Document:

Guaranty by C. Preston Butcher

 Exhibit 10.16 
 Freddie Mac Loan Number: 534384196 
 Dakota Hill at Valley Ranch Apartments

 GUARANTY 
 MULTISTATE 
 (for use in all Property jurisdictions except California)

 REVISION DATE 05/06/05 
 This Guaranty (“Guaranty”) is entered into to be effective as of October 26, 2010, by the undersigned person(s) (the “Guarantor” jointly and severally if more than
one), for the benefit of FEDERAL HOME LOAN MORTGAGE CORPORATION (the “Lender”). 
 RECITALS 

A.         DAKOTA HILL PROPERTIES, A TEXAS LIMITED PARTNERSHIP, a Texas limited partnership (the
“Original Borrower”), previously obtained a loan from CBRE Capital Markets, Inc. (“Original Lender”) in the amount of $23,475,000.00 (the “Loan”). The Loan was evidenced by a Multifamily Note from
Original Borrower to Original Lender dated February 1, 2010 (the “Note”). The Note was secured by a Multifamily Deed of Trust, Assignment of Rents and Security Agreement and Fixture Filing dated the same date as the Note (the
“Security Instrument”), encumbering the real property described in the Security Instrument (the “Mortgaged Property”). The Original Lender sold the Note, assigned its rights in the Security Instrument and
transferred the Loan to Lender, which is now the holder of the Note and the owner of the Loan. 
 B.
        As a condition to allowing the Original Borrower to transfer the Mortgaged Property to KBS LEGACY PARTNERS DAKOTA HILL LLC, a Delaware limited liability company (the “New Borrower”),
and to allow New Borrower to assume the Loan, Lender has required that C. PRESTON BUTCHER, Individually, and C. PRESTON BUTCHER, as Trustee of the Preston Butcher Legacy Partners Business Assets Revocable Trust under declaration of trust dated
May 12, 2003, execute this Guaranty. 
 C.         All references to Borrower in this Guaranty will
be deemed to refer to the New Borrower. 
 NOW, THEREFORE, to induce Lender to consent to the transfer of the Mortgaged Property
to Borrower, and in consideration thereof, Guarantor agrees as follows: 
 1.     Defined Terms.
“Indebtedness,” “Loan Documents” and “Property Jurisdiction” and other capitalized terms used but not defined in this Guaranty shall have the meanings assigned to them in the Security Instrument.

 2.     Scope of Guaranty. 

(a)  Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Lender: 

 

	 	(i)	the full and prompt payment when due, whether at the Maturity Date or earlier, by reason of acceleration or otherwise, and at all times thereafter, of each of the
following: 

  
  

PAGE 1 

  

	 	(A)	a portion of the Indebtedness equal to zero percent (0%) of the original principal balance of the Note (the “Base Guaranty”); and

	 	(B)	in addition to the Base Guaranty, all other amounts for which Borrower is personally liable under Sections 9(c), 9(d) and 9(f) of the Note; and

	 	(C)	all costs and expenses, including reasonable Attorneys’ Fees and Costs incurred by Lender in enforcing its rights under this Guaranty; and

  

	 	(ii)	the full and prompt payment and performance when due of all of Borrower’s obligations under Section 18 of the Security Instrument. 

(b)  In addition to the Base Guaranty, all other amounts for which Borrower is personally liable under Sections 9(c) through
(f) of the Note; and 
 If the Base Guaranty stated in Section 2(a)(i)(A) is less than 100 percent of the original
principal balance of the Note, then this Section 2(b) shall be completely inapplicable and shall be treated as if not a part of this Guaranty. 
 (c)  If Guarantor is not liable for the entire Indebtedness, then all payments made by Borrower with respect to the Indebtedness and all amounts received by Lender from the enforcement of its rights
under the Security Instrument and the other Loan Documents (except this Guaranty) shall be applied first to the portion of the Indebtedness for which neither Borrower nor Guarantor has personal liability. 

3.     Additional Guaranty Relating to Bankruptcy. 

(a)  Notwithstanding any limitation on liability provided for elsewhere in this Guaranty, Guarantor hereby absolutely,
unconditionally and irrevocably guarantees to Lender the full and prompt payment when due, whether at the Maturity Date or earlier, by reason of acceleration or otherwise, and at all times thereafter, the entire Indebtedness, in the event that:

  

	 	(i)	Borrower voluntarily files for bankruptcy protection under the United States Bankruptcy Code; or 

	 	(ii)	Borrower voluntarily becomes subject to any reorganization, receivership, insolvency proceeding, or other similar proceeding pursuant to any other federal or state law
affecting debtor and creditor rights; or 

	 	(iii)	an order of relief is entered against Borrower pursuant to the United States Bankruptcy Code or other federal or state law affecting debtor and creditor rights in any
involuntary bankruptcy proceeding initiated or joined in by a “Related Party.” 

 (b)  For
purposes of this Section, the term “Related Party” means: 
  

	 	(i)	Borrower or Guarantor; and 

	 	(ii)	any person or entity that holds, directly or indirectly, any ownership interest in or right to manage Borrower or Guarantor, including without limitation, any
shareholder, member or partner of Borrower or Guarantor; and 

  
  

PAGE 2 

  

	 	(iii)	any person or entity in which any ownership interest (direct or indirect) or right to manage is held by Borrower, Guarantor or any partner, shareholder or member of, or
any other person or entity holding an interest in, Borrower or Guarantor; and 

	 	(iv)	any other creditor of Borrower that is related by blood, marriage or adoption to Borrower, Guarantor or any partner, shareholder or member of, or any other person or
entity holding an interest in, Borrower or Guarantor. 

 (c)  If Borrower, Guarantor or any Related Party has
solicited creditors to initiate or participate in any proceeding referred to in this Section, regardless of whether any of the creditors solicited actually initiates or participates in the proceeding, then such proceeding shall be considered as
having been initiated by a Related Party. 
 4.     Guarantor’s Obligations Survive Foreclosure.
The obligations of Guarantor under this Guaranty shall survive any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the Security Instrument, and, in addition, the
obligations of Guarantor relating to Borrower’s obligations under Section 18 of the Security Instrument shall survive any repayment or discharge of the Indebtedness. Notwithstanding the foregoing, if Lender has never been a
mortgagee-in-possession of or held title to the Mortgaged Property, Guarantor shall have no obligation under this Guaranty relating to Borrower’s obligations under Section 18 of the Security Instrument after the date of the release of
record of the lien of the Security Instrument as a result of the payment in full of the Indebtedness on the Maturity Date or by voluntary prepayment in full. 
 5.     Guaranty of Payment and Performance. Guarantor’s obligations under this Guaranty constitute an unconditional guaranty of payment and performance and not merely a
guaranty of collection. 
 6.     No Demand by Lender Necessary; Waivers by Guarantor. The
obligations of Guarantor under this Guaranty shall be performed without demand by Lender and shall be unconditional regardless of the genuineness, validity, regularity or enforceability of the Note, the Security Instrument, or any other Loan
Document, and without regard to any other circumstance which might otherwise constitute a legal or equitable discharge of a surety, a guarantor, a borrower or a mortgagor. Guarantor hereby waives, to the fullest extent permitted by applicable law:

 (a)  the benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with
the terms of this Guaranty and agrees that Guarantor’s obligations shall not be affected by any circumstances, whether or not referred to in this Guaranty, which might otherwise constitute a legal or equitable discharge of a surety, a
guarantor, a borrower or a mortgagor; 
 (b)  the benefits of any right of discharge under any and all statutes or other
laws relating to a guarantor, a surety, a borrower or a mortgagor, and any other rights of a surety, a guarantor, a borrower or a mortgagor under such statutes or laws; 
 (c)  diligence in collecting the Indebtedness, presentment, demand for payment, protest, all notices with respect to the Note and this Guaranty which may be required by statute, rule of law or
otherwise to preserve Lender’s rights against Guarantor under this Guaranty, including, but not limited to, notice of acceptance, notice of any amendment of the Loan Documents, notice of the occurrence of any default or Event of Default, notice
of intent to accelerate, notice of acceleration, notice of dishonor, 

  
  

PAGE 3 

 
notice of foreclosure, notice of protest, and notice of the incurring by Borrower of any obligation or indebtedness; 
 (d)  all rights to cause a marshalling of the Borrower’s assets or to require Lender to: 
  

	 	(i)	proceed against Borrower or any other guarantor of Borrower’s payment or performance under the Loan Documents (an “Other Guarantor”);

	 	(ii)	proceed against any general partner of Borrower or any Other Guarantor if Borrower or any Other Guarantor is a partnership; 

	 	(iii)	proceed against or exhaust any collateral held by Lender to secure the repayment of the Indebtedness; or 

	 	(iv)	pursue any other remedy it may now or hereafter have against Borrower, or, if Borrower is a partnership, any general partner of Borrower; 

(e)  any right to object to the timing, manner or conduct of Lender’s enforcement of its rights under any of the Loan
Documents; and 
 (f)  any right to revoke this Guaranty as to any future advances by Lender under the terms of the
Security Instrument to protect Lender’s interest in the Mortgaged Property. 
 7.     Modification
of Loan Documents. At any time or from time to time and any number of times, without notice to Guarantor and without affecting the liability of Guarantor, Lender may: 
 (a)  extend the time for payment of the principal of or interest on the Indebtedness or renew the Indebtedness in whole or in part; 

(b)  extend the time for Borrower’s performance of or compliance with any covenant or agreement contained in the Note, the
Security Instrument or any other Loan Document, whether presently existing or hereinafter entered into, or waive such performance or compliance; 
 (c)  accelerate the Maturity Date of the Indebtedness as provided in the Note, the Security Instrument, or any other Loan Document; 

(d)  with Borrower, modify or amend the Note, the Security Instrument, or any other Loan Document in any respect, including, but not
limited to, an increase in the principal amount; and/or 
 (e)  modify, exchange, surrender or otherwise deal with any
security for the Indebtedness or accept additional security that is pledged or mortgaged for the Indebtedness. 
 8.
    Joint and Several Liability. The obligations of Guarantor (and each party named as a Guarantor in this Guaranty) and any Other Guarantor shall be joint and several. Lender, in its sole and absolute discretion, may:

 (a)  bring suit against Guarantor, or any one or more of the parties named as a Guarantor in this Guaranty, and any
Other Guarantor, jointly and severally, or against any one or more of them; 

  
  

PAGE 4 

 (b)  compromise or settle with Guarantor, any one or more of the parties named as a
Guarantor in this Guaranty, or any Other Guarantor, for such consideration as Lender may deem proper; 
 (c)  release one
or more of the parties named as a Guarantor in this Guaranty, or any Other Guarantor, from liability; and 
 (d)  otherwise
deal with Guarantor and any Other Guarantor, or any one or more of them, in any manner, and no such action shall impair the rights of Lender to collect from Guarantor any amount guaranteed by Guarantor under this Guaranty. 

9.     Subordination of Borrower’s Indebtedness to Guarantor. Any indebtedness of Borrower held by
Guarantor now or in the future is and shall be subordinated to the Indebtedness and Guarantor shall collect, enforce and receive any such indebtedness of Borrower as trustee for Lender, but without reducing or affecting in any manner the liability
of Guarantor under the other provisions of this Guaranty. 
 10.     Waiver of Subrogation. Guarantor
shall have no right of, and hereby waives any claim for, subrogation or reimbursement against Borrower or any general partner of Borrower by reason of any payment by Guarantor under this Guaranty, whether such right or claim arises at law or in
equity or under any contract or statute, until the Indebtedness has been paid in full and there has expired the maximum possible period thereafter during which any payment made by Borrower to Lender with respect to the Indebtedness could be deemed a
preference under the United States Bankruptcy Code. 
 11.     Preference. If any payment by Borrower
is held to constitute a preference under any applicable bankruptcy, insolvency, or similar laws, or if for any other reason Lender is required to refund any sums to Borrower, such refund shall not constitute a release of any liability of Guarantor
under this Guaranty. It is the intention of Lender and Guarantor that Guarantor’s obligations under this Guaranty shall not be discharged except by Guarantor’s performance of such obligations and then only to the extent of such
performance. 
 12.     Financial Statements. Guarantor, from time to time upon written request by
Lender, shall deliver to Lender such financial statements as Lender may reasonably require. 
 13.
    Assignment. Lender may assign its rights under this Guaranty in whole or in part and upon any such assignment, all the terms and provisions of this Guaranty shall inure to the benefit of such assignee to the extent so
assigned. The terms used to designate any of the parties herein shall be deemed to include the heirs, legal representatives, successors and assigns of such parties, and the term “Lender” shall also include any lawful owner, holder
or pledgee of the Note. Reference in this Guaranty to “person” or “persons” shall be deemed to include individuals and entities. 
 14.     Complete and Final Agreement. This Guaranty and the other Loan Documents represent the final agreement between the parties and may not be contradicted by evidence of
prior, contemporaneous or subsequent oral agreements. There are no unwritten oral agreements between the parties. All prior or contemporaneous agreements, understandings, representations, and statements, oral or written, are merged into this
Guaranty and the other Loan Documents. Guarantor acknowledges that Guarantor has received a copy of the Note and all other Loan Documents. Neither this Guaranty nor any of its provisions may be waived, modified, amended, discharged, or terminated
except by a writing signed by 

  
  

PAGE 5 

 
the party against which the enforcement of the waiver, modification, amendment, discharge, or termination is sought, and then only to the extent set forth in that writing. 

15.     Governing Law. This Guaranty shall be governed by and enforced in accordance with the laws of the
Property Jurisdiction, without giving effect to the choice of law principles of the Property Jurisdiction that would require the application of the laws of a jurisdiction other than the Property Jurisdiction. 

16.     Jurisdiction; Venue. Guarantor agrees that any controversy arising under or in relation to this
Guaranty may be litigated in the Property Jurisdiction, and that the state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have jurisdiction over all controversies which shall arise under or in relation to
this Guaranty. Guarantor irrevocably consents to service, jurisdiction and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing
herein is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters arising under this Guaranty against Guarantor or any of Guarantor’s assets in any court of any other jurisdiction. 

17.     Guarantor’s Interest in Borrower. Guarantor represents to Lender that Guarantor has a direct or
indirect ownership or other financial interest in Borrower and/or will otherwise derive a material financial benefit from the making of the Loan. 
 18.     STATE-SPECIFIC PROVISIONS: 
 In addition to the
waivers set forth elsewhere in this Guaranty, 
 (a)  Guarantor waives the benefit of any right of
discharge under Chapter 34 of the Texas Business and Commerce Code and all other rights of sureties and guarantors under such Chapter; and 
 (b)  Guarantor waives all rights or defenses arising under Rule 31 of the Texas Rules of Civil Procedure, Section 17.001 of the Texas Civil Practice and Remedies Code, Chapter 34 of
the Texas Business and Commerce Code, or any other statute or law, common law, in equity, under contract or otherwise, or under any amendments, recodifications, supplements or any successor statute or law of or to any such statute or law; and all
rights under Sections 51.003, 51.004 and 51.005 of the Texas Property Code and under any amendments, recodifications, supplements or any successor statute or law of or to any such statute or law. 

19.     Residence; Community Property Provision. 

(a)       Guarantor represents and warrants that his/her state of residence is California. 

(b)       Guarantor warrants and represents that s/he is: 

[        ] single 
 [x] married 
 (c)       Guarantor is a married
individual residing in California. Guarantor acknowledges that this Guaranty is with recourse against the separate property and assets of such individual and against the marital community property and assets of such individual and his or her spouse.

  
  

PAGE 6 

 20.     GUARANTOR AND LENDER EACH (A) AGREES NOT TO ELECT A
TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS GUARANTY OR THE RELATIONSHIP BETWEEN THE PARTIES AS GUARANTOR AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE
EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL. 

ATTACHED EXHIBIT. The following Exhibit is attached to this Guaranty: 

|X|     Exhibit A     Modifications to Guaranty 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

  
  

PAGE 7 

 IN WITNESS WHEREOF, Guarantor has signed and delivered this Guaranty under seal or
has caused this Guaranty to be signed and delivered under seal by its duly authorized representative. 
  

			
	 Names and Address of Guarantor:
  

C. PRESTON BUTCHER, Individually and as trustee of the
Preston Butcher Legacy Partners Business Assets Revocable
Trust under declaration of trust
dated May 12, 2003
 c/o Legacy Partners Residential Realty LLC
 4000 E. Third Avenue, Sixth Floor
 Foster City, California 94404

 
 With a copy to:
 c/o Legacy Partners Residential Realty LLC
 4000 E. Third Avenue, Sixth Floor

Foster City, California 94404
 Attn: W. Dean
Henry/ Guy K. Hays
	  	  
 /s/ C. Preston Butcher

C. PRESTON BUTCHER, Individually and as trustee of the
Preston Butcher Legacy Partners Business Assets Revocable
Trust under declaration of trust
dated May 12, 2003

  
  

PAGE 8 

 THE STATE OF CALIFORNIA § 
                                   
                              § 
 COUNTY OF San Mateo             § 
 On October 15, 2010 before me, Sylvia Stein, a notary public, personally appeared Preston Butcher, 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, 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 official seal. 

/s/ Sylvia
Stein                                (seal) 

Signature of Notary 

  
  

PAGE 9 

 EXHIBIT A 
 MODIFICATIONS TO GUARANTY 
 The following modifications are made to the text of the Guaranty that
precedes this Exhibit: 
  

	 	1.	Section 17 of the Guaranty is deleted in its entirety and replaced with the following revised provision: 

17.     Guarantor’s Interest in Borrower. Guarantor represents to Lender that Guarantor has a direct or
indirect ownership or other financial interest in Borrower and/or will otherwise derive a material financial benefit from the assumption of the Loan. 
  

	2.	The following new Section 21 is added to the end of the Guaranty after the last numbered section: 

21.     Limitation of Liability to Business Assets. 

(a)       Notwithstanding anything herein to the contrary, any recourse against Guarantor
under the Guaranty under or in connection with any other Loan Document shall be limited to the respective Business Assets (as defined below) owned by Guarantor at the time of enforcement of the Guaranty. In no event, except for cash and cash
equivalents which are included in the Business Assets, will any tangible or intangible real and personal property assets not specifically included in the Business Assets, including without limitation cash, cash equivalents, jewelry, works of art,
securities (including the OP Units (as defined below)) or similar intangible personal property, or any tangible or intangible proceeds (whether from disposition of, or borrowings secured by, such assets) of any of the foregoing assets, be available
to pay or satisfy any obligations of Guarantor under the Guaranty. The Business Assets available at the time of enforcement of any recourse obligations of the Guarantor shall be deemed to include any assets that would otherwise have constituted
Business Assets but for the transfer thereof with the intent to hinder, delay or defraud creditors or but for a transfer that would otherwise constitute a fraudulent conveyance or avoidable transfer under applicable laws. This provision shall apply
only so long as the Borrower is KBS Legacy Partners Dakota Hill LLC, a Delaware limited liability company, or is owned and controlled directly or indirectly by Guarantor individually or through a trust for the benefit of family members. 

(b)       For purposes of this Section 21, the following terms shall have the meaning
set forth below: 
 (i)       “Business Assets” means the net
equity of Guarantor as reflected in the Statements of Net Equity in the Legacy Partners Organization dated as of December 31, 2009 and December 31, 2008 and owned by Guarantor at the time of enforcement of the Guaranty; provided, however,
that Business Assets shall exclude the Designated REIT Assets (as defined below). 

  
  

PAGE A-1 

 (ii)       “Designated REIT
Assets” shall mean (i) any assets or the proceeds thereof (whether from disposition of, or borrowings secured by, such assets) related to and/or received in consideration for the properties (including management contracts) sold or
contributed to and/or the properties owned by entities involved in a merger with ERP Operating Limited Partnership and its affiliates (collectively, “Equity Residential”) as part of the Equity Residential merger/contribution
transaction with affiliates of Guarantor, (ii) any assets or the proceeds thereof (whether from disposition of, or borrowings secured by, such assets) related to and/or received in consideration for the properties contributed to AMB Property
L.P. and its affiliates (collectively, “AMB”) as part of the AMB contribution transaction with affiliates of Guarantor, (iii) any assets or the proceeds thereof (whether from disposition of, or borrowings secured by, such assets)
related to and/or received in consideration for the properties contributed to Spieker Properties, L.P. and its affiliates which has since merged with or into Equity Office Properties Trust or its affiliates (collectively, “Equity Office”)
as part of the Equity Office contribution transaction with affiliates of Guarantor, (iv) any assets or the proceeds thereof (whether from disposition of, or borrowings secured by, such assets) related to and/or received in consideration for the
properties contributed to Essex Portfolio, L.P. and its affiliates (collectively, “Essex”) as part of the Essex contribution transaction with affiliates of Guarantor and/or (v) any assets or the proceeds thereof (whether from
disposition of, or borrowings secured by, such assets) related to and/or received in consideration for the property(ies) contributed to Archstone Smith Operating Trust and its affiliates (collectively, “ASOT”) as part of the ASOT
contribution transaction with affiliates of Guarantor. 
 (iii)       “OP
Units” shall mean any units of limited partnership interest and/or shares of beneficial interest issued by Equity Residential, AMB, Equity Office, Essex and/or ASOT to Guarantor and/or any entity in which Guarantor has a direct or indirect
ownership interest in connection with the Equity Residential merger/contribution transaction, the AMB contribution transaction, the Equity Office contribution transaction, the Essex contribution transaction and/or the ASOT contribution transaction.

  

	3.	The following new provision is added as Section 22: 

  

	 	22.	Release of Individual Guaranty. Lender will release new Guarantors C. Preston Butcher and the Preston Butcher Legacy Partners Business Assets Revocable
Trust dated 5/12/2003 (the “Butcher Guarantors”) from their respective Guaranty obligations upon full satisfaction of each of the following conditions: 

 

	 	(a)	Lender’s review of audited financial statements for Guarantor KBS Legacy Partners Properties LLC, a Delaware limited liability company (the “Legacy
Guarantor”) which statements isolate and demonstrate to Lender’s satisfaction that (A) the net worth of the Legacy Guarantor is not less than $30 million, and (B) the minimum liquidity of the Legacy Guarantor is not less than $3
million. 

  
  

PAGE A-2 

  

	 	(b)	The Borrower submits to Lender rent rolls, in form satisfactory to Lender, demonstrating that the Mortgaged Property has been at least 90 percent occupied for a
minimum of six consecutive months at the time of the request for release of the Butcher Guarantors. 

  

	 	(c)	The Borrower submits to Lender operating statements for the Mortgaged Property demonstrating to Lender’s satisfaction that the average debt coverage ratio for the
Mortgaged Property, as determined by Lender, has been at least 1.3x for 12 consecutive months and in each of the final 3 months of that 12 month period, based on the maximum 7.25% interest rate for Loan, applied to the declining unpaid principal
balance of the Loan. 

  

	 	(d)	The Loan must not be on any version of Lender’s watchlist. 

  

	4.	The following provision is added as Section 23: 

  

	 	23.	Guarantor Minimum Net Worth. For purposes of this Section, “Guarantor” shall mean collectively C. Preston Butcher, the Preston Butcher Legacy Partners
Business Assets Revocable Trust under declaration of trust dated May 12, 2003 and KBS Legacy Partners Properties LLC, a Delaware limited liability company. 

	 	(a)	Guarantor shall maintain a minimum joint net worth of $30 million, with liquid assets of at least $3 million (the “Minimum Net Worth Requirement”).

	 	(b)	Annually, within 60 days after the end of each fiscal year of Guarantor, Guarantor will provide Lender a written certification of the net worth of Guarantor,
derived in accordance with customarily acceptable accounting practices, which shall be certified, under penalty of perjury, by the Guarantor. This certification is in addition to any financial statements required to be delivered by the terms of the
Guaranty. 

	 	(c)	It will be an Event of Default under the Security Instrument if Guarantor fails to maintain the Minimum Net Worth Requirement or provide the annual net worth reporting
requirements contained in this Guaranty. Lender’s remedies for such an Event of Default shall include, but shall not be limited to, requiring a letter of credit or a partial paydown of the Mortgage. 

  
  

PAGE A-3Promissory Note

 Exhibit 10.17 
 PROMISSORY NOTE 
 $14,000,000 
 Borrower: KBS Legacy Partners Limited Partnership 
 Dated as of October 25, 2010 

FOR VALUE RECEIVED, KBS Legacy Partners Limited Partnership (the “Borrower”) promises to pay to the order of KBS Capital
Advisors LLC, its successors and assigns (the “Lender”) the principal sum of $14,000,000, or such lesser amount as shall equal the outstanding amount of the advances made by the Lender to the Borrower from time to time under this
Note, together with interest on the unpaid principal so advanced, calculated as set forth in Section 2 below. 
 1.
        Maturity. On April 25, 2011 (the “Stated Maturity Date”), all of the obligations of the Borrower to the Lender, including all outstanding principal, interest and all
other amounts due under this Note, shall be due and payable in full. Notwithstanding the preceding sentence, if the maturity date of the $14.0 million loan between the Lender and Wells Fargo Bank, N.A., dated October 25, 2010 (the
“Wells Fargo Loan”), is extended to July 25, 2011, the Stated Maturity Date shall be automatically extended to July 25, 2011 without any further action. 

2.         Interest Rate. The unpaid principal of this Note shall bear simple
interest from the date advanced at the rate of six percent (6%) per annum, or the maximum amount of interest allowed under the laws of the State of California, whichever is less. Interest shall be calculated based on the principal balance
outstanding under this Note as may be adjusted from time to time to reflect advances under this Note and the prepayment of outstanding principal and interest. Interest shall not be due and payable until such time as the principal balance of this
Note becomes due and payable. 
 3.         Application of Payments. All payments
made on account of this Note, including prepayments, shall be applied first to the payment of any accrued and unpaid interest due hereunder, and the remainder shall be applied to the unpaid principal sum. 

4.         Prepayment. 

        (a)       Notwithstanding Section 1 above and upon
written demand of the Lender, Borrower shall prepay, in whole or in part as specified by the Lender, any accrued and unpaid principal and interest under this Note; provided, however, that Borrower is only required to prepay such amounts if funds are
available from the net proceeds of the ongoing initial public offering of KBS Legacy Partners Apartment REIT, Inc. (“KBS Legacy Partners REIT”), the Borrower’s sole general partner. Funds shall be deemed to be available from
the net proceeds of KBS Legacy Partners REIT’s initial public offering to the extent such proceeds remain following the payment of or reserve for payment of future fees and expenses through the Stated Maturity Date related to KBS Legacy
Partners REIT’s operations, including, but not limited to, any fees and expenses related to real estate investments, payment of principal or interest on third-party debt obligations, general and administrative expenses, other general

  
 1 

 
corporate purposes or distributions (including dividend payments to investors in KBS Legacy Partners REIT) of KBS Legacy Partners REIT, determined as of the date of the Lender’s demand.

         (b)       Borrower may prepay the unpaid
principal balance of this Note, in whole or in part, together with all interest then accrued under this Note and any other sums then due and payable to Lender under the Note, without premium or penalty, at any time. 

5.         Loan Documents. The term “Loan Documents” as used in this Note
shall mean collectively this Note and any other instrument or agreement hereafter executed and delivered by the Borrower or any person as evidence of, security for or in connection with this Note or the principal amount evidenced hereby and all
renewals, extensions, refinancings, modifications, supplements or amendments hereof. 
 6.
        Commitment Fee. On the date of the closing of the Wells Fargo Loan, the Borrower agrees to pay to the Lender a non-refundable commitment fee in the amount of $140,000 (the “Commitment
Fee”). To the extent that the Commitment Fee, or any part thereof, is not paid on the date of the execution and delivery of this Note, such outstanding unpaid balance of the Commitment Fee shall be added to the outstanding principal balance
of the Note. 
 7.         Events of Default. The occurrence of any one or more
of the following events shall constitute an event of default (individually, an “Event of Default” and collectively, the “Events of Default”) under the terms of this Note: 

        (a)       Failure of the Borrower to pay any sum due the
Lender under this Note or any of the other Loan Documents, when and as the same shall become due, whether at the Stated Maturity Date, by demand for prepayment pursuant to Section 4 hereof or otherwise. 

        (b)       Failure of the Borrower to observe or perform any
warranty, covenant, condition or agreement to be observed or performed by the Borrower under this Note or any of the other Loan Documents. 
 8.         Remedies. Upon the occurrence of an Event of Default, at the option of the Lender and upon written notice to Borrower, all amounts payable by the
Borrower to the Lender under the terms of this Note shall immediately become due and payable, and the Lender shall have all of the rights, powers, and remedies available under the terms of this Note, any of the other Loan Documents and all
applicable laws. 
 9.         Waiver. To the fullest extent permitted by law and
except to the extent such rights are expressly provided in this Note, Borrower waives presentment; demand; notice of dishonor; notice of default or delinquency; notice of acceleration; notice of protest and nonpayment; notice of costs, expenses or
losses and interest thereon; notice of late charges; and diligence of taking any action to collect any sums owing under this Note or in proceeding against any of the rights or interests in or to properties securing payment of this Note. 

10.         Expenses. The Borrower shall pay to the Lender on demand by the Lender all
costs and expenses incurred by the Lender in connection this Note, including, without 

  
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limitation, recording costs, intangible taxes, documentary stamps, title insurance premiums and fees and costs of Lender’s counsel incurred in connection with the making and preparation of
Loan Documents and closing the Note, and costs related to the collection and enforcement of the Note, including, without limitation, any fees and expenses incurred in any bankruptcy proceeding of the Borrower. 

11.       Governing Law. The provisions of this Note shall be construed, interpreted and enforced in
accordance with the laws of the State of California. 
 12.       Amendments. This Note may
not be amended or modified, nor may any of its terms be waived, except by written instruments signed by the Borrower and the Lender and then only to the extent set forth therein. 

13.       Severability. If any provision of this Note is determined to be invalid, illegal or
unenforceable, in whole or in part, the validity, legality and enforceability of any of the remaining provisions or portions of this Note shall not in any way be affected or impaired thereby. 

14.       Replacement. Upon the Borrower’s receipt of reasonably satisfactory evidence of the
loss, theft, destruction or mutilation of this Note and (i) in the case of any such loss theft or destruction, upon delivery of indemnity reasonably satisfactory to the Borrower in form and amount, or (ii) in the case of any such
mutilation, upon surrender of this Note for cancellation, the Borrower shall execute and deliver, in lieu thereof, a new Note. 

15.       Tax Treatment of Loan. The parties hereto intend that the arrangements reflected in the
Loan Documents shall constitute debt for federal income tax purposes and shall be reported by the parties consistent with such intent. 
 16.       Late Charge; Default Rate. The Borrower recognizes that its default in making any payment as provided under this Note as agreed to be paid when due will
require the Lender to incur additional expense in servicing and administering the loan evidenced by this Note, in loss to the Lender of the use of the money due and in frustration to the Lender in meeting its other financial and loan commitments and
that the damages caused thereby would be extremely difficult and impractical to ascertain. The Borrower agrees that an amount equal to (a) a late or collection charge equal to four percent (4%) of the amount of such unpaid or due payment
(the “Late Charge”) plus (b) the accrual of interest at a rate per annum equal to five percent (5%) in excess of the interest rate otherwise accruing under this Note as set forth in Section 2 above (the
“Default Rate”) is a reasonable estimate of the damage to the Lender in the event of a late payment or any other Event of Default, regardless of whether there has been an acceleration of the loan evidenced hereby. Nothing in this
Note shall be construed as an obligation on the part of the Lender to accept, at any time, less than the full amount then due hereunder, or as a waiver or limitation of the Lender’s right to compel prompt performance. 

17.       Pledge of Note. Lender shall pledge this Note to Wells Fargo Bank, N.A., (“Wells
Fargo”) as collateral security for the Wells Fargo Loan. Under the loan documents evidencing and securing the Wells Fargo Loan, Wells Fargo is authorized, at any time following the occurrence of a default under the Wells Fargo Loan, to give
notice of such 

  
 3 

 
default to Borrower and to direct Borrower to make all further payments under this Note directly to Wells Fargo, as pledgee of this Note. In accepting this Note, Lender hereby authorizes and
directs Borrower to honor such direction from Wells Fargo, without further acknowledgement or consent from Lender. 
 18.
      Miscellaneous. Each right, power and remedy of the Lender as provided for in this Note or any of the other Loan Documents, or now or hereafter existing under any applicable law or otherwise shall be
cumulative and concurrent and shall be in addition to every other right, power or remedy provided for in this Note or any of the other Loan Documents or now or hereafter existing under any applicable law, and the exercise or beginning of the
exercise by the Lender of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by the Lender of any or all such other rights, powers or remedies. No course of dealing or any failure or delay by the
Lender to insist upon the strict performance of any term, condition, covenant or agreement of this Note or any of the other Loan Documents, or any failure to exercise any right, power or remedy consequent upon a breach thereof, shall constitute a
waiver of any such term, condition, covenant or agreement or of any such breach, or preclude the Lender from exercising any such right, power or remedy at a later time or times. By accepting payment after the due date of any amount payable under the
terms of this Note, the Lender shall not be deemed to waive the right either to require prompt payment when due of all other amounts payable under the terms of this Note or to declare an Event of Default for the failure to effect such prompt payment
of any such other amount. No course of dealing or conduct shall be effective to amend, modify, waive, release or change any provisions of this Note. 
 Signature page follows. 

  
 4 

 IN WITNESS WHEREOF, Borrower has executed this Note as of the date first written above.

  

					
	Borrower:
	
	KBS Legacy Partners Limited Partnership
		
	By:	 	KBS Legacy Partners Apartment REIT, Inc.,
its sole general partner
			
		 	By:	 	 /s/ Guy K. Hays

Name: Guy K. Hays
 Title: Executive Vice
President

  
 5

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