Exhibit 10.2

 

AMENDED AND RESTATED

 

AGREEMENT OF LIMITED PARTNERSHIP

 

OF

 

RICH UNCLES NNN OPERATING PARTNERSHIP, LP

 

(A Delaware Limited Partnership)

 

THE INTERESTS REFERENCED HEREIN HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. WITHOUT REGISTRATION, THESE INTERESTS MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED AT ANY TIME WHATSOEVER, EXCEPT ON
DELIVERY TO THE PARTNERSHIP OF AN OPINION OF COUNSEL SATISFACTORY TO THE
PARTNERSHIP THAT REGISTRATION IS NOT REQUIRED FOR THE TRANSFER, OR THE
SUBMISSION TO THE PARTNERSHIP OF OTHER EVIDENCE SATISFACTORY TO THE PARTNERSHIP
TO THE EFFECT THAT ANY TRANSFER WILL NOT BE IN VIOLATION OF THE SECURITIES ACT
OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR
REGULATIONS PROMULGATED THEREUNDER.

 

 

 

 

Table of Contents

 

    Page       Article 1 DEFINITIONS 1 1.1 Definitions 1 1.2 Other Definitions 4
      Article 2 GENERAL 4 2.1 Formation 4 2.2 Name and Certificate 4 2.3 Office
and Agent 4 2.4 Term 4 2.5 Purposes 4 2.6 Limits 4 2.7 Foreign Qualification 5  
    Article 3 CONTRIBUTIONS AND INTERESTS 5 3.1 Identification 5 3.2 Capital
Contributions 5 3.3 Capital Accounts 5 3.4 Withdrawal or Reduction of Capital
Contributions 6 3.5 Liability of the Partners 6 3.6 Deficit Capital Accounts 6
3.7 Loans 6 3.8 Preferred Partnership Interests 6       Article 4 DISTRIBUTIONS
AND ALLOCATIONS 6 4.1 Allocation of Net Profits and Net Loss 6 4.2 Special
Allocations and Related Definitions 7 4.3 Curative Allocations 9 4.4 Other
Allocation Rules 10 4.5 Distributions 10 4.6 Tax Withholdings 10 4.7 Other
Advances 10 4.8 Limitation Upon Distributions 10 4.9 Tax Matters Partner 10 4.10
Compliance with Code and Treasury Regulations 11       Article 5 STATUS OF
LIMITED PARTNERS 11 5.1 General 11 5.2 Limitation on Liability 12 5.3
Bankruptcy; Death 12       Article 6 MANAGEMENT 12 6.1 Rights 12 6.2 Exculpation
of Partners and Officers 12 6.3 Limitation of Liability 12 6.4 Duties 12 6.5
Compensation and Reimbursement 13 6.6 Agreements with Affiliates 13 6.7 Officers
13 6.8 Appointment and Replacement 13 6.9 Approval and Meetings 13 6.10
Execution of Documents 13      

 

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Table of Contents

(continued)

 

    Page Article 7 BOOKS AND ACCOUNTS 14 7.1 Books and Records 14 7.2 Reports 14
7.3 Tax Returns and Other Elections 14 7.4 Depositories 15       Article 8
ADMISSION OF NEW PARTNERS; TRANSFER OF INTERESTS 15 8.1 Admission of New
Partners 15 8.2 Transfers 15 8.3 Substitute Partner 15 8.4 Assignee’s Rights 16
8.5 Tax Matters 16       Article 9 DISSOLUTION 16 9.1 Causes 16 9.2
Reconstitution 16 9.3 Interim Manager 17       Article 10 WINDING UP AND
TERMINATION 17 10.1 General 17 10.2 Liquidation 18 10.3 Creation of Reserves 18
10.4 Final Accounting 18       Article 11 INDEMNIFICATION 19 11.1
Indemnification of Partners and Officers 19 11.2 Applicability and Effect 20
11.3 Limitation on Partners’ Liability 20       Article 12 MISCELLANEOUS 20 12.1
Notices 20 12.2 Interpretation 20 12.3 Terms 20 12.4 Amendment; Waiver 21 12.5
Severability 21 12.6 No Third-Party Beneficiary 21 12.7 Sole and Absolute
Discretion 21 12.8 Binding Effect 21 12.9 Complete Agreement 21 12.10 Title to
Partnership Property 21 12.11 Other Business 21 12.12 Partition Rights 22 12.13
Agreement in Counterparts 22       Attachment: Exhibit A A-1

 

ii 

 

 

AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

 

OF

 

RICH UNCLES NNN OPERATING PARTNERSHIP, LP

 

THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (this “Agreement”) is
made as of August 11, 2017, by and between RW Holdings NNN REIT, Inc. (f/k/a
Rich Uncles NNN REIT, Inc.), a Maryland corporation (the “General Partner”), and
Rich Uncles NNN LP, LLC (the “Limited Partner”), and they together hereby form a
limited partnership (the “Partnership”) pursuant to the Act (hereinafter
defined).

 

Article 1

DEFINITIONS

 

1.1 Definitions. In this Agreement, the following terms, unless the context
otherwise requires, have the meanings indicated:

 

“Accountant” means the certified public accountant or firm of certified public
accountants, if any, selected by the General Partner to perform accounting
functions on behalf of the Partnership.

 

“Act” means the Delaware Revised Limited Partnership Act, as amended from time
to time (or any corresponding provisions of succeeding law).

 

“Advisor” means Rich Uncles REIT Operator, LLC, a Delaware limited liability
company.

 

“Advisory Agreement” means an advisory agreement executed from time to time
between the Advisor and a Partner.

 

“Agreement” means this Amended and Restated Agreement of Limited Partnership, as
may be further amended, from time to time. The words “herein,” “hereinafter,”
“hereof,” “hereto,” “hereunder” and any similar words refer to this Agreement as
a whole, unless the context otherwise requires.

 

“Approval of the Partners” or “Approved by the Partners” means the affirmative
approval, determined under Section 6.9, of Partners then entitled to vote who
hold in the aggregate more than fifty percent (50%) of the Percentage Interests.

 

“Assignee” means a transferee of all or any portion of a Partner’s or any other
transferor’s Interest.

 

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“Bankruptcy” means, for any Partner, that Partner’s taking or acquiescing in the
taking of an action seeking relief under, or advantage of, any applicable debtor
relief, liquidation, receivership, conservatorship, bankruptcy, moratorium,
rearrangement, insolvency, reorganization or similar law affecting the rights or
remedies of creditors generally, as in effect from time to time.

 

“Capital Account” means, with respect to any Partner, the account maintained for
such Partner in a manner which the General Partner determines is in accordance
with Treasury Regulations Section 1.704-1 (b)(2)(iv), and Section 3.3 of this
Agreement.

 

“Capital Contribution” means, with respect to any Partner, the amount of money
or property contributed to the Partnership with respect to the interest in the
Partnership held by that Partner.

 

“Certificate” means the certificate of limited partnership of the Partnership.

 

“Class C Partner” means any Partner named as a Class C Partner of the
Partnership on Exhibit A attached hereto and includes any Person admitted as an
Class C Partner after the date hereof or a Substitute Class C Partner.

 

“Class C Interest” means an Interest in the Partnership as a Class C Partner.

 

“Class S Partner” means any Partner named as a Class S Limited Partner of the
Partnership on Exhibit A attached hereto and includes any Person admitted as an
Class S Partner after the date hereof or a Substitute Class S Partner.

 

“Class S Interest” means an Interest in the Partnership as a Class S Partner.

 

“Class S Offering Expenses” means any commissions and fees payable to brokers or
other persons that are related, directly or indirectly, to a Class S Interest.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time (or
any corresponding provisions of succeeding law).

 

“Fiscal Year” means the Partnership’s fiscal year, which shall be the calendar
year.

 

“General Partner” means any Person who (i) is referred to as such in the first
paragraph of this Agreement, or has become a General Partner pursuant to the
terms of this Agreement, and (ii) has not ceased to be a General Partner
pursuant to the terms of this Agreement, irrespective of Class, unless the
context so requires..

 

“Interest” means, with respect to any Partner, such Partner’s ownership interest
in the Partnership.

 

“Limited Partner” means any Person who (i) is referred to as such in the first
paragraph of this Agreement, or has become a Limited Partner pursuant to the
terms of this Agreement, and (ii) has not ceased to be a Limited Partner
pursuant to the terms of this Agreement, irrespective of Class, unless the
context so requires.

 

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"Net Capital Contribution" means, with respect to any Partner, the sum of the
initial and all permitted additional Capital Contributions made by such Partner
hereunder minus the cumulative amount of cash distributions received by such
Partner that are treated as a return of Capital Contributions pursuant to
Section 4.5 of this Agreement. If at any time the cumulative amount of cash
distributions received by such Partner as a return of capital exceeds the sum of
the Partner's initial and all permitted additional Capital Contributions, then
the Partner's Net Capital Contribution shall be deemed to be zero until such
excess is eliminated.

 

“Net Loss” means, for each Fiscal Year or other period, the taxable loss of the
Partnership for such period determined under such method of accounting as is
elected by the Partnership, applied in accordance with accounting principles
consistently applied from year to year, plus any expenditures described in
Section 705(a)(2)(B) of the Code; provided, however, that any items which are
specially allocated pursuant to Sections 4.1(b) through 43 hereof shall not be
taken into account in computing Net Loss.

 

“Net Profits” means, for each Fiscal Year or other period, the taxable net
income and taxable net gains of the Partnership for such period determined under
such method of accounting as is elected by the Partnership, applied in
accordance with accounting principles consistently applied from year to year,
plus any income described in Section 705(a)(1)(B) of the Code; provided,
however, that any items which are specially allocated pursuant to Sections
4.1(b) through 4.3 hereof shall not be taken into account in computing Net
Profits.

 

“Partners” means all General Partners and all Limited Partners, where no
distinction is required by the context in which the term is used herein.

 

“Percentage Interest” means, with respect to any Partner, the percentage
determined by dividing the aggregate Net Capital Contributions of such Partner
to the Partnership since the inception of the Partnership by the aggregate Net
Capital Contributions of all Partners to the Partnership since the inception of
the Partnership. The General Partner shall maintain a complete record of each
Partner's Capital Contributions and shall revise such record periodically to
reflect additional contributions, transfers of Interests, and any other changes
affecting the Partners or their respective Capital Contributions. The General
Partner shall also determine each Partner's Percentage Interest as provided
herein and re-determine such Percentage Interest upon any additional
contribution, distribution or other transaction affecting a Partner's Percentage
Interest. Pursuant to Section 7.1, the General Partner shall advise any Limited
Partner of its respective Percentage Interest promptly upon receipt of a written
request therefor from such Limited Partner.

 

“Person” means any corporation, limited liability company, partnership, joint
venture, co-tenancy, trust or any other legal entity or natural person, whether
or not a party to this Agreement.

 

“Property” means all the assets of the Partnership.

 

“Pro Rata” means the ratio determined by dividing the Percentage Interest of a
Partner to whom a particular provision of this Agreement is stated to apply by
the aggregate of the Percentage Interests of all Partners to whom that provision
is stated to apply.

 

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“Substitute Partner” has the meaning set forth in Section 8.3.

 

“Transfer” or derivations thereof, of an Interest means, as a noun, the
transfer, sale, assignment, exchange, pledge, hypothecation or other disposition
of an Interest, or any part thereof, directly or indirectly, and as a verb,
voluntarily to transfer, sell, assign, exchange, pledge, hypothecate or
otherwise dispose of an Interest.

 

“Treasury Regulations” means the Income Tax Regulations, including Temporary
Regulations, promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).

 

1.2 Other Definitions. All terms used in this Agreement that are not defined in
this Article 1 have the meanings contained elsewhere in this Agreement.

 

Article 2

GENERAL

 

2.1 Formation. The Partners hereby form the Partnership pursuant to the Act.
Except as otherwise provided in this Agreement, the rights and liabilities of
the Partners are governed by the Act.

 

2.2 Name and Certificate. The name of the Partnership is “Rich Uncles NNN
Operating Partnership, LP.” The General Partner shall promptly cause to be
prepared and filed the Certificate to satisfy the requirements of the Act, and
any assumed name certificates required by applicable laws.

 

2.3 Office and Agent. The registered agent, registered office and principal
place of business of the Partnership are set forth on Exhibit A. The registered
agent, registered office or principal place of business may be changed by the
General Partner after the General Partner delivers a written notice about such
change to the Partners.

 

2.4 Term. The Partnership shall be formed as a limited partnership on the date
that the Certificate is filed with the Secretary of State of the State of
Delaware and shall continue until terminated pursuant to this Agreement.

 

2.5 Purposes. The purpose for which the Partnership is organized is to transact
any or all lawful business for which limited partnerships may be organized under
the Act. The Partnership shall have any and all powers that are necessary or
desirable to carry out the purposes and business of the Partnership, to the
extent the same may be legally exercised by limited partnerships under the Act.
The Partnership shall carry out the foregoing activities pursuant to the
arrangements set forth in the Certificate and this Agreement.

 

2.6 Limits. The relationship between and among the Partners is limited to the
carrying on of the business of the Partnership in accordance with this
Agreement. That relationship shall be construed and deemed to be a limited
partnership for the sole and limited purpose of carrying on that business. This
Agreement does not create a general partnership between the parties or authorize
any party to act as general agent for any other party.

 

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2.7 Foreign Qualification. The General Partner shall cause the Partnership to
comply with all requirements necessary to qualify the Partnership as a foreign
limited partnership in each jurisdiction in which the business of the
Partnership makes such qualification necessary. Each Partner shall execute,
acknowledge, swear to, and deliver all certificates and other instruments
conforming with this Agreement that are necessary or appropriate to qualify,
continue, and terminate the Partnership as a foreign limited partnership in all
such jurisdictions in which the Partnership may conduct business.

 

Article 3

CONTRIBUTIONS AND INTERESTS

 

3.1 Identification. The name, address, initial Capital Contribution and
Percentage Interest of each Partner are set forth on Exhibit A.

 

3.2 Capital Contributions.

 

(a) At any time the General Partner determines that additional funds are
required to operate the Partnership, the General Partner may request that the
Partners make additional Capital Contributions; provided, however, no Partner
shall be obligated to make any additional Capital Contributions.

 

(b) No Partner shall be paid interest on any Capital Contribution to the
Partnership.

 

3.3 Capital Accounts.

 

(a) A separate Capital Account will be maintained for each Partner. Each
Partner’s Capital Account will be increased by (i) the amount of money
contributed by such Partner to the Partnership; (ii) the fair market value of
any property contributed by such Partner to the Partnership; (iii) the amount of
any Partnership liabilities that are expressly assumed by such Partner or that
are secured by any Partnership Property distributed to such Partner; (iv) the
amount of Net Profits allocated to such Partner; and (v) any item of income or
gain specially allocated to such Partner pursuant to Sections 4.1(b) through
4.3. Each Partner’s Capital Account will be decreased by (i) the amount of money
distributed to such Partner by the Partnership; (ii) the fair market value of
any property distributed to such Partner by the Partnership; (iii) the amount of
any liabilities of such Partner that are expressly assumed by the Partnership or
that are secured by any property contributed by such Partner to the Partnership;
(iv) the amount of Net Loss allocated to such Partner; and (v) any items of
deduction or Net Loss specially allocated to such Partner pursuant to
Sections 4.1(b) through 4.3.

 

(b) In the event of a permitted sale or exchange of an Interest in the
Partnership, the Capital Account of the transferor shall become the Capital
Account of the transferee to the extent it relates to the transferred interest.

 

(c) The manner in which Capital Accounts are to be maintained pursuant to this
Section 3.3 is intended to comply with the requirements of Code Section 704(b)
and the Treasury Regulations promulgated thereunder and shall be interpreted and
applied in a manner consistent therewith. The Partners agree to make appropriate
modification if unanticipated events might otherwise cause this Agreement not to
comply with Code Section 704(b) and the Treasury Regulations promulgated
thereunder.

 

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3.4 Withdrawal or Reduction of Capital Contributions.

 

(a) No Partner shall receive out of the Partnership’s Property any part of its
Capital Contribution until all liabilities of the Partnership have been paid or
there remains Property of the Partnership sufficient to pay such liabilities.

 

(b) Except as may be otherwise specifically provided in this Agreement, the
Partners shall not have the right to withdraw all or any part of their Capital
Contributions.

 

3.5 Liability of the Partners. No Partner shall be liable for the debts,
liabilities or obligations of the Partnership beyond its Capital Contributions.

 

3.6 Deficit Capital Accounts. No Partner will be required to pay to the
Partnership, to any other Partner or to any third party any deficit balance
which may exist from time to time in the Partner’s Capital Account.

 

3.7 Loans. If the General Partner makes a request for loans, the Partners, Pro
Rata or as they may otherwise agree, may make a loan or loans to the
Partnership. The amount of any such loan or advance shall not be deemed an
increase in the Capital Contributions of the Partner that makes such loan or
entitle that lending Partner to any increase in its Percentage Interest. The
Partners shall not be required to loan any funds to the Partnership.

 

3.8 Preferred Partnership Interests. The Partnership, upon the determination of
the General Partner, may issue preferred partnership interests in connection
with acquisitions of property or otherwise. Such preferred partnership interests
may have priority over the Interests of other Limited Partners with respect to
distributions and allocations as set forth in Article 4 of this Agreement.

 

Article 4

DISTRIBUTIONS AND ALLOCATIONS

 

4.1 Allocation of Net Profits and Net Loss. Except as required by Code Section
704(c) (dealing with contributed property), and after giving effect to the
special allocations and limitations set forth in Section 4.1(b) and in Sections
4.2 and 4.3:

 

(a) Net Profits for any Fiscal Year shall be allocated in the following order
and ‘ priority:

 

(i) First, to the Partners in an amount equal to the excess, if any, of (i) the
cumulative Net Loss allocated pursuant to Section 4.1(b) for all prior Fiscal
Years, over (ii) the cumulative Net Profits allocated pursuant to this
Section 4.1(a) for all prior Fiscal Years; provided, however, such allocation
among the Partners shall be in such amounts as will proportionately reduce such
respective excess amounts of the various Partners.

 

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(ii) The balance, if any, to the Partners to be allocated among them in
proportion to their respective Percentage Interests.

 

(b) Net Loss for any Fiscal Year shall be allocated as set forth in
Section 4.1(b)(i), subject to the limitation in Section 4.1(b)(ii).

 

(i) Net Loss for any Fiscal Year shall be allocated among the Partners in
proportion to their respective Percentage Interests.

 

(ii) No Net Loss (or item of loss or deduction) shall be allocated to a Partner
if such allocation would cause the Partner to have an Adjusted Capital Account
Deficit, as hereinafter defined, at the end of any Fiscal Year. Such Net Loss
(or item of loss or deduction) shall be allocated among the Partners whose
Adjusted Capital Account, as hereinafter defined, balances are positive in
proportion to such positive balances to the extent necessary to reduce the
balances of such other Partners’ positive Adjusted Capital Accounts balances to
zero, it being the intention of the Partners that no Partner’s Adjusted Capital
Account balance shall fall below zero while any other Partner’s Adjusted Capital
Account has a positive balance. In the event no Partner has a positive Adjusted
Capital Account balance, such Net Loss (or item of loss or deduction) shall be
allocated in accordance with Section 5.1(b)(i) unless otherwise required by Code
Section 704(b) and the Treasury Regulations thereunder.

 

4.2 Special Allocations and Related Definitions.

 

(a) Definitions. The following definitions pertain to the special allocations
provided for in this Section 4.2.

 

(i) “Adjusted Capital Account Deficit” means, with respect to any Partner, the
deficit balance, if any, in such Partner’s Adjusted Capital Account as of the
end of the relevant Fiscal Year. The foregoing definition of Adjusted Capital
Account Deficit is intended to comply with the provisions of Section
1.704-l(b)(2)(ii)(d) of the Treasury Regulations and shall be interpreted
consistently therewith.

 

(ii) “Adjusted Capital Account” of a Partner means such Partner’s Capital
Account, after giving effect to the following adjustments:

 

(A) Credit to such Capital Account any amounts which such Partner is obligated
to restore pursuant to any provision of this Agreement or is deemed to be
obligated to restore pursuant to the penultimate sentences of Treasury
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

 

(B) Debit to such Capital Account the items described in Treasury Regulations
Sections 1.704-i(b)(2)(ii)(d)(4), 1.704-l(b)(2)(ii)(d)(5), and
1.704-l(b)(2)(ii)(d)(6).

 

(iii) “Partnership Minimum Gain” has the same meaning as “partnership minimum
gain” set forth in Treasury Regulations Sections 1.704-2(b)(2) and 1.704-2(d).

 

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(iv) “Partner Nonrecourse Debt” has the same meaning as “partner nonrecourse
debt” set forth in Section 1.704-2(b)(4) of the Treasury Regulations.

 

(v) “Partner Nonrecourse Debt Minimum Gain” has the same meaning as “partner
nonrecourse debt minimum gain” set forth in Section 1.704-2(i) of the Treasury
Regulations.

 

(vi) “Partner Nonrecourse Deductions” has the same meaning as “partner
nonrecourse deductions” set forth in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of
the Treasury Regulations.

 

(vii) “Nonrecourse Deductions” has the meaning set forth in Section
1.704-2(b)(1) of the Treasury Regulations, and such deductions are determined in
accordance with Sections 1.704-2(c)(1) and 1.704-2(j)(1) of the Treasury
Regulations.

 

(viii) “Nonrecourse Liability” has the meaning set forth in Section
1.704-2(b)(3) of the Treasury Regulations.

 

(b) The following special allocation provisions should be applied in the order
in which they are listed. Such ordering is intended to comply with the ordering
rules in Treasury Regulations Section 1.704-2(j) and shall be applied
consistently therewith.

 

(i) Minimum Gain Chargeback. If there is a net decrease in Partnership Minimum
Gain during any Fiscal Year, each Partner shall be allocated items of
Partnership income and gain for such year in an amount equal to that Partner’s
share of the net decrease in Partnership Minimum Gain (within the meaning of
Treasury Regulations Section 1.704-2(g)). The items to be so allocated shall be
determined in accordance with Section 1.704-2(f) of the Treasury Regulations.
This Section 4.2(b)(i) is intended to comply with the minimum gain chargeback
requirement in such Section of the Treasury Regulations and shall be interpreted
consistently therewith.

 

(ii) Partner Nonrecourse Debt Minimum Gain Chargeback. If during a Fiscal Year
there is a net decrease in Partner Nonrecourse Debt Minimum Gain, any Partner
with a share of that Partner Nonrecourse Debt Minimum Gain (determined in
accordance with Treasury Regulations Section 1.704-2(i)(5)) as of the beginning
of the year shall be allocated items of Partnership income and gain for such
year (and, if necessary, for succeeding years) in an amount equal to that
Partner’s share of the net decrease in the Partner Nonrecourse Debt Minimum
Gain, The items to be so allocated shall be determined in accordance with
Section 1.704-2(i)(4) of the Treasury Regulations. This Section 4.2(b)(ii) is
intended to comply with the minimum gain chargeback requirement in such Section
of the Treasury Regulations and shall be interpreted consistently therewith.

 

(iii) Qualified Income Offset. In the event any Partner unexpectedly receives
any adjustments, allocations, or distributions described in Treasury Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-l(b)(2)(ii)(d)(5), or
1.704-l(b)(2)(n)(d)(6), items of Partnership income and gain shall be specially
allocated to each such Partner in an amount and manner sufficient to eliminate,
to the extent required by the Treasury Regulations, the Adjusted Capital Account
Deficit of such Partner as quickly as possible, provided that an allocation
pursuant to this Section 4.2(b(iii) shall be made only if and to the extent that
such Partner would have an Adjusted Capital Account Deficit after all other
allocations provided for in this Article 5 have been tentatively made as if this
Section 4.2(b)(iii) were not in this Agreement. This allocation is intended to
constitute a “qualified income offset” within the meaning of Treasury
Regulations Section 1.704-l(b)(2)(ii)(d)(3) and shall be construed in accordance
with the requirements thereof.

 

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(iv) Gross Income Allocation. In the event any Partner has a deficit Capital
Account at the end of any Fiscal Year which is in excess of the sum of (i) the
amount such Partner is obligated to restore pursuant to any provision of this
Agreement, and (ii) the amount such Partner is deemed to be obligated to restore
pursuant to the penultimate sentences of Sections 1.704-2(g)(l) and
1.704-2(i)(5) of the Treasury Regulations, each such Partner shall be specially
allocated items of Partnership income and gain in the amount of such excess as
quickly as possible, provided that an allocation pursuant to this Section
4,2(b)(iv) shall be made only if and to the extent that such Partner would have
a deficit Capital Account in excess of such sum after all other allocations
provided for in this Article 4 have been made as if Sections 4.2(b)(iii) and
4.2(b)(iv) were not in this Agreement.

 

(v) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year or other
period shall be specially allocated among the Partners in accordance with their
respective Percentage Interests.

 

(vi) Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions for any
Fiscal Year or other period shall be specially allocated to the Partner who
bears the economic risk of loss with respect to the Partner Nonrecourse Debt to
which such Partner Nonrecourse Deductions are attributable in accordance with
Treasury Regulations Section 1.704-2(i).

 

4.3 Curative Allocations. The allocations set forth in Sections 4.1(b) and 4.2
hereof (the “Regulatory Allocations”) are intended to comply with certain
requirements of the Treasury Regulations. It is the intent of the Partners that,
to the extent possible, all Regulatory Allocations shall be offset either with
other Regulatory Allocations or with special allocations of other items of
Partnership income, gain, loss, or deduction pursuant to this Section 4.3.
Therefore, notwithstanding any other provision of this Article 4 (other than the
Regulatory Allocations), the General Partner shall make such offsetting special
allocations of Partnership income, gain, loss, or deduction in whatever manner
it determines appropriate so that, after such offsetting allocations are made,
each Partner’s Capital Account balance is, to the extent possible, equal to the
Capital Account balance such Partner would have had if the Regulatory
Allocations were not part of this Agreement and all Partnership items were
allocated pursuant to the general rules of Section 4.1. In exercising its
discretion under this Section 4.3, the Partners shall take into account future
Regulatory Allocations under Sections 4.2(b)(i) and 4.2(b)(ii) that, although
not yet made, are likely to offset other Regulatory Allocations previously made
under Sections 4.2(b)(v) and 4.2(b)(iv).

 

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4.4 Other Allocation Rules.

 

(a) For purposes of determining the profits, losses, or any other items
allocable to any period, profits, losses, and any such other items shall be
determined on a daily, monthly, or other basis, as determined by the Partners
using any permissible method under Code Section 706 and the Treasury Regulations
thereunder.

 

(b) The Partners are aware of the income tax consequences of the allocations
made by this Article 4 and hereby agree to be bound by the provisions of this
Article 4 in reporting their shares of Partner income and loss for income tax
purposes.

 

(c) Solely for purposes of determining a Partner’s proportionate share of the
“excess nonrecourse liabilities” of the Partnership within the meaning of
Section 1.752-3(a)(3) of the Treasury Regulations, the Partners’ interests in
Partnership profits are in proportion to their Percentage Interests.

 

4.5 Distributions. Subject to Section 4.8, the Partnership shall make all
distributions in accordance with the Partners’ Percentage Interests and at such
times and in such amounts as determined by the General Partner. All
distributions pursuant to this Article 4 shall be treated as a distribution of
Net Profits to the extent thereof as of the date of distribution. Subject to
Section 3.4, each of the following shall be treated as a return of the Partners'
Capital Contributions: (a) any distribution in excess of Net Profits; (b) any
distribution in full or partial redemption of a Partner's Interest; and, to the
extent determined by the General Partner, (c) any payment by the Partnership of
Class S Offering Expenses.

 

4.6 Tax Withholdings. To the extent the Partnership is required by federal,
state or local law or any tax treaty to withhold or to make tax payments on
behalf of or with respect to any Partner, the Partnership shall withhold such
amounts and make such tax payments as so required. The amount of such payments
shall constitute an advance by the Partnership to such Partner and shall be
repaid to the Partnership by reducing the amount of the current or next
succeeding distribution or distributions which would otherwise have been made to
such Partner or, if such distributions are not sufficient for that purpose, by
so reducing the proceeds of liquidation otherwise payable to such Partner or, if
such proceeds are insufficient, such Partner shall pay to the Partnership the
amount of such insufficiency.

 

4.7 Other Advances. To the extent the Partnership pays any Class S Offering
Expenses on behalf of or with respect to any Partner, the amount of such
payments shall constitute an advance by the Partnership to such Partner and
shall be repaid to the Partnership by reducing the amount of the current or next
succeeding distribution or distributions which would otherwise have been made to
such Partner. Alternatively, the General Partner may, in its sole discretion,
treat such advance as a return of capital pursuant to Section 4.5(c), above.

 

4.8 Limitation Upon Distributions. No distribution shall be declared and paid
unless, if after the distribution is made, the value of assets of the
Partnership would exceed the liabilities of the Partnership, except liabilities
to the Partners on account of their Capital Contributions.

 

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4.9 Tax Matters Partner.

 

(a) RW Holdings NNN REIT, Inc. will be treated as the initial tax matters
partner of the Partnership pursuant to Section 6231(a)(7) of the Code. Subject
to Treasury Regulations adopted under the Code, the tax matters partner shall,
without the necessity of consent of the other Partners, have discretion in its
capacity as tax matters partner to make such decisions and take such actions,
including the institution of legal proceedings and the determination of the
legal forum, as it deems appropriate in such capacity. The Partners, by written
consent of the Partners, shall be entitled to substitute another Partner to
serve as tax matters partner. In such event, (i) the Partner who is designated
“tax matters partner” shall take such action as may be necessary to cause each
other Partner to become a “notice partner” within the meaning of Section
6231(a)(8) of the Code, (ii) the Partner who is designated “tax matters partner”
shall inform each other Partner of all significant matters that may come to its
attention in its capacity as “tax matters partner” by giving notice thereof on
or before the fifth business day after becoming aware thereof and, within that
time, shall forward to each other Partner copies of all significant written
communications it may receive in that capacity and (iii) the Partner who is
designated “tax matters partner” may not take any action contemplated by
Sections 6222 through 6232 of the Code without the consent of all of the
Partners; provided, however, such Partner is not authorized to take any action
left to the determination of an individual Partner under Section 6222 through
6232 of the Code or any similar state or local provision.

 

(b) Title XI of the Bipartisan Budget Act of 2015, H.R. 1314, Public Law Number
114-74 (the “Budget Act”), provides that effective for taxable years beginning
on or after January 1, 2018, there will be extensive changes to the manner in
which the IRS audits and collects taxes with respect to partners and their
partnerships. Unless otherwise agreed by the Partners, the Tax Matters Member
designated in subsection (a) above shall be the “partnership’s representative”
(or designate such if it is not able to serve) under the new rules and the
Partners will work together to apply the new rules in a manner consistent with
this Agreement. To the extent not inconsistent with the Budget Act, the
partnership’s representative shall continue to have all rights and powers
delegated to the “Tax Matters Member” under this Agreement after the Partnership
applies the Budget Act new rules.

 

4.10 Compliance with Code and Treasury Regulations. The allocation and
distribution provisions set forth in this Article 4 are intended to apply in a
manner consistent with the provisions of Sections 704 and 706 of the Code, and
the Treasury Regulations promulgated for those Sections. The Partners shall have
the reasonable discretion to apply the allocation and distribution provisions
set forth in this Article 4 in any manner consistent with Sections 704 and 706
of the Code and the Treasury Regulations. The Partners agree to make such
amendments to this Agreement as are necessary to maintain such compliance.

 

Article 5

STATUS OF LIMITED PARTNERS

 

5.1 General. Each Limited Partner has all of the rights, and is afforded the
status, of a limited partner under the Act. No Limited Partner shall participate
in the management or control of the business of the Partnership, transact any
business for the Partnership or have any power to act for or bind the
Partnership.

 

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5.2 Limitation on Liability. No Limited Partner has any personal liability
whatsoever, whether to the Partnership, the General Partner or any creditor of
the Partnership, for the debts, expenses, liabilities or obligations of the
Partnership (but each Partner does have personal liability for its obligations
under Article 3) unless that Limited Partner otherwise agrees in a separate
writing with a third party creditor of the Partnership.

 

5.3 Bankruptcy; Death. None of the Bankruptcy, death, disability or declaration
of incompetence of a Limited Partner shall cause a dissolution of the
Partnership. However, the rights of that Limited Partner to share in the profits
and losses of the Partnership and to receive distributions of the funds of the
Partnership shall, on the happening of one of these events, devolve on the
estate, legal representative or successors in interest, as the case may be, of
that Limited Partner subject to the terms and conditions of this Agreement. The
estate, representative or successors in interest of that Limited Partner are
liable for all of the unsatisfied obligations, if any, of that Limited Partner.
However, the estate, representative or successors in interest may become a
limited partner in the Partnership only with the consent of the General Partner
and in accordance with Section 8.3.

 

Article 6

MANAGEMENT

 

6.1 Rights. The General Partner shall have the exclusive right, power and
authority to take any action on behalf of the Partnership, other than actions
specifically restricted herein.

 

6.2 Exculpation of Partners and Officers. No Partner or officer shall be liable
to the Partnership or any other Partner or officer for any loss, damage or claim
incurred by reason of any action taken or omitted to be taken by such Partner or
officer in good-faith reliance on the provisions of this Agreement, so long as
such action or omission does not constitute fraud or willful misconduct by such
Partner or officer.

 

6.3 Limitation of Liability. This Agreement is not intended to, and does not,
create or impose any fiduciary duty on any Partner or officer. Furthermore, each
of the Partners, officers and the Partnership hereby waives any and all
fiduciary duties that, absent such waiver, may be implied by Applicable Law, and
in doing so, acknowledges and agrees that the duties and obligation of each
Partner or officer to each other and to the Partnership are only as expressly
set forth in this Agreement. The provisions of this Agreement, to the extent
that they restrict the duties and liabilities of a Partner or officer existing
at law or in equity, are agreed by the Partners to replace such other duties and
liabilities of such Partner or officer.

 

6.4 Duties. The General Partner shall manage and control the Partnership and its
business and affairs in accordance with the standards of the industry, and shall
use reasonable, good faith efforts to carry out the business of the Partnership.
The General Partner shall devote itself to the business of the Partnership to
the extent required to carry out the business of the Partnership, but shall not
be precluded from being involved in other businesses or activities. The General
Partner shall perform its duties under this Agreement with ordinary prudence and
in a manner characteristic of a businessman in similar circumstances.

 

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6.5 Compensation and Reimbursement. The General Partner shall be reimbursed by
the Partnership for any and all reasonable out-of-pocket expenses, fees and
costs incurred in connection with the organization, business and affairs of the
Partnership, including any payment due to the General Partner, the Advisor or
any other Person under the Advisory Agreement.

 

6.6 Agreements with Affiliates. The General Partner may execute on behalf of the
Partnership contracts or agreements with affiliates of the General Partner, so
long as the contracts or agreements are approved by the Conflicts Committee of
the General Partner.

 

6.7 Officers. The General Partner may designate such officers and agents of the
Partnership as it may deem necessary or proper in the conduct of the affairs of
the Partnership, delegating to such officers and agents the titles, duties,
responsibilities, and authority reflected in such authorizations. At all times
the actions of the officers and agents shall be subject to the review,
delegation, redetermination, direction and control of the General Partner. The
General Partner may remove, terminate, reassign, redefine the duties of, or
change any officer of the Partnership at any time and from time to time.

 

6.8 Appointment and Replacement. The General Partner shall serve in such
capacity unless and until replaced pursuant to this Agreement. In the event of
the death, liquidation, dissolution, Bankruptcy, retirement, resignation,
withdrawal, disability, declaration of incompetence or any other occurrence that
would legally disqualify the General Partner from acting under this Agreement of
any Person herein or hereafter named as General Partner, the Limited Partners
shall appoint a successor General Partner who must be Approved by the Partners,
excluding in such computation the Interest(s) of the then General Partner.

 

6.9 Approval and Meetings.

 

(a) Actions and decisions requiring Approval of the Partners may be authorized
or made either by vote of the required Partners taken at a meeting of the
required Partners or by written consent of same without a meeting. For the
purpose of determining the Partners entitled to vote on, or to vote at, any
meeting of the Partners or on a request for written consent, the record date for
any such determination shall be the day before a General Partner delivers notice
of the meeting or its request for written consent.

 

(b) The General Partner may call a meeting to obtain Approval of the Partners
for an action or decision under this Agreement by delivering to the other
Partners notice of the time and purpose of the meeting at least seven (7) days
before the day of the meeting. Each meeting of Partners shall be conducted by
the General Partner. Meetings may be held by telephone conference and
participation by a Partner in a meeting by telephone conference shall constitute
presence of that Partner.

 

6.10 Execution of Documents. All Partners shall, on the request of the General
Partner, promptly execute all documents and instruments necessary or helpful in
carrying out actions of the Partnership that have been properly authorized.

 

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Article 7

BOOKS AND ACCOUNTS

 

7.1 Books and Records.

 

(a) The books and records of the Partnership shall, at the cost and expense of
the Partnership, be kept or caused to be kept at the principal place of business
of the Partnership, and shall be available for inspection by any Partner. The
books and records shall be kept on the basis of a calendar year, shall reflect
all transactions of the Partnership, shall be appropriate and adequate for
conducting the business of the Partnership and shall otherwise be in accordance
with generally accepted accounting principles and procedures applied in a
consistent manner. The Partnership shall initially use the method of accounting
chosen by the Accountant with the approval of the General Partner. The General
Partner shall maintain the records required to be kept pursuant to Section
7.1(b).

 

(b) At a minimum, the Partnership shall keep at its principal place of business
the following records:

 

(i) A current list that states: (A) the name and mailing address of each Partner
and (B) the Percentage Interest owned by each Partner;

 

(ii) Copies of the federal, state and local information or income tax returns
for each of the Partnership’s six (6) most recent tax years (or such shorter
period that the Partnership has been in existence);

 

(iii) A copy of the Certificate and this Agreement, all amendments or
restatements thereof, and executed copies of any powers of attorney;

 

(iv) Correct and complete books and records of account of the Partnership; and

 

(v) Any other books, records or documents required by this Agreement, the Act or
other applicable law.

 

7.2 Reports. At the expense of the Partnership, the General Partner shall
maintain records and accounts of all operations and expenditures of the
Partnership and submit annual reports regarding same to each Partner.

 

7.3 Tax Returns and Other Elections. The Partners intend for the Partnership to
be treated, for federal, state and municipal income and franchise tax purposes,
as a partnership. The General Partner shall prepare, or cause the Accountant to
prepare, all federal, state and local income and other tax returns that the
Partnership is required to file and shall furnish a copy of each Partner’s IRS
Form K1 and any other information that any Partner reasonably requests relating
thereto, as soon as practicable after the end of the Fiscal Year. All elections
permitted to be made by the Partnership under federal or state laws shall be
made by the General Partner.

 

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7.4 Depositories. One or more accounts may be maintained for the Partnership at
any commercial financial institution or depository chosen by the General
Partner. The funds of the Partnership shall not be commingled with the funds of
any other Person unless otherwise Approved by the Partners. Checks may be drawn
on the account or accounts of the Partnership only for the purposes of the
Partnership and shall be signed by a duly authorized officer of the General
Partner or such other Persons as designated by the General Partner.

 

Article 8

ADMISSION OF NEW PARTNERS; TRANSFER OF INTERESTS

 

8.1 Admission of New Partners. New Partners may be admitted to the Partnership
upon terms and conditions determined by the General Partner.

 

8.2 Transfers. Notwithstanding any other provision of this Agreement, no Partner
may Transfer in any manner whatsoever all or any part of its Interest unless (i)
such Partner has fully complied with the provisions of this Section 8.2 for the
Transfer, (ii) after giving effect thereto, such Transfer would not otherwise
terminate the Partnership for the purposes of Code Section 708 or cause the
Partnership to be classified as other than a partnership for United States
federal income tax purposes and (iii) such Transfer would not result in a
violation of applicable law, including U.S. federal or state securities laws, or
any term or condition of this Agreement.

 

(a) Transfers by the General Partner. The General Partner may Transfer its
Interest only upon the Approval of the Partners.

 

(b) Transfers by a Limited Partner. The Limited Partner may sell, assign or
otherwise Transfer all or any portion of its Interest only with the consent of
the General Partner.

 

8.3 Substitute Partner. No Assignee shall have the right to become a substitute
Partner (a “Substitute Partner”) upon Transfer of any Interest to it unless all
the following conditions are satisfied:

 

(a) The Partner and the Assignee shall have executed and acknowledged such other
instruments and taken such other action as the General Partner shall deem
reasonably necessary or desirable to effect such substitution, including,
without limitation, appropriate amendment to this Agreement;

 

(b) The conditions set forth in Section 8.2 shall have been satisfied, and, if
requested by the General Partner, the Partner or the Assignee shall have
obtained an opinion of counsel satisfactory to the General Partner (which
counsel may be a staff attorney employed by the Partner) as to the legal matters
set forth therein; and

 

(c) The Partner or the Assignee shall have paid to the Partnership such amount
of money as is sufficient to cover all expenses incurred by or on behalf of the
Partnership in connection with such substitution.

 

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8.4 Assignee’s Rights.

 

(a) Unless an Assignee becomes a Substitute Partner in accordance with the
provisions of Section 8.3, it shall not be entitled to any of the rights
(including voting rights) granted to a Partner hereunder or under the Act, other
than the right to receive the share of distributions and any other items
attributable to a Partner’s Interest to which its assignor would otherwise be
entitled.

 

(b) Any Partner that Transfers all of its Interest shall cease to be a Partner.

 

8.5 Tax Matters. On the Transfer of all or part of an Interest, at the request
of the transferee of the Interest, or upon the redemption of all or part of a
Partner's Interest, the General Partner may cause the Partnership to elect,
pursuant to Code Section 754 to adjust the tax basis of the properties of the
Partnership as provided by Code Sections 734 and 743.

 

Article 9

DISSOLUTION

 

9.1 Causes. The Partnership shall be dissolved on the first to occur of any of
the following events, and each Partner hereby expressly waives any right that it
might otherwise have to dissolve the Partnership:

 

(a) The Bankruptcy death, disability, declaration of incompetence or any other
occurrence that would legally disqualify the last remaining General Partner from
acting under this Agreement;

 

(b) The retirement, resignation or withdrawal from the Partnership by the last
remaining General Partner;

 

(c) The execution by all the Partners of an instrument dissolving the
Partnership; or

 

(d) An event requiring such action under the Act.

 

Nothing contained in this Section 9.1 is intended to grant to a Partner the
right to dissolve the Partnership at will (by retirement, resignation,
withdrawal or otherwise), or to exonerate a Partner from liability to the
Partnership and the remaining Partners if that Partner dissolves the Partnership
at will. A dissolution at will of the Partnership is in contravention of this
Agreement for purposes of the Act or any successor statute.

 

9.2 Reconstitution. If dissolution of the Partnership results from the
occurrence of an event described in Section 9.1(a) or Section 9.1(b) , then the
Partnership may be reconstituted and its business continued pursuant to the Act.
If a reconstitution is completed, an appropriate amendment to this Agreement
and, if necessary, to the Certificate shall be executed and, in the case of the
Certificate, if necessary, appropriately filed of record. The rights of the
remaining Partners after reconstitution, and the rights and liabilities of any
Partner wrongfully dissolving the Partnership in contravention of this
Agreement, shall be as provided for under the laws of the State of Delaware.

 

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9.3 Interim Manager. If the Partnership is dissolved as a result of an event
described in Section 9.1(a) or Section 9.1(b), the Limited Partners, by the
Approval of the Limited Partners, may appoint an interim manager of the
Partnership, who shall have and may exercise all the rights, powers and duties
of the General Partner under this Agreement, until (i) the new General Partner
is elected pursuant to Section 6.8, if the Partnership is reconstituted pursuant
to Section 9.2 or (ii) a Liquidator is appointed pursuant to Section 10.1 if the
Partnership is not reconstituted.

 

Article 10

WINDING UP AND TERMINATION

 

10.1 General.

 

(a) Selection of Liquidator. If the Partnership is dissolved as a result of an
event described in Section 9.1(a) or Section 9.1(b) and is not reconstituted,
then the Limited Partners, by the Approval of the Limited Partners, shall,
subject to Section 10.1(b), select a party to begin to wind up the affairs of
the Partnership and to liquidate and sell its assets, all pursuant to the Act.
If the Partnership is dissolved pursuant to Section 9.1(c) or Section 9.1(d),
the General Partner shall begin to wind up the affairs of the Partnership and to
liquidate and sell its assets, all pursuant to the Act. The party or parties
actually conducting the liquidation in accordance with the foregoing sentences
are herein referred to as the “Liquidator.”

 

(b) Duties; Qualifications. The Liquidator (if other than a General Partner)
shall have sufficient business expertise and competence to conduct the winding
up and termination of the Partnership and, in the course thereof, to cause the
Partnership to perform any existing or future Partnership contractual
obligations. The Liquidator shall determine the time, manner and terms of any
sale or sales of Property in liquidation, having due regard to the activity and
condition of the relevant market and general financial and economic conditions.

 

(c) Compensation. The Liquidator is entitled to receive reasonable compensation
for its services, as agreed upon by the Liquidator and the General Partner, if
any, and as Approved by the Partners.

 

(d) Amendment to Certificate. At the request of a Liquidator who is not a
General Partner, the Certificate shall be amended as permitted by the Act.

 

(e) Resignation, Removal, Succession. The Liquidator may resign at any time by
giving fifteen (15) days’ prior written notice and may be removed at any time,
with or without cause, by written notice of removal Approved by the Partners. On
the death, dissolution, removal or resignation of the Liquidator, a successor
and substitute Liquidator (who shall have and succeed to all the rights, powers
and duties of the original Liquidator) will, within thirty (30) days thereafter,
be Approved by the Partners, evidenced by written appointment and acceptance.
The right to appoint a successor substitute Liquidator in the manner provided
herein shall be recurring and continuing for so long as the functions and
services of the Liquidator are authorized to continue under this Agreement, and
every reference herein to the Liquidator refers also to any successor or
substituted Liquidator appointed in the manner herein provided. The Liquidator
has and may exercise, without further authorization or consent of any of the
parties hereto or their legal representatives or successors in interest, all of
the powers conferred by this Agreement upon the General Partner to the extent
necessary or desirable in the good faith judgment of the Liquidator to perform
its duties and functions. The Liquidator is not liable as a General Partner
hereunder to the Limited Partners or to third-party creditors.

 

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10.2 Liquidation. In the course of the winding up and termination of the
business and affairs of the Partnership, its assets (other than cash) shall be
sold, its liabilities and obligations to creditors and all expenses incurred in
its liquidation shall be paid and all resulting taxable items shall be allocated
as provided in Section 4.1. All Property shall be sold on liquidation of the
Partnership, and no Property shall be distributed in kind to the Partners,
unless it is distributed in proportion to the amounts that each Partner is due
under this Section 10.2. Thereafter, the net proceeds from those sales (after
deducting all selling costs and expenses in connection therewith), together with
(at the expiration of the one-year period referred to in Section 10.3) the
balance in the reserve account referred to in Section 10.3, shall be distributed
among the Partners in accordance with their respective positive capital account
balances.

 

The Liquidator shall use all reasonable efforts to effect complete liquidation
of the Partnership within one (1) year after the date on which the Partnership
is dissolved. Each holder of an Interest shall look solely to the assets of the
Partnership for all distributions and shall have no recourse therefor (on
dissolution or otherwise) against the Partnership or the other Partners. On the
completion of the liquidation of the Partnership and the distribution of all
funds of the Partnership, the Partnership shall terminate, and the Liquidator
shall have the authority to execute and record all documents required to
effectuate the dissolution and termination of the Partnership. Distributions
pursuant to this Section 10.2 may be made to a trust established for the benefit
of the Partners for the purposes of liquidating the Property, collecting amounts
owed to the Partnership and paying contingent or unforeseen liabilities or
obligations of the Partnership.

 

10.3 Creation of Reserves. After making payment or provision for payment of all
fixed and determinable debts and liabilities of the Partnership and all expenses
of liquidation, the Liquidator may set up, for a period not to exceed one (1)
year after the date of dissolution, the cash reserves that the Liquidator deems
reasonably necessary for any contingent or unforeseen liabilities or obligations
of the Partnership.

 

10.4 Final Accounting. Within a reasonable time following the completion of the
liquidation, the Liquidator shall supply to the Partners a statement that shall
set forth (i) the assets and the liabilities of the Partnership as of the date
of complete liquidation, (ii) the distributions to each Partner pursuant to
Section 10.2, and (iii) the amount retained as reserves by the Liquidator
pursuant to Section 10.3.

 

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Article 11

INDEMNIFICATION

 

11.1 Indemnification of Partners and Officers.

 

(a) Right to Indemnification. The Partnership shall indemnify, to the fullest
extent permitted by law (including without limitation in circumstances in which,
in the absence of this Section 11.1(a)), indemnification would be discretionary
under the laws of the State of Delaware or limited or subject to particular
standards of conduct under such laws) each Partner and each officer of the
Partnership, if any, against all costs, expenses and liability, including
reasonable attorneys’ fees, incurred in connection with, relating to or as a
result of any action, suit or proceeding to which a Partner or an officer may be
involved or made a party by reason of being or having been a Partner or officer
of the Partnership.

 

(b) Advancement of Expenses. In the event of any action, suit or proceeding in
which a Partner or officer is involved or which may give rise to a right of
indemnification under Section 11.1(a), following written request to the
Partnership by the Partner or officer, the Partnership shall pay to such Partner
or officer, to the fullest extent permitted by law (including without limitation
in circumstances in which, in the absence of this Section 11.1(b), advancement
of expenses would be discretionary under the laws of the State of Delaware or
limited or subject to particular standards of conduct under such laws), amounts
to cover expenses incurred by the Partner or officer in, relating to or as a
result of such action, suit or proceeding in advance of its final disposition.

 

(c) Settlements. The Partnership shall not be liable under this Section 11.1 for
any amounts paid in settlement of any action, suit or proceeding effected
without the approval of the General Partner. The Partnership shall not settle
any action, suit or proceeding in any manner that would impose any penalty or
limitation on a Partner or officer without the Partner or officer’s written
consent. Consent to a proposed settlement of any action, suit or proceeding
shall not be unreasonably withheld by a Partner or an officer.

 

(d) Liability Insurance. The Partnership may purchase and maintain insurance on
behalf of any Person who is or was a Partner or officer or who is or was serving
at the request of the Partnership as a manager, director, officer, partner,
trustee, employee, fiduciary or agent of any other domestic or foreign limited
partnership, limited liability company, corporation, partnership, joint venture,
trust, employee benefit plan or other entity or enterprise against any liability
asserted against and incurred by such Person in any such capacity or arising out
of such Person’s status as such, whether or not the Partnership would have the
power to indemnify such Person against such liability under the provisions of
this Section.

 

(e) Other Rights and Remedies. The rights to indemnification and advancement of
expenses provided in this Section shall be in addition to any other rights a
Partner or officer of the Partnership may have or hereafter acquire under any
law, provision of the Certificate, any other or further provision of this
Agreement, any agreement or otherwise. The Partnership shall have the right, but
shall not be obligated, to indemnify or advance expenses to any employee or
agent of the Partnership in accordance with and to the fullest extent permitted
by law.

 

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11.2 Applicability and Effect. The rights to indemnification and advancement of
expenses provided in this Section shall be applicable to acts or omissions that
occurred prior to the adoption of this Section, shall continue as to any Partner
or officer during the period such Partner or officer serves in any one or more
of the capacities covered by this Section, shall continue thereafter so long as
the Partner or officer may be subject to any possible action, suit or proceeding
by reason of the fact that the Partner or officer served in any one or more of
the capacities covered by this Section, and shall inure to the benefit of the
estate and personal representatives of each such Person. Any repeal or
modification of this Section or of any provision hereof shall not affect any
rights or obligations then existing. All rights to indemnification under this
Section shall be deemed to be provided by a contract between the Partnership and
each Partner or officer.

 

11.3 Limitation on Partners’ Liability. The indemnification provided for in this
Section shall in no event cause the Partners to incur any liability beyond their
Capital Contributions plus their share of any undistributed Net Profits of the
Partnership, nor shall it result in any liability of the Partners to any third
party.

 

Article 12

MISCELLANEOUS

 

12.1 Notices.

 

(a) Any notice, notification, demand or request provided or permitted to be
given under this Agreement must be in writing and shall have been deemed to have
been properly given if sent by (i) FedEx or other comparable overnight courier,
(ii) registered or certified mail, postage prepaid, return receipt requested, or
(iii) facsimile during normal business hours to the place of business of the
recipient.

 

(b) For purposes of all notices, the addresses and facsimile numbers of the
Partners are set forth on Exhibit A.

 

(c) All notices, notifications, demands or requests so given shall be deemed
given and received (i) if sent via FedEx or overnight courier, the next business
day after being delivered, (ii) if sent via registered or certified mail, three
(3) days after being deposited in the mail, or (iii) if sent via facsimile, the
next business day after being faxed.

 

12.2 Interpretation. The construction and validity of this Agreement and the
rights and obligations of the respective parties hereunder shall be governed by,
and interpreted and enforced in accordance with, the laws of the State of
Delaware.

 

12.3 Terms. Common nouns and pronouns shall be deemed to refer to the masculine,
feminine, neuter, singular and plural, as the identity of the Person or Persons
may in the context require. Any reference to the Code or other statutes or laws
shall include all amendments, modifications or replacements of the specific
sections and provisions concerned.

 

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12.4 Amendment; Waiver. This Agreement may not be amended, altered or modified
except by an instrument in writing signed by all of the Partners (or the
duly-authorized agent of any party), excluding each Partner who has transferred
its entire interest in the Partnership to an Assignee. No provision of this
Agreement may be waived except by an agreement in writing signed by the waiving
Partner. A waiver of any term or provision shall not be construed as a waiver of
any other term or provision

 

12.5 Severability. If any provision of this Agreement or any application of such
provision to any Person or circumstances shall be invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such
provisions to other Persons or circumstances shall not be affected thereby and
shall be enforced to the greatest extent permitted by law.

 

12.6 No Third-Party Beneficiary. This Agreement is made solely and specifically
between and for the benefit of the parties hereto and their respective
successors and assigns, subject to the expressed provisions hereof relating to
successors and assigns. Except to the extent required under the Act and except
for fees, rights to reimbursement and indemnity, and other compensation provided
for in this Agreement, no other Person has any rights, interest or claims
hereunder or is or will be entitled to any benefits under or on account of this
Agreement as a third-party beneficiary or otherwise.

 

12.7 Sole and Absolute Discretion. Except as otherwise provided in this
Agreement, all actions that any General Partner may take and all determinations
that any General Partner may make pursuant to this Agreement may be taken and
made at the sole and absolute discretion of that General Partner.

 

12.8 Binding Effect. Subject to the provisions of this Agreement relating to
transferability, this Agreement shall be binding upon and inure to the benefit
of the parties signatory hereto, and their respective distributees, successors
and assigns.

 

12.9 Complete Agreement. This Agreement constitutes the complete and exclusive
statement of the agreement between the Partners and replaces and supersedes all
prior agreements, except for any agreement executed contemporaneously herewith
by and among the Partners or any of them contemporaneously herewith. This
Agreement supersedes all written and oral statements, and no representation,
statement, condition or warranty not contained in this Agreement shall be
binding on the Partners or have any force or effect whatsoever. No Partner has
rendered any services to, or on behalf of, any other Partner or the Partnership,
and no Partner shall have any rights with respect to any services that might be
alleged to have been rendered.

 

12.10 Title to Partnership Property. To the extent that Property is held in the
name of a Partner, the Property shall be deemed held by that Partner as agent
and nominee for and on behalf of the Partnership. Any other property acquired by
or standing in the name of any Partner shall be conclusively presumed not to be
Property, unless an instrument in writing, signed by such Partner, shall specify
to the contrary.

 

12.11 Other Business. The Partners recognize that the Partners and their
Affiliates have or may have other business interests, activities and
investments, some of which may be in conflict or competition with the business
of the Partnership, and that such Persons are entitled to carry on such other
business interests, activities and investments. The Partners and their
Affiliates may engage in or possess an interest in any other business or venture
of any kind, independently or with others, on their own behalf or on behalf of
other Persons with which they are affiliated or associated, and such Persons may
engage in any activities, whether or not competitive with the Partnership,
without any obligation to offer any interest in such activities to the
Partnership or to any Partner. Neither the Partnership nor any Partner shall
have any right by virtue of this Agreement in or to such activities, or the
income or profits derived therefrom, and the pursuit of such activities, even if
competitive with the business of the Partnership shall not be deemed wrongful or
improper.

 

 21

 

 

12.12 Partition Rights. No Partner shall have the right to the partition of any
Property or to take any action or initiate or prosecute any judicial proceeding
for the partition, or the partition and sale, of any Property.

 

12.13 Agreement in Counterparts. This Agreement may be executed in several
counterparts, and all so executed shall constitute one Agreement, binding on all
of the parties hereto, notwithstanding that all the parties are not signatories
to the original or the same counterpart.

 

Remainder of Page Intentionally Left Blank.
Signature Page Follows.

 

 22

 

 

IN WITNESS WHEREOF, this Agreement is effective as of the day and year first
above written.

 

 

GENERAL PARTNER:

 

RW HOLDINGS NNN REIT, INC.,

a Maryland corporation

                By:  /s/ Harold Hofer       Name: Harold Hofer       Title:
Chief Executive Officer

 

 

LIMITED PARTNER:

 

RICH UNCLES NNN LP, LLC,

a Delaware limited liability company

         

By:

Rich Uncles NNN REIT, Inc.

a Maryland corporation,

its Sole Member 

 

 

    By:  /s/ Harold Hofer       Name: Harold Hofer       Title: Chief Executive
Officer

 

 23

 

 

AGREEMENT OF LIMITED PARTNERSHIP

 

OF

 

RICH UNCLES NNN OPERATING PARTNERSHIP, LP

 

(A Delaware Limited Partnership)

 

EXHIBIT A

 

 

1.

Name of Partnership:

Rich Uncles NNN Operating Partnership, LP

      2. Address, and Telephone and
Facsimile Numbers of Principal
Office:

3080 Bristol Avenue

Suite 550

Costa Mesa, CA 92626

 

    Telephone: [______________]     Facsimile: [______________] 

 

3. Registered Agent and Office:

[______________________

____________________

_____________, Delaware ______]

      4.

General Partner: 

          Name:

RW Holdings NNN REIT, Inc. 

       

Mailing Address, and Telephone

and Facsimile Numbers:

3080 Bristol Avenue Suite 550

Costa Mesa, CA 92626

 

    Telephone: [______________]     Facsimile: [______________] 

 

  Class or Classes of Interest:

[__________]

[__________]

       

Initial Capital Contribution By Class:

 

$[_________]

$[_________]

        Percentage Interest By Class:

[ 99]%

[___]%

       

Time of or Events Requiring

Additional Contribution(s) By Class:

As provided in the Agreement        

Effective Date Became Partner:

[_____________], 2016 

     

 

A-1

 

 

5.

Limited Partner: 

          Name:

Rich Uncles NNN LP, LLC

 

       

Mailing Address, and Telephone

and Facsimile Numbers:

3080 Bristol Avenue

Suite 550

Costa Mesa, CA 92626 

 

    Telephone: [______________]     Facsimile: [______________] 

 

 

Class of Interest: 

[__________]        

Initial Capital Contribution: 

$[_________]        

Percentage Interest: 

[ 1 ]% 

       

Time of or Events Requiring

Additional Contribution(s): 

As provided in the Agreement         Effective Date Became Partner:

[_____________], 2016 

 

A-2