Document:

Document

Exhibit 10.3

COWORKING SPACE DESIGN AGREEMENT
SUMMARY OF BASIC INFORMATION

						
	TERMS OF AGREEMENT
	DESCRIPTION

	1.Owner:
	_________________________________

Address for Owner Notices:
1245 Brickyard Rd., Suite 250
Salt Lake City, UT 84106

	2.Provider:
	APT Cowork, LLC, a Delaware limited liability company

Address for Provider Notices:
1245 Brickyard Rd., Suite 160
Salt Lake City, UT 84106

	3.Delivery: 
	Owner shall permit the Provider to enter the Space within two (2) business days following the Effective Date (the “Delivery Date”).
	4.Design & Project Management Fee:
	$60,000, to be paid by Owner to Provider as follows: 10% of the fee is to have been paid within five (5) business days of the complete execution of the letter of intent by the parties, as a deposit; 40% of the fee shall be paid within five (5) business days of the Effective Date; and the remaining 50% shall be due within fifteen (15) days after Provider delivers Owner written notice that installation of the Coworking Improvements according to the Coworking Plans has been substantially completed.
	

	
	

	

									
			

Coworking Space Services Agreement 
This Coworking Space Services Agreement, including the Summary of Basic Information and all exhibits hereto (the “Agreement”) is made by and between APT Cowork, LLC, a Delaware limited liability company (“Provider”) and the undersigned owner (“Owner”) of the “Space”, located in the “Building” and “Complex”, each as such terms are defined in the attached Exhibit A. The Agreement shall be effective as of the date the Agreement is last executed by Owner and Provider, respectively (the “Effective Date”). 
1.    COWORKING IMPROVEMENTS.  
1.1    Design and Project Management Fee. In exchange for Owner’s payment to Provider of the Design & Project Management Fee as outlined in Section 4 of the Summary of Basic Information, Provider agrees to complete the “Coworking Improvements” as set forth in, and in accordance with, the Coworking Plans (as each of such terms are defined and described in Section 1.2).   
1.2    Plans for Coworking Improvements.    If the Exhibit A descriptions and renderings of the existing Space, Building and Complex are not attached as Exhibit A on the Effective Date, Provider may produce and attach such descriptions and renderings and Owner shall reimburse Provider for the cost of the same.  After the Effective Date and upon receipt of 50% of the Design & Project Management Fee, Provider will prepare (or cause to be prepared) detailed plans and specifications for implementing the Coworking Improvements (the “Coworking Plans”). The Coworking Plans shall be subject to Owner’s reasonable approval, which shall not be unreasonably withheld, conditioned, or delayed. In the event that Owner fails to comment on the Coworking Plans within ten (10) days from the date of Provider’s submission (or resubmission) of the same to Owner, the Coworking Plans shall be deemed approved. Once the Coworking Plans are approved, any adjustments thereto shall be mutually agreed upon by Owner and Provider in writing. Provider may require a reasonable increase to the Design & Project Management Fee as a condition to agreeing to any material increase in the scope of work specified in the resulting Coworking Plans. 
1.3    Utilities, & Permits.   Unless (and only to the extent) designated in the Coworking Plans as the Provider’s responsibility, Owner shall be responsible for providing at Owner’s cost, all equipment, fixtures, and improvements which are reasonably necessary to equip the Space for coworking use in accordance with the Coworking Plans, specifically including but not limited to providing adequate access to, and capacity for, all necessary utilities including high speed internet on a separate, stand-alone, network. Furthermore, unless specifically stated to the contrary in the Coworking Plans, Owner shall be solely responsible to obtain, at Owner’s expense, any and all permits required for coworking use or any alteration of the Space contemplated by the Coworking Plans, including but not limited to all costs associated with obtaining an occupancy permit, building permits, and all other or similar expenses, fees, or any fines or assessments levied or imposed as a result of Owner not obtaining such permits. In the event that Owner or Provider (as the case may be), after diligent effort through such administrative processes, as are reasonably and normally required, is unable to obtain the permits required in order to construct the Coworking Improvements or operate the coworking business, then either party shall have the right to terminate this Agreement and declare the same null and void and of no further force and effect and without further liability to either party arising thereafter.
2.    INSURANCE.  
2.1    Indemnification and Waiver.  Provider shall indemnify, defend, protect, and hold harmless Owner, its agents, employees, and contractors (collectively “Owner Parties”) from any and all third party claims for loss, cost, damage, expense and liability (including without limitation court costs and reasonable attorneys' fees) (collectively “Losses”) incurred in connection with or arising from any acts, omissions or negligence of Provider, its agents, employees, or contractors (collectively, the “Provider Parties”), in, on, or about the Complex, provided that the terms of the foregoing indemnity shall not apply to the extent such Losses are attributable to the  negligence act of omissions of the Owner Parties.  Likewise, Owner shall indemnify, defend, protect, and hold harmless Provider Parties from any and all third party claims for Losses incurred in connection with or arising from any acts, omissions or negligence of Owner Parties, provided that the terms of the foregoing indemnity shall not apply to the extent such losses are attributable to the negligent act or omissions of the Provider Parties. The provisions 
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of this Section 2.1 shall survive the expiration or sooner termination of this Agreement with respect to any claims or liability occurring prior to such expiration or termination.  
2.2    Provider's Insurance.  Provider shall maintain at Provider’s cost and expense, Commercial/Comprehensive General Liability Insurance covering the insured against claims of bodily injury, personal injury and property damage (including loss of use thereof) arising out of Provider's operations, and contractual liabilities (covering the performance by Provider of its indemnity agreements) including a Broad Form endorsement covering the insuring provisions of this Agreement and the performance by Provider of the indemnity agreements set forth in Section 2.1 of this Agreement, for limits of liability not less than One Million Dollars ($1,000,000.00) for each occurrence and Two Million Dollars ($2,000,000.00) annual aggregate. Provider’s policy of insurance shall be primary as to all claims arising directly from Provider’s operations, and provide that any insurance carried by Owner is excess and is non-contributing with any insurance requirement of Provider.
2.3    Owner’s Insurance. Owner shall maintain at Owner’s cost and expense, Commercial/Comprehensive General Liability Insurance covering the insured against claims of bodily injury, personal injury and property damage (including loss of use thereof) arising out of Owner’s operations, and contractual liabilities (covering the performance by Owner of its indemnity agreements) including a Broad Form endorsement covering the insuring provisions of this Agreement and the performance by Owner of the indemnity agreements set forth in Section 2.1 of this Agreement, for limits of liability not less than One Million Dollars ($1,000,000.00) for each occurrence and Two Million Dollars ($2,000,000.00) annual aggregate. Owner’s policy of insurance shall be primary as to all claims arising directly from Owner’s operations and provide that any insurance carried by Provider is excess and is non-contributing with any insurance requirement of Owner.
2.4    Form of Policies.  Each policy of insurance shall (i) name Owner, Provider, and any other party it so specifies, as an additional insured; (ii) specifically cover the liability assumed by the insured under this Agreement, including, but not limited to, an insured’s obligations under Section 2.1 of this Agreement; (iii) be issued by an insurance company having a rating of not less than A-VIII in Best's Insurance Guide or which is otherwise acceptable to Owner and licensed to do business in the state in which the Space is located; (iv) provide that said insurance shall not be canceled or coverage changed unless thirty (30) days’ prior written notice shall have been given to Owner and any mortgagee (except that only ten (10) days’ notice shall be required for any termination due to failure to pay premiums).  Provider shall deliver said policy or policies or certificates thereof to the other party on or before the Delivery Date and at least thirty (30) days before the expiration dates thereof.  
2.5    Subrogation.  Owner and Provider agree to have their respective insurance companies issuing property damage insurance waive any rights of subrogation that such companies may have against Owner or Provider, as the case may be, so long as the insurance carried by Owner and Provider, respectively, is not invalidated thereby.  Notwithstanding anything to the contrary contained in this Agreement, Owner and Provider hereby waive any right that either may have against the other on account of any loss or damage to their respective property to the extent such loss or damage is insurable under the policies to be maintained in accordance with this Agreement.

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3.    ASSIGNMENT.  Owner and Provider hereby agree that Provider shall not assign, or otherwise transfer, this Agreement or any interest hereunder, to permit any assignment or other such foregoing transfer of this Agreement or any interest hereunder by operation of law, without the advance written consent of Owner. Notwithstanding anything to the contrary contained in this Section 3 or the Agreement, Provider may transfer this Agreement without Owner’s consent to (i) any corporation, limited liability company, partnership or other business entity that controls, is controlled by, or is under common control with Provider (specifically including, but not limited to an internal corporate reorganization of Provider constituting a mere change in its entity form, such as converting to a corporation); (ii) any corporation, limited liability company, partnership or other business entity resulting from the merger or consolidation with Provider; (iii) any entity that acquires substantially all of Provider's assets; (iv) a transfer of ownership or control in Provider; or (v) any issuance or subsequent transfer of voting stock to the public through a listing on a “national securities exchange” as defined in the Securities Exchange Act of 1934 (each of (i) through (v) is individually referred to herein as a “Permitted Transfer” to a “Permitted Transferee”).  Any Permitted Transferee shall expressly assume in writing the obligations of Provider hereunder. Provider shall provide to Owner a fully executed copy of the transfer of this Agreement within thirty (30) days of such transfer, together with such other information as Owner shall reasonably require to confirm that the transfer in fact qualifies as a Permitted Transfer.  
4.    NOTICES.  All notices, demands, statements or communications (collectively, “Notices”) given or required to be given by either party to the other hereunder shall be in writing, shall be sent by United States certified or registered mail or a regionally or nationally recognized overnight courier service, postage prepaid, return receipt requested, or delivered personally (i) to Provider at the appropriate address set forth in Section 2 of the Summary, or to such other place as Provider may from time to time designate in a Notice to Owner; or (ii) to Owner at the addresses set forth in Section 1 of the Summary, or to such other firm or to such other place as Owner may from time to time designate in a Notice to Provider.  Any Notice will be deemed given on the date it is mailed as provided in this Section 4 or upon the date personal delivery is made.  
5.    DEFAULTS; REMEDIES
5.1    Events of Default.  The occurrence of any of the following shall constitute a “Default” of this Agreement by either party:
5.1.1    Any failure by either party to observe or perform any other provision, covenant, or condition of this Agreement to be observed or performed by such party within twenty (20) days of written notice from the non-defaulting party, provided that if the nature of the default claimed by the non-defaulting party is such that it cannot be reasonably cured within such twenty (20) day period, no Default shall be deemed to have occurred so long as the defaulting party commences to cure the alleged default within such twenty (20) day period, and thereafter diligently pursues the same to completion.  
5.2    Remedies Upon Default.  In addition to all rights and remedies to which a party may be entitled at law or in equity, in the event of Default, such non-defaulting party shall have the right, upon notice to the other party, to immediately terminate this Agreement.    
5.3    Waiver of Default.  No waiver by Owner or Provider of any violation or breach of any of the terms, provisions and covenants herein contained shall be deemed or construed to constitute a waiver of any other or later violation or breach of the same or any other of the terms, provisions, and covenants herein contained.  
6.    FORCE MAJEURE.  Notwithstanding anything to the contrary contained in this Agreement, any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts of God, inability to obtain services, labor, or materials or reasonable substitutes therefor, governmental actions, civil commotions, fire or other casualty, epidemic, pandemic, disease, quarantine, or any other causes beyond the reasonable control of the party obligated to perform (collectively, “Force Majeure”), shall excuse the performance of such party for a period equal to any such Force Majeure and, therefore, if this Agreement specifies a time period for performance of an obligation of either party, that time period shall be extended by the period of any delay in such party's performance caused by a Force Majeure. In no event shall financial inability be considered to be an event of Force Majeure. 
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7.    LIMITATIONS ON LIABILITY.  Notwithstanding any contrary provision herein, neither Owner nor Provider shall be liable for any special, consequential, or punitive damages.  
8.    SIGNS.  Any signs, notices, logos, pictures, names, or advertisements (“Signage”) to be installed at the Space or anywhere at the Complex shall be subject to Owner's prior approval, which such approval will not be unreasonably withheld. Prior to the installation of any exterior signs, Provider will submit to Owner a proof for Owner’s review. Provider is responsible for obtaining all required municipal approvals and permits for sign installation. 
9.    COMPLIANCE WITH LAW.  Neither Provider nor Owner shall do anything or suffer anything to be done in or about the Space which will in any way conflict with any law, statute, ordinance or other governmental rule, regulation or requirement now in force or which may hereafter be enacted or promulgated.  At its sole cost and expense, Owner shall promptly comply with all governmental regulations (including the making of any alterations to the Space required by applicable laws) with regards to accessibility and safety, including but not limited to the Americans with Disabilities Act.  Should any standard or regulation now or hereafter be imposed on Owner or Provider by a state, federal or local governmental body charged with the establishment, regulation and enforcement of occupational, health or safety standards for employers, employees, landlords or tenants, then Owner agrees, at its sole cost and expense, to comply promptly with such standards or regulations.  
10.    LATE CHARGES.  If any sum due from Provider or Owner hereunder shall not be received by the party to whom it is due or such party’s designee within fifteen (15) days after said amount is due, then the party charged with such payment shall pay to the other party a late charge equal to three percent (3%) of the amount due plus any reasonably attorneys’ fees and costs incurred by reason of such party’s failure to pay charges when due hereunder.  The late charge shall be in addition to all of a party’s other rights and remedies hereunder or at law and shall not be construed as liquidated damages or as limiting remedies in any manner.  In addition to the late charge described above, any amounts owing hereunder which are not paid within fifteen (15) days after the date they are due shall thereafter bear interest until paid at a rate equal to twelve percent (12%) per annum, provided that in no case shall such rate be higher than the highest rate permitted by applicable law.
11.    MISCELLANEOUS PROVISIONS
11.1    Transfer of Owner’s Interest.  Provider acknowledges that Owner has the right to transfer all or any portion of its interest in the Building and in this Agreement, and Provider agrees that in the event of any such transfer, so long as the transferee assumes all of Owner’s obligations under this Agreement, Owner shall automatically be released from all liability under this Agreement and Provider agrees to look solely to such transferee for the performance of Owner’s obligations hereunder after the date of transfer.  The liability of any transferee of Owner shall be limited to the interest of such transferee in the Complex and such transferee shall be without personal liability under this Agreement, and Provider hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Provider.  Provider further acknowledges that Owner may assign its interest in this Agreement to a mortgage lender as additional security and agrees that such an assignment shall not release Owner from its obligations hereunder and that Provider shall continue to look to Owner for the performance of its obligations hereunder. In the event that either: (i) title to the Space is transferred pursuant to an arms-length sale of the Building or Complex by Owner to a third party; (ii) a mortgage lender forecloses on the Owner’s interest or receives a deed to Owner’s interest in lieu of such foreclosure; or (iii) Owner reasonably determines that this Agreement violates any material covenants to Owner’s mortgage lender and Provider declines to modify the terms of the Agreement in order to remedy such violation within ten (10) days of Owner’s request, then Owner shall have the option to terminate this Agreement upon thirty (30) day advance written notice to Provider, and the terms of the Agreement shall continue to be enforceable with respect to any events occurring prior to the effective date of such termination.
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11.2    Confidentiality.  Each party shall retain in confidence the terms of this Agreement and all non-public information and know-how of the other party disclosed to such party (the “Receiving Party”) in connection with this Agreement and the coworking services, which is either designated as confidential or proprietary, or which should reasonably be considered confidential or proprietary given the nature of the circumstance of disclosure, including but not limited to, non-public pricing and cost information, business plans and practices, sales information, business opportunities, applications, interfaces, affiliate lists, strategies, software, technologies, forecasts, intellectual property, designs, research, development, know-how, personnel, supplier information, customer lists, and databases (“Confidential Information”). Each party may disclose the Confidential Information of the other party only to those of its affiliates, legal and financial advisors, employees and contractors who have a need to know such information for purposes contemplated by this Agreement and who are legally bound (by agreement or operation of law) by an obligation to maintain the confidential nature of such information at least as protective as the terms of this Agreement.  Each party further agrees to hold, and to cause its employees and contractors to hold, all such Confidential Information of the other party in strict confidence, and to protect the Confidential Information of the other party from unauthorized disclosure using precautions at least as protective as those taken to protect its own confidential information of a similar nature but in no case less than reasonable precautions.  Notwithstanding the foregoing, Confidential Information shall not include any information that: (i) was known by the Receiving Party prior to disclosure thereof by the other party; (ii) becomes generally known to the public through no fault of the Receiving Party and not in violation of this Agreement; (iii) is disclosed to the Receiving Party by a third party legally entitled to make such disclosure without violation of any obligation of confidentiality; or (iv) is independently developed by the Receiving Party without reference to any Confidential Information of the other party.  Each party may also disclose Confidential Information as compelled to do so by court order, subpoena, or similar instrument legally compelling disclosure or as otherwise required by applicable law, provided that the party being compelled to make the disclosure shall (to the extent legally permitted) provide prompt written notice of such required disclosure to the other party and allow such other party the opportunity to seek a protective order. Notwithstanding the foregoing, each of Owner Provider may share the Agreement with its professional advisors, lenders, investors, and prospective assignees who agree to maintain the confidentiality thereof. It is understood and agreed that damages alone would be an inadequate remedy for the breach of this Section 11.2, and a party shall also have the right to seek specific performance of this provision and to seek injunctive relief to prevent any breach or continued breach of this Section by the other party.
11.3    Time of Essence.  Time is of the essence with respect to all covenants, terms, conditions, and provisions of this Agreement and all times specified herein shall be strictly enforced, unless waived by Owner. 
11.4    Partial Invalidity.  If any term, provision or condition contained in this Agreement shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term, provision or condition to persons or circumstances other than those with respect to which it is invalid or unenforceable, shall not be affected thereby, and each and every other term, provision and condition of this Agreement shall be valid and enforceable to the fullest extent possible permitted by law.

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11.5    Entire Agreement.  It is understood and acknowledged that there are no oral agreements between the parties hereto affecting this Agreement and this Agreement supersedes and cancels any and all previous negotiations, arrangements, brochures, agreements and understandings, if any, between the parties hereto or displayed by Owner to Provider with respect to the subject matter thereof, and none thereof shall be used to interpret or construe this Agreement.  This Agreement contains all of the terms, covenants, conditions, warranties and agreements of the parties relating in any manner to the rental, use and occupancy of the Space, shall be considered to be the only agreement between the parties hereto and their representatives and agents, and none of the terms, covenants, conditions or provisions of this Agreement can be modified, deleted or added to except in writing signed by the parties hereto.  All negotiations and oral agreements acceptable to both parties have been merged into and are included herein.  There are no other representations or warranties between the parties, and all reliance with respect to representations is based totally upon the representations and agreements contained in this Agreement. Notwithstanding the foregoing, Owner agrees to join with Provider in amending this Agreement, as required by any Provider lender, or in order to comply with any applicable real estate investment trust rules and regulations, so long as the effect of the required amendment will not have a material and adverse impact on the rights of Owner pursuant to this Agreement.

11.6    Attorneys’ Fees.  If either party commences litigation against the other for the specific performance of this Agreement, for damages for the breach hereof or otherwise for enforcement of any remedy hereunder, the parties hereto agree to and hereby do waive any right to a trial by jury and, in the event of any such commencement of litigation, the prevailing party shall be entitled to recover from the other party such costs and reasonable attorneys’ fees as may have been incurred, including any and all costs incurred in enforcing, perfecting and executing such judgment.

11.7    Governing Law.  The laws of the State in which the Space is located shall govern the validity, construction, and enforcement of this Agreement. All parties to this Agreement waive the right to a jury in any action, claim, proceeding, counterclaim, or affirmative defenses brought by any of them against any other party related to any matters whatsoever arising under this Agreement, or their relationship as Owner and Provider. The provisions of this Agreement shall be construed, in all respects in accordance with the general tenor of such provisions, without reference to any rule or canon requiring or permitting the construction of provisions of documents against the interest of the party responsible for the drafting of the same, it being the intention and agreement of the parties that this Agreement shall be conclusively deemed to be the joint product of both parties and their counsel. This section shall survive the expiration of termination of the Agreement.

11.8    Representations or Warranties.  Each of Provider and Owner hereby represent and warrant to the other that such party is duly organized, validly existing and in good standing under the laws of the State where the Space is located, with the requisite power and authority (corporate or otherwise) to carry on its business and to enter into and to perform its obligations under this Agreement.  Each person executing this Agreement on behalf of either Provider or Owner hereby represents and warrants that (1) such person is duly and validly authorized to do so on behalf of the entity it purports to so bind, (2) if such party is a corporation or limited liability company, that such corporation or limited liability company has full right and authority to enter into this Agreement and to perform all of its obligations hereunder, and (c) the execution of this Agreement will not violate the terms of any agreements that such party may have with any other parties, including agreements, restrictive covenants, exclusives, and mortgages. Each party hereby warrants that this Agreement is valid and binding upon itself and enforceable against itself in accordance with its terms.  

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11.9    Electronic Signature. This Agreement may be executed by a party’s signature transmitted by facsimile or by electronic mail in portable document format (“pdf”) or through an electronic signature/online signature service such as “DocuSign”, and copies of this Agreement executed and delivered by means of faxed or pdf signatures or by DocuSign or similar service shall have the same force and effect as copies hereof executed and delivered with original signatures. 

    

[remainder of page left blank to accommodate signatures]

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IN WITNESS WHEREOF, Owner and Provider have caused this Agreement to be executed the day and date first below written.
                

						
	OWNER    
	PROVIDER

	

______________________________________

Print Name: ____________________________

Title: _________________________________

Date: _________________________________
	APT Cowork, LLC, 
a Delaware limited liability company

______________________________________

Print Name: ____________________________

Title: _________________________________

Date: _________________________________

                                

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EXHIBIT A
IDENTIFICATION OF THE SPACE, BUILDING, AND COMPLEX

The spaces identified below are located at:
NAME
ADDRESS
ADDRESSDocument

Exhibit 10.1

ADVISORY AGREEMENT

between

KBS REAL ESTATE INVESTMENT TRUST III, INC.

and

KBS CAPITAL ADVISORS LLC

November 8, 2022

TABLE OF CONTENTS
									
	Page
	ARTICLE 1 – DEFINITIONS	1
	ARTICLE 2 – APPOINTMENT	9
	ARTICLE 3 – DUTIES OF THE ADVISOR	9
		3.01 Organizational and Offering Services	10
		3.02 Acquisition Services	10
		3.03 Asset Management Services	10
		3.04 Stockholder Services	13
		3.05 Other Services	13
	ARTICLE 4 – AUTHORITY OF ADVISOR	13
		4.01 General	13
		4.02 Powers of the Advisor	13
		4.03 Approval by the Board	14
		4.04 Modification or Revocation of Authority of Advisor	14
	ARTICLE 5 – BANK ACCOUNTS	14
	ARTICLE 6 – RECORDS AND FINANCIAL STATEMENTS	14
	ARTICLE 7 – LIMITATION ON ACTIVITIES	15
	ARTICLE 8 – FEES	15
		8.01 Acquisition Fees	15
		8.02 Origination Fees	16
		8.03 Asset Management Fees	16
		8.04 Disposition Fees	18
		8.05 Subscription Processing Fee	19
		8.06 Subordinated Share of Cash Flows	20
		8.07 Subordinated Incentive Fee	20
		8.08 Changes to Fee Structure	21
	ARTICLE 9 – EXPENSES	21
		9.01 General	21
		9.02 Timing of and Limitations on Reimbursements	22
	ARTICLE 10 – VOTING AGREEMENT	23
	ARTICLE 11 – RELATIONSHIP OF ADVISOR AND COMPANY; OTHER ACTIVITIES OF
THE ADVISOR	23
		11.01 Relationship	23
		11.02 Time Commitment	24
		11.03 Investment Opportunities and Allocation	24
	ARTICLE 12 – THE KBS NAME	24
	ARTICLE 13 – TERM AND TERMINATION OF THE AGREEMENT	25
		13.01 Term	25
		13.02 Termination by Either Party	25
		13.03 Payments on Termination and Survival of Certain Rights and Obligations	25
	ARTICLE 14 – ASSIGNMENT	26
	ARTICLE 15 – INDEMNIFICATION AND LIMITATION OF LIABILITY	26
		15.01 Indemnification	26
		15.02 Limitation on Indemnification	27

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

ii

ADVISORY AGREEMENT
This Advisory Agreement, dated as of November 8, 2022 (the “Agreement”), is between KBS Real Estate Investment Trust III, Inc., a Maryland corporation (the “Company”), and KBS Capital Advisors LLC, a Delaware limited liability company (the “Advisor”).
W I T N E S S E T H
WHEREAS, the Company and the Advisor previously entered an advisory agreement dated as of September 27, 2021 with a term of one year (the “Prior Advisory Agreement”);
WHEREAS, the Company and the Advisor wish to authorize, ratify and approve the terms of the Prior Advisory Agreement as the understanding between the parties as of September 27, 2022 through September 30, 2022 and to authorize, ratify and approve the terms of this Agreement as the understanding between the parties as of October 1, 2022;
WHEREAS, the Company desires to avail itself of the knowledge, experience, sources of information, advice, assistance and certain facilities available to the Advisor and to have the Advisor undertake the duties and responsibilities hereinafter set forth, on behalf of, and subject to the supervision of, the board of directors of the Company (the “Board”), all as provided herein; and
WHEREAS, the Advisor is willing to undertake to render such services, subject to the supervision of the Board, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
The following defined terms used in this Agreement shall have the meanings specified below:
“Acquisition Expenses” means any and all expenses, excluding the fees payable to the Advisor pursuant to Section 8.01 and Section 8.02, 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, 
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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.
“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. 
“Bonus Retention Fund” shall have the meaning set forth in Section 8.03(iii).
“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). 
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“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 including, without limitation, Disposition Fees, if applicable. In the case of a transaction described in clause (i) (C) of the definition of “Sale” and (i)(B) of the definition of “Settlement,” Cash from Sales and Settlements means the proceeds of any such transaction actually distributed to the Company from the Joint Venture or partnership. Cash from Sales and Settlements shall not include Cash from Financings. 
 “Cash from Sales, Settlements and Financings” means the total sum of Cash from Sales and Settlements and Cash from Financings.
“Cause” means, with respect to the termination of this Agreement, fraud, criminal conduct, bad faith, willful misconduct or breach of fiduciary duty by the Advisor in connection with performing its duties hereunder, or a material breach of this Agreement by the Advisor which is not cured within 45 days of written notice.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto. Reference to any provision of the Code shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted by any applicable regulations as in effect from time to time.
“Company” means KBS Real Estate Investment Trust III, Inc., a corporation organized under the laws of the State of Maryland.
“Competitive Real Estate Commission” means a real estate or brokerage commission for the purchase or sale of property that is reasonable, customary, and competitive in light of the size, type, and location of the property. 
“Conflicts Committee” shall have the meaning set forth in the Company’s Articles of Incorporation.
“Construction Fee” means a fee or other remuneration for acting as general contractor and/or construction manager to construct improvements, supervise and coordinate projects or to provide major repairs or rehabilitation on a Property. 
“Contract Sales Price” means the total consideration received by the Company for the sale of a Property, Loan or other Permitted Investment. 
“Cost of 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 (but exclusive of any Acquisition Fees or Origination Fees paid or payable to the Advisor or its affiliates under this Agreement), and the amount of any debt associated with or used to acquire or fund such investment) and (ii) the 
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outstanding principal amount of such Loan or Permitted Investment, plus the fees and expenses related to the acquisition or funding of such investment (but exclusive of any Acquisition Fees or Origination Fees paid or payable to the Advisor or its affiliates under this Agreement), 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 (but exclusive of any Acquisition Fees paid or payable to the Advisor or its affiliates under this Agreement), 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 (but exclusive of any Acquisition Fees paid or payable to the Advisor or its affiliates under this Agreement), plus the amount of any outstanding debt associated with such Properties that is attributable to the Company’s investment in the Joint Venture or partnership. 
 “Dealer Manager” means (i) KBS Capital Markets Group LLC, a Delaware limited liability company, or (ii) any successor dealer manager to the Company.
“Deferred Asset Management Fees” shall have the meaning set forth in Section 8.03(iv).
“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 principles 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. 

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“Initial Public Offering” means the initial public offering of Shares registered on Registration Statement No. 333-164703 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. 
“IPA” shall have the meaning set forth in Section 8.03(iv).
 “Joint Venture” means any joint venture, limited liability company or other Affiliate of the Company that owns, in whole or in part, on behalf of the Company any Properties, Loans or other Permitted Investments.
“Listed” or “Listing” shall have the meaning set forth in the Company’s Articles of Incorporation.
“Loans” means mortgage loans and other types of debt financing investments made by the Company or the Partnership, either directly or indirectly, including through ownership interests in a Joint Venture or partnership, and including, without limitation, mezzanine loans, B-notes, bridge loans, convertible mortgages, wraparound mortgage loans, construction mortgage loans, loans on leasehold interests, and participations in such loans.
“Market Value” shall have the meaning set forth in Section 8.07.
“MFFO” shall have the meaning set forth in Section 8.03(iv).
“MFFO Surplus” shall have the meaning set forth in Section 8.03(iv).
 “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 
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the NASAA Guidelines and (vi) Acquisition Fees, Origination Fees, Acquisition Expenses, real estate commissions on the resale of real property, and other expenses connected with the acquisition, origination, 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, Origination Fees, Acquisition Expenses, real estate commissions on the resale of real property, and other expenses connected with the acquisition, origination, 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.
“Organization and Offering Expenses” means all expenses incurred by or on behalf of the Company in connection with or in preparing the Company for registration of and subsequently offering and distributing its Shares to the public, whether incurred before or after the date of this Agreement, which may include but are not limited to, total underwriting and brokerage discounts and commissions (including fees of the underwriters’ attorneys); any expense allowance granted by the Company to the underwriter or any reimbursement of expenses of the underwriter by the Company; expenses for printing, engraving and mailing; compensation of employees while engaged in sales activity; charges of transfer agents, registrars, trustees, escrow holders, depositaries and experts; and expenses of qualification of the sale of the securities under Federal and State laws, including taxes and fees, accountants’ and attorneys’ fees. 
“Origination Fees” means the fee payable to the Advisor pursuant to Section 8.02 plus all other fees and commissions, excluding Acquisition Expenses, paid by any Person to any Person in connection with making or investing in any Loan by the Company.
“Partnership” means KBS Limited Partnership III, a Delaware limited partnership formed to own and operate Properties, Loans and other Permitted Investments on behalf of the Company. 
“Permitted Investments” means all investments (other than Properties, Loans and short-term investments acquired for purposes of cash management) in which the Company may acquire an interest, either directly or indirectly, including through ownership interests in a Joint Venture 
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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. 333-164703), as amended from time to time, in connection with the Initial Public Offering.
“REIT” means a “real estate investment trust” under Sections 856 through 860 of the Code.
“Sale” or “Sales” means (i) any transaction or series of transactions whereby: (A) the Company or the Partnership sells, grants, transfers, conveys, or relinquishes its ownership of any Property, Loan or other Permitted Investment or portion thereof, including the transfer of any Property that is the subject of a ground lease, and including any event with respect to any Property, Loan or other Permitted Investment that gives rise to a significant amount of insurance proceeds or condemnation awards, and including the issuance by one of the Company’s subsidiaries of any asset-backed securities as part of a securitization transaction; (B) the Company or the Partnership sells, grants, transfers, conveys, or relinquishes its ownership of all or substantially all of the interest of the Company or the Partnership in any Joint Venture or partnership in which it is, directly or indirectly, a co-venturer or partner; or (C) any Joint Venture or partnership (in which the Company or the Partnership is, directly or indirectly, a co-venturer or partner) sells, grants, transfers, conveys, or relinquishes its ownership of any Property, Loan or other Permitted Investment or portion thereof, including any event with respect to any Property, Loan or other Permitted Investment that gives rise to insurance claims or condemnation awards, and including the issuance by such Joint Venture or partnership or one of its subsidiaries of any asset-backed securities as part of a securitization transaction, but (ii) not including any transaction or series of transactions specified in clause (i) (A), (i) (B), or (i) (C) above in which the proceeds of such transaction or series of transactions are reinvested in one or more Properties, Loans or other Permitted Investments within 180 days thereafter.

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“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.
“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 
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full, with interest. If the Performance Fee Note has not been paid in full within five years from the Termination Date, then the Advisor, its successors or assigns, may elect to convert the balance of the fee, including accrued but unpaid interest, into Shares at a price per Share equal to the average closing price of the Shares over the ten trading days immediately preceding the date of such election if the Shares are Listed at such time. If the Shares are not Listed at such time, the Advisor, its successors or assigns, may elect to convert the balance of the fee, including accrued but unpaid interest, into Shares at a price per Share equal to the fair market value for the Shares as determined by the Board of Directors based upon the Appraised Value of Company’s Properties on the date of election plus the fair market value of all other Loans and Permitted Investments of the Company on the date of election. 
“Subordinated Share of Cash Flows” has the meaning set forth in Section 8.06.
“Subscription Processing Fee” has the meaning set forth in Section 8.05. 
“Termination Date” means the date of termination of the Agreement determined in accordance with Article 13 hereof. 
“2%/25% Guidelines” means the requirement pursuant to the NASAA Guidelines that, in any period of four consecutive fiscal quarters, total Operating Expenses not exceed the greater of 2% of the Company’s Average Invested Assets during such 12-month period or 25% of the Company’s Net Income over the same 12-month period.
ARTICLE 2
APPOINTMENT
The Company hereby appoints the Advisor to serve as its advisor and asset manager on the terms and conditions set forth in this Agreement, and the Advisor hereby accepts such appointment.
ARTICLE 3
DUTIES OF THE ADVISOR
The Advisor is responsible for managing, operating, directing and supervising the operations and administration of the Company and its assets. The Advisor undertakes to use its best efforts to present to the Company potential investment opportunities and to provide the Company with a continuing and suitable investment program consistent with the investment objectives and policies of the Company as determined and adopted from time to time by the Board. Subject to the limitations set forth in this Agreement, 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 
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perform directly or (iii) would require the Advisor to register as a broker-dealer with the SEC or any state.
3.02 Acquisition Services.
(i) Serve as the Company’s investment and financial advisor and provide relevant market research and economic and statistical data in connection with the Company’s assets and investment objectives and policies;
(ii) Subject to Section 4 hereof and the investment objectives and policies of the Company: (a) locate, analyze and select potential investments; (b) structure and negotiate the terms and conditions of transactions pursuant to which investments in Properties, Loans and other Permitted Investments will be made; (c) acquire, originate and dispose of Properties, Loans and other Permitted Investments on behalf of the Company; (d) arrange for financing and refinancing and make other changes in the asset or capital structure of investments in Properties, Loans and other Permitted Investments; and (e) enter into leases, service contracts and other agreements for Properties, Loans and other Permitted Investments;
(iii) Perform due diligence on prospective investments and create due diligence reports summarizing the results of such work;
(iv) Prepare reports regarding prospective investments that include recommendations and supporting documentation necessary for the Directors to evaluate the proposed investments;
(v) Obtain reports (which may be prepared by the Advisor or its Affiliates), where appropriate, concerning the value of contemplated investments of the Company; 
(vi) Deliver to or maintain on behalf of the Company copies of all appraisals obtained in connection with the Company’s investments; and
(vii) Negotiate and execute approved investments and other transactions, including prepayments, maturities, workouts and other settlements of Loans and other Permitted Investments.
3.03 Asset Management Services.
(i) Real Estate and Related Services:
(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 
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acting in any other capacity deemed by the Advisor necessary or desirable for the performance of any of the foregoing services;
(b) Negotiate and service the Company’s debt facilities and other financings;
(c) Monitor applicable markets and obtain reports (which may be prepared by the Advisor or its Affiliates) where appropriate, concerning the value of investments of the Company;
(d) Monitor and evaluate the performance of each asset of the Company and the Company’s overall portfolio of assets, provide daily management services to the Company and perform and supervise the various management and operational functions related to the Company’s investments;
(e) Formulate and oversee the implementation of strategies for the administration, promotion, management, operation, maintenance, improvement, financing and refinancing, marketing, leasing and disposition of Properties, Loans and other Permitted Investments on an overall portfolio basis;
(f) Consult with the Company’s officers and the Board and assist the Board in the formulation and implementation of the Company’s financial policies, and, as necessary, furnish the Board with advice and recommendations with respect to the making of investments consistent with the investment objectives and policies of the Company and in connection with any borrowings proposed to be undertaken by the Company; 
(g) Oversee the performance by the Property Managers of their duties, including collection and proper deposits of rental payments and payment of Property expenses and maintenance;
(h) Conduct periodic on-site property visits to some or all (as the Advisor deems reasonably necessary) of the Properties to inspect the physical condition of the Properties and to evaluate the performance of the Property Managers;
(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:

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(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;
(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; 

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(n) Perform all reporting, record keeping, internal controls and similar matters in a manner to allow the Company to comply with applicable law, including federal and state securities laws and the Sarbanes-Oxley Act of 2002;
(o) Notify the Board of all proposed material transactions before they are completed; and
(p) Do all things necessary to assure its ability to render the services described in this Agreement.
3.04 Stockholder Services.
(i) Manage services for and communications with Stockholders, including answering phone calls, preparing and sending written and electronic reports and other communications; 
(ii) Oversee the performance of the transfer agent and registrar; 
(iii) Establish technology infrastructure to assist in providing Stockholder support and service; and
(iv) Consistent with Section 3.01, the Advisor shall perform the various subscription processing services reasonably necessary for the admission of new Stockholders.
3.05 Other Services. Except as provided in Article 7, the Advisor shall perform any other services reasonably requested by the Company (acting through the Conflicts Committee).
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.
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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 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 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.
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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 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 1.00% 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 1.00% 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 1.00% of the portion of the amount actually paid or allocated to the purchase, development, construction or improvement of the Property or other Permitted Investment, inclusive of the Acquisition Expenses associated with such Property or Permitted Investment, plus the amount of any outstanding debt associated with such Property or Permitted Investment that is attributable to the Company’s investment in the Joint Venture or partnership. Notwithstanding anything herein to the contrary, the payment of Acquisition Fees by the Company shall be subject to the limitations contained in the Company’s Articles of Incorporation. The Advisor shall submit an invoice to the Company on or about the closing or closings of each acquisition, accompanied by a computation of the Acquisition Fee. The Acquisition Fee payable to the Advisor shall be paid at the closing of the acquisition upon receipt of the invoice by the Company. The Company will not pay an Acquisition Fee to the Advisor with respect to any transaction in which the Company is required to pay an Origination Fee to the Advisor pursuant to the provisions of Section 8.02 below. The Acquisition Fee may or may not be taken, in whole or in part, as to any period in the sole discretion of the Advisor. All or any portion 
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of the Acquisition Fee not taken as to any period shall be deferred without interest and may be paid in such other period as the Advisor shall determine. 
8.02 Origination Fees. As compensation for the investigation, selection, sourcing and acquisition or origination of Loans, the Company shall pay an Origination Fee to the Advisor for each such acquisition or origination. With respect to the acquisition or origination of a Loan to be wholly owned by the Company, the Origination Fee payable to the Advisor shall equal 1% of the amount to be 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 to be paid or allocated by the Company 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. The Origination Fee may or may not be taken, in whole or in part, as to any period in the sole discretion of the Advisor. All or any portion of the Origination Fee not taken as to any period shall be deferred without interest and may be paid in such other period as the Advisor shall determine.
8.03 Asset Management Fees. 
(i)    Except as provided in Sections 8.03(ii) and 8.03(iii) and subject to the provisions of 8.03(iii), 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 Sections 8.03(i) and 8.03(iii) 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) the Advisor determines that it will no 
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longer pursue collection or other remedies related to such investment, or (ii) the Advisor recommends a revised fee arrangement with respect to such investment. 
(iii)    Notwithstanding anything contained in Section 8.03(i) and until the Bonus Retention Fund (defined herein) is fully funded, commencing with Asset Management Fees accruing from October 1, 2022, the Company will pay $1.15 million of the monthly Asset Management Fee to the Advisor in cash and the Company will deposit the remainder of the monthly Asset Management Fee into an interest bearing account in the Company’s name, which amounts will be paid to the Advisor from such account solely as reimbursement for payments made by the Advisor pursuant to the Advisor’s employee retention program (such account, the “Bonus Retention Fund”). Such funds deposited by the Company into the Bonus Retention Fund will not be commingled with other accounts of the Company. The Company will be deemed to have fully funded the Bonus Retention Fund once the Company has deposited $8.5 million in cash into such account, at which time the monthly Asset Management Fee will be payable in full to the Advisor. Amounts deposited in the Bonus Retention Fund will not be due or paid by the Company to the Advisor unless the Company has received an invoice from the Advisor with a computation of the payments paid or to be paid by the Advisor to employees pursuant to the Advisor’s employee retention program (in the form, including as to employees and amounts, as provided to the Conflicts Committee concurrent with the Company’s entry into this Agreement with the Advisor) for the applicable period. The Advisor acknowledges and agrees that payments by the Advisor to employees under the Advisor’s employee retention program that are reimbursed by the Company from the Bonus Retention Fund will be conditioned on (a) the Company’s liquidation and dissolution; (b) a transaction involving the acquisition, merger, conversion or consolidation, either directly or indirectly, of the Company in which (i) the Company is not the surviving entity and (ii) the Advisor is no longer serving as an advisor or asset manager to the surviving entity in such transaction; (c) the sale or other disposition of all or substantially all of the Company’s assets; (d) the non-renewal or termination of this Agreement without Cause in accordance with Article 13 hereof; or (e) the termination of the employee without cause.  To the extent the Bonus Retention Fund is not fully paid out to employees as set forth above, the residual amount will be deemed additional Deferred Asset Management Fees and be treated in accordance with Section 8.03 (iv).   
(iv)    Deferred Asset Management Fees.  
(a) With respect to Asset Management Fees that accrued from March 1, 2014 through September 30, 2022, the Advisor, on behalf of itself and its Affiliates, and its and their respective successors and assigns, deferred the Company’s obligation to pay the Asset Management Fee for any month in which the Company’s modified funds from operations (“MFFO”) for such month, as such term is defined in the practice guideline issued by the Investment Program Association (“IPA”) in November 2010 and interpreted by the Company, excluding the Asset Management Fee for such month, did not exceed the amount of distributions declared by the Company for record dates of that month (such deferred amounts, the “Deferred Asset Management Fees”). As of September 30, 2022, Deferred Asset Management Fees totaled approximately $8.5 million. The Company remains obligated to pay the Advisor outstanding Deferred Asset Management Fees in any month to the extent that MFFO for such month exceeds the amount of distributions declared for the record dates of that month (such excess amount, an “MFFO Surplus”); provided 
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however, that any amount of outstanding Deferred Asset Management Fees in excess of the MFFO Surplus will continue to be deferred in accordance with this Section 8.03(iv). 
(b) Notwithstanding anything contained in Section 8.03(iv)(a) to the contrary, any and all Deferred Asset Management Fees that are unpaid shall be immediately due and payable upon the earlier of:
(i) such time as the owners of all outstanding Shares have received Distributions in an aggregate amount equal to the sum of: 
    (y) the Stockholders’ 8% Return and 
    (z) Invested Capital. 
When determining whether the above threshold has been met: 
(1) Any stock dividend shall not be included as a Distribution; and 
(2) 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. 
(ii) a Listing of the Shares.
(iii) the Company’s liquidation and dissolution. 
(iv) a transaction involving the acquisition, merger, conversion or consolidation, either directly or indirectly, of the Company in which (i) the Company is not the surviving entity and (ii) the Advisor is no longer serving as an advisor or asset manager to the surviving entity in such transaction. 
(v) the sale or other disposition of all or substantially all of the Company’s assets.
(c) The Advisor acknowledges and agrees that no interest shall accrue on any Deferred Asset Management Fees. To the extent payment of any outstanding Deferred Asset Management Fees is due to the Advisor hereunder, the Company shall pay the Advisor no later than the last business day of the month in which the amount of such payment is determined, or the first business day of the following month.
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 if in connection with such Sale commissions are paid to third parties other than the Advisor or its Affiliates, the fee paid to the Advisor or any of its Affiliates may not exceed the commissions paid to such unaffiliated third parties; and provided further that no Disposition Fee shall be payable to the Advisor for any Sale if such Sale involves the Company selling all or substantially all of its assets in one or more transactions designed to effectuate a business combination transaction (as opposed to a Company liquidation, in which case 
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the Disposition Fee would be payable if the Advisor or an Affiliate provides a substantial amount of services as provided above). The payment of any Disposition Fees by the Company shall be subject to the limitations contained in the Company’s Articles of Incorporation. Any Disposition Fee payable under this Section 8.04 may be paid in addition to commissions paid to non-Affiliates, provided that the total commissions (including such Disposition Fee) paid to all Persons by the Company for each Sale shall not exceed an amount equal to the lesser of (i) 6.0% of the aggregate Contract Sales Price of each Property, Loan or other Permitted Investment or (ii) the Competitive Real Estate Commission for each Property, Loan or other Permitted Investment. Substantial assistance in connection with the Sale of a Property includes the Advisor's preparation of an investment package for the Property (including a new investment analysis, rent rolls, tenant information regarding credit, a property title report, an environmental report, a structural report and exhibits) or such other substantial services performed by the Advisor in connection with a Sale. The Advisor shall submit an invoice to the Company on or about the closing or closings of each disposition, accompanied by a computation of the Disposition Fee. Generally, the Disposition Fee payable to the Advisor shall be paid at the closing of the transaction upon receipt of the invoice by the Company. However, the Disposition Fee may or may not be taken, in whole or in part, as to any period in the sole discretion of the Advisor. All or any portion of the Disposition Fee not taken as to any period shall be deferred without interest and may be paid in such other period as the Advisor shall determine. 
8.05 Subscription Processing Fee. The Company shall pay the Advisor as compensation for the services described in Section 3.04(iv) hereof a monthly fee (the “Subscription Processing Fee”) in an amount equal to $35 per subscription agreement for Shares received and processed by the Advisor. The Advisor shall submit a monthly invoice to the Company, accompanied by a computation of the total amount of the Subscription Processing Fee for the applicable period. Generally, the Subscription Processing Fee payable to the Advisor shall be paid on the last day of such month, or the first business day following the last day of such month. However, the Subscription Processing Fee may or may not be taken, in whole or in part, as to any period in the sole discretion of the Advisor. All or any portion of the Subscription Processing Fees not taken as to any period shall be deferred without interest and may be paid in such other period as the Advisor shall determine. The Subscription Processing Fee is an Organization and Offering Expense of the Company and is subject to the limitations on Organization and Offering Expenses in Article 9 hereof.
8.06 Subordinated Share of Cash Flows. The Subordinated Share of Cash Flows shall be payable to the Advisor in an amount equal to 15% of Operating Cash Flow and Cash from Sales, Settlements and Financings remaining after the Stockholders have 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

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(B)    Distributions paid on Shares redeemed by the Company (and thus no longer included in the determination of Invested Capital), shall not be included as a Distribution.
Following Listing, no Subordinated Share of Cash Flows will be paid to the Advisor.
If the Subordinated Share of Cash Flows is payable to the Advisor, the Advisor shall submit a monthly invoice to the Company, accompanied by a computation of the total amount of the Subordinated Share of Cash Flows for the applicable period. Generally, the Subordinated Share of Cash Flows payable to the Advisor shall be paid on the last day of such month, or the first business day following the last day of such month. However, the Subordinated Share of Cash Flows may or may not be taken, in whole or in part, as to any period in the sole discretion of the Advisor. All or any portion of the Subordinated Share of Cash Flows not taken as to any period shall be deferred without interest and may be paid in such other period as the Advisor shall determine.
8.07 Subordinated Incentive Fee. Upon Listing, the Advisor shall be entitled to the Subordinated Incentive Fee in an amount equal to 15.0% of the amount by which (i) the market value of the outstanding Shares of the Company, measured by taking the average closing price or the average of the bid and asked price, as the case may be, over a period of 30 days during which the Shares are traded, with such period beginning 180 days after Listing (the “Market Value”), plus the total of all Distributions paid to Stockholders (excluding any stock dividends) from the Company’s inception until the date that Market Value is determined, exceeds (ii) the sum of (A) 100% of Invested Capital and (B) the total Distributions required to be paid to the Stockholders in order to pay the Stockholders’ 8% Return from inception through the date Market Value is determined. The Company shall have the option to pay such fee in the form of cash, Shares, a promissory note or any combination of the foregoing. The Subordinated Incentive Fee will be reduced by the amount of any prior payment to the Advisor of a Subordinated Share of Cash Flows. In the event the Subordinated Incentive Fee is paid to the Advisor following Listing, no other performance fee will be paid to the Advisor. In addition, the Subordinated Incentive Fee may or may not be taken, in whole or in part, as to any period in the sole discretion of the Advisor. All or any portion of the Subordinated Incentive Fee not taken as to any period shall be deferred without interest and may be paid in such other period as the Advisor shall determine. 
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) 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 
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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, (a) the Advisor shall reimburse the Company to the extent the Company incurred Organization and Offering Expenses excluding underwriting compensation (which includes selling commissions, dealer manager fees and any other items viewed as underwriting compensation by the Financial Industry Regulatory Authority) exceeding 2% of the Gross Proceeds raised in the completed Offering and (b) the Advisor shall reimburse the Company to the extent the Company incurred Organization and Offering Expenses in the aggregate exceeding 15% of the Gross Proceeds raised in the completed Offering; the Company shall not reimburse the Advisor for any Organization and Offering Expenses that are not fair and commercially reasonable to the Company, and the Advisor shall reimburse the Company for any Organization and Offering Expenses that are not fair and commercially reasonable to the Company;
(ii) Acquisition Fees, Origination Fees and Acquisition Expenses incurred in connection with the selection and acquisition of Properties, Loans and other Permitted Investments, including such expenses incurred related to assets pursued or considered but not ultimately acquired by the Company, provided that, notwithstanding anything herein to the contrary, the payment of Acquisition Fees, Origination Fees and Acquisition Expenses by the Company shall be subject to the limitations contained in the Company’s Articles of Incorporation;
(iii) The actual out-of-pocket cost of goods and services used by the Company and obtained from entities not Affiliated with the Advisor;
(iv) Interest and other costs for borrowed money, including discounts, points and other similar fees;
(v) Taxes and assessments on income or Properties, taxes as an expense of doing business and any other taxes otherwise imposed on the Company and its business, assets or income;
(vi) Out-of-pocket costs associated with insurance required in connection with the business of the Company or by its officers and Directors;
(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, (a) other than reimbursement of travel 
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and communication expenses, no reimbursement shall be made for the cost 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 and (b) no reimbursement shall be made for the salaries and benefits the Advisor or its Affiliates may pay to the Company’s executive officers;
(x) Out-of-pocket expenses of providing services for and maintaining communications with Stockholders, including the cost of preparation, printing, and mailing annual reports and other Stockholder reports, proxy statements and other reports required by governmental entities;
(xi) Audit, accounting and legal fees, and other fees for professional services relating to the operations of the Company and all such fees incurred at the request, or on behalf of, the Board, the Conflicts Committee or any other committee of the Board;
(xii) Out-of-pocket costs for the Company to comply with all applicable laws, regulations and ordinances; 
(xiii) Expenses connected with payments of Distributions made or caused to be made by the Company to the Stockholders;
(xiv) Expenses of organizing, redomesticating, merging, liquidating or dissolving the Company or of amending the Articles of Incorporation or the Bylaws; and
(xv) All other out-of-pocket costs incurred by the Advisor in performing its duties hereunder.
9.02 Timing of and Additional Limitations on Reimbursements.
(i) Expenses incurred by the Advisor on behalf of the Company and reimbursable pursuant to this Article 9 shall be reimbursed no less than monthly to the Advisor. The Advisor shall prepare a statement documenting the expenses 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 with the quarter ending March 31, 2012, 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 
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Committee determines such excess was justified, then, within 60 days after the end of any fiscal quarter of the Company for which total reimbursed Operating Expenses for the Expense Year exceed the 2%/25% Guidelines, the Advisor, at the direction of the Conflicts Committee, shall cause such fact to be disclosed to the Stockholders in writing (or the Company shall disclose such fact to the Stockholders in the next quarterly report of the Company or by filing a Current Report on Form 8-K with the SEC within 60 days of such quarter end), together with an explanation of the factors the Conflicts Committee considered in determining that such excess expenses were justified. The Company will ensure that such determination will be reflected in the minutes of the meetings of the Board. All figures used in the foregoing computation shall be determined in accordance with GAAP applied on a consistent basis.
ARTICLE 10
VOTING AGREEMENT
The Advisor agrees that, with respect to any Shares now or hereinafter owned by it, the Advisor will not vote or consent on matters submitted to the stockholders of the Company regarding (i) the removal of the Advisor, a director or any of their Affiliates or (ii) any transaction between the Company and the Advisor, a director or any of their Affiliates. This voting restriction shall survive until such time that the Advisor is both no longer serving as such and is no longer an Affiliate of the Company.
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 
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unrelated to the Company and may provide services to Persons other than the Company or any of its Affiliates.
11.03 Investment Opportunities and Allocation. The Advisor shall be required to use commercially reasonable efforts to present a continuing and suitable investment program to the Company that is consistent with the investment policies and objectives of the Company, but neither the Advisor nor any Affiliate of the Advisor shall be obligated generally to present any particular investment opportunity to the Company even if the opportunity is of character that, if presented to the Company, could be taken by the Company. In the event an investment opportunity is located, the allocation procedure set forth under the caption “Conflicts of Interest – Certain Conflict Resolution Measures – Allocation of Investment Opportunities” in the Registration Statement or, as applicable, the most recently effective registration statement for the sale of the Company’s Shares, 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 a term expiring on September 27, 2023. This Agreement 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.
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13.02 Termination by Either Party. This Agreement may be terminated (i) upon 60 days written notice without Cause or penalty by either the Company (acting through the Conflicts Committee) or the Advisor or (ii) immediately by the Company for Cause or upon the bankruptcy of the Advisor. The provisions of Articles 1, 10, 12, 13, 15 and 16 shall survive termination of this Agreement. 
13.03 Payments on Termination and Survival of Certain Rights and Obligations. Payments to the Advisor pursuant to this Section 13.03 shall be subject to the 2%/25% Guidelines to the extent applicable.
(i) After the Termination Date, the Advisor shall not be entitled to compensation for further services hereunder except it shall be entitled to receive from the Company within 30 days after the effective date of such termination (A) all unpaid reimbursements of expenses and all earned but unpaid fees payable to the Advisor prior to termination of this Agreement, (B) any unpaid amounts from the Bonus Retention Fund for payments paid or to be paid in accordance with Section 8.03(iii) by the Advisor to employees pursuant to the Advisor’s employee retention program prior to or upon termination of this Agreement, (C) if this Agreement is terminated without Cause, any residual amount of the Bonus Retention Fund deemed to be additional Deferred Asset Management Fees pursuant to Section 8.03(iii), provided that upon such non-renewal or termination the Company does not retain an advisor in which the Advisor or its affiliates have a majority interest, and (D) 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.  For the avoidance of doubt, if this Agreement is terminated, all unpaid Deferred Asset Management Fees will automatically be forfeited by the Advisor, and if this Agreement is terminated for Cause, any residual amount of the Bonus Retention Fund deemed to be additional Deferred Asset Management Fees pursuant to Section 8.03(iii) will also automatically be forfeited by the Advisor.
(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.

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ARTICLE 14
ASSIGNMENT
This Agreement may be assigned by the Advisor to an Affiliate with the consent of the Conflicts Committee. The Advisor may assign any rights to receive fees or other payments under this Agreement without obtaining the approval of the Board or the Conflicts Committee. This Agreement shall not be assigned by the Company without the consent of the Advisor, except in the case of an assignment by the Company to a corporation or other organization that is a successor to all of the assets, rights and obligations of the Company, in which case such successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the Company is bound by this Agreement.
ARTICLE 15
INDEMNIFICATION AND LIMITATION OF LIABILITY
15.01 Indemnification. Except as prohibited by the restrictions provided in this Section 15.01, Section 15.02 and Section 15.03, the Company shall indemnify, defend and hold harmless the Advisor and its Affiliates, including their respective officers, directors, equity holders, partners and employees, from all liability, claims, damages or losses arising in the performance of their duties hereunder, and related expenses, including reasonable attorneys’ fees, to the extent such liability, claims, damages or losses and related expenses are not fully reimbursed by insurance. Any indemnification of the Advisor may be made only out of the net assets of the Company and not from Stockholders.
Notwithstanding the foregoing, the Company shall not indemnify the 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. 

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(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. 
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 III, Inc. 
800 Newport Center Drive, Suite 700
Newport Beach, California 92660
To the Advisor:
KBS Capital Advisors LLC
800 Newport Center Drive, Suite 700
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.
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16.04 Construction. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware.
16.05 Entire Agreement. This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing.
16.06 Waiver. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.
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.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.

																		
	KBS REAL ESTATE INVESTMENT TRUST III, INC.
		By: 	/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:	PBCS Management, LLC, a Manager
					By:	/s/ Charles J. Schreiber, Jr.
						Charles J. Schreiber, Jr., Manager
						
		By:	Schreiber Real Estate Investments, L.P., a Manager
			By:	Schreiber Investments, LLC, as general partner
				By:	PBCS Management, LLC, a Manager
					By:	/s/ Charles J. Schreiber, Jr.
						Charles J. Schreiber, Jr., Manager

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