Document:

RII Q2 3013 Exhibit 10.1

Exhibit 10.1

ADVISORY AGREEMENT

between

KBS REAL ESTATE INVESTMENT TRUST II, INC.

and

KBS CAPITAL ADVISORS LLC

May 21, 2013

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
	9
	

	 
	3.02 Acquisition Services
	9
	

	 
	3.03 Asset Management Services
	10
	

	 
	3.04 Stockholder Services
	12
	

	 
	3.05 Other Services
	13
	

	ARTICLE 4 - AUTHORITY OF ADVISOR
	13
	

	 
	4.01 General
	13
	

	 
	4.02 Powers of the Advisor
	13
	

	 
	4.03 Approval by the Board
	13
	

	 
	4.04 Modification or Revocation of Authority of Advisor
	13
	

	ARTICLE 5 - BANK ACCOUNTS
	13
	

	ARTICLE 6 - RECORDS AND FINANCIAL STATEMENTS
	14
	

	ARTICLE 7 - LIMITATION ON ACTIVITIES
	14
	

	ARTICLE 8 - FEES
	14
	

	 
	8.01 Acquisition Fees
	14
	

	 
	8.02 Origination Fees
	15
	

	 
	8.03 Asset Management Fees
	16
	

	 
	8.04 Disposition Fees
	16
	

	 
	8.05 Subscription Processing Fee
	17
	

	 
	8.06 Subordinated Share of Cash Flows
	17
	

	 
	8.07 Subordinated Incentive Fee
	17
	

	 
	8.08 Changes to Fee Structure
	18
	

	ARTICLE 9 - EXPENSES
	18
	

	 
	9.01 General
	18
	

	 
	9.02 Timing of and Limitations on Reimbursements
	20
	

	ARTICLE 10 – VOTING AGREEMENT
	21
	

	ARTICLE 11 – RELATIONSHIP OF ADVISOR AND COMPANY; OTHER ACTIVITIES OF 
THE ADVISOR
	21
	

	 
	11.01 Relationship
	21
	

	 
	11.02 Time Commitment
	21
	

	 
	11.03 Investment Opportunities and Allocation
	21
	

	ARTICLE 12 - THE KBS NAME
	22
	

	ARTICLE 13 - TERM AND TERMINATION OF THE AGREEMENT
	22
	

	 
	13.01 Term
	22
	

	 
	13.02 Termination by Either Party
	22
	

	 
	13.03 Payments on Termination and Survival of Certain Rights and Obligations
	22
	

	ARTICLE 14 - ASSIGNMENT
	23
	

	ARTICLE 15 - INDEMNIFICATION AND LIMITATION OF LIABILITY
	23
	

	 
	15.01 Indemnification
	23
	

i

	
						
	 
	15.02 Limitation on Indemnification
	24
	

	 
	15.03 Limitation on Payment of Expenses
	24
	

	ARTICLE 16 - MISCELLANEOUS
	25
	

	 
	16.01 Notices
	25
	

	 
	16.02 Modification
	25
	

	 
	16.03 Severability
	25
	

	 
	16.04 Construction
	25
	

	 
	16.05 Entire Agreement
	25
	

	 
	16.06 Waiver
	25
	

	 
	16.07 Gender
	26
	

	 
	16.08 Titles Not to Affect Interpretation
	26
	

	 
	16.09 Counterparts
	26
	

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ADVISORY AGREEMENT
This Advisory Agreement, dated as of May 21, 2013 (the “Agreement”), is between KBS Real Estate Investment Trust II, 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, all as provided herein; and
WHEREAS, the Advisor is willing to undertake to render such services, subject to the supervision of the Board of Directors of the Company, 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 communication 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 Affiliated with the Advisor in connection with the actual development and construction of a Property.

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“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 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

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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 II, 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 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.
“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

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debt associated with such Properties that is attributable to the Company’s investment in the Joint Venture or partnership.
“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. 333-146341 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 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-

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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 8.07.
“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, 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, 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, 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.

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“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 II, 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 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. 333-146341), as amended from time to time, in connection with the Initial Public Offering.

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“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; (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, 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.
“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.

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“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 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.

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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, 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;

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(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:
(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

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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;
(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 and 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;

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(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;
(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.

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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).
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 Advisor.  The Advisor shall from time to time 

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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.
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

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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 following 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.
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 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.

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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 the resulting change in the Asset Management Fee with respect to such investment will be applicable 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”) equal to 1.0% of the Contract Sales Price; provided, however, 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

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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 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.
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.  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 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.
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”),

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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.
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 the Conflicts Committee determines 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;

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(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;
(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 communication expenses, no reimbursement shall be made for costs 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.

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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 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’s acquisition of its first real estate asset or (ii) October 22, 2008 (which is 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.

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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 or any Affiliate of the Advisor, (ii) any transaction between the Company and the Advisor or any of its Affiliates, (iii) the election of directors of the Company or (iv) the approval or termination of any contract with the Advisor or any Affiliate of the Advisor. 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.
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

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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 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.

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(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:
(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

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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 Advisor 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 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 Advisor 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.

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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 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 II, 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

25

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.
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.]

26

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

KBS REAL ESTATE INVESTMENT TRUST II, INC.
		
	By:
	/s/ Charles J. Schreiber, Jr.

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:
	/s/ Peter M. Bren

Peter M. Bren, Manager
		
	By:
	Schreiber Real Estate Investments, L.P., a 

Manager
		
	By:
	Schreiber Investments, LLC, as general

partner
		
	By:
	/s/ Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr., Manager

27Exhibit10.1-Employment Agreement

Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (“Agreement”) is made between THOMPSON CREEK METALS COMPANY USA, a corporation existing under the laws of the Colorado (“Thompson Creek”), and JACQUES PERRON (“Executive”).
WHEREAS Thompson Creek wishes to employ the Executive and the Executive wishes to be employed by Thompson Creek in connection with the operation of the business carried on by Thompson Creek and the Parent (the “Business”).
NOW THEREFORE IN CONSIDERATION OF the covenants and agreements contained in this Agreement, and other good and valuable consideration including the Executive’s Employment with Thompson Creek, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
DEFINITIONS
1.In this Agreement, in addition to those terms defined above and unless there is something in the subject matter inconsistent therewith, the terms set forth below shall have the following corresponding meanings:   

“Affiliate” means any Person which, directly or indirectly, controls or is controlled by or is under common control with a Party, and the term "Affiliated" has a corresponding meaning.  

“Agreement” means this agreement between the Parties.

“Board” means the Board of Directors of the Parent from time to time.

“Cause” shall be deemed to exist in the event the Executive:

		
	(a)
	engages in gross or willful misconduct which causes substantial loss, damage or injury to the property or reputation of Thompson Creek or any of its Affiliates, including the Parent; or

		
	(b)
	has committed an act of fraud in connection with his Employment; or

		
	(c)
	has intentionally committed a material violation of applicable securities legislation; or

		
	(d)
	materially breaches the Executive’s duties under this Agreement, including without limitation the provisions of paragraph 6 and such breach is specifically identified and is not cured within thirty (30) days after written notice thereof by the Board to the Executive; or

		
	(e)
	materially breaches a written, material Policy and such breach is specifically identified and is not cured within thirty (30) days after written notice thereof by the Board to the Executive.  

“Change of Control” means the occurrence of any one or more of the following events:
		
	(a)
	less than 50% of the Board being composed of Continuing Directors; 

		
	(b)
	any Person, entity or group of Persons or entities acting jointly or in concert (an "Acquiror") acquires or acquires control (including, without limitation, the right to vote or direct the voting) of Voting Securities of the Parent which, when added to the Voting Securities owned of record or beneficially by the Acquiror or which the Acquiror has the right to vote or in respect of which the Acquiror has the right to direct the voting, would entitle the Acquiror and/or associates and/or affiliates of the Acquiror to cast or to direct the casting of 30% or more of the Parent's outstanding Voting Securities; 

		
	(c)
	the Parent shall sell or otherwise transfer, including by way of the grant of a leasehold interest or joint venture interest (or one or more subsidiaries of the Parent shall sell or otherwise transfer, including without limitation by way of the grant of a leasehold interest or joint venture interest) property or assets (i) aggregating more than 50% of the consolidated assets (measured by either book value or fair market value) of the Parent and its subsidiaries as of the end of the most recently completed financial year of the Parent or (ii) which during the most recently completed financial year of the Parent generated, or during the then current financial year of the Parent are expected to generate, more than 50% of the consolidated operating income or cash flow of Parent and its subsidiaries, to any other Person or Persons (other than one or more Affiliates of the Parent), in which case the Change of Control shall be deemed to occur on the date of transfer of the assets representing one dollar more than 50% of the consolidated assets in the case of clause (i) or 50% of the consolidated operating income or cash flow in the case of clause (ii), as the case may be; or

		
	(d)
	in the event the Parent:

		
	(i)
	becomes insolvent or generally not able to pay its debts as they become due;

		
	(ii)
	admits in writing its inability to pay its debts generally or makes a general assignment for the benefit of creditors; or

		
	(iii)
	institutes or has instituted against it any proceeding seeking:

		
	a.
	to adjudicate it as bankrupt or insolvent;

2

		
	b.
	liquidation, winding-up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors including any plan or compromise or arrangement or other corporate proceeding involving or affecting its creditors; or

		
	c.
	the entry of an order for the relief or the appointment of a receiver, trustee or other similar official for it or for any substantial part of its properties and assets, and in the case of any such proceeding instituted against it (but not instituted by it), either the proceeding remains undismissed or unstayed for a period of thirty (30) days, or any of the actions sought in such proceeding (including the entry of an order for relief against it or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its properties and assets) occurs.

For the purposes of the foregoing, "Voting Securities" means Common Shares and any other shares entitled to vote for the election of directors and shall include any security, whether or not issued by the Parent, which are not shares entitled to vote for the election of directors but are convertible into or exchangeable for shares which are entitled to vote for the election of directors including any options or rights to purchase such shares or securities.
“Code” means the United States Internal Revenue Code of 1986, as amended.
“Common Shares” means the common shares in the capital of the Parent.
“Continuing Director” means either:

		
	(a)
	an individual who is a member of the Board on the date this Agreement is executed by the Parties; or

		
	(b)
	an individual who becomes a member of the Board, subsequent to the date this Agreement is executed by the Parties, with the agreement of at least a majority of the Continuing Directors who are members of the Board at the date that the individual became a member of the Board.

“Employment” means the employment of the Executive in connection with the Business and in accordance with the terms and conditions of this Agreement.

“Parent” means Thompson Creek Metals Company Inc., a corporation existing under the laws of the Province of British Columbia, Canada.

“Party” means a party to this Agreement, and “Parties” has a similar extended meaning.

3

“Person” includes any individual, partnership, joint venture, trust, unincorporated organization or any other association, corporation, or any government or any department or agency thereof.

“Policies” mean the Thompson Creek Code of Conduct and Ethics and all other written and material Thompson Creek policies, all of which are incorporated by reference in and form part of this Agreement, and including such amendments thereto as may occur from time to time.  

“Termination” or “Termination of Employment” or “Termination of the Executive’s Employment” or any similar variation thereof shall, for purposes of any payment to be made to Executive, be interpreted to mean “separation from service” within the meaning provided under Treasury Regulation section 1.409A-1(h); provided, however, that the use of the term “Termination” does not mean that any payment is necessarily due to the Executive, except as expressly stated in this Agreement.

“Treasury Regulation” means a regulation issued under the Code.

“Triggering Event” means any one of the following events which occurs without the express agreement in writing of the Executive:
 
(a)    a material adverse change in any of the duties, responsibilities, salary, or bonus opportunity of the Executive as they exist, and with respect to financial entitlements, the conditions under and manner in which they were payable;

(b)    a material diminution of the title of the Executive;

(c)    a change in the person or body to whom the Executive reports, except if such person or body is of equivalent rank or stature or such change is as a result of the resignation or removal of such person or the persons comprising such body, as the case may be, provided that this shall not include a change resulting from a promotion in the normal course of business; 

(d)    a material change in the location at which the Executive is regularly required to carry out the terms of the Executive’s Employment, or a material increase in the amount of travel the Executive is required to conduct as described in paragraph 5; or

(e)    any action or inaction that constitutes a material breach by Thompson Creek of this Agreement.

However, the Executive must provide written notification of any such event to the Chief Executive Officer of Thompson Creek or the Board within 90 days of having knowledge of the occurrence of any of the above in order to treat such occurrence as a “Triggering 

4

Event” and Thompson Creek shall have 30 days from the date of receipt of such notice to remedy the condition. After the expiration of such 30 day cure period without remedy by the Thompson Creek, “Triggering Event” shall be deemed to exist for 60 days after the end of the cure period.
AGREEMENT TO EMPLOY
2.Thompson Creek agrees to employ the Executive in connection with the Business on the terms and conditions set out herein and the Executive agrees to accept Employment on such terms.   Executive represents that Executive is entering into this Agreement voluntarily and that Executive’s employment hereunder and compliance with the terms and conditions of this Agreement will not conflict with or result in the breach of any agreement to which the Executive is a party or by which the Executive may be bound or any legal duty that the Executive owes or may owe to another.
TERM
3.The term of this Agreement and the Executive’s Employment shall commence on November 1, 2013 or as otherwise agreed by Executive and Thompson Creek, and terminate on the  third anniversary of the date hereof, unless Executive’s employment is sooner terminated pursuant to the termination provisions of this Agreement by Thompson Creek or Executive.  Commencing on the third anniversary of the date hereof, and on each anniversary thereafter, the term of this Agreement will automatically be extended for one additional year unless not later than 180 days prior to the expiration of the initial term or any extended  term, Thompson Creek has given written notice to the Executive that it  wishes to terminate this Agreement as per the terms set out in paragraph 15 (Without Cause). This Agreement is subject to the following conditions, whether the Executive’s Employment is within the initial three year term specified in this paragraph, or the Executive’s Employment is within a renewal period specified in this paragraph, or the term of the agreement is not renewed and terminates at the end of the initial term:
		
	(a)
	the Executive's employment is subject to his qualifying for an acceptable visa under U.S. immigration law. 

		
	(b)
	Thompson Creek may terminate this Agreement and the Executive’s Employment at any time as set out in paragraphs 14 (With Cause), 15 (Without Cause) and 18 (Disability) hereof;

		
	(c)
	the Executive may terminate this Agreement and the Executive’s Employment at any time as set out in paragraph 15 (Triggering Event) and 17 (Resignation/Retirement) hereof;

		
	(d)
	Thompson Creek or the Executive may terminate this Agreement and the Executive’s Employment upon the occurrence of a Change of Control as set out in paragraph 16 (Change of Control) hereof; or 

5

		
	(e)
	this Agreement and the Executive’s Employment are automatically terminated when the Executive dies as set out in paragraph 19 (Death) hereof.

		
	(f)
	In the event that Thompson Creek gives notice to the Executive that it wishes to terminate this Agreement at the end of the initial three year term or at the end of any extended term without Cause, as defined in this Agreement, the Executive shall receive the compensation set forth in Paragraph 15 of this Agreement.

DUTIES AND RESPONSIBILITIES
4.The Executive shall serve as Chief Executive Officer and shall perform such duties and assume such responsibilities inherent in and consonant with Executive’s position as an executive of Thompson Creek, and further will perform such reasonable additional duties and responsibilities as the Chief Executive Officer may require and assign to Executive including serving as an officer of Affiliates, including the Parent, of Thompson Creek at no additional compensation. The Executive’s authority, duties and responsibility shall be consistent with such authority, duties and responsibilities that are customary for the position of Chief Executive Officer including, without limitation: supervising and managing all aspects of the Company's business; developing, refining and implementing the Company's strategic growth plans; and overall responsibility for the Company’s domestic and international operations. The Executive shall report to the Board of Thompson Creek.  The Executive’s regular place of Employment shall be Thompson Creek’s offices in Littleton, Colorado.  Executive shall be appointed to the Board on the commencement of his employment.
5.  The Executive shall at all times act in compliance with the Policies, and be committed to safety and Executive’s contribution to Thompson Creek and its Affiliates, including the Parent, as a whole.  The Executive acknowledges that Executive’s Employment will entail frequent travel, including to places where the Parent and its Affiliates have operations, other than Executive’s regular place of Employment.  
CONFLICT OF INTEREST/DUTY OF LOYALTY
		
	6.
	(a)    The Executive agrees to devote all of Executive’s working time during Executive’s Employment to the Business and shall not engage or have an interest in any other enterprise, occupation or profession, directly or indirectly, or become a principal, agent, director, officer or employee of another company, firm or Person, as applicable, which will or may interfere with or conflict with the Executive’s duties and responsibilities hereunder without the written approval, not to be unreasonably withheld, of the Board.  

		
	(b)
	If Thompson Creek determines that the Executive is in breach of this provision and such breach is capable of cure, it shall provide written notice of the 

6

breach and afford the Executive 10 days to cure the breach.  Failure by the Executive to cure the breach within such 10-day period shall constitute Cause for Termination of the Executive’s Employment.  In the event of breach not capable of cure, the breach by the Executive of this provision shall constitute immediate grounds for Termination of the Executive’s Employment for Cause.  
CONFIDENTIALITY AND NON-SOLICITATION
		
	7.
	(a)    The Executive agrees to keep the affairs of the Business, financial and otherwise, strictly confidential and shall not disclose the same to any Person, company or firm, directly or indirectly, during or after Executive’s Employment by Thompson Creek except as reasonably necessary to carry out Executive’s Employment duties or as otherwise authorized in writing by the Board or an authorized committee thereof.  The Executive agrees not to use such information, directly or indirectly, for Executive’s own interests, or any interests other than those of the Business, whether or not those interests conflict with the interests of the Business, during or after Executive’s Employment by Thompson Creek.  The Executive agrees that all trade secrets, trade names, financial information, client information, client files and processing and marketing techniques, mineral properties, mineral exploration data or information or mining or exploration proposals relating to the Business or disclosed to the Executive in the course of Executive’s Employment shall become, on execution of this Agreement, and shall be thereafter, as the case may be, the sole property of Thompson Creek whether arising before or after the execution of this Agreement.

		
	(b)
	The Executive covenants and agrees with Thompson Creek that he will not, at any time during the term of this Agreement and for a period of twelve (12) months thereafter, without the prior written consent of Thompson Creek, either directly or indirectly solicit (for the purposes of enticing away from Thompson Creek or its Affiliates), interfere with or endeavor to entice away from Thompson Creek or its Affiliates any customer or employee of or consultant to Thompson Creek or its Affiliates.

REMUNERATION
8.    The Executive shall be remunerated as follows during the term of this Agreement:
		
	(a)
	a signing bonus of US$200,000, payable upon Thompson Creek’s first regular payroll date following Executive’s first day of employment;

		
	(b)
	initial base salary of US$550,000 per annum payable bi-weekly which shall be reviewed annually by the Board but in any event shall not be less than the previous year’s base salary and consistent with the practice of Thompson Creek, Executive will be eligible for an annual merit increase in January 2014, 

7

to the extent such increases are given generally to the company, or if otherwise approved by the Board; 
		
	(c)
	all benefits generally provided to executives of Thompson Creek effective as of the date of this Agreement, including any profit-sharing or 401(k) plans, employee stock purchase, group life, health hospitalization and disability insurance plans and discount privileges, or such other benefits that may be generally provided to executives of Thompson Creek from time to time on terms determined by the Board or its designee, subject to the regular eligibility requirements with respect to each of such benefit plans or programs, provided however Executive’s participation in such benefit plans will be subject to the then current terms and conditions of each such benefit plan, including eligibility and compliance requirements and the Company shall have the right to change, alter or terminate any such plan in its sole discretion; 

		
	(d)
	four (4) weeks of vacation earned each year (hereinafter referred to as a “Vacation Year”).  Such amount shall be prorated for the Executive’s first partial year of Employment; thereafter, the Executive’s Vacation Year shall commence on January 1 and end on December 31 of the same year.  Vacation must be taken in the Vacation Year in which it is earned.   If less than two weeks of vacation are taken in any Vacation Year, then two weeks of unused vacation time from that Vacation Year shall be carried forward into the next Vacation Year; provided, however, Executive shall never have more than six (6) weeks of vacation in Executive’s vacation bank.   All other unused vacation shall be forfeited, unless otherwise approved by the Board.  Executive shall be paid upon Termination of Employment for any unused vacation then existing in Executive’s vacation bank, but shall not be paid for vacation that was previously forfeited;

		
	(e)
	Executive will receive relocation assistance provided in his move to the Denver area, including but not limited to one house-finding trip up to seven days; payment of closing costs associated with the purchase or lease of a new home in the Denver area and home sale assistance for Executive’s real estate property in Toronto, including transfer taxes, recording fees, real estate commissions/fees, leasing and legal fees incurred; packing, transportation and insurance of household goods; shipment of one personal vehicle; reimbursement of any loss on the sale of privately owned automobile based on the difference between the book value and the selling price; temporary living accommodations up to three months; incidental moving allowance of $20,000 less applicable taxes; tax preparation and advice services for both Executive’s Canadian and US income tax returns for the years 2013 and 2014; visa processing and immigration assistance, including all costs fees in attorneys’ fees; and 

8

(f)    the Company agrees to maintain Director and Officer insurance liability coverage and indemnify Executive from any and all liability consistent with the Bylaws of the Company and Colorado law. 
9.    The Executive shall be eligible to participate in the Parent’s performance bonus plan, as in effect from time to time, at the sole discretion of the Board; provided, however, that for the first 12 months of his employment, the Executive shall receive a minimum bonus equal to 90% of the Executive’s base salary during such 12-month period.   The Executive’s individual performance bonus criteria will be developed in consultation between the Executive and the Board and determined in the reasonable discretion of the Board.  The Executive’s initial bonus target will be 90% of base salary, with a maximum bonus opportunity of 180%, in each case subject to change at the reasonable exercise of  discretion of the Board.  
10.    The Executive shall be entitled to participate in the Parent’s Long Term Incentive Plan (LTIP), as in effect from time to time.  The Executive may be granted from time to time, at the sole discretion of the Board, any form of compensation permitted under such plan.   Upon commencement of employment executive will receive the following:
(a)      400,000 stock options of which one third (1/3) will vest on the first, second and third anniversaries of the Executive’s commencement of employment; and
(b)      300,000 time-based Restricted Share Units (RSU’s) with one third (1/3) of the RSU’s vesting on the first, second, and third anniversaries of the Executive’s commencement of employment.
11.    All payments required to be made under this Agreement are subject to statutory deductions, as applicable, including without limitation for income and payroll taxes.
12.    (a)    Notwithstanding any other provision in this Agreement, if (i) on the date of
Termination of Executive’s Employment with Thompson Creek, any of the Parent’s stock is publicly traded on an established securities market or otherwise (within the meaning of Code section 409A(a)(2)(B)(i)), and (ii) as a result of such Termination, Executive would receive any payment under this Agreement that, absent the application of this provision, would be subject to additional tax imposed pursuant to Code section 409A(a) as a result of the application of Code section 409A(a)(2)(B)(i), then such payment shall be payable on the date that is the earliest of (x) six (6) months after Executive’s Termination date, (y) Executive’s death or (z) such other date as will not result in such payment being subject to Code section 409A sanctions.

		
	(b)
	It is the intention of the Parties that payments or benefits payable under this Agreement not be subject to the additional tax imposed pursuant to Code section 409A.  Each amount to be paid or benefit to be provided to Executive shall be construed as a separate payment for purposes of Code section 409A 

9

to the fullest extent permitted therein.  To the extent such potential payments or benefits could become subject to such section, Thompson Creek shall cooperate to amend the Agreement with the goal of giving the Executive the applicable economic benefits in a manner that does not result in such sanctions being imposed.  Thompson Creek does not guarantee or warrant that such cooperation will result in such sanctions not being imposed.

		
	(c)
	Except as otherwise permitted under Code section 409A, Thompson Creek shall not accelerate or defer any payment under this Agreement.  

REIMBURSEMENT OF EXPENSES
13.    All the Executive’s reasonable expenses related to the Business approved in accordance with Policies will be reimbursed upon the submittal by the Executive of an expense report with appropriate supporting documentation to Thompson Creek. The Company shall pay the reasonable legal fees incurred by the executive to review and negotiate this agreement in an amount not to exceed $7,500.00.
TERMINATION BY EMPLOYER WITH CAUSE
14.    This Agreement and the Executive’s Employment may be terminated by Thompson Creek summarily and without notice, and without payment of any performance bonus, Without Cause Payment, Change of Control Payment,  damages or any other sums or payments whatsoever, except for base salary through the date of termination, unused vacation, outstanding business expenses and all health and medical insurance premiums through the end of the month in which termination occurs as provided in paragraph 8 and except as otherwise required by law, in the event that there is Cause for Termination of the Executive’s Employment as defined in paragraph 1.  
TERMINATION BY EMPLOYER WITHOUT CAUSE OR BY EXECUTIVE UPON A TRIGGERING EVENT
15.    Despite the Term of this Agreement and the Executive’s Employment set forth in paragraph 3:

		
	(a)
	This Agreement and the Executive’s Employment may be terminated without Cause on notice by Thompson Creek to the Executive, or on notice by the Executive to Thompson Creek upon the occurrence of a Triggering Event, in which case Thompson Creek shall pay the Executive, within sixty days of the Executive’s Termination:  a lump sum equal to 24  months’ base salary (the “Without Cause Payment”) in effect on the date that the notice of Termination is given (“Notice Date”); plus accrued but unused vacation as of the Notice Date; plus a lump sum equivalent of 24 multiplied by the last monthly premium amount that Thompson Creek paid on the Executive’s behalf for long-term disability insurance before the Termination of the 

10

Executive’s Employment.  The Executive shall also be paid a pro rated bonus with respect to the year of Termination if a bonus otherwise would have been awarded to the Executive had the Executive remained employed, with payment to be made at the time the bonus would have been paid to Executive had the Executive remained employed.  All amounts paid by Thompson Creek hereunder shall be less required withholdings.

		
	(b)
	Upon Termination of the Executive’s Employment pursuant to this paragraph 15, Executive shall be entitled to elect to continue coverage for himself (and Executive’s eligible dependents who were receiving coverage immediately prior to Termination), for up to 24 months following Employment Termination, under the medical and dental plans of Thompson Creek in which Executive was participating immediately prior to such Employment Termination.  Thompson Creek shall pay the Executive's monthly premium directly to Thompson Creek's medical and dental provider for (i) the first six months after Termination and (ii) following Thompson Creek's administrative procedures for COBRA, Thompson Creek shall pay the Executive's monthly COBRA premium directly to Thompson Creek's COBRA administrator for up to 18 months. For the avoidance of doubt, the Parties acknowledge that Executive’s right to elect COBRA coverage is not subject to execution of a release.  The monthly payments and coverage described in this paragraph shall cease upon the Executive’s obtaining or being eligible to obtain alternate coverage under the terms of any new employment.

		
	(c)
	If the Executive elects to convert the life and accidental death and dismemberment insurance policy to an individual policy upon Termination of Employment pursuant to this paragraph 15, Thompson Creek shall pay to the Executive, by the end of each month, the Executive’s cost to continue such individual policy, so long as the Executive maintains the individual policy and provides proof of each monthly payment to Thompson Creek, but in no event shall Thompson Creek pay such amount to Executive beyond the  first anniversary of the Executive’s Termination date.

		
	(d)
	The Executive shall only be paid the payments provided for in this paragraph 15 if the Executive has signed a general release of claims in a form satisfactory to Thompson Creek, similar to the form of general release attached hereto as Exhibit A.  If the Executive does not sign a general release within 60 days of Termination of Employment, no payments shall vest and no payments shall be made to Executive pursuant to this paragraph 15.

		
	(e)
	Notwithstanding paragraph 16, if the Executive receives the payments provided for in this paragraph 15, the Executive is not entitled to any payments pursuant to paragraph 16.

11

CHANGE OF CONTROL

		
	16.
	(a)    If at any time during the term of this Agreement there is a Change of Control and within 12 months after such Change of Control (or in anticipation of a Change of Control), Thompson Creek gives written notice of termination of this Agreement and the Executive’s Employment for any reason other than Cause, or a Triggering Event occurs and the Executive elects to terminate this Agreement and Executive’s Employment by providing Thompson Creek with written notice which Termination shall be effective on any date that the Executive provides in the written notice to Thompson Creek in accordance with the procedure set forth in the definition of Triggering Event (provided such date is within 12 months  after such Change of Control), then the Executive shall be entitled to receive what is set forth in paragraph (b) below.  

		
	(b)
	Subject to paragraph (a) above, upon Termination of Executive’s Employment pursuant to this paragraph 16, the Executive shall be entitled to receive from Thompson Creek the following:

		
	 (i)
	within sixty (60) days of Termination of the Executive’s Employment, a lump sum equal to  24 months’ base salary in effect on the date of the Executive’s Termination (the “Change of Control Payment”); plus any unused vacation then existing in the Executive’s vacation bank upon Termination of Employment, but the Executive shall not be paid for vacation that was previously forfeited; plus a lump sum equivalent to 24 multiplied by the last monthly premium amount that Thompson Creek paid on the Executive’s behalf for long-term disability insurance before the Termination of the Executive’s Employment, all amounts of which are less required withholdings.  

		
	(ii)
	a lump sum equal to 2 times the Executive’s target bonus in effect for the year of Termination if a bonus otherwise would have been awarded to the Executive had the Executive remained employed, with payment to be made at the time the bonus would have been paid to Executive had the Executive remained employed, less required withholdings.

		
	(iii)
	Executive shall be entitled to elect to continue coverage for the Executive (and Executive’s eligible dependents who were receiving coverage immediately prior to Termination), for up to  24 months following Employment Termination, under the medical and dental plans of Thompson Creek in which Executive was participating immediately prior to such Employment Termination.  Thompson Creek shall pay the Executive's monthly premium directly to Thompson Creek's medical and dental provider for (i) the first six months after Termination and (ii) following Thompson Creek's administrative procedures for COBRA, Thompson Creek shall pay the Executive's 

12

monthly COBRA premium directly to Thompson Creek's COBRA administrator for up to 18 months. For the avoidance of doubt, the Parties acknowledge that Executive’s right to elect COBRA coverage is not subject to execution of a release.  The monthly payments and coverage described in this paragraph shall cease upon the Executive’s obtaining or being eligible to obtain alternate coverage under the terms of any new employment.  
		
	(iv)
	If the Executive elects to convert the life and accidental death and dismemberment insurance policy to an individual policy upon Termination of Employment pursuant to this paragraph 16, Thompson Creek shall pay to the Executive, by the end of each month, the Executive’s cost to continue such individual policy, so long as the Executive maintains the individual policy and provides proof of each monthly payment to Thompson Creek, but in no event shall Thompson Creek pay such amount to Executive beyond the  third anniversary of the Executive’s Termination date.

		
	(v)
	The Executive shall only be paid the payments provided for in this paragraph 16 if the Executive has signed a general release of claims in a form satisfactory to Thompson Creek, similar to the form of general release attached hereto as Exhibit A.  If the Executive does not sign a general release within 60 days of Termination of Employment, payment shall not vest and shall not be paid to Executive and no payments shall be made pursuant to this paragraph 16.

		
	(vi)
	Notwithstanding paragraph 15, if the Executive receives the payments provided for in this paragraph 16, the Executive is not entitled to any payments pursuant to paragraph 15. 

RESIGNATION/RETIREMENT
17.     Subject to paragraph 15 (Triggering Event) and  16 (Change of Control), this Agreement and the Executive’s Employment may be terminated on notice by the Executive to Thompson Creek by giving ninety (90) days’ written notice.  Should the Executive terminate this Agreement and Executive’s Employment pursuant to this paragraph 17, the Executive  shall not be entitled to the Without Cause Payment, Change of Control Payment, damages or any other payments or sums whatsoever, except for base salary through the date of termination, unused vacation, outstanding business expenses  as provided in paragraph 8, as may be provided pursuant to Thompson Creek or the Parent’s bonus program, and except as otherwise required by law; provided, however, that if the Executive retires pursuant to this paragraph 17 after age 62 or any such earlier age as may be provided pursuant to Thompson Creek or the Parent’s bonus program then the Executive shall be entitled to a pro rated bonus with respect to the year of Termination if a bonus otherwise would have been awarded had the Executive remained employed, with payment to be made at the time the bonus would have been paid to Executive had the Executive 

13

remained employed (less withholdings).  Should the Executive terminate this Agreement and the Executive’s Employment pursuant to this paragraph 17, Thompson Creek in its sole discretion may designate an effective date of the Executive’s Termination of Employment earlier than the 90th day and shall pay the Executive the equivalent number of days base salary in lieu of notice.  Such amount shall be payable upon Thompson Creek’s next regularly scheduled payday.  
DISABILITY

18.    If the Executive suffers a physical or mental impairment that renders the Executive unable to perform the essential functions of the Executive’s position for a period of six (6) consecutive months, Thompson Creek may deem Executive’s Employment and this Agreement to have been Terminated, consistent with applicable law.  The Executive’s eligibility for long-term disability and other such benefits, if any, will be determined pursuant to the applicable benefit plans or programs and/or applicable law.  The Executive shall be paid for any for base salary through the date of termination, unused vacation, outstanding business expenses and all health and medical insurance premiums through the end of the month in which termination occurs. The Executive shall also be paid a pro rated bonus with respect to the year of Termination if a bonus otherwise would have been awarded to the Executive had the Executive remained employed, with payment to be made at the time the bonus would have been paid to Executive had the Executive remained employed.  

DEATH

19.    Should this Agreement and the Executive’s Employment Terminate by virtue of the Executive’s death, a pro rated bonus shall be paid to the Executive’s beneficiary, as designated by the Executive, if a bonus otherwise would have been awarded to the Executive had the Executive not died, with payment to be made at the time the bonus would have been paid to Executive had the Executive remained employed.  The only other payments due to the Executive’s beneficiary shall be for any earned compensation and any unused vacation and as otherwise required by law.
COOPERATION WITH RESPECT TO INVESTIGATIONS, CLAIMS OR LITIGATION.  
20.    During Executive’s employment and at all times thereafter, should Thompson Creek become involved in any investigation, claim or litigation relating to or arising out of Executive’s past, present, or future duties with Thompson Creek or with respect to any matters of which Executive has knowledge, Executive agrees to fully, truthfully and in good faith, cooperate with Thompson Creek with respect to such investigation, claim or litigation.  Subject to the provisions of applicable law, and provided that such investigation, claim or litigation is not the result of the Executive engaging in business practices which qualify as Cause under this Agreement, Thompson Creek shall reimburse Executive for reasonable out-of-pocket expenses incurred to provide such cooperation, and shall provide hourly compensation at a rate not to exceed the equivalent hourly rate of Executive’s base salary 

14

at Termination for each hour of Executive’s time spent in such cooperation not including travel.  
DETERMINATION OF BENEFITS UNDER CODE SECTION 280G
21.    In the event that any payment or benefits received or to be received by Executive pursuant to this Agreement ("Benefits") would (a) constitute a "parachute payment" within the meaning of Code section 280G, and (b) but for this subsection, would be subject to the excise tax imposed by Code section 4999, or any comparable successor provisions (the "Excise Tax"), then the Benefits shall be either: (i) provided to Executive in full, or (ii) provided to Executive as to such lesser extent which would result in no portion of such Benefits being subject to the Excise Tax, whichever of the foregoing amounts, when taking into account applicable federal, state, local and foreign income and employment taxes, the Excise Tax, and any other applicable taxes, results in the receipt by Executive, on an after-tax basis, of the greatest amount of Benefits, notwithstanding that all or some portion of such Benefits may be taxable under the Excise Tax.  To the extent Benefits need to be reduced pursuant to the preceding sentence, reductions shall come from taxable amounts before non-taxable amounts and beginning with the payments otherwise scheduled to occur soonest.  Executive agrees to cooperate fully with Thompson Creek to determine the benefits applicable under this paragraph.
SEVERABILITY
22.    The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision, and any invalid provision will be modified to the extent necessary to make it enforceable, or if not possible, will be severed from this Agreement.
GOVERNING LAW
23.    This Agreement shall be governed by and shall be considered, interpreted and enforced in accordance with the laws of Colorado, except and only to the extent that specific laws of Canada are referenced in this Agreement.  The Executive hereby agrees to the exclusive jurisdiction of the courts of Colorado in the event of a dispute between Thompson Creek and the Executive.
ASSIGNMENT
24.    This Agreement inures to the benefit of and is binding upon the Executive, as well as Thompson Creek, Parent, and the successors and/or assigns of each.  Executive hereby consents to Thompson Creek’s or Parent’s assignment of any and all of its interests in this Agreement.
RECOURSE ON BREACH

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25.    The Executive acknowledges that damages would be an insufficient remedy for a breach of this Agreement and agrees that Thompson Creek and the Parent may apply for and obtain any relief available to it in a court of law or equity, including injunctive relief, to restrain breach or threat of breach of this Agreement or to enforce the covenants contained herein, and, in particular, the covenants contained in paragraph 7 herein, in addition to rights Thompson Creek and the Parent may have to damages arising from said breach or threat of breach.  The Executive hereby waives any defenses the Executive may or can have to strict enforcement of this Agreement by Thompson Creek and the Parent.  Furthermore, the Executive acknowledges and agrees that the Executive’s obligations to Thompson Creek and its Affiliates, including the Parent, under this Agreement are material to Thompson Creek’s willingness to provide Termination and other benefits to the Executive and, without prejudice to any other rights Thompson Creek and the Parent may have, a breach by the Executive of such obligations will constitute cause for Thompson Creek or the Parent to cease making any payments and providing such other benefits.
WAIVER OF BREACH
26.    The waiver by Thompson Creek of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by the Executive.
HEADINGS
27.    All headings in this Agreement are for convenience only and shall not be used for the interpretation of this Agreement.
INDEPENDENT LEGAL ADVICE
28.    The Executive agrees that the Executive has had independent legal advice or the opportunity to receive same in connection with the execution of this Agreement and has read this Agreement in its entirety, understands its contents and is signing this Agreement freely and voluntarily, without duress or undue influence from any party.  The Parties agree that no part of this Agreement should be construed against either Party on the basis of authorship.
NOTICE
29.    Any notice required or permitted to be made or given under this Agreement to either Party shall be in writing and shall be sufficiently given if delivered personally, or if sent by prepaid registered mail to the intended recipient of such notice at:
(a)    in the case of Thompson Creek, to:

Thompson Creek Metals Company USA
Attn:    Chairman of the Board
26 West Dry Creek Circle, Suite 810

16

Littleton, Colorado  80120
U.S.A.
 (b)    in the case of the Executive, to the last address on file with Thompson     Creek:

or at such other address as the Party to whom such writing is to be given shall provide in writing to the Party giving the said notice.  Any notice delivered personally to the Party to whom it is addressed shall be deemed to have been given and received on the day it is so delivered or, if such day is not a business day, then on the next business day following any such day.  Any notice mailed shall be deemed to have been given and received on the fifth business day following the date of mailing.
ACKNOWLEDGEMENTS
30.    By accepting employment with Thompson Creek, the Executive acknowledges and consents to:
		
	(a)
	Thompson Creek monitoring the Executive’s access to and use of Thompson Creek’s electronic media services (including but not limited to telephones, computers, blackberries, and other electronic devices) in order to ensure that the use of such services is in compliance with Thompson Creek’s Policies and is not in violation of any applicable laws.  The Executive acknowledges and agrees that the Executive has no expectation of privacy with respect to such services; and

		
	(b)
	The Executive complying with Thompson Creek’s obligations to report improper or illegal conduct by any director, officer, employee or agent of Thompson Creek or its Affiliates, including the Parent, under any applicable securities, criminal or other law, which may include reporting conduct of the Executive.

GUARANTEE OF PAYMENT
31.    In the event Thompson Creek is unable to meet its financial obligations under the terms of this Agreement, the Parent agrees to assume such obligations to the extent owing and not satisfied.  Such guarantee is not intended to and does not increase the amount of any obligations under the terms of this Agreement.  Notwithstanding any other provision in this Agreement, Executive shall not be a compensated employee of the Parent by virtue of this Agreement.  

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SURVIVAL
32.    Paragraphs 7, 15, 16, 20, 21, 22, 23, 24, 25, 26, 31, 32, 33, 35 and 36 shall survive the Termination of this Agreement and the Executive’s Employment and shall continue in full force and effect according to their terms.
ENTIRE AGREEMENT
33.    As of its date of execution below, this Agreement supersedes all prior agreements, whether written or oral, express or implied between the Parties, and constitutes the entire agreement between the Parties; provided that, to the extent the Parties shall enter into a separate indemnification agreement, such indemnification agreement shall be incorporated into and form part of this Agreement.  The Parties agree that there are no other collateral agreements or understandings between them except as set out in this Agreement.  

AMENDMENT

34.    This Agreement may be amended only in writing signed by the Parties.

PAYMENT PURSUANT TO RELEASE

35.    Notwithstanding anything to the contrary in this Agreement, in the event that a payment to be made under this Agreement provides for the deferral of compensation pursuant to section 409A of the Code and is pursuant to this Agreement to be made to Executive within sixty days of the Executive’s Termination of Employment but only upon the execution (and, if applicable, the nonrevocation) of a general release, then, if such sixty-day period begins in one taxable year of Executive and ends in a subsequent taxable year of Executive, such payment shall only be made in such subsequent taxable year.

RECOUPMENT

36.    The Executive acknowledges that he will be subject to recoupment policies adopted by Thompson Creek or the Parent pursuant to the requirements of Dodd-Frank Wall Street Reform and Consumer Protection Act or other law or the listing requirements of any national securities exchange on which the common stock of the Parent is listed.

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The Parties hereto have duly executed this Agreement.
	
			
	THOMPSON CREEK METALS 
COMPANY USA
	 
	JACQUES PERRON

	 
	 
	 

	/s/ Timothy Haddon
	 
	/s/ Jacques Perron

	Timothy Haddon
	 
	Signature

	 
	 
	 

	August 1, 2013
	 
	August 1, 2013

	Date
	 
	Date

	 
	 
	 

	THOMPSON CREEK METALS COMPANY INC., ONLY AS TO THE GUARANTEE IN PARAGRAPH 31
	 
	 

	 
	 
	 

	/s/ Timothy Haddon
	 
	 

	Timothy Haddon
	 
	 

	 
	 
	 

	August 1, 2013
	 
	 

	Date
	 
	 

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EXHIBIT A

CONFIDENTIAL WAIVER AND RELEASE AGREEMENT

This Confidential Waiver and Release Agreement ("Agreement") is entered into between [INSERT NAME OF OFFICER] ("Executive") and Thompson Creek Metals Company USA ("Thompson Creek").  For the purpose of this Agreement, the term “Thompson Creek” includes any company or affiliate related to Thompson Creek Metals Company USA, in the past or present, including but not limited to Thompson Creek Metals Company Inc.; the past and present officers, directors, executives, employees, shareholders, attorneys, agents and representatives of Thompson Creek; any present or past executive or employee benefit plan sponsored by Thompson Creek and/or the officers, directors, trustees, administrators, executives, employees, attorneys, agents and representatives of such plan; and any person who acted on behalf of Thompson Creek or on instruction from Thompson Creek.

Executive and Thompson Creek agree as follows:

1.    Executive's Termination of Employment.  Executive’s employment with Thompson Creek was terminated effective __________, 20__. 

2.    Executive’s Continuing Obligations to Thompson Creek and Agreement Not to Disparage Thompson Creek.  Executive acknowledges and agrees that Executive has, and will abide by, continuing obligations to Thompson Creek, including the obligations set forth in Executive’s Employment Agreement.  

Executive further acknowledges and agrees that by reason of Executive’s position with Thompson Creek, Executive was given access to confidential information, including trade secret information, with respect to the business affairs of Thompson Creek.  Executive represents that Executive has held all such information confidential and will continue to do so.  Executive has not retained any confidential information or documents, including but not limited to trade secret information, obtained as a result of or in connection with Executive’s employment.  Further, Executive will not defame, slander or otherwise disparage Thompson Creek, its business, or its representatives.  

3.    Consideration for Executive.  Executive acknowledges and agrees that Thompson Creek has paid Executive all amounts, and has provided Executive with all benefits, to which Executive is entitled through and including the date that Executive executes this Agreement, and that Executive is not entitled to any further payments or benefits, other than as set forth below.

Thompson Creek will provide Executive with the following additional specified items as consideration in exchange for this Agreement, including Executive’s waiver and release of Thompson Creek:  

20

		
	(a)
	Upon Executive’s execution of this Agreement and upon expiration of the time period for revocation set forth in paragraph 11(e) below, Thompson Creek will provide Executive with:  [set forth applicable consideration provided for in the Employment Agreement, depending on the nature of Executive’s termination (e.g., retirement, without cause, change of control, etc.)]  

		
	(b)
	Notwithstanding any other provision in this Agreement, if (i) on the date of termination of Executive’s employment with Thompson Creek, any of Thompson Creek’s stock is publicly traded on an established securities market or otherwise (within the meaning of U.S. Internal Revenue Code section 409A(a)(2)(B)(i)), and (ii) as a result of such termination, Executive would receive any payment under this Agreement that, absent the application of this provision, would be subject to additional tax imposed pursuant to section 409A(a) of the Code as a result of the application of section 409A(a)(2)(B)(i) of the Code, then such payment shall be payable on the date that is the earliest of (i) six (6) months after Executive’s termination date, (ii) Executive’s death or (iii) such other date as will not result in such payment being subject to Code section 409A sanctions.

		
	(c)
	It is the intention of the parties that payments or benefits payable under this Agreement not be subject to the additional tax imposed pursuant to section 409A of the Code.  To the extent such potential payments or benefits could become subject to such section, Thompson Creek shall cooperate to amend the Agreement with the goal of giving the Executive the applicable economic benefits in a manner that does not result in such sanctions being imposed.  Thompson Creek does not guarantee or warrant that such cooperation will result in such sanctions not being imposed.

		
	(d)
	Except as otherwise permitted under Code section 409A, Thompson Creek shall not accelerate or defer any payment under this Agreement.  

		
	(e)
	Executive will indemnify and hold Thompson Creek harmless from any costs, liability or expense, including reasonable attorney's fees, arising from the taxation, if any, of any amounts received by Executive pursuant to this Agreement, including but not limited to any penalties or administrative expenses. 

4.    Executive Waiver and Release of Thompson Creek.  In exchange for the consideration set forth in this Agreement, Executive, and Executive’s representatives, successors and assigns, waive, release and forever discharge Thompson Creek from any and all claims, demands, damages, losses, obligations, rights and causes of action, whether known or unknown, including but not limited to, all 

21

claims, causes of action or administrative complaints that Executive now has or has ever had against Thompson Creek relating in any way to Executive’s employment or termination of employment with Thompson Creek.  

Without limiting the generality of the foregoing terms, the scope of Executive’s waiver and release under the Agreement specifically includes but is not limited to: any and all claims for breach of contract and any other claim under the common law, including but not limited to claims for tort, breach of implied contract, wrongful discharge, breach of a covenant of good faith and fair dealing, intentional infliction of emotional distress, or defamation; any and all claims under any state or local statutory or common law, including but not limited to claims under the Colorado Anti-Discrimination Act; any and all claims under any federal statutory or common law, including but not limited to claims under the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Acts of 1866 and 1871, the Equal Pay Act, the Fair Labor Standards Act, the Family and Medical Leave Act, the National Labor Relations Act, the Occupational Safety and Health Act, the Rehabilitation Act, Executive Order 11246, the Worker Adjustment and Retraining Notification Act, and employment-related claims under the Employee Retirement Income Security Act, all as amended, and any and all regulations under such laws; any and all claims under any Canadian law, including but not limited to all federal, provincial and local laws; and any and all claim for damages (including but not limited to claims for compensatory or punitive damages), injunctive relief, attorney’s fees and costs, and equitable relief.  

Executive agrees not to bring any lawsuits against Thompson Creek relating to the claims that Executive has released and not to accept any damages pursued by any other entity or person on Executive’s behalf.  

5.    Reservation of Executive’s Rights.  Nothing contained in this Agreement waives or releases any rights Executive may have to: (a) continue group health insurance coverage pursuant to applicable law; (b) receive any benefits in which Executive may have vested in under any retirement plan; (c) make any claim for unemployment benefits; (d) make any claim relating to the validity of this Agreement under the ADEA as amended by the OWBPA (however, nothing in this Agreement is intended to reflect any party’s belief that the waiver of Executive's claims under the ADEA is invalid or unenforceable, it being the intent of the parties that such claims are waived); (e) file an administrative charge with the Equal Employment Opportunity Commission (“EEOC”) (however, Executive agrees that Executive will not be entitled to any further recovery of any kind from Thompson Creek in the event the EEOC or any other administrative agency pursues a claim on Executive's behalf or arising out of Executive's administrative charge); (f) to make any claim under workers’ compensation; or (g) to make any other claim that cannot be released by law.

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6.    Confidentiality of Agreement.  Executive agrees to keep this Agreement confidential and will not communicate the terms of this Agreement, the facts or circumstances giving rise to this Agreement, or the fact that such Agreement exists, to any third party except, as necessary, Executive’s immediate family, accountants, or legal or financial advisors, provided that they agree to be bound by this paragraph 6, or otherwise as required by law or court order.

7.    Enforcement.  In the event that there has been a breach of any provisions of this Agreement by Executive, Thompson Creek will be entitled to recover reasonable costs and attorneys' fees in any legal proceeding to enforce this Agreement.

8.    Severability.  If any provision of this Agreement is declared by any court of competent jurisdiction to be invalid for any reason, such invalidity shall not affect the remaining provisions of this Agreement, which shall be fully severable, and given full force and effect.

9.    Governing Law and Venue.  This Agreement shall be construed in accordance with the laws of the State of Colorado.  Any dispute regarding, relating to or arising under this Agreement or the facts giving rise to the Agreement shall be litigated in Colorado, and Executive expressly agrees to the personal and subject matter jurisdiction of the state and federal courts in Colorado.  

10.    Entire Agreement.  Thompson Creek and Executive understand and agree that this Agreement contains all the agreements between Thompson Creek and Executive relating to Executive’s employment and termination of employment with Thompson Creek, other than the continuing obligations set forth in the Amended and Restated Employment Agreement.

11.    Acknowledgements.  Executive specifically acknowledges and agrees that by entering into this Agreement and in exchange for the consideration described in paragraph 3 above to which Executive otherwise would not be entitled, Executive is waiving and releasing any and all rights and claims that Executive may have arising from the Age Discrimination in Employment Act, as amended, which have arisen on or before the date of execution of this Agreement.

Executive further expressly acknowledges and agrees that:

		
	(a)
	EXECUTIVE HAS READ AND UNDERSTANDS THIS AGREEMENT AND IS ENTERING THIS AGREEMENT KNOWINGLY AND VOLUNTARILY.

    
		
	(b)
	Executive understands and agrees that, by signing this Agreement, Executive is giving up any right to file legal proceedings against Thompson Creek arising on or before the date of the Agreement.  Executive is not waiving (or giving up) rights or claims that may arise after the date the Agreement is executed.

23

		
	(c)
	EXECUTIVE IS HEREBY ADVISED IN WRITING BY THIS AGREEMENT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS AGREEMENT.  EXECUTIVE REPRESENTS THAT THIS AGREEMENT HAS BEEN FULLY EXPLAINED BY THE EXECUTIVE’S ATTORNEY, OR THAT EXECUTIVE HAS WAIVED CONSULTATION WITH AN ATTORNEY, CONTRARY TO THOMPSON CREEK’S RECOMMENDATION.

		
	(d)
	Executive understands and represents that Executive has had twenty-one (21) days from the day Executive received this Agreement, not counting the day upon which Executive received it, to consider whether Executive wishes to sign this Agreement.  Executive further acknowledges that if Executive signs this Agreement before the end of the twenty-one (21) day period, it will be Executive’s personal, voluntary decision to do so and Executive has not been pressured to make a decision sooner.

		
	(e)
	Executive further understands that Executive may revoke (that is, cancel) this Agreement for any reason within seven (7) calendar days after signing it.  Executive agrees that the revocation will be in writing and hand-delivered or mailed to Thompson Creek.  If mailed, the revocation will be postmarked within the seven (7) day period, properly addressed to THOMPSON CREEK METALS COMPANY USA, Attn: Chief Executive Officer, 26 West Dry Creek Circle, Suite 810, Littleton, Colorado 80120 USA; and sent by certified mail, return receipt requested.  Executive understands that Executive will not receive any payment under this Agreement if Executive revokes it, and in any event, Executive will not receive any payment until after the seven (7) day revocation period has expired.

I ACKNOWLEDGE THAT I HAVE READ AND UNDERSTOOD THIS ENTIRE AGREEMENT BEFORE SIGNING IT:

	
				
	 
	 
	 
	EXECUTIVE

	 
	 
	 
	 

	DATED:
	 
	 
	 

	 
	 
	 
	[INSERT NAME OF OFFICER]

	 
	 
	 
	THOMPSON CREEK METALS COMPANY USA

	 
	 
	 
	 

	DATED:
	 
	 
	 

	 
	 
	 
	Name

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	Title

24

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