Document:

Form of Securities Purchase Agreement

 Exhibit 10.1 

SECURITIES PURCHASE AGREEMENT 

This Securities Purchase Agreement (this “Agreement”) is dated as of May 23, 2010, among Cell Therapeutics, Inc., a
Washington corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).

 WHEREAS, subject to the terms and conditions set forth in this Agreement, the Company desires to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, (i) shares of Preferred Stock (as defined below) pursuant to the Registration Statement (as defined below), and (ii) Warrants (as defined
below) pursuant to an exemption from the registration requirements of Section 5 of the Securities Act (as defined below) contained in Section 4(2) thereof and/or Regulation D thereunder, in each case as more fully described in this
Agreement. 
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and
valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows: 

ARTICLE I. 

DEFINITIONS 
 1.1
Definitions. In addition to the terms defined elsewhere in this Agreement, (a) capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Certificate of Designation (as defined herein) and
(b) the following terms have the meanings set forth in this Section 1.1: 

“Action” shall have the meaning ascribed to such term in Section 3.1(j) of this Agreement.

 “Affiliate” means any Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a Person (as such terms are used in and construed under Rule 405 of the Securities Act). With respect to a Purchaser, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser. 

“Articles of Incorporation” means the Company’s Amended and Restated Articles of Incorporation, as
amended from time to time. 
 “Business Day” means any day except Saturday, Sunday, any day
which shall be a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. 

“Certificate of Designation” means the Articles of Amendment to the Articles of Incorporation filed by
the Company with the Secretary of State of the State of Washington on or prior to the Closing Date, in the form of Exhibit A attached hereto. 
  

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 “Closing” means the closing of the purchase and sale of the
Securities on the Closing Date pursuant to Section 2.1 of this Agreement. 

“Closing Date” means the fourth
(4th) Trading Day after the date hereof. 

“Commission” means the U.S. Securities and Exchange Commission. 

“Common Stock” means the common stock of the Company, no par value per share, and any other class of
securities into which such securities may hereafter be reclassified or changed into. 
 “Common Stock
Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof, pursuant to the terms of such securities, to acquire at any time Common Stock, including, without limitation, any debt, preferred
stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock. 

“Company Counsel” means O’Melveny & Myers LLP. 

“Conversion Notice” means the Notice of Conversion in the form of Annex A attached to the
Certificate of Designation. 
 “Conversion Price” shall have the meaning ascribed to such term
in the Certificate of Designation. 
 “Exchange Act” means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder. 
 “Form S-3” shall have the
meaning ascribed to such term in Section 3.1(f) of this Agreement. 
 “GAAP” shall
have the meaning ascribed to such term in Section 3.1(h) of this Agreement. 

“Indebtedness” means (a) any liabilities for borrowed money or amounts owed in excess of $250,000
(other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of others, whether or not the same are or should be reflected in the
Company’s balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, and (c) the present value of any lease
payments in excess of $250,000 due under leases required to be capitalized in accordance with GAAP. 

“Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(o)
of this Agreement. 
  

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 “Investment Company Act” means the Investment Company Act
of 1940, as amended. 
 “Liens” means a lien, charge, security interest, encumbrance, right of
first refusal, preemptive right or other restriction. 
 “Material Adverse Effect” shall have
the meaning assigned to such term in Section 3.1(b) of this Agreement. 
 “Material
Permits” shall have the meaning ascribed to such term in Section 3.1(m) of this Agreement. 

“Per Share Purchase Price” equals $1,000, subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement and prior to Closing. 

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 

“Preferred Stock” means up to 21,000 shares of the Company’s Series 5 Preferred Stock issued
hereunder and having the rights, preferences and privileges set forth in the Certificate of Designation. 

“Proceeding” means any action, claim, suit, investigation or proceeding whether commenced or threatened.

 “Prospectus” means the final prospectus filed for the Registration Statement, including the
documents incorporated by reference in the Registration Statement, including the documents incorporated by reference in such final prospectus. 

“Prospectus Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the
Securities Act that is filed with the Commission and delivered by the Company to each Purchaser prior to the execution and delivery of this Agreement, including the documents incorporated by reference therein. 

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.7 of this
Agreement. 
 “Registration Statement” means the automatically effective registration statement
on Form S-3 (Commission File No. 333-161442) filed by the Company with the Commission pursuant to the Securities Act for the registration of the Preferred Stock and the Underlying Shares, as such Registration Statement may be amended and
supplemented from time to time (including pursuant to Rule 462(b) of the Securities Act), including all documents filed as part thereof or incorporated by reference therein, and including all information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430B of the Securities Act. 
  

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 “Required Approvals” shall have the meaning ascribed to
such term in Section 3.1(e) of this Agreement. 
 “Rule 144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h) of this
Agreement. 
 “Securities” means the Preferred Stock, the Underlying Shares, the Warrants and
the Warrant Shares. 
 “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder. 
 “Shareholder Approval” means the approval of
the Company’s shareholders as required by applicable law, after the Initial Issuance Date (as defined in the Warrants), of an amendment to the Articles of Incorporation to increase the authorized number of shares of Common Stock available for
issuance thereunder by 400,000,000 shares. 
 “Short Sales” means all “short sales” as
defined in Rule 200 of Regulation SHO of the Exchange Act (but shall be deemed to not include the location and/or reservation of borrowable shares of Common Stock).

“Stated Value” means $1,000 per share of Preferred Stock, subject to increase as set forth in
Section 3(a) of the Certificate of Designation. 
 “Subscription Amount” means, as to each
Purchaser, the aggregate amount to be paid for the Preferred Stock purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States
dollars and in immediately available funds. 
 “Subsidiary” shall have the meaning ascribed to
such term in Section 3.1(a) of this Agreement. 
 “Trading Day” means a day on which
the Common Stock is traded on a Trading Market. 
 “Trading Market” means the following markets
or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE Amex; The NASDAQ Capital Market; The NASDAQ Global Market; The NASDAQ Global Select Market; the New York Stock Exchange; or the Borsa Italiana
S.p.A. (MTA International). 
  

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 “Transaction Documents” means this Agreement, the
Certificate of Designation, the Warrants and any other documents or agreements executed and delivered to the Purchasers in connection with the transactions contemplated hereunder. 

“Underlying Shares” means the shares of Common Stock issued and issuable upon conversion of the Preferred
Stock in accordance with the terms of the Certificate of Designation. 
 “Washington Counsel”
means Karr Tuttle Campbell. 
 “Warrants” means the Common Stock purchase warrants delivered to
the Purchasers at the Closing on the Closing Date in accordance with Section 2.2(a) of this Agreement, which warrants shall be exercisable as set forth therein, and have a term of exercise beginning six months and one day after the
Initial Issuance Date and expire four years, six months and one day after the Initial Issuance Date, in the form of Exhibit D attached hereto; provided, however, that the exercisability of the Warrants shall be subject to, and
conditioned upon, receipt of the Shareholder Approval. 
 “Warrant Shares” means the shares of
Common Stock to be issuable upon exercise of the Warrants, subject to, and conditioned upon, receipt of the Shareholder Approval. 

ARTICLE II. 

PURCHASE AND SALE 

2.1 Closing. On the Closing Date, upon the terms set forth herein, the Company shall sell, and the Purchasers
shall purchase, in the aggregate, severally and not jointly, up to $21,000,000 of Preferred Stock with an aggregate Stated Value equal to such Purchaser’s Subscription Amount and Warrants as determined pursuant to Section 2.2(a) of
this Agreement at the Per Share Purchase Price; provided, however, that in the event that any Purchaser delivers to the Company a duly executed Conversion Notice at least two (2) Business Days prior to the Closing Date, the
Company shall (i) unconditionally agree to such conversion and (ii) deliver the applicable number of Underlying Shares on the Closing Date to any such Purchaser against delivery of the applicable Subscription Amount therefor. The aggregate
number of shares of Preferred Stock sold hereunder shall be 21,000. The Preferred Stock is being issued and sold pursuant to the Registration Statement and the Warrants are being issued and sold pursuant to the an exemption from Section 5 of
the Securities Act contained in Section 4(2) thereof and/or Regulation D thereunder. Each Purchaser shall deliver to the Company via wire transfer or certified check immediately available funds equal to its Subscription Amount and the Company
shall deliver to each Purchaser its respective shares of Preferred Stock and Warrants as determined pursuant to Section 2.2(a) of this Agreement and the other items set forth in Section 2.2 of this Agreement deliverable at
the Closing on the Closing Date. The Closing shall occur at the offices of O’Melveny & Myers, LLP, Two Embarcadero Center,
28th Floor, San Francisco, California or such other
location as the parties shall mutually agree. 
  

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 2.2 Deliveries. 

(a) On the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following: 

(i) a legal opinion of Company Counsel, substantially in the form of Exhibit B attached hereto; 

(ii) a legal opinion of Washington Counsel, substantially in the form of Exhibit C attached hereto;

 (iii) a certificate evidencing a number of shares of Preferred Stock equal to such Purchaser’s
Subscription Amount divided by the Stated Value, registered in the name of such Purchaser (such certificate will be issued simultaneously with the execution and delivery hereof but may be delivered within three (3) Business Days of the Closing
Date); provided, however, that the Company shall deliver Underlying Shares on the Closing Date to any Purchaser that delivers to the Company a duly executed Conversion Notice at least two (2) Business Days prior to the Closing
Date; and 
 (iv) a Warrant registered in the name of such Purchaser to purchase up to 1,250 shares of Common
Stock for each share of Preferred Stock purchased by such Purchaser, with an exercise price equal to $0.50 per share, subject to adjustment therein, in the form of Exhibit D attached hereto. 

(b) On the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company such Purchaser’s
Subscription Amount by wire transfer to the account as specified in writing by the Company. 
 ARTICLE III. 

REPRESENTATIONS AND WARRANTIES 

3.1 Representations and Warranties of the Company. Except as set forth in the SEC Reports, which shall qualify any representation
or warranty otherwise made herein to the extent of such disclosure, the Company hereby makes the following representations and warranties set forth below to each Purchaser as of the date hereof and as of the Closing Date: 

(a) Subsidiaries. All of the direct and indirect subsidiaries (each, a “Subsidiary”) of the
Company are set forth on the Company’s most recently filed Annual Report on Form 10-K. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all the
issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. 

 

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 (b) Organization and Qualification. The Company and each of the
Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use
its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in (i) a material adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or
(iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and
no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification except where the revocation, limitation or curtailment could not have or
reasonably be expected to result in a Material Adverse Effect. 
 (c) Authorization; Enforcement. The
Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and
delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is
required by the Company, its board of directors or its shareholders in connection therewith other than in connection with the Required Approvals and the Shareholder Approval. Each Transaction Document has been (or upon delivery will have been) duly
executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies. 
 (d) No Conflicts. The execution, delivery and
performance of the Transaction Documents by the Company, the issuance and sale of the Securities and the consummation by the Company of the other transactions contemplated hereby and thereby do not and will not, subject to receipt of the Shareholder
Approval, (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company
or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company
or a Subsidiary is bound or affected, except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect. 

 

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 (e) Filings, Consents and Approvals. Other than the Shareholder
Approval and related matters, the Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority
or other Person or other entity of any kind, including, without limitation, any Trading Market or Commissione Nazionale per le Societa e la Borsa, in connection with the execution, delivery and performance by the Company of the Transaction
Documents, except for any filings required to be made under applicable federal and state securities laws (collectively, the “Required Approvals”), and except where the failure to obtain any such consent, waiver, authorization or
order, give any such notice, or make any such filing or registration could not have or reasonably be expected to result in a Material Adverse Effect. 

(f) Issuance of the Securities. The Preferred Stock and the Warrants are duly authorized and, when issued and paid
for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Underlying Shares are duly authorized and, when issued in accordance
with the terms of the Preferred Stock, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. Subject to the Shareholder Approval, the Warrant Shares will be duly authorized and, when issued in
accordance with the terms of the Warrants following receipt of the Shareholder Approval, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company (i) has reserved from its duly
authorized capital stock the shares of Common Stock issuable upon conversion of the Preferred Stock, and (ii) following receipt of the Shareholder Approval, will reserve from its duly authorized capital stock the shares of Common Stock issuable
upon exercise of the Warrants. The Preferred Stock and the Underlying Shares are being issued pursuant to the Registration Statement and the issuance of the Preferred Stock and the Underlying Shares have been registered by the Company pursuant to
the Securities Act. The Company has prepared and filed with the Commission in accordance with the provisions of the Securities Act the Registration Statement. The Registration Statement was automatically effective upon filing with the Commission on
August 19, 2009. The Registration Statement is effective pursuant to the Securities Act and available for the issuance of the Preferred Stock and the Underlying Shares thereunder and the Company has not received any written notice that the
Commission has issued or intends to issue a stop-order or other order with respect to the Registration Statement or the Prospectus or that the Commission otherwise has (i) suspended or withdrawn the effectiveness of the Registration Statement
or (ii) issued any order preventing or suspending the use of the Prospectus, in either case, either temporarily or permanently or intends or has threatened in writing to do so. The “Plan of Distribution” section of the Registration
Statement permits the issuance of the Preferred Stock and the Underlying Shares hereunder. Upon receipt of the Preferred Stock and the Underlying Shares upon conversion thereof, the Purchasers will have good and marketable title to such securities
and the Preferred Stock and the Underlying Shares will be immediately freely tradable on each Trading Market. At the time the Registration Statement and any amendments thereto became effective, at the date of this Agreement and at each deemed
effective date thereof pursuant to Rule 430B(f)(2) of the Securities Act, the Registration Statement and any amendments thereto complied and will comply in all material respects with the requirements of the Securities Act and did not and will
not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus and any amendments or supplements thereto, at the
time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, complied and will comply in all material respects with the requirements of the Securities Act and did not and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company meets all of the requirements for the use of a registration
statement on Form S-3 (“Form S-3”) pursuant to the Securities Act for the offering and sale of the Preferred Stock and the Underlying Shares contemplated by this Agreement, and the Commission has not notified the Company of any
objection to the use of the form of the Registration Statement pursuant to Rule 401(g)(1) of the Securities Act. The Registration Statement, as of the Effective Date, meets the requirements set forth in Rule 415(a)(1)(x) pursuant to the
Securities Act. At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act) relating to the Preferred Stock
and the Underlying Shares, the Company was not and is not an Ineligible Issuer (as defined in Rule 405 of the Securities Act). The Company (i) has not distributed any offering material in connection with the offering and sale of any of the
Securities and (ii) until no Purchaser holds any of the Securities, shall not distribute any offering material in connection with the offering and sale of any of the Securities to, or by, the Purchasers, in each case, other than the
Registration Statement, the Prospectus, the Prospectus Supplement and the Transaction Documents. In accordance with Rule 5110(b)(7)(C)(i) of the Financial Industry Regulatory Authority Manual, the offering of the Preferred Stock and the Underlying
Shares has been registered with the Commission on Form S-3 pursuant to the Securities Act pursuant to the standards for Form S-3 in effect prior to October 21, 1992, and the Preferred Stock and the Underlying Shares are being offered pursuant
to Rule 415 of the Securities Act. 
  

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 (g) Capitalization. Except as disclosed in the SEC Reports, the
Company has not issued any capital stock since its most recently filed periodic report pursuant to the Exchange Act, other than pursuant to the Exchange Agreements entered into with certain holders of the Company’s outstanding 4% Convertible
Senior Subordinated Notes on May 16, 2010 (the “Exchange Agreements”), pursuant to the exercise of employee stock options pursuant to the Company’s stock option plans, the issuance of shares of Common Stock to employees
pursuant to the Company’s employee stock purchase plan and pursuant to the conversion or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report pursuant to the Exchange Act. No Person has any
right of first refusal, preemptive right, right of participation or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Securities and for various
outstanding series of convertible debt, options and warrants described in the SEC Reports, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights
or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other
than the Purchasers and the warrants to be issued to Rodman & Renshaw, LLC (“Rodman”) in connection with the transactions contemplated by this Agreement, if any) and will not result in a right of any holder of Company
securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with
all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. Other than the Shareholder Approval and related matters, no
further approval or authorization of any shareholder, the Board of Directors of the Company or others is required for the issuance and sale of the Securities. Except as disclosed in the SEC Reports, there are no shareholders agreements, voting
agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s shareholders. 

 

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 (h) SEC Reports; Financial Statements. The Company has complied in
all material respects with requirements to file all reports, schedules, forms, statements and other documents required to be filed by it pursuant to the Securities Act and the Exchange Act, including, without limitation, pursuant to
Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, together with the Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing
and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, the
rules and regulations of the Commission promulgated thereunder and other federal, state and local laws, rules and regulations applicable to it, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC
Reports, together with the related notes and schedules thereto, comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission and all other applicable rules and regulations with respect
thereto as in effect at the time of filing. Such financial statements, together with the related notes and schedules, have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied on a
consistent basis during the periods involved, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to
normal, immaterial, year-end audit adjustments. 
  

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 (i) Material Changes; Undisclosed Events, Liabilities or
Developments. Except as disclosed in the SEC Reports, since the date of the latest audited financial statements included within the SEC Reports, (i) there has been no event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of
accounting, and (iv) the Company has not issued any equity securities to any officer, director or Affiliate except pursuant to existing Company stock option plans. Except for the issuance of the Securities contemplated by this Agreement, or as
set forth in the SEC Reports and the Prospectus, or as otherwise disclosed to the Purchasers, no event, liability or development has occurred or exists with respect to the Company or its Subsidiaries or their respective business, properties,
operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made that has not been publicly disclosed at least one Business Day prior to the date that
this representation is made. 
 (j) Litigation. Except as disclosed in the SEC Reports, there is no
Proceeding pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or
(ii) could, if there were an unfavorable decision, reasonably be expected to result in a Material Adverse Effect. Except as disclosed in the SEC Reports, neither the Company nor any Subsidiary, nor any director or officer thereof, is or has
been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. Except as disclosed in the SEC Reports, there has not been, and to the knowledge of the
Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any Subsidiary pursuant to the Exchange Act or the Securities Act. 
  

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 (k) Labor Relations. No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of the Company which could reasonably be expected to result in a Material Adverse Effect. The Company and its Subsidiaries believe that their relationships with their
employees are good. No executive officer, to the knowledge of the Company, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of
the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours,
except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 

(l) Compliance. Neither the Company nor any Subsidiary (i) is in default under or in violation of (and no
event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under
or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived),
(ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal,
state and local laws applicable to its business and all such laws that affect the environment, except in each case as could not reasonably be expected to have a Material Adverse Effect. 

(m) Regulatory Permits. Except as disclosed in the SEC Reports, (i) the Company and the Subsidiaries possess
all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such
permits could not have or reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and (ii) neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or
modification of any Material Permit. 
 (n) Title to Assets. The Company and the Subsidiaries have good
and marketable title in fee simple to all real property owned by them that is material to the business of the Company and the Subsidiaries and good and marketable title in all personal property owned by them that is material to the business of the
Company and the Subsidiaries, in each case free and clear of all Liens, except for Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company
and the Subsidiaries and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by
them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance. 
  

 12 

 (o) Patents and Trademarks. The Company and the Subsidiaries have, or
have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other similar intellectual property rights currently employed by them in
connection with the business currently operated by them that are necessary for use in the conduct of their respective businesses as described in the SEC Reports, except where the failure to so have could not reasonably be expected to have a Material
Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary has received any written notice that any of the Intellectual Property Rights used by the Company or any Subsidiary violates or
infringes upon the rights of any Person, except for such as could not reasonably be expected to have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights of others. 
 (p) Insurance. The
Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged,
including, but not limited to, directors and officers insurance coverage. To the best knowledge of the Company, such insurance contracts are accurate and complete. Neither the Company nor any Subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost. 

(q) Transactions With Affiliates and Employees. None of the officers or directors of the Company and, to the
knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for
expenses incurred on behalf of the Company and (iii) other employee benefits, including restricted stock programs and stock option agreements under any stock option plan of the Company. 

(r) Sarbanes-Oxley. The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002, as
amended, which are applicable to it as of the date hereof. 
 (s) Certain Fees. No brokerage or
finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction
Documents, other than as specifically set forth in the Prospectus Supplement. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in
this Section 3.1(s) that may be due in connection with the transactions contemplated by the Transaction Documents. 
  

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 (t) Investment Company. The Company is not, and immediately after
receipt of payment for the Securities will not be, an “investment company” within the meaning of the Investment Company Act. 

(u) Registration Rights. No Person has any right to cause the Company to effect the registration pursuant to the
Securities Act of any securities of the Company, which rights will interfere with the transactions contemplated hereunder. 

(v) Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of
the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock pursuant to the Exchange Act nor has the Company received any notification
that the Commission is currently contemplating terminating such registration. Except as disclosed in the SEC Reports, the Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock
is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. Except as disclosed in the SEC Reports, the Company is, and has no reason to believe that it
will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. 

(w) Application of Takeover Protections. The Company and its Board of Directors have taken all necessary action, if
any, in order to render inapplicable any control share acquisition, business combination, poison pill (other than with respect to that certain Shareholder Rights Agreement dated as of December 28, 2009, between the Company and Computershare
Trust Company, N.A., a federally chartered trust company as Rights Agent) (including any distribution under a rights agreement), or other similar anti-takeover provision pursuant to the Articles of Incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights pursuant to the Transaction Documents, including without
limitation, as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities. 

(x) Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the
Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that it believes constitutes or might constitute material,
non-public information which is not otherwise disclosed in the Prospectus Supplement. The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company. All
disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company, its business and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not contain any
untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that no
Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 of this Agreement. 

 

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 (y) No Integrated Offering. Assuming the accuracy of the
Purchasers’ representations and warranties set forth in Section 3.2 of this Agreement, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company in a manner that would require shareholder approval pursuant
to the rules of any Trading Market on which any of the securities of the Company are listed or designated. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of any Trading Market. 

(z) Indebtedness. The SEC Reports set forth as of the dates thereof all outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness disclosed to the Purchasers except for any such default
that could not have or reasonably be expected to result in a Material Adverse Effect. 
 (aa) Tax Status.
Except for matters that could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect and except as disclosed in the SEC Reports, the Company and each Subsidiary has filed all necessary federal,
state and foreign income and franchise tax returns and has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which has been asserted or threatened against the Company or any Subsidiary. 

(bb) Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person
acting on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment
to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its
behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended. 

(cc) Accountants. Stonefield Josephson, Inc. (i) to the knowledge of the Company, is an independent public
accountant as required by the Exchange Act and is an independent registered public accounting firm within the meaning of the Sarbanes-Oxley Act of 2002, as amended, as required by the rules of the Public Company Accounting Oversight Board and
(ii) expressed its opinion with respect to the audited financial statements and related schedules included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009. 

 

 15 

 (dd) Acknowledgment Regarding Purchasers’ Purchase of
Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company
further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any
Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further
represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its
representatives. 
 (ee) Acknowledgement Regarding Purchasers’ Trading Activity. Anything in this
Agreement or elsewhere herein to the contrary notwithstanding (except for Section 3.2(g) of this Agreement which shall control), it is understood and acknowledged by the Company (i) that none of the Purchasers have been asked to
agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term;
(ii) that past or future open market or other transactions by any Purchaser, including Short Sales, and specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or
future transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) that any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly
or indirectly, presently may have a “short” position in the Common Stock, and (iv) that each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that (A) one or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding, and (B) such hedging activities (if any)
could reduce the value of the existing shareholders’ equity interests in the Company at and after the time that the hedging activities are being conducted. The Company acknowledges that such aforementioned hedging activities do not
constitute a breach of any of the Transaction Documents. 
 (ff) Regulation M Compliance. The Company
has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale
or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase
any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with the placement of the Securities. 

 

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 (gg) Shell Company Status. The Company is not, and has never been, an
issuer identified in Rule 144(i)(1) of the Securities Act. 
 (hh) Regulation D Compliance. Neither the
Company, nor any person acting on its behalf and at its direction, (i) has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer and sale of
the Warrants and the Warrant Shares, (ii) has made, directly or indirectly, any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the offer and sale of the Warrants and the Warrant
Shares to be integrated with prior offerings by the Company for purposes of the Securities Act in a manner that would require registration of such offer and sale under the Securities Act, or (iii) will take any action or steps referred to in
clause (ii) above that would cause the offer and sale of the Warrants and the Warrants Shares to be integrated with future offerings by the Company in a manner that requires registration of the Warrants and the Warrant Shares under the
Securities Act 
 (ii) Rule 144 Holding Period. In the absence of an order or directive from a
governmental authority to the contrary, the Company will not take a position that the holding period for the Warrants or the Warrant Shares did not commence on the Closing Date. 

3.2 Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and
warrants as of the execution and delivery of this Agreement on the date first above written in this Agreement to the Company as follows: 

(a) Organization; Authority. Such Purchaser is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with full right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The execution, delivery and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or similar action on the part of such Purchaser.
Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited
by applicable law. 
 (b) No Intent to Take Over. Such Purchaser has no present actual intent to seek to
effect, or to assist others in effecting, a hostile acquisition of the Company. 
  

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 (c) Purchaser Status. At the time such Purchaser was offered the
Securities, it was, and as of the date hereof it is, and on each date on which it exercises any Warrants for cash it will be a “qualified institutional buyer” as defined in Rule 144A(a) of the Securities Act. Such Purchaser is not required
to be registered as a broker-dealer under Section 15 of the Exchange Act. 
 (d) Experience of Such
Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective
investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such
investment. Such Purchaser understands that nothing in the Agreement or any other materials presented to the Purchaser in connection with the purchase and sale of the Securities constitutes legal, tax or investment advice. Such Purchaser
acknowledges that it must rely on legal, tax and investment advisors of its own choosing in connection with its purchase of the Securities. 

(e) Purchase for Own Account; No General Solicitation or General Advertising. Such Purchase is acquiring the
Warrants and the Warrant Shares for its own account, in the ordinary course of its business and not with a view toward, or for resale in connection with, the public sale or distribution thereof in a manner that would violate the Securities Act. Such
Purchaser is not acquiring the Warrants or the Warrant Shares as a result of any “general solicitation” or “general advertising,” as such terms are used in Regulation D under the Securities Act, including advertisements,
articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.

 (f) Rule 144; Restricted Nature of Warrants and Warrant Shares. Such Purchaser has read and understands
Rule 144 and further understands that until such time as the same are no longer required under applicable requirements of the Securities Act or applicable state securities laws, the Warrants and the Warrant Shares shall be restricted securities
within the meaning of the federal securities laws and the Warrants and any certificates representing the Warrant Shares, and all certificates or other instruments issued in exchange therefor or in substitution thereof, shall bear a customary
restrictive legend, and that the Company will make a notation on its records and give instructions to its transfer agent in order to implement the restrictions on transfer set forth and described therein. 

(g) Short Sales and Confidentiality Prior to the Date Hereof. Other than consummating the transactions contemplated
hereunder, such Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed any purchases or sales, including Short Sales, of the securities of the Company during
the period commencing as of the time that such Purchaser first learned of the specific purchase and sale transaction being effected pursuant to this Agreement and ending immediately prior to the execution and delivery hereof. Notwithstanding the
foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment
decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement and to its counsel, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with the transaction
expressly contemplated by this Agreement (including the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions,
with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future. 
  

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 (h) No Government Review. Such Purchaser understands that no U.S.
federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities purchased hereunder. 

ARTICLE IV. 

OTHER AGREEMENTS OF THE PARTIES 

4.1 Warrant Shares. Subject to the Shareholder Approval, if all or any portion of a Warrant is exercised at a time when there is
an effective registration statement to cover the issuance or resale of the Warrant Shares or if the Warrant is exercised via cashless exercise, the Warrant Shares issued pursuant to any such exercise shall be issued free of all legends. If at any
time following the date on which the Shareholder Approval has been obtained, a registration statement registering the Warrant Shares is not effective or is not otherwise available for the sale or resale of the Warrant Shares, the Company shall
immediately notify the holders of the Warrants in writing that no such registration statement is then effective and thereafter shall promptly notify such holders when a registration statement is effective and available for the sale or resale of the
Warrant Shares. 
 4.2 Furnishing of Information. Until the earlier of the time that (i) no Purchaser owns Preferred
Stock or Underlying Shares or (ii) the Warrants have expired, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the
date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act, and the Company shall not terminate its status as an issuer required to file reports pursuant to the Exchange Act
even if the Exchange Act or the rules and regulations thereunder would no longer require or otherwise permit such termination other than in connection with a Fundamental Transaction (as defined in the Warrants) in which the Company is not the
surviving entity or in which all of the capital stock of the Company is acquired by an unaffiliated and unrelated Person. As long as any Purchaser owns Securities, if the Company is not required to file reports pursuant to the Exchange Act other
than in connection with a Fundamental Transaction in which the Company is not the surviving entity or in which all of the capital stock of the Company is acquired by an unaffiliated and unrelated Person, it will prepare and furnish to the Purchasers
and make publicly available in accordance with Rule 144(c)(1) of the Securities Act such information as is required for the Purchasers to sell the Securities under Rule 144 of the Securities Act. The Company further covenants that it will take such
further action as any holder of Securities may reasonably request, to the extent required from time to time to enable such Person to sell such Securities without registration pursuant to the Securities Act within the requirements of the exemption
provided by Rule 144 of the Securities Act. The Company represents and warrants that it is in material compliance with all of the requirements (including, without limitation, the reporting, submission and posting requirements) of Rule 144(c)(1) of
the Securities Act and Rule 405 of Regulation S-T, each as in effect and amended as of the date hereof. 
  

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 4.3 Integration. After this transaction, the Company shall not sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities such that the rules of the Trading Market would require
shareholder approval of this transaction prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction. 

4.4 Securities Laws Disclosure; Publicity. The Company shall (a) issue a press release disclosing the material terms of the
transactions contemplated hereby simultaneously with the execution and delivery hereof, and (b) by 8:30 a.m. (New York City time) on the fourth (4th) Trading Day following the date hereof, file a Current Report on Form 8-K disclosing the
material terms of the transactions contemplated hereby and including the Transaction Documents as exhibits thereto. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions
contemplated hereby, and, except as may be required by law, neither the Company nor any Purchaser shall issue any such press release or otherwise make any such public statement without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the
disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the Commission or any regulatory agency or any Trading Market, without the prior written consent of such Purchaser, except (i) as required by federal securities law in connection with the filing of final Transaction
Documents (including signature pages thereto) with the Commission and (ii) to the extent such disclosure is required by law or any Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such
disclosure permitted under this subclause (ii). 
 4.5 Non-Public Information. Except with respect to the material terms
and conditions of the transactions contemplated by the Transaction Documents, the Company covenants and agrees that neither it nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that
the Company believes constitutes material non-public information, unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and confirms that each
Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. 
  

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 4.6 Use of Proceeds. The use of proceeds shall be as described in the Prospectus
Supplement. 
 4.7 Indemnification of Purchasers. Subject to the provisions of this Section 4.7, the Company
will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title
or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees
(and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling Persons (each, a “Purchaser Party”) harmless from any and all
losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may
suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted
against a Purchaser, or any of them or their respective Affiliates, by any shareholder of the Company who is not an Affiliate of such Purchaser, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is
based upon a material breach of such Purchaser’s representations, warranties or covenants of the Transaction Documents or any agreements or understandings such Purchaser may have with any such shareholder or any material violations by the
Purchaser of state or federal securities laws or any conduct by such Purchaser which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity
may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser
Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that
(i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the
reasonable opinion of such separate counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses
of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (i) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be
unreasonably withheld or delayed or (ii) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made
by such Purchaser Party in this Agreement or in the other Transaction Documents. 
  

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 4.8 Reservation and Registration of Common Stock. As of the date hereof, the Company
has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue all of the Underlying Shares. In
addition, to the extent that shares of Common Stock representing the Warrant Shares are not available or authorized for issuance upon the exercise of the Warrants on the date when the Warrants are first exercisable, the Company shall reserve for
issuance upon the exercise in full of the Warrants any and all shares of Common Stock currently reserved for issuance upon conversion, exchange or exercise of currently outstanding securities to the extent such securities are no longer convertible,
exchangeable or exercisable for such shares of Common Stock; provided, however, that the foregoing obligation shall not require the Company to eliminate any reserve for its equity incentive plans regardless of whether the shares of
Common Stock issuable pursuant to such equity incentive plans have been granted or otherwise allocated. Such shares of Common Stock shall be reserved pro rata among the holders of the Warrants; provided, however, that the obligations
in this Section 4.8 shall terminate upon receipt of the Shareholder Approval; provided, further, that the Company shall not be required to eliminate any reserve that it currently maintains except to the extent set forth
above. The Company shall provide the holders of the Warrants with written notice of any Warrant Shares that become reserved for issuance upon exercise of the Warrants after the date hereof pursuant to the preceding sentence. The Company shall use
its reasonable best efforts to obtain the Shareholder Approval at a special meeting of shareholders on June 4, 2010 (the “Special Meeting”); provided, however, that no adjournment of the Special Meeting shall
constitute a failure on the part of the Company to use its reasonable best efforts to obtain the Shareholder Approval; provided, further, however, that the foregoing requirement shall terminate upon a Change of Control
Transaction (as defined in the Certificate of Designation) if the Company or the successor in such Change of Control Transaction has a sufficient number of shares of Common Stock authorized and reserved for the exercise in full of the Warrants. In
the event the Company does not obtain the Shareholder Approval at the Special Meeting or any adjournment thereof, the Company further agrees to use its reasonable best efforts to obtain the Shareholder Approval at subsequent special meetings of
shareholders to be called every four months until the Shareholder Approval is obtained. For the avoidance of doubt, upon receipt of the Shareholder Approval, a portion of the additional authorized shares of Common Stock shall first be reserved for
issuance upon exercise of the Warrants to the extent necessary so that 100% of the Warrant Shares are reserved for issuance. Also for the avoidance of doubt, the Company shall not be required to reserve for issuance upon exercise of the Warrants
more shares of Common Stock than the number of Warrant Shares then required. 
 4.9 Listing of Common Stock. The Company
hereby agrees to use commercially reasonable efforts to maintain the listing of the Common Stock on a Trading Market, and the Company shall list all of the Underlying Shares on each of The NASDAQ Capital Market and the Borsa Italiana S.p.A. (MTA
International) no later than the Closing Date. The Company further agrees that if the Company applies to have the Common Stock traded on any other Trading Market, it will include in such application all of the Underlying Shares and will take such
other action as is necessary to cause all of the Underlying Shares to be listed on such other Trading Market as promptly as possible. The Company will take all action reasonably necessary to continue the listing and trading of its Common Stock on a
Trading Market, other than in connection with a Fundamental Transaction (as defined in the Warrants) in which the Company is not the surviving entity or in which all of the capital stock of the Company is acquired by an unaffiliated and unrelated
Person, and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of such Trading Market. 
  

 22 

 4.10 Equal Treatment of Purchasers. No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration is also offered to all of the parties to this Agreement. For clarification purposes, this provision constitutes a separate right
granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with
respect to the purchase, disposition or voting of the Securities or otherwise. 
 4.11 Certain Transactions and
Confidentiality After The Date Hereof. Notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it
will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release to be issued simultaneously with the
execution and delivery hereof as described in Section 4.4 of this Agreement, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable
securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to such initial press release as described in Section 4.4 of this Agreement and (iii) no Purchaser
shall have any duty of confidentiality to the Company or its Subsidiaries after the issuance of such press initial release as described in Section 4.4 of this Agreement. Notwithstanding the foregoing, in the case of a Purchaser that is a
multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing
other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this
Agreement. 
 4.12 Restriction on Exchanges. Until June 5, 2010, the Company shall not exchange any outstanding debt
of the Company for shares of Common Stock or Common Stock Equivalents other than pursuant the Exchange Agreements. 
 4.13
Additional Issuance of Securities. The Company agrees that for the period commencing on the date hereof and ending on the thirtieth (30th) day after the date hereof, neither the Company nor any of its Subsidiaries shall, without the
prior consent of the Purchasers, (i) directly or indirectly, issue, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any share of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or file any registration statement under the Act (other than a Registration Statement on Form S-8) with
respect to any of the foregoing, or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap
or transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. The provisions of this Section 4.13 shall not apply to (A) the Securities to
be issued and sold hereunder or issuable upon conversion or exercise of the Securities, (B) issuances of shares of Common Stock upon the exercise of the warrants issued to Rodman in connection with the transactions contemplated by this
Agreement, if any, (C) issuances of shares of Common Stock issuable upon conversion of currently outstanding convertible notes, (D) issuances of shares of Common Stock upon the exercise of currently outstanding warrants or amendments to
the warrant agreements related thereto, (E) granting options under the Company’s incentive compensation plans existing on the date hereof or issuances of shares of Common Stock issuable in connection with outstanding awards thereunder as
of the date hereof, (F) issuances of shares of Common Stock issuable pursuant to agreements in effect as of the date hereof or amendments related thereto, (G) issuances of shares of Common Stock in connection with strategic acquisitions,
or (H) issuances of shares of Common Stock subject to shareholder approval; provided, however, that in the case of clauses (C) and (D) above, no shares of Common Stock shall be issued as a result of an amendment to such
securities after the date hereof and prior to the expiration of the Restricted Period. In addition, the provisions of this Section 4.13 shall not apply to issuances of shares of Common Stock issuable upon exchange of currently
outstanding convertible notes. 
  

 23 

 4.14 Registration Statement. The Company shall use commercially reasonable efforts to
keep the Registration Statement effective at all times until no Purchaser owns any Preferred Stock or Underlying Shares. The Company shall ensure that the Registration Statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances
in which they were made) not misleading. After the date hereof and during any period in which a Prospectus or Prospectus Supplement relating to any of the Preferred Stock and the Underlying Shares is required to be delivered by any Purchaser
pursuant to the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172 of the Securities Act), (i) the Company will notify the Purchasers promptly of the time when any subsequent amendment to the
Registration Statement, other than documents incorporated by reference, has been filed with the Commission and/or has become effective or any subsequent supplement to the Prospectus that relates to the Preferred Stock and the Underlying Shares or
any of the Purchasers or any subsequent amendment to the Prospectus or any supplement or amendment to the Prospectus Supplement has been filed with the Commission and of any comment letter from the Commission or any request by the Commission for any
amendment or supplement to the Registration Statement, any amendment to the Prospectus, any supplement to the Prospectus that relates the Preferred Stock and the Underlying Shares or any of the Purchasers or any amendment or supplement to the
Prospectus Supplement or for additional information, (ii) the Company will prepare and file with the Commission, promptly upon a Purchaser’s request, any amendments or supplements to the Registration Statement, Prospectus or Prospectus
Supplement that, in such Purchaser’s reasonable opinion, may be necessary or advisable in connection with any distribution (if any) of the Preferred Stock and the Underlying Shares by such Purchaser (provided, however, that the failure of such
Purchaser to make such request shall not relieve the Company of any obligation or liability hereunder, or affect such Purchaser’s right to rely on the representations and warranties made by the Company in this Agreement), (iii) the Company
will not file any amendment or supplement to the Registration Statement, Prospectus or Prospectus Supplement, other than documents incorporated by reference, relating to the Preferred Stock and the Underlying Shares unless a copy thereof has been
submitted to each Purchaser within a reasonable period of time before the filing and no Purchaser has reasonably objected in writing thereto (provided, however, that (A) the failure of any Purchaser to make such objection shall not relieve the
Company of any obligation or liability hereunder, or affect any Purchaser’s right to rely on the representations and warranties made by the Company in this Agreement, and (B) the Company has no obligation to provide a Purchaser any advance
copy of such filing or to provide such Purchaser an opportunity to object to such filing if such filing does not name such Purchaser or specifically discuss the Preferred Stock and the Underlying Shares as contemplated hereby) and the Company will
furnish to each Purchaser at the time of filing thereof a copy of any document that upon filing is deemed to be incorporated by reference into the Registration Statement, Prospectus or Prospectus Supplement, except for those documents available via
EDGAR, and (iv) the Company will cause each amendment or supplement to the Prospectus or the Prospectus Supplement, other than documents incorporated by reference, to be filed with the Commission as required pursuant to the applicable paragraph
of Rule 424(b) of the Securities Act (without reliance on Rule 424(b)(8) of the Securities Act). 
  

 24 

 4.15 Notice of Commission Stop Orders. Promptly after it receives notice or obtains
knowledge thereof, the Company will advise each Purchaser of the issuance or threatened issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any other order preventing or suspending the use of
the Prospectus or the Prospectus Supplement, of the suspension of the qualification of the Preferred Stock and the Underlying Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any proceeding for any such purpose
or any examination pursuant to Section 8(e) of the Securities Act, or if the Company becomes the subject of a proceeding under Section 8A of the Securities Act in connection with the offering of the Preferred Stock and the Underlying
Shares; and it will promptly use its commercially reasonable efforts to prevent the issuance of any stop or other order or to obtain its withdrawal if such a stop or other order should be issued. 

4.16 Delivery of Prospectus: Subsequent Changes. During any period in which a Prospectus or the Prospectus Supplement relating to
the Preferred Stock and the Underlying Shares is required to be delivered by any Purchaser pursuant to the Securities Act with respect to a pending sale of the Preferred Stock and the Underlying Shares (including in circumstances where such
requirement may be satisfied pursuant to Rule 172 of the Securities Act), the Company will comply in all material respects with the requirements imposed upon it by the Securities Act, as from time to time in force, and shall use commercially
reasonable best efforts to file on or before their respective due dates all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other
provision of the Exchange Act. If during such period any event occurs as a result of which the Prospectus or the Prospectus Supplement as then amended or supplemented would include an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or if during such period it is necessary to amend or supplement the Registration Statement, the Prospectus or the Prospectus Supplement
to comply with the Securities Act, the Company will promptly notify the Purchasers to suspend the offering of the Preferred Stock and the Underlying Shares during such period and the Company will promptly amend or supplement, or file a free writing
prospectus applicable to, the Registration Statement, the Prospectus or the Prospectus Supplement (at the expense of the Company) so as to correct such statement or omission or effect such compliance. 

 

 25 

 4.17 Delivery of Registration Statement and Prospectus. The Company will furnish to
each Purchaser and its counsel (at the expense of the Company) copies of the Registration Statement, the Prospectus, the Prospectus Supplement (including all documents incorporated by reference therein) and all amendments and supplements to the
Registration Statement, the Prospectus or the Prospectus Supplement that are filed with the Commission during any period in which a Prospectus or Prospectus Supplement relating to the Preferred Stock and the Underlying Shares is required to be
delivered pursuant to the Securities Act (including all documents filed with the Commission during such period that are deemed to be incorporated by reference therein), in each case as soon as reasonably practicable and in such quantities as such
Purchaser may from time to time reasonably request and, at such Purchaser’s request, will also furnish copies of the Prospectus and the Prospectus Supplement to each exchange or market on which sales of the Preferred Stock and the Underlying
Shares may be made; provided, however, that the Company shall not be required to furnish any document to a Purchaser to the extent such document is available to such Purchaser or the public on EDGAR. 

4.18 Federal and State Securities Law Compliance. The Company represents and warrants that it has taken prior to the execution and
delivery of this Agreement all such action as is necessary in order to obtain an exemption for, or to, qualify the Preferred Stock and the Underlying Shares for sale to, and by, the Purchasers under all applicable securities laws (including, without
limitation, all federal securities laws and “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification)), and the Company shall provide evidence of any such action so taken to the Purchasers
simultaneously with the Closing. The Company shall make all filings and reports relating to the offer and sale of the Preferred Stock and the Underlying Shares required under all applicable securities laws (including, without limitation, all federal
securities laws and “Blue Sky” laws of the states of the United States) following the Closing, and the Company shall comply with all applicable federal, state and local laws, statutes, rules, regulations and the like relating to the
offering and sale of the Preferred Stock and the Underlying Shares to, and by, the Purchasers. 
 ARTICLE V. 

MISCELLANEOUS 

5.1 Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only
and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated by the Closing Date through no fault of such Purchaser; provided,
however, that no such termination will affect the right of any party to sue for any breach by the other party (or parties). 

5.2 Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees
and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all
transfer agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers. 
  

 26 

 5.3 Entire Agreement. The Transaction Documents, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such subject matter, which the parties acknowledge
have been merged into such documents, exhibits and schedules; provided that the foregoing shall not have any effect on any agreements that a Purchaser has entered into with the Company or any of its Subsidiaries prior to the date hereof with
respect to any prior investment made by such Purchaser in the Company. 
 5.4 Notices. Any and
all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second
(2nd) Trading Day following the date of mailing, if
sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages
attached hereto. 
 5.5 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written
instrument signed, in the case of an amendment, by the Company and the holders of at least 67% of the Preferred Stock or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall
any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. 
 5.6
Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. 

5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and
permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to
any Person to whom such Purchaser assigns or transfers any Securities; provided such Purchaser provides prior written notice to the Company and such transferee agrees in writing to be bound, with respect to the transferred Securities, by the
provisions of the Transaction Documents that apply to the “Purchasers.” 
 5.8 No Third-Party Beneficiaries.
This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in
Section 4.7 of this Agreement. 
  

 27 

 5.9 Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all
legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in the City of New York, borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or
is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in
such action or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. 

5.10 Survival. The representations, warranties and covenants contained herein shall survive the Closing and the delivery of the
Preferred Stock and Warrants and for a period of one year thereafter. 
 5.11 Execution. This Agreement may be executed
in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof. 

5.12 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto
shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. 

 

 28 

 5.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its
related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights. 
 5.14 Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs (including customary indemnity) associated with the issuance of such replacement Securities. 
 5.15
Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance pursuant to the Transaction
Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agrees to waive and not to assert in any action for
specific performance of any such obligation the defense that a remedy at law would be adequate. 
 5.16 Independent Nature of
Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by
the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in their review and negotiation of the Transaction Documents. The Company
has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. 

 

 29 

 5.17 Liquidated Damages. The Company’s obligations to pay any partial liquidated
damages or other amounts owing pursuant to the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the
instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled. 

5.18 Construction. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to
revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any
amendments hereto. 
 5.19 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY
PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY. 

(Signature Pages Follow) 
  

 30 

 IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be
duly executed by their respective authorized signatories as of the date first indicated above. 
  

					
	CELL THERAPEUTICS, INC.	 		 	Address for Notice:
			
	  
 James A. Bianco, M.D.

Chief Executive Officer
	 		 	  
 501 Elliott Avenue West, Suite 400

Seattle, Washington 98119
 Facsimile: (206)
272-4302
 Attention: Louis A. Bianco

	 With a copy to (which shall not constitute notice):
  

O’Melveny & Myers, LLP
 Two
Embarcadero Center, 28th Floor

San Francisco, California 94111
 Facsimile:
(415) 984-8701
 Attention: C. Brophy Christensen, Esq.
	 		 	

 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; 

PURCHASER SIGNATURE PAGES FOLLOW] 
  

 31 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above. 
  

			
	Name of Purchaser:	 	  

			
		
	Signature of Authorized Signatory of Purchaser:	 	  

			
		
	Name of Authorized Signatory:	 	  

			
		
	Title of Authorized Signatory:	 	  

			
		
	Email Address of Purchaser:	 	  

			
		
	Fax Number of Purchaser:	 	  

			
		
	Address for Notice of Purchaser:	 	

 [            ] 

[Address] 
 [Address] 

Telephone: (    ) [            ] 

Facsimile: (    ) [            ] 

Attention: [            ] 

With a copy to (which shall not constitute notice): 

[Counsel] 
 [Address] 

[Address] 
 Telephone: (    )
[            ] 
 Facsimile: (    )
[            ] 
 Attention:
[            ] 
  

 32 

 Address for Delivery of Securities for Purchaser (if not same as address for notice): 

Subscription Amount: $             

Shares of Preferred Stock:
                             

Warrant Shares:
                             

EIN Number:
                             

 

 33 

 EXHIBIT A 

CERTIFICATE OF DESIGNATION 

(See attached). 
  

 34 

 EXHIBIT B 

FORM OF OPINION OF COMPANY COUNSEL 

(See attached). 
  

 35 

 EXHIBIT C 

OPINION OF WASHINGTON COUNSEL 

(See attached). 
  

 36 

 EXHIBIT D 

FORM OF WARRANT 

(See attached). 
  

 37Form of Advisory Agreement

 Exhibit 10.1 

FORM OF 

ADVISORY AGREEMENT 

between 
 KBS
REAL ESTATE INVESTMENT TRUST III, INC. 
 and 

KBS CAPITAL ADVISORS LLC 

                      
      , 2010 

 TABLE OF CONTENTS 

 

			
	 	  	Page
		
	ARTICLE 1 - DEFINITIONS	  	1
	ARTICLE 2 - APPOINTMENT	  	9
	ARTICLE 3 - DUTIES OF THE ADVISOR	  	9
	 3.01 Organizational and Offering Services
	  	10
	 3.02 Acquisition Services
	  	10
	 3.03 Asset Management Services
	  	10
	 3.04 Stockholder Services
	  	13
	 3.05 Other Services
	  	13
	ARTICLE 4 - AUTHORITY OF ADVISOR	  	14
	 4.01 General
	  	14
	 4.02 Powers of the Advisor
	  	14
	 4.03 Approval by the Board
	  	14
	 4.04 Modification or Revocation of Authority of Advisor
	  	14
	ARTICLE 5 - BANK ACCOUNTS	  	14
	ARTICLE 6 - RECORDS AND FINANCIAL STATEMENTS	  	15
	ARTICLE 7 - LIMITATION ON ACTIVITIES	  	15
	ARTICLE 8 - FEES	  	16
	 8.01 Acquisition Fees
	  	16
	 8.02 Origination Fees
	  	16
	 8.03 Asset Management Fees
	  	17
	 8.04 Disposition Fees
	  	17
	 8.05 Subscription Processing Fee
	  	18
	 8.06 Subordinated Share of Cash Flows
	  	18
	 8.07 Subordinated Incentive Fee
	  	19
	 8.08 Changes to Fee Structure
	  	20
	ARTICLE 9 - EXPENSES	  	20
	 9.01 General
	  	20
	 9.02 Timing of and Limitations on Reimbursements
	  	21
	ARTICLE 10 – VOTING AGREEMENT	  	22
	ARTICLE 11 - RELATIONSHIP OF ADVISOR AND COMPANY; OTHER ACTIVITIES OF THE ADVISOR	  	23
	 11.01 Relationship
	  	23
	 11.02 Time Commitment
	  	23
	 11.03 Investment Opportunities and Allocation
	  	23
	ARTICLE 12 - THE KBS NAME	  	23
	ARTICLE 13 - TERM AND TERMINATION OF THE AGREEMENT	  	24
	 13.01 Term
	  	24
	 13.02 Termination by Either Party
	  	24
	 13.03 Payments on Termination and Survival of Certain Rights and Obligations
	  	24
	ARTICLE 14 - ASSIGNMENT	  	25
	ARTICLE 15 - INDEMNIFICATION AND LIMITATION OF LIABILITY	  	25

  

 i 

			
	 15.01 Indemnification
	  	25
	 15.02 Limitation on Indemnification
	  	26
	 15.03 Limitation on Payment of Expenses
	  	26
	 ARTICLE 16 - MISCELLANEOUS
	  	26
	 16.01 Notices
	  	26
	 16.02 Modification
	  	27
	 16.03 Severability
	  	27
	 16.04 Construction
	  	27
	 16.05 Entire Agreement
	  	27
	 16.06 Waiver
	  	27
	 16.07 Gender
	  	28
	 16.08 Titles Not to Affect Interpretation
	  	28
	 16.09 Counterparts
	  	28

  

 ii 

 ADVISORY AGREEMENT 

This Advisory Agreement, dated as of
                    , 2010 (the “Agreement”), is between KBS Real Estate Investment Trust III, Inc., a Maryland corporation (the
“Company”), and KBS Capital Advisors LLC, a Delaware limited liability company (the “Advisor”). 
 W I T N E
S S E T H 
 WHEREAS, the Company desires to avail itself of the knowledge, experience, sources of information, advice,
assistance and certain facilities available to the Advisor and to have the Advisor undertake the duties and responsibilities hereinafter set forth, on behalf of, and subject to the supervision of, the board of directors of the Company (the
“Board”), all as provided herein; and 
 WHEREAS, the Advisor is willing to undertake to render such services, subject
to the supervision of the Board, on the terms and conditions hereinafter set forth. 
 NOW, THEREFORE, in consideration of the
foregoing and of the mutual covenants and agreements contained herein, the parties hereto agree as follows: 
 ARTICLE 1

 DEFINITIONS 

The following defined terms used in this Agreement shall have the meanings specified below: 

“Acquisition Expenses” means any and all expenses, excluding the fee payable to the Advisor pursuant to Section 8.01,
incurred by the Company, the Advisor or any Affiliate of either in connection with the selection, acquisition or development of any property, loan or other potential investment, whether or not acquired or originated, as applicable, including,
without limitation, legal fees and expenses, travel and communications expenses, costs of appraisals, nonrefundable option payments on properties or other investments not acquired, accounting fees and expenses, title insurance premiums and
miscellaneous expenses related to the selection, acquisition or development of any property, loan or other potential investment. 

“Acquisition Fees” means the fee payable to the Advisor pursuant to Section 8.01 plus all other fees and commissions,
excluding Acquisition Expenses, paid by any Person to any Person in connection with making or investing in any Property or other Permitted Investment or the purchase, development or construction of any Property by the Company. Included in the
computation of such fees or commissions shall be any real estate commission, selection fee, Development Fee, Construction Fee, nonrecurring management fee, loan fees or points or any fee of a similar nature, however designated. Excluded shall be
Development Fees and Construction Fees paid to Persons not 
  

 1 

 
Affiliated with the Advisor in connection with the actual development and construction of a Property. 

“Advisor” means (i) KBS Capital Advisors LLC, a Delaware limited liability company, or (ii) any successor advisor to
the Company. 
 “Affiliate or Affiliated.” An Affiliate of another Person includes any of the following: (i) any
Person directly or indirectly controlling, controlled by, or under common control with such other Person; (ii) any Person directly or indirectly owning, controlling, or holding with the power to vote 10% or more of the outstanding voting
securities of such other Person; (iii) any legal entity for which such Person acts as an executive officer, director, trustee, or general partner; (iv) any Person 10% or more of whose outstanding voting securities are directly or
indirectly owned, controlled, or held, with power to vote, by such other Person; and (v) any executive officer, director, trustee, or general partner of such other Person. An entity shall not be deemed to control or be under common control with
an Advisor-sponsored program unless (i) the entity owns 10% or more of the voting equity interests of such program or (ii) a majority of the board of directors (or equivalent governing body) of such program is composed of Affiliates of the
entity. 
 “Appraised Value” means the value according to an appraisal made by an Independent Appraiser. 

“Articles of Incorporation” means the Articles of Incorporation of the Company under Title 2 of the Corporations and
Associations Article of the Annotated Code of Maryland, as amended from time to time. 
 “Asset Management Fee” shall
have the meaning set forth in Section 8.03. 
 “Average Invested Assets” means, for a specified period, the
average of the aggregate book value of the assets of the Company invested, directly or indirectly, in Properties, Loans and other Permitted Investments secured by real estate before reserves for depreciation or bad debts or other similar non-cash
reserves, computed by taking the average of such values at the end of each month during such period. 
 “Board of
Directors” or “Board” means the persons holding such office, as of any particular time, under the Articles of Incorporation of the Company, whether they be the Directors named therein or additional or successor Directors. 

“Bylaws” means the bylaws of the Company, as amended from time to time. 

“Cash from Financings” means the net cash proceeds realized by the Company from the financing of Properties, Loans or other
Permitted Investments or from the refinancing of any Company indebtedness (after deduction of all expenses incurred in connection therewith). 

“Cash from Sales and Settlements” means the net cash proceeds realized by the Company (i) from the sale, exchange or other
disposition of any of its assets or any 
  

 2 

 
portion thereof after deduction of all expenses incurred in connection therewith including, without limitation, Disposition Fees and (ii) from the prepayment, maturity, workout or other
settlement of any Loan or Permitted Investment or portion thereof after deduction of all expenses incurred in connection therewith. In the case of a transaction described in clause (i) (C) of the definition of “Sale” and (i)(B)
of the definition of “Settlement,” Cash from Sales and Settlements means the proceeds of any such transaction actually distributed to the Company from the Joint Venture or partnership. Cash from Sales and Settlements shall not include Cash
from Financings. 
 “Cash from Sales, Settlements and Financings” means the total sum of Cash from Sales and
Settlements and Cash from Financings. 
 “Code” means the Internal Revenue Code of 1986, as amended from time to time,
or any successor statute thereto. Reference to any provision of the Code shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted by any applicable regulations as in
effect from time to time. 
 “Company” means KBS Real Estate Investment Trust III, Inc., a corporation organized under
the laws of the State of Maryland. 
 “Competitive Real Estate Commission” means a real estate or brokerage commission
for the purchase or sale of property that is reasonable, customary, and competitive in light of the size, type, and location of the property. 

“Conflicts Committee” shall have the meaning set forth in the Company’s Articles of Incorporation. 

“Construction Fee” means a fee or other remuneration for acting as general contractor and/or construction manager to construct
improvements, supervise and coordinate projects or to provide major repairs or rehabilitation on a Property. 
 “Contract
Sales Price” means the total consideration received by the Company for the sale of a Property, Loan or other Permitted Investment. 

“Cost of Real Estate Investments” means the sum of (i) with respect to Properties wholly owned, directly or indirectly, by
the Company, the amount actually paid or allocated to the purchase, development, construction or improvement of Properties, inclusive of fees and expenses related thereto, plus the amount of any outstanding debt attributable to such Properties and
(ii) in the case of Properties owned by any Joint Venture or partnership in which the Company or the Partnership is, directly or indirectly, a co-venturer or partner, the portion of the amount actually paid or allocated to the purchase,
development, construction or improvement of Properties, inclusive of fees and expenses related thereto, plus the amount of any outstanding debt associated with such Properties that is attributable to the Company’s investment in the Joint
Venture or partnership. 
  

 3 

 “Cost of Loans and other Permitted Investments” means the sum of the cost of all
Loans and Permitted Investments held, directly or indirectly, by the Company or the Partnership, calculated each month on an ongoing basis, and calculated as follows for each investment: the lesser of (i) the amount actually paid or allocated
to acquire or fund the Loan or Permitted Investment (inclusive of fees and expenses related thereto and the amount of any debt associated with or used to acquire or fund such investment) and (ii) the outstanding principal amount of such Loan or
Permitted Investment (plus the fees and expenses related to the acquisition or funding of such investment), as of the time of calculation. With respect to any Loan or Permitted Investment held by the Company or the Partnership through a Joint
Venture or partnership of which it is, directly or indirectly, a co-venturer or partner, such amount shall be the Company’s proportionate share thereof. 

“Dealer Manager” means (i) KBS Capital Markets Group LLC, a Delaware limited liability company, or (ii) any successor
dealer manager to the Company. 
 “Development Fee” means a fee for the packaging of a Property, including negotiating
and approving plans, and undertaking to assist in obtaining zoning and necessary variances and necessary financing for the Property, either initially or at a later date. 

“Director” means a member of the Board of Directors of the Company. 

“Disposition Fee” shall have the meaning set forth in Section 8.04. 

“Distributions” means any distributions of money or other property by the Company to owners of Shares, including distributions
that may constitute a return of capital for federal income tax purposes. 
 “GAAP” means accounting principals
generally accepted in the United States. 
 “Gross Proceeds” means the aggregate purchase price of all Shares sold for
the account of the Company through an Offering, without deduction for Organization and Offering Expenses. 
 “Independent
Appraiser” means a person or entity with no material current or prior business or personal relationship with the Advisor or the Directors, who is engaged to a substantial extent in the business of rendering opinions regarding the value of
assets of the type held by the Company, and who is a qualified appraiser of real estate as determined by the Board. Membership in a nationally recognized appraisal society such as the American Institute of Real Estate Appraisers (“M.A.I.”)
or the Society of Real Estate Appraisers (“S.R.E.A.”) shall be conclusive evidence of such qualification. 

“Initial Public Offering” means the initial public offering of Shares registered on Registration Statement
No. 333-                     on Form S-11. 

“Invested Capital” means the amount calculated by multiplying the total number of Shares purchased by Stockholders by the issue
price, reduced by any amounts paid by 
  

 4 

 
the Company to repurchase Shares pursuant to the Company’s plan for redemption of Shares. 

“Joint Venture” means any joint venture, limited liability company or other Affiliate of the Company that owns, in whole or in
part, on behalf of the Company any Properties, Loans or other Permitted Investments. 
 “Listed” or
“Listing” shall have the meaning set forth in the Company’s Articles of Incorporation. 
 “Loans” means
mortgage loans and other types of debt financing investments made by the Company or the Partnership, either directly or indirectly, including through ownership interests in a Joint Venture or partnership, and including, without limitation, mezzanine
loans, B-notes, bridge loans, convertible mortgages, wraparound mortgage loans, construction mortgage loans, loans on leasehold interests, and participations in such loans. 

“Market Value” shall have the meaning set forth in Section 8.08. 

“NASAA Guidelines” means the NASAA Statement of Policy Regarding Real Estate Investment Trusts as in effect on the date hereof.

 “Net Income” means, for any period, the total revenues applicable to such period, less the total expenses
applicable to such period excluding additions to reserves for depreciation, bad debts or other similar non-cash reserves; provided, however, Net Income for purposes of calculating total allowable Operating Expenses (as defined herein) shall exclude
the gain from the sale of the Company’s assets. 
 “Offering” means any offering of Shares that is registered
with the SEC, excluding Shares offered under any employee benefit plan. 
 “Operating Cash Flow” means Operating
Revenue Cash Flows minus the sum of (i) Operating Expenses, (ii) all principal and interest payments on indebtedness and other sums paid to lenders, (iii) the expenses of raising capital such as Organization and Offering Expenses,
legal, audit, accounting, underwriting, brokerage, listing, registration, and other fees, printing and other such expenses and tax incurred in connection with the issuance, distribution, transfer, registration and Listing of the Shares,
(iv) taxes, (v) incentive fees paid in compliance with Section IV.F. of the NASAA Guidelines and (vi) Acquisition Fees, Acquisition Expenses, real estate commissions on the resale of real property, and other expenses connected with
the acquisition, disposition, and ownership of real estate interests, mortgage loans or other property (other than commissions on the sale of assets other than real property), such as the costs of foreclosure, insurance premiums, legal services,
maintenance, repair and improvement of property. 
 “Operating Expenses” means all costs and expenses incurred by the
Company, as determined under GAAP, that in any way are related to the operation of the Company or to Company business, including fees paid to the Advisor, but excluding (i) the expenses of raising capital such as Organization and Offering
Expenses, legal, audit, accounting, 
  

 5 

 
underwriting, brokerage, listing, registration, and other fees, printing and other such expenses and tax incurred in connection with the issuance, distribution, transfer, registration and Listing
of the Shares, (ii) interest payments, (iii) taxes, (iv) non-cash expenditures such as depreciation, amortization and bad loan reserves, (v) incentive fees paid in compliance with Section IV.F. of the NASAA Guidelines and
(vi) Acquisition Fees, Acquisition Expenses, real estate commissions on the resale of real property, and other expenses connected with the acquisition, disposition, and ownership of real estate interests, mortgage loans or other property (other
than commissions on the sale of assets other than real property), such as the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property. 

“Operating Revenue Cash Flows” means the Company’s cash flow from ownership and/or operation of (i) Properties,
(ii) Loans, (iii) Permitted Investments, (iv) short-term investments, and (v) interests in Properties, Loans and Permitted Investments owned by any Joint Venture or any partnership in which the Company or the Partnership is,
directly or indirectly, a co-venturer or partner. 
 “Organization and Offering Expenses” means all expenses incurred
by or on behalf of the Company in connection with or in preparing the Company for registration of and subsequently offering and distributing its Shares to the public, whether incurred before or after the date of this Agreement, which may include but
are not limited to, total underwriting and brokerage discounts and commissions (including fees of the underwriters’ attorneys); any expense allowance granted by the Company to the underwriter or any reimbursement of expenses of the underwriter
by the Company; expenses for printing, engraving and mailing; compensation of employees while engaged in sales activity; charges of transfer agents, registrars, trustees, escrow holders, depositaries and experts; and expenses of qualification of the
sale of the securities under Federal and State laws, including taxes and fees, accountants’ and attorneys’ fees. 

“Origination Fees” means the fee payable to the Advisor pursuant to Section 8.02 plus all other fees and commissions,
excluding Acquisition Expenses, paid by any Person to any Person in connection with making or investing in any Loan by the Company. 

“Partnership” means KBS Limited Partnership III, a Delaware limited partnership formed to own and operate Properties, Loans and
other Permitted Investments on behalf of the Company. 
 “Permitted Investments” means all investments (other than
Properties, Loans and short-term investments acquired for purposes of cash management) in which the Company may acquire an interest, either directly or indirectly, including through ownership interests in a Joint Venture or partnership, pursuant to
its Articles of Incorporation, Bylaws and the investment objectives and policies adopted by the Board from time to time. 

“Person” means an individual, corporation, partnership, estate, trust (including a trust qualified under Section 401(a) or
501(c) (17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 

 

 6 

 
642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity, or any government or any agency or political
subdivision thereof, and also includes a group as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. 

“Property” or “Properties” means any real property or properties transferred or conveyed to the Company or the
Partnership, either directly or indirectly, and/or any real property or properties transferred or conveyed to a Joint Venture or partnership in which the Company is, directly or indirectly, a co-venturer or partner. 

“Property Manager” means an entity that has been retained to perform and carry out at one or more of the Properties
property-management services, excluding persons, entities or independent contractors retained or hired to perform facility management or other services or tasks at a particular Property, the costs for which are passed through to and ultimately paid
by the tenant at such Property. 
 “Registration Statement” means the registration statement filed by the Company with
the SEC on Form S-11 (Reg. No. 333-            ), as amended from time to time, in connection with the Initial Public Offering. 

“REIT” means a “real estate investment trust” under Sections 856 through 860 of the Code. 

“Sale or Sales” means (i) any transaction or series of transactions whereby: (A) the Company or the Partnership
sells, grants, transfers, conveys, or relinquishes its ownership of any Property, Loan or other Permitted Investment or portion thereof, including the transfer of any Property that is the subject of a ground lease, and including any event with
respect to any Property, Loan or other Permitted Investment that gives rise to a significant amount of insurance proceeds or condemnation awards, and including the issuance by one of the Company’s subsidiaries of any asset-backed securities as
part of a securitization transaction; (B) the Company or the Partnership sells, grants, transfers, conveys, or relinquishes its ownership of all or substantially all of the interest of the Company or the Partnership in any Joint Venture or
partnership in which it is, directly or indirectly, a co-venturer or partner; or (C) any Joint Venture or partnership (in which the Company or the Partnership is, directly or indirectly, a co-venturer or partner) sells, grants, transfers,
conveys, or relinquishes its ownership of any Property, Loan or other Permitted Investment or portion thereof, including any event with respect to any Property, Loan or other Permitted Investment that gives rise to insurance claims or condemnation
awards, and including the issuance by such Joint Venture or partnership or one of its subsidiaries of any asset-backed securities as part of a securitization transaction, but (ii) not including any transaction or series of transactions
specified in clause (i) (A), (i) (B), or (i) (C) above in which the proceeds of such transaction or series of transactions are reinvested in one or more Properties, Loans or other Permitted Investments within 180 days thereafter.

 “SEC” means the United States Securities and Exchange Commission. 

 

 7 

 “Settlement” means (i) the prepayment, maturity, workout or other settlement
of any Loan or other Permitted Investment or portion thereof owned, directly or indirectly, by (A) the Company or the Partnership or (B) any Joint Venture or any partnership in which the Company or the Partnership is, directly or
indirectly, a partner, but (ii) not including any transaction or series of transactions specified in clause (i) (A) or (i) (B) above in which the proceeds of such prepayment, maturity, workout or other settlement are
reinvested in one or more Properties, Loans or other Permitted Investments within 180 days thereafter. 
 “Shares”
means the shares of common stock of the Company, par value $.01 per share. 
 “Stockholders” means the registered
holders of the Shares. 
 “Stockholders’ 8% Return” means, as of any date, an aggregate amount equal to an 8%
cumulative, non-compounded, annual return on Invested Capital (calculated like simple interest on a daily basis based on a three hundred sixty-five day year). For purposes of calculating the Stockholders’ 8% Return, Invested Capital shall be
determined for each day during the period for which the Stockholders’ 8% Return is being calculated and shall be calculated net of (1) Distributions of Operating Cash Flow to the extent such Distributions of Operating Cash Flow provide a
cumulative, non-compounded, annual return in excess of 8%, as such amounts are computed on a daily basis based on a three hundred sixty-five day year and (2) Distributions of Cash from Sales, Settlements and Financings, except to the extent
such Distributions would be required to supplement Distributions of Operating Cash Flow in order to achieve a cumulative, non-compounded, annual return of 8%, as such amounts are computed on a daily basis based on a three hundred sixty-five day
year. 
 “Subordinated Incentive Fee” means the fee payable to the Advisor under certain circumstances if the Shares
are Listed, as calculated in Section 8.07. 
 “Subordinated Performance Fee Due Upon Termination” means a fee
payable in the form of an interest bearing promissory note (the “Performance Fee Note”) in a principal amount equal to (1) 15% of the amount, if any, by which (a) the Appraised Value of the Company’s Properties at the
Termination Date, less amounts of all indebtedness secured by the Company’s Properties, plus the fair market value of all other Loans and Permitted Investments of the Company at the Termination Date, less amounts of indebtedness related to such
Loans and Permitted Investments, plus total Distributions (excluding any stock dividend) through the Termination Date exceeds (b) the sum of Invested Capital plus total Distributions required to be made to the stockholders in order to pay the
Stockholders’ 8% Return from inception through the Termination Date less (2) any prior payment to the Advisor of a Subordinated Share of Cash Flows. Interest on the Performance Fee Note will accrue beginning on the Termination Date at a
rate deemed fair and reasonable by the Conflicts Committee. The Company shall repay the Performance Fee Note at such time as the Company completes the first Sale or Settlement after the Termination Date using Cash from Sales and Settlements. If the
Cash from Sales and Settlements from the first Sale or Settlement after the Termination Date is 
  

 8 

 
insufficient to pay the Performance Fee Note in full, including accrued interest, then the Performance Fee Note shall be paid in part from the Cash from Sales and Settlements from the first Sale
or Settlement, and in part from the Cash from Sales and Settlements from each successive Sale or Settlement until the Performance Fee Note is repaid in full, with interest. If the Performance Fee Note has not been paid in full within five years from
the Termination Date, then the Advisor, its successors or assigns, may elect to convert the balance of the fee, including accrued but unpaid interest, into Shares at a price per Share equal to the average closing price of the Shares over the ten
trading days immediately preceding the date of such election if the Shares are Listed at such time. If the Shares are not Listed at such time, the Advisor, its successors or assigns, may elect to convert the balance of the fee, including accrued but
unpaid interest, into Shares at a price per Share equal to the fair market value for the Shares as determined by the Board of Directors based upon the Appraised Value of Company’s Properties on the date of election plus the fair market value of
all other Loans and Permitted Investments of the Company on the date of election. 
 “Subordinated Share of Cash
Flows” has the meaning set forth in Section 8.06. 
 “Subscription Processing Fee” has the meaning set forth
in Section 8.05. 
 “Termination Date” means the date of termination of the Agreement determined in accordance
with Article 13 hereof. 
 “2%/25% Guidelines” means the requirement pursuant to the NASAA Guidelines that, in any
period of four consecutive fiscal quarters, total Operating Expenses not exceed the greater of 2% of the Company’s Average Invested Assets during such 12-month period or 25% of the Company’s Net Income over the same 12-month period.

 ARTICLE 2 

APPOINTMENT 

The Company hereby appoints the Advisor to serve as its advisor and asset manager on the terms and conditions set forth in this
Agreement, and the Advisor hereby accepts such appointment. 
 ARTICLE 3 

DUTIES OF THE ADVISOR 

The Advisor is responsible for managing, operating, directing and supervising the operations and administration of the Company and its
assets. The Advisor undertakes to use its best efforts to present to the Company potential investment opportunities and to provide the Company with a continuing and suitable investment program consistent with the investment objectives and policies
of the Company as determined and adopted from time to time by the Board. Subject to the limitations set forth in this Agreement, 

 

 9 

 
including Article 4 hereof, and the continuing and exclusive authority of the Board over the management of the Company, the Advisor shall, either directly or by engaging an Affiliate or third
party, perform the following duties: 
 3.01 Organizational and Offering Services. The Advisor shall perform all services
related to the organization of the Company or any Offering or private sale of the Company’s securities, other than services that (i) are to be performed by the Dealer Manager, (ii) the Company elects to perform directly or
(iii) would require the Advisor to register as a broker-dealer with the SEC or any state. 
 3.02 Acquisition Services.

 (i) Serve as the Company’s investment and financial advisor and provide relevant market research and
economic and statistical data in connection with the Company’s assets and investment objectives and policies; 

(ii) Subject to Section 4 hereof and the investment objectives and policies of the Company: (a) locate, analyze
and select potential investments; (b) structure and negotiate the terms and conditions of transactions pursuant to which investments in Properties, Loans and other Permitted Investments will be made; (c) acquire, originate and dispose of
Properties, Loans and other Permitted Investments on behalf of the Company; (d) arrange for financing and refinancing and make other changes in the asset or capital structure of investments in Properties, Loans and other Permitted Investments;
and (e) enter into leases, service contracts and other agreements for Properties, Loans and other Permitted Investments; 

(iii) Perform due diligence on prospective investments and create due diligence reports summarizing the results of such
work; 
 (iv) Prepare reports regarding prospective investments that include recommendations and supporting
documentation necessary for the Directors to evaluate the proposed investments; 
 (v) Obtain reports (which may
be prepared by the Advisor or its Affiliates), where appropriate, concerning the value of contemplated investments of the Company; 

(vi) Deliver to or maintain on behalf of the Company copies of all appraisals obtained in connection with the
Company’s investments; and 
 (vii) Negotiate and execute approved investments and other transactions,
including prepayments, maturities, workouts and other settlements of Loans and other Permitted Investments. 
 3.03 Asset
Management Services. 
 (i) Real Estate and Related Services: 

 

 10 

 (a) Investigate, select and, on behalf of the Company, engage and conduct
business with (including enter contracts with) such Persons as the Advisor deems necessary to the proper performance of its obligations as set forth in this Agreement, including but not limited to consultants, accountants, lenders, technical
advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, developers, construction companies, Property Managers and any and all Persons acting in
any other capacity deemed by the Advisor necessary or desirable for the performance of any of the foregoing services; 

(b) Negotiate and service the Company’s debt facilities and other financings; 

(c) Monitor applicable markets and obtain reports (which may be prepared by the Advisor or its Affiliates) where
appropriate, concerning the value of investments of the Company; 
 (d) Monitor and evaluate the performance of
each asset of the Company and the Company’s overall portfolio of assets, provide daily management services to the Company and perform and supervise the various management and operational functions related to the Company’s investments;

 (e) Formulate and oversee the implementation of strategies for the administration, promotion, management,
operation, maintenance, improvement, financing and refinancing, marketing, leasing and disposition of Properties, Loans and other Permitted Investments on an overall portfolio basis; 

(f) Consult with the Company’s officers and the Board and assist the Board in the formulation and implementation of
the Company’s financial policies, and, as necessary, furnish the Board with advice and recommendations with respect to the making of investments consistent with the investment objectives and policies of the Company and in connection with any
borrowings proposed to be undertaken by the Company; 
 (g) Oversee the performance by the Property Managers of
their duties, including collection and proper deposits of rental payments and payment of Property expenses and maintenance; 

(h) Conduct periodic on-site property visits to some or all (as the Advisor deems reasonably necessary) of the Properties
to inspect the physical condition of the Properties and to evaluate the performance of the Property Managers; 
  

 11 

 (i) Review, analyze and comment upon the operating budgets, capital budgets
and leasing plans prepared and submitted by each Property Manager and aggregate these property budgets into the Company’s overall budget; 

(j) Coordinate and manage relationships between the Company and any co-venturers or partners; and 

(k) Consult with the Company’s officers and the Board and provide assistance with the evaluation and approval of
potential asset dispositions, sales and refinancings. 
 (ii) Accounting and Other Administrative Services:

 (a) Provide the day-to-day management of the Company and perform and supervise the various administrative
functions reasonably necessary for the management of the Company; 
 (b) From time to time, or at any time
reasonably requested by the Board, make reports to the Board on the Advisor’s performance of services to the Company under this Agreement; 

(c) Make reports to the Conflicts Committee each quarter of the investments that have been made by other programs
sponsored by the Advisor or any of its Affiliates, including KBS Realty Advisors LLC, as well as any investments that have been made by the Advisor or any of its Affiliates directly; 

(d) Provide or arrange for any administrative services and items, legal and other services, office space, office
furnishings, personnel and other overhead items necessary and incidental to the Company’s business and operations; 

(e) Provide financial and operational planning services; 

(f) Maintain accounting and other record-keeping functions at the Company level and the investment levels, including
information concerning the activities of the Company as shall be required to prepare and to file all periodic financial reports, tax returns and any other information required to be filed with the SEC, the Internal Revenue Service and any other
regulatory agency; 
 (g) Maintain and preserve all appropriate books and records of the Company; 

(h) Provide tax and compliance services and coordinate with appropriate third parties, including the Company’s
independent auditors and other consultants, on related tax matters; 
  

 12 

 (i) Provide the Company with all necessary cash management services;

 (j) Manage and coordinate with the transfer agent the dividend process and payments to Stockholders;

 (k) Consult with the Company’s officers and the Board and assist the Board in evaluating and obtaining
adequate insurance coverage based upon risk management determinations; 
 (l) Provide the Company’s
officers and the Board with timely updates related to the overall regulatory environment affecting the Company, as well as managing compliance with such matters, including but not limited to compliance with the Sarbanes-Oxley Act of 2002;

 (m) Consult with the Company’s officers and the Board relating to the corporate governance structure and
appropriate policies and procedures related thereto; 
 (n) Perform all reporting, record keeping, internal
controls and similar matters in a manner to allow the Company to comply with applicable law, including federal and state securities laws and the Sarbanes-Oxley Act of 2002; 

(o) Notify the Board of all proposed material transactions before they are completed; and 

(p) Do all things necessary to assure its ability to render the services described in this Agreement. 

3.04 Stockholder Services. 

(i) Manage services for and communications with Stockholders, including answering phone calls, preparing and sending
written and electronic reports and other communications; 
 (ii) Oversee the performance of the transfer agent
and registrar; 
 (iii) Establish technology infrastructure to assist in providing Stockholder support and
service; and 
 (iv) Consistent with Section 3.01, the Advisor shall perform the various subscription
processing services reasonably necessary for the admission of new Stockholders. 
 3.05 Other Services. Except as provided in
Article 7, the Advisor shall perform any other services reasonably requested by the Company (acting through the Conflicts Committee). 
  

 13 

 ARTICLE 4 

AUTHORITY OF ADVISOR 

4.01 General. All rights and powers to manage and control the day-to-day business and affairs of the Company shall be vested in the
Advisor. The Advisor shall have the power to delegate all or any part of its rights and powers to manage and control the business and affairs of the Company to such officers, employees, Affiliates, agents and representatives of the Advisor or the
Company as it may deem appropriate. Any authority delegated by the Advisor to any other Person shall be subject to the limitations on the rights and powers of the Advisor specifically set forth in this Agreement or the Articles of Incorporation.

 4.02 Powers of the Advisor. Subject to the express limitations set forth in this Agreement and the continuing and exclusive
authority of the Board over the management of the Company, the power to direct the management, operation and policies of the Company shall be vested in the Advisor, which shall have the power by itself and shall be authorized and empowered on behalf
and in the name of the Company to carry out any and all of the objectives and purposes of the Company and to perform all acts and enter into and perform all contracts and other undertakings that it may in its sole discretion deem necessary,
advisable or incidental thereto to perform its obligations under this Agreement. 
 4.03 Approval by the Board. Notwithstanding
the foregoing, the Advisor may not take any action on behalf of the Company without the prior approval of the Board or duly authorized committees thereof if the Articles of Incorporation or Maryland General Corporation Law require the prior approval
of the Board. The Advisor will deliver to the Board all documents required by it to evaluate a proposed investment (and any related financing). 

4.04 Modification or Revocation of Authority of Advisor. The Board may, at any time upon the giving of notice to the Advisor, modify or
revoke the authority or approvals set forth in Article 3 and this Article 4 hereof; provided, however, that such modification or revocation shall be effective upon receipt by the Advisor and shall not be applicable to investment transactions to
which the Advisor has committed the Company prior to the date of receipt by the Advisor of such notification. 
 ARTICLE 5

 BANK ACCOUNTS 

The Advisor may establish and maintain one or more bank accounts in its own name for the account of the Company or in the name of the
Company and may collect and deposit into any such account or accounts, and disburse from any such account or accounts, any money on behalf of the Company, under such terms and conditions as the Board may approve, provided that no funds shall be
commingled with the funds of the 
  

 14 

 
Advisor. The Advisor shall from time to time render appropriate accountings of such collections and payments to the Board and the independent auditors of the Company. 

ARTICLE 6 

RECORDS AND FINANCIAL STATEMENTS 

The Advisor, in the conduct of its responsibilities to the Company, shall maintain adequate and separate books and records for the
Company’s operations in accordance with GAAP, which shall be supported by sufficient documentation to ascertain that such books and records are properly and accurately recorded. Such books and records shall be the property of the Company and
shall be available for inspection by the Board and by counsel, auditors and other authorized agents of the Company, at any time or from time to time during normal business hours. Such books and records shall include all information necessary to
calculate and audit the fees or reimbursements paid under this Agreement. The Advisor shall utilize procedures to attempt to ensure such control over accounting and financial transactions as is reasonably required to protect the Company’s
assets from theft, error or fraudulent activity. All financial statements that the Advisor delivers to the Company shall be prepared on an accrual basis in accordance with GAAP, except for special financial reports that by their nature require a
deviation from GAAP. The Advisor shall liaise with the Company’s officers and independent auditors and shall provide such officers and auditors with the reports and other information that the Company so requests. 

ARTICLE 7 

LIMITATION ON ACTIVITIES 

Notwithstanding any provision in this Agreement to the contrary, the Advisor shall not take any action that, in its sole judgment made in
good faith, would (i) adversely affect the ability of the Company to qualify or continue to qualify as a REIT under the Code, (ii) subject the Company to regulation under the Investment Company Act of 1940, as amended, (iii) violate
any law, rule, regulation or statement of policy of any governmental body or agency having jurisdiction over the Company, its Shares or its other securities, (iv) require the Advisor to register as a broker-dealer with the SEC or any state, or
(v) violate the Articles of Incorporation or Bylaws. In the event an action that would violate (i) through (v) of the preceding sentence but such action has been ordered by the Board, the Advisor shall notify the Board of the
Advisor’s judgment of the potential impact of such action and shall refrain from taking such action until it receives further clarification or instructions from the Board. In such event, the Advisor shall have no liability for acting in
accordance with the specific instructions of the Board so given. 
  

 15 

 ARTICLE 8 

FEES 
 8.01
Acquisition Fees. As compensation for the investigation, selection and acquisition (by purchase, investment or exchange) of Properties and other Permitted Investments, the Company shall pay an Acquisition Fee to the Advisor for each such investment.
With respect to the acquisition of a Property to be wholly owned by the Company, the Acquisition Fee payable to the Advisor shall equal 0.75% of the sum of the amount actually paid or allocated to the purchase, development, construction or
improvement of such Property, inclusive of the Acquisition Expenses associated with such Property, and the amount of any debt attributable to such Property. With respect to other wholly owned Permitted Investments, the Acquisition Fee payable to the
Advisor shall equal 0.75% of the cost of such investment, inclusive of Acquisition Expenses associated with such investment, and the amount of any debt attributable to such Permitted Investment. With respect to the acquisition of a Property or other
Permitted Investment through any Joint Venture or any partnership in which the Company is, directly or indirectly, a co-venturer or partner, the Acquisition Fee payable to the Advisor shall equal 0.75% of the portion of the amount actually paid or
allocated to the purchase, development, construction or improvement of the Property or other Permitted Investment, inclusive of the Acquisition Expenses associated with such Property or Permitted Investment, plus the amount of any outstanding debt
associated with such Property or Permitted Investment that is attributable to the Company’s investment in the Joint Venture or partnership. Notwithstanding anything herein to the contrary, the payment of Acquisition Fees by the Company shall be
subject to the limitations contained in the Company’s Articles of Incorporation. The Advisor shall submit an invoice to the Company on or about the closing or closings of each acquisition, accompanied by a computation of the Acquisition Fee.
The Acquisition Fee payable to the Advisor shall be paid at the closing of the acquisition upon receipt of the invoice by the Company. The Company will not pay an Acquisition Fee to the Advisor with respect to any transaction in which the Company is
required to pay an Origination Fee to the Advisor pursuant to the provisions of Section 8.02 below. The Acquisition Fee may or may not be taken, in whole or in part, as to any period in the sole discretion of the Advisor. All or any portion of
the Acquisition Fee not taken as to any period shall be deferred without interest and may be paid in such other period as the Advisor shall determine. 

8.02 Origination Fees. As compensation for the investigation, selection, sourcing and acquisition or origination of Loans, the Company
shall pay an Origination Fee to the Advisor for each such acquisition or origination. With respect to the acquisition or origination of a Loan to be wholly owned by the Company, the Origination Fee payable to the Advisor shall equal 1% of the amount
funded by the Company to acquire or originate the Loan, including any Acquisition Expenses related to such investment and any debt used to fund the acquisition or origination of the Loan. With respect to the acquisition of a Loan through any Joint
Venture or any partnership in which the Company is, directly or indirectly, a co-venturer or partner, the Origination Fee payable to the Advisor shall equal 1% of the portion of the amount actually paid or allocated to acquire or originate the Loan,
inclusive of the Acquisition Expenses associated with such 
  

 16 

 
Loan, plus the amount of any outstanding debt associated with such Loan that is attributable to the Company’s investment in the Joint Venture or partnership. The Company will not pay an
Origination Fee to the Advisor with respect to any transaction pursuant to which the Company is required to pay the Advisor an Acquisition Fee. Notwithstanding anything herein to the contrary, the payment of Origination Fees by the Company shall be
subject to the limitations on Acquisition Fees contained in (and defined in) the Company’s Articles of Incorporation. The Advisor shall submit an invoice to the Company following the closing or closings of each Loan, accompanied by a
computation of the Origination Fee. The Origination Fee payable to the Advisor shall be paid at the closing of the transaction upon receipt of the invoice by the Company. The Origination Fee may or may not be taken, in whole or in part, as to any
period in the sole discretion of the Advisor. All or any portion of the Origination Fee not taken as to any period shall be deferred without interest and may be paid in such other period as the Advisor shall determine. 

8.03 Asset Management Fees. 

(i) Except as provided in Section 8.03(ii) hereof, the Company shall pay the Advisor as compensation for the services described in
Section 3.03 hereof a monthly fee (the “Asset Management Fee”) in an amount equal to one-twelfth of 0.75% of the sum of the Cost of Real Estate Investments and the Cost of Loans and other Permitted Investments. The Advisor shall
submit a monthly invoice to the Company, accompanied by a computation of the Asset Management Fee for the applicable period. The Asset Management Fee shall be payable on the last day of such month, or the first business day following the last day of
such month. The Asset Management Fee may or may not be taken, in whole or in part, as to any period in the sole discretion of the Advisor. All or any portion of the Asset Management Fees not taken as to any period shall be deferred without interest
and may be paid in such other fiscal period as the Advisor shall determine. 
 (ii) Notwithstanding anything contained in
Section 8.03(i) to the contrary, a Property, Loan or other Permitted Investment that has suffered an impairment in value, reduction in cash flow or other negative circumstances may either be excluded from the calculation of the Cost of Real
Estate Investments or the Cost of Loans and other Permitted Investments or included in such calculation at a reduced value that is recommended by the Advisor and the Company’s management and then approved by a majority of the Company’s
independent directors, and this change in the fee will be applicable to an investment upon the earlier to occur of the date on which (i) such investment is sold, (ii) such investment is surrendered to a Person other than the Company, its
direct or indirect wholly owned subsidiary or a Joint Venture or partnership in which the Company has an interest, (iii) the Advisor determines that it will no longer pursue collection or other remedies related to such investment, or
(iv) the Advisor recommends a revised fee arrangement with respect to such investment. 
 8.04 Disposition Fees. If the
Advisor or any of its Affiliates provide a substantial amount of services (as determined by the Conflicts Committee) in connection with a Sale, the Advisor or such Affiliate shall receive a fee at the closing (the “Disposition Fee”)

  

 17 

 
equal to 1.0% of the Contract Sales Price; provided, however, that if in connection with such Sale commissions are paid to third parties other than the Advisor or its Affiliates, the fee paid to
the Advisor or any of its Affiliates may not exceed the commissions paid to such unaffiliated third parties; and provided further that no Disposition Fee shall be payable to the Advisor for any Sale if such Sale involves the Company selling all or
substantially all of its assets in one or more transactions designed to effectuate a business combination transaction (as opposed to a Company liquidation, in which case the Disposition Fee would be payable if the Advisor or an Affiliate provides a
substantial amount of services as provided above). The payment of any Disposition Fees by the Company shall be subject to the limitations contained in the Company’s Articles of Incorporation. Any Disposition Fee payable under this
Section 8.04 may be paid in addition to commissions paid to non-Affiliates, provided that the total commissions (including such Disposition Fee) paid to all Persons by the Company for each Sale shall not exceed an amount equal to the lesser of
(i) 6.0% of the aggregate Contract Sales Price of each Property, Loan or other Permitted Investment or (ii) the Competitive Real Estate Commission for each Property, Loan or other Permitted Investment. Substantial assistance in connection
with the Sale of a Property includes the Advisor’s preparation of an investment package for the Property (including a new investment analysis, rent rolls, tenant information regarding credit, a property title report, an environmental report, a
structural report and exhibits) or such other substantial services performed by the Advisor in connection with a Sale. The Advisor shall submit an invoice to the Company on or about the closing or closings of each disposition, accompanied by a
computation of the Disposition Fee. Generally, the Disposition Fee payable to the Advisor shall be paid at the closing of the transaction upon receipt of the invoice by the Company. However, the Disposition Fee may or may not be taken, in whole or
in part, as to any period in the sole discretion of the Advisor. All or any portion of the Disposition Fee not taken as to any period shall be deferred without interest and may be paid in such other period as the Advisor shall determine. 

8.05 Subscription Processing Fee. The Company shall pay the Advisor as compensation for the services described in Section 3.04(iv)
hereof a monthly fee (the “Subscription Processing Fee”) in an amount equal to $35 per subscription agreement for Shares received and processed by the Advisor. The Advisor shall submit a monthly invoice to the Company, accompanied by a
computation of the total amount of the Subscription Processing Fee for the applicable period. Generally, the Subscription Processing Fee payable to the Advisor shall be paid on the last day of such month, or the first business day following the last
day of such month. However, the Subscription Processing Fee may or may not be taken, in whole or in part, as to any period in the sole discretion of the Advisor. All or any portion of the Subscription Processing Fees not taken as to any period shall
be deferred without interest and may be paid in such other period as the Advisor shall determine. The Subscription Processing Fee is an Organization and Offering Expense of the Company and is subject to the limitations on Organization and Offering
Expenses in Article 9 hereof. 
 8.06 Subordinated Share of Cash Flows. The Subordinated Share of Cash Flows shall be payable to
the Advisor in an amount equal to 15% of Operating Cash Flow and Cash from Sales, Settlements and Financings remaining after the Stockholders have 

 

 18 

 
received Distributions of Operating Cash Flow and of Cash from Sales, Settlements and Financings such that the owners of all outstanding Shares have received Distributions in an aggregate amount
equal to the sum of: 
  

	 	a.	the Stockholders’ 8% Return and 

	 	b.	Invested Capital. 

 When determining whether the
above threshold has been met: 
  

	 	(A)	Any stock dividend shall not be included as a Distribution; and 

  

	 	(B)	Distributions paid on Shares redeemed by the Company (and thus no longer included in the determination of Invested Capital), shall not be included as a Distribution.

 Following Listing, no Subordinated Share of Cash Flows will be paid to the Advisor. 

If the Subordinated Share of Cash Flows is payable to the Advisor, the Advisor shall submit a monthly invoice to the Company, accompanied by a
computation of the total amount of the Subordinated Share of Cash Flows for the applicable period. Generally, the Subordinated Share of Cash Flows payable to the Advisor shall be paid on the last day of such month, or the first business day
following the last day of such month. However, the Subordinated Share of Cash Flows may or may not be taken, in whole or in part, as to any period in the sole discretion of the Advisor. All or any portion of the Subordinated Share of Cash Flows not
taken as to any period shall be deferred without interest and may be paid in such other period as the Advisor shall determine. 

8.07 Subordinated Incentive Fee. Upon Listing, the Advisor shall be entitled to the Subordinated Incentive Fee in an amount equal to
15.0% of the amount by which (i) the market value of the outstanding Shares of the Company, measured by taking the average closing price or the average of the bid and asked price, as the case may be, over a period of 30 days during which the
Shares are traded, with such period beginning 180 days after Listing (the “Market Value”), plus the total of all Distributions paid to Stockholders (excluding any stock dividends) from the Company’s inception until the date that
Market Value is determined, exceeds (ii) the sum of (A) 100% of Invested Capital and (B) the total Distributions required to be paid to the Stockholders in order to pay the Stockholders’ 8% Return from inception through the date
Market Value is determined. The Company shall have the option to pay such fee in the form of cash, Shares, a promissory note or any combination of the foregoing. The Subordinated Incentive Fee will be reduced by the amount of any prior payment to
the Advisor of a Subordinated Share of Cash Flows. In the event the Subordinated Incentive Fee is paid to the Advisor following Listing, no other performance fee will be paid to the Advisor. In addition, the Subordinated Incentive Fee may or may not
be taken, in whole or in part, as to any period in the sole discretion of the Advisor. All or any portion of the Subordinated Incentive Fee not taken as to any period shall be deferred without interest and may be paid in such other period as the
Advisor shall determine. 
  

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 8.08 Changes to Fee Structure. In the event of Listing, the Company and the Advisor shall
negotiate in good faith to establish a fee structure appropriate for a perpetual-life entity. 
 ARTICLE 9 

EXPENSES 
 9.01
General. In addition to the compensation paid to the Advisor pursuant to Article 8 hereof, the Company shall pay directly or reimburse the Advisor for all of the expenses paid or incurred by the Advisor or its Affiliates on behalf of the Company or
in connection with the services provided to the Company pursuant to this Agreement, including, but not limited to: 

(i) All Organization and Offering Expenses; provided, however, that the Company shall not reimburse the Advisor to the
extent such reimbursement would cause the total amount spent by the Company on Organization and Offering Expenses to exceed 15% of the Gross Proceeds raised as of the date of the reimbursement and provided further that within 60 days after the end
of the month in which an Offering terminates, the Advisor shall reimburse the Company to the extent the Company incurred Organization and Offering Expenses exceeding 15% of the Gross Proceeds raised in the completed Offering; the Company shall not
reimburse the Advisor for any Organization and Offering Expenses that are not fair and commercially reasonable to the Company, and the Advisor shall reimburse the Company for any Organization and Offering Expenses that are not fair and commercially
reasonable to the Company; 
 (ii) Acquisition Fees, Origination Fees and Acquisition Expenses incurred in
connection with the selection and acquisition of Properties, Loans and other Permitted Investments, including such expenses incurred related to assets pursued or considered but not ultimately acquired by the Company, provided that, notwithstanding
anything herein to the contrary, the payment of Acquisition Fees, Origination Fees and Acquisition Expenses by the Company shall be subject to the limitations contained in the Company’s Articles of Incorporation; 

(iii) The actual out-of-pocket cost of goods and services used by the Company and obtained from entities not Affiliated
with the Advisor; 
 (iv) Interest and other costs for borrowed money, including discounts, points and other
similar fees; 
 (v) Taxes and assessments on income or Properties, taxes as an expense of doing business and
any other taxes otherwise imposed on the Company and its business, assets or income; 
 (vi) Out-of-pocket costs
associated with insurance required in connection with the business of the Company or by its officers and Directors; 
  

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 (vii) Expenses of managing, improving, developing, operating and selling
Properties, Loans and other Permitted Investments owned, directly or indirectly, by the Company, as well as expenses of other transactions relating to such Properties, Loans and other Permitted Investments, including but not limited to prepayments,
maturities, workouts and other settlements of Loans and other Permitted Investments; 
 (viii) All out-of-pocket
expenses in connection with payments to the Board and meetings of the Board and Stockholders; 
 (ix) Personnel
and related employment costs incurred by the Advisor or its Affiliates in performing the services described in Article 3 hereof, including but not limited to reasonable salaries and wages, benefits and overhead of all employees directly involved in
the performance of such services, provided that, other than reimbursement of travel and communications expenses, no reimbursement shall be made for the compensation of such employees of the Advisor or its Affiliates to the extent that such employees
perform services for which the Advisor receives Acquisition Fees, Origination Fees or Disposition Fees; 
 (x)
Out-of-pocket expenses of providing services for and maintaining communications with Stockholders, including the cost of preparation, printing, and mailing annual reports and other Stockholder reports, proxy statements and other reports required by
governmental entities; 
 (xi) Audit, accounting and legal fees, and other fees for professional services
relating to the operations of the Company and all such fees incurred at the request, or on behalf of, the Board, the Conflicts Committee or any other committee of the Board; 

(xii) Out-of-pocket costs for the Company to comply with all applicable laws, regulations and ordinances; 

(xiii) Expenses connected with payments of Distributions made or caused to be made by the Company to the Stockholders;

 (xiv) Expenses of organizing, redomesticating, merging, liquidating or dissolving the Company or of amending
the Articles of Incorporation or the Bylaws; and 
 (xv) All other out-of-pocket costs incurred by the Advisor
in performing its duties hereunder. 
 9.02 Timing of and Additional Limitations on Reimbursements. 

(i) Expenses incurred by the Advisor on behalf of the Company and reimbursable pursuant to this Article 9 shall be
reimbursed no less than monthly to the Advisor. The Advisor shall prepare a statement documenting the expenses 
  

 21 

 
of the Company during each quarter and shall deliver such statement to the Company within 45 days after the end of each quarter. 

(ii) Notwithstanding anything else in this Article 9 to the contrary, the expenses enumerated in this Article 9 shall not
become reimbursable to the Advisor unless and until the Company has raised $2.5 million in the Initial Public Offering. 

(iii) Commencing upon the earlier to occur of four fiscal quarters after (i) the Company makes its first real estate
or real estate-related investment or (ii) six months after commencement of the Initial Public Offering, the following limitation on Operating Expenses shall apply: The Company shall not reimburse the Advisor at the end of any fiscal quarter for
Operating Expenses that in the four consecutive fiscal quarters then ended (the “Expense Year”) exceed (the “Excess Amount”) the greater of 2% of Average Invested Assets or 25% of Net Income (the “2%/25% Guidelines”)
for such year unless the Conflicts Committee determines that such excess was justified, based on unusual and nonrecurring factors that the Conflicts Committee deems sufficient. If the Conflicts Committee does not approve such excess as being so
justified, any Excess Amount paid to the Advisor during a fiscal quarter shall be repaid to the Company. If the Conflicts Committee determines such excess was justified, then, within 60 days after the end of any fiscal quarter of the Company for
which total reimbursed Operating Expenses for the Expense Year exceed the 2%/25% Guidelines, the Advisor, at the direction of the Conflicts Committee, shall cause such fact to be disclosed to the Stockholders in writing (or the Company shall
disclose such fact to the Stockholders in the next quarterly report of the Company or by filing a Current Report on Form 8-K with the SEC within 60 days of such quarter end), together with an explanation of the factors the Conflicts Committee
considered in determining that such excess expenses were justified. The Company will ensure that such determination will be reflected in the minutes of the meetings of the Board. All figures used in the foregoing computation shall be determined in
accordance with GAAP applied on a consistent basis. 
 ARTICLE 10 

VOTING AGREEMENT 

The Advisor agrees that, with respect to any Shares now or hereinafter owned by it, the Advisor will not vote or consent on matters
submitted to the stockholders of the Company regarding (i) the removal of the Advisor, a director or any of their Affiliates or (ii) any transaction between the Company and the Advisor, a director or any of their Affiliates. This voting
restriction shall survive until such time that the Advisor is both no longer serving as such and is no longer an Affiliate of the Company. 
  

 22 

 ARTICLE 11 

RELATIONSHIP OF ADVISOR AND COMPANY; 

OTHER ACTIVITIES OF THE ADVISOR 

11.01 Relationship. The Company and the Advisor are not partners or joint venturers with each other, and nothing in this Agreement shall
be construed to make them such partners or joint venturers. Nothing herein contained shall prevent the Advisor from engaging in other activities, including, without limitation, the rendering of advice to other Persons (including other REITs) and the
management of other programs advised, sponsored or organized by the Advisor or its Affiliates. Nor shall this Agreement limit or restrict the right of any manager, director, officer, employee or equityholder of the Advisor or its Affiliates to
engage in any other business or to render services of any kind to any other Person. The Advisor may, with respect to any investment in which the Company is a participant, also render advice and service to each and every other participant therein.
The Advisor shall promptly disclose to the Board the existence of any condition or circumstance, existing or anticipated, of which it has knowledge, that creates or could create a conflict of interest between the Advisor’s obligations to the
Company and its obligations to or its interest in any other Person. 
 11.02 Time Commitment. The Advisor shall, and shall cause
its Affiliates and their respective employees, officers and agents to, devote to the Company such time as shall be reasonably necessary to conduct the business and affairs of the Company in an appropriate manner consistent with the terms of this
Agreement. The Company acknowledges that the Advisor and its Affiliates and their respective employees, officers and agents may also engage in activities unrelated to the Company and may provide services to Persons other than the Company or any of
its Affiliates. 
 11.03 Investment Opportunities and Allocation. The Advisor shall be required to use commercially reasonable
efforts to present a continuing and suitable investment program to the Company that is consistent with the investment policies and objectives of the Company, but neither the Advisor nor any Affiliate of the Advisor shall be obligated generally to
present any particular investment opportunity to the Company even if the opportunity is of character that, if presented to the Company, could be taken by the Company. In the event an investment opportunity is located, the allocation procedure set
forth under the caption “Conflicts of Interest – Certain Conflict Resolution Measures – Allocation of Investment Opportunities” in the Registration Statement shall govern the allocation of the opportunity among the Company and
Affiliates of the Advisor. 
 ARTICLE 12 

THE KBS NAME 

The Advisor and its Affiliates have a proprietary interest in the name “KBS.” The Advisor hereby grants to the Company a
non-transferable, non-assignable, non-exclusive royalty-free right and license to use the name “KBS” during the term of this Agreement. Accordingly, and in recognition of this right, if at any time the Company ceases to retain

  

 23 

 
the Advisor or one of its Affiliates to perform advisory services for the Company, the Company will, promptly after receipt of written request from the Advisor, cease to conduct business under or
use the name “KBS” or any derivative thereof and the Company shall change its name and the names of any of its subsidiaries to a name that does not contain the name “KBS” or any other word or words that might, in the reasonable
discretion of the Advisor, be susceptible of indication of some form of relationship between the Company and the Advisor or any its Affiliates. At such time, the Company will also make any changes to any trademarks, servicemarks or other marks
necessary to remove any references to the word “KBS.” Consistent with the foregoing, it is specifically recognized that the Advisor or one or more of its Affiliates has in the past and may in the future organize, sponsor or otherwise
permit to exist other investment vehicles (including vehicles for investment in real estate) and financial and service organizations having “KBS” as a part of their name, all without the need for any consent (and without the right to
object thereto) by the Company. 
 ARTICLE 13 

TERM AND TERMINATION OF THE AGREEMENT 

13.01 Term. This Agreement shall have an initial term of one year from the date hereof and may be renewed for an unlimited number of
successive one-year terms upon mutual consent of the parties. The Company (acting through the Conflicts Committee) will evaluate the performance of the Advisor annually before renewing this Agreement, and each such renewal shall be for a term of no
more than one year. Any such renewal must be approved by the Conflicts Committee. 
 13.02 Termination by Either Party. This
Agreement may be terminated upon 60 days written notice without cause or penalty by either the Company (acting through the Conflicts Committee) or the Advisor. The provisions of Articles 1, 10, 12, 13, 15 and 16 shall survive termination of this
Agreement. 
 13.03 Payments on Termination and Survival of Certain Rights and Obligations. Payments to the Advisor pursuant to
this Section 13.03 shall be subject to the 2%/25% Guidelines to the extent applicable. 
 (i) After the
Termination Date, the Advisor shall not be entitled to compensation for further services hereunder except it shall be entitled to receive from the Company within 30 days after the effective date of such termination (A) all unpaid reimbursements
of expenses and all earned but unpaid fees payable to the Advisor prior to termination of this Agreement and (B) the Subordinated Performance Fee Due Upon Termination, provided that no Subordinated Performance Fee Due Upon Termination will be
paid if the Company has paid or is obligated to pay the Subordinated Incentive Fee. 
 (ii) The Advisor shall
promptly upon termination: 
  

 24 

 (a) pay over to the Company all money collected pursuant to this Agreement,
if any, after deducting any accrued compensation and reimbursement for its expenses to which it is then entitled; 

(b) deliver to the Board a full accounting, including a statement showing all payments collected by it and a statement of
all money held by it, covering the period following the date of the last accounting furnished to the Board; 

(c) deliver to the Board all assets and documents of the Company then in the custody of the Advisor; and 

(d) cooperate with the Company to provide an orderly transition of advisory functions. 

ARTICLE 14 

ASSIGNMENT 

This Agreement may be assigned by the Advisor to an Affiliate with the consent of the Conflicts Committee. The Advisor may assign any
rights to receive fees or other payments under this Agreement without obtaining the approval of the Board or the Conflicts Committee. This Agreement shall not be assigned by the Company without the consent of the Advisor, except in the case of an
assignment by the Company to a corporation or other organization that is a successor to all of the assets, rights and obligations of the Company, in which case such successor organization shall be bound hereunder and by the terms of said assignment
in the same manner as the Company is bound by this Agreement. 
 ARTICLE 15 

INDEMNIFICATION AND LIMITATION OF LIABILITY 

15.01 Indemnification. Except as prohibited by the restrictions provided in this Section 15.01, Section 15.02 and
Section 15.03, the Company shall indemnify, defend and hold harmless the Advisor and its Affiliates, including their respective officers, directors, equity holders, partners and employees, from all liability, claims, damages or losses arising
in the performance of their duties hereunder, and related expenses, including reasonable attorneys’ fees, to the extent such liability, claims, damages or losses and related expenses are not fully reimbursed by insurance. Any indemnification of
the Advisor may be made only out of the net assets of the Company and not from Stockholders. 
 Notwithstanding the foregoing,
the Company shall not indemnify the Advisors or its Affiliates for any loss, liability or expense arising from or out of an alleged violation of federal or state securities laws by such party unless one or more of the following

  

 25 

 
conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to the particular indemnitee;
(ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against a particular
indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state
securities regulatory authority in which securities of the Company were offered or sold as to indemnification for violations of securities laws. 

15.02 Limitation on Indemnification. Notwithstanding the foregoing, the Company shall not provide for indemnification of the Advisor or
its Affiliates for any liability or loss suffered by any of them, nor shall any of them be held harmless for any loss or liability suffered by the Company, unless all of the following conditions are met: 

(i) The Advisor or its Affiliates have determined, in good faith, that the course of conduct that caused the loss or
liability was in the best interests of the Company. 
 (ii) The Advisor or its Affiliates were acting on behalf
of or performing services for the Company. 
 (iii) Such liability or loss was not the result of negligence or
misconduct by the Advisor or its Affiliates. 
 15.03 Limitation on Payment of Expenses. The Company shall pay or reimburse
reasonable legal expenses and other costs incurred by the Advisors or its Affiliates in advance of the final disposition of a proceeding only if (in addition to the procedures required by the Maryland General Corporation Law, as amended from time to
time) all of the following are satisfied: (a) the proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Company, (b) the legal proceeding was initiated by a third party who is not a
stockholder or, if by a stockholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement and (c) the Advisor or its Affiliates undertake to repay the amount paid or reimbursed by the Company,
together with the applicable legal rate of interest thereon, if it is ultimately determined that the particular indemnitee is not entitled to indemnification. 

ARTICLE 16 

MISCELLANEOUS 

16.01 Notices. Any notice, report or other communication required or permitted to be given hereunder shall be in writing unless some
other method of giving such notice, report or other communication is required by the Articles of Incorporation, the Bylaws or is accepted by the party to whom it is given, and shall be given by being delivered by

  

 26 

 
hand or by overnight mail or other overnight delivery service to the addresses set forth herein: 

To the Company or the Board: 

KBS Real Estate Investment Trust III, Inc. 

620 Newport Center Drive, Suite 1300 

Newport Beach, California 92660 

To the Advisor: 

KBS Capital Advisors LLC 

620 Newport Center Drive, Suite 1300 

Newport Beach, California 92660 

Either party may at any time give notice in writing to the other party of a change in its address for the purposes of this
Section 16.01. 
 16.02 Modification. This Agreement shall not be changed, modified, terminated or discharged, in whole or
in part, except by an instrument in writing signed by both parties hereto, or their respective successors or permitted assigns. 

16.03 Severability. The provisions of this Agreement are independent of and severable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part. 

16.04 Construction. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of
Delaware. 
 16.05 Entire Agreement. This Agreement contains the entire agreement and understanding between the parties hereto
with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof.
The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing. 

16.06 Waiver. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver
of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by
the party asserted to have granted such waiver. 
  

 27 

 16.07 Gender. Words used herein regardless of the number and gender specifically used, shall
be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires. 

16.08 Titles Not to Affect Interpretation. The titles of Articles and Sections contained in this Agreement are for convenience only, and
they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof. 
 16.09
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument.
This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. 

[The remainder of this page is intentionally left blank. 

Signature page follows.] 
  

 28 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year
first above written. 
  

			
	KBS REAL ESTATE INVESTMENT TRUST III, INC.
		
	    By:	 	  

		 	Charles J. Schreiber, Jr., Chief Executive Officer

							
	
	KBS CAPITAL ADVISORS LLC
		
	    By:	 	PBren Investments, L.P., a Manager
			
		 	By:	 	PBren Investments, LLC, as general partner
				
		 		 	By:	 	  

		 		 		 	Peter M. Bren, Manager
		
	    By:	 	Schreiber Real Estate Investments, L.P., a Manager
			
		 	By:	 	Schreiber Investments, LLC, as general partner
				
		 		 	By:	 	  

		 		 		 	Charles J. Schreiber, Jr., Manager

  

 29

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