currency
options, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether or
not any such transaction is governed by or subject to any Master Agreement, or
(b) any and all transactions of any kind, and the related confirmations, which
are subject to the terms and conditions of, or governed by, any form of Master
Agreement (as such agreement may be amended, restated, extended, supplemented or
otherwise modified in writing from time to time), including any such obligations
or liabilities under any Master Agreement, entered into between Swap
Counterparty and Borrower (or its Affiliate) in connection with the Loan.
Taxes: Means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes and Other Taxes.
Term Loan. Shall mean the aggregate of the Advances made by the Lenders under
the Non-revolving Portion.
Termination Date: The date that is thirty (30) days following the date of this
Agreement.
Tests: Such soil tests, chemical tests, materials tests and other tests and
analyses as are reasonably required to confirm, with relative certainty, the
absence of toxic or hazardous substances from any Property.

 
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Title Company: Commonwealth Land Title Insurance Company.
Title Policy: A loan policy of title insurance in favor of Agent issued by the
Title Company and complying with the requirements of Exhibit F attached hereto
and hereby made a part hereof.
Treasury Note Rate: The yields reported, as of 10:00 a.m. (New York time) on any
Business Day (hereinafter defined), on the display designated as "Page 678" on
the Telerate Data Service (or such other display as may replace Page 678 on the
Telerate Data Service) for actively traded U.S. Treasury securities having a
maturity equal to ten (10) years, or if such yields shall not be reported as of
such time or the yields reported as of such time shall not be ascertainable, the
latest Treasury Constant Maturity Series yields reported, for the latest day for
which such yields shall have been so reported as of the applicable Business Day,
in Federal Reserve statistical Release H. 15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having a constant
maturity equal to ten (10) years. Such implied yield shall be determined, if
necessary, by (i) converting U.S. Treasury bill quotations from bond‑equivalent
yields in accordance with accepted financial practice, and (ii) interpolating
linearly between reported yields. The term "Business Day" as used in this
paragraph means a day on which banks are open for business in New York,
New York.
U.S. Bank: U.S. Bank National Association, a national banking association, in
its capacity as a Lender, and not as Agent.
I. LOAN
1.1    Principal. Subject to the terms, provisions and conditions of this
Agreement, each Lender severally, but not jointly, agrees to lend to Borrower,
pro rata in accordance with its Commitment Percentage, and Borrower agrees to
borrow from the Lenders, the proceeds of the Loan, from time to time, in
accordance with the terms hereof until the Maturity Date (as may be extended
pursuant to the terms of Section 1.4 below). All advances of Loan proceeds shall
be evidenced by the Note. In no event shall the Lenders be obligated hereunder
to lend to Borrower more than Borrower has qualified to receive under the terms
of Article III hereof. Amounts borrowed under the Revolving Portion and repaid
can be re-borrowed subject to satisfaction of the terms and conditions set forth
in this Agreement. Amounts borrowed under the Non-revolving Portion and repaid
may not be subsequently re-borrowed. The Revolving Portion and the Non-revolving
Portion constitute a single facility in the Committed Amount represented by the
Note.
1.2    Interest.
(a)    Absent an Event of Default hereunder, the outstanding principal balance
hereunder shall bear interest at the Applicable Interest Rate (as defined
below). The "Applicable Interest Rate" shall mean (a) the Monthly Reset LIBOR
Rate, as the same may fluctuate from time to time, as to all amounts outstanding
on the Loan, other than LIBOR Rate Advances, and (b) the LIBOR Rate as to those
portions of the Loan that are LIBOR Rate Advances. Changes in the Monthly Reset
LIBOR Rate (if applicable) shall become effective on the same day as the date of
any change in the Monthly Reset LIBOR Rate, and shall apply to all advances made

 
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hereunder (other than LIBOR Rate Advances), whether such advances are made prior
to, the same day as, or subsequent to any particular change in the Monthly Reset
LIBOR Rate.
(b)    Interest accrued during each calendar month shall be payable, as accrued,
on the first Business Day of the next calendar month, commencing on the first
Business Day of the next calendar month following the calendar month in which
the Initial Advance of the Loan is made, and all unpaid, accrued interest shall
be paid in full at the time all advances are paid in full. If all unpaid
advances made by Agent and Lenders have not been repaid on or before the
Maturity Date, then the entire unpaid balance of all advances made by Agent and
Lenders shall (without notice to or demand upon Borrower) become due and payable
on said date, together with all unpaid, accrued interest thereon, and with
interest computed from and after that date in accordance with the terms of this
Agreement and the Note, until all advances are paid in full.
(c)    All payments of principal and interest due hereunder must be made without
deduction of any present and future taxes, levies, imposts, deductions, charges
or withholdings, which amounts must be paid by Borrower. Borrower shall pay the
amounts necessary such that the gross amount of the principal and interest
received by Agent and Lenders is not less than that required by this Agreement
and the Note. If Borrower is required by law to deduct any such amounts from or
in respect of any principal or interest payment hereunder, then (i) the sum
payable to Agent and Lenders shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this provision) Agent and Lenders receive an
amount equal to the sum they would have received had no deductions been made,
(ii) Borrower shall make such deductions, and (iii) Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law. Borrower shall pay all stamp and documentary
taxes. If, notwithstanding the foregoing, Agent or Lenders pay such taxes,
Borrower shall reimburse Agent and Lenders for the amount paid. Borrower shall
furnish Agent official tax receipts or other evidence of payment of all taxes.
(d)    Throughout the term of the Loan, interest will be calculated on the basis
of a 360 day year and shall be computed for the actual number of days elapsed in
the period for which interest is charged. If any payment of interest to be made
by Borrower hereunder becomes due on a day which is not a Business Day, such
payment must be made on the next succeeding Business Day.
(e)    Absent manifest error, Agent's records as to the amounts of principal,
interest and other sums owing hereunder shall be conclusive and binding.
1.3    LIBOR Rate Option. If no Event of Default, or event which, with notice or
lapse of time or both, could become an Event of Default, has occurred and is
continuing under any Loan Document, Borrower may from time to time elect, by a
LIBOR Rate Notice, to pay interest on the LIBOR Rate Advance described in said
LIBOR Rate Notice at a LIBOR Rate during the LIBOR Rate Period specified in said
LIBOR Rate Notice. Agent shall notify Borrower of the LIBOR Rate applicable to
any LIBOR Rate Period promptly after the same is determined by Agent, which
determination, in the absence of manifest error, shall be final, conclusive and
binding on Borrower. From and after the end of each LIBOR Rate Period, if
Borrower does not timely select another interest rate option at least two New
York Banking Days

 
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before the end of the LIBOR Rate Period for a LIBOR Rate Advance, Agent may at
any time after the end of the LIBOR Rate Period convert the LIBOR Rate Advance
to a Monthly Reset LIBOR Rate Advance accruing interest at the Monthly Reset
LIBOR Rate, but until such conversion, such LIBOR Rate Advance shall continue to
accrue interest at the same rate as the interest rate in effect for such LIBOR
Rate Advance prior to the end of the LIBOR Rate Period, unless and until
Borrower has again properly elected, by a LIBOR Rate Notice, to pay interest
thereon at a LIBOR Rate pursuant to this Agreement. Notwithstanding the
foregoing, no more than four (4) LIBOR Rate Advances may be outstanding at any
time. Subject to the terms and conditions set forth in Section 1.5 and
Section 1.10, LIBOR Rate Advances may be repaid or prepaid on any day; provided,
however, Borrower shall also pay to Agent, from time to time, on demand, any
sums necessary to compensate Agent and Lenders for all costs, expenses, claims,
penalties and liabilities incurred by Agent and Lenders by virtue of the
repayment or prepayment of funds, or Agent's and Lenders' inability to repay or
prepay funds, borrowed by Agent in the London interbank market to advance to
Borrower or to make a LIBOR Rate available to Borrower including, without
limitation, the Interest Differential.
1.4    Maturity Date; Extension. All principal owing on the Loan, and all
accrued interest and other sums owing under the Loan Documents not otherwise
paid when due, shall be due and payable in full on the Maturity Date. Borrower
shall have the option to extend (each extension, an "Extension") the term of the
Loan (the "First Extension") from the Maturity Date (the "Original Maturity
Date") to a date that is twelve (12) months following the Original Maturity Date
(for purposes of this Section, the "First Extended Maturity Date"), and upon the
expiration of the First Extension, Borrower shall have the option to extend the
term of the Loan (the "Second Extension") from the First Extended Maturity Date
to a date that is twelve (12) months following the First Extended Maturity Date
(for purposes of this Section, the "Second Extended Maturity Date"), each such
Extension being subject to the satisfaction of each of the following conditions
precedent:
(a)    Borrower shall provide Agent with written notice of Borrower's request to
exercise its option to extend the Maturity Date not more than one hundred twenty
(120) days but not less than forty-five (45) days prior to the (i) the Original
Maturity Date, in the case of the First Extension, and (ii) the First Extended
Maturity Date, in the case of the Second Extension.
(b)    As of the date of Borrower's delivery of the notice of request to
exercise its option to extend, and as of the then existing Maturity Date, no
Event of Default shall have occurred and be continuing, and no event or
condition which, with the giving of notice or the passage of time or both, would
constitute an Event of Default shall have occurred and be continuing, and
Borrower shall so certify in writing to the best of its knowledge.
(c)    Prior to the commencement of the Extension, Borrower shall deliver to
Agent, at Borrower's sole cost and expense, a date-down to the Title Policy in
form and substance acceptable to Agent and such title insurance endorsements
reasonably required by Agent to the extent available in each jurisdiction in
which an applicable Property is located.
(d)    Immediately prior to the commencement of the Extension, Borrower shall
pay to Agent an extension fee in the amount specified in the Fee Letter.

 
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(e)    Borrower shall be in compliance with the financial covenants contained in
the Loan Documents.
(f)    Immediately prior to the commencement of the Extension, Borrower shall be
in compliance with Section 5.23 hereof.
(g)    Immediately prior to the commencement of the Extension, the ratio of the
then applicable Committed Amount to the then "As-Is" appraised value (based on
evidence reasonably satisfactory to Agent, including, if required by Agent or
Borrower, updated Appraisals approved by Agent) of the Properties (the
"Commitment-to-Value Ratio") shall not exceed the Maximum Committed Amount
Leverage Ratio, as calculated by Agent; provided, however, if the required
Commitment-to-Value Ratio is not met, Borrower may (1) pay down the outstanding
principal amount of the Loan and permanently (except in connection with a
Property addition under Sections 7.20 and 7.21) reduce the Committed Amount by
an amount (as reasonably determined by Agent) sufficient to cause the
above-required Commitment-to-Value Ratio to not exceed the Maximum Committed
Amount Leverage Ratio (without the payment of any prepayment fee, other than
Interest Differential amounts and sums owing under Section 1.10, and Swap
Contract fees or breakage amounts), or (2) to the extent that a principal
payment is not required to permanently reduce the Committed Amount to the
required amount, permanently (except in connection with a Property addition
under Sections 7.20 and 7.21) reduce the Committed Amount by an amount (as
reasonably determined by Agent) sufficient to cause the above-required
Commitment-to-Value Ratio to not exceed the Maximum Committed Amount Leverage
Ratio.
(h)    Immediately prior to the commencement of the Extension, the Commitment
Resizing Debt Service Coverage Ratio shall not be less than 1.25 to 1.0 (or 1.35
to 1.0 if only one Property then secures the Loan), as calculated by Agent
(using the then Committed Amount (as the same may be reduced by Borrower in
accordance with Section 7.16 hereof) and, if required by Agent or Borrower, new
updated Appraisals); provided, however, if the required Commitment Resizing Debt
Service Coverage Ratio is not met, Borrower may (1) pay down the outstanding
principal amount of the Loan and permanently (except in connection with a
Property addition under Sections 7.20 and 7.21) reduce the Committed Amount by
an amount (as reasonably determined by Agent) sufficient to cause the Commitment
Resizing Debt Service Coverage Ratio to be equal to or greater than 1.25 to 1.0
(or 1.35 to 1.0 if only one Property then secures the Loan) or (2) to the extent
that a principal payment is not required to permanently reduce the Committed
Amount to the required amount, permanently (except in connection with a Property
addition under Sections 7.20 and 7.21) reduce the Committed Amount (as the same
may be reduced by Borrower in accordance with Section 7.16 hereof) by an amount
(as reasonably determined by Agent) sufficient to cause the Commitment Resizing
Debt Service Coverage Ratio to be equal to or greater than 1.25 to 1.0 (or 1.35
to 1.0 if only one Property then secures the Loan).
(i)    Guarantor shall be in compliance with its financial covenants set forth
in the Guaranty, and Agent shall have received a certificate from Guarantor
certifying such compliance and such other information reasonably required by
Agent to confirm that Guarantor is in compliance with such financial covenants
to the extent such information is required pursuant to Section 5.4 below.

 
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Notwithstanding the foregoing, the Second Extension may not come into effect
unless the First Extension shall have been in effect. If each of the foregoing
conditions precedent are satisfied with respect to the First Extension, and the
Original Maturity Date is extended as provided above to the First Extended
Maturity Date, as used herein and in the other Loan Documents, the term
"Maturity Date" shall thereafter mean the First Extended Maturity
[Remainder of page intentionally blank.]

 
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Date. If each of the foregoing conditions precedent are satisfied with respect
to the Second Extension, and the First Extended Maturity Date is extended as
provided above to the Second Extended Maturity Date, as used herein and in the
other Loan Documents, the term "Maturity Date" shall thereafter mean the Second
Extended Maturity Date.
1.5    Prepayment.
(a)    Subject to Section 1.10 hereto, and (as to the Non-revolving Portion)
Section 1.5(b) below, Borrower may prepay, in full or in part, principal
advanced under the Revolving Portion and Non-revolving Portion and accrued
interest thereon, provided that Borrower shall give Agent two (2) Business Days'
prior written notice of the date of prepayment. If Borrower prepays all or any
portion of the Revolving Portion or Non-revolving Portion, Borrower shall also
pay to Agent and Lenders any and all sums necessary to compensate Agent and
Lenders for all costs, expenses, claims, penalties and liabilities incurred by
Agent and Lenders by virtue of the repayment or prepayment of funds, or Agent's
and/or Lenders' inability to repay or prepay funds borrowed by Agent and/or
Lenders in the London interbank market to advance to Borrower or to make a LIBOR
Rate available to Borrower, including, without limitation, the Interest
Differential. In addition to the foregoing, any prepayment of principal advanced
under any of the Revolving Loans and Term Loan shall be subject to the
provisions of Section 1.10.
(b)    In addition to all other sums then owing hereunder, Borrower shall pay to
Agent for the benefit of Lenders (i) a prepayment fee equal to one percent
(1.0%) of any principal amount of the Non-revolving Portion that is paid prior
to March 1, 2014, and (ii) no prepayment fee shall be due and payable for any
payment that is made on or following March 1, 2014. Notwithstanding the
foregoing, the amount of any principal paydown which results directly from the
application of the release price from the release of one of the three buildings
on the KBS Willow Oaks Property pursuant to Section 7.22 hereof shall not be
subject to the prepayment fee specified in this Section 1.5(b) (provided,
however, that those prepayments resulting from the release of any other
Properties, shall be subject to the prepayment fee specified in this subsection
1.5(b)). For the avoidance of doubt, no prepayment fee shall be payable with
respect to the Revolving Portion. Borrower expressly waives any and all rights
it may have under applicable law (including without limitation Section 2954.10
of the California Civil Code) to repay the Loan in whole or in part without
premium or penalty, including without limitation the payment of a prepayment fee
or penalty for prepayment upon acceleration. Borrower acknowledges that the
foregoing prepayment fee is a material part of the consideration for the Agent
and Lenders making the Loan, which has been given individual weight to the
consideration for the Loan and this waiver and agreement.
BORROWER'S INITIALS:
 
/s/ CJS
 
/s/ CJS
 
/s/ CJS
 
 
 
 
 
 
 

1.6    Yield Protection. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation, promulgation, implementation or administration
thereof by any governmental or quasi-governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof
including, notwithstanding the foregoing, all requests, rules, guidelines or
directives in

 
 
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connection with Dodd-Frank Wall Street Reform and Consumer Protection Act
regardless of the date enacted, adopted or issued, or compliance by Agent or any
Lender (or applicable Lending Installation) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(a)    subjects Agent and/or any Lender (or any applicable Lending Installation)
to any Taxes, or changes the basis of taxation of payments (other than with
respect to Excluded Taxes) to Agent and/or any Lender in respect of the Loan or
participations therein, including without limitation the principal of or
interest on any LIBOR Rate Advance or any other fees or amounts payable
hereunder (other than with respect to Excluded Taxes), or
(b)    imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, Agent and/or any
Lender (or any applicable Lending Installation), or
(c)    imposes any other condition the result of which is to increase the cost
to Agent and/or any Lender (or any applicable Lending Installation) of making,
funding or maintaining the Loan or any LIBOR Rate Advance (or any related Loan
commitment), or to reduce any amount receivable by Agent and/or any Lender (or
any applicable Lending Installation) in connection with the Loan or
participations therein (whether of principal, interest or otherwise), or
requires Agent and/or any Lender (or any applicable Lending Installation) to
make any payment calculated by reference to the amount of the Loan by an amount
deemed material by Agent and/or such Lender,
and the result of any of the foregoing is to increase the cost to Agent and/or
such Lender (or applicable Lending Installation) of making or maintaining the
Loan or to reduce the return received by Agent and/or such Lender (or applicable
Lending Installation), as the case may be, in connection with the Loan, then,
upon written demand by Agent, Borrower shall pay Agent and/or such Lender such
additional amount or amounts as will compensate Agent and/or such Lender for
such increased cost or reduction in amount received, as reasonably determined by
Agent and/or such Lender. A statement from Agent setting forth such amount or
amounts as shall be necessary to so compensate Agent and/or such Lender shall be
delivered to Borrower and shall, in the absence of manifest error, be conclusive
and binding upon Borrower. Borrower shall pay Agent (for the benefit of Agent
and/or such Lender) the amount shown as due on any such statement within
fifteen (15) days after its receipt of the same. Failure on the part of Agent
and/or such Lender to demand compensation for any increased costs, lost income
or reduction in amounts received or receivable shall not constitute a waiver of
Agent's or such Lender's rights to demand compensation for any increased costs
or reduction in amounts received or receivable. The protection under this
section shall be available to Agent and the Lenders regardless of any possible
contention of the invalidity or inapplicability of any law, regulation or
directive which shall give rise to any demand by Agent or any Lender.
1.7    Inability to Determine LIBOR. In the event that on the date for
determining LIBOR in respect of the LIBOR Rate Period for any LIBOR Rate
Advance, Agent shall determine (which determination shall be conclusive in the
absence of manifest error) that, by reason of circumstances affecting the London
interbank market, adequate and fair means do not

 
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exist for ascertaining LIBOR for such LIBOR Rate Period, Agent shall promptly
give to Borrower notice (confirmed as soon as practicable in writing) of the
nature and effect of such circumstances, and the LIBOR Rate Advance in question
shall bear interest, or continue to bear interest, as the case may be, at the
Monthly Reset LIBOR Rate. If at any time subsequent to Agent's giving of such
notice, Agent determines that because of a change in circumstances the LIBOR
Rate is again available to Borrower, Agent shall so notify Borrower and shall
convert the rate of interest payable with respect to such portion of the
Principal Balance from the Monthly Reset LIBOR Rate to the LIBOR Rate. Nothing
in this Section shall affect the LIBOR Rate then in effect on any LIBOR Rate
Advance outstanding at the time of receipt by Borrower of such notice until the
expiration of the LIBOR Rate Period in effect with respect to such LIBOR Rate
Advance at such time.
1.8    Illegality. Notwithstanding anything to the contrary herein contained, if
any Change shall make it unlawful for Agent and/or the Lenders to make or
maintain any LIBOR Rate Advance or to give effect to its obligations as
contemplated hereby, then, by written notice to Borrower, Agent may:
(a)    declare that LIBOR Rate Advances will not thereafter be made hereunder,
in which event Borrower shall be prohibited from requesting LIBOR Rate Advances
from Agent, and Agent shall not be required to make LIBOR Rate Advances to
Borrower, hereunder unless such declaration is subsequently withdrawn; and
(b)    require, but only to the extent the Change affects outstanding LIBOR Rate
Advances, that all outstanding LIBOR Rate Advances made by Agent and/or the
Lenders be added to, and become a part of, the Monthly Reset LIBOR Rate Advances
hereunder, in which event all such LIBOR Rate Advances shall automatically be
added to, and become a part of, the Monthly Reset LIBOR Rate Advances as of the
effective date of such notice as is hereinafter provided for (notwithstanding
any provisions of the Note or this Agreement to the contrary), and interest
shall accrue thereon, from and after said date, at the Monthly Reset LIBOR Rate
or the Default Rate, whichever is then applicable. For purposes of this Section,
a notice to Borrower by Agent shall be effective, if lawful, on the date of
receipt by Borrower.
1.9    Capital Adequacy. If Agent determines the amount of capital required or
expected to be maintained by Agent or any Lender, any Lending Installation of
Agent or any Lender, or any corporation or other Person controlling Agent or any
Lender is increased as a result of a Change, then, within fifteen (15) days of
demand by Agent, the Borrower shall pay to Agent the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which Agent determines is attributable to this Agreement or
any Loan or commitment made hereunder (after taking into account Agent's
policies as to capital adequacy). Without limiting the foregoing, such
compensation shall include an amount equal to any reduction in return on assets
or return on equity to a level below that which Agent or any Lender could have
achieved absent its extension of credit hereunder and but for such Change. Agent
will notify Borrower as promptly as practicable after it determines to demand
such compensation. "Change" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines (defined below) or (ii) any
adoption of or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) or in the interpretation, promulgation,

 
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implementation or administration thereof after the date of this Agreement which
affects the amount of capital required or expected to be maintained by Agent or
any Lender (or any Lending Installation) or any corporation or other Person
controlling Agent or any Lender, including without limitation, (a) any such law,
regulation or change which affects the London interbank market, and (b) any such
change which results in an adjustment (i) of the Federal Deposit Insurance
Corporation assessment rate, (ii) of the reserve requirement specified by
Regulation D. Notwithstanding the foregoing, for purposes of this Agreement, all
requests, rules, guidelines or directives in connection with the Dodd-Frank Wall
Street Reform and Consumer Protection Act shall be deemed to be a Change
regardless of the date enacted, adopted or issued and all requests, rules,
guidelines or directives promulgated by the Bank for International Settlements,
the Basel Committee on Banking Regulations and Supervisory Practices (or any
successor or similar authority) or the United States financial regulatory
authorities shall be deemed to be a Change regardless of the date adopted,
issued, promulgated or implemented. "Risk-Based Capital Guidelines" means
(i) the risk-based capital guidelines in effect in the United States on the date
of this Agreement, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside the United
States including transition rules, and any amendments to such regulations
adopted prior to the date of this Agreement.
1.10    Indemnification of Agent and the Lenders. Except for a failure caused by
Agent's default, Borrower shall indemnify Agent and Lenders against any loss or
expense that Agent and/or Lenders may sustain or incur (including, without
limitation, any loss or expense sustained or incurred in obtaining, liquidating
or employing deposits or other funds acquired to effect, fund or maintain any
LIBOR Rate Advance, but excluding any Lender's (other than Agent's attorneys'
fees) as a consequence of (a) any failure of the Borrower to make any payment
when due of any amount due under the Loan Documents, (b) any failure of the
Borrower to borrow, continue or convert a LIBOR Rate Advance on a date specified
therefor in a notice thereof, (c) any failure to fulfill on the scheduled
commencement date of any LIBOR Rate Period hereunder the applicable conditions
set forth herein as prerequisites to an advance that is to be a LIBOR Rate
Advance or to the election of a LIBOR Rate Advance at a LIBOR Rate, (d) any
failure to borrow hereunder after a LIBOR Rate Notice has been given, (e) any
payment or prepayment permitted or mandated hereunder of a LIBOR Rate Advance on
a date other than the last day of the relevant LIBOR Rate Period, including
without limitation upon acceleration following an Event of Default, or (f) the
occurrence of any Event of Default, including but not limited to any loss or
expense sustained or incurred or to be sustained or incurred in liquidating or
employing deposits from third parties acquired to effect or maintain a LIBOR
Rate Advance. Without limiting the foregoing, such loss or expense shall
conclusively be deemed to include the Interest Differential. Because of the
short‑term nature of this facility, the Borrower agrees that the Interest
Differential shall not be discounted to its present value. Any prepayment of an
Advance bearing interest at the LIBOR Rate shall be in an amount equal to the
remaining entire principal balance of such advance. Agent shall provide to
Borrower a statement, signed by an officer of Agent, explaining any such loss or
expense and the Interest Differential, and setting forth, if applicable, the
computations used to determine such loss or expense and the Interest
Differential, which shall be conclusive and binding on Borrower, absent manifest
error. All such loss, expense and Interest Differential shall be payable by
Borrower to Agent within five (5) days of demand by Agent.

 
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Borrower acknowledges that payment or prepayment of any LIBOR Rate Advance on a
date other than the last day of an applicable LIBOR Rate Period shall result in
Agent and Lenders incurring additional costs, expenses and/or liabilities and
that it is extremely difficult and impractical to ascertain the extent of such
costs, expenses and/or liabilities, and any such payment or prepayment therefore
must include the Interest Differential and other sums set forth above. Borrower
hereby expressly (a) waives any rights it may have under California Civil Code
Section 2954.10 to prepay any LIBOR Rate Advance without penalty, upon
acceleration of the maturity of the Loan, and (b) agrees that if a prepayment of
any LIBOR Rate Advance is made, following any acceleration of the maturity of
the Loan by the Agent on account of any transfer or disposition as prohibited or
restricted by this Agreement or by any Deed of Trust, then Borrower shall be
obligated to pay, concurrently therewith, as a prepayment premium, the
applicable Interest Differential and other sums specified above. By initialing
this provision in the space provided below, Borrower hereby declares that the
Agent and Lenders' agreement to make the subject Loan at the interest rate and
for the term set forth in this Agreement constitutes adequate consideration,
given individual weight by Borrower, for this waiver and agreement.
BORROWER'S INITIALS:
 
/s/ CJS
 
/s/ CJS
 
/s/ CJS
 
 
 
 
 
 
 

1.11    Default Rate. If an Event of Default shall occur and be continuing under
the Note, this Agreement or under any of the other Loan Documents, or the entire
Principal Balance, all interest accrued thereon, and all other amounts payable
under the Loan have not been repaid on or before the Maturity Date, then the
entire Principal Balance shall (without notice to or demand upon Borrower)
become due and payable on said date, together with all unpaid, accrued interest
thereon and all other amounts payable under the Loan, and with interest computed
on all such sums from and after that date at a rate which is five percent (5.0%)
per annum in excess of the rate(s) of interest then accruing on the Principal
Balance, or at the maximum lawful rate of interest which may be charged thereon
by Agent, if any, whichever is less (hereinafter called "Default Rate"), until
all such amounts are paid in full.
1.12    Late Payment Charge. In the event that any required payment of principal
and/or interest hereunder is not made on or before the due date thereof, taking
into account any grace period, (but expressly excluding payment of principal due
upon maturity (by acceleration or otherwise), Borrower shall pay to Agent, for
the benefit of Lenders, a late payment charge equal to five percent (5.0%) of
the amount of the overdue payment, for the purpose of reimbursing Agent and
Lenders for a portion of the expense incident to handling the overdue payment.
1.13    Effective Rate. Borrower, Agent and the Lenders agree that no payment of
interest or other consideration made or agreed to be made by Borrower to Agent
and/or the Lenders pursuant to this Agreement, the Note, any Deed of Trust or
any other instrument referring to or securing the Loan shall, at any time, be
deemed to have been computed at an interest rate in excess of the maximum rate
of interest permissible by law, if any. In the event such payments of interest
or other consideration provided for in this Agreement, the Note, any Deed of
Trust or any other instrument referring to or securing the Loan shall result in
payment of an effective rate of interest which, for any period of time, is in
excess of the limit of the usury law or any other law applicable to the Loan
evidenced by the Note, all sums in excess of those lawfully collectible as
interest for the period in question shall, without further agreement or

 
 
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notice between or by any party or parties hereto, be applied to the Principal
Balance immediately upon receipt of such monies by Agent with the same force and
effect as though Borrower had specifically designated, and Agent had agreed to
accept, such extra payments as a principal payment, without premium or penalty.
If principal has been fully paid, any such excess amount shall be refunded to
Borrower. This provision shall control over every other obligation of Borrower,
Agent and the Lenders hereunder and under the Note, the Deeds of Trust and any
other instrument which secures the Note.
1.14    Application of Payments. Unless Agent otherwise consents in writing, all
proceeds and payments made and received under the Note shall be applied in the
manner set forth in Section 8.5(b); provided, that if an Event of Default exists
and is continuing, with the written consent of all Lenders, Agent may apply any
payments and proceeds received to the obligations owing under the Loan Documents
and any Swap Contracts in such order and manner as Agent, with the consent of
all Lenders, may elect (and if such consent is not forthcoming, in the order and
manner set forth in Section 8.5(b)).
1.15    Fees. On the date hereof and on or before the dates set forth therein,
Borrower shall pay U.S. Bank all fees, costs and expenses referenced in the Fee
Letter. Notwithstanding anything contained in this Agreement or any other Loan
Document to the contrary, all fees, costs and expenses payable to U.S. Bank
under the Fee Letter shall be solely for the account of U.S. Bank, and need not
be shared with any other Lender (except only, if at all, as set forth in a
separate letter agreement between U.S. Bank and such other Lender).
1.16    No Waiver by Agent. Agent shall not by any act, delay, omission or
otherwise be deemed to have waived any of its rights or remedies, and no waiver
of any kind shall be valid unless in writing and signed by Agent. All rights and
remedies of Agent under the terms of this Agreement, the Note, or any of the
other Loan Documents, and under any statutes or rules of law shall be cumulative
and may be exercised successively or concurrently. Any provision of this
Agreement and the Note which may be unenforceable or invalid under any law shall
be ineffective to the extent of such unenforceability or invalidity without
affecting the enforceability or validity of any other provision hereof.
II. CONDITIONS OF BORROWING
Neither Agent nor the Lenders shall be required to make any advances hereunder
until the pre‑closing requirements, conditions and other requirements set forth
below and in Article III have been completed and fulfilled to the satisfaction
of Agent, at Borrower's sole cost and expense. It is agreed, however, that Agent
and the Lenders may, in their discretion, make advances prior to completion and
fulfillment of any or all of such pre‑closing requirements, conditions and
requirements, without waiving its right to require such completion and
fulfillment before any additional advances are made. If all conditions to the
disbursement of the Initial Advance are not satisfied by the Termination Date,
Agent at its option and in its sole discretion may terminate this Agreement and
all obligations of Agent and Lenders hereunder and under the other Loan
Documents.
2.1    Pre-Closing Requirements. Prior to the closing of the Loan, Borrower
shall provide to Agent each of the following, in form and substance acceptable
to Agent.

 
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(a)    A commitment for each Title Policy or a preliminary title report for each
Initial Property from the Title Company, complying with the standard
requirements of Agent therefor, a copy of each of which has been delivered to
Borrower.
(b)    Three (3) copies of a current, certified ALTA/ACSM LAND TITLE SURVEY of
each Initial Property, which shall also be prepared in accordance with Agent's
standard requirements therefor, a copy of each of which has been delivered to
Borrower.
(c)    [Intentionally Deleted].
(d)    An environmental report for each Initial Property showing that no
remedial environmental action is recommended or required and other information
produced in connection with the Tests. Each environmental report shall also
specify whether or not any environmental assessment, study or statement with
respect to the Initial Property covered thereby is required by any Governmental
Requirement. If such an assessment, study or statement is so required for any
Initial Property, Borrower shall provide a copy thereof to Agent, and, if none
is so required, Borrower shall provide Agent with an appropriate declaration of
environmental nonsignificance relating to such Initial Property, if available in
the jurisdiction in which such Initial Property is located.
(e)    Insurance policies or insurance certificates (conforming to the
requirements of Exhibit G) written by insurers satisfactory to Agent and in
amounts satisfactory to Agent, prepared in accordance with Agent's standard
requirements therefor, a copy of each of which has been delivered to Borrower.
(f)    Agent shall have received a flood zone and landslide hazard certification
for each Initial Property from a qualified Consultant indicating that the
improvements on such Initial Property are not located in a flood plain or any
other flood prone area, or within an area subject to landslide hazards, as
designated by the Federal Emergency Management Agency or any other Governmental
Authority.
(g)    A zoning endorsement for each Initial Property (to the extent available)
insuring that such Initial Property is in compliance with the applicable zoning
and building codes.
(h)    An Agent-commissioned Appraisal of each Initial Property, addressed to
Agent prepared in substantial conformance with applicable Governmental
Requirements, and signed by an Appraiser acceptable to Agent and Lenders.
(i)    UCC chattel lien searches from the office of the Secretary of State of
Delaware, covering the name of each Borrower.
(j)    A copy of each Borrower's limited liability company agreement (certified
by a manager as being true, correct, complete, unamended and in full force and
effect) and a copy of each Borrower's Articles of Organization (certified by the
appropriate governmental officials in whose offices the same must be filed under
applicable law), together with evidence, satisfactory to Agent, that each
Borrower has complied with all other filing requirements and fictitious name
requirements, if any, necessary to permit such Borrower to do business in the

 
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state in which such Borrower's Initial Property is located, and evidence,
satisfactory to Agent, that each Borrower has complied with the above-mentioned
documents in executing the Loan Documents; together with all formation documents
for each Guarantor.
(k)    The standard form of office lease and industrial lease to be used by
Borrower in leasing space within the Properties.
(l)    A copy of each noncancelable agreement relating to the management,
operation or maintenance of the Properties and of each such agreement which
cannot be cancelled by thirty (30) days' or less notice.
(m)    A proposed Operating Budget for each Initial Property for its first year
of operation.
(n)    The most current available financial statements of each Borrower and each
Guarantor certified by the applicable party to be true, correct and complete in
all material respects.
(o)    [Intentionally Deleted].
(p)    All title, zoning and entitlement information and documentation requested
by Agent.
(q)    Other agreements, documents and exhibits, without limitation, which may
be required, in Agent's judgment, to assure compliance with the requirements of
this Agreement.
(r)    Receipt and approval by Agent of the Environmental Insurance Policy
covering the Initial Properties.
2.2    Loan Documents.
(a)    On or before the Closing Date, Borrower shall execute and deliver (or
cause to be executed and delivered) to Agent the following documents in form and
substance acceptable to Agent and to its counsel, to evidence and secure the
Loan:
(b)    A Note for each Lender in an amount equal to the total initial Committed
Amount times such Lender's Commitment Percentage.
(c)    The Deeds of Trust.
(d)    A general assignment of all leases of and rents and income from each
Initial Property.
(e)    A first security interest in all Equipment and in all of Borrower's
intangible property relating to the Initial Properties, created and evidenced by
a security agreement (which may be incorporated within the Deeds of Trust) and
by appropriate Uniform Commercial Code financing statements.

 
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(f)    The Guaranty.
(g)    All other Loan Documents.
(h)    Such other documents as Agent may reasonably require to evidence and
secure the Loan.
Agent may designate which of the Loan Documents are to be placed of record, the
order of recording thereof, and the offices in which the same are to be
recorded. Borrower shall pay all documentary, recording and/or registration
taxes and/or fees, if any, due upon the Loan Documents.
2.3    Recordation of Deeds of Trust; Title Insurance. The Deeds of Trust shall
have recorded against the Initial Properties, and Agent shall have received
Title Policy for each Deed of Trust.
2.4    Opinion of Borrower's Attorneys. Agent shall have received from outside
counsel for Borrower a current written opinion or opinions, in scope, form and
substance reasonably acceptable to Agent.
2.5    Fees. Borrower shall have paid to U.S. Bank each of the fees specified
in, and in accordance with the terms of, the Fee Letter.
2.6    SNDA's and Estoppels. Borrower shall on a commercially reasonable basis
have provided to Agent, in form and substance satisfactory to Agent,
(a) estoppels with respect to 85% of the current tenants for each Initial
Property, and (b) subordination, non-disturbance and attornment agreements for
the following tenants:
Park Avenue
Philadelphia Financial Admin
Jacobs Levy Equity Mgmt, Inc.
Merrill Lynch, P, F & S, Inc
BASF Corp & BASF Americas Corp
Wells Fargo Advisors, LLC
Wilson Elser Moskowitz Edelman
One Meadowlands
Russell Marketing Research Inc
Hudson Group Retail, LLC
Michael Kors
RGN - East Rutherford, LLC
Aegis Insurance Services, Inc.
The MWW Group, Inc.
Cushman & Wakefield of NJ
Willow Oaks
United Negro College Fund
ACS State Local Solutions

 
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SRA International Inc
BAUM Romstedt Technology
Dell Services Federal Govt
General Dynamics
AM Society for Therapeutic
Direct Holdings Americas
2.7    Conditions for Disbursement. Borrower shall have satisfied all conditions
for disbursement set forth in Article III (with respect to the initial
disbursement of Loan proceeds being requested by Borrower).
2.8    Borrower Operating Accounts. Borrower shall maintain all of its operating
accounts (which shall expressly exclude any initial collection accounts into
which any rents from a Property are initially deposited, if any, provided such
funds shall be promptly deposited into the operating account with U.S. Bank)
(collectively, the "Borrower Operating Account") for the Properties with U.S.
Bank at all times during the term of the Loan (including any extensions
thereof). Borrower hereby grants to Agent and Lenders a first priority lien and
security interest in any funds and proceeds deposited with U.S. Bank in such
Borrower Operating Account and in all other deposit accounts of Borrower with
Agent or U.S. Bank to secure the Loan and all obligations of Borrower under the
Loan Documents (collectively for the purposes of this Section 2.8, the
"Collateral"). U.S. Bank, in its capacity as the depository bank for the
Borrower Operating Account and any other deposit accounts of Borrower held with
Agent or U.S. Bank, hereby acknowledges notice of the above pledge and security
interest, and agrees to follow all instructions of Agent with respect thereto.
The parties to this Agreement acknowledge that U.S. Bank, as depository bank,
holds or will hold possession of the Collateral for the benefit of Agent and
Lenders, as secured parties, and will take directions from U.S. Bank, as Agent,
with respect to the Collateral.
2.9    Credit Approval. On or before the date of closing of the Loan, Agent and
Lenders shall have completed their due diligence of Borrower, Guarantor and the
Initial Properties and received full credit approval with respect to the
transaction.
2.10    [Intentionally Omitted].
2.11    First Disbursement Hereunder Shall be Used Only for the Repayment of the
Original One Meadowlands Loan, the Original 100-200 Campus Drive Loan and the
Original Willow Oaks Loan and Other Expenses Reasonably Approved by Agent.
Notwithstanding anything contained herein which may be construed to the
contrary, the Initial Advance hereunder shall be used to repay the outstanding
principal amount of the Original One Meadowlands Loan, the Original 100-200
Campus Drive Loan and the Original Willow Oaks Loan (and Borrower shall
concurrently therewith pay all accrued and unpaid interest and all other sums
then owing under the Original One Meadowlands Loan and the Original One
Meadowlands Loan Documents, the Original 100-200 Campus Drive Loan and the
Original 100-200 Campus Drive Loan Documents, and the Original Willow Oaks Loan
and the Original Willow Oaks Loan Documents), closing costs and expenses
associated therewith, future working capital and operating expenses,
distributions to any direct or indirect owners of Borrowers and any other lawful
uses to be determined by Borrower. All advances to repay the Original One
Meadowlands Loan, the Original 100-200 Campus Drive Loan and the Original Willow
Oaks Loan made hereunder, as well as all other advances on the Loan governed by
this Agreement, shall be evidenced by the Notes executed pursuant hereto and
governed by the Loan Documents executed in connection herewith. Following the
first disbursement of the Loan hereunder, the Original One

 
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Meadowlands Loan Agreement and the other Original One Meadowlands Loan Documents
and the Original Willow Oaks Loan Agreement and the other Original Willow Oaks
Loan Documents and the Original 100-200 Campus Drive Loan Agreement and the
Original 100-200 Campus Drive Loan Documents shall be deemed to be superseded
and replaced in their entirety by this Agreement and the other Loan Documents
executed in connection herewith, and the Loan being made pursuant hereto shall
be evidenced and governed by this Agreement and the other Loan Documents
executed in connection herewith (and not by any of the Original One Meadowlands
Loan Documents, the Original Willow Oaks Loan Documents or the Original 100-200
Campus Drive Loan Documents.
2.12    Successful Syndication. It shall be a condition to the closing of the
Loan, and of any obligations of Agent and U.S. Bank under this Agreement and the
other Loan Documents, that Agent shall have successfully syndicated with Lenders
under this Agreement commitments to make Advances under this Agreement in an
aggregate amount of not less than Two Hundred Thirty-Five Million Dollars
(235,000,000), with U.S. Bank retaining no more than a commitment of One Hundred
Thirty-Five Million Dollars ($135,000,000), and other Lenders having committed
to not less than One Hundred Million Dollars ($100,000,000).
Notwithstanding anything stated to the contrary in this Article II and/or in
Article III herein or elsewhere in this Agreement, the initial funding of the
Loan and/or recordation of the Deeds of Trust shall be deemed a confirmation by
Agent and the Lenders that all conditions precedent to the funding of the
Initial Advance as set forth in this Article II have been satisfied or waived
for all purposes, including for purposes of making of any Additional Advances
under Article III (except as otherwise expressly reserved by Agent in a writing
delivered to Borrower prior to the closing of the Loan).
III. ADVANCES OF LOAN PROCEEDS
3.1    General. Subject to the terms and conditions set forth in this Agreement,
each Lender shall, pro rata according to such Lender's Commitment Percentage of
the Committed Amount, make advances to Borrower in such amounts as Borrower may
request in accordance with the terms of this Agreement. All monies advanced by
Agent and the Lenders (including amounts payable to Agent and the Lenders and
advanced by Agent and the Lenders to themselves pursuant to the terms hereof)
shall constitute loans made to Borrower under this Agreement, evidenced by the
Note and this Agreement and secured by the other Loan Documents, and interest
shall be computed thereon, as prescribed by this Agreement and the Note, from
the date Borrower's Loan account is charged with the amount of the advance,
whether or not an advance made to the Title Company is fully disbursed by the
Title Company or is withheld in full or in part.
No advance shall constitute a waiver of any condition precedent to the
obligation of the Lenders to make any further advance or preclude Agent from
thereafter declaring the failure of Borrower to satisfy any such condition
precedent to be an Event of Default. All

 
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conditions precedent to the obligation of the Lenders to make any advance are
imposed hereby solely for the benefit of Agent and the Lenders, and no other
party may require satisfaction of any such condition precedent or shall be
entitled to assume that Agent and the Lenders will make or refuse to make any
advance in the absence of strict compliance with such condition precedent.
Agent may, at Agent's option, without any obligation to do so, advance to Agent
and/or Lenders from the proceeds of the Loan all other sums due or to become due
Agent and/or Lenders under this Agreement, under any Swap Contract entered into
with Borrower or under any of the other Loan Documents, including but not
limited to their fees, attorneys' fees, Appraisal fees, internal Appraisal
review and other fees, administrative fees and expenses, syndication and
transfer costs, and all other out-of-pocket expenses incurred by Agent in
connection with this Agreement and with the Loan. Agent shall also have the
right, but not the obligation, to advance and directly apply the proceeds of the
Loan to the satisfaction of any of Borrower's other obligations hereunder, under
any Swap Contracts entered into with Borrower or under any of the other Loan
Documents.
In no event shall Agent and Lenders have any obligation to make any advance if
the requested advance, plus the sum of all outstanding advances, would exceed
the then current Availability Amount.
3.2    Inspections. Agent, the Title Company, Consultants and their
representatives shall have access to the Properties at all reasonable times and
upon not less than twenty four hours prior notice, and shall have the right to
enter any Property and to conduct such inspections thereof at their sole cost
and expense, and subject to the rights of tenants under their leases, provided
if an Event of Default exists, such inspection shall be at Borrower's expense,
as they shall deem necessary or desirable for the protection of the interests of
Agent and the Lenders.
3.3    Responsibility of Agent and the Lenders. It is expressly understood and
agreed that neither Agent nor the Lenders assume any liability or responsibility
for protection of the Properties, for any representations made by Borrower, or
for any acts on the part of Borrower to be performed under the Loan Documents.
3.4    [Intentionally Deleted].
3.5    Initial Advance and Additional Advances. Provided that all of the terms
and conditions precedent set forth in Article II above and this Article III
(including without limitation Section 3.6 below) shall have been satisfied or
deemed satisfied as provided in Article II above, Lenders shall make the Initial
Advance of the Loan in the amount of $141,000,000 from the Non-revolving Portion
and $ 0 from the Revolving Portion (collectively, the "Initial Advance") to or
for the benefit of Borrower. At any time from and after the Closing Date through
the date that is sixty (60) days prior to the initial Maturity Date (or to the
date that is sixty (60) days prior to the applicable extended Maturity Date if
Borrower exercises one or both of its extension options pursuant to the
provisions of Section 1.4 herein) (the "Availability Period"), provided that all
of the terms and conditions set forth in this Article III have been satisfied
(or deemed satisfied) or waived, Borrower shall have the right to request and
receive additional advances of the Loan (each, an "Additional Advance") in an
amount not to exceed the then existing Availability Amount. Whenever Borrower
desires to obtain an advance of

 
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Loan proceeds, Borrower shall submit a signed Draw Request, in the form attached
hereto as Exhibit J, to Agent at least two (2) business days prior to the date
on which the requested advance is to be made ("Advance Date"). The funding of
any Additional Advance shall be subject to the satisfaction of the following
additional conditions:
(a)    If requested by Agent in connection with any advance, Borrower shall
provide to Agent one or more endorsements (to the full extent available) to and
continuation of each Title Policy, showing that there have been no mechanic's or
materialmen's liens or other liens filed since the date of the issuance of such
Title Policy, ensuring that each Additional Advance shall be secured by the
Deeds of Trusts in a first lien position, subject to no other liens or title
exceptions, other than the Permitted Encumbrances, and/or updating the effective
date of each Title Policy to the relevant Advance Date, which endorsements shall
be provided at Borrower's expense. If any liens or other matters, which in
Agent's good faith reasonable judgment jeopardize or otherwise impair its
security interest (and/or the first priority thereof) in any Property, are
disclosed by said endorsement and continuation or are in any other manner
discovered by the Title Company or Agent, no further advances shall be made
until such liens or other matters have been waived by Agent or satisfied in a
manner acceptable to Agent. Upon written demand of Agent, Borrower shall
immediately cause any such liens or other matters to be satisfied or released,
of record, or bonded around and removed from the Property encumbered thereby or
affirmatively insured over by the Title Company to Agent's satisfaction, or
shall make other arrangements with respect to the discharge thereof and the
releases thereof from the Property encumbered thereby as are acceptable to
Agent, in its reasonable discretion.
(b)    No Event of Default (or event that with the giving of notice and/or the
passage of time could become an Event of Default) shall have occurred and be
continuing. In no event shall Agent be required to make any advance unless, at
the time of the advance, there shall exist no Event of Default hereunder (or
event that with the giving of notice and/or the passage of time could become an
Event of Default), and all representations and warranties made herein shall be
true and correct in all material respects on and as of each Advance Date with
the same effect as if made on that date.
(c)    Unless otherwise agreed by Agent, Borrower shall not be entitled to more
than two (2) disbursements of Loan proceeds per month.
(d)    Each Advance under the Loan must be for at least Two Hundred Fifty
Thousand Dollars ($250,000), or for the amount of the remaining available
Committed Amount if less.
(e)    In no event shall Agent and Lenders have any obligation to make any
advance if the requested advance, plus the sum of all the previous advances,
would exceed the then existing Availability Amount.
3.6    Additional Conditions to Each Disbursement. In addition to all other
conditions and requirements set forth in this Agreement and any of the other
Loan Documents, Agent may require that each of the following conditions be
satisfied (or deemed satisfied or waived as provided in Article II herein) with
respect to each disbursement of Loan proceeds:

 
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(a)    As of the date of each disbursement, no suit or proceeding at law or in
equity, and no investigation or proceeding of any governmental body, has been
instituted or, to the knowledge of Borrower, has been threatened, which in
either case would substantially, negatively affect the condition or business
operations of Borrower or the Property.
(b)    As of the date of each disbursement, no default or Event of Default under
this Agreement or under any of the other Loan Documents shall have occurred and
be continuing, and no event shall have occurred which, upon the service of
notice and/or the lapse of time, would constitute an Event of Default
thereunder.
(c)    As of the date of each disbursement, the representations and warranties
set forth in Article IV of this Agreement shall each be true and correct in all
material respects as of the date of each disbursement.
(d)    Agent shall have determined, in its reasonable discretion, that
immediately following the requested disbursements of Loan proceeds, the
outstanding principal amount of the Loan would not exceed the Availability
Amount.
IV.    REPRESENTATIONS AND WARRANTIES OF BORROWER
Borrower represents and warrants to Agent and the Lenders that, except as
disclosed by Borrower to Agent in writing:
4.1    Legal Status of Borrower. Each Borrower is a limited liability company
duly formed, validly existing and in good standing under the laws of the State
of Delaware and is duly registered and qualified to transact business in, and is
in good standing under the laws of, the state in which the Property it owns is
located, and has all power, authority, permits, consents, authorizations and
licenses necessary to carry on its business, to construct, equip, own and
operate such Property and to execute, deliver and perform this Agreement and the
other Loan Documents; all consents of the members of each Borrower necessary to
authorize the execution, delivery and performance of this Agreement and of the
other Loan Documents which have been or are to be executed by and on behalf of
each Borrower have been duly obtained and are in full force and effect; this
Agreement and such other Loan Documents have been duly authorized, executed and
delivered by and on behalf of each Borrower so as to constitute this Agreement
and such other Loan Documents the valid and binding obligations of each
Borrower, enforceable in accordance with their terms; and each Borrower has
complied with all applicable assumed and/or fictitious name requirements of the
state in which it is organized and of the state in which the Property it owns is
located, if different.
4.2    Title. Each Borrower is the owner, in fee simple, of one of the
Properties (or, if approved by Agent and Lenders with respect to an Additional
Property, the owner of a valid leasehold estate in such Additional Property),
subject to no lien, charge, mortgage, deed of trust, restriction or encumbrance,
except Permitted Encumbrances.
4.3    No Breach of Applicable Agreements or Laws. The consummation of the
transactions contemplated hereby and the execution, delivery and/or performance
of this Agreement and the other Loan Documents will not result in any breach of
or constitute a default under any mortgage, deed of trust, lease, bank loan,
credit agreement, or other instrument or

 
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violate any Governmental Requirements, to which any Borrower or Guarantor is a
party, or by which any Borrower or Guarantor may be bound or affected.
4.4    No Litigation or Defaults. To the knowledge of Borrower, there are no
actions, suits or proceedings pending or threatened in writing against any
Borrower, Guarantor or any Property, or involving the validity or enforceability
of the Loan Documents or the priority of the lien thereof, at law or in equity;
and no Borrower or Guarantor is in default under any order, writ, injunction,
decree or demand of any court or any administrative body having jurisdiction
over such Borrower or Guarantor.
4.5    Financial and Other Information. The financial statements of each
Borrower and Guarantor previously or hereafter delivered to Agent fairly and
accurately present, or will fairly and accurately present, the financial
condition of such Borrower and Guarantor as of the dates of such statements, and
neither this Agreement nor any document, financial statement, financial or
credit information, certificate or statement referred to herein or furnished to
Agent by Borrower or Guarantor contains, or will contain, any untrue statement
of a material fact or omits, or will omit, a material fact, or is or will be
misleading in any material respect.
4.6    No Defaults under Loan Documents or Other Agreements. There is, and,
until the Lenders have been fully repaid the entire indebtedness evidenced or to
be evidenced by the Note, there will be, no default or Event of Default on the
part of any Borrower or Guarantor under the Loan Documents or under any other
document to which any Borrower or Guarantor is a party and which relates to the
ownership, occupancy, use, development, construction or management of any
Property; and no Borrower or Guarantor is in default or will be in default in
the payment of the principal or interest on any of its indebtedness for borrowed
money, and no Borrower or Guarantor is, or will be, in default under any
instrument or agreement under and subject to which any indebtedness for borrowed
money has been issued or is secured; and no event has occurred, or will occur,
which, with the lapse of time or the giving of notice or both, would constitute
a default thereunder.
4.7    Boundary Lines; Conformance with Governmental Requirements and
Restrictions. The exterior lines of the Improvements are, and at all times will
be, within the boundary lines of the Land pertaining thereto (except as
specifically disclosed on the survey(s) delivered to Agent), and Borrower has
examined and is familiar with all applicable covenants, conditions, restrictions
and reservations, and with all applicable Governmental Requirements, including
but not limited to building codes and zoning, environmental, hazardous
substance, energy and pollution control laws, ordinances and regulations
affecting each Property, and each Property will conform to and comply in all
material respects with said covenants, conditions, restrictions, reservations
and Governmental Requirements.
4.8    Utilities, Etc. Telephone services, gas, electric power, storm sewers,
sanitary sewer and water facilities are available to the boundaries of each
Property, adequate to serve the Property and not subject to any conditions
(other than normal charges to the utility supplier) which would limit the use of
such utilities. All streets and easements necessary for operation of each
Property are available to the boundaries of the Property.

 
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4.9    Personal Property. Each Borrower is now and shall continue to be the sole
owner of the Equipment pertaining to its Property, free from any lien, security
interest or adverse claim of any kind whatsoever, except for liens or security
interests in favor of Agent, the interest of a lessor pursuant to a lease of
personal property approved by Agent, in Agent's sole discretion, or liens or
security interests otherwise approved by Agent in Agent's sole discretion.
4.10    Condemnation. To Borrower's knowledge, no condemnation proceeding or
moratorium is pending or threatened against any Property which would impair the
construction, use, sale or occupancy of such Property (or any portion thereof)
in any manner whatsoever.
4.11    Governmental Regulations. No Borrower is subject to regulation under the
Investment Company Act of 1940, the Federal Power Act, the Public Utility
Holding Company Act of 1935, the Interstate Commerce Act or any federal or state
statute or regulation limiting its ability to incur indebtedness for money
borrowed.
4.12    Employee Benefit Plans. No Borrower maintains any pension, retirement or
profit sharing employee benefit plan that is subject to any provision of the
Employee Retirement Income Security Act of 1974, as amended from time to time.
4.13    Brokers. There are no brokerage commissions or finders' fees due or
claimed by any party to be due in connection with or with respect to the
transaction contemplated hereby.
4.14    Defects and Hazards. To Borrower's knowledge, Borrower does not know of
any defects, facts or conditions affecting the Land that would make it
unsuitable for the use contemplated hereunder or of any abnormal hazards
(including earth movement or slippage) affecting the Land.
4.15    Permits. To Borrower's knowledge and except as disclosed in any zoning
reports obtained by Agent (if any), each Borrower has obtained all permits for
the Improvements, annexation agreements, plot plan approvals, subdivision
approvals (including the approval and recordation of any required subdivision
map), environmental approvals (including a negative declaration or an
environmental impact report if required under applicable law), sewer and water
permits and zoning and land use entitlements necessary for the operation of such
Borrower's Property.
4.16    No Consumer Purpose. Borrower represents and warrants that the Note
evidences a business loan and that no portion of the proceeds of the Loan
evidenced by the Note will be used by any Borrower for family or household
purposes.
THE WARRANTIES AND REPRESENTATIONS IN THIS ARTICLE IV, AND ANY ADDITIONAL
WARRANTIES AND REPRESENTATIONS CONTAINED HEREIN AND IN THE OTHER LOAN DOCUMENTS,
SHALL BE DEEMED TO HAVE BEEN RENEWED AND RESTATED BY BORROWER EACH TIME BORROWER
SUBMITS A REQUEST FOR AN ADDITIONAL ADVANCE TO AGENT OR DELIVERS A QUARTERLY
CERTIFICATE TO AGENT PURSUANT TO SECTION 5.4, SUBJECT TO THE QUALIFICATIONS AS
TO SUCH REPRESENTATIONS AND WARRANTIES CONTAINED THEREIN (PROVIDED, FOR PURPOSES
OF CLARIFICATION, THIS SHALL IN NO EVENT PREVENT AGENT AND LENDERS FROM
EXERCISING THEIR

 
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RIGHTS AND REMEDIES UNDER THIS AGREEMENT IN ACCORDANCE WITH SECTION 5.12 AND
SECTION 6.1 OF THIS AGREEMENT IF AT ANY TIME AGENT OR LENDERS DETERMINE THAT A
REPRESENTATION OR WARRANTY IS NOT TRUE, CORRECT AND COMPLETE IN ALL MATERIAL
RESPECTS).
V. COVENANTS OF BORROWER
While this Agreement is in effect, and until the Lenders have been paid in full
the principal of and interest on all advances made by the Lenders hereunder and
under the other Loan Document, Borrower hereby covenants as set forth in this
Article V:
5.1    Paying Costs of Property and Loan. Borrower shall pay and discharge, when
due, all taxes, assessments and other governmental charges upon each Property,
as well as all claims for labor and materials which, if unpaid, might become a
lien or charge upon any Property; provided, however, that Borrower shall have
the right to contest the amount, validity and/or applicability of any of the
foregoing with respect to any Property in strict accordance with the terms of
the Deed of Trust encumbering such Property.
Borrower shall also pay all costs and expenses of Agent (but not any of the
other Lenders) and Borrower in connection with each Property, the preparation
and review of the Loan Documents and the making, closing, administration and
repayment of the Loan, including, but not limited to, the fees of Agent's
attorneys (which shall be limited to reasonable attorneys' fees), appraisal
fees, environmental fees, survey and title search fees, title insurance costs,
disbursement expenses, and all other costs and expenses payable to third parties
incurred by Agent or Borrower in connection with the Loan. Without limiting the
foregoing, Borrower shall pay all reasonable fees, charges and disbursements of
outside counsel for Agent (determined on the basis of such counsel's generally
applicable rates) and/or the allocated costs of in-house counsel incurred from
time to time. Such costs and expenses shall be so paid by Borrower whether or
not the Loan is fully advanced or disbursed.
5.2    Using Loan Proceeds. Borrower shall use the Loan proceeds only for
investments in commercial real estate and for other business and investment
purposes (which shall include distributions to its members when such
distributions are permitted under the terms and conditions of this Agreement),
and in no event shall Borrower use the proceeds of the Loan for family or
household purposes. Borrower agrees not to permit, at any time, the outstanding
principal balance of the Loan to exceed the Committed Amount (as it may be
reduced hereunder), and if Agent determines at any time that the outstanding
principal balance of the Loan exceeds the Committed Amount, Borrower shall
immediately pay to Agent upon demand by Agent, an amount sufficient to reduce
the outstanding principal balance of the Loan to an amount equal to or less than
the then existing Committed Amount. Borrower's failure to comply with this
Section shall constitute an immediate Event of Default under the Loan Documents.
5.3    Keeping of Records. Borrower shall set up and maintain accurate and
complete books, accounts and records pertaining to each Property in a manner
reasonably acceptable to Agent. Borrower will permit representatives of Agent to
have free access to and to inspect and copy all books, records and contracts of
Borrower. Any such inspection by Agent and/or its

 
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Consultants shall be for the sole benefit and protection of Agent and the
Lenders, and Agent shall have no obligation to disclose the results thereof to
Borrower or to any third party.
5.4    Providing Financial Information. Beginning with the quarter ending
March 31, 2013, Borrower shall furnish to Agent (a) evidence of payment of real
estate taxes assessed against each Property on or before each due date thereof
during the term of the Loan, (b) annual unaudited financial statements for each
Borrower and Guarantor within one hundred twenty (120) days of each fiscal year
end, including balance sheets, income statements, a statement of cash flow and
supporting schedules reasonably requested by Agent, (c) quarterly unaudited
financial statements for each Borrower and Guarantor, within forty-five (45)
days of each fiscal quarter end (except for the fiscal quarters ending December
31, for which such statements shall be delivered within one hundred twenty (120)
days of each December 31), including balance sheets and income statements, and
at Agent's request, a statement of funds available for distribution and a
supplementary real estate schedule (including, when applicable, covenant
compliance certificates from Guarantor in form and substance satisfactory to
Agent with respect to Guarantor's financial covenants set forth in the
Guaranty), (d) to the extent there is a balance outstanding under the Loan
during such period, a quarterly certification statement and Availability Amount
calculation within forty-five (45) days of each fiscal quarter end, (except for
the fiscal quarters ending December 31, for which such statements shall be
delivered within one hundred twenty (120) days of each December 31), including
Borrower's Borrowing Base Amount calculation, in form and substance satisfactory
to Agent, and (e) such additional information as Agent shall reasonably request
(not more than once per month) regarding any Borrower, Guarantor and any
Property, within thirty (30) days (or such reasonably necessary time period as
may be required by Borrower or Guarantor) after Agent's written request
therefor. All such financial statements shall be in reasonable detail, shall be
prepared in accordance with GAAP, and shall be certified by the party to which
they apply as true, correct and complete.
5.5    Providing Operating Budgets and Operating Statements. Borrower shall
deliver to Agent within forty-five (45) days after the end of each fiscal
quarter (except for the fiscal quarters ending December 31, for which such
statements shall be delivered within one hundred twenty (120) days of each
December 31) (or, upon Agent's written request, within thirty (30) days after
the end of the applicable month, and not more frequently than once per calendar
month), a Borrower prepared Operating Statement and rent roll for each Property
for the preceding calendar quarter, which shall specifically note all material
variations from such Property's current Operating Budget. Borrower shall also
deliver to Agent an annual Operating Statement and rent roll for each Property
within one hundred twenty (120) days following the end of each fiscal year. All
such Operating Statements shall be certified as true, correct and complete by
Borrower.
5.6    Providing Leasing Information. Borrower shall provide a leasing status
report for each Property within forty-five (45) days of the end of each fiscal
quarter (except for the fiscal quarters ending December 31, for which such
statements shall be delivered within one hundred twenty (120) days of each
December 31) (or, upon Agent's request, thirty (30) days following the end of
the applicable month).
5.7    Maintaining Insurance Coverage. Borrower shall, at all times until all
Obligations have been fully repaid, maintain, or cause to be maintained, in
effect (and shall

 
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furnish to Agent copies of), insurance policies or insurance certificates, as
required under the terms of Exhibit G attached hereto, and shall furnish to
Agent on an annual basis with proof of payment of all premiums therefor within
thirty (30) days of payment.
5.8    Complying with Other Documents. Borrower shall comply with and perform
all of its agreements and obligations under all other contracts and agreements
to which any Borrower is a party relating to the ownership, occupancy, use,
development, construction or management of the Properties to the extent, at such
time, a reasonably prudent owner of commercial property would do so, and shall
comply with all requests by Agent which are consistent with the terms thereof.
5.9    Lease Approval Rights. Except as specified below, Borrower shall not
enter into, amend or modify any lease covering any portion of any Property
without Agent's prior written consent, in Agent's reasonable discretion, and
shall furnish to Agent, upon execution, a fully executed copy of each such lease
entered into by Borrower, together with all exhibits and attachments thereto and
all amendments and modifications thereof. For leases that require Agent
approval, Borrower shall provide Agent with a copy of the Letter of Intent
("LOI") for each proposed lease and, to the extent available, with financial
information on the proposed tenant to aid Agent in determining whether it will
consent thereto. Agent may declare any future leases with key tenants at any
Property to be prior or subordinate to the Deed of Trust encumbering such
Property, at Agent's sole option, and Borrower shall use commercially reasonable
efforts to obtain SNDAs to achieve such subordination. A proposed LOI shall be
deemed approved by Agent unless Agent disapproves such LOI in writing within
five (5) Business Days after such LOI is submitted to Agent for approval.  Upon
approval (or deemed approval) of the LOI, no further approval will be required
by Agent and Agent will have granted its consent to the lease that results from
the LOI so long as such lease is on a lease form approved by Agent (which lease
form may be modified to address customary lease modifications in the
marketplace), and the business terms in the lease are not materially different
from the terms outlined in the approved (or deemed approved) LOI.
Notwithstanding the first sentence of this Section 5.9, with respect to
Qualifying Leases (as defined below), Borrower shall not be obligated to obtain
Agent's prior written consent so long as such lease (i) is on a lease form
approved by Agent (which lease form may be modified to address customary lease
modifications in the marketplace); (ii) the net effective rent payable under
such lease is equal to or in excess of 85% of market rents at the time the lease
is executed; and (iii) the term for such lease is equal to or greater than
1-year.
Borrower shall use commercially reasonable efforts to obtain SNDAs and estoppel
statements, in form and substance reasonably satisfactory to Agent, as to those
leases and tenants requested by Agent, within thirty (30) days of Agent's
request.
For purposes of this Section 5.9, "Qualifying Lease" shall mean a lease for less
than 50,000 square feet.
5.10    Compliance with Laws. Borrower will comply and, to the extent it is
able, will cause others to comply with all laws and requirements of Governmental
Authorities having jurisdiction over the processing, approving and recording of
any subdivision map, any of the

 
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Land or construction or sale of any of the Improvements and will furnish Agent
with reports of any official searches for violation of any requirements
established by such Governmental Authorities. Borrower will use commercially
reasonable efforts to comply and, to the extent it is able, will use
commercially reasonable efforts to cause others to comply with all restrictive
covenants and all obligations created by private contracts and leases which
affect ownership, construction, equipping, fixturing, use, occupancy, sale or
leasing of each Property (or any portion thereof). Each Property and the leasing
and sale thereof shall be in compliance with all permits and approvals issued by
Governmental Authorities with respect to such Property, applicable building,
zoning and use laws, requirements, regulations and ordinances and such leasing
and sale will not violate any restrictions of record against such Property.
Borrower will deliver to Agent, promptly after receipt thereof, copies of all
permits and approvals received from Governmental Authorities relating to the
use, development, leasing and/or sale of the Improvements for each Property.
5.11    Ownership of Personal Property. Each Borrower is, and after the date
hereof, will be the sole owner of all Equipment pertaining to such Borrower's
Property, free from any adverse lien, security interest or adverse claim of any
kind whatsoever, except for security interests and liens in favor of Agent and
other liens approved by Agent, in Agent's sole discretion. Borrower will not
convey or transfer any portion of the Equipment without the prior written
consent of Agent.
5.12    Representations and Warranties. Until repayment of the Note and all
other obligations secured by the Deeds of Trust, Borrower shall ensure that the
representations and warranties of Article IV remain true and complete in all
material respects, provided Agent shall not declare an Event of Default based
solely on a breach of this covenant unless Agent reasonably determines that such
breach (a) would have a material adverse effect on any Property, any Borrower
and/or Guarantor or (b) was intentional.
5.13    Trade Names. Borrower shall immediately notify Agent in writing of any
change in the jurisdiction of organization or place of business of, or the
change in the legal, trade or fictitious business names used by, any Borrower,
any of its constituent members or Guarantor, and Agent is hereby authorized to
file or record any additional financing statements, amendments and other
certificates necessary to reflect any such changes.
5.14    No Distributions. If an Event of Default exists and is continuing, no
Borrower will, without the prior written consent of Agent in its sole
discretion, make any distribution of assets to any member in any Borrower,
whether or not such a distribution is permitted under the terms of such
Borrower's limited liability company agreement, including repayment of any loans
made by a member in any Borrower to such Borrower, return of capital
contributions, distributions upon termination, liquidation or dissolution of
such Borrower or any development, property management, accounting or other fees
payable to a member in such Borrower (unless any such fee has been approved by
Agent, in Agent's sole discretion).
5.15    Future Development. Borrower shall not undertake any on-site
construction, demolition or rehabilitation work at any Property (other than
tenant improvements under leases approved by Agent or under leases which do not
require Agent's consent and capital

 
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improvements on the Properties done in the ordinary course of business) without
the prior written consent of Agent, which consent shall not be unreasonably
withheld or delayed.
5.16    Further Assurances. Borrower shall execute and deliver from time to
time, promptly after any request therefore by Agent, any and all instruments,
agreements and documents and shall take such other action as may be necessary or
desirable in the opinion of Agent to maintain, perfect or insure Agent's
security provided for herein and in the other Loan Documents, including the
filing or recording of UCC renewal statements or amendments, the execution of
such amendments to the Deeds of Trust and the other Loan Documents and the
delivery of such endorsements to the Title Company, all as Agent reasonably
requires, and shall pay all fees and expenses (including reasonable attorneys'
fees) related thereto or incurred by Agent in connection therewith.
5.17    Notice of Litigation, Etc.. Promptly upon receiving notice thereof,
Borrower will give, or cause to be given, prompt written notice to Agent of
(a) any action or proceeding instituted by or against any Borrower or Guarantor
in any federal or state court or before any commission or other regulatory body,
Federal, state or local, foreign or domestic; or (b) any such proceedings that
are threatened against any Borrower, or Guarantor which, if adversely
determined, could have a material and adverse effect upon any Borrower's or
Guarantor's businesses, operations, properties, assets, managements, natures of
ownership or conditions (financial or otherwise) or which would constitute an
event of default or a default under any other contract, instrument or agreement
to which any of them is a party or by or to which any of them or any of their
properties or assets may be bound or subject; or (c) any actions, proceedings or
notices materially adversely affecting any Property (or any portion thereof) or
Agent's interest therein or any zoning, building or other municipal officers,
offices or departments having jurisdiction with respect to any Property or the
leasing of it.
5.18    USA Patriot Act Compliance Covenant. No Borrower or Guarantor, and no
Affiliate or agent of any Borrower or Guarantor shall (i) conduct any business
or engage in any transaction or dealing with any Blocked Person, including the
making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person; (ii) deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked pursuant
to Executive Order No. 13224; or (iii) engage in or conspire to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in Executive Order No.
13224, the USA Patriot Act of 2001 (Public Law 107-56) (the "USA Patriot Act")
or any other Anti-Terrorism Law.  Borrower shall deliver to Agent any
certification or other evidence requested from time to time by Agent in its sole
discretion, confirming Borrower's compliance with this Section. For the purposes
of this Section, (1) "Blocked Person" shall mean (i) a Person that is listed in
the annex to, or is otherwise subject to the provisions of, Executive Order No.
13224; (ii) a Person owned or controlled by, or acting for or on behalf of, any
Person that is listed in the annex to, or is otherwise subject to the provisions
of, Executive Order No. 13224; (iii) a Person with which any Lender is
prohibited from dealing or otherwise engaging in any transaction by any
Anti-Terrorism Law; (iv) a Person that commits, threatens or conspires to commit
or supports "terrorism" as defined in Executive Order No. 13224; (v) a Person
that is named as a "specially designated national" on the most current list
published by the U.S. Treasury Department Office of Foreign Asset Control at its
official website or any replacement website or other replacement

 
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official publication of such list; or (vi) a Person who is affiliated or
associated with a person or entity listed above and (2) "Anti-Terrorism Laws"
shall mean any laws relating to terrorism or money laundering, including
Executive Order No. 13224, the USA Patriot Act, the laws comprising or
implementing the Bank Secrecy Act, and the Law administered by the United States
Treasury Department's Office of Foreign Asset Control (as any of the foregoing
laws may from time to time be amended, renewed, extended, or replaced).
5.19    Maintenance of Existence. Borrowers, Guarantor and their respective
constituent members each shall maintain and preserve its existence and all
rights and franchises material to its business.
5.20    Borrower Operating Account. Borrower shall at all times maintain the
Borrower Operating Account described in Section 2.8 with Agent.
5.21    Single Purpose Entity Provisions. Each Borrower's sole business purpose
shall be to own, finance and operate a Property and to take such other actions
as are ancillary thereto. Each Borrower (i) shall conduct business only in its
own name and under any trade name for the Improvements, (ii) shall not engage in
any business or have any assets unrelated to its Property, (iii) shall not have
any indebtedness other than as permitted by this Agreement or except as
permitted in writing by Agent, (iv) shall have its own separate books, records,
and accounts (with no commingling of assets), (v) shall hold itself out as being
an entity separate and apart from any other person or entity, (vi) shall observe
limited liability company formalities independent of any other entity, and
(vii) shall not change its name, identity, or organizational structure, unless
Borrower shall have obtained the prior written consent of Agent to such change,
and shall have taken all actions necessary or requested by Agent to file or
amend any financing statement or continuation statement to assure perfection and
continuation of perfection of security interests under the Loan Documents.
5.22    No Other Debt. Without Agent's written consent, no Borrower shall incur
any other indebtedness, whether secured or unsecured, other than the Loan, trade
debt and other expenditures contemplated under this Agreement (including payment
of taxes, insurance, tenant improvements and capital expenditures) reasonably
incurred in the ordinary course of operating such Borrower's Property (all of
which are debts which are expressly permitted under the Loan Documents);
provided that the foregoing shall not be deemed to prohibit up to $1,000,000 in
the aggregate at each Property owing under equipment leases for equipment to be
used by Borrowers in connection with the Properties; and provided further,
however, that in no case may such leased equipment be incorporated into any
Improvements as part of the structure thereof or otherwise installed as part of
any Improvements in such a way that the removal thereof would result in material
damage to such Improvements.
5.23    Minimum Required Debt Service Coverage Ratio. Subject to the immediately
following sentence, commencing on the March 31, 2013 reporting period, Borrower
shall maintain a Debt Service Coverage Ratio of not less than the Minimum
Borrowing Base DSCR tested as of the end of each calendar quarter, on the
extension of the Maturity Date under Section 1.4, and upon the occurrence of any
Event of Default (each a "DSCR Testing Date") during the term of the Loan and,
only for the purposes of determining whether the applicable disbursement
condition has been met, in connection with any Draw Request. Notwithstanding the
foregoing,

 
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so long as no Event of Default exists, if at the end of any calendar quarter (or
on any other DSCR Testing Date), Agent determines that the Debt Service Coverage
Ratio is equal to or greater than 1.10 to 1.0 but less than the Minimum
Borrowing Base DSCR ("Temporary Permitted Debt Service Coverage Ratio"),
Borrower shall have two (2) calendar quarters following the applicable DSCR
Testing Date (the "Compliance Period") to cause the Debt Service Coverage Ratio
to be equal to or greater than the Minimum Borrowing Base DSCR. If Agent or
Borrower determines that the Debt Service Coverage Ratio (i) as of any DSCR
Testing Date is less than 1.10 to 1.00 or (ii) at any time is within the
Temporary Permitted Debt Service Coverage Ratio and the applicable Compliance
Period has expired, Borrower shall, within 45 days of demand by Agent, pay down
the outstanding principal amount of the Loan by an amount (as reasonably
determined by Agent but without paying any prepayment or exit fees other than
Interest Differential amounts and sums owing under Section 1.10, and Swap
Contract fees or breakage amounts) sufficient to cause the Debt Service Coverage
Ratio to be equal to or greater than the Minimum Borrowing Base DSCR.
5.24    Affiliate Transactions. No Borrower shall engage in any transaction
affecting any Property with an Affiliate of any Borrower or of Guarantor unless
(a) the Affiliate is either a taxable REIT subsidiary of Parent REIT or KBS
Capital Advisors LLC, (b) the terms are commercially reasonable and Borrower's
payment terms thereunder are competitive with amounts that would be paid to or
received from third parties on an "arm's-length" basis, (c) the terms are
reduced to a writing covering all material aspects of such arrangement, and
(d) the agreement with the Affiliate is terminable without cause by Borrower or
Agent, without penalty or fee, upon thirty (30) days' prior written notice.
5.25    Borrower and Guarantor Covenants. Borrower shall cause Guarantor to
comply with the financial covenants set forth in Section 13 of the Guaranty.
Failure to comply with this Section 5.25 shall constitute an immediate Event of
Default hereunder.
5.26    EIN. Each Borrower's U.S. employer identification number is set forth on
Exhibit K attached hereto.
VI. DEFAULTS
6.1    Events of Default. Any of the following events shall constitute an Event
of Default under this Agreement:
(a)    Borrower shall fail to make payment of principal within three (3)
business days after the same becomes due according to the terms hereof or of any
Note.
(b)    Borrower shall fail to make payment of interest on advances made by Agent
or Lenders, or fail to pay any fees or other amounts payable to Agent or
Lenders, hereunder, under any Note or under any of the other Loan Documents
within three (3) business days after the same becomes due.
(c)    Any Borrower or Guarantor shall fail to perform or observe any obligation
or covenant (other than those obligations and covenants described in
subparagraphs (a) and (b), above, or otherwise set forth in subparagraphs (d)
through (l), below, of this Section 6.1) under this Agreement or any other Loan
Document within thirty (30) days after receipt of written

 
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notice that such obligation was not performed; provided that, if cure cannot
reasonably be effected within such 30-day period, such failure shall not be an
event of default hereunder so long as Borrower or Guarantor, as applicable,
promptly (in any event, within ten (10) days after receipt of such notice)
commences cure, and thereafter diligently (in any event, within sixty (60) days
after receipt of such notice) prosecutes such cure to completion; and provided
further, however, that notwithstanding the 30-day cure period or extended cure
period described above in this subparagraph (c), if a different notice or cure
period is specified under any Loan Document or under any provision of the Loan
Documents as to any such failure or breach, the specific Loan Document or
provision shall control, and Borrower and Guarantor, as applicable, shall have
no more time to cure the failure or breach than is allowed under the specific
Loan Document or provision as to such failure or breach.
(d)    Any representation or warranty made by any Borrower in this Agreement, in
any of the other Loan Documents, or in any certificate or document furnished
under the terms of this Agreement or in connection with the Loan, shall be
untrue or incomplete in any material respect provided, to the extent curable and
to the extent Agent determines a breach was not intentional, Borrower shall have
thirty (30) days to remedy the untrue or incomplete representation, warranty,
document or other material (so that it is true and complete in all material
respects), before such event constitutes an Event of Default hereunder.
(e)    Any Borrower shall be in default under the terms of any of the other Loan
Documents beyond any applicable grace or cure period specified therein, and such
default shall not be waived by Agent, or an Event of Default shall exist under
the terms of any such instrument.
(f)    Any Borrower or Guarantor shall apply for, consent to or permit the
appointment of a receiver, custodian, trustee or liquidator for it or any of its
property or assets; or shall fail to, or admit in writing its inability to, pay
its debts as they mature; or shall make a general assignment for the benefit of
creditors or shall be adjudicated bankrupt or insolvent; or shall take other
similar action for the benefit or protection of its creditors; or shall give
notice to any governmental body of insolvency or pending insolvency or
suspension of operations; or shall file a voluntary petition in bankruptcy or a
petition or an answer seeking reorganization or an arrangement with creditors,
or to take advantage of any bankruptcy, reorganization, insolvency, readjustment
of debt, rearrangement, dissolution, liquidation or other similar debtor relief
law or statute; or shall file an answer admitting the material allegations of a
petition filed against it in any proceeding under any such law or statute; or
shall be dissolved, liquidated, terminated or merged; or shall effect a plan or
other arrangement with creditors; or a trustee, receiver, liquidator or
custodian shall be appointed for it or for any of its property or assets and
shall not be discharged within ninety (90) days after the date of his
appointment; or a petition in involuntary bankruptcy or similar proceedings is
filed against it and is not dismissed within ninety (90) days after the date of
its filing.
(g)    Any of the Guaranty or the Environmental Indemnity, at any time and for
any reason ceases to be in full force and effect, or Guarantor or indemnitor
contests or denies the validity or enforceability of the Guaranty or the
Environmental Indemnity, or gives notice to Agent to such effect, or otherwise
attempts to revoke or repudiate any of the foregoing as to any existing or
future obligations, or any Borrower has Guarantor as a general partner (or
otherwise

 
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has a structure where Guarantor would be liable for such Borrower's obligations
under the Loan Documents absent the Guaranty).
(h)    Any Borrower shall fail to maintain insurance as required by this
Agreement (which, for purposes of clarification, shall not include the
Environmental Insurance Policy, it being understood by the parties that
termination of such Environmental Insurance Policy shall not be an Event of
Default, or constitute a breached obligation under this Agreement, but instead
shall only trigger liability of the Guarantor under the Guaranty for any amounts
owing by Borrower under the Environmental Indemnity, as more fully set forth in
the Guaranty) or shall fail to furnish to Agent proof of payment of all premiums
for such insurance within five (5) business days following Agent's written
request for same (provided that Borrower has received proof of such payment at
the time Agent requests such proof).
(i)    A transfer, encumbrance, lien, change of ownership or other action or
occurrence prohibited by any Deed of Trust shall occur (and all notice and cure
periods, if any, have elapsed).
(j)    Guarantor shall fail to perform or observe or comply with any covenant,
agreement or obligation set forth in Section 13 of Guaranty applicable to
Guarantor.
(k)    Any Borrower fails at any time to satisfy or otherwise comply with (i)
the terms, conditions and covenants set forth in (i) Section 5.2 or (ii)
Section 5.23.
6.2    Rights and Remedies. Upon the occurrence of an Event of Default, unless
such Event of Default is subsequently waived in writing by Agent and Majority
Lenders, Agent shall be entitled, at the option of Agent, to exercise any or all
of the following rights and remedies, consecutively or simultaneously, and in
any order:
(a)    Lenders may make one (1) or more further advances of Loan proceeds,
without liability to make any subsequent advances thereof.
(b)    Lenders may suspend their obligation to make advances under this
Agreement, without notice to Borrower.
(c)    Lenders may terminate their obligation to make advances under this
Agreement, and Agent may declare the entire unpaid principal balance of the
advances made under this Agreement to be immediately due and payable, together
with accrued and unpaid interest on such advances, without notice to or demand
on Borrower.
(d)    Agent may exercise any or all remedies specified herein and in the other
Loan Documents, including (without limiting the generality of the foregoing) the
right to foreclose the Deeds of Trust (or any of them), and/or any other
remedies which it may have therefor at law, in equity or under statute.
(e)    Agent may cure the Event of Default on behalf of Borrower, and, in doing
so, may enter upon the Properties, and may expend such sums as it may deem
desirable, including attorneys' fees, all of which shall be deemed to be
advances hereunder, even though

 
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causing the Loan to exceed the face amount of the Note, shall bear interest at
the Default Rate and shall be payable by Borrower on demand.
VII. MISCELLANEOUS
7.1    Binding Effect; Waivers; Cumulative Rights and Remedies. The provisions
of this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, personal
representatives, legal representatives, successors and assigns; provided,
however, that neither this Agreement nor the proceeds of the Loan may be
assigned by any Borrower voluntarily, by operation of law or otherwise, without
the prior written consent of Agent. No delay on the part of Agent in exercising
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder constitute such a waiver or exhaust the same, all of which
shall be continuing. The rights and remedies of Agent specified in this
Agreement shall be in addition to, and not exclusive of, any other rights and
remedies which Agent would otherwise have at law, in equity or by statute, and
all such rights and remedies, together with Agent's rights and remedies under
the other Loan Documents, are cumulative and may be exercised individually,
concurrently, successively and in any order.
7.2    Survival. All agreements, representations and warranties made in this
Agreement shall survive the execution of this Agreement, the making of the
advances by the Lenders, and the execution of the other Loan Documents, and
shall continue until Agent on behalf of the Lenders receives payment in full of
all indebtedness of Borrower incurred under this Agreement and under the other
Loan Documents.
7.3    Governing Law; Waiver of Jury Trial. This Agreement, the rights of the
parties hereunder and the interpretation hereof shall be governed by, and
construed in accordance with, the laws of the State of California in all
respects. To the maximum extent permitted by applicable law, Borrower hereby
waives any right to a trial by jury in any action relating to the Loan and/or
the Loan Documents.
7.4    Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute a single Agreement.
7.5    Notices. Any notice required or permitted to be given by either party
hereto to the other under the terms of this Agreement, or documents related
hereto, shall be deemed to have been given on the date the same is deposited in
the United States Mail, registered or certified, return receipt requested,
postage prepaid, addressed to the party to which the notice is to be given at
the address set forth opposite its name below, or at any other address specified
in a notice given by such party to the other not less than ten (10) days prior
to the effective date of the address change.

 
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If to Borrower:
KBSII Willow Oaks, LLC
c/o KBS Capital Advisors LLC
1909 K Street NW, Suite 340
Washington, DC 20006
Attention: Robin Burke

KBSII 100-200 Campus Drive, LLC
KBSII One Meadowlands, LLC
c/o KBS Capital Advisors LLC
590 Madison Ave., 26th Floor
New York, NY 10022
Attention: Randi Kaufman
 
 
With a copy to:
c/o KBS Capital Advisors LLC
620 Newport Center Drive, Suite 1300
 Newport Beach, CA 92660
Attention: Todd Smith
 
 
With a copy to:
c/o KBS Capital Advisors LLC
620 Newport Center Drive, Suite 1300
 Newport Beach, CA 92660
Attention: Jeff Waldvogel
 
 
With a copy to:
Greenberg Traurig, LLP
3161 Michelson Drive, Suite 1000
Irvine, CA 92612
Attention: Bruce Fischer, Esq.
 
 
If to Agent:
U.S. Bank National Association
Commercial Real Estate
4100 Newport Place, Suite 900
Newport Beach, CA 92660
Attention: Loan Administration

7.6    Agent's Sign. Agent may, if it so desires, publicize its involvement with
the Properties, including, but not limited to, issuing press releases, but it
may not place any signage on any Property without Borrower's prior written
consent (which consent may be withheld, conditioned or delayed in Borrower's
sole and absolute discretion).
7.7    No Third Party Reliance. No third party shall be entitled to rely upon
this Agreement or to have any of the benefits of Agent's and the Lenders'
interest hereunder, unless such third party is an express assignee of all or a
portion of the interest of Agent and/or any Lender hereunder.
7.8    Time of the Essence. Time is of the essence hereof with respect to the
dates, terms and conditions of this Agreement.

 
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7.9    Entire Agreement; No Oral Modifications. This Agreement, the other Loan
Documents and the other documents mentioned herein set forth the entire
agreement of the parties with respect to the Loan and supersede all prior
written or oral understandings and agreements with respect thereto. No
modification or waiver of any provision of this Agreement shall be effective
unless set forth in writing and signed by the parties hereto.
7.10    Captions. The headings or captions of the Articles and Sections set
forth herein are for convenience only, are not a part of this Agreement and are
not to be considered in interpreting this Agreement.
7.11    Joint and Several Liability. If Borrower consists of more than one (1)
individual and/or entity, each of said individuals and/or entities shall be
jointly and severally liable for each covenant, agreement, representation and
warranty of Borrower hereunder.
7.12    Borrower's Relationship with Agent and the Lenders. The relationship
between Borrower, Agent and the Lenders created hereby and by the other Loan
Documents shall be that of a borrower and a lender only, and in no event shall
Agent and/or the Lenders be deemed to be a partner of, or a joint venturer with,
any Borrower.
7.13    Swap Transactions. Borrower may enter into one or more Swap Transactions
and Swap Contracts with the Swap Counterparty on terms that are acceptable to
Swap Counterparty in its sole discretion for the purpose of hedging and
protecting against interest rate fluctuation risks with respect to the Loan.
Upon the Maturity Date, or such earlier date that the Loan becomes due by reason
of an Event of Default, or otherwise, or upon payment of the Loan in full, Agent
may direct that all existing Swap Contracts be broken and discontinued, and any
and all breakage fees, discontinuance fees, settlement obligations, and any and
all other sums, fees and costs with respect to such Swap Transactions and Swap
Contracts shall become due and payable by Borrower in accordance with the
respective Swap Contract, with the Borrower as the sole defaulting party as
contemplated by the Swap Contract. Unless otherwise specifically agreed in
writing by Borrower, Agent and Swap Counterparty, Borrower's obligations
(including any payment obligations) with respect to any such Swap Contracts
provided by or entered into with Swap Counterparty (that is a Lender hereunder)
with respect to the Loan shall be secured by the Deeds of Trust and all other
collateral for the Loan, and any default by Borrower (after the expiration of
any applicable notice and cure period) under any such Swap Contracts shall, at
the discretion of the Agent, constitute an Event of Default under this
Agreement. As additional security for the obligations of Borrower under the Loan
Documents, Borrower hereby transfers, assigns, and conveys to Agent and grants
to Agent a security interest in, subject to the terms and conditions contained
herein, all of Borrower's present and future rights, titles and interests, but
not its obligations, duties or liabilities for any breach, in, under and to all
Swap Contracts and all Swap Transactions, any and all amounts received by
Borrower in connection therewith or to which Borrower is entitled thereunder,
and all proceeds of the foregoing. At Agent's option, if an Event of Default
exists, all net amounts payable to Borrower under the Swap Contract shall be
paid to Agent and shall be applied to pay interest or other amounts under the
Loan. Borrower acknowledges and agrees that, notwithstanding the terms of the
Swap Contract, Borrower shall not modify or terminate the Swap Contract without
the prior written consent of Agent.

 
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Additionally, subject to the terms of the Swap Contract, if there is an uncured
default under any Swap Contract, if an Event of Default exists, Agent shall have
the right at any time (but shall have no obligation) to take in its name or in
the name of Borrower (or its Affiliate) such action as Agent may at any time
determine to be necessary or advisable to cure any uncured default under any
Swap Contract or to protect the rights of Borrower (or its Affiliate) or Swap
Counterparty thereunder; provided, however, that before the occurrence of an
Event of Default, Agent shall give prior written notice to Borrower before
taking any such action. For this purpose, Borrower hereby constitutes Agent its
true and lawful attorney-in-fact with full power of substitution, which power of
attorney is coupled with an interest and irrevocable by Borrower in any manner,
or for any reason, to exercise, at the election of Agent and so long as an Event
of Default exists, any and all rights and remedies of Borrower (or its
Affiliate) under the Swap Contract, including making any payments thereunder and
consummating any transactions contemplated thereby, and to take any action that
Agent may deem proper in order to collect, assert or enforce any claim, right or
title, in and to the Swap Contract hereby assigned and conveyed, from time to
time to institute and prosecute in the name and at the expense of Borrower, or
otherwise, but for the benefit of Agent, any and all proceedings at law, in
equity, or otherwise, that Agent may deem proper in order to collect, assert or
enforce any claim, right or title, of any kind, in and to the Swap Contract
hereby assigned and conveyed, or intended so to be, and to defend and
compromise, at the election of Agent, any and all actions, suits or proceedings
with respect to the Swap Contract, and generally to do all and any such action
in relation thereto as Agent shall deem advisable. Agent shall not incur any
liability if any action so taken by Agent or on its behalf shall prove to be
inadequate or invalid. Borrower expressly understands and agrees that Agent is
not hereby assuming any duties or obligations of Borrower (or its Affiliate) to
make payments to Swap Counterparty under any Swap Contract or under any other
Loan Document. Such payment duties and obligations remain the responsibility of
Borrower (or its Affiliate) notwithstanding any language in this Agreement. In
no event shall any terms and conditions set forth in this Section 7.13 be deemed
to diminish or otherwise restrict any rights of a Swap Counterparty under a Swap
Contract.
7.14    Automatic Deduction and Credit. So long as Agent is the sole Lender
hereunder, at Agent's option, payments owed by Agent as Swap Counterparty under
any Swap Contract may be credited against accrued interest and other payments
owed by Borrower under the Loan provided Agent will provide written notice to
Borrower of any such credit. Agent will credit the applicable amounts on the
dates the foregoing payments become due; provided, however, that if a due date
does not fall on a Business Day, Agent will credit the applicable amounts on the
first Business Day following such due date.
7.15    Borrower Waiver. In the event that, at any time, any surety exists that
is liable upon only a portion of Borrower's obligations under the Loan Documents
and Borrower provides partial satisfaction of any such obligation(s), Borrower
hereby waives any right it would otherwise have under applicable law, if any, or
otherwise to designate the portion of the obligation to be satisfied. The
designation of the portion of the obligation to be satisfied shall, to the
extent not expressly made by the terms of the Loan Documents, be made by Agent
rather than by Borrower.
7.16    Reduction of Committed Amount. Provided (a) no Draw Request is pending
that would result in the Principal Balance exceeding the sum of the
Non-revolving Portion and

 
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the available proposed reduced Revolving Portion, and (b) that immediately after
such reduction the outstanding principal amount of the Revolving Loans is less
than or equal to the reduced Revolving Portion as determined by Agent indicated
in any such notice (which for the purposes of this Section shall include any
amounts requested under a pending Draw Request), Borrower may, subject to
Section 7.27 hereof, permanently (except in connection with a Property addition
under Sections 7.20 and 7.21) reduce the available Revolving Portion of the Loan
(without the payment of any prepayment fee, other than break funding, including
any sums owing under Section 1.10 hereof, and any charges relating to early
termination of any Swap Contracts), by giving Agent irrevocable notice of such
reduction (including the new maximum Revolving Portion) to Agent at least two
(2) Business Days prior to the indicated effective date of the reduction. Each
such reduction shall (a) be in a minimum amount of $1,000,000 (and in increments
of $500,000 thereafter), (b) in no event reduce the Committed Amount below
$20,000,000 (unless Agent otherwise agrees in writing) and (c) permanently
(except in connection with a Property addition under Sections 7.20 and 7.21)
reduce the maximum Revolving Portion of the Loan available to Borrower. Borrower
may not make more than one reduction election during each calendar month. For
purposes of clarification, Borrower may not reduce the amount of the
Non-revolving Portion except as expressly provided in Section 1.5 above.
7.17    USA Patriot Act Notice. The USA Patriot Act of 2001 (Public Law 107-56)
and federal regulations issued with respect thereto require all financial
institutions to obtain, verify and record certain information that identifies
individuals or business entities which open an "account" with such financial
institution. Consequently, Agent and/or Lenders) may from time-to-time request
in writing, and each Borrower shall provide to Agent and/or Lenders, such
Borrower's name, address, tax identification number and/or such other
identification information as shall be reasonably necessary for Agent and/or
Lenders to comply with federal law. An "account" for this purpose may include,
without limitation, a deposit account, cash management service, a transaction or
asset account, a credit account, a loan or other extension of credit, and/or
other financial services product.
7.18    Statute of Frauds. The rights and obligations of Borrower, Agent and
Lenders under the Loan Documents shall be determined solely from the Loan
Documents, and any prior oral agreements between the Borrower, Agent and Lenders
relating to the Loan are superseded by and merged into the Loan Documents.
7.19    Joint Borrower Provisions. Each Borrower acknowledges and agrees that it
shall be jointly and severally liable for the Loan and all other Obligations
arising under this Agreement and/or any of the other Loan Documents. In
furtherance thereof, each Borrower acknowledges and agrees as follows:
(a)    For the purpose of implementing the joint borrower provisions of the Loan
Documents, each Borrower hereby irrevocably appoints each other Borrower as its
agent and attorney-in-fact for all purposes of the Loan Documents, including the
giving and receiving of notices and other communications.
(b)    To induce the Lenders to make the Loan, and in consideration thereof,
each Borrower hereby agrees to indemnify the Agent and Lenders against, and hold
the Agent

 
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and Lenders harmless from, any and all liabilities, expenses, losses, damages
and/or claims of damage or injury asserted against Agent and/or Lenders by any
Borrower or by any other Person arising from or incurred by reason of
(i) reliance by the Agent and/or Lenders on any requests or instructions from
any Borrower, or (ii) any other action taken by Agent and/or Lenders in good
faith with respect to this Agreement or the other Loan Documents.
(c)    Each Borrower acknowledges that the liens and security interests created
or granted herein and by the other Loan Documents will secure Obligations of all
Borrowers under the Loan Documents and, in full recognition of that fact, each
Borrower consents and agrees that the Agent and/or Lenders may, at any time and
from time to time, without notice or demand, and without affecting the
enforceability or security hereof or of any other Loan Document:
(1)    agree with any Borrower to supplement, modify, amend, extend, renew,
accelerate, or otherwise change the time for payment or the terms of the
Obligations or any part thereof, including any increase or decrease of the
rate(s) of interest thereon;
(2)    agree with any Borrower to supplement, modify, amend or waive, or enter
into or give any agreement, approval or consent with respect to, the Obligations
or any part thereof or any of the Loan Documents or any additional security or
guaranties, or any condition, covenant, default, remedy, right, representation
or term thereof or thereunder;
(3)    accept new or additional instruments, documents or agreements in exchange
for or relative to any of the Loan Documents or the Obligations or any part
thereof;
(4)    accept partial payments on the Obligations;
(5)    receive and hold additional security or guaranties for the Obligations or
any part thereof;
(6)    release, reconvey, terminate, waive, abandon, subordinate, exchange,
substitute, transfer and enforce any security for or guaranties of the
Obligations, and apply any security and direct the order or manner of sale
thereof as Agent, in its sole and absolute discretion may determine;
(7)    release any Person or any guarantor from any personal liability with
respect to the Obligations or any part thereof;
(8)    settle, release on terms satisfactory to Agent or by operation of
applicable laws or otherwise liquidate or enforce any Obligations and any
security therefor or guaranty thereof in any manner, consent to the transfer of
any such security and bid and purchase at any sale; and consent to the merger,
change or any other restructuring or termination of the corporate existence of
any Borrower or any other Person, and correspondingly restructure the
obligations of such Borrower or other Person, and any such merger, change,
restructuring or termination shall not affect the liability of any Borrower or
the continuing existence of any lien or security interest hereunder, under any
other Loan Document to which any Borrower is a party or the enforceability
hereof or thereof with respect to all or any part of the Obligations.

 
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(d)    Upon the occurrence of and during the continuance of any Event of
Default, Agent may enforce this Agreement and the other Loan Documents
independently as to each Borrower and independently of any other remedy or
security Agent and/or Lenders at any time may have or hold in connection with
the Obligations, and in collecting on the Loan it shall not be necessary for
Agent to marshal assets in favor of any Borrower or any other Person or to
proceed upon or against and/or exhaust any other security or remedy before
proceeding to enforce this Agreement and the other Loan Documents. Each Borrower
expressly waives any right to require Agent and/or Lenders, in connection with
Agent and/or Lender's efforts to obtain repayment of the Loan and other
Obligations, to marshal assets in favor of any Borrower or any other Person or
to proceed against any other Person or any collateral provided by any other
Person, and agrees that Agent and/or Lenders may proceed against any Persons
and/or collateral in such order as it shall determine in its sole and absolute
discretion in connection with Agent's efforts to obtain repayment of the Loan
and other Obligations. Agent may file a separate action or actions against each
Borrower to enforce the Obligations, whether action is brought or prosecuted
with respect to any other security or against any other Person, or whether any
other Person is joined in any such action or actions. Each Borrower agrees that
Agent, Lenders, each Borrower and/or any other Person may deal with each other
in connection with the Obligations or otherwise, or alter any contracts or
agreements now or hereafter existing between any of them, in any manner
whatsoever, all without in any way altering or affecting the security of this
Agreement or the other Loan Documents. The rights of Agent and/or Lenders
hereunder and under the other Loan Documents shall be reinstated and revived,
and the enforceability of this Agreement and the other Loan Documents shall
continue, with respect to any amount at any time paid on account of the
Obligations which thereafter shall be required to be restored or returned by
Agent and/or Lenders as a result of the bankruptcy, insolvency or reorganization
of any Borrower or any other Person, or otherwise, all as though such amount had
not been paid. The enforceability of this Agreement and the other Loan Documents
at all times shall remain effective even though the any or all Obligations, or
any other security or guaranty therefor, may be or hereafter may become invalid
or otherwise unenforceable as against any Borrower or any other Person and
whether or not any Borrower or any other Person shall have any personal
liability with respect thereto. Each Borrower expressly waives any and all
defenses to the enforcement of its obligations under the Loan Documents now or
hereafter arising or asserted by reason of (i) any disability or other defense
of any Borrower or any other Person with respect to the Obligations, (ii) the
unenforceability or invalidity of any security or guaranty for the Obligations
or the lack of perfection or continuing perfection or failure of priority of any
security for the Obligations, (iii) the cessation for any cause whatsoever of
the liability of any Borrower or any other Person (other than by reason of the
full and final payment and performance of all Obligations), (iv) any failure of
Agent and/or Lenders to marshal assets in favor of any of the Borrowers or any
other Person, (v) any failure of Agent and/or Lenders to give notice of sale or
other disposition of any Collateral for the Obligations to any Borrower or to
any other Person or any defect in any notice that may be given in connection
with any such sale or disposition, (vi) any failure of Agent and/or Lenders to
comply in any non‑material respect with applicable laws in connection with the
sale or other disposition of any Collateral or other security for any
Obligation, (vii) any act or omission of Agent and/or Lenders or others that
directly or indirectly results in or aids the discharge or release of any
Borrower or of any other Person or of any of the Obligations or any other
security or guaranty therefor by operation of law or otherwise, (viii) any law
which provides that the obligation of a surety or guarantor must neither be
larger in amount

 
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nor in other respects more burdensome than that of the principal or which
reduces a surety's or guarantor's obligation in proportion to the principal
obligation, (ix) any failure of Agent and/or Lenders to file or enforce a claim
in any bankruptcy or other proceeding with respect to any Person, (x) the
election by Agent, in any bankruptcy proceeding of any Person, of the
application or non-application of Section 1111(b)(2) of the United States
Bankruptcy Code, (xi) any extension of credit or the grant of any lien under
Section 364 of the United States Bankruptcy Code except to extent otherwise
provided in this Agreement, (xii) any use of cash collateral under Section 363
of the United States Bankruptcy Code, (xiii) any agreement or stipulation with
respect to the provision of adequate protection in any bankruptcy proceeding of
any Person, (xiv) the avoidance of any lien or security interest in favor of
Agent securing the Obligations for any reason, or (xv) any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt, liquidation or
dissolution proceeding commenced by or against any Person, including any
discharge of, or bar or stay against collecting, all or any of the Obligations
(or any interest thereon) in or as a result of any such proceeding. Without in
any way limiting the foregoing, with respect to the Loan Documents and the
Obligations, each Borrower: (A) waives all rights and defenses arising out of an
election of remedies by Agent, even though that election of remedies, such as
non-judicial foreclosure with respect to security for Borrowers' obligations,
has destroyed each of their rights of subrogation and reimbursement against the
other by the operation of Section 580(d) of the California Code of Civil
Procedure or otherwise; and (B) waives any right to a fair value hearing or
similar proceeding following a nonjudicial foreclosure of the Obligations,
whether arising under California Code of Civil Procedure Section 580a or
otherwise.
(e)    The Borrowers represent and warrant to Agent and Lenders that they have
established adequate means of obtaining from each other, on a continuing basis,
financial and other information pertaining to their respective businesses,
operations and condition (financial and otherwise) and their respective
properties, and each now is and hereafter will be completely familiar with the
businesses, operations and condition (financial and otherwise) of the other and
their respective properties. Each Borrower hereby expressly waives and
relinquishes any duty on the part of Agent and/or Lenders to disclose to such
Borrower any matter, fact or thing related to the businesses, operations or
condition (financial or otherwise) of the other Borrowers or the other
Borrowers' properties, whether now known or hereafter known by Agent and/or
Lenders during the life of this Agreement. With respect to any of the
Obligations, the Agent and/or Lenders need not inquire into the powers of any
Borrower or the officers, employees or other Persons acting or purporting to act
on such Borrower's behalf.
(f)    Without limiting the foregoing, or anything else contained in this
Agreement, each Borrower waives all rights and defenses that it may have because
the Obligations are secured by real property. This means, among other things:
(1)    Agent and/or Lenders may collect on the Obligations from any Borrower
without first foreclosing on any real or personal property collateral pledged by
the other Borrowers; and
(2)    If Agent forecloses on any real property collateral pledged by any
Borrower for the Obligations: (A) the amount of the indebtedness owed by the
other Borrowers may be reduced only by the price for which that collateral is
sold at the foreclosure sale, even if

 
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the collateral is worth more than the sale price; and (B) Agent may collect from
any Borrower even if Agent, by foreclosing on the real property collateral, has
destroyed any right any Borrower may have to collect from the other Borrowers.
(g)    This is an unconditional and irrevocable waiver of any rights and
defenses each Borrower may have because the Obligations are secured by real
property. These rights and defenses include, but are not limited to, any rights
or defenses based upon Sections 580a, 580b, 580d or 726 of the California Code
of Civil Procedure. Each Borrower expressly waives any right to receive notice
of any judicial or nonjudicial foreclosure or sale of any real property
collateral provided by the other Borrower to secure the Obligations and failure
to receive any such notice shall not impair or affect such Borrower's
obligations hereunder or the enforceability of this Agreement or the other Loan
Documents or any liens created or granted hereby or thereby.
(h)    Notwithstanding anything to the contrary elsewhere contained herein or in
any other Loan Document to which any Borrower is a party, with respect to the
Loan and all other Obligations, each Borrower hereby waives with respect to the
other Borrowers and their successors and assigns (including any surety) and any
other Person any and all rights at law or in equity, to subrogation, to
reimbursement, to exoneration, to contribution, to setoff, to any other rights
and defenses available to it by reason of California Civil Code Sections 2787
and 2855, inclusive, or to any other rights that could accrue to a surety
against a principal, to a guarantor against a maker or obligor, to an
accommodation party against the party accommodated, or to a holder or transferee
against a maker and which each of them may have or hereafter acquire against the
other or any other Person in connection with or as a result of such Borrower's
execution, delivery and/or performance of this Agreement or any other Loan
Document to which it is a party until the Obligations are paid and performed in
full. Each Borrower agrees that it shall not have or assert any such rights
against any other Borrower or any other Borrower's successors and assigns or any
other Person (including any surety), either directly or as an attempted setoff
to any action commenced against such Borrower by any other Borrower (as borrower
or in any other capacity) or any other Person until the all Obligations are paid
and performed in full. Each Borrower hereby acknowledges and agrees that this
waiver is intended to benefit Agent and Lenders and shall not limit or otherwise
affect any Borrower's liability under this Agreement or any other Loan Document
to which it is a party, or the enforceability hereof or thereof.
(i)    Each Borrower warrants and agrees that each of the waivers and consents
set forth herein is made with full knowledge of its significance and
consequences, with the understanding that events giving rise to any defense
waived may diminish, destroy or otherwise adversely affect rights which each
otherwise may have against the other, against Agent and Lenders or others, or
against any collateral. If any of the waivers or consents herein are determined
to be contrary to any applicable law or public policy, such waivers and consents
shall be effective to the maximum extent permitted by law.
7.20    Possible Increase in the Committed Amount. As of the Closing Date, the
maximum Committed Amount shall be $235,000,000. However, subsequent to the
Closing Date Borrower shall have the option to increase the Committed Amount
based, in part, on the addition of one or more Additional Properties in
accordance with Section 7.21 to secure the Loan (such

 
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option shall be referred to herein as the "Accordion Option"), subject to the
following: (a) one or more new lenders shall have been added to this Agreement
(each, a "New Lender") and/or one or more existing Lenders (each, an
"Additionally Committed Lender"), in their sole and absolute discretion, shall
have elected to increase their individual commitments, so that the Committed
Amount may be increased, provided that each New Lender and/or Additionally
Committed Lender shall be approved by Agent and Borrower (but not the other
Lenders), (b) the Committed Amount may be increased up to a maximum of
$335,000,000, (c) unless Agent otherwise consents, the allocation of the
increased Committed Amount between the Revolving Portion and the Non-revolving
Portion must be such that the Non-revolving Portion (and the Term Loan) always
constitutes at least sixty percent (60%) of the total Committed Amount, (d) each
exercise of the Accordion Option shall be in an amount not less than
$10,000,000, (e) the Accordion Option may be exercised a maximum of two (2)
times, and (f) Borrower's right to exercise the Accordion Option shall terminate
on March 1, 2015 (and all conditions to exercising such option must have been
satisfied as of such date). Each Lender acknowledges and agrees that its consent
to any such increase in the Committed Amount shall not be required and
additional Lenders may be added to this Agreement, and any Additionally
Committed Lenders under this Agreement may increase their individual
commitments, without the consent or agreement of the other Lenders (provided,
however, that no Lender's individual commitment may be increased without such
Lender's consent), so long as Agent and Borrower have consented in writing to
any New Lenders or the increase in the commitment of any Additionally Committed
Lender, as applicable.
The addition of any New Lender to this Agreement, and/or the increase in the
commitment of any Additionally Committed Lender, shall be effective upon the
satisfaction of the following:
(a)    Agent and Borrower shall have approved such New Lender and/or such
increase in the commitment of any Additionally Committed Lender, as applicable;
and Agent shall have sent written notice to all Lenders of such New Lender and
its commitment amount and/or the amount of the increase in the commitment of any
Additionally Committed Lender (each, an "Accordion Notice").
(b)    Agent shall have calculated each Lender's new Commitment Percentage,
based on each Lender's commitment and the new Committed Amount, and Agent shall
have determined the portion of the Non-revolving Portion (and outstanding Term
Loan) and the Revolving Portion (and outstanding Revolving Loans) allocable to
each Lender based on such Lender's new Commitment Percentage.
(c)    Borrower shall have executed and delivered to Agent a new Note with
respect to any New Lender in the amount of such New Lender's commitment; or with
respect to an increase in the Commitment of an Additionally Committed Lender,
Borrower shall have executed a replacement Note for such Additionally Committed
Lender in an amount equal to such Additionally Committed Lender's increased
commitment amount.
(d)    The Lenders shall execute such Assignment and Assumption Agreements as
Agent shall require to evidence each New Lender's acquisition of its Commitment
Percentage of the Non-revolving Portion, Revolving Portion and Loan Documents,
and to evidence each

 
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Additionally Committed Lender's increased commitment amount. Alternatively (or
in addition), at Agent's option each New Lender shall acknowledge in writing (in
a form reasonably satisfactory to Agent) that it is assuming the rights and
obligations of a "Lender" under this Agreement, and if required by Agent shall
execute a copy of this Agreement. Each New Lender and/or each Additionally
Committed Lender shall pay to the other existing Lenders a portion of the then
outstanding Term Loan and Revolving Loans so that upon the closing of the
exercise of the Accordion Option and increase in the Committed Amount, each
Lender shall have owing to it its Commitment Percentage of the then outstanding
principal amount of the Term Loan and the Revolving Loans (as set forth in the
revised Exhibit I to be delivered in accordance with subparagraph (e) below).
For the avoidance of doubt, each New Lender must acquire the same percentage
(i.e., its Commitment Percentage) of the Term Loan and the Revolving Loans, and
each Additionally Committed Lender must increase its commitment with respect to
the Term Loan and the Revolving Loans by the same percentage.
(e)    Agent shall have prepared an updated Exhibit I, revised to reflect each
Lender's the Commitment Percentage, commitment amount and share of the
Non-revolving Portion and Revolving Portion, which updated Exhibit I shall be
delivered to the Lenders with the Accordion Notice.
(f)    Guarantor shall have executed and delivered to Agent such reaffirmations
of its Guaranty and acknowledgment of its increased liability thereunder as
Agent shall reasonably require; provided, however, that with the exception of
the Guarantor's increased liability due to the increase in the Committed Amount,
Guarantor's liability shall remain unmodified as set forth in the Guaranty.
(g)    Borrower shall have paid the applicable fees set forth in the Fee Letter.
(h)    The Accordion Option may only be exercised in connection with the
addition of an Additional Property under Section 7.21 below.
(i)    Borrower, each New Lender and each Additionally Committed Lender shall
execute and deliver to Agent such additional documents as Agent and its legal
counsel shall reasonably require to carry out the intent of this Section 7.20.
7.21    Additional Property Collateral. During the term of the Loan, Borrower
shall have the option of adding new properties to secure the Loan and/or to
increase the Committed Amount, subject to Agent's approval in its sole
discretion, and satisfaction of all of the following conditions precedent with
respect to each such additional property (each, an "Additional Property") (and
each item delivered below shall be subject to Agent's (and, where indicated,
Lenders') receipt, review, approval and/or confirmation, at Borrower's cost and
expense (whether or not the addition of the Additional Property is ultimately
approved), each in form and substance satisfactory to Agent in its sole
discretion (and, where indicated, Lenders):
(a)    The Additional Property must be (i) a fully developed and operating
"Class A" or "Class B" property utilized principally as an office or industrial
property, (ii) located in the contiguous United States (including the District
of Columbia) or Hawaii, and

 
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(iii) at least 85% occupied by tenants who are not the subject of any
bankruptcy, reorganization, insolvency, liquidation, dissolution, receivership
or similar proceeding.
(b)    The owner of the Additional Property (the "New Borrower") shall be a
single purpose entity wholly-owned, directly or indirectly, by Properties REIT
and otherwise satisfactory to Agent and Lenders in their sole discretion which
(i) has no indebtedness or claims against it other than non-delinquent trade
debt incurred in the ordinary course of business, (ii) shall assume, on a joint
and several basis, the Loan and the other obligations of Borrowers hereunder and
under the other Loan Documents pursuant to a Joinder Agreement and such other
documents reasonably satisfactory to Agent and Lenders in their sole discretion,
and (iii) does not have Guarantor as a general partner, and does not otherwise
have a structure where Guarantor would be liable for such New Borrower's
obligations under the Joinder Agreement absent the Guaranty.
(c)    Agent shall have received a Deed of Trust covering the Additional
Property and all personal property directly related thereto (and such Deed of
Trust shall have been properly recorded in the official records of the county or
counties in which the Additional Property is located) and such other Loan
Documents, and amendments, modifications or supplements to any existing Loan
Documents, as reasonably required by Agent, executed by New Borrower, Borrower
and Guarantor; provided that Borrower's and Guarantor's obligations or rights
under the Loan Documents shall not be modified or affected beyond what is
contemplated pursuant to the transaction.
(d)    The New Borrower owns fee title to, or holds a leasehold interest as a
lessee in, the Additional Property. In connection with any Additional Property
in which a New Borrower holds a leasehold interest, Agent and Lenders shall have
received and approved (i) a copy of the ground lease creating such leasehold
interest, and (ii) a ground lessor's estoppel and consent executed by the ground
lessor under any such ground lease.
(e)    New Borrower shall deliver to Agent a certificate executed by an officer
of New Borrower certifying that New Borrower is qualified to transact business
in the state in which the Additional Property is located.
(f)    Agent shall have received a Title Policy, containing no exceptions or
exclusions other than Permitted Encumbrances or as may be reasonably approved by
Agent, insuring that the insured Deed of Trust for the Additional Property is a
valid, first priority lien on the Additional Property and related collateral, in
an insured amount as reasonably required by Agent. Borrower also shall obtain,
at its sole cost and expense, any endorsements, continuations or modifications
to the existing Title Policies as Agent may reasonably request and to the extent
available, including endorsements to increase the insured amounts under such
Title Policies.
(g)    If the Additional Property is being acquired by New Borrower, Agent shall
have received certified and complete copies of any purchase agreement for the
Additional Property.
(h)    Agent and Lenders shall have received a recent Appraisal for the
Additional Property.

 
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(i)    New Borrower shall have provided Agent with current title, tax, UCC
chattel lien and bankruptcy searches (and any other searches which Agent may
require) for the Additional Property, New Borrower, New Borrower's constituent
members and such other parties as Agent shall require in its reasonable
discretion.
(j)    A copy of New Borrower's limited liability company agreement (certified
by a manager as being true, correct, complete, unamended (except as disclosed to
Agent in writing) and in full force and effect) and a copy of New Borrower's
Articles of Organization (certified by the appropriate governmental officials in
whose offices the same must be filed under applicable law, as applicable),
together with evidence reasonably satisfactory to Agent, that New Borrower has
complied with all other filing requirements and fictitious name requirements, if
any, necessary to permit New Borrower to do business in the state in which the
Additional Property is located, and evidence reasonably satisfactory to Agent,
that New Borrower has complied with the above‑mentioned documents in executing
the Deed of Trust and other documents which it is required to execute pursuant
to this Section 7.21.
(k)    Agent shall have received insurance policies or insurance certificates
for the Additional Property (conforming to the requirements of Exhibit G)
written by insurers reasonably satisfactory to Agent and in amounts reasonably
satisfactory to Agent, prepared in accordance with Agent's standard requirements
therefor.
(l)    Agent shall have received a flood zone and landslide hazard certification
for the Additional Property from a qualified Consultant indicating that the
improvements on such Additional Property are not located in a flood plain or any
other flood prone area, or within an area subject to landslide hazards, as
designated by the Federal Emergency Management Agency or any other Governmental
Authority.
(m)    Agent shall have received a current "as built" ALTA/ACSM Land Title
Survey of the Additional Property, dated or updated to a date not earlier than
thirty (30) days prior to the recordation of the Deed of Trust for the
Additional Property, certified to Agent and the Title Company, prepared by a
licensed surveyor reasonably acceptable to Agent and such title insurer, and
conforming to Agent's current standard survey requirements.
(n)    Agent and Lenders shall have received a current, reasonably acceptable
engineering report with respect to the Additional Property, covering, among
other matters, inspection of heating and cooling systems, roof and structural
details and showing no failure of compliance with building plans and
specifications, applicable legal requirements (including requirements of the
Americans with Disabilities Act) and fire, safety and health standards. As
requested by Agent, such report shall also include an assessment of the
Additional Property's tolerance for earthquake and seismic activity.
(o)    An environmental report for the Additional Property reasonably acceptable
to Agent and Majority Lenders, showing that no remedial environmental action is
recommended or required and other information produced in connection with the
Tests.
(p)    Agent shall have received either (i) reasonably satisfactory evidence
that the Additional Property is covered by the Environmental Insurance Policy or
(ii) confirmation

 
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from the Guarantor of its liability under the Guaranty for any amounts owing by
Borrower under the Environmental Indemnity with respect to such Additional
Property, as more fully set forth in the Guaranty.
(q)    Agent and Lenders shall have received the following financial information
for the Additional Property: (i) annual operating statements for the preceding
two fiscal years, if applicable, and for the current fiscal year through the
fiscal quarter most recently ending, provided that if New Borrower or any
Affiliate of New Borrower has not owned the Additional Property for such entire
period, then Borrower shall provide operating statements for the period of New
Borrower's (and any such Affiliate's) ownership and, only to the extent
available, operating statements for the balance of such period, (ii) a pro forma
operating statement and proposed Operating Budget for the current and next
succeeding fiscal years.
(r)    Agent and Lenders shall have received a current rent roll for the
Additional Property, together with all leases for the Additional Property not
previously delivered to Agent. Such rent roll shall include the following:
(i) tenant names; (ii) unit/suite numbers; (iii) area of each demised premises
and total area of the related Additional Property (stated in net rentable square
feet); (iv) rental rate (including escalations) (stated in gross amount and in
amount per net rentable square foot per year); (v) lease term (commencement,
expiration and renewal options); (vi) expense pass-throughs; (vii)
cancellation/termination provisions; (viii) security deposit; and (ix) material
operating covenants and co-tenancy clauses.
(s)    If requested, Agent shall have received copies of all material agreements
with respect to the Additional Property, including without limitation all
noncancelable agreements relating to the management, operation or maintenance of
the Additional Property and of each such agreement which cannot be cancelled by
thirty (30) days' or less notice.
(t)    Agent shall have received all title, zoning and entitlement information
and documentation regarding the Additional Property reasonably requested by
Agent and reasonably available to New Borrower.
(u)    Agent shall have received reasonable evidence that the Additional
Property and the operation thereof comply with all governmental requirements,
including that all requisite certificates of occupancy, building permits, and
other licenses, certificates, approvals or consents required of any governmental
authority have been issued without variance or condition and that there is no
litigation, action, citation, injunctive proceedings, or like matter pending or
threatened with respect to the validity of such matters except as may be
consented to by Agent in writing. New Borrower shall provide Agent with copies
of all certificates of occupancy, and shall deliver letters (to the extent
reasonably available to Borrower) from applicable zoning, building and municipal
agencies evidencing the foregoing.
(v)    New Borrower shall have established all accounts and escrows for the
Additional Property as required by the express terms of this Agreement and
delivered to Agent reasonably satisfactory evidence thereof.
(w)    No condemnation or adverse zoning or usage change proceeding shall have
occurred or shall have been threatened against the Additional

 
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Property; the Additional Property shall have not suffered any significant damage
by fire or other casualty which has not been repaired; no law, moratorium,
injunctive proceeding, restriction, litigation, action, citation or similar
proceeding or matter shall have been enacted, adopted, or threatened by any
governmental authority, which would have, in Agent's judgment, a material
adverse effect.
(x)    All fees and commissions payable to real estate brokers, mortgage
brokers, or any other brokers or agents in connection with the acquisition of
the Additional Property shall have been paid.
(y)    At Agent's discretion and written request, New Borrower shall have used
commercially reasonable efforts to obtain estoppel certificates and, where
required by Agent, subordination, nondisturbance and attornment agreements from
key tenants as reasonably requested by Agent.
(z)    Agent shall have received such other authorizations, documents,
certificates, opinions of counsel, updates, reports, searches or items as Agent
reasonably may require with respect to New Borrower or the Additional Property.
(aa)    Agent shall have prepared revised Exhibits B, C, and D, in each case
revised to include the applicable information for the Additional Property (the
"Replacement Exhibits").
(bb)    Agent shall have approved the inclusion of the Additional Property as
security for the Loan. Unless otherwise agreed to by Agent in writing, Agent
shall be deemed to have disapproved the inclusion of the Additional Property if
it has not notified Borrower in writing of its approval of the inclusion of such
Additional Property, within fifteen (15) days after receiving all of the items
to be delivered to Agent and Lenders pursuant to this Section 7.21.
(cc)    An Additional Property may be added to the collateral for the Loan only
in connection with an increase to the Committed Amount under Section 7.20 above.
From and after the date a Deed of Trust is recorded against the Additional
Property in accordance with Agent's written instructions to the Title Company,
(i) such Additional Property shall be included in the definition of "Property"
set forth in this Agreement and in the other Loan Documents, (ii) the Deed of
Trust recorded against such Additional Property shall be included in the
definition of "Deed of Trust" as set forth is this Agreement and in the other
Loan Documents, (iii) New Borrower shall be included in the definition of
"Borrower" set forth in this Agreement and the other Loan Documents, (iv) the
Replacement Exhibits shall be attached to this Agreement in substitution of the
then existing corresponding exhibits and shall thereafter be deemed to replace
such exhibits, and (v) all of the foregoing requirements set forth in Sections
7.21(a) through (cc), shall be deemed satisfied by New Borrower, Borrower and
Guarantor, as to such Additional Property, except as reasonably reserved or
specified by Agent in writing.
Following the addition of an Additional Property to the collateral for the Loan,
the Committed Amount shall be recalculated (inclusive of the new Additional
Property), as reasonably determined by Agent (based on a new Appraisal as to the
Additional Property and updated Appraisals satisfactory to Agent as to any
Appraisals more than twelve (12) months old as to the existing Properties), to
be an amount equal to the lesser of (a) an amount such that the ratio of the

 
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Committed Amount to the Borrowing Base Value would not exceed the Maximum
Committed Amount Leverage Ratio, and (b) an amount such that the Commitment
Resizing Debt Service Coverage Ratio would not be less than 1.25 to 1.0 (or 1.35
to 1.0 if only one Property then secures the Loan).
7.22    Releases of Properties. Except as expressly set forth below in this
Section 7.22, Agent shall have no obligation to release any of the Properties
(or any portion thereof) until the Loan and all other Obligations have been paid
in full and all obligations of Agent and Lenders under this Agreement and the
other Loan Documents have terminated. Borrower shall be entitled to obtain the
release of a Property, and as to Properties that contain more than one building
and are legally sub-divided, a portion of such Property containing a building
(each, a "Release Property"), from the lien of the Loan Documents, provided that
all of the following conditions are satisfied:
(a)    Borrower shall have submitted to Agent a written request for such release
at least twenty (20) days prior to the proposed release date, together with
copies of any documents which Borrower requests Agent to execute in connection
with such proposed release.
(b)    No Event of Default shall have occurred and be continuing, and no event
shall have occurred and be continuing that with the giving of notice and/or the
lapse of time would constitute an Event of Default.
(c)    After giving effect to the proposed release, at least one (1) Property
remains as security for the Loan.
(d)    Borrower shall have paid to Agent, for application to the Principal
Balance, an amount equal to the amount, if any, by which the Principal Balance
exceeds the then current Availability Amount. In calculating the Availability
Amount, the Borrowing Base Amount shall be determined based only on the
Properties or portions thereof remaining after the proposed release (i.e.,
without regard to the Release Property).
(e)    Immediately following the release, the Commitment-to-Value-Ratio shall
not exceed the Maximum Committed Amount Leverage Ratio, as determined by the
Appraisals and calculated by Agent (using the then Committed Amount and, if
required by Majority Lenders or Borrower, new updated Appraisals as to any
Appraisals more than six (6) months old); provided, however, if the required
Committment-to-Value Ratio is not met, Borrower may (1) pay down the outstanding
principal amount of the Loan and permanently (except in connection with a
Property addition under Sections 7.20 and 7.21) reduce the Committed Amount by
an amount sufficient to cause the above-required Commitment-to-Value Ratio to
not exceed the Maximum Committed Amount Leverage Ratio, or (2) to the extent
that a principal payment is not required to reduce the Committed Amount to the
required amount, permanently (except in connection with a Property addition
under Sections 7.20 and 7.21) reduce the Committed Amount by an amount
sufficient to cause the above-required Commitment-to-Value Ratio to not exceed
the Maximum Committed Amount Leverage Ratio.
(f)    Immediately following the release, the Commitment Resizing Debt Service
Coverage Ratio shall not be less than 1.25 to 1.0 (or 1.35 to 1.0 if only one
Property then

 
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secures the Loan), as calculated by Agent (using the then Committed Amount and,
if required by Majority Lenders or Borrower, new updated Appraisals as to any
Appraisals more than six (6) months old); provided, however, if the required
Commitment Resizing Debt Service Coverage Ratio is not met, Borrower may (1) pay
down the outstanding principal amount of the Loan and permanently (except in
connection with a Property addition under Sections 7.20 and 7.21) reduce the
Committed Amount by an amount sufficient to cause the Commitment Resizing Debt
Service Coverage Ratio to be equal to or greater than 1.25 to 1.0 (or 1.35 to
1.0 if only one Property then secures the Loan) or (2) to the extent that a
principal payment is not required to reduce the Committed Amount to the required
amount, permanently (except in connection with a Property addition under
Sections 7.20 and 7.21) reduce the Committed Amount by an amount sufficient to
cause the Commitment Resizing Debt Service Coverage Ratio to be equal to or
greater than 1.25 to 1.0 (or 1.35 to 1.0 if only one Property then secures the
Loan).
(g)    Borrower shall have provided Agent with such certifications from the
Guarantor(s) that, after giving effect to the proposed release, Guarantor(s)
shall be in compliance with their financial covenants under the Guaranty.
(h)    As to any Appraisals then more than six (6) months old as to any
remaining Properties, Agent may require new Appraisals (at Borrowers' cost) and
may calculate the Borrowing Base Amount on the basis of such updated Appraisals.
(i)    Borrower shall provide to Agent at Borrower's sole cost and expense such
title insurance endorsements to the Title Policies for the remaining Deeds of
Trust as Agent shall reasonably request (including, without limitation, CLTA
Form 111 Endorsements (or its equivalent), to the extent available and in form
and substance reasonably satisfactory to Agent, which shall insure that after
such release, each remaining Deed of Trust shall continue as a valid first
position lien against the Property encumbered thereby, subject only to such new
title exceptions as Agent shall approve in writing.
(j)    The Property or portion thereof being released, as well as all remaining
Properties and portions thereof remaining encumbered by Deeds of Trust, shall
constitute legally subdivided interests in real property, and such release shall
not violate any applicable law pertaining to the subdivision of lots or parcels
of real property.
(k)    Borrower shall pay, or caused to be paid, to Agent all reasonable costs
and expenses incurred in connection with such release, including without
limitation all breakage fees, recording fees, transfer and other taxes,
trustee's fees, reasonable attorneys' fees, appraisal fees, escrow fees, and
fees for title insurance and similar charges.
Following the release of any Property, such Release Property shall no longer be
included in the definition of "Property" except with respect to any indemnities
and other provisions of the Loan Documents that expressly survive repayment of
the Loan.
7.23    Collateral Documents. If any Deed of Trust shall for any reason (other
than pursuant to the terms thereof) cease to create a valid lien and security
interest in the collateral purported to be covered thereby or such lien or
security interest shall for any reason cease to be a perfected and first
priority lien and security interest subject only to Permitted Encumbrances, and

 
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any such defect or infirmity is not cured to Agent's reasonable satisfaction
within ninety (90) days of demand by Agent, the Property encumbered by such Deed
of Trust shall immediately (following the expiration of such ninety (90) day
cure period) cease to be included in the calculation of Borrowing Base Value and
Borrowing Base Amount, and Borrower shall repay to Agent for the ratable benefit
of Lenders, within ten (10) days of demand by Agent, any amounts by which the
total outstanding Obligations exceed the Availability Amount.
7.24    [Intentionally Omitted.]
7.25    Limited Recourse Provision. Except as to Guarantor as set forth in the
Guaranty, Agent and Lenders shall have no recourse against, nor shall there be
any personal liability to, the members of Borrower, or to any shareholders,
members, partners, beneficial interest holders or any other entity or person in
the ownership (directly or indirectly) of Borrower (except for the Guarantor as
provided in the Guaranty) with respect to the obligations of Borrower and
Guarantor under the Loan. For purposes of clarification, in no event shall the
above language limit, reduce or otherwise affect any Borrower's liability or
obligations under the Loan Documents, Guarantor's liability or obligations under
the Guaranty or Agent's right to exercise any rights or remedies against any
collateral securing the Loan.
7.26    Release of a Borrower. As to any Release Property released from the lien
of a Deed of Trust pursuant to the terms of Section 7.22 hereinabove, the
Borrower owning such Release Property (a "Release Borrower") shall be
automatically released from any and all obligations and liabilities under this
Agreement and the other Loan Documents (excepting, however, any obligations that
may arise under the Environmental Indemnity) upon the consummation of the
release of such Release Property, as evidenced by a written release from Agent
to be delivered concurrently with the consummation of such release (and Agent
hereby agrees to deliver such written release to such Release Borrower upon
satisfaction of all release conditions set forth in Section 7.22) provided that
such Release Borrower shall also be automatically released from any and all of
its obligations under the Environmental Indemnity if, at the time of such
release, (i) such Release Borrower shall have delivered to Agent a current
environmental site assessment for such Release Property and such report does not
disclose the existence of any violation of any Environmental Regulation (as
defined in the Environmental Indemnity) or any Environmental Claims (as defined
in the Environmental Indemnity) applicable to such Release Property, which
reports shall be dated, or last updated, to a date which is no more than thirty
days earlier than the date on which the Deed of Trust securing such Release
Property is discharged or released of record, (ii) no Environmental Claim shall
be pending or threatened in writing with respect to such Release Property, and
(iii) Borrower maintains for such Release Property an environmental insurance
policy substantially in the form of the Environmental Insurance Policy approved
by Agent when such Release Property was added as collateral for the Loan, which
policy shall have a term of no less than one year after the date of the release
of such Release Property and which policy (or endorsement thereto) shall name
Agent as an additional insured. Additionally, notwithstanding the foregoing,
upon the bankruptcy, insolvency or reorganization of a Release Borrower, to the
extent that any payment made by such Release Borrower is rescinded or otherwise
must be returned by Agent, any Lender or any other Person, such Release
Borrower's liability shall be reinstated (solely to the extent rescinded or
returned plus any amounts payable pursuant to Section 5.1 of this Loan
Agreement), all as though such payment had not occurred. For purposes of
clarification, in no event shall the

 
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release of a Release Borrower under this Section 7.26 release any other Borrower
or Guarantor from any obligations owing under the Loan Documents (including,
without limitation, such parties continuing indemnity obligations under the
Environmental Indemnity relating to a Release Property following the release of
a Release Borrower).
7.27    The Non-revolving Portion Must Always Constitute at Least Sixty Percent
(60%) of the total Committed Amount. Notwithstanding anything else contained in
this Agreement which may be construed to the contrary, the Non-revolving Portion
(and the Term Loan) must always constitute at least sixty percent (60%) of the
total Committed Amount, so that upon any increase or decrease of the Committed
Amount as provided for in this Agreement, the Non-revolving Portion of the
Committed Amount shall equal at least 60% of the total Committed Amount, and the
Revolving Portion shall equal no more than 40% of the total Committed Amount. To
the extent, at any time, the outstanding amount of the Revolving Loans exceeds
40% of the then total Committed Amount, Borrower shall promptly pay to Agent for
the benefit of Lenders the amounts by which the outstanding Revolving Loans
exceed such percentage (for application by Agent to pay down the outstanding
principal amount of the Revolving Loans so that such percentage is brought into
compliance), and the Revolving Portion of the Committed Amount shall be reduced
accordingly. Provided that no Event of Default shall have occurred and be
continuing, and so long as the Non-revolving Portion (and the outstanding amount
of the Term Loan) of the Committed Amount shall at all times be equal to at
least 60% of the total Committed Amount, the Borrower may, upon three (3) days
prior written notice to Agent, reallocate a portion of the Committed Amount from
the Non-revolving Portion to the Revolving Portion of the Loan (and concurrently
therewith reduce the outstanding principal amount of the Term Loan by the amount
of such reallocation from the Non-revolving Portion to the Revolving Portion and
increase the outstanding principal amount of the Revolving Portion by the same
amount); and, provided further, however any such reallocation shall in no event
increase the total Committed Amount.  For avoidance of doubt, so long as no
Event of Default then exists, the foregoing reallocation and reduction in the
principal amount of the Non-revolving Portion and increase in the principal
amount of the Revolving Portion will be implemented without Borrower’s being
required to request an Additional Advance under Article III hereof and without
Borrower’s being obligated to satisfy any of the conditions in Article III
hereof.
VIII. AGENCY PROVISIONS
8.1    Agency.
(a)    Appointment and Authorization. Each Lender hereby appoints and authorizes
Agent to act as sole administrative agent under this Agreement and the other
Loan Documents, authorizes and directs Agent to enter into the Loan Documents
other than this Agreement for the benefit of the Lenders, and authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and the Loan Documents and to exercise such powers as are set forth herein or
therein, together with such other powers as are reasonably incidental thereto.
In furtherance thereof, Lenders hereby ratify the execution and delivery by
Agent of this Agreement, the acceptance by Agent of all of the other Loan
Documents and the terms and conditions of the Loan Documents. The Agent hereby
accepts such appointment as administrative agent. Agent shall exercise all
rights and powers of Agent under this Agreement, including the administration of
the Loan and disbursement of Advances, except as otherwise

 
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expressly provided in this Agreement. The Borrower, without further inquiry or
investigation, shall, and is hereby authorized by the Lenders to, assume that
all actions taken by the Agent hereunder and in connection with or under the
Loan Documents are duly authorized by the Lenders and Borrower shall be entitled
to rely on Agent's acknowledgment of consent and approvals when required under
the Loan.
(b)    Non‑Liability of Agent and Indemnity.
(1)    Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement or in the other Loan Documents. Agent shall administer
the Loan in accordance with the terms and conditions of this Agreement in the
same manner as it customarily does for similar loans for its own account. The
duties of the Agent shall be mechanical and administrative in nature; the Agent
shall not have by reason of this Agreement a fiduciary relationship in respect
of any Lender; and nothing in this Agreement or any Loan Document, expressed or
implied, is intended to or shall be so construed as to impose upon the Agent any
obligations in respect of this Agreement or any Loan Document except as
expressly set forth herein or therein. In the absence of gross negligence or
willful misconduct, neither Agent nor any of its respective directors, officers,
agents or employees shall be liable to any Lender for any action taken or not
taken by them under or in connection with this Agreement or under any of the
other Loan Documents. In this regard, Agent may consult with independent legal
counsel, accountants and other professionals or experts selected by it, and
shall not be liable for any action taken or not taken by it or them in good
faith in accordance with the advice of such legal counsel, accountants or other
professionals or experts. In the absence of gross negligence or willful
misconduct, Agent shall not be liable for any apportionment or distribution of
payments made by it in good faith pursuant to the terms of this Agreement, and
if any such apportionment or distribution is subsequently determined to have
been made in error, the sole recourse of any person to whom payment was due, but
not made, shall be to recover from the recipients of such payments any payment
in excess of the amount to which they are determined to have been entitled.
(2)    In the event the Agent is not reimbursed and indemnified by the Borrower,
within ten (10) Business Days of demand therefor by Agent, each Lender will
reimburse and indemnify the Agent, and its directors, officers, agents and
employees, in proportion to its respective Commitment Percentage of the Loan (or
commitment), for and against any claims, actions, judgments, costs, expenses or
disbursements of whatsoever kind or nature which may be imposed on, asserted
against or incurred by the Agent, or its directors, officers, agents, or
employees in performing its duties hereunder or under any Loan Document, except
for claims, actions, judgments, costs, expenses or disbursements incurred solely
due to the Agent's gross negligence or willful misconduct. The obligations of
the Lenders under this Section 8.1(b) shall survive the payment in full of all
obligations of Borrower and the termination of this Agreement.
8.2    Resignation of Agent; Removal.
(a)    Except as expressly provided below, U.S. Bank shall remain the Agent and
shall not resign as Agent. In the event of Agent's gross negligence or willful
misconduct, Agent may be removed pursuant to the unanimous approval of all
Lenders by giving thirty (30)

 
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days prior written notice to Agent and Borrower; provided, however, for purposes
of calculating such unanimous approval in this context, Agent shall be deemed a
Defaulting Lender and its Commitment Percentage shall therefore be disregarded
and excluded for voting purposes only.
(b)    In the case of any of the events described in Section 8.2(a), (1) the
Majority Lenders shall appoint a successor Agent from among the Lenders (which
appointment shall require Borrower's written consent so long as no Event of
Default exists, which consent shall not be unreasonably withheld or delayed) so
long as such successor meets the requirements described in Sections 8.9(a)(2)
and 8.9(a)(3) hereof; (2) upon a successor's acceptance of appointment (and
assumption of the Agent's obligations hereunder arising after the date of such
appointment), the successor will thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the resigning or removed Agent; and
(3) upon the effectiveness of any removal, the removed Agent will thereupon be
discharged from the duties and obligations of Agent which thereafter arise under
this Agreement.
8.3    Administration.
(a)    Expenses. Each Lender shall reimburse the Agent for its Commitment
Percentage of any expenses with respect to the administration, enforcement or
collection of the Loan which are not reimbursed by the Borrower pursuant to and
within the period required by the Loan Documents, or if not specified in the
Loan Documents, on the date of demand therefor made by the Agent. The Agent
shall have the right, but not the obligation, to incur such expenditures prior
to reimbursement therefor by the Lenders. Notwithstanding anything stated to the
contrary in this Article 8 or elsewhere in this Loan Agreement, Borrower shall
have no obligation to pay, or reimburse for any costs or expenses incurred by
Lenders (other than Agent) in connection with this Loan Agreement or any of the
other Loan Documents or arising out of the exercise of remedies under any of the
Loan Documents.
(b)    Documents; Information; Inspection. Except for the Note executed in favor
of each Lender and for Loan Documents sent for filing or recording (which are
not returned following recording), Agent shall hold and maintain a duplicate set
of all original Loan Documents. The Agent shall promptly deliver to each Lender
a copy or counterpart of execution copy of each Loan Document. Agent shall
promptly forward to each Lender a copy of each financial statement of Borrower
or rent roll or other financial statement for the Property received from
Borrower. Agent shall promptly forward to such Lender each financial statement
of Borrower and Guarantor received by Agent. The Lenders may, upon reasonable
prior notice and during the Agent's normal business hours, inspect and make
copies of such books and records of Agent that relate to this Loan.
8.4    Actions by Agent; Required Consents.
(a)    Except as specified below, Agent shall exercise its sole discretion to
act or not to act under the Loan Documents. Such discretion may be exercised
with respect to the granting of approvals, consents, and modifications under the
Loan Documents and with respect to the exercise or refraining from exercise of
rights under the Loan Documents.

 
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(b)    Notwithstanding Section 8.4(a), the following matters shall require the
prior consent of all of the Lenders:
(1)    any reduction (other than by operation of the Loan Documents) in the
interest rate under the Loan;
(2)    any reduction in the amount of any payment of any fees payable to
Lenders;
(3)    any change (other than by operation of the Loan Documents) in the
principal amount or Maturity Date of the Loan or in the conditions for any
extension of the Maturity Date;
(4)    any release, termination, modification or amendment of the Guaranty or
any indemnity provided in the Loan Documents (except to the extent expressly
provided for in the Loan Documents);
(5)    any forgiveness of principal, interest or other amounts payable under the
Loan (other than late fees) or any extension of time for payment of principal or
interest;
(6)    any increase in the Committed Amount (except to the extent expressly
provided for in the Loan Documents);
(7)    any release of Borrower or Guarantor (except to the extent expressly
provided for in the Loan Documents);
(8)    acceptance and approval of a new Borrower;
(9)    any amendment to this Section 8.4(b);
(10)    any amendment to the definition of Majority Lenders;
(11)    any release of any material portion of the collateral securing the Loan
(except to the extent expressly provided for in the Loan Documents).
(c)    Notwithstanding Section 8.4(a) or Section 8.4(b), the prior consent of
the Majority Lenders shall be required for the acceleration of any indebtedness
under the Loan Documents, or the pursuit of remedies against the Borrower or
Guarantor; provided, however, if the Majority Lenders cannot agree on a course
of action within sixty (60) days following notice from Agent, Agent may, without
the consent of the Majority Lenders, accelerate the Loan and exercise any and
all rights and remedies under the Loan Documents and applicable law (and in
equity) that Agent in its sole discretion deems appropriate and in the best
interests of the Lenders.
(d)    In case one or more Events of Default have occurred and shall be
continuing, and whether or not acceleration of the Loan shall have occurred, the
Agent shall, if (1) so requested by the Majority Lenders and (2) the Lenders
have provided to the Agent such

 
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additional indemnities and assurances against expenses and liabilities as the
Agent may reasonably request, proceed to enforce the provisions of this
Agreement and the other Loan Documents and exercise all or any such other legal
and equitable and other rights or remedies as it may have in respect of
enforcement of the Lenders' rights against the Borrower and the Guarantor under
this Agreement and the other Loan Documents. The Majority Lenders may direct the
Agent in writing as to the method and the extent of any such enforcement, the
Lenders (including any Lender which is not one of the Majority Lenders so
directing the Agent in writing) hereby agreeing to ratably and severally
indemnify and hold the Agent harmless from all liabilities and expenses incurred
in respect of all actions taken or omitted in accordance with such directions,
provided that the Agent need not comply with any such direction to the extent
that the Agent reasonably believes the Agent's compliance with such direction to
be unlawful or commercially unreasonable in any applicable jurisdiction. Lenders
also agree, ratably and severally, to indemnify and hold the Agent harmless from
all liabilities and expenses incurred in respect of all actions taken or omitted
to be taken under Section 8.4(c) above should the Majority Lenders not be able
to agree upon a course of action within the time period specified therein, and
Agent exercises any and all rights and remedies under the Loan Documents and
applicable law (or in equity) that Agent in its sole discretion deems
appropriate and in the best interests of the Lenders under the circumstances.
8.5    Payments.
(a)    Interest Rates and Disbursement Matters. Lenders and Agent specifically
agree to the following operational and administrative procedures as between
themselves:
(1)    Agent shall notify each Lender by telephone or facsimile of the LIBOR
Rate two (2) Business Days prior to the date on which the LIBOR Rate shall be
effective. Agent shall notify each Lender by telephone or facsimile of its
Commitment Percentage of a proposed Advance of the Loan and the date of such
disbursement two (2) Business Days prior to such disbursement with respect to
disbursements which are to bear interest at the LIBOR Rate, such notice to be
delivered by facsimile. Each Lender shall deposit by wire transfer of
immediately available funds to Agent's account as specified on Exhibit H hereto
the amount of such Commitment Percentage no later than 10:00 a.m. (California
time) on the date of such disbursement.
Unless Agent shall have been notified by any Lender not later than the close of
business (California time) on the Business Day immediately preceding the date
for funding in respect of any Advance that such Lender does not intend to make
available to Agent such Lender's Commitment Percentage of such Advance, Agent
may assume that such Lender has made such amount available to Agent. In any case
where a Lender does not for any reason make available to Agent such Lender's
Commitment Percentage of such Advance, Agent, in its sole discretion, may, but
shall not be obligated to, fund to Borrower such Lender's Commitment Percentage
of such Advance. If the amount so funded by Agent is not in fact made available
to Agent by the responsible Lender, then such Lender hereby assigns to Agent any
payments received by Agent from Borrower in repayment of such amount, together
with interest thereon at the rate applicable to such Advance.

 
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(2)    If any Lender fails to deliver funds to Agent for a disbursement by the
time required by subsection (1) above, such Lender shall pay to Agent interest
on such funds at the Federal Funds Rate, for each day (or portion thereof) until
such funds are delivered. Any interest paid pursuant to this section shall be
divided among the Lenders which funded the applicable disbursement.
(3)    Agent shall wire transfer to each Lender at such Lender's account as
designated on Exhibit H hereto (or otherwise specified by each Lender) its
Commitment Percentage of any payments (to the extent payable pursuant to
Section 8.5(b)) within one (1) Business Day of Agent's receipt of such payment.
Agent shall pay to the Lenders interest thereon, at the Federal Funds Rate from
the Business Day following receipt of such funds by Agent until such funds are
paid in immediately available funds to the Lender.
(4)    Any Lender desiring to make a claim for costs or taxes payable by
Borrower shall deliver a certificate to Agent setting forth the basis and
calculation thereof and the Agent shall forward such certificate to the
Borrower. Except as provided in the Loan Documents, each Lender shall be
responsible for any taxes payable in respect of amounts paid hereunder. All
payments made by Agent to Lenders shall be made without withholding for taxes,
charges, or levies, except as may be required by law. Each Lender shall on
demand from Agent provide completed and signed copies of certificates required
to show exemption of such Lender from United States withholding taxes.
(b)    Application of Recoveries. Except to the extent otherwise provided in
Section 8.7 hereof, all payments and proceeds received by Agent in connection
with the Loan and the Note and all proceeds from the liquidation of collateral,
if any, and from any enforcement action (or other realization), from any source
related to the Loan, shall be applied in the following order of priority (unless
Agent otherwise agrees in writing, or, during the existence and continuance of
an Event of Default, unless Agent and all of the Lenders otherwise agree in
writing):
(1)    to the reimbursement of any costs incurred by the Agent to administer,
enforce, collect or deal with the Loan (including payments made pursuant to
Sections 8.5(a)(2) and (3) hereof (or to reimbursement of the Lenders to the
extent such costs have been paid by the Lenders);
(2)    to the repayment of any Protective Advances (to the extent not paid
pursuant to clause (1) above);
(3)    to the payment of all interest (including interest calculated at the
Default Rate) due and payable on each Note and to the payment of all amounts
owing to Swap Counterparty under all Swap Contracts that are secured by the
Deeds of Trust (which shall be paid parri passu with interest);
(4)    to the payment of fees payable under the Loan Documents;
(5)    to the payment of principal of each Note; and

 
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(6)    to the payment of any other amounts owing under the Loan Documents.
(c)    Excess Payments. If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set‑off or
otherwise) on account of its interest in the Loan in excess of its Commitment
Percentage in the Loan, such Lender will make such disposition and arrangements
with the other Lenders with respect to such excess, either by way of
distribution, pro tanto assignment of claims, subrogation or otherwise, as shall
result in each Lender receiving in respect of the Note held by it its
proportionate payment as contemplated by this Agreement; provided, however, that
if all or any portion of such excess payment is thereafter recovered by the
Borrower or other party entitled thereto through legal action or otherwise, each
Lender shall reimburse the party returning such excess payment in an amount
equal to such Lender's Commitment Percentage of the excess payment.
(d)    Liability for Advances. If in the reasonable opinion of the Agent the
distribution of any amount received by it in such capacity hereunder or under
any of the other Loan Documents might involve it in material liability, it may
refrain from making distribution until its right to make distribution shall have
been adjudicated by a court of competent jurisdiction, provided that the Agent
shall invest any such undistributed amounts in overnight obligations on behalf
of the Lenders and interest thereon shall be paid pro rata to the Lenders in
accordance with their respective Commitment Percentages. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the Agent
is to be repaid, each Person to whom any such distribution shall have been made
shall either repay to the Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.
8.6    Management of Acquired Collateral. If the Majority Lenders or Agent elect
to take title to any of the Properties, whether by the exercise of remedies
under the Loan Documents or by a consensual agreement with Borrower or
otherwise, Agent shall form a limited liability company (the "Ownership LLC") to
hold such ownership interest in the Properties. The manager of the Ownership LLC
shall be a wholly owned subsidiary of Agent (the "Manager"). The member
interests in the Ownership LLC shall be held by Lenders (or their designees or
affiliates) in accordance with their respective Commitment Percentages (the
"Members"). The operating agreement for the Ownership LLC shall have terms and
provisions similar to this Agreement with respect to the ownership and
administration of the Properties (the "Operating Agreement"). The Manager shall
have a right to resign, and the Members shall have the right to remove the
Manager for cause only under the same terms and conditions as are required for
removal or replacement of Agent under Section 8.2(a). The Members shall have
voting control of the Ownership LLC in accordance with their respective
Commitment Percentages. The Operating Agreement shall require each Member to
fund all amounts due from it in connection with the Ownership LLC with respect
to the Properties. If any Member is a designee of a Lender, such Lender shall
execute an agreement in favor of the Manager and the other Members guarantying
the payment of any indemnity and other payment obligations made by such
non-Lender Member in connection with the Ownership LLC (each a "Lender Guaranty"
and collectively, the "Lender Guaranties"). Notwithstanding the foregoing, if
Agent determines that, to protect the collateral securing the Loan or to
otherwise avoid significant delays, title to any of the Properties should be
transferred for the benefit of Lenders

 
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before the ownership structure described above can be completed, then Agent
shall have the right to take title to such Properties in the name of its
wholly-owned subsidiary, on behalf of itself and each Lender, and thereafter,
cause such subsidiary to transfer title to the Ownership LLC as soon as
reasonably practicable. The specific terms and provisions of the (A) Operating
Agreement and all other agreements, instruments, certificates, articles and
other documents evidencing, governing and creating the Ownership LLC (the
"Formation Documents"), and (B) Lender Guaranties, if any, shall be subject to
the approval of Lenders by vote of the Majority Lenders. If the terms and
provisions of any such agreements are so approved and are not inconsistent with
the provisions of this Agreement, all Lenders or their respective designees, as
applicable, shall join in executing and delivering the Formation Documents and
the Lender Guaranties, if applicable. Each Lender hereby irrevocably waives any
right to seek a partition of any interests in any Property. Prior to entering
into the Formation Documents, or if the form or terms thereof are not approved
by the Majority Lenders, Agent or its wholly owned subsidiary shall have the
sole and exclusive right to make (or to refrain from making) all decisions with
respect to, and to perform (or refrain from performing) all actions with respect
to, the leasing, encumbering, use, operation, maintenance, improvement, repair
and restoration of the Properties (and any Improvements located thereon) or
disposition of any other collateral; provided, however, that, notwithstanding
anything contained in this Agreement to the contrary, Agent or its wholly owned
subsidiary shall not, without the prior written consent of the Majority Lenders,
(a) sell (or lease as a whole) any Property or encumber any Property with a
mortgage, deed of trust or similar instrument securing indebtedness for borrowed
money, or (b) make any single expenditure with respect to any Property in an
amount in excess of $500,000 (exclusive of taxes and assessments, insurance
premiums, utility charges and expenditures required to comply with applicable
laws), (c) make any material repairs, restorations and/or improvements to any
Property (except to the extent required by applicable Governmental Requirements)
or (d) dispose of any other material collateral. Subject to the foregoing, each
Lender, pro rata in accordance with its Commitment Percentage, shall reimburse
Agent or its wholly owned subsidiary, as the case may be, on demand, for all
costs and expenses incurred by Agent or its wholly owned subsidiary in
connection with the sale, lease, encumbering, use, operation, maintenance,
improvement, repair and restoration of any Property (including all costs and
expenses incurred by Agent to pay taxes and assessments, utility charges,
insurance premiums, common area maintenance charges, leasing commissions, tenant
improvement costs, repair costs and restoration costs). The indemnity provisions
contained in Section 8.1(b) above, shall apply equally to actions (and
omissions) by Agent or its wholly owned subsidiary with respect to the
Properties so acquired by Agent or its wholly owned subsidiary. Each Lender
shall participate pro rata in accordance with their respective Commitment
Percentage in all income, expenses, profits and losses of the Properties. The
foregoing provisions of this Section 8.6 shall remain in full force and effect
following the entering into of the Formation Documents unless the terms thereof
specifically contradict the foregoing provisions. Unless all Lenders otherwise
consent in writing, the terms and provisions of the Formation Documents for the
Ownership LLC shall be consistent with the foregoing provisions of this
Section 8.6, this Article 8 and the other applicable provisions of the Loan
Documents.
8.7    Defaulting Lender.
(a)    Defaults. If for any reason any Lender becomes a Defaulting Lender, then
in addition to the rights and remedies that may be available to the Agent and
the other Lenders at

 
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law and in equity, such Defaulting Lender's right to participate in the
administration of the Loan and the Loan Documents, including, without
limitation, any rights to consent to or direct any action or inaction of the
Agent, shall be suspended during the pendency of such failure or refusal.
Borrower acknowledges and agrees that (1) the obligations of the Lenders under
this Agreement are several, (2) no Lender is or will be obligated to lend
Borrower more than the amount set forth in Exhibit I hereto (or the applicable
Assignment and Assumption Agreement) for such Lender, nor to fund any part of
any advance except upon fulfillment of all applicable conditions precedent
provided herein and in the other Loan Documents, (3) except to the extent
expressly provided in this Agreement, Borrower shall have no recourse or claim
against a non‑defaulting Lender nor against Agent (so long as the same have
otherwise complied with their obligations under this Agreement), for any
deficiency or any liability, loss, damage or expense resulting from the default
of a Defaulting Lender, and (4) the Commitment Percentage of the Committed
Amount of any Lender shall not be increased or decreased as a result of the
failure by any other Lender to perform its obligation to make an advance.
(b)    Remedies. If for any reason the Defaulting Lender fails to make timely
payment to any other party to this Agreement of any amount required to be paid
to it hereunder, in addition to other rights and remedies which such other party
may have under Section 8.7(a) or otherwise, such other party shall be entitled
(1) to collect interest from the Defaulting Lender for the period from the date
on which the payment was due until the date on which the payment is made for
each day during such period at the Federal Funds Rate, (2) to withhold or set
off, and to apply to the payment of the defaulted amount and any related
interest, any amounts to be paid to the Defaulting Lender under this Agreement,
(3) to bring an action or suit against the Defaulting Lender in a court of
competent jurisdiction to recover the defaulted amount and any related interest,
(4) to arrange for the purchase of the Commitment Percentage of the Defaulting
Lender as provided in Section 8.7(d), and (5) to advance funds on behalf of the
Defaulting Lender as provided in Section 8.7(e).
(c)    Indemnity. The Defaulting Lender shall indemnify, defend, and hold Agent
and each of the other Lenders harmless from and against any and all losses,
damages, liabilities, and expense (including attorneys' fees) which they may
sustain or incur by reason of or in consequence of the Defaulting Lender's
failure or refusal to abide by the terms of this Agreement.
(d)    Purchase Right. If a Lender becomes a Defaulting Lender, the other
Lenders who are not Defaulting Lenders shall have the right, but not the
obligation, in their sole discretion, to acquire (pro rata based on the
Commitment Percentages of the Lenders exercising such right) all of such
Defaulting Lender's right, title, and interest in and to the Loan. The purchase
price shall be the principal and accrued interest allocable to the Defaulting
Lender's Commitment Percentage of the Loan and shall be paid on the closing day
of such purchase. On the date of closing of such purchase, the Defaulting Lender
shall pay the Agent a processing fee of $5,000. The Defaulting Lender shall
retain liability for all obligations in respect of the Loan and this Agreement
arising prior to the date of transfer and shall execute and deliver such
documents as may be reasonably necessary to effect such transfer.
(e)    Default Loans. If a Lender becomes a Defaulting Lender, the other Lenders
may (pro rata based on the Commitment Percentages of the Lenders exercising such

 
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right), but are not obligated to, make advances to the Agent in the aggregate
amount that the Defaulting Lender is obligated to advance under this Agreement.
Such advances shall be treated as loans made to the Defaulting Lender, shall
bear interest at the Default Rate (payable on demand), shall be due and payable
upon demand, and shall be paid prior to any payment being made to the Defaulting
Lender.
(f)    Payments Owed to Defaulting Lender. If a Lender becomes a Defaulting
Lender, any amount payable to such Defaulting Lender under the Loan Documents
(whether on account of principal, interest, fees or otherwise) shall, in lieu of
being distributed to such Defaulting Lender, be retained by Agent in a
segregated account and, subject to any applicable requirements of law, be
applied at such time or times as may be determined by Agent: (i) first, to the
payment of any amounts owing by such Defaulting Lender to the Agent hereunder,
(ii) second, to the funding of any advances in respect of which such Defaulting
Lender has failed to fund its portion thereof as required by this Agreement, as
determined by Agent, and any related interest as described in Section 8.7(b)
above, (iii), third, to the repayment of any default loans described in
Section 8.7(e) above, (iv) fourth, if so determined by the Agent, held in such
account as cash collateral for future funding obligations of the Defaulting
Lender under this Agreement, (v) fifth, pro rata, to the payment of any amounts
owing to the Borrower or the Lenders as a result of any judgment of a court of
competent jurisdiction obtained by the Borrower or any Lender against such
Defaulting Lender as a result of such Defaulting Lender's breach of its
obligations under this Agreement, and (vi) sixth, to such Defaulting Lender or
as otherwise directed by a court of competent jurisdiction.
(g)    Cumulative Remedies and Survival. The exercise of the above remedies
shall not reduce, diminish or liquidate the Defaulting Lender's obligation for
the sharing of losses and reimbursement of costs, liabilities, and expenses
under the Loan Documents and this Agreement. The obligations of the Defaulting
Lender arising prior to any purchase pursuant to Section 8.7(d) shall survive
any such purchase.
8.8    Representations, Warranties and Acknowledgments.
(a)    Authorization, etc. Each Lender represents and warrants, as of the date
hereof, as follows:
(1)    Such Lender has all necessary corporate power and authority to own its
interest in the Loan and the Loan Documents, and has all necessary corporate
power and authority to perform its obligations with respect to this Agreement
and the Loan Documents;
(2)    The execution and delivery of this Agreement and all other instruments
and documents executed and delivered in connection therewith by such Lender have
been duly authorized by all requisite corporate action of such Lender; and
(3)    No approval, authorization, order, license or consent of, or registration
of filing with, any Governmental Authority or other person is required in
connection with such Lender's execution and delivery of this Agreement by such
Lender.
(b)    Independent Decision. Each Lender agrees that it has, independently and
without reliance upon any other party hereto, or upon the directors, officers,
agents or employees

 
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of any other party hereto, but only in reliance upon information supplied to it
by or on behalf of the Borrower and upon such other information as it has deemed
appropriate, made its own independent credit analysis and decision to enter into
this Agreement and the Loan Documents. Without limiting the foregoing, each
Lender acknowledges that it has received copies of the Loan Documents and
financial statements, certificates, instruments, documents, affidavits,
resolutions and agreements as it deems necessary to make its credit analysis and
decisions in respect of the Loan. Each Lender also agrees that it shall,
independently and without reliance upon any other party hereto, continue to make
its own independent credit analyses and decisions in acting or not acting under
the Loan Documents. Except as specifically provided herein, the Agent shall have
no duty or responsibility, either initially or on a continuing basis, to provide
any Lender with any credit or other information with respect thereto, whether
coming into its possession before the Closing Date or at any time or times
thereafter.
(c)    No Reliance. Each Lender hereby acknowledges that, except as specifically
set forth herein, Agent (i) makes no warranty or representation to Lenders for
any statements, warranties or representations (written or otherwise, express or
implied) made in or in connection with the Loan Documents of for the financial
condition of the Borrower or for the title or the value of any of the collateral
for the Loan, and (ii) shall not be responsible to the Lenders for any recitals,
statements, representations or warranties herein or for the due execution,
effectiveness, legality, validity, enforceability, genuineness, sufficiency, or
collectability of any of the Loan Documents or any other instrument or document
furnished pursuant thereto or in connection with the Loan or the legality,
validity, enforceability, genuineness, sufficiency, perfection or priority of
any rights in all or any portion of the collateral for the Loan. The Agent shall
not be bound to ascertain whether any notice, consent, waiver or request
delivered to it by the Borrower or Guarantor or any holder of any Note shall
have been duly authorized or is true, accurate and complete. Agent shall not be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement or any of the other
Loan Documents or the financial condition of the Borrower or any of its
Affiliates, or the existence or possible existence of any Event of Default or
any default which, with the giving of notice, passage of time, or both, would
become an Event of Default.
8.9    Assignments; Participation.
(a)    Permitted Assignments. Any Lender may, upon the prior approval of Agent
and Borrower (which consent shall not be unreasonably withheld or delayed),
assign to any affiliate of such Lender all or a portion of its respective
Commitment Percentage of the Loan, in such a manner as to create privity of
contract between such affiliate and the Borrower and to make such affiliate a
Lender for all purposes hereunder. Any Lender may, upon the prior approval of
Agent (and so long as no Event of Default has occurred and is continuing, the
prior approval of Borrower, which shall not be unreasonably withheld or
delayed), assign to any entity which meets the following conditions ("Assignee
Lender") all or a portion of its respective Commitment Percentage of the Loan,
in such a manner as to create privity of contract between such person and the
Borrower and to make such person a Lender for all purposes hereunder:
(1)    The minimum portion of the total commitment which the assigning Lender
may assign to an Assignee Lender shall be Ten Million Dollars ($10,000,000.00).

 
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(2)    Without limiting the power of consent in subsection (4) below, an
Assignee Lender (or its direct or indirect parent) shall be either (A) a
commercial lender organized under the laws of the United States, or any state
thereof, and having total assets in excess of Two Billion Dollars
($2,000,000,000) or (B) a commercial bank organized under the laws of any other
country which has total assets in excess of Ten Billion Dollars
($10,000,000,000) or (C) any other financial institution which has total assets
in excess of Ten Billion Dollars ($10,000,000,000).
(3)    The senior unsecured debt of an Assignee Lender (or its direct or
indirect parent) shall have a rating of Baa‑2 (stable outlook) or higher from
Moody's Investors Service, Inc. or a comparable rating agency.
(4)    Such assignment shall have been approved by Agent, which approval shall
not be unreasonably withheld. No sub‑assignments shall be permitted.
(5)    The Assignee Lender shall have paid to the Agent an administrative fee of
$3,500.00 to process the admission of such Assignee Lender.
(6)    The Assignee Lender shall not be Borrower or any of Borrower's
Affiliates.
(b)    Assignment and Assumption. The Borrower and Agent may continue to deal
solely and directly with the assigning Lender in connection with the interest so
assigned to an Assignee Lender (or to an affiliate of such Lender) until such
time as (i) written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee
Lender (or such affiliate) shall have been given to the Borrower and Agent by
the assigning Lender and the Assignee Lender (or such affiliate); (ii) the
assigning Lender and the Assignee Lender (or such affiliate) shall have
delivered to the Borrower and Agent an Assignment and Assumption.
Upon request, Borrower will execute and deliver to Agent, at Borrower's cost to
the extent such costs do not exceed $10,000, an appropriate replacement
promissory note or replacement promissory notes in favor of each assignee (and
assignor, if such assignor is retaining a portion of its Commitment Percentage
and advances) reflecting such assignee's (and assignor's) Commitment Percentage
of the Committed Amount. Upon execution and delivery of such replacement
promissory note(s) the original promissory note or notes evidencing all or a
portion of the Commitment Percentage of the Committed Amount and advances being
assigned shall be canceled and returned to Borrower. For purposes of
clarification, if Borrower's costs relating to an Assignment and Assumption
exceed $10,000, such costs exceeding $10,000 shall be borne by the Lenders
receiving replacement notes pro rata in accordance with such Lenders' Commitment
Percentage of the Committed Amount. Under no circumstances shall Borrower be
required to execute any certifications or similar documents or to provide any
representations or warranties confirming the accuracy of any information or
otherwise in connection with any assignment or participation.
(c)    Notice by Agent. Promptly following receipt by Agent of an executed
Assignment and Assumption, Agent shall give notice to the Borrower and to the
Lenders of:

 
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(i) the effectiveness of the assignment by the assigning Lender to the Assignee
Lender (or the affiliate of the Lender); and (ii) the revised percentages and
maximum amounts of the Commitment Percentage of the Committed Amount in effect
as a result of such assignment.
(d)    Adjustment of Shares. Immediately upon delivery of the Assignment and
Assumption to Agent, this Agreement shall be deemed to be amended to the extent,
but only to the extent, necessary to reflect the addition of the Assignee Lender
(or affiliate of the Lender) and the resulting adjustment of the Commitment
Percentage arising therefrom. The Commitment Percentage of the Committed Amount
assigned to each Assignee Lender (or such affiliate) shall reduce the Commitment
Percentage of the Committed Amount of the assigning Lender by a like amount.
(e)    Rights of Assignee. From and after the date upon which Agent notifies the
assigning Lender that it has received an executed Assignment and Assumption:
(1) the Assignee Lender (or the Lender's affiliate) thereunder shall be a party
to this Agreement and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Assumption, shall have the
rights and obligations of a Lender under this Agreement; provided, however, that
the Assignee Lender's consent shall be required only with respect to matters
particularly set forth in Sections 8.4(b)(1), (3), (4) and (7) hereof, and
(2) the assigning Lender shall, to the extent that rights and obligations under
this Agreement have been assigned by it pursuant to such Assignment and
Assumption, relinquish its rights and be released from its obligations under
this Agreement.
(f)    Assignee's Agreements. By executing and delivering an Assignment and
Assumption, the Assignee Lender (or the Lender's affiliate) thereunder confirms
and agrees as follows: (1) other than as provided in such Assignment and
Assumption, the assigning Lender makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
the Note or any other instrument or document furnished pursuant to the Loan;
(2) the assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other parties or the performance or observance by the Borrower of any of its
obligations under the Note and this Agreement; (3) the Assignee Lender (or such
affiliate) has received a copy of this Agreement, together with such other
documents and information as the Assignee Lender (or such affiliate) has deemed
appropriate to make its own credit analysis and decision to enter into the
Assignment and Assumption; (4) the Assignee Lender (or such affiliate) will,
independently and without reliance upon Agent, continue to make its own credit
decisions in taking or not taking action under this Agreement; (5) the Assignee
Lender (or such affiliate) hereby appoints and authorizes Agent to take such
action as administrative agent on its behalf and to exercise such powers under
the Loan Documents and this Agreement as are delegated to Agent thereunder and
hereunder, together with such powers as are reasonably incidental thereto; and
(6) the Assignee Lender (or such affiliate) agrees that it will perform all of
the obligations which by the terms of this Agreement are required to be
performed by it as a Lender and confirms the representations and warranties of
the assigning Lender under this Agreement.

 
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(g)    Participations. Any Lender may upon prior written notice to Borrower and
Agent sell a participation interest in all or any portion of the Loan without
the prior consent of the Agent and the other Lenders; provided, however, the
voting rights of any participants shall be limited to actions with respect to
increases in the maximum Committed Amount, extensions of the maturity date
beyond the extension option terms and changes in the interest rates applicable
to the Loan.
8.10    Other Business. The Agent and each Lender may accept deposits from, lend
money to, and generally engage in any kind of banking, trust or other business
with Borrower or any affiliate of Borrower as if it were not performing the
duties specified herein, and may accept fees and other considerations from the
Borrower or any such affiliate for services in connection with this Agreement
and otherwise without having to account for the same to the other parties
hereto.
8.11    Consents. If the Agent requests in writing consent or approval from the
Lenders and any Lender does not respond to such written request within ten (10)
Business Days (or such other period as may be provided herein), such Lender
shall be deemed to have given such consent or approval.
8.12    Agent as Lender. In its individual capacity as a Lender, U.S. Bank shall
have the same obligations and the same rights, powers and privileges in respect
to its Commitment Percentage and the Advances made by it, and as the holder of
any Note as it would have were it not also the Agent.
8.13    Notification of Defaults and Events of Default. Each Lender hereby
agrees that, upon learning of the existence of a default or an Event of Default,
it shall (to the extent notice has not previously been provided) promptly notify
the Agent thereof. The Agent hereby agrees that upon receipt of any notice under
this provision it shall promptly notify the other Lenders of the existence of
such default or Event of Default.
8.14    No Reliance by Borrower. Except for the provisions contained in
Sections 8.1(a), 8.2(a) and 8.3(a), Sections 8.9(a), (b) and (c) and
Section 8.17 hereof (which Borrower shall have the right to enforce), the
provisions of this Article VIII are solely for the benefit of Agent and the
Lenders, and Borrower shall have no right to rely on or enforce any of the
provisions under this Article VIII and in no event shall Borrower have any
additional obligations arising solely out of the provisions contained in this
Article VIII, except for those obligations expressly provided for in
Sections 8.2(b), 8.7(a) and Section 8.9(a), and 8.9(b) of this Agreement. In
performing its functions and duties under this Agreement, Agent shall act solely
as Agent of the Lenders and does not assume and shall not be deemed to have
assumed any obligation toward or relationship of agency or trust with or for
Borrower or any other person.
8.15    Reliance. Agent shall be entitled to rely upon any written notices,
statements, certificates, orders or other documents, telecopies or any telephone
message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper person, and with respect to all matters
pertaining to this Agreement or any of the other Loan Documents and its duties
hereunder or thereunder, upon advice of legal counsel (including counsel for
Borrower), independent public accountants and other experts selected by it.

 
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8.16    Pledge to Federal Reserve Bank. Anything in this Agreement to the
contrary notwithstanding, without the need to comply with any of the formal or
procedural requirements of this Agreement, including this Section 8.16, any
Lender may at any time and from time to time pledge and assign all or any
portion of its rights under all or any of the Loan Documents to a Federal
Reserve Bank; provided that no such pledge or assignment shall release such
Lender from its obligations thereunder. To facilitate any such pledge or
assignment, Agent shall, at the request of such Lender, enter into a letter
agreement with the Federal Reserve Bank in, or substantially in, the form of the
exhibit to Appendix C to the Federal Reserve Bank of New York Operating Circular
No. 10.
8.17    Confidentiality.
(a)    Lenders agree to use commercially reasonable efforts to preserve the
confidential nature of financial information obtained pursuant to the
requirements of this Agreement and identified as confidential by Borrower or
Guarantor; provided, however, that the foregoing shall not apply to
(i) disclosures required of any Lender pursuant to any applicable law, rule,
regulation or order of any Governmental Authority, (ii) any information
contained in any report prepared or delivered pursuant to the reporting
requirements of federal or state securities laws and regulations, including, but
not limited to, any prospectus, registration statement, proxy materials or
periodic reports, (iii) any disclosures made in connection with the enforcement
of any of the Loan Documents or any litigation in connection therewith, or
(iv) disclosures of information that is publicly available other than as a
result of a disclosure by any Lender. In addition, and notwithstanding the
foregoing, Agent agrees not to share any confidential information of Borrower or
Guarantor with any potential or actual Loan Participant or Assignees without
first obtaining Borrower's or Guarantor's consent (which consent shall require
an execution of a confidentiality agreement or confidentiality agreements, in
form and substance reasonably satisfactory to Borrower).
(b)    Notwithstanding anything to the contrary set forth herein or in any other
written or oral understanding or agreement to which the parties hereto are
parties or by which they are bound, the parties hereto acknowledge and agree
that (i) any obligations of confidentiality contained herein and therein do not
apply and have not applied from the commencement of discussions between the
parties to the tax treatment and tax structure of the transactions contemplated
by the Loan Documents (and any related transactions or arrangements), and
(ii) each party (and each of its employees, representatives, or other agents)
may disclose to any and all parties as required by applicable laws, without
limitation of any kind, the tax treatment and tax structure of the transactions
contemplated by the Loan Documents and all materials of any kind (including
opinions or other tax analyses) that are provided to such party relating to such
tax treatment and tax structure, all within the meaning of Treasury Regulations
Section 1.6011‑4; provided, however, that each party acknowledges that any
privilege that may exist for the benefit of a party, in such party's sole
discretion, to maintain the confidentiality of a communication relating to the
transactions contemplated by the Loan Documents, including a confidential
communication with its attorney or a confidential communication with a federally
authorized tax practitioner under Section 7525 of the Internal Revenue Code, is
not intended to be affected by the foregoing.
 

 
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[Signatures on Following Page]

 
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IN WITNESS WHEREOF, intending to be legally bound, the parties have executed and
delivered this Agreement, under seal, as of the date first written above.
Borrower:

KBSII 100-200 CAMPUS DRIVE, LLC,
a Delaware limited liability company

By:
KBSII REIT ACQUISITION I, LLC,

a Delaware limited liability company,
its sole member

By:
KBS REIT PROPERTIES II, LLC,

a Delaware limited partnership,
its sole member

By:
KBS LIMITED PARTNERSHIP II,

a Delaware limited partnership,
its sole member

By:
KBS REAL ESTATE INVESTMENT TRUST II, INC.,

a Maryland corporation, its general partner

By:
/s/ Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.,
Chief Executive Officer

 
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KBSII ONE MEADOWLANDS, LLC,
a Delaware limited liability company

By:
KBSII REIT ACQUISITION XXV, LLC

a Delaware limited liability company,
its sole member

By:
KBS REIT PROPERTIES II, LLC,

a Delaware limited liability company,
its sole member

By:
KBS LIMITED PARTNERSHIP II,

a Delaware limited partnership,
its sole member

By:
KBS REAL ESTATE INVESTMENT TRUST II, INC.,

a Maryland corporation, its general partner

By:
/s/ Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.
Chief Executive Officer

KBSII WILLOW OAKS, LLC,
a Delaware limited liability company

By:
KBSII REIT ACQUISITION V, LLC

a Delaware limited liability company,
its sole member

By:
KBS REIT PROPERTIES II, LLC,

a Delaware limited liability company,
its sole member

By:
KBS LIMITED PARTNERSHIP II,

a Delaware limited partnership,
its sole member

By:
KBS REAL ESTATE INVESTMENT TRUST II, INC.,

a Maryland corporation, its general partner

By:
/s/ Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.
Chief Executive Officer

 
S-2
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Agent:

U.S. BANK NATIONAL ASSOCIATION,
as Agent

By:
/s/ Adrian B. Montero

Name:
Adrian B. Montero

Title:
Senior Vice President

Lender(s):

U.S. BANK NATIONAL ASSOCIATION

By:
/s/ Adrian B. Montero

Name:
Adrian B. Montero

Title:
Senior Vice President

TD BANK, N.A.

By:
/s/ Brian S. Welch

Name:
Brian S. Welch

Title:
Senior Vice President

(Lender signatures continued on next page)

 
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EXHIBIT A
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement") is dated as of
_______________, 20___, between __________________________________ ("Assignor")
and _________________________________________ ("Assignee").
RECITALS:
Assignor is a Lender under that certain Loan Agreement dated as of ______, 2013
(the "Loan Agreement") by and between U.S. Bank National Association in its
capacity as a Lender and as Agent (the "Agent") and certain other Lenders named
therein, as modified from time to time. The Lenders made a loan to KBSII 100-200
CAMPUS DRIVE, LLC, KBSII ONE MEADOWLANDS, LLC, and KBSII WILLOW OAKS, LLC, each
a Delaware limited liability company (collectively, "Borrower"). Capitalized
terms used but not defined in this Agreement shall have the meanings ascribed to
such terms in the Loan Agreement. Assignor desires to assign to Assignee and
Assignee desires to accept and assume [a portion of] the rights and obligations
of Assignor under the Loan Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
1.    Assignment. Effective on the Assignment Effective Date (as defined in
Section 3 below), Assignor hereby assigns to Assignee an Assigned Share (as
defined below) of all of Assignor's right, title, interest and obligations under
the Loan Agreement and other Loan Documents. The Assigned Share of all such
rights, title, interest and obligations is referred to collectively as the
"Assigned Rights and Obligations".
The "Assigned Share" means (a) a $________________ portion of the total
Committed Amount on the Assignment Effective Date (which shall include
Assignee's Commitment Percentage of all Advances outstanding under the Loan
Agreement on the Assignment Effective Date). Following the assignment, the
Assignee's Commitment Percentage shall equal the quotient of the above portion
of the Committed Amount divided by $________________ [insert Loan amount]
expressed as a percentage rounded to eight decimal places (i.e., _________%),
and the Assignor's Commitment Percentage shall equal _________%.
2.    Assumption. Effective on the Assignment Effective Date, Assignee hereby
accepts the foregoing assignment of, and hereby assumes from Assignor, the
Assigned Rights and Obligations.
3.    Effectiveness. This Agreement shall become effective on a date (the
"Assignment Effective Date") selected by Assignor, which shall be on or as soon
as practicable after the execution and delivery of counterparts of this
Agreement by Assignor, Assignee, Agent

 
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and Borrower. Assignor shall promptly notify Assignee, Agent and Borrower in
writing of the Assignment Effective Date.
4.    Payments on Assignment Effective Date. In consideration of the assignment
by Assignor to and the assumption by Assignee of the Assigned Rights and
Obligations, on the Assignment Effective Date (a) Assignee shall pay to Assignor
the amount of $________ [usually the Assignee's Commitment Percentage of the
outstanding principal], and (b) Assignee shall pay to Agent an assignment
processing fee of $3,500.
5.    Allocation and Payment of Interest and Fees.
(a)    Agent shall pay to Assignee all interest, and other amounts not
constituting principal that are paid by or on behalf of Borrower pursuant to the
Loan Documents and are attributable to the Assigned Rights and Obligations
("Borrower Amounts"), that accrue on and after the Assignment Effective Date. If
Assignor receives or collects any such Borrower Amounts, Assignor shall promptly
pay them to Assignee.
(b)    Agent shall pay to Assignor all Borrower Amounts that accrue before the
Assignment Effective Date when and as the same are paid by Agent to the other
the Lenders. If Assignee receives or collects any such Borrower Amounts,
Assignee shall promptly pay such amounts to Assignor.
(c)    Unless specifically assumed by Assignee, Assignor shall be responsible
and liable for all reimbursable liabilities and costs and indemnification
obligations which accrue prior to the Assignment Effective Date, and such
liability shall survive the Assignment Effective Date.
(d)    Agent shall not be liable for any allocation or payment to either
Assignor or Assignee subsequently determined to be erroneous, unless resulting
from Agent's willful misconduct or gross negligence.
6.    Representations and Warranties.
(a)    Each of Assignor and Assignee represents and warrants to the other and
Agent as follows:
(i)    It has full power and authority, and has taken all action necessary, to
execute and deliver this Agreement and to fulfill its obligations under, and to
consummate the transactions contemplated by this Agreement;
(ii)    The making and performance of this Agreement and all documents required
to be executed and delivered by it hereunder do not and will not violate any law
or regulation applicable to it;
(iii)    This Agreement has been duly executed and delivered by it and
constitutes its legal, valid and binding obligation enforceable in accordance
with its terms; and

 
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(iv)    All approvals, authorizations or other actions by, or filings with, any
Governmental Authority necessary for the validity or enforceability of its
obligations under this Agreement have been made or obtained.
(b)    Assignor represents and warrants to Assignee that Assignor owns the
Assigned Rights and Obligations, free and clear of any lien or other
encumbrance.
(c)    Assignee represents and warrants to Assignor as follows:
(i)    Assignee has made and shall continue to make its own independent
investigation of the financial condition, affairs and creditworthiness of the
Borrower and Guarantor and any other person or entity obligated under the Loan
Documents (collectively, "Credit Parties"), and the value of any collateral now
or hereafter securing any of the Obligations; and
(ii)    Assignee has received a copy of those Loan Documents and such other
documents, financial statements and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Agreement.
7.    No Assignor Responsibility. Assignor makes no representation or warranty
and assumes no responsibility to Assignee for:
(a)    the execution (by any party other than Assignor), effectiveness,
genuineness, validity, enforceability, collectability or sufficiency of the Loan
Documents or for any representations, warranties, recitals or statements made in
the Loan Documents or in any financial or other written or oral statement,
instrument, report, certificate or any other document made or furnished or made
available by Assignor to Assignee or by or on behalf of Borrower or Guarantor to
Assignor or Assignee in connection with the Loan Documents and the transactions
contemplated thereby;
(b)    the performance or observance of any of the terms, covenants or
agreements contained in any of the Loan Documents or as to the existence or
possible existence of any default or Event of Default under the Loan Documents;
or
(c)    the accuracy or completeness of any information provided to Assignee,
whether by Assignor or by or on behalf of Borrower or Guarantor.
Assignor shall have no initial or continuing duty or responsibility to make any
investigation of the financial condition, affairs or creditworthiness of
Borrower or Guarantor, in connection with the assignment of the Assigned Rights
and Obligations or to provide Assignee with any credit or other information with
respect thereto, whether coming into its possession before the date hereof or at
any time or times thereafter.
8.    Assignee Bound By Loan Agreement. Effective on the Assignment Effective
Date, Assignee (a) shall be deemed to be a party to the Loan Agreement,
(b) agrees to be bound by the Loan Agreement as it would have been if it had
been an original Lender thereunder, and (c) agrees to perform in accordance with
their respective terms all of the obligations which are required under the Loan
Documents to be performed by it as a Lender. Assignee appoints and

 
EXHIBIT A - Page 3
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--------------------------------------------------------------------------------

authorizes Agent to take such actions as agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to Agent by the terms
thereof, together with such powers as are reasonably incidental thereto.
9.    Assignor Released From Loan Agreement. Effective on the Assignment
Effective Date, Assignor shall be released from the Assigned Rights and
Obligations; provided, however, that Assignor shall retain all of its rights to
indemnification under the Loan Agreement and the other Loan Documents for any
events, acts or omissions occurring before the Assignment Effective Date, and to
the extent not assumed by Assignee, Assignor shall continue to be responsible
for the liabilities and obligations described in Section 5(c).
10.    New Notes. On or promptly after the Assignment Effective Date, Borrower,
Agent, Assignor and Assignee shall make appropriate arrangements so that [a] new
Note[s] executed by Borrower, dated as of the Assignment Effective Date and in
the amount of the [respective] commitment[s] of [Assignor and] Assignee, after
giving effect to this Agreement, are issued to [Assignor and] Assignee, in
exchange for the surrender by Assignor [and Assignee] to Borrower of any
applicable outstanding Note marked "Exchanged". The provisions of this
Section 10 are subject to Section 8.9(b) of the Loan Agreement.
11.    General.
(a)    No term or provision of this Agreement may be amended, waived or
terminated orally, but only by an instrument signed by the parties hereto.
(b)    This Agreement may be executed in one or more counterparts. Each set of
executed counterparts shall be an original. Executed counterparts may be
delivered by facsimile transmission.
(c)    If Assignor has not assigned its entire remaining commitment of the Loan
to Assignee, Assignor may at any time and from time to time grant to others
pursuant to the Loan Agreement assignments of or participation in all or part of
Assignor's remaining Loan or commitment.
(d)    This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Neither Assignor nor
Assignee may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the other and Agent. The
preceding sentence shall not limit the right of Assignee to grant to others
assignment of or participation in all or part of the Assigned Rights and
Obligations to the extent permitted by the terms of the Loan Agreement.
(e)    All payments to Assignor or Assignee hereunder shall, unless otherwise
specified by the party entitled thereto, be made in Dollars, in immediately
available funds, and to the address or account specified on the signature pages
of this Agreement. The address of Assignee for notice purposes under the Loan
Agreement shall be as specified on the signature pages of this Agreement.
(f)    If any provision of this Agreement is held invalid, illegal or
unenforceable, the remaining provisions hereof will not be affected or impaired
in any way.

 
EXHIBIT A - Page 4
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(g)    Each party shall bear its owns expenses in connection with the
preparation and execution of this Agreement.
(h)    This Agreement shall be governed by and construed in accordance with the
laws of the State of California.
IN WITNESS WHEREOF, the parties have executed this Agreement, under seal, as of
the day and year first above written.
 
Assignor:
Address:
 
___________________________________ ___________________________________
___________________________________
Attention: __________________________
___________________________________

By: ________________________________
Name: _______________________________
Title: _______________________________

 
Assignee:
Address:
 
___________________________________ ___________________________________
___________________________________
Attention: __________________________
___________________________________

By: ________________________________
Name: _______________________________
Title: _______________________________
 
 

 
EXHIBIT A - Page 5
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ACKNOWLEDGED AND AGREED: [Borrower is executing in signature blocks below solely
for the purpose of acknowledging receipt of the Assignment and Assumption
Agreement to which this acknowledgment is attached and, by signing below,
Borrower shall not incur any additional obligations or additional liability
except as contemplated by the Loan Documents.]

Borrower:
KBSII 100-200 CAMPUS DRIVE, LLC,
a Delaware limited liability company

By:
KBSII REIT ACQUISITION I, LLC,

a Delaware limited liability company,
its sole member

By:
KBS REIT PROPERTIES II, LLC,

a Delaware limited liability company,
its sole member

By:
KBS LIMITED PARTNERSHIP II,

a Delaware limited partnership,
its sole member

By:
KBS REAL ESTATE INVESTMENT TRUST II, INC.,

a Maryland corporation, its general partner

Charles J. Schreiber, Jr.,
Chief Executive Officer

 
EXHIBIT A - Page 6
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KBSII ONE MEADOWLANDS, LLC,
a Delaware limited liability company

By:
KBSII REIT ACQUISITION XXV, LLC

a Delaware limited liability company,
its sole member

By:
KBS REIT PROPERTIES II, LLC,

a Delaware limited liability company,
its sole member

By:
KBS LIMITED PARTNERSHIP II,

a Delaware limited partnership,
its sole member

By:
KBS REAL ESTATE INVESTMENT TRUST II, INC.,

a Maryland corporation, its general partner

By:
______________________

Charles J. Schreiber, Jr.
Chief Executive Officer

KBSII WILLOW OAKS, LLC,
a Delaware limited liability company

By:
KBSII REIT ACQUISITION V, LLC

a Delaware limited liability company,
its sole member

By:
KBS REIT PROPERTIES II, LLC,

a Delaware limited liability company,
its sole member

By:
KBS LIMITED PARTNERSHIP II,

a Delaware limited partnership,
its sole member

By:
KBS REAL ESTATE INVESTMENT TRUST II, INC.,

a Maryland corporation, its general partner

By:
______________________

Charles J. Schreiber, Jr.
Chief Executive Officer

 
EXHIBIT A - Page 7
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Agent:

U.S. BANK NATIONAL ASSOCIATION,
as Agent

By:
_____________________________

Name:
_____________________________

Title:
_____________________________

Address:

 
EXHIBIT A - Page 8
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EXHIBIT B
DESCRIPTION OF IMPROVEMENTS
The KBS 100-200 Campus Drive Improvements include two 4-story class A office
buildings totaling approximately 574,970 square feet.  
The KBS One Meadowlands Improvements include one 15-story class A office
building totaling approximately 421,719 square feet.
The KBS Willow Oaks Improvements include three class A office buildings totaling
approximately 570, 038 square feet.

 
EXHIBIT B
Loan Agreement (KBS REIT II)

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EXHIBIT C-1
LEGAL DESCRIPTION OF THE KBS 100-200 CAMPUS DRIVE LAND
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE BOROUGH OF FLORHAM PARK,
COUNTY OF MORRIS, AND STATE OF NEW JERSEY, AND IS DESCRIBED AS FOLLOWS:

All that real property located in the Borough of Florham Park, County of Morris
and State of New Jersey, more particularly described as follows:

TRACT ONE:
Lot 4.02, Block 1201 as shown on a map entitled "Final Plat of Major
Subdivision, Florham Park Corporate Centre, Phase 1, Block 1201, Lot 4, Borough
of Florham Park, Morris County, New Jersey", prepared by Storch Engineers and
filed in the Morris County Clerk's Office on November 23, 1988 as Map No. 4720.

TRACT TWO:

Lot 4.04 in Block 1201 as shown on a map entitled "Final Plat of Major
Subdivision, Florham Park Corporate Centre, Phase II, Block 1201, Lot 4, Borough
of Florham Park, Morris County, New Jersey", prepared by Storch Engineers and
filed in the Morris County Clerk's Office on September 15, 1989 as Map No. 4799.

FOR INFORMATION PURPOSES ONLY:
"In compliance with Chapter 157, Laws of 1977, premises herein is Lots 5 and 7
in Block 1201 on the Tax Map of the Borough of Florham Park, County of Morris,
State of New Jersey."

TRACT THREE:
A perpetual non-exclusive access easement over and across Campus Drive, the
Landscaping Islands (as defined in the Landscaping Maintenance Agreement), the
Campus Drive Jug Handle (as defined in the Landscaping Maintenance Agreement)
and the Campus Drive Jug Handle Basin (as defined int he Landscaping Maintenance
Agreement) as provided in the Deed recorded in Book 3503, page 287, and in that
Landscaping Maintenance Agreement dated October 17, 2000, recorded in Deed Book
5270, page 150, Morris County Clerk's Office, Morris County, New Jersey.
TRACTOR FOUR:
A non-exclusive easement to develop, install, use, maintain, repair, inspect,
remove and replace the Common Facilities (as defined in the Declaration), a
non-exclusive easement in, upon, over, under, across, and through the Lots (as
defined in the Declaration) for surface water drainage and runoff, and a
non-exclusive blanket easement for entry upon, over, across, and through the
Lots for the purpose for carrying out the objectives of the Declaration, as
described in that Declaration of Cross-Easements as set forth in Deed Book 4262,
page 258, as amended by First Amended Declaration of Cross-Easements as set
forth in Deed Book 4748, page 36.

BEING ALSO KNOWN AS (FOR INFORMATIONAL PURPOSES ONLY):
Being known and designated as Block 1201, Lot 5 and 7 on the official tax map of
the Borough of Florham Park, County of Morris, NJ.

 
EXHIBIT C-1
Loan Agreement (KBS REIT II)

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EXHIBIT C-2
LEGAL DESCRIPTION OF THE KBS ONE MEADOWLANDS LAND
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE BOROUGH OF EAST RUTHERFORD,
COUNTY OF BERGEN, AND STATE OF NEW JERSEY, AND IS DESCRIBED AS FOLLOWS:

All that certain tract or parcel of land and premises, situate, lying and being
in the Borough of East Rutherford, County of Bergen and State of New Jersey,
more particularly described as follows:

PARCEL ONE;
Beginning at a B2A Capped Pin Found at the point of intersection of the
Southerly line of the South Service Road, and Lands of the New Jersey Turnpike,
said point having New Jersey State Plane Coordinates (NAD 27 feet) of
N-719251.185, E=608547.407, and from said beginning point running thence;

1.    Along said South Service Road, South 75 Degrees 49 minutes 41 seconds East
a distance of 621.82 feet to a point of curve, thence;

2.    Still along same, along a curve to the right having a radius of 643.00
feet a Delta of 28 degrees 43 minutes 23 seconds, an arc length 322.34 feet and
a chord which bears South 61 degrees 27 minutes 58 seconds East having a chord
distance of 318.98 feet to a point of compound curve, thence;

3.    Still along same, along a curve to the right having a radius of 5,123.63
feet a Delta of 00 degrees 32 minutes 40 seconds, an arc length 48.69 feet and a
chord which bears South 46 degrees 49 minutes 56 seconds East having a chord
distance of 48.69 feet to a point and corner in a common with Lot 3 of Block
108.03 as shown on the Municipal Tax map of the Borough of East Rutherford,
Bergen County, New Jersey, thence;

4.    Along Westerly line of Lot 3, South 37 degrees 55 minutes 44 seconds West
a distance of 458.80 feet to a point and corner in common with Lot 1.02 of said
Block, thence;

5.    Along Northerly line of said Lot 1.02, the following two courses, North 52
degrees 06 minutes 17 seconds West a distance of 360.86 feet to a point, thence;

6.    South 83 degrees 04 minutes 52 seconds West a distance of 610.55 feet to a
point in the Easterly line of the aforementioned lands of the New Jersey
Turnpike, thence;

7.    Along said lands of the New Jersey Turnpike Authority, the following two
courses, North 04 degrees 07 minutes 39 seconds West a distance of 121.93 feet
to a B2A Capped Pin Found, Thence;

8.    North 31 degrees 26 minutes 50 seconds East a distance of 504.15 feet to
the point and place of beginning.

PARCEL TWO:
Together with the benefit of title rights set forth in Declaration of Easements,
Covenants and Restrictions for Meadowlands Plaza recorded In Deed Book 8278,
page 204, including, but not limited to, access easements for vehicular and
pedestrian ingress and egress, easements for use of certain common areas, and
easements for drainage facilities, utility lines and street lighting.

 
EXHIBIT C-2
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BEING ALSO KNOWN AS (REPORTED FOR INFORMATIONAL PURPOSES ONLY):
 
Block 108.03, Lot 1.01 on the tax map of the Borough of East Rutherford, County
of Bergen, State of New Jersey.

 
EXHIBIT C-2
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EXHIBIT C-3
LEGAL DESCRIPTION OF THE KBS WILLOW OAKS LAND
All of that certain lot or parcel of land situated, lying and being in Fairfax
County, Virginia, and being more particularly described as follows:

TRACTI:

All of Parcel E-2-1, WILLOW OAKS CORPORATE CENTER, and containing 4.19681 acres,
more or less, as the same is more particularly shown on plat attached to Deed of
Resubdivision of Parcel E-2, Providence Park, recorded in Deed Book 7085 at page
884, among the land records of Fairfax County, Virginia.

TOGETHER WITH AND SUBJECT TO easements for vehicular and pedestrian passage as
shown on the Deed of Resubdivision as recorded in Deed Book 7085 at page 884,
among the aforesaid land records and as more particularly set forth in that
certain Roadway Easement Agreement as recorded in Deed Book 7108 at page 375,
among the aforesaid land records.

TRACT II:

All of Parcel E-4, WILLOW OAKS CORPORATE CENTER, and containing 4.05294 acres
(erroneously referenced in the Deed recorded in Deed Book 18135, at page 539 as
4.06294 acres), more or less, as the same is more particularly shown on plat
attached to Deed of Resubdivision of Parcel E-2, Providence Park, recorded in
Deed Book 7085 at page 884, among the land records of Fairfax County, Virginia.

TOGETHER WITH AND SUBJECT TO easements for vehicular and pedestrian passage as
shown on the Deed of Resubdivision as recorded in Deed Book 7085 at page 884,
among the aforesaid land records and as more particularly set forth in that
certain Roadway Easement Agreement as recorded in Deed Book 7108 at page 375,
among the aforesaid land records.

TRACT III:

All of Parcel E-3, WILLOW OAKS CORPORATE CENTER, as more particularly shown on
plat attached to Deed of Resubdivision of Parcel E-2, Providence Park, recorded
in Deed Book
7085 at page 884, among the land records of Fairfax County, Virginia.

TOGETHER WITH AND SUBJECT TO easements for vehicular and pedestrian passage as
shown on the Deed of Resubdivision as recorded in Deed Book 7085 at page 884,
among the aforesaid land records and as more particularly set forth in that
certain Roadway Easement Agreement as recorded in Deed Book 7108 at page 375,
among the aforesaid land records.

 
EXHIBIT C-3
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EXHIBIT D
PERMITTED ENCUMBRANCES
As set forth in Agent's letter of title instructions to the Title Company
setting forth Agent's requirements for the Title Policy for each Deed of Trust
encumbering a Property. In no event shall any deeds of trust, mortgages or other
liens securing indebtedness or monetary obligations (other than the Deeds of
Trust in favor of Agent for the benefit of Lenders) be "Permitted Encumbrances."
 

 
EXHIBIT D
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EXHIBIT E
[Intentionally Omitted.]

 
EXHIBIT E
Loan Agreement (KBS REIT II)

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EXHIBIT F
TITLE INSURANCE REQUIREMENTS
For each Deed of Trust, an ALTA form extended coverage lender's policy of title
insurance] [a title insurance policy in the form of an American Land Title
Association Extended Coverage Loan Policy 1970, amended 10/17/70 (without
further modification, revision or amendment) with ALTA Endorsement Form 1
Coverage, with such endorsements as Agent requires in its sole discretion
(including but not limited to variable rate, survey, creditors' rights (if
applicable), comprehensive coverage, access, zoning (with parking), subdivision,
usury, separate tax lot, contiguity, first-loss and tie-in endorsements as
available), insuring that such Deed of Trust is a valid, first priority lien on
the Property encumbered thereby, and in an insured amount as reasonably required
by Agent. Each Title Policy must not contain any exceptions or exclusions other
than Permitted Encumbrances or as may be approved by Agent in writing. Each
Title Policy must contain such reinsurance agreements and direct access
agreements as Agent may require. During the term of the Loan, Agent may require
other endorsements to the Title Policies, as specified in the Loan Agreement.

 
EXHIBIT F
Loan Agreement (KBS REIT II)

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EXHIBIT G
Insurance Requirements
I.    PROPERTY INSURANCE
An ORIGINAL (or certified copy) All-Risk Hazard Insurance Policy or Acord 28
Certificate of Insurance naming the borrowing entity as an insured, reflecting
coverage of 100% of the replacement cost, and written by a carrier approved by
Lender with a current A.M. Best's Insurance Guide Rating of at least A-IX (which
is authorized to do business in the state in which the property is located) that
affirmatively includes the following:
1.
Mortgage Clause naming Agent as Mortgagee ISAA ATIMA with a 30-day notice to
Agent in the event of cancellation, non-renewal or material change or the
Lenders Loss Payable Endorsement specified in 2 below.

Address for Agent is as follows:
U.S. Bank National Association, ISAA ATIMA
Commercial Real Estate
4100 Newport Place, Suite 900
Newport Beach, CA 92660
Attention: Loan Administration

2.
Lender's Loss Payable Endorsement (ISO 1218 or similar) with a 30-day notice to
Lender in the event of cancellation, non-renewal or material change.

3.
Replacement Cost Endorsement.

4.
No Exclusion for Acts of Terrorism (United States Certified Acts of Terrorism
coverage – TERRORISM RISK INSURANCE PROGRAM REAUTHORIZATION ACT OF 2007).

5.
No Coinsurance Clause.

6.
Boiler and Machinery Coverage (aka Electrical and Mechanical Breakdown).

7.
Sprinkler Leakage Coverage.

8.
Vandalism and Malicious Mischief Coverage.

9.
Flood Insurance (with respect to the Initial Properties, initially required only
for the KBS One Meadowlands Property; but will be required for all

 
EXHIBIT G - Page 1
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Properties that Agent determines are, at any time, in a Special Flood Hazard
Area).
10.
Loss of Rents Insurance in an amount of not less than 100% of one year's Rental
Value of the Property. "Rental Value" shall include:

(a)    The total projected gross rental income from tenant occupancy of the
Property as determined by Agent.
(b)    The amount of all charges which are the legal obligation of tenants and
which would otherwise be the obligation of Borrower; and
(c)    The fair rental value of any portion of the Property which is occupied by
Borrower.
11.
One year's business interruption insurance in an amount acceptable to Lender.

12.
Coastal & Other Wind Coverage.

13.
Extra Expense Coverage.

14.
Borrower’s coverage is primary and non-contributory with any insurance or
self-insurance carried by U.S. Bank National Association (or any other Lender)

15.
Demolition and Increased Cost of Construction.

II.    LIABILITY INSURANCE
BORROWER: An Acord 25 Certificate of Liability Insurance naming the borrowing
entity as an insured, providing coverage on an “occurrence” rather than a
“claims made” basis and written by a carrier approved by the Lender, with a
current A.M. Best's Insurance Guide Rating of at least A- IX (which is
authorized to do business in the state in which the property is located) that
affirmatively includes the following:
1.
Combined general liability policy limit of at least $5,000,000.00 each
occurrence and aggregate applying liability for Bodily Injury, Personal Injury,
Property Damage, Contractual, Products and Completed Operations which combined
limit may be satisfied by the limit afforded under the Commercial General
Liability Policy, or by such Policy in combination with the limits afforded by
an Umbrella or Excess Liability Policy (or policies); provided, the coverage
afforded under any such Umbrella or Excess Liability Policy is at least as broad
in all material respects as that afforded by the underlying Commercial General
Liability Policy. Such policies must contain a Separations of Insureds /
Severability of Interest clause.

 
EXHIBIT G - Page 2
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2.
No Exclusion for Acts of Terrorism (United States Certified Acts of Terrorism
coverage – TERRORISM RISK INSURANCE PROGRAM REAUTHORIZATION ACT OF 2007).

3.
Aggregate limit to apply per location.

4.
Borrower’s coverage is primary and non-contributory with any insurance or
self-insurance carried by U.S. Bank National Association.

5.
Additional Insured Endorsement naming U.S. Bank National Association as an
additional insured with a 30-day notice to Lender in the event of cancellation,
non-renewal or material change. A Severability of Interests provision should be
included.

Address for Agent is as follows:
U.S. Bank National Association, ISAA ATIMA
Commercial Real Estate
4100 Newport Place, Suite 900
Newport Beach, CA 92660
Attention: Loan Administration

III.    GENERAL REQUIREMENTS
1.
All policies of insurance required herein must contain an endorsement or
agreement by the insurer that any loss will be payable in accordance with the
terms of such policy notwithstanding any act or negligence of Borrower or any
party holding under Borrower which might otherwise result in forfeiture of said
insurance and the further agreement of the insurer waiving all rights of setoff,
counterclaim or deductions against Borrower.

2.
If Agent consents, Borrower may provide any of the required insurance through
blanket policies carried by Borrower and covering more than one location, or by
policies procured by a party holding under Borrower; provided, however, all such
policies must be in form and substance and issued by companies reasonably
satisfactory to Agent.

IV.    OTHER COVERAGES
At Agent's request, Borrower shall procure and maintain such other insurance, or
such additional amounts of insurance, covering Borrower and/or the Property, as
Agent shall from time to time require, in the exercise of its reasonable
business judgment in light of the commercial real estate practice existing at
the time the insurance is issued and in the place where the Property is located,
provided such insurance is available at commercially reasonable rates. In
addition, the above insurance requirements are subject to change or the
imposition of additional coverages if

 
EXHIBIT G - Page 3
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required by applicable laws, regulations or policies applicable to Agent or
Lenders or the Property.

 
EXHIBIT G - Page 4
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EXHIBIT H
NOTICES AND WIRE INSTRUCTIONS
U.S. Bank National Association
Commercial Real Estate
4100 Newport Place, Suite 900
Newport Beach, CA 92660
Attention: Loan Administration

U.S. Bank National Association
Commercial Real Estate
Newport Beach, CA 92660
Account #0003136260600
ABA #123000220
Attention: Susanie Samson
Tel.: (949) 863-2376

 
EXHIBIT H
Loan Agreement (KBS REIT II)

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EXHIBIT I
COMMITMENTS AND COMMITMENT PERCENTAGES OF LENDERS
Lender

Total
Commitment
Commitment
Percentage
U.S. Bank National Association
$135,000,000
57.446808510638
TD Bank
$100,000,000
42.553191489362

 
EXHIBIT I
Loan Agreement (KBS REIT II)

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EXHIBIT J
FORM OF DRAW REQUEST
(See Attached)

 
EXHIBIT J
Loan Agreement (KBS REIT II)

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Draw Request
Borrower hereby requests an advance of Loan proceeds in the amount of $________,
which request is supported by the attached (which includes information required
by Agent regarding Availability Amount calculations).
Borrower hereby certifies as follows (all terms herein having the meanings set
forth in the Loan Agreement (the "Loan Agreement") dated as of ______, 2013,
between Borrower and U.S. Bank National Association, as "Agent" and the Lenders
from time to time a party thereto ("Lenders"):
1.    At the date hereof, to the knowledge of Borrower, no suit or proceeding at
law or in equity, and, to the knowledge of Borrower, no investigation or
proceeding of any governmental body, has been instituted or is threatened, which
in either case would substantially, negatively affect the condition or business
operations of any Borrower or any Property, except the following:
__________________________________________________________________________________________________________________________________________________________________________________________________________________
2.    At the date hereof, to the knowledge of Borrower, no default or Event of
Default under the Loan Agreement or under any of the other Loan Documents has
occurred and is continuing, and, to the knowledge of Borrower, no event has
occurred which, upon the service of notice and/or the lapse of time, would
constitute an Event of Default thereunder, except the following:
__________________________________________________________________________________________________________________________________________________________________________________________________________________
3.    Guarantor is in compliance with all required financial covenants under the
Loan Documents.
4.    All bills for labor, materials, equipment, work, services and supplies
furnished in connection with any Property, which could give rise to a mechanic's
lien if unpaid, have been paid or will be paid before they become delinquent.
5.    Immediately following the disbursement of the requested funds, the
outstanding principal amount of the Loan will not exceed the Availability Amount
(and the calculation of that Availability Amount is attached as Schedule 1).
6.    Borrower authorizes and requests Agent and Lenders to charge the total
amount of this Draw Request against Borrower's Loan account and to advance from
the proceeds of the Loan the funds hereby requested. The advance made pursuant
to this Draw Request is acknowledged to be an accommodation to Borrower and is
not a waiver by Agent or Lenders of any defaults or events of default under the
Loan Documents or any other claims of Agent or Lenders against Borrower or
Guarantor(s).

 
EXHIBIT J
Loan Agreement (KBS REIT II)

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The advances and disbursements on the attached sheets are hereby approved and
authorized.
BORROWER:

 
EXHIBIT J
Loan Agreement (KBS REIT II)

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Schedule 1 to Draw Request
(Calculation of Availability Amount)

 
EXHIBIT J
Loan Agreement (KBS REIT II)

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EXHIBIT K
BORROWER EIN NUMBERS
Borrower
U.S. EIN
KBSII 100-200 Campus Drive, LLC
26-2983460
KBSII One Meadowlands, LLC
38-3854864
KBSII Willow Oaks, LLC
27-0731730

 
EXHIBIT K
Loan Agreement (KBS REIT II)

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EXHIBIT L
FORM OF JOINDER AGREEMENT

 
EXHIBIT L
Loan Agreement (KBS REIT II)