Document:

RI Q4 2011 Exhibit 10.115

Exhibit 10.115
PREPARED BY:

POLSINELLI SHUGHART PC
700 West 47th Street, Suite 1000
Kansas City, MO 64112-1802
Attention:  Michael B. Hickman
MLS Loan Nos. 03-0251365 and 03-0251366
CONSENT AGREEMENT
THIS CONSENT AGREEMENT (this "Agreement") is dated as of December 15, 2011, and is by and among FIRST STATES INVESTORS 5200, LLC, a Delaware limited liability company (“Borrower”), FIRST STATES GROUP, L.P., a Delaware limited partnership (“Original Guarantor”), KBS ACQUISITION HOLDINGS, LLC, a Delaware limited liability company (“New Guarantor”, and collectively with Original Guarantor, “Guarantor”) and WELLS FARGO BANK, N.A., AS TRUSTEE IN TRUST FOR HOLDERS OF BSDB 2005-AFR1 TRUST COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-AFR1, its successors and assigns, having an address at c/o Midland Loan Services, 10851 Mastin, Suite 300, Overland Park, Kansas 66210 ("Lender").
RECITALS
A.    Lender is the owner and holder of a loan (the “Loan”) made by German American Capital Corporation, a Maryland corporation (“GACC”) and Bear Stearns Commercial Mortgage, Inc., a New York corporation (“Bear Stearns” and together with GACC, the “Original Lender”), to Borrower, evidenced and secured by certain documents, instruments and agreements, including without limitation the following, all dated, or with an effective date, as of March 4, 2005, and except as noted, from Borrower in favor of Original Lender or by and between Borrower and Original Lender (collectively, the “Original Loan Documents”):  
1.Loan and Security Agreement, as amended by First Amendment to Loan Agreement dated as of April 12, 2005, Second Amendment to Loan Agreement dated as of June 9, 2005, Third Amendment to Loan Agreement dated as of July 19, 2007 (as further amended or otherwise modified, the “Loan Agreement”), 
2.    Promissory Note (Note A-1) in the original principal amount of $152,000,000.00, made by Borrower and payable to GACC (the “A-1 Note”), 
3.    Promissory Note (Note A-2) in the original principal amount of $152,000,000.00 made by Borrower and payable to Bear Stearns (the “A-2 Note” and together with the A-1 Note, the “Note”), 
4.    Combined Fee and Leasehold Multistate Mortgage, Deed to Secure Debt, Deed of Trust, Security Agreement, Financing Statement, Fixture Filing and Assignment of Leases, Rents and Security Deposits (the “Security Instrument”), which encumbers various properties described therein (such properties collectively, together with all improvements, fixtures and personal property located thereon, shall be referred to herein as the “Property”), 
5.    Assignment of Leases and Rents,

6.    Environmental Indemnity from Original Guarantor in favor of Original Lender (the “Environmental Indemnity”), 
7.    Guaranty of Recourse Obligations from Original Guarantor in favor of Original Lender (the “Guaranty”),
8.    Guaranty and Indemnity from Original Guarantor in favor of Borrower (the “Lease Guaranty”),
9.    Account and Control Agreement by and among Borrower, First States Management Corp., LLC, a Delaware limited liability company (“Manager”), Original Lender and PNC Bank, National Association, 
10.    Manager’s Consent and Subordination of Management Agreement from Manager in favor of Original Lender, 
11.    Defeasance Assignment, Assumption and Release Agreement dated as of July 19, 2007, by and among Borrower, Lender, SB BSBD 2005-AFR1 Holdings, LLC, a Delaware limited liability company (“Defeasance Borrower”), Midland Loan Services, Inc., now known as Midland Loan Services, a Division of PNC Bank, National Association (“Midland”) and Wilmington Trust Company, a Delaware banking corporation, and 
12.    Splitter, Modification and Ratification Agreement (A-1) and Splitter, Modification and Ratification Agreement (A-2), both dated as of July 19, 2007, and both by and among Borrower, Lender and Original Guarantor; and 
13.    Certain other Loan Documents (as defined in the Loan Agreement).
B.    Midland is the Master Servicer and Special Servicer under the Trust and Servicing Agreement dated as of June 15, 2005 by and among Bear Stearns Commercial Mortgage Securities Inc., as Depositor, Servicer and Special Servicer, and Wells Fargo Bank, N.A., as Trustee (as from time to time amended, supplemented or modified, the “Pooling and Servicing Agreement”). 
C.    In connection with a corporate restructuring in 2008 involving entities affiliated with Borrower and Original Guarantor, certain of such entities obtained up to $850,000,000 in mezzanine financing (the “Original Mezzanine Loan”) from Goldman Sachs Commercial Mortgage Capital, L.P., Citicorp North America, Inc. and SL Green Realty Corp. (collectively, the “Original Mezzanine Lender”), secured by a pledge of, among other security, one hundred percent (100%) of the direct or indirect ownership interests in Borrower, Original Guarantor and certain of their respective affiliated entities.
D.    In connection with a default under the Original Mezzanine Loan, Lender has been requested to consent to the following (collectively, the “Transaction”): (i) the acquisition of 100% of the ownership interests in Borrower and its 100% owner, First States Investors 5200 Holdings, LLC, a Delaware limited liability company (“5200 Holdings”), by KBS Acquisition Sub-Owner 9, LLC, a Delaware limited liability company (“KBS-9”), and (ii) the pledge of one hundred percent (100%) of the direct or indirect ownership interests in Borrower, 5200 Holdings, KBS-9 and KBS Acquisition Sub, LLC, a Delaware limited liability company (“KBS Acquisition”), the 100% owner of the KBS-9, to Goldman Sachs Mortgage Company, a New York limited partnership (“GSMC”) and Citigroup Financial Products Inc., a Delaware corporation (“Citigroup”, and collectively with GSMC, the “Repo Lender”) in connection with a loan in an aggregate principal amount of up to $160,000,000.00 (the “Repo Loan”) from Repo Lender to KBS GKK Participation Holdings I, LLC (“Repo Borrower I”) and KBS GKK 

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Participation Holdings II, LLC (“Repo Borrower II”; and collectively with Repo Borrower I, the “Repo Borrowers”), as set forth in the following agreements (collectively, as the same may be amended, modified, restructured or refinanced from time to time in accordance with the terms and conditions of this Agreement and the Intercreditor Agreement (hereinafter defined), the “Repo Loan Agreement”): (a) Amended and Restated Master Repurchase Agreement, dated as of April 28, 2011, by and between GSMC, as buyer, and Repo Borrower I, as seller, and (b) Amended and Restated Master Repurchase Agreement, dated as of April 28, 2011, by and between Citigroup, as buyer, and Repo Borrower II, as seller.
E.    Certain aspects of the Transaction would constitute a default under the Original Loan Documents if completed without the consent of Lender.  Subject to the satisfaction of the terms of this Agreement and an Intercreditor Agreement (the “Intercreditor Agreement”) executed contemporaneously herewith by and between Lender and Repo Lender, Lender has agreed to consent to the Transaction.
F.    The term "Loan Documents" as used hereinafter shall mean collectively this Agreement, all documents, instruments and agreements executed by Borrower, Original Guarantor or New Guarantor in connection with the Loan or the consent to the Transaction, and except to the extent amended or replaced pursuant to this Agreement, the Original Loan Documents (as previously modified).
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties agree as follows:
1.GENERAL.  The parties hereto confirm and agree that:  (i) there are no defenses, contributions or claims of setoffs with respect to any such sums due or owing under the Note, the Loan Agreement, the Security Instrument or any of the other Loan Documents; and (ii) unless and until Lender provides an alternative address for Lender, all Loan payments and all notices and correspondence to Lender shall be made or given to Lender at the address of Lender set forth in the introductory paragraph of this Agreement.  The parties hereto each ratify, affirm and consent to all of the terms of the Loan Documents.
2.CONSENT TO THE TRANSACTION.  Subject to satisfaction of all of the conditions contained herein, Lender hereby consents to the Transaction.  This consent is strictly limited to the Transaction described in this Agreement. Except as expressly provided herein or in the Intercreditor Agreement, this Agreement shall not constitute: (a) a waiver or modification of any requirement of obtaining Lender's consent to any future transfer of direct or indirect beneficial ownership interests in Borrower, Original Guarantor, New Guarantor or the Property, or any portion thereof or interest therein or (b) a modification of the terms, provisions, or requirements in the Loan Documents in any respect.  Borrower, Original Guarantor and New Guarantor specifically acknowledge that any subsequent transfer of any direct or indirect interest in Borrower, Original Guarantor, New Guarantor or the Property in violation of the Loan Documents, this Agreement or the Intercreditor Agreement shall be a default thereunder.  The Loan Documents are hereby ratified and, except as expressly modified in this Agreement, remain unmodified and are in full force and effect.
3.LOAN INFORMATION.  The parties hereto agree that as of the date hereof:
		
	a.
	The outstanding principal balance of the A-1 Note is $103,123,368.93. 

		
	b.
	The outstanding principal balance of the A-2 Note is $103,123,368.93. 

		
	c.
	The interest rate applicable to each of the A-1 Note and the A-2 Note is 5.9634% per annum. 

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	d.
	The maturity date applicable to each of the A-1 Note and the A-2 Note is September 8, 2019. 

		
	e.
	Separate monthly payments of principal and interest, with respect to each of the A-1 Note and the A-2 Note, both in the amount of $697,754.96, are due and payable on the twelfth day of each and every calendar month.

		
	f.
	The following additional payments are due and payable on the first day of each and every calendar month with respect to the Loan:

		
	•
	$822,895.93    tax escrow deposit.

		
	•
	$  54,768.27    insurance escrow deposit.

		
	•
	$  26,538.18    replacement reserves escrow deposit.

		
	•
	$125,000.00    tenant improvement/leasing commission escrow deposit. 

		
	•
	$  27,449.64    other charges escrow deposit. 

		
	g.
	The current balance of each escrow account held by Lender with respect to the Loan is:

		
	•
	$1,884,307.29    tax escrow account.

		
	•
	$   493,929.61    insurance escrow account.

		
	•
	$7,122,059.89    debt service escrow account.

		
	•
	$     48,763.33    replacement reserves escrow account.

		
	•
	$4,086,574.80    tenant improvement/leasing commission escrow account.  

		
	•
	$1,563,247.74    environmental reserves account.

		
	•
	$   219,696.51    other charges escrow account.

		
	•
	$7,171,576.59    BofA reserve fund escrow account.

		
	•
	$4,109,525.40    BofA reserve fund escrow account.

		
	•
	$   130,385.33    repair reserves escrow account.  

		
	h.
	All required payments due through December 1, 2011 under the Loan Documents have been paid. 

		
	i.
	There are no defenses or claims of setoffs with respect to any sums or amounts owing under the Loan Documents. 

		
	j.
	Lender is the current owner and holder of the Loan Documents. 

		
	k.
	There is no existing Event of Default (as defined in the Loan Documents) or event or condition that, with the giving of notice or passage of time or both, would constitute an Event of Default.

4.CONDITIONS.  In addition to any other conditions set forth herein or required by Lender, the following are conditions precedent that must be satisfied prior to the closing of the Transaction (the “Closing”): 
		
	a.
	The execution, acknowledgment and delivery of this Agreement by all of the parties concurrently with the Closing, and the execution, acknowledgement and delivery of the Intercreditor Agreement, a Borrower General Certificate and a Guarantor General Certificate for each Guarantor.

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	b.
	New Guarantor’s execution and delivery of (1) a Supplemental Environmental Indemnity to evidence New Guarantor’s assumption, jointly with Old Guarantor, of the indemnities and guaranties set forth in the Environmental Indemnity (the “Supplemental Environmental Indemnity”) and (2) a Supplemental Guaranty of Recourse Obligations to evidence New Guarantor’s assumption, jointly with Old Guarantor, of the indemnities and guaranties set forth in the Guaranty (the “Supplemental Guaranty”),.

		
	c.
	Lender's receipt of copies of loan documents for the Repo Loan, transfer documents related to the transfer of ownership of Borrower and 5200 Holdings, and copies of current partnership, operating and trust agreements of Borrower, 5200 Holdings, KBS-9 and such other affiliated entities as Lender shall request, all in form and substance acceptable to Lender.

		
	d.
	The full release and reconveyance (or other disposition as permitted under the Loan Documents) of any other liens or monetary encumbrances against the Property, unless such liens or monetary encumbrances are permitted under the Loan Documents.

		
	e.
	Lender's receipt of all of the Required Payments (hereinafter defined).

		
	f.
	Lender's receipt of enforceability, authorization, “bring-down” of nonconsolidation and REMIC legal opinion letters in form and substance acceptable to Lender.

5.    MODIFICATION OF LOAN AGREEMENT.  The Loan Agreement is modified as follows:
		
	a.
	The term “Environmental Indemnity”, as defined therein, shall be modified to mean the Environmental Indemnity and/or the Supplemental Environmental Indemnity, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

		
	b.
	The term “Guarantor”, as defined therein, shall be modified to mean Original Guarantor and/or New Guarantor.

		
	c.
	The term “Recourse Guaranty”, as defined therein, shall be modified to mean the Guaranty and/or the Supplemental Guaranty, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

		
	d.
	Reference is made to Section 12 of the Loan Agreement, to the Environmental Indemnity and to the Supplemental Environmental Indemnity. The parties agree that the provisions of Section 12 of the Loan Agreement, the Environmental Indemnity and the Supplemental Environmental Indemnity shall be read together to maximize the coverage with respect to the subject matter thereof, as determined by Lender.

		
	e.
	Sections 8.1 and 8.5 of the Loan Agreement are hereby deleted and replaced with the following:

Section 8.1    Restrictions on Transfers. Unless such action is permitted by the provisions of this Article VIII, Borrower shall not, and shall not permit any other Person holding any direct or indirect ownership interest in Borrower, any Guarantor or the Property to, except with the prior written consent of Lender (which may be granted or withheld in Lender’s sole and absolute discretion): (i) Transfer all or any part of the 

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Property, (ii) permit any Transfer (directly or indirectly) of any interest in Borrower, any Guarantor, KBS Acquisition Sub-Owner 9, LLC, a Delaware limited liability company (“KBS-9“), KBS Real Estate Investment Trust, Inc, a Maryland corporation (“KBS REIT”), or any Person (or group of Persons acting in concert) directly or indirectly owning or controlling more than forty-nine percent (49%) of the beneficial interests in Borrower or any Guarantor, (iii) permit any merger, consolidation or reorganization of Borrower, any Guarantor, KBS-9, KBS REIT or any Person (or group of Persons acting in concert) directly or indirectly owning or controlling more than forty-nine percent (49%) of the beneficial interests in Borrower or any Guarantor.   
Section 8.5    Permitted Interest Transfers.
(a)    Notwithstanding anything contained in Section 8.1 to the contrary, a Transfer (but not a pledge or encumbrance) of a direct or indirect beneficial interest in Borrower shall be permitted without Lender’s consent if: (i) following such Transfer, one hundred percent (100%) of the beneficial interests in Borrower are indirectly owned by KBS-9, (ii) following such Transfer, one hundred percent (100%) of the beneficial interests in KBS-9 are owned directly and indirectly by KBS REIT, (iii) following such Transfer, one hundred percent (100%) of the beneficial interests in KBS Acquisition Holdings, LLC, a Delaware limited liability company (“KBS Acquisition Holdings”) are indirectly owned by KBS REIT, (iv) following such Transfer, KBS REIT remains a publicly owned company and no Person or group of Persons acting in concert acquires in the aggregate more than forty-nine percent (49%) of the beneficial interests in KBS REIT, (v) no Person or group of Persons acting in concert, other than KBS REIT and Persons directly or indirectly wholly owned by KBS REIT acquires direct or indirect management control of Borrower, KBS-9 or KBS Acquisition Holdings, (vi) Lender receives at least thirty (30) days prior written notice thereof; and (vii) immediately prior to such Transfer, no Event of Default shall have occurred and be continuing.
(b)    Notwithstanding any provision in this Agreement or in any other Loan Document to the contrary, Section 8.5(a) shall not restrict the right of any shareholder in KBS REIT to Transfer its shares in KBS REIT so long as KBS REIT remains a publicly owned company and such Transfer does not result in any Person or group of Persons acting in concert owning or controlling more than forty-nine percent (49%) of the beneficial ownership of KBS REIT; provided that any such Transfer or redemption in connection with a merger, consolidation or reorganization of KBS REIT where KBS REIT will not be the surviving entity shall be subject to the provisions of Section 8.5(c).
(c)    Any Transfer or any direct or indirect beneficial interest in Borrower, any Guarantor or KBS REIT, other than as permitted in Section 8.5(a), or Section 8.5(b), shall require the prior written consent of Lender, which may be granted or withheld in Lender’s sole and absolute discretion; provided, that in the event the Loan is subject to Securitization, Lender’s consent shall not be required, in connection with a merger, consolidation or reorganization of KBS REIT where KBS REIT shall not be the surviving Person, if (i) Borrower delivers an Additional Non-Consolidation Opinion in a form satisfactory to Lender, (ii) either (1) Borrower delivers a Rating Agency Confirmation to Lender with respect to such Transfer, or (2) the surviving Person following such merger, consolidation or reorganization (A) has a net worth of $500,000,000 or more (exclusive of the Property), (B) has total assets of $1,500,000,000 or more (exclusive of the Property), and (C) has a substantial portion of its business involving the ownership and operation of institutional office and related properties, as reasonably determined by 

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Lender or the Rating Agencies, and (iii) Borrower pays all Rating Agency fees, a $10,000 processing fee for Lender’s servicer, and all out of pocket expenses (including reasonable attorneys fees) of the Rating Agencies, the Lender and its servicers.    
(d)    With respect to any Transfer that does not require consent under this Section 8.5, Borrower shall pay all of Lender’s out of pocket costs and expenses, as applicable, including but not limited to (i) a standard review and processing fee of $10,000 for Lender’s servicers, (ii) rating agency fees and (iii) reasonable fees of counsel to Lender and the Rating Agencies.  
5.FEES, PAYMENT AND EXPENSES.  Borrower agrees to pay at Closing the following (the "Required Payments"):
(a)$3,000.00 to Lender as a processing fee.  
(b)$15,000.00 to Lender as Lender’s consent fee with respect to the Repo Loan.
(c)$100,000.00 to Lender as a consent fee pursuant to the Intercreditor Agreement.  
(d)Payment of fees and costs of rating agencies and their respective counsel. 
(e)Payment of all out of pocket costs and expenses of Lender, including Lender’s reasonable legal fees, costs and expenses.
6.NO REPRESENTATIONS OF LENDER.  The parties hereto agree that (a) Lender has made no representations or warranty, either express or implied regarding the Property and has no responsibility whatsoever with respect to the Property, its condition, or its use, occupancy or status, and (b) no claims relating to the Property, its condition, or its use, occupancy or status, will be asserted against Lender or its agents, employees, professional consultants, affiliated entities, successors or assigns, either affirmatively or as a defense.
7.REPRESENTATIONS AND WARRANTIES.  Borrower hereby represents and warrants as follows:  
(a)Borrower hereby represents and warrants as follows:  
(i)All information and data provided by Borrower to Lender in connection with the Transaction is true and correct in all material respects.
(ii)The Transaction will not have a Material Adverse Effect (as defined in the Loan Agreement).
(iii)Lender has received copies of all consents and approvals, if any, required in connection with the execution, delivery and performance by Borrower of this Agreement and all other documents related to the Loan or the Transaction.  
(iv)Borrower is duly authorized to execute, deliver and perform this Agreement and all other documents related to the Loan or the Transaction.

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(v)Any court or third-party approvals necessary for Borrower to enter into this Agreement and all other documents related to the Loan or the Transaction have been obtained.
(vi)This Agreement and the other Loan Documents are in full force and effect and the transactions contemplated therein constitute valid and binding obligations enforceable by Lender in accordance with their terms and have not been modified either orally or in writing, except as provided herein. 
(vii)After the completion of the Transaction, the direct and indirect ownership structure of Borrower is accurately depicted on the ownership chart attached hereto as Exhibit A.  
(viii)There is no bankruptcy or receivership proceeding pending or, to Borrower’s knowledge, threatened against Borrower.
(ix)All representations and warranties referred to herein are true in all material respects as of the date of this Agreement and shall survive closing of the Transaction.
(x)After the completion of the Transaction, none of the obligors remaining liable for the Original Mezzanine Loan possess any direct and indirect ownership interest in Borrower.
(b)Original Guarantor hereby represents and warrants as follows:  
(i)All information and data provided by it to Lender in connection with the Transaction is true and correct in all material respects.
(ii)The Transaction will not have a Material Adverse Effect.
(iii)Lender has received copies of all consents and approvals, if any, required in connection with the execution, delivery and performance by it of this Agreement and all other documents to which it is a party related to the Loan or the Transaction.  
(iv)It is duly authorized to execute, deliver and perform this Agreement and all other documents to which it is a party related to the Loan or the Transaction.
(v)Any court or third-party approvals necessary for it to enter into this Agreement or any other documents related to the Loan or the Transaction have been obtained.
(vi)This Agreement, the Environmental Indemnity, the Guaranty and the other Loan Documents are in full force and effect and the transactions contemplated therein constitute its valid and binding obligations enforceable by Lender in accordance with their terms and have not been modified either orally or in writing, except as provided herein. 
(vii)There is no bankruptcy or receivership proceeding pending or, to its knowledge, threatened against it.

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(viii)All representations and warranties referred to herein are true in all material respects as of the date of this Agreement and shall survive closing of the Transaction.
(ix)After the completion of the Transaction, none of the obligors remaining liable for the Original Mezzanine Loan possess any direct and indirect ownership interest in Borrower.
(c)New Guarantor hereby represents and warrants as follows:  
(i)    All information and data provided by it to Lender in connection with the Transaction is true and correct in all material respects.
(ii)    The Transaction will not have a Material Adverse Effect.
(iii)    Lender has received copies of all consents and approvals, if any, required in connection with the execution, delivery and performance by it of this Agreement and all other documents to which it is a party related to the Loan or the Transaction.  
(iv)    It is duly authorized to execute, deliver and perform this Agreement and all other documents to which it is a party related to the Loan or the Transaction.
(v)    Any court or third-party approvals necessary for it to enter into this Agreement or any other documents related to the Loan or the Transaction have been obtained.
(vi)    This Agreement, the Supplemental Environmental Indemnity, the Supplemental Guaranty and the other Loan Documents are in full force and effect and the transactions contemplated therein constitute its valid and binding obligations enforceable by Lender in accordance with their terms and have not been modified either orally or in writing, except as provided herein. 
(vii)    There is no bankruptcy or receivership proceeding pending or, to its knowledge, threatened against it.
(viii)    All representations and warranties referred to herein are true in all material respects as of the date of this Agreement and shall survive closing of the Transaction.
(ix)    After the completion of the Transaction, none of the obligors remaining liable for the Original Mezzanine Loan possess any direct and indirect ownership interest in Borrower.
Lender is entitled to rely, and has relied, upon the foregoing representations and warranties in the execution and delivery of this Agreement and all other documents, agreements and instruments executed and delivered by Lender in connection with this Agreement.
8.    RELEASE OF LENDER.  Each of Borrower, Old Guarantor and New Guarantor, for itself and for its agents, employees, representatives, officers, directors, general partners, limited partners, joint shareholders, beneficiaries, trustees, administrators, subsidiaries, affiliates, employees, servants and attorneys (collectively, the "Releasing Parties") jointly and severally release and forever discharge 

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Lender, PNC Bank, National Association, and Midland Loan Services, a division of PNC Bank, National Association, and their respective successors, assigns, partners, directors, officers, employees, agents, attorneys, administrators, trustees, subsidiaries, affiliates, beneficiaries, shareholders and representatives from all liabilities, obligations, costs, expenses, claims and damages, at law or in equity, known or unknown, which any of the Releasing Parties may now or hereafter hold or claim to hold under common law or statutory right, arising in any manner out of the Property, the Loan, any of the Loan Documents or any of the documents, instruments or any other transactions relating thereto or the transactions contemplated thereby, in each case solely to the extent arising prior to the date hereof.  Without limiting the generality of the foregoing, this release shall include the following matters: (a) all aspects of this Agreement and the Loan Documents, any negotiations, demands or requests with respect thereto, and (b) Lender's exercise or attempts to exercise any of its rights under this Agreement, any of the Loan Documents, at law or in equity. The Releasing Parties agree that this release is a full, final and complete release and that it may be pleaded as an absolute bar to any or all suit or suits pending or which may thereafter be filed or prosecuted by any of the Releasing Parties, or anyone claiming by, through or under any of the Releasing Parties. The Releasing Parties agree that this release is binding upon each of them and their respective agents, employees, representatives, officers, directors, general partners, limited partners, joint shareholders, beneficiaries, trustees, administrators, subsidiaries, affiliates, employees, servants and attorneys. 
9.    RATIFICATION AND CONFIRMATION OF THE LOAN.  Each of the parties agrees to perform each and every obligation under the Loan Documents, as specifically modified by this Agreement, in accordance with their respective terms and conditions.  Each of the parties hereby ratifies, affirms, reaffirms, acknowledges, confirms and agrees that the Loan Documents remain in full force and effect and represent legal, valid and binding obligations, enforceable against each of the parties in accordance with their terms. Each of Borrower, Old Guarantor and New Guarantor agrees that neither this Agreement nor any document, instrument or agreement executed by Borrower, Original Guarantor or New Guarantor in connection with the Loan or the consent to the Transaction shall diminish, impair, release or relinquish the liens, powers, titles, security interests and rights securing or guaranteeing payment of the Loan, including the validity or first priority of the liens and security interests encumbering the Property granted Lender by the Loan Documents. 
At all times each of Borrower, Old Guarantor and New Guarantor, shall comply with all terms of the Loan Documents to which it is a party, including without limitation, the insurance requirements of the Loan Documents. Although the Lender may accept certain evidence of insurance for purposes of closing the Transaction, subject to the terms of the Loan Documents, the Lender or its servicer may at any time and from time to time request additional insurance information from Borrower to ensure or monitor Borrower's compliance with the insurance provisions of the Loan Documents and may request that Borrower provide such coverages as Lender or its servicer may require consistent with the terms of the Loan Documents.  By entering into this Agreement, Lender specifically does not waive or modify any of the insurance requirements under the Loan Documents or any of the remedies provided therein for failure to secure such required insurance coverage.
10.    NONWAIVER.  The parties hereto acknowledge and agree that (a) any performance or non-performance of the Loan Documents prior to the date of this Agreement does not affect or diminish Lender's ability to require future compliance with the Loan Documents, and (b) in the future, Lender will require strict compliance with and performance of the Loan Documents. Nothing contained herein shall be construed as a waiver of any of Lender's rights or remedies with respect to any default under this Agreement or any Loan Document.
11.    BANKRUPTCY.  Each of Borrower, Old Guarantor and New Guarantor covenants and agrees that in the event it shall (i) file any petition with any bankruptcy court or be the subject of any 

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petition under the United States Bankruptcy Code (11 U.S.C. §101 et seq., the "Code"), (ii) file or be the subject of any petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any present or future federal or state act or law relating to bankruptcy, insolvency, or other relief for debtors, (iii) have sought or consented to or acquiesced in the appointment of any trustee, receiver, conservator, or liquidator, or (iv) be the subject of any order, judgment, or decree entered by any court of competent jurisdiction approving a petition filed against such party for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any present or future federal or state act or law relating to bankruptcy, insolvency, or relief for debtors, Lender shall thereupon be entitled, and each of Borrower, Old Guarantor and New Guarantor irrevocably consents, to the entry of an order by a bankruptcy court granting to Lender relief from any automatic stay imposed by Section 362 of the Code, or otherwise, on or against the exercise of the rights and remedies otherwise available to Lender as provided in the Loan Documents, this Agreement or as otherwise provided by law or in equity, and each of Borrower, Old Guarantor and New Guarantor irrevocably waives its rights to object to, attempt to enjoin or otherwise interfere with such relief and the exercise and enforcement by Lender of its rights and remedies following entry of such order.  Without limiting the generality of the immediately preceding sentence, each of Borrower, Old Guarantor and New Guarantor agrees that Lender will be entitled to and consents to immediate relief from the automatic stay imposed by the Code to allow Lender to take any and all actions necessary, desirable or appropriate to enforce any rights Lender may have under the Loan Documents, including, but not limited to, the right to possession of the Property, collection of rents, and/or the commencement or continuation of an action to foreclose Lender's liens and security interests. Each of Borrower, Old Guarantor and New Guarantor further agrees that the filing of any petition for relief under the Code which postpones, prevents, delays or otherwise hinders Lender's efforts to collect the amounts due under the Note or to liquidate any of the collateral therefor shall be deemed to have been filed in bad faith and, therefore, shall be subject to prompt dismissal or conversion to a liquidation case under the Code upon motion therefor by Lender.  Further, each of Borrower, Old Guarantor and New Guarantor agrees that it will not seek, apply for or cause the entry of any order enjoining, staying, or otherwise prohibiting or interfering with Lender's obtaining an order granting relief from the automatic stay and enforcement of any rights which Lender may have under the Loan Documents, including, but not limited to, Lender's right to possession of the Property, collection of rents and/or the commencement or continuation of an action to foreclose Lender's liens and security interests under the Loan Documents.
12.    COMPLIANCE WITH INTEREST LAW.  It is the intention of the parties hereto to conform strictly to any present or future law which has application to the interest and other charges under the Loan Documents (the "Interest Law").  Accordingly, notwithstanding anything to the contrary in the Loan Documents, the parties hereto agree that the aggregate amount of all interest or other charges taken, reserved, contracted for, charged or received under the Loan Documents or otherwise in connection with the Loan shall under no circumstances exceed the maximum amount of interest allowed by the Interest Law.  If any excess interest is provided for in the Loan Documents, then any such excess shall be deemed a mistake and canceled automatically and, if theretofore paid, shall be credited against the indebtedness evidenced and secured by the Loan Documents (the "Indebtedness") (or if the Indebtedness shall have been paid in full, refunded by Lender), and the effective rate of interest under the Loan Documents shall be automatically reduce to the maximum effective contract rate of interest that Lender may from time to time legally charge under the then applicable Interest Law with respect to the Loan.  To the extent permitted by the applicable Interest Law, all sums paid or agreed to be paid to Lender for the use, forbearance or detention of the Indebtedness shall be amortized, prorated, allocated and spread throughout the full term of the Loan.
13.    LIMITATION OF CONSENT.  Lender's consent in this Agreement is strictly limited to the Transaction.  Except as expressly provided herein, this Agreement shall not constitute a waiver or modification of any requirement to obtain Lender's consent to any future transfer of any ownership 

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interest, sale, recapitalization, financial interest, etc., in Borrower, Old Guarantor, New Guarantor, the Property or any portion thereof or interest therein, nor shall it constitute a modification of the terms, provisions, or requirements in the Loan Documents in any respect.
14.    EFFECT OF AGREEMENT.  The Agreement shall be deemed to form a part of the Loan Documents.  This Agreement shall not prejudice any present or future rights, remedies or powers belonging or accruing to Lender under the Loan Documents, nor impair the lien of the Security Instrument. 
15.    NO EFFECT ON LIENS OR PRIORITY.  Nothing in this Agreement shall in any way release, diminish or affect the validity or priority of the Security Instrument or any liens created by, or the agreements or covenants contained in, the Loan Documents.  Each of Borrower, Old Guarantor and New Guarantor agrees that the Note, the Security Instrument, and other Loan Documents shall secure all other sums that may be advanced in the future by Lender to Borrower or any of its successors or assigns or any other owner(s) of the Property pursuant to the terms of the Loan Documents.
16.    COMPLIANCE WITH ANTI-TERRORISM ORDERS.  
(a)Borrower will not knowingly permit the transfer of any interest in Borrower to any person or entity who is listed on the Lists or whose beneficial owners are listed on the specially Designated Nationals and Blocked Persons List (the “List”) maintained by the Office of Foreign Asset Control, Department of the Treasury (“OFAC”) pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (September 25, 2001) (the “Order”) and/or any other list of terrorists or terrorist organizations maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Executive Orders (such lists are collectively referred to as the “Lists”).
(b)Borrower will not knowingly enter into a Lease with any party who is either (A) listed on the Lists or (B) engaged in illegal activities.
(c)Borrower shall immediately notify Lender if it becomes known to Borrower that any member or beneficial owner of Borrower is listed on the Lists or (A) is indicted on, or (B) arraigned and held over on charges involving money laundering or predicate crimes to money laundering.
(d)Borrower shall immediately notify Lender if it becomes known to Borrower that any tenant at the Property is listed on the Lists or (A) is convicted on, (B) pleads nolo contendere to, (C) is indicted on or (D) is arraigned and held over on charges involving money laundering or predicate crimes to money laundering.
17.    FURTHER ASSURANCES.  Each of the parties hereto agrees to do any act or execute any additional documents requested by the other party as may reasonably be required by the other party to effectuate the purposes of this Agreement or to perfect or retain Lender’s first priority perfected security interest in the Property.
18.    INUREMENT.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors in interest and permitted assigns.
19.    GOVERNING LAW/SEVERABILITY.  This Agreement shall with all respects be governed, construed, applied and enforced in accordance with the terms of the Loan Agreement, as if it was a part of the Loan Agreement.  In the event one or more provisions of the agreement shall be invalid, 

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illegal or unenforceable, the validity and enforceability of the remaining provisions shall not in any way be affected.
20.    NO LEGAL RESTRICTIONS ON PERFORMANCE.  Each of the parties hereto agree that the execution and delivery of this Agreement and compliance with the provisions hereof will not conflict with, or constitute a breach of or a default under any agreement or other instrument to which such party is a party or by which it may be bound.
21.    MODIFICATIONS.  Neither this Agreement, nor any term or provision hereof, may be changed, discharged or terminated orally, but only by an instrument in writing signed by the party against whom enforcement of the change, discharge or termination is sought.
22.    NOTICES.  All notices to parties in connection with this Agreement shall be in writing and shall be addressed to the intended recipient thereof, in the case of Lender, at its address as set forth in the first paragraph of this Agreement, and in the case of Borrower, Old Guarantor or New Guarantor, as follows (or at such other address as such party may designate in writing from time to time by notice given to the other party):
If to Borrower:
First States Investors 5200, LLC
c/o KBS Capital Advisors LLC
620 Newport Center Drive, Suite 1300
Newport Beach, California 92660
Attention:  Keith Hall and David Snyder
    
and
First States Investors 5200, LLC
c/o KBS Capital Advisors LLC
620 Newport Center Drive, Suite 1300
Newport Beach, California 92660
Attention:  Keith Hall and David Snyder

With copies to:
Greenberg Traurig, LLP
3161 Michelson Drive, Suite 1000
Irvine, California 92612
Attention: L. Bruce Fischer, Esq.

Goldman Sachs Mortgage Company
200 West Street
New York, New York 10282
Attention:  Anthony Preisano 

Citigroup Financial Products Inc.
388 Greenwich Street
New York, New York 10013
Attention: Michael Schadt

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If to Old Guarantor:
First States Group, L.P.
c/o Gramercy Capital Corp.
420 Lexington Avenue, 19th Floor
New York, New York 10170
Attention: Allan B. Rothschild, Esq.

With a copy to:
Kirkland & Ellis LLP
300 North LaSalle
Chicago, Illinois 60654
Attention: Andrew D. Small, Esq.

If to New Guarantor:
KBS Acquisition Holdings, LLC
c/o KBS Capital Advisors LLC
620 Newport Center Drive, Suite 1300
Newport Beach, California 92660
Attention:  Keith Hall and David Snyder

With a copy to:
Greenberg Traurig, LLP
3161 Michelson Drive, Suite 1000
Irvine, California 92612
Attention: L. Bruce Fischer, Esq.

Provided, however, that failure to provide copies of notices to any of the copy parties shall not render ineffective any notice to the Borrower or the Guarantor.  All notices given to any party of this transaction shall be deemed effectively given (a) upon personal delivery of any such notice to the premises of the intended recipient as required above or as most recently designated by such intended recipient as provided herein; (b) two (2) business days following the deposit of an envelope containing such notice in the United States mail, sent by certified mail, postage pre-paid and addressed to the intended recipient as set forth above or, as most recently designated, by the intended recipients as provided herein; or (c) upon actual receipt if sent by overnight courier.
23.    HEADING: TERMS GENERALLY.  The section heading contained herein are intended for convenience of reference and shall not be deemed to define, limit or describe the scope or intent of the respective provisions of this Agreement.  Each definition contained in this or any other article of this Agreement shall apply equally to both singular and plural form of the term defined.  Each pronoun shall include the masculine, the feminine and the neuter form, whichever is appropriate to the context.  The words "included", "includes" and "including" shall each be deemed to be followed by the phrase, "without limitation".  The words "herein", "hereby", "hereof", and "hereunder" shall each be deemed to refer to this entire Agreement and not to any particular Article or Section hereof.  Notwithstanding the foregoing, if any law is amended so as to broaden the meaning of any term defined in it, such broader meaning shall apply subsequent to the effective date of such amendment.  Where a defined term derives its meaning from a statutory reference, any regulatory definition is broader than the statutory reference and any reference or citation to a statute or regulation shall be deemed to include any amendments to that statute or regulation and judicial and administrative interpretations of it.

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24.    COMPLIANCE WITH ERISA.  As of the date of this Agreement, the Borrower does not maintain any employee benefit plans that require compliance with ERISA.  If at any time Borrower institutes any employee benefit plans, it shall at all times comply with the requirements of ERISA.
25.    SOLE DISCRETION OF LENDER.  Wherever pursuant to this Agreement, Lender exercises any right given to it to approve or disapprove, or any arrangement or term is to be satisfactory to Lender, Lender’s decision to approve or disapprove or to decide that arrangements or terms are satisfactory or not satisfactory shall be in the sole and absolute discretion of Lender and shall be final and conclusive, except as may be otherwise expressly and specifically provided herein.
26.    LIABILITY.  If any party hereto consists of more than one person, the obligations and liabilities of each such person hereunder shall be joint and several.
27.    ENTIRE AGREEMENT.  This Agreement and the Loan Documents contain the entire agreement of the parties hereto with respect to the Transaction and supersedes any prior written or oral agreements between them concerning said subject matter. There are no representations, agreements, arrangements, or understanding, oral or written, between and among the parties hereto, relating to the subject matter contained in this Agreement, that are not fully expressed herein or in the Loan Documents.  This Agreement may be executed in multiple counterparts for the convenience of the parties, which together shall constitute one agreement, and the counterpart signature and acknowledgment pages may be detached from the various counterparts and attached to one copy of this Agreement.
28.    INTEGRATION, SURVIVAL.  This Agreement and the Loan Documents embody the entire agreement by and between the parties hereto with respect to the Loan, and any and all prior correspondence, discussions or negotiations are deemed merged therein. Except as otherwise specifically provided herein, all obligations of any party contained in this Agreement or the Loan Documents shall survive the Closing and Lender hereby preserves all of its rights against all persons or entities and all collateral securing the Loan, including, without limitation, the Property.
29.    NO ORAL CHANGE.  This Agreement, and any provisions hereof, may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of any party hereto, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought.
30.    ANTICIPATED RESTRUCTURE OR REFINANCE OF THE REPO LOAN.  Repo Lender and Repo Borrowers have indicated to Lender that they currently intend to restructure the Repo Loan from a repurchase facility into a traditional mezzanine loan (the “Restructured Loan”), and sometime thereafter, to refinance the Restructured Loan in an approximate amount not to exceed $200,000,000 (the “Refinanced Loan”). Lender agrees that it will grant its consent to the Restructured Loan so long as (a) the terms, conditions, documentation and collateral related to the Restructured Loan are substantially similar to the Repo Loan’s existing terms, conditions, documentation and collateral, as determined by Lender, (b) the lender under the Restructured Loan is a Qualified Transferee (as defined in the Intercreditor Agreement), (c) the lender under the Restructured Loan enters into an intercreditor agreement with terms and conditions substantially similar to the Intercreditor Agreement, as determined by Lender, (d) Lender’s master servicer is paid its standard processing fee for such transactions equal to $10,000.00, and (e) Lender is reimbursed for all costs and expenses incurred by it in connection therewith. Lender further agrees that it will grant its consent to the Refinanced Loan so long as (a) the terms, conditions, documentation and collateral related to the Refinanced Loan are substantially similar to the Repo Loan’s existing terms, conditions, documentation and collateral, as determined by Lender, (b) the lender under the Refinanced Loan is a Qualified Transferee (as defined in the Intercreditor 

15

Agreement), (c) the lender under the Refinanced Loan enters into an intercreditor agreement with terms and conditions substantially similar to the Intercreditor Agreement, as determined by Lender, (d) Lender’s master servicer is paid its standard processing fee for such transactions equal to $10,000.00, and (d) Lender is reimbursed for all costs and expenses incurred by it in connection therewith.
31.    LIMITATION ON LIABILITY OF CONSTITUENT PARTIES.  Notwithstanding anything stated to the contrary in this Agreement or the other Loan Documents, under no circumstances shall the constituent shareholders, partners, members, managers, directors, officers or employees of Borrower, Old Guarantor or New Guarantor (direct or indirect) have any liability whatsoever under the Security Instrument, this Agreement or any of the other Loan Documents, except for Old Guarantor’s obligations under the Guaranty and Environmental Indemnity, and New Guarantor’s obligations under the Supplemental Guaranty and the Supplemental Environmental Indemnity.
32.    WAIVER OF JURY TRIAL. THE PARTIES HERETO KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THE LOAN OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF ANY PARTY HERETO.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER'S CONSENT TO THE TRANSACTION.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE.]

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WHEREFORE, the parties hereto have executed this Agreement as of the date first above written.
BORROWER:    
FIRST STATES INVESTORS 5200, LLC, 
a Delaware limited liability company

By:    /s/ David E. Snyder
David E. Snyder
Chief Financial Officer

STATE OF CALIFORNIA
COUNTY OF ORANGE    )

On December 12, 2011, before me, Rhonda Radford personally appeared David E. Snyder, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and seal.

/s/ Rhonda Radford (Seal)
Signature

LENDER:
WELLS FARGO BANK, N.A., AS TRUSTEE IN TRUST FOR HOLDERS OF BSDB 2005-AFR1 TRUST COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-AFR1
		
	By
	Midland Loan Services,

a division of PNC Bank, National Association,
its Servicer and Attorney in Fact
    
		
	By:
	/s/ Bradley J. Hauger

		
	Print Name:
	Bradley J. Hauger

		
	Title:
	Senior Vice President-Servicing Officer

STATE OF KANSAS        )
) ss.
COUNTY OF JOHNSON    )

This instrument was acknowledged before me on December 15, 2011, by Bradley J. Hauger, as Senior V.P. of Midland Loan Services, a division of PNC Bank, National Association, the Master Servicer and Attorney-in-Fact for WELLS FARGO BANK, N.A., AS TRUSTEE IN TRUST FOR HOLDERS OF BSDB 2005-AFR1 TRUST COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-AFR1.

/s/ Trishia L. Lake
Print Name: Trishia L. Lake
Notary Public in and for said
County and State

My Appointment Expires:

8/14/2013

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ACKNOWLEDGMENT OF OLD GUARANTOR
The undersigned hereby acknowledges, consents to, agrees and ratifies the terms and conditions of this Agreement.  The undersigned further represents and warrants to Lender as follows: (a) the Guaranty and the Environmental Indemnity are in full force and effect; (b) as of the date hereof, the undersigned has no defenses to, or offsets against, any of its obligations under the Guaranty, the Environmental Indemnity and other Loan Documents; (c) the undersigned has full power, authority, legal right and capacity to execute and deliver this Agreement; (d) the Loan Documents, without limitation including, each of the Environmental Indemnity, the Guaranty and this Agreement, constitute valid, enforceable and binding obligations of the undersigned, and (e) the undersigned’s liabilities and obligations under (1) the Environmental Indemnity are joint and several with the liabilities and obligation of New Guarantor under the Supplemental Environmental Indemnity, and (2) the Guaranty are joint and several with the liabilities and obligation of New Guarantor under the Supplemental Guaranty.  
OLD GUARANTOR
FIRST STATES GROUP, L.P.,
a Delaware limited partnership

By:     First States Group, LLC,
a Delaware limited liability company,
its General Partner

By:/s/ Allan B. Rothschild
Name:  Allan B. Rothschild
Title:  Vice President

STATE OF New York      )
) ss.
COUNTY OF New York    )

This instrument was acknowledged before me on December 15, 2011, by Allan B. Rothschild, the Vice President of First States Group, LLC, a Delaware limited liability company, the General Partner of First States Group, L.P., a Delaware limited partnership..
/s/ Katerina Manasakis
Print Name: Katerina Manasakis
Notary Public in and for said
County and State
My Appointment Expires:

3/7/2015

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ACKNOWLEDGMENT OF NEW GUARANTOR
The undersigned hereby acknowledges, consents to, agrees and ratifies the terms and conditions of this Agreement.  The undersigned further represents and warrants to Lender as follows:  (a) the Supplemental Environmental Indemnity and the Supplemental Guaranty are in full force and effect; (b) as of the date hereof, the undersigned has no defenses to, or offsets against, any of its obligations under the Supplemental Environmental Indemnity, the Supplemental Guaranty and other Loan Documents; (c) the undersigned has full power, authority, legal right and capacity to execute and deliver this Agreement; (d) the Loan Documents, without limitation including, each of the Supplemental Environmental Indemnity, the Supplemental Guaranty and this Agreement, constitute valid, enforceable and binding obligations of the undersigned, and (e) the undersigned’s liabilities and obligations under (1) the Supplemental Environmental Indemnity are joint and several with the liabilities and obligation of Old Guarantor under the Environmental Indemnity, and (2) the Supplemental Guaranty are joint and several with the liabilities and obligation of Old Guarantor under the Guaranty. 
NEW GUARANTOR
KBS ACQUISITION HOLDINGS, LLC,
a limited liability company
		
	By: 
	/s/ David E. Snyder

David E. Snyder
Chief Financial Officer

STATE OF CALIFORNIA
COUNTY OF ORANGE    )
On December 12, 2011, before me, Rhonda Radford personally appeared David E. Snyder, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and seal.

/s/ Rhonda Radford (Seal)
Signature

EXHIBIT A
POST CLOSING OWNERSHIP CHART

EXHIBIT ARI Q4 2011 Exhibit 10.116

Exhibit 10.116

SUPPLEMENTAL RECOURSE LIABILITY AGREEMENT

This SUPPLEMENTAL RECOURSE LIABILITY AGREEMENT (this “Agreement”), is made as of December 15, 2011 by KBS DEBT HOLDINGS, LLC, a Delaware limited liability company, having an address at c/o KBS Capital Advisors LLC, 620 Newport Center Drive, Suite 1300, Newport Beach, California 92660 (“Guarantor”), to and for the benefit of PB CAPITAL CORPORATION, a Delaware corporation, having an address at 230 Park Avenue, 19th Floor, New York, New York 10169, as agent (in such capacity, “Agent”) for Lenders as more particularly set forth in the Loan Agreement (as hereinafter defined) and Lenders.  All capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Loan Agreement.
W I T N E S S E T H:
WHEREAS, First States Investors 3300 B, L.P., a Delaware limited partnership (“Borrower”) requested that Lenders make, and Agent administer, a loan in the original principal amount of $240,000,000 to Borrower (the “Loan”) pursuant to that certain Loan Agreement dated as of April 1, 2008 (the “Original Closing Date”), among Borrower, Agent and Lenders, as amended by that certain First Amendment to Loan Agreement dated as of August 22, 2008 (as so amended, the “Existing Loan Agreement”), and as further amended by that certain Omnibus Amendment and Reaffirmation of Loan Documents dated as of the date hereof (the Existing Loan Agreement, as so amended, and as the same may from time to time be further amended, supplemented, restated, converted, restructured, refinanced, extended, replaced, waived, cross-collateralized, renewed or otherwise modified in accordance with the terms of the Loan Documents, the “Loan Agreement”), which Loan is evidenced by that certain Promissory Note (the “Note”) dated as of the Original Closing Date in the same amount by Borrower to Agent and initially secured by, inter alia, those certain mortgages, deeds of trust and deeds to secure debt (each, a “Mortgage”, and collectively, the “Mortgages”) dated as of the Original Closing Date by Borrower in favor of Agent encumbering, inter alia, forty-eight (48) parcels of real property and the improvements therein, which are located at the respective addresses set forth on Exhibit A of the Loan Agreement (each a “Property” and collectively, the “Properties”);
WHEREAS, in connection with the Loan, Gramercy Capital Corp. (“Original Guarantor”), previously an Affiliate of Borrower, executed and delivered, inter alia, that certain Recourse Liability Agreement dated as of the Original Closing Date in favor of Agent, as amended by that certain Amendment to Recourse Liability Agreement dated as of the date hereof (the “Original Recourse Liability Agreement”);
WHEREAS, pursuant to the terms and conditions set forth in that certain Amended and Restated Senior Mezzanine Loan Agreement (the “Mezzanine Loan Agreement”), dated as of August 22, 2008, among First States Investors B GP, LLC, a Delaware limited liability company, First States Group, L.P., a Delaware limited partnership (“FSG”) and other borrowers named therein (collectively, “Mezzanine Borrowers”), Mezzanine Borrowers obtained a loan in the original principal amount of $500,000,000 (the “Mezzanine Loan”) from Goldman Sachs Mortgage Company, a New York limited partnership (“Goldman”), and Citigroup

Financial Products Inc., a Delaware corporation (“Citi”; and together with Goldman, “Mezzanine Lender”), as the interest in the Mezzanine Loan was subsequently assigned by Goldman and Citi to Guarantor, and as such interest in the Mezzanine Loan was further assigned by Guarantor to KBS Debt Holdings Mezz Holder, LLC, a Delaware limited liability company (“KBS Mezz Holder”), and which Mezzanine Loan is secured and evidenced by, inter alia, certain collateral described in the Mezzanine Loan Agreement and in the Mezzanine Loan Documents;
WHEREAS, KBS GKK Participation Holdings I, LLC (“Participation Holdings I”) and KBS GKK Participation Holdings II, LLC (“Participation Holdings II”; and together with Participation Holdings I, “Participation Holdings”), acquired a participation interest in the Mezzanine Loan pursuant to that certain Participation Agreement dated as of August 22, 2008 between Guarantor, as seller of the participation interests referenced therein, Participation Holdings I, as participant A, and Participation Holdings II, as participant B;
WHEREAS, pursuant to the terms, provisions and conditions set forth in that certain (collectively, as the same have been amended and may be further amended, modified, converted or restructured from time to time after the date hereof, the “Repo Agreements”): (a) Amended and Restated Master Repurchase Agreement, dated as of April 28, 2011, by and between Goldman, as buyer, and Participation Holdings I, as seller; and (b) Amended and Restated Master Repurchase Agreement, dated as of April 28, 2011, by and between Citi, as buyer, and Participation Holdings II, as seller, Participation Holdings has assigned to Mezzanine Lender all of Participation Holdings’ right, title and interest, and granted a precautionary security interest to Mezzanine Lender, in the Transaction Assets and Transaction Asset Items (as such terms are defined in the Repo Agreements), in connection with the arrangement and related obligations existing pursuant to the Repo Agreements (the “Repo Facility”);
WHEREAS, in connection with the Mezzanine Loan, on December 14, 2011, FSG did assign eighty nine percent (89%) of the limited partnership interests in Borrower to KBS Acquisition Sub-Owner 3, LLC, a Delaware limited liability company (“KBS-3”), an Affiliate of Guarantor;
WHEREAS, in connection with the Mezzanine Loan, concurrently herewith, GKK Stars Acquisition LLC, a Delaware limited liability company, will assign one hundred percent (100%) of the beneficial interests in American Financial Realty Trust, a Maryland real estate investment trust (“AFRT”), to KBS Sub-Upper Tier Owner, LLC, a Delaware limited liability company, an Affiliate of Borrower and Guarantor (“KBS Sub-Upper”);
WHEREAS, in connection with the Repo Facility, (a) KBS-3 will pledge its interest in Borrower to Mezzanine Lender and (b) KBS Sub-Upper will pledge its interest in AFRT to Mezzanine Lender;
WHEREAS, as a result of the KBS Assignments and the Repo Pledges, Guarantor will obtain substantial benefits from Lenders maintaining, and Agent administering, the Loan to Borrower; and
WHEREAS, as a condition to Agent and Lenders consenting to the KBS Assignments and the Repo Pledges, Agent and Lenders have required that, inter alia, Guarantor

2

enter into this Agreement in order for Guarantor to indemnify and compensate Agent and Lenders as hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged by all parties, Guarantor agrees as follows:
Section 1.Recourse Liability Events.  Guarantor hereby irrevocably, unconditionally and absolutely agrees to indemnify and hold harmless Agent and Lenders from and against any and all actual loss, cost, damage (excluding consequential damages), liability or expense, including reasonable attorney’s fees and disbursements, suffered or incurred by Agent or Lenders by reason of the occurrence of any of the Recourse Liability Events; provided, however, that Guarantor shall only be liable for Recourse Liability Events arising and accruing on or after the date hereof.  
Section 2.Full Recourse Events.  In the event of the occurrence of any Full Recourse Event, Guarantor hereby irrevocably, unconditionally and absolutely agrees to assume and be responsible for the prompt and complete payments of all principal, Interest, Additional Interest and other sums evidenced by the Note or payable under any other Loan Documents.  Such assumption and responsibility shall occur automatically upon the occurrence of any Full Recourse Event without further action on the part of any Person; provided, however, that Guarantor shall only be liable for Full Recourse Events arising and accruing on or after the date hereof.
Section 3.Termination.  The obligations of Guarantor under this Agreement shall terminate automatically upon the actual and irrevocable receipt by Agent of payment in full of all of the Obligations.  Notwithstanding the foregoing, Agent shall promptly execute and deliver an instrument at Guarantor’s sole cost and expense evidencing such termination.
Section 4.Application of Amounts Realized.  In the event Agent has caused a foreclosure sale or has otherwise caused a transfer of any Property, Agent shall not be required to apply any net proceeds of any such sale on account of any sums which are the subject of any obligation of Guarantor pursuant to this Agreement unless such net proceeds shall be in excess of the amount which would satisfy in full all of the Obligations (other than obligations of Guarantor arising pursuant to this Agreement), in which case Agent shall apply such excess, if any, on account of any sums which are the obligation of Guarantor pursuant to this Agreement.  
Section 5.Default Rate.  Any amount payable by Guarantor that is not paid by Guarantor within five (5) Business Days after demand therefor from Agent shall bear interest from the date of such demand at the Default Rate.
Section 6.Financial Covenants.  Guarantor hereby covenants and agrees that at all times, the Tangible Net Worth (as hereinafter defined) of Guarantor shall not be less than the Required Net Worth (as hereinafter defined) and the Liquidity of Guarantor shall not be less than the Required Liquidity (as hereinafter defined), in each case on a consolidated basis in accordance with GAAP.  For purposes of this Section 6, the following terms are defined as follows:

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(a)“Cash or Cash Equivalents” means (i) cash, (ii) marketable securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided, that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one (1) year from the date of acquisition, (iii) time deposits and certificates of deposit of any commercial bank having, or which is the principal banking subsidiary of a bank holding company organized under the laws of the United States or any State thereof having, capital, surplus and undivided profits aggregating in excess of $200,000,000, with maturities of not more than one (1) year from the date of acquisition by Guarantor, (iv) commercial paper issued by any Person incorporated in the United States rated at least A-1 or the equivalent thereof by Standard & Poor’s Corporation or at least P-1 or the equivalent thereof by Moody’s Investors Service, Inc. and in each case maturing not more than one (1) year after the date of acquisition by Guarantor and (v) investments in money market or mutual funds substantially all of whose assets are comprised of securities of the types described in clauses (i) through (iv) above.
(b)“Liquidity” shall mean (i) unrestricted and unencumbered Cash or Cash Equivalents and (ii) funds available to Guarantor through an undisbursed (in whole or in part), committed (without conditions other than for customary ministerial requirements, such as notices of drawing) line of credit to Guarantor from a banking or other financial institution reasonably acceptable to Agent that shall not expire or mature prior to, and shall otherwise be available to Guarantor through, the next succeeding date on which Guarantor’s Required Liquidity and Required Net Worth are required to be tested.
(c)“Required Liquidity” shall mean Liquidity tested on a date which is forty-five (45) days after the end of each Calendar Half equal to Fifty Million Dollars ($50,000,000); provided, that for so long as KBS Debt Holdings, LLC (as distinguished from any successor and/or assign of KBS Debt Holdings, LLC or any other Person) is Guarantor hereunder, such Liquidity shall be equal to Fifteen Million Dollars ($15,000,000).
(d)“Required Net Worth” shall mean Tangible Net Worth tested on a date which is forty-five (45) days after the end of each Calendar Half equal to Five Hundred Million Dollars ($500,000,000); provided, that for so long as KBS Debt Holdings, LLC (as distinguished from any successor and/or assign of KBS Debt Holdings, LLC or any other Person) is Guarantor hereunder, such Tangible Net Worth shall be equal to Two Hundred Fifty Million Dollars ($250,000,000).
(e)“Tangible Net Worth” means, as of any date, (i) the aggregate amount of (y) all assets of Guarantor which would be reflected on a balance sheet or personal financial statements, plus (z) accumulated depreciation (but excluding therefrom (A) capitalized interest, debt discount and expense, goodwill, patents, trademarks, service marks, tradenames, copyrights, franchises, licenses, amounts due from Affiliates and any other items which would be treated as intangibles under GAAP, (B) write-ups in book value of any asset and (C) any amount, however designated on the balance sheet, representing the excess of the purchase price paid for assets or stock acquired over the value assigned thereto on the books of Guarantor), less (ii) the aggregate amount of all liabilities of Guarantor, including contingent liabilities, which would be reflected on a balance sheet, in each case prepared in accordance with GAAP.

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Section 7.Representations and Warranties.  Guarantor represents and warrants to Agent and Lenders (which representations and warranties shall be given as of the date hereof and shall survive the execution and delivery of this Agreement) that:
(a)Guarantor is duly organized, validly existing and in good standing under the laws of the state or country first written above and is duly qualified to do business in each jurisdiction where such qualification is necessary to carry on its business. Guarantor has all necessary power and authority to own its properties and to conduct its business as presently conducted or proposed to be conducted.  Guarantor has all necessary power and authority to enter into and perform its obligations under this Agreement.
(b)This Agreement has been duly executed and delivered, and all necessary actions have been taken to authorize Guarantor to perform its obligations hereunder.
(c)This Agreement constitutes the legal, valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms, subject only to applicable bankruptcy, insolvency or similar laws generally affecting the enforcement of creditor’s rights.
(d)The consummation of the transactions herein contemplated, the execution and delivery of this Agreement, and the performance by Guarantor of its obligations hereunder, do not and will not (i) violate any Legal Requirement, (ii) result in a breach of any of the terms, conditions or provisions of, or constitute a default under any mortgage, deed of trust, indenture, agreement, permit, franchise, license, note or instrument to which Guarantor is a party or by which Guarantor or any of the Collateral bound, (iii) result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the Collateral (except as contemplated by this Agreement and by the other Loan Documents), or (iv) violate any provision of Guarantor’s organizational documents.  Guarantor is not in default with respect to any Legal Requirement relating to its formation or organization.  
(e)All consents, approvals, authorizations or orders of any Person, court or Governmental Authority or any third party that are required in connection with the execution and delivery by Guarantor of this Agreement or to consummate the transactions contemplated hereby have been obtained and are in full force and effect.  Guarantor is not in default with respect to any law, statute, rule, regulation, judgment, license, permit, order, writ injunction or decree of any court or Governmental Authority applicable to Guarantor.
(f)There are no actions, suits, or proceedings at law or in equity, pending or, to Guarantor’s knowledge, threatened, before or by any Governmental Authority or other Person against or affecting Guarantor, which, if determined adversely, has had or would reasonably be expected to have a Material Adverse Effect.  To Guarantor’s knowledge, there are no actions, suits or proceedings at law or in equity, pending or threatened, before any Governmental Authority or other Person against or affecting, the Collateral or any party thereof, which, if determined adversely, has had or would reasonably be expected to have a Material Adverse Effect.
(g)To Guarantor’s knowledge, all statements of financial condition and related schedules of Guarantor, if any, heretofore delivered to Agent are true, correct and complete in all

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material respects, fairly present the financial conditions of the subjects thereof as of the respective dates thereof and have been prepared in accordance with GAAP (except as may be disclosed therein).  To Guarantor’s knowledge, the aforesaid statements of financial condition and related schedules reflect all direct and contingent liabilities of Guarantor as of the date thereof.  To Guarantor’s knowledge, neither the aforesaid statements of financial condition and related schedules nor any certificate, statement, document or information furnished in writing to Agent, Agent’s Counsel or to any other Person at the request of Agent by or on behalf of either Guarantor in connection with or related to the transactions contemplated hereby, nor any representation nor warranty in this Agreement, contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained therein or herein not misleading in any material respect.  Guarantor is not the subject of, or has ever been the subject of, any bankruptcy, insolvency, debt relief, reorganization, liquidation, receivership or similar proceeding, or any proceeding seeking the appointment of a conservator, custodian, trustee or similar person or a readjustment of debt or marshalling of assets and liabilities and, to Guarantor’s knowledge, no such proceeding is threatened or imminent.  Both before and immediately after entering into each of the Loan Documents to which they are a party, Guarantor is able to pay its debts and other obligations when due and has a positive net worth.
(h)Guarantor does not have any offsets, defenses, rights of recoupment, claims or counterclaims of any nature with respect to the Existing Loan Agreement, Original Recourse Liability Agreement, this Agreement, the Loan Documents and/or any act or omission of any nature whatsoever which relates to, arises out of or in connection with (directly or indirectly) any of the foregoing, and Guarantor hereby waives any and all such offsets, defenses, rights of recoupment, claims or counterclaims, if any, of Guarantor.
(i)To Guarantor’s knowledge, there is no material fact pertaining to Guarantor, the Premises or the other Collateral that Guarantor has not disclosed to Agent prior to the date hereof that would reasonably be expected to have a Material Adverse Effect. 
Section 8.Liability Not Limited.  Guarantor’s liability hereunder shall not be subject to, limited by or affected in any way by any nonrecourse provisions or provisions limiting liability contained in the Loan Agreement, the Note, any Mortgage or any other Loan Document.  Guarantor agrees that the indemnities made in Sections 1 and 2 hereof and given in this Agreement are separate and distinct from, independent of and in addition to Borrower’s undertakings under the Note, the Mortgages and the other Loan Documents.  Guarantor agrees that a separate action may be brought to enforce the provisions of this Agreement which shall in no way be deemed to be an action on the Note, the Loan Agreement or any other Loan Document.  Guarantor hereby waives the defenses of laches and any applicable statute of limitations.
Section 9.Unconditional Character of Obligations.
(a)Obligations.  The obligations of Guarantor hereunder shall be absolute and unconditional, irrespective of the validity, regularity or enforceability, in whole or in part, of the Note, the Loan Agreement, the Mortgages or the other Loan Documents or any provision thereof, or the absence of any action to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against Borrower or any other Person or any

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action to enforce the same, any failure or delay in the enforcement of the obligations of Borrower, Guarantor or any other Person under any Loan Document, or any setoff, counterclaim, recoupment, limitation or termination, and irrespective of any other circumstances which might otherwise limit recourse against Guarantor by Agent or constitute a legal or equitable discharge or defense of a guarantor or surety.  Agent may enforce the obligations of Guarantor hereunder by a proceeding at law, in equity or otherwise, independent of any foreclosure or similar proceeding or any deficiency action against Borrower or any other Person at any time, and either before or after an action against the Collateral or any part thereof, Borrower or any other Person.  Guarantor waives diligence, filing of claims with any court, any proceeding to enforce any provision of the Note, the Loan Agreement, the Mortgages or any other Loan Documents against Borrower or any other Person, any right to require a proceeding first against Borrower or any other Person (or, if Guarantor consists of more than one Person, to proceed against the Persons constituting Guarantor in any particular order), or to exhaust any security (including the Collateral) for the performance of the obligations of Borrower or any other Person, or to cause a marshalling of Borrower’s assets, and any protest, presentment, notice of default or other notice or demand whatsoever.
(b)Agreement and Collateral.  Without limiting the generality of the provisions of Section 9(a) hereof and except as otherwise limited by applicable law, the obligations of Guarantor under this Agreement, and the rights of Agent to enforce the same by proceedings, whether by action at law, suit in equity or otherwise, shall not be in any way affected by any of the following: 
(i)any insolvency, bankruptcy, liquidation, reorganization, readjustment, composition, dissolution, receivership, conservatorship, winding up or other similar proceeding involving or affecting Borrower, Guarantor or any other Person or the Collateral or any part thereof, including any automatic stay granted pursuant to any provision of a bankruptcy or similar law; 
(ii)any failure by Agent, any Lender or any other Person, whether or not without fault on its part, to perform or comply with any of the terms of the Loan Agreement, or any other Loan Documents or any document or instrument relating thereto; 
(iii)the sale, transfer or conveyance of the Collateral or any interest therein to any Person, whether now or hereafter having or acquiring an interest in the Collateral or any interest therein and whether or not pursuant to any foreclosure, trustee sale or similar proceeding against Borrower or the Collateral or any part thereof; 
(iv)the conveyance to Agent, any Lender, any Affiliate of Agent or any Lender or Agent’s or any Lender’s nominee of the Collateral or any interest therein by a deed in lieu of foreclosure;
(v)subject to Section 3 hereof, the release of Borrower, Guarantor, Original Guarantor or any other Person from the performance or observance of any of the agreements, covenants, terms or conditions contained in any of the Loan Documents by operation of law or otherwise;

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(vi)the release in whole or in part of the Collateral;
(vii)any failure by Agent to record, register or file any Mortgage, any UCC financing statements or other security document or to otherwise perfect, protect, secure or insure any security interest or lien given as security for the Obligations;
(viii)any recovery from Guarantor or any other obligor of any of the Obligations, which recovery is obtained under this Agreement or any other guaranty or indemnity executed in connection with the Loan (provided that in no event shall Guarantor be liable hereunder for any Obligations which have already been satisfied by Borrower or another Person); or
(ix)any accuracy or inaccuracy of any representations or warranties made by Borrower, Guarantor or any other Person in any of the Loan Documents.
(c)Waiver.  Guarantor hereby expressly and irrevocably waives all defenses in an action brought by Agent to enforce this Agreement based on claims of waiver, release, surrender, alteration or compromise and all setoffs, reductions, or impairments, whether arising hereunder or otherwise.
(d)Agent’s and Lenders’ Ability to Act.  Agent and Lenders may deal with Borrower, Affiliates of Borrower and the Collateral in the same manner and as freely as if this Agreement did not exist and shall be entitled, among other things, to grant Borrower or any other Person such extension or extensions of time to perform any act or acts as may be deemed advisable by Agent, at any time and from time to time, without terminating, affecting or impairing the validity of this Agreement or the obligations of Guarantor hereunder.
(e)Changes to Loan Documents and Other Documents.  No compromise, alteration, amendment, modification, extension, renewal, release or other change of, or waiver, consent, delay, omission, failure to act or other action with respect to, any liability or obligation under or with respect to, or of any of the terms, covenants or conditions of, the Note, the Loan Agreement, any Mortgage or the other Loan Documents shall in any way alter, impair or affect any of the obligations of Guarantor hereunder. 
(f)Agent’s Remedies.  Agent may proceed to protect and enforce any or all of its rights under this Agreement by suit in equity or action at law against Guarantor, whether for the specific performance of any covenants or agreements contained in this Agreement or otherwise, or to take any action authorized or permitted under applicable law, and shall be entitled to require and enforce the performance of all acts and things required to be performed hereunder by Guarantor.  All rights, remedies, powers and privileges conferred by the other Loan Documents are cumulative of all other rights, remedies, powers and privileges herein or by law or in equity provided, or provided in any other Loan Document, and shall not be deemed to deprive Agent of any such other legal or equitable rights, remedies, powers and privileges to enforce the conditions, covenants and terms of this Agreement or the other Loan Documents by judicial proceedings or otherwise, and the employment of any rights, remedies, powers and privileges hereunder or otherwise, shall not prevent the concurrent or subsequent employment of any other appropriate rights, remedies, powers and privileges.

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(g)Actions.  At the option of Agent, Guarantor may be joined in any action or proceeding commenced by Agent against Borrower in connection with or based upon the Note, the Loan Agreement, the Mortgage or any other Loan Documents and recovery may be had against Guarantor in such action or proceeding or in any independent action or proceeding against Guarantor to the extent of Guarantor’s liability hereunder, without any requirement that Agent first assert, prosecute or exhaust any remedy or claim against Borrower or any other Person, or any security for the obligations of Borrower or any other Person.  Any demand by Agent for payments, or performance of the obligations under, this Agreement upon Guarantor shall not be and shall not be construed to be a release or waiver by Agent of any other obligor with respect to such payment or obligation.
(h)Continuance or Reinstatement of Agreement.  Notwithstanding anything to the contrary contained in this Agreement, Guarantor agrees that this Agreement shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment is made by Guarantor to Agent or any Lender and such payment is rescinded or must otherwise be returned by Agent or such Lender upon insolvency, bankruptcy, liquidation, reorganization, readjustment, composition, dissolution, receivership, conservatorship, winding up or other similar proceeding involving or affecting Guarantor, all as though such payment had not been made.  Agent may, but shall not be required to, litigate or otherwise dispute such rescission or its obligation to make such repayments.
(i)Payments to Guarantor; Subrogation.  In the event that Guarantor shall advance or become obligated to pay any sums under this Agreement, or in the event that for any reason whatsoever Borrower or any subsequent owner of the Collateral or any part thereof is now, or shall hereafter become, indebted to Guarantor, Guarantor agrees that (i) the amount of such sums and of such indebtedness and all interest thereon shall at all times be subordinate as to lien, the time of payment and in all other respects to all Obligations, including principal and interest and other amounts, at any time owed to Agent and/or Lenders under the Loan Documents, and (ii) Guarantor shall not be entitled to enforce or receive payment thereof until the actual and irrevocable receipt by Agent of payment in full of all Obligations.  Nothing herein contained is intended or shall be construed to give Guarantor any right of subrogation in or under the Loan Documents or any right to participate in any way therein, or in the right, title or interest of Agent or any Lender in or to the Collateral, notwithstanding any payments made by Guarantor under this Agreement, all such rights of subrogation and participation, if any, being hereby expressly postponed until the actual and irrevocable receipt by Agent of payment in full of all Obligations.  If any amount shall be paid to Guarantor by reason of the payment of sums by Guarantor under this Agreement at any time when any such sums due and owing to Agent and/or Lenders shall not have been fully paid, such amount shall be paid by Guarantor to Agent for credit and application against such sums due and owing to Agent and/or Lenders. 
(j)Effect of Foreclosure, Exercise of Remedies.  Guarantor’s obligations hereunder shall continue notwithstanding a foreclosure, deed in lieu of foreclosure or similar proceeding or transaction involving the Mortgaged Property or any part thereof or other exercise by Agent of the other remedies under the Loan Documents, at law or in equity.
Section 10.    Intentionally Omitted.

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Section 11.    Rights of Agent.  Unless expressly provided to the contrary in any particular instance, with respect to any and all rights of Agent to (a) give or withhold any consent, approval or other authorization requested by Guarantor with respect to this Agreement, (b) make any election or exercise any option granted herein, (c) make any decision, judgment or determination with respect hereto, (d) modify or amend this Agreement or waive any obligation of Guarantor hereunder or grant any extension of time for performance of the same or (e) take or omit to take any other action of any kind whatsoever, Agent shall, to the maximum extent permitted by law, have the right, and Guarantor expressly acknowledges Agent’s right, in each instance, to make or give the same or take such action or to omit to take such action, as the case may be, in its sole and absolute discretion.
Section 12.    Further Assurances.  Guarantor promptly shall make, execute or endorse, and acknowledge and deliver or file or cause the same to be done, all such vouchers, invoices, notices, certifications, instruments, additional agreements, undertakings, conveyances, deeds of trust, mortgages, transfers, assignments, financing statements or other assurances, and take all such other action, as Agent may, from time to time, reasonably determine to be necessary or proper in connection with this Agreement or any of the other Loan Documents, the obligations of Guarantor hereunder or thereunder, or for better assuring and confirming unto Agent and Lenders the full benefits and rights granted or purported to be granted by this Agreement or the other Loan Documents; provided that none of the foregoing shall increase the obligations or liabilities of Guarantor or any of its respective Affiliates hereunder or under the other Loan Documents in excess of the obligations or liabilities intended to be provided herein or in the other Loan Documents or decrease such Person’s rights hereunder or under the other Loan Documents to less than what they were prior to the execution of such documents, instruments or agreements.
Section 13.    Amendment, Waivers, Consents and Approvals.  No failure or delay of Agent in exercising any power or right hereunder or to demand payment for any sums due pursuant to this Agreement or any other Loan Document, shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  No waiver of any provision of this Agreement or in any of the other Loan Documents or consent to any departure by Guarantor or any other Person therefrom shall in any event be effective unless signed in writing by Agent, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Consents, approvals and waivers granted by Agent for any matters covered under this Agreement or any Loan Document shall not be effective unless signed in writing by Agent, and such consents, approvals and waivers shall be narrowly construed to cover only the parties and facts identified in any such consent, approval or waiver.  No notice or demand on Guarantor or any other Person in any case shall entitle Guarantor or such Person to any other or further notice or demand in similar or other circumstances.  Unless expressly provided to the contrary, any consents, approvals or waivers of Agent or Lenders pursuant to this Agreement or any other Loan Documents shall be granted or withheld in Agent’s or Lenders’ sole discretion, as the case may be.  No amendment, modification or termination of any provision of this Agreement shall be effective unless in writing and signed by Guarantor and Agent.  

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Section 14.    Binding Effect.  Except where expressly stated otherwise in the proviso in Section 6(c) and (d) hereof, this Agreement shall be binding upon Guarantor and its heirs, legatees, personal representatives, successors and assigns, and shall inure to the benefit of and shall be enforceable by Agent, Lenders and their respective successors and assigns.
Section 15.    Counterparts.  This Agreement may be executed in any number of counterparts each of which shall be deemed an original, and all of which when taken together shall be one and the same Agreement.  Signatures to this Agreement executed and transmitted by facsimile (or by copies of physically signed documents exchanged via email attachments in PDF format or equivalent) shall be valid and effective to bind the party so signing and in the event of such transmission each party agrees to deliver promptly an executed original of this Agreement with its actual signature to the other party, but a failure to do so shall not affect the enforceability of this Agreement, it being expressly agreed that each party to this Agreement shall be bound by its own facsimile or electronically transmitted signature and shall accept the facsimile or electronically transmitted signature of the other party to this Agreement.
Section 16.    Notices.  Any notice, demand, request, consent, approval or other communication, which any party hereto may be required or may desire to give hereunder, shall be made in accordance with Section 12.12 of the Loan Agreement to the party to whom notice is being given, in any of the foregoing cases, at the address set forth below:
		
	Agent:
	PB Capital Corporation 
230 Park Avenue, 19th Floor 
New York, New York  10169 
Attention:  Real Estate Portfolio Management

with a copy to: 

Kaye Scholer LLP 
425 Park Avenue 
New York, New York  10022 
Attention:  Warren J. Bernstein, Esq.
		
	Guarantor:
	First States Investors 3300 B, L.P.

c/o KBS Capital Advisors LLC
620 Newport Center Drive, Suite 1300
Newport Beach, California 92660
Attention: Keith Hall and David Snyder

with a copy similarly delivered to:

with copies to:

Greenberg Traurig, LLP
3161 Michelson Drive, Suite 1000
Irvine, California 92612
Attention: L. Bruce Fischer

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Any party may change its address for purposes of this Agreement by giving notice of such change to the other parties pursuant to this Section 16.  All such notices, certificates, demands, requests, approvals, waivers and other communications given pursuant to this Section 16 shall be effective when received or refused at the address specified as aforesaid.
Section 17.    Severability.  In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect in a particular jurisdiction or as to particular Persons or circumstances, the validity, legality and enforceability of the remaining provisions contained herein (or the effectiveness of the invalid, illegal or unenforceable provision in a different jurisdiction or as to different Persons or circumstances) shall not in any way be affected or impaired thereby.  The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
Section 18.    Captions.  The captions, headings and arrangements used in this Agreement are for convenience only and do not in any way affect, limit, amplify or modify the terms and provisions hereof.
Section 19.    Governing Law; Choice of Forum; Consent to Service of Process and Jurisdiction; Waiver of Trial by Jury.  This Agreement shall be governed by, and construed in accordance with, the substantive and procedural laws of the State of New York.  Guarantor irrevocably (a) agrees that any suit, action or other legal proceeding arising out of or relating to this Agreement, the Note or the other Loan Documents may be brought in (i) the courts of the United States of America located in the Southern District of New York or the District where any Property is located or (ii) in the state courts of the State and County of New York or the state courts of the State and County where any Property is located, (b) consents to the jurisdiction of each such court in any such suit, action or proceeding and (c) waives any objection which it may have to the laying of venue of any such suit, action or proceeding in any of such courts and any claim that any such suit, action or proceeding has been brought in an inconvenient forum.  Guarantor irrevocably consents to the service of any and all process in any such suit, action or proceeding by service of copies of such process to Guarantor at its address provided in Section 16 hereof, as the same may be changed pursuant to Section 16 hereof.  Nothing in this Section 19, however, shall affect the right of Agent to serve legal process in any other manner permitted by law or affect the right of Agent to bring any suit, action or proceeding against Guarantor or its property in the courts of any other jurisdiction.  EACH OF GUARANTOR AND LENDER (BY ITS ACCEPTANCE OF THIS AGREEMENT) HEREBY WAIVES, AND AGENT, BY ACCEPTANCE OF THIS AGREEMENT HEREBY WAIVES, TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN CONNECTION WITH THIS AGREEMENT, WHICH WAIVER IS INFORMED AND VOLUNTARY.
Section 20.    Definitional Provisions.  For purposes of this Agreement, (a) defined terms used in the singular shall import the plural and vice-versa; (b) the words “hereof,” “herein,” “hereunder” and similar terms when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (c) the words “include” and “including” wherever used in this Agreement shall be deemed to be followed by the words “without limitation” and (d) all of the agreements or instruments referred to in this

12

Agreement shall mean such agreements or instruments as the same may, from time to time, be modified, supplemented or amended, or the terms thereof waived or modified to the extent permitted by, and in accordance with, the terms and conditions thereof and of this Agreement and the other Loan Documents.
Section 21.    No Other Party Beneficiary.  This Agreement is for the sole benefit of Agent, Lenders and their successors and assigns, and is not for the benefit of any other party.  Nothing contained in this Agreement shall be deemed to confer upon anyone other than Agent, Lenders and their successors and assigns any right to insist upon or to enforce the performance or observance of any of the obligations contained herein.
Section 22.    Entire Agreement.  This Agreement and the other Loan Documents constitute the entire agreement between the parties hereto with respect to the subject matter hereof and supersede all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter contained in this Agreement.
Section 23.Reservation of Rights against Original Guarantor.  Nothing in this Agreement shall be construed as a waiver on the part of Agent or Lenders of any Defaults, Events of Defaults, Recourse Liability Events and/or Full Recourse Events of Original Guarantor, and Agent and Lenders reserve all rights and remedies against Original Guarantor arising under the Original Recourse Liability Agreement.   Notwithstanding anything to the contrary contained herein, in the event that Agent elects to pursue any rights and/or remedies against Original Guarantor, any recovery or amounts realized by Agent shall accrue solely to Agent and Lenders and shall not be applied or credited against the Loan or the Obligations or reduce, modify or otherwise affect any obligations of Borrower and/or Guarantor to Agent and Lenders; provided, that in the event Agent pursues any such rights and/or remedies against Original Guarantor and obtains any recovery in relation thereto, Agent shall not pursue any related rights and/or remedies against Guarantor in order to obtain the same recovery.  
Section 24.Limitation on Liability.  Notwithstanding anything to the contrary contained in the Loan Documents, recourse against Guarantor under this Agreement is limited solely to Guarantor and (a) no member of Guarantor, (b) no Person owning, directly or indirectly, any legal or beneficial interest in a member in Guarantor, (c) no member, manager, principal, officer, controlling person, beneficiary, trustee, real estate investment advisor, or other similar fiduciary, shareholder, employee, agent, affiliate or director of any Person described in the foregoing clauses (a) and (b), and (d) none of the respective successors and assigns of the Persons referred to in the foregoing clauses (a) through (c), shall have any personal or other liability for the payment or performance of any of the obligations or otherwise under this Agreement.  
[Remainder of Page Intentionally Left Blank; Signature Page Follows]

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IN WITNESS WHEREOF, Guarantor has executed this instrument the day and year first above written.
GUARANTOR:
KBS DEBT HOLDINGS, LLC,
a Delaware limited liability company
                        
		
	By:  
	KBS Limited Partnership, a 

Delaware limited partnership, its manager

		
	By:
	KBS Real Estate Investment Trust, Inc., 

a Maryland corporation, its sole general
partner

		
	By:
	/s/ David E. Snyder

Name:  David Snyder 
Title:   Chief Financial Officer

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