Exhibit 10.9

Loan No. 1009271

UNSECURED PROMISSORY NOTE
(One-Month LIBO Rate, Adjusted Monthly)
$25,000,000.00
 
Irvine, California
April 19, 2013

FOR VALUE RECEIVED, the undersigned KBS LEGACY PARTNERS APARTMENT REIT, INC., a
Maryland corporation ("Borrower") promise(s) to pay to the order of WELLS FARGO
BANK, NATIONAL ASSOCIATION ("Lender"), at the Minneapolis Loan Center, 608 2nd
Avenue South, 11th Floor, Minneapolis, Minnesota 55402, or at such other place
as may be designated in writing by Lender, the principal sum of Twenty-Five
Million Dollars ($25,000,000) or so much thereof as may from time to time be
owing hereunder by reason of advances by Lender to or for the benefit or account
of Borrower, with interest thereon, per annum, at one or more of the Effective
Rates (as hereinafter defined) calculated in accordance with the terms and
provisions of the Fixed Rate Agreement attached hereto as Exhibit A (based on a
360-day year and charged on the basis of actual days elapsed). All sums owing
hereunder are payable in lawful money of the United States of America, in
immediately available funds without offset, deduction or counterclaim of any
kind.
Interest accrued on this note ("Note") shall be due and payable on the first
(1st) Business Day of each month commencing with the first (1st) month after the
date of this Note.
The outstanding principal balance of this Note, together with all accrued and
unpaid interest, shall be due and payable in full on October 19, 2013, subject
to extension to January 19, 2014 in accordance with the terms of the Loan
Agreement referenced below ("Maturity Date"). Principal amounts outstanding
hereunder, upon which repayment obligations exist and interest accrues, shall be
determined by the records of Lender, which shall be deemed to be conclusive in
the absence of clear and convincing evidence to the contrary presented by
Borrower.
This Note is evidenced by the other Loan Documents as defined in that certain
Loan Agreement dated as of the date hereof, executed by Borrower and Lender (as
the same may be amended or restated from time to time, the "Loan Agreement").
In order to assure timely payment to Lender of accrued interest, principal, fees
and late charges due and owing under the Loan (as defined in the Loan Agreement)
evidenced by this Note, Borrower hereby irrevocably authorizes Lender to
directly debit Borrower's demand deposit account with Lender, account no.
496-7225855, for payment when due of all such amounts payable to Lender.
Borrower represents and warrants to Lender that Borrower is the legal owner of
said account. Written confirmation of the amount and purpose of any such direct
debit shall be given to Borrower by Lender not less frequently than monthly. In
the event any direct debit hereunder is returned for insufficient funds,
Borrower shall pay Lender upon demand, in immediately available funds, all
amounts and expenses due and owing to Lender.
If any interest or principal payment required hereunder is not received by
Lender (whether by direct debit or otherwise) on or before the fifteenth (15th)
calendar day following the first (1st) Business Day of the month (regardless of
whether the fifteenth (15th) day falls on a Saturday, Sunday or legal holiday)
in which it becomes due, Borrower shall pay, at Lender's option, a late or
collection charge equal to four percent (4%) of the amount of such unpaid
payment ("Late Charge").
If: (a) Borrower shall fail to pay when due any sums payable hereunder; or (b) a
Default (as defined in the Loan Agreement) occurs under the Loan Agreement or
under any obligation evidenced thereby; THEN Lender may, at its sole option,
declare all sums owing under this Note immediately due and payable; provided,
however, that if any document related to this Note provides for automatic
acceleration of payment of sums owing hereunder, all sums owing hereunder shall
be automatically due and payable in accordance with the terms of that document.
From and after the Maturity Date, or such earlier date on which a Default (as
defined in the Loan Agreement) exists under the Loan Agreement or under any of
the other Loan Documents, then at the option of Lender, all sums owing on this
Note shall bear interest at a rate per annum equal to five percent (5%) in
excess of the interest rate otherwise accruing under this Note ("Default Rate").

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Loan No. 1009271

If any attorney is engaged by Lender to enforce or defend any provision of this
Note or any of the other Loan Documents, or as a consequence of any Default,
with or without the filing of any legal action or proceeding, then Borrower
shall pay to Lender immediately upon demand all attorneys' fees and all costs
incurred by Lender in connection therewith, together with interest thereon from
the date of such demand until paid at the rate of interest applicable to the
principal balance owing hereunder as if such unpaid attorneys' fees and costs
had been added to the principal.
No previous waiver and no failure or delay by Lender in acting with respect to
the terms of this Note or any of the other Loan Documents shall constitute a
waiver of any breach, default, or failure of condition under this Note or any of
the other Loan Documents. A waiver of any term of this Note or any of the other
Loan Documents must be made in writing and shall be limited to the express
written terms of such waiver. In the event of any inconsistencies between the
terms of this Note and the terms of any other document related to the Loan
evidenced by this Note, the terms of the Loan Agreement shall prevail.
If this Note is executed by more than one person or entity as Borrower, the
obligations of each such person or entity shall be joint and several. No person
or entity shall be a mere accommodation maker, but each shall be primarily and
directly liable hereunder. Borrower waives: presentment; demand; notice of
dishonor; notice of default or delinquency; notice of acceleration; notice of
protest and nonpayment; notice of costs, expenses or losses and interest
thereon; notice of late charges; and diligence in taking any action to collect
any sums owing under this Note or in proceeding against any of the rights or
interests in this Note.
Time is of the essence with respect to every provision hereof. This Note shall
be governed by, construed and enforced in accordance with the laws of the State
of California, except to the extent that federal laws preempt the laws of the
State of California, and all persons and entities in any manner obligated under
this Note consent to the jurisdiction of any federal or state court within the
State of California having proper venue and also consent to service of process
by any means authorized by California or federal law.
Borrower recognizes that its default in making any payment as provided herein or
in any other Loan Document as agreed to be paid when due, or the occurrence of
any other Default hereunder or under any other Loan Document, will require
Lender to incur additional expense in servicing and administering the Loan, in
loss to Lender of the use of the money due and in frustration to Lender in
meeting its other financial and loan commitments and that the damages caused
thereby would be extremely difficult and impractical to ascertain. Borrower
agrees (a) that an amount equal to the Late Charge plus the accrual of interest
at the Default Rate is a reasonable estimate of the damage to Lender in the
event of a late payment, and (b) that the accrual of interest at the Default
Rate following any other Default is a reasonable estimate of the damage to
Lender in the event of such other Default, regardless of whether there has been
an acceleration of the Loan evidenced hereby. Nothing in this Note shall be
construed as an obligation on the part of Lender to accept, at any time, less
than the full amount then due hereunder, or as a waiver or limitation of
Lender’s right to compel prompt performance.
All notices or other communications required or permitted to be given pursuant
to this Note shall be given to the Borrower or Lender at the address and in the
manner provided for in the Loan Agreement, except as otherwise provided herein.
The Loan Documents contain or expressly incorporate by reference the entire
agreement of the parties with respect to the matters contemplated therein and
supersede all prior negotiations or agreements, written or oral. The Loan
Documents shall not be modified except by written instrument executed by all
parties. Any reference to the Loan Documents includes any amendments, renewals
or extensions now or hereafter approved by Lender in writing.
The limitations on personal liability of the shareholders, partners and members
of Borrower contained in Section 8.20 of the Loan Agreement shall apply to this
Note.
All exhibits, schedules or other items attached hereto are incorporated into
this Note by such attachment for all purposes.
[Signature Follows on Next Page]

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Loan No. 1009271

"BORROWER"

KBA LEGACY PARTNERS APARTMENT REIT, INC.,
a Maryland corporation

By:
/s/ W. Dean Henry

Name:
W. Dean Henry

Its:
Chief Executive Officer

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EXHIBIT A
Loan No. 1009271

FIXED RATE AGREEMENT
Exhibit A to Unsecured Promissory Note ("Note"), dated April 19, 2013, made by
KBS LEGACY PARTNERS APARTMENT REIT, INC., a Maryland corporation, as Borrower,
to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION, as Lender.
Borrower has requested and Lender has agreed to provide the option to fix the
rate of interest for specified periods on specified portions of the outstanding
principal balance as a basis for calculating the Effective Rate on such portions
of the principal amounts owing under this Note (the "One-Month LIBO Rate
Option"). Borrower understands: (i) the process of exercising the One-Month LIBO
Rate Option as provided herein; (ii) that amounts owing under this Note may bear
interest at different rates and for different time periods; and (iii) that
absent the terms and conditions hereof, it would be extremely difficult to
calculate Lender's additional costs, expenses, and damages in the event of a
Default or prepayment by Borrower hereunder. Given the above, Borrower agrees
that the provisions herein (including, without limitation, the One-Month LIBO
Rate Price Adjustment defined below) provide for a reasonable and fair method
for Lender to recover its additional costs, expenses and damages in the event of
a Default or prepayment by Borrower.
1.
RATES AND TERMS DEFINED. Various rates and terms not otherwise defined herein
are defined and described as follows:

"Business Day" is a day of the week (but not a Saturday, Sunday or holiday) on
which the offices of Lender are open to the public for carrying on substantially
all of Lender's business functions.
"Effective Rate" is the rate of interest calculated in accordance with Section 2
herein.
"Federal Funds Rate" is, for any period, a fluctuating interest rate per annum
equal for each day during such period to the weighted average of the rates on
overnight Federal Funds transactions with members of the Federal Reserve System
arranged by Federal Funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Lender from three (3) Federal Funds brokers of recognized standing
selected by Lender.
"Loan Agreement" is that certain Loan Agreement dated as of April 19, 2013,
between Borrower and Lender.
"Loan Documents" are the documents defined as such in the Loan Agreement.
"One-Month LIBO Rate" is the rate of interest equal to the sum of: (a) three
percent (3.0%), plus (b) the rate of interest that is quoted by Lender from time
to time as the London InterBank Offered Rate for deposits in U.S. Dollars, at
approximately 9:00 a.m. (California time), for a period of one (1) month
("One-Month Rate"), which rate is divided by one (1.00) minus the Reserve
Percentage.

One-Month LIBO Rate = 3.0%

+

One-Month Rate
 
 
(1 – Reserve Percentage)

"One-Month LIBO Rate Period" is the period of one (1) month from the first (1st)
Business Day of a calendar month to, but not including, the first (1st) Business
Day of the next calendar month; provided, however, no One-Month LIBO Rate Period
shall extend beyond the Maturity Date.
"One-Month LIBO Rate Portion" is the principal balance of this Note which is
subject to a One-Month LIBO Rate. In the event Borrower is subject to a
principal amortization schedule under the terms and conditions of the Loan
Documents, the One-Month LIBO Rate Portion shall in no event exceed the maximum
outstanding principal balance which will be permissible on the last day of the
One-Month LIBO Rate Period.
"One-Month Rate" is the rate of interest defined above in the definition of
"One-Month LIBO Rate".

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EXHIBIT A
Loan No. 1009271

"Regulatory Costs" are, collectively, future, supplemental, emergency or other
changes in Reserve Percentages, assessment rates imposed by the FDIC, or similar
requirements or costs imposed by any domestic or foreign governmental authority
and related in any manner to a One-Month LIBO Rate.
"Replacement Rate" is, for any day, a fluctuating rate of interest equal to
three percent (3.0%), plus the Federal Funds Rate plus one and one-half percent
(1.50%).
"Reserve Percentage" is at any time the percentage announced within Lender as
the reserve percentage under Regulation D for loans and obligations making
reference to the One-Month LIBO Rate. The Reserve Percentage shall be based on
Regulation D or other regulations from time to time in effect concerning
reserves for Eurocurrency Liabilities as defined in Regulation D from related
institutions as though Lender were in a net borrowing position, as promulgated
by the Board of Governors of the Federal Reserve System, or its successor.
"Taxes" are, collectively, all withholdings, interest equalization taxes, stamp
taxes or other taxes (except income and franchise taxes) imposed by any domestic
or foreign governmental authority and related in any manner to a One-Month LIBO
Rate.
2.
EFFECTIVE RATE. The Effective Rate upon which interest shall be calculated for
this Note shall be one or more of the following:

2.1
Pre-Maturity; No Default. Provided no Default exists under this Note or under
the Loan Agreement or under any of the other Loan Documents:

(a)
Initial Disbursement; Subsequent Disbursements During Any Calendar Month. For
the initial disbursement of principal under this Note, and for any subsequent
disbursements of principal during any calendar month, the Effective Rate on such
principal amount shall be the One-Month LIBO Rate on the date of disbursement as
determined by Lender. Such Effective Rate shall apply to such principal amount
from the date of disbursement through and including the date immediately
preceding the first (1st) Business Day of the next calendar month. On the first
(1st) Business Day of the next calendar month, any principal disbursed during
the prior calendar month shall be added to (or become) the One-Month LIBO Rate
Portion for purposes of calculation of the Effective Rate under Section 2.1(b)
below.

(b)
Monthly Reset of One-Month LIBO Rate. Commencing with the first (1st) Business
Day of the first (1st) calendar month after the initial disbursement of
principal under this Note, and continuing thereafter on the first (1st) Business
Day of each succeeding calendar month, the Effective Rate on the outstanding
One-Month LIBO Rate Portion under this Note (i.e., all outstanding principal on
such first (1st) Business Day) shall be reset to the One-Month LIBO Rate, as
determined by Lender on each such first (1st) Business Day.

NOTWITHSTANDING THE ABOVE, Borrower, by written notice to Lender not less than
three (3) Business Days prior to the first (1st) Business Day of any calendar
month, may elect that the Effective Rate for all or any part of the outstanding
principal balance on this Note for the One-Month LIBO Rate Period commencing on
such first (1st) Business Day shall be the One-Month LIBO Rate, as determined by
Lender, reset daily. Each such election shall apply only to a single One-Month
LIBO Rate Period. Any written request by Borrower to Lender shall be delivered
to Lender at the Minneapolis Loan Center, 608 2nd Avenue South, 11th Floor,
Minneapolis, Minnesota 55402, with a copy to: 2030 Main Street, Suite 800,
Irvine, CA 92614, Attention: Bryan Stevens or Office Manager, or at such other
place as may be designated in writing by Lender.
(c)
If One-Month LIBO Rate Becomes Unavailable. In the event the One-Month LIBO
Rate, for any reason, should become prohibited or unavailable to Lender, or, if
in Lender's good faith judgment, it is not possible or practical for Lender to
set a One-Month LIBO Rate, THEN the Effective Rate shall be the Replacement
Rate.

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EXHIBIT A
Loan No. 1009271

2.2
Post-Maturity; Default Rate. From and after the Maturity Date, or such earlier
date on which a Default exists under the Loan Agreement or any other Loan
Document, THEN at the option of Lender, all sums owing on this Note shall bear
interest at a rate per annum equal to the Default Rate.

3.
TAXES, REGULATORY COSTS AND RESERVE PERCENTAGES. Upon Lender's demand, Borrower
shall pay to Lender, in addition to all other amounts which may be, or become,
due and payable under this Note and the other Loan Documents, any and all Taxes
and Regulatory Costs, to the extent they are not internalized by calculation of
an Effective Rate. Further, at Lender's option, the Effective Rate shall be
automatically adjusted by adjusting the Reserve Percentage, as determined by
Lender in its prudent banking judgment, from the date of imposition (or
subsequent date selected by Lender) of any such Regulatory Costs. Lender shall
give Borrower notice of any Taxes and Regulatory Costs as soon as practicable
after their occurrence, but Borrower shall be liable for any Taxes and
Regulatory Costs regardless of whether or when notice is so given.

4.
ONE-MONTH LIBO RATE PRICE ADJUSTMENT. Borrower acknowledges that prepayment or
acceleration of a One-Month LIBO Rate Portion during a One-Month LIBO Rate
Period shall result in Lender's 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. Therefore, on the date a
One-Month LIBO Rate Portion is prepaid or the date all sums payable hereunder
become due and payable, by acceleration or otherwise ("Price Adjustment Date"),
Borrower will pay Lender (in addition to all other sums then owing to Lender) an
amount ("One-Month LIBO Rate Price Adjustment") equal to the then present value
of (a) the amount of interest that would have accrued on the One-Month LIBO Rate
Portion for the remainder of the One-Month LIBO Rate Period at the One-Month
LIBO Rate set on the first (1st) Business Day of the month in which such amount
is prepaid or becomes due, less (b) the amount of interest that would accrue on
the same One-Month LIBO Rate Portion for the same period if the One-Month LIBO
Rate were set on the Price Adjustment Date at the One-Month LIBO Rate in effect
on the Price Adjustment Date. The present value shall be calculated by using as
a discount rate the One-Month Rate quoted on the Price Adjustment Date.

By initialing this provision where indicated below, Borrower confirms that
Lender's agreement to make the Loan evidenced by this Note at the interest rates
and on the other terms set forth herein and in the other Loan Documents
constitutes adequate and valuable consideration, given individual weight by
Borrower, for this agreement.
BORROWER'S INITIALS:
/s/GKH

5.
PURCHASE, SALE AND MATCHING OF FUNDS. Borrower understands, agrees and
acknowledges the following: (a) Lender has no obligation to purchase, sell
and/or match funds in connection with the use of a One-Month Rate as a basis for
calculating an Effective Rate or One-Month LIBO Rate Price Adjustment; (b) a
One-Month Rate is used merely as a reference in determining an Effective Rate or
a One-Month LIBO Rate Price Adjustment; and (c) Borrower has accepted a
One-Month Rate as a reasonable and fair basis for calculating an Effective Rate
or a One-Month LIBO Rate Price Adjustment. Borrower further agrees to pay the
One-Month LIBO Rate Price Adjustment, Taxes and Regulatory Costs, if any,
whether or not Lender elects to purchase, sell and/or match funds.

6.
MISCELLANEOUS. As used in this Exhibit, the plural shall mean the singular and
the singular shall mean the plural as the context requires.

[Signature Follows on Next Page]

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EXHIBIT A
Loan No. 1009271

This Agreement is executed concurrently with and as part of the Note referred to
and described first above.

"BORROWER"

KBA LEGACY PARTNERS APARTMENT REIT, INC.,
a Maryland corporation

By:
/s/ W. Dean Henry

Name:
W. Dean Henry

Its:
Chief Executive Officer