KBS Real Estate Investment Trust II, Inc. (Form: 8-K, Received: 05/19/2014 17:10:51)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________

FORM 8-K

__________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 15, 2014

KBS REAL ESTATE INVESTMENT TRUST II, INC.

(Exact Name of Registrant as Specified in Its Charter)

______________________________________________________



Maryland	000-53649	26-0658752
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

620 Newport Center Drive, Suite 1300

Newport Beach, California 92660

(Address of principal executive offices)

Registrant’s telephone number, including area code: (949) 417-6500

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

£ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

£ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

£ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

£ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

Purchase and Sale Agreement for Sale of 300 N. LaSalle Building

On July 29, 2010, KBS Real Estate Investment Trust II, Inc. (the “Company”), through an indirect wholly owned subsidiary, KBSII 300 North LaSalle, LLC (the “Owner”), purchased a 60-story office building containing 1,302,901 rentable square feet (the “300 N. LaSalle Building”). The 300 N. LaSalle Building is located at 300 North LaSalle Street in Chicago, Illinois on approximately 1.2 acres of land. As of March 31, 2014, the 300 N. LaSalle Building represented approximately 19.1% of the Company’s assets and 19.5% of the Company’s total revenues for the three months ended March 31, 2014.

On May 16, 2014, after a competitive bidding process overseen by HFF, Inc., a leading provider of commercial real estate and capital markets services and an unaffiliated independent third party, the Owner entered into a purchase and sale agreement and escrow instructions (the “Agreement”) for the sale of the 300 N. LaSalle Building to an affiliate of the Irvine Company, 300 North LaSalle LLC (the “Purchaser”). Donald Bren is the chairman and owner of the Purchaser and the Irvine Company and the brother of Peter Bren (one of the Company’s executive officers and sponsors). Pursuant to the Agreement, the purchase price for the 300 N. LaSalle Building is $850.0 million.

There can be no assurance that the Company will complete the sale of the 300 N. LaSalle Building. The Purchaser would be obligated to purchase the 300 N. LaSalle Building only after satisfaction of agreed upon closing conditions. In some circumstances, if the Purchaser fails to complete the acquisition, it may forfeit up to $25.0 million of earnest money.

If the Company completes the sale of the 300 N. LaSalle Building, the Company expects to make a special distribution to stockholders of a significant portion of the net proceeds from the sale, after payment of fees, expenses, the debt related to the 300 N. LaSalle Building and allowance for cash reserves. The Company expects that any special distribution will constitute a return of a portion of the stockholder’s invested capital for federal income tax purposes and any special distribution will also reduce the Company’s estimated value per share.

ITEM 8.01 OTHER EVENTS

Termination of Dividend Reinvestment Plan and Amendment and Restatement of Share Redemption Program

As of March 31, 2014, eight of the Company’s real estate properties, including the 300 N. LaSalle Building, and its leasehold interest in an industrial property were classified as held for sale and these properties had an aggregate net book value of $1.0 billion. In connection with the Company’s entry into the Agreement and the proposed sale of these properties, on May 15, 2014, the Company’s board of directors approved the termination of the Company’s dividend reinvestment plan, which termination will be effective May 29, 2014, and the amendment and restatement of the Company’s share redemption program (the “Amended Share Redemption Program”).

The Amended Share Redemption Program provides only for redemptions sought upon a stockholder’s death, “qualifying disability” or “determination of incompetence” (each as defined in the Amended Share Redemption Program, and collectively “special redemptions”). During each calendar year, such special redemptions are limited to an annual dollar amount determined by the board of directors, which may be reviewed during the year and increased or decreased upon ten business days’ notice to the Company’s stockholders. The Company may provide notice by including such information (a) in a Current Report on Form 8-K or in its annual or quarterly reports, all publicly filed with the Securities and Exchange Commission or (b) in a separate mailing to the stockholders. Commencing with the June 2014 redemption date, the dollar amount limitation for special redemptions for the remainder of calendar year 2014 is $10.0 million in the aggregate, as may be reviewed and adjusted from time to time by the board of directors. Based on historical redemption data, the board of directors believes that the $10.0 million redemption limitation for the remainder of calendar year 2014 will be sufficient for these special redemptions. There were no other changes to the terms of special redemptions, and special redemptions will continue to be made at a price per share equal to the most recent estimated value per share of the Company’s common stock as of the applicable redemption date. The Company currently does not expect to make ordinary redemptions in the future.

The Amended Share Redemption Program will become effective on June 18, 2014. The Amended Share Redemption Program is filed as an exhibit to this Current Report on Form 8-K.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS



Ex.		Description

99.1		Eighth Amended and Restated Share Redemption Program

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.




	KBS REAL ESTATE INVESTMENT TRUST II, INC.

Dated: May 19, 2014	BY:	/s/ David E. Snyder
		David E. Snyder
		Chief Financial Officer

Exhibit 99.1

EIGHTH AMENDED AND RESTATED SHARE REDEMPTION PROGRAM

Adopted May 15, 2014

The board of directors of KBS Real Estate Investment Trust II, Inc., a Maryland corporation (the “ Company ”), has adopted an Eighth Amended and Restated Share Redemption Program (the “ SRP ”), the terms and conditions of which are set forth below. Capitalized terms shall have the same meaning as set forth in the Company’s charter unless otherwise defined herein.

1. Qualifying Stockholders . “ Qualifying Stockholders ” are holders of the Company’s shares of Common Stock (the “ Shares ”) or authorized representatives of such stockholders seeking redemption upon a stockholder’s death, Qualifying Disability (as defined in paragraph 7) or Determination of Incompetence (as defined in paragraph 8).

2. Share Redemption . Subject to the terms and conditions of this SRP, including the limitations on redemptions set forth in paragraph 4 and the procedures for redemption set forth in paragraph 5, the Company will redeem such number of Shares as requested by a Qualifying Stockholder.

3. Redemption Price . The redemption price per Share for all Qualifying Stockholders is equal to the most recent estimated value per Share, as determined from time to time by the Company's advisor or another firm chosen for that purpose. The Company expects its advisor or another firm to determine its estimated value per Share every 12 to 18 months. The Company will report the redemption price in a Current Report on Form 8-K or in its annual or quarterly reports, all publicly filed with the Securities and Exchange Commission.

4. Limitations on Redemption . Notwithstanding anything contained in this SRP to the contrary, the Company’s obligation to redeem Shares pursuant to paragraphs 1, 2, 7 and 8 hereof is limited by each of the following:

a. During each calendar year, redemptions sought in connection with a stockholder's death, Qualifying Disability or Determination of Incompetence will be limited to an annual dollar amount determined by the board of directors, which may be reviewed during the year and increased or decreased upon ten business days’ notice to the Company’s stockholders. The Company may provide notice by including such information (a) in a Current Report on Form 8-K or in its annual or quarterly reports, all publicly filed with the Securities and Exchange Commission or (b) in a separate mailing to the stockholders. Commencing with the June 2014 Redemption Date (defined below) the dollar amount limitation for the remainder of calendar year 2014 is $10.0 million in the aggregate, as may be reviewed and adjusted from time to time by the board of directors as set forth above.

b. During any calendar year, the Company may redeem no more than 5% of the weighted-average number of Shares outstanding during the prior calendar year.

c. The Company has no obligation to redeem Shares if the redemption would violate the restrictions on distributions under Maryland General Corporation Law,

as amended from time to time, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency.

5. Procedures for Redemption . The Company has engaged a third party to administer the SRP. Upon any change to the identity or the mailing address of the program administrator, the Company will notify stockholders of such change. The Company will redeem Shares on the last business day of each month (the “ Redemption Date ”). For a Qualifying Stockholder’s Shares to be eligible for redemption in a given month, the program administrator must receive a written redemption request from the Qualifying Stockholder setting forth the number of Shares requested to be redeemed at least five business days before the Redemption Date. If the Company cannot repurchase all Shares presented for redemption in any month because of the limitations on redemptions set forth in paragraph 4, then the Company will honor redemption requests on a pro rata basis, except that if a pro rata redemption would result in a Qualifying Stockholder owning less than the minimum purchase requirement described in a currently effective, or the most recently effective, registration statement of the Company, as such registration statement has been amended or supplemented, then the Company would redeem all of such Qualifying Stockholder’s Shares.

If the Company does not completely satisfy a redemption request on a Redemption Date because the program administrator did not receive the request in time or because of the limitations on redemptions set forth in paragraph 4, then the Company will treat the unsatisfied portion of the redemption request as a request for redemption at the next Redemption Date funds are available for redemption, unless the redemption request is withdrawn. Any Qualifying Stockholder can withdraw a redemption request by sending written notice to the program administrator, provided such notice is received at least five business days before the Redemption Date.

6. Intentionally Omitted .

7. Qualifying Disability Determinations . In order for a disability to entitle a stockholder to the redemption terms available for a “Qualifying Disability” under this SRP, (1) the stockholder must receive a determination of disability based upon a physical or mental condition or impairment arising after the date the stockholder acquired the Shares to be redeemed, and (2) such determination of disability must be made by the governmental agency responsible for reviewing the disability retirement benefits that the stockholder could be eligible to receive (the “ Applicable Government Agency ”). The Applicable Government Agencies are limited to the following: (i) if the stockholder paid Social Security taxes and, therefore, could be eligible to receive Social Security disability benefits, then the Applicable Governmental Agency is the Social Security Administration or the agency charged with responsibility for administering Social Security disability benefits at that time if other than the Social Security Administration; (ii) if the stockholder did not pay Social Security taxes and, therefore, could not be eligible to receive Social Security disability benefits, but the stockholder could be eligible to receive disability benefits under the Civil Service Retirement System (“ CSRS ”), then the Applicable Governmental Agency is the U.S. Office of Personnel Management or the agency charged with responsibility for administering CSRS benefits at that time if other than the Office of Personnel Management; or (iii) if the stockholder did not pay Social Security taxes

and, therefore, could not be eligible to receive Social Security benefits but suffered a disability that resulted in the stockholder’s discharge from military service under conditions that were other than dishonorable and, therefore, could be eligible to receive military disability benefits, then the Applicable Governmental Agency is the Department of Veterans Affairs or the agency charged with the responsibility for administering military disability benefits at that time if other than the Department of Veterans Affairs.

Disability determinations by governmental agencies for purposes other than those listed above, including but not limited to worker’s compensation insurance, administration or enforcement of the Rehabilitation Act or Americans with Disabilities Act, or waiver of insurance premiums will not entitle a stockholder to the redemption terms available for a Qualifying Disability under this SRP. Redemption requests following an award by the applicable governmental agency of disability benefits must be accompanied by: (1) the investor’s initial application for disability benefits and (2) a Social Security Administration Notice of Award, a U.S. Office of Personnel Management determination of disability under CSRS, a Department of Veterans Affairs record of disability-related discharge or such other documentation issued by the Applicable Governmental Agency that the Company deems acceptable and that demonstrates an award of the disability benefits.

As the following disabilities do not entitle a worker to Social Security disability benefits, they do not qualify a stockholder for the redemption terms available for a Qualifying Disability under this SRP, except in the limited circumstances when the stockholder is awarded disability benefits by the other Applicable Governmental Agencies described above:

a. disabilities occurring after the legal retirement age; and

b. disabilities that do not render a worker incapable of performing substantial gainful activity.

8. Determination of Incompetence . In order for a determination of incompetence or incapacitation to entitle a stockholder to the redemption terms available for a “ Determination of Incompetence ” under this SRP, a state or federal court located in the United States (a “ U.S. Court ”) must declare, determine or find the stockholder to be (i) mentally incompetent to enter into a contract, to prepare a will or to make medical decisions or (ii) mentally incapacitated, in both cases such determination must be made by a U.S. court after the date the stockholder acquired the Shares to be redeemed.

A determination of incompetence or incapacitation by any person or entity other than a U.S. Court, or for any purpose other than those listed above, will not entitle a stockholder to the redemption terms available for a Determination of Incompetence under this SRP. Redemption requests following a Determination of Incompetence by a U.S. Court must be accompanied by the court order, determination or the certificate of the court declaring the stockholder incompetent or incapacitated.

9. Termination, Suspension or Amendment of the SRP by the Company . The Company may amend, suspend or terminate the SRP for any reason upon thirty days notice to the Company’s stockholders, provided that the Company may increase or decrease the funding available for the redemption of Shares pursuant to paragraph 4(a) hereof upon ten business days notice to the Company’s stockholders. The Company may provide notice by including such information (a) in a Current Report on Form 8-K or in its annual or quarterly reports, all publicly

filed with the Securities and Exchange Commission or (b) in a separate mailing to the stockholders.

The SRP provides Qualifying Stockholders a limited ability to redeem Shares for cash until a secondary market develops for the Shares. If and when such a secondary market develops, the SRP will terminate.

10. Notice of Redemption Requests . Qualifying Stockholders who desire to redeem their Shares must provide written notice to the Company on the form provided by the Company.

11. Liability of the Company . The Company shall not be liable for any act done in good faith or for any good faith omission to act.

12. Governing Law . The SRP shall be governed by the laws of the State of Maryland.