Document:

ex4_12.htm

EXHIBIT 4.12

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

USA TECHNOLOGIES, INC.

 

Warrant To Purchase Common Stock

 

Warrant No.: CR-011

Date of Issuance: March 16, 2011 (“Issuance Date”)

 

USA Technologies, Inc., a Pennsylvania corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, CRANSHIRE CAPITAL MASTER FUND, LTD., the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or times on or after the six (6) month and one (1) day anniversary of the Issuance Date (the “Initial Exercise Date”), but not after 11:59 p.m., New York time, on the Expiration Date (as defined below), 50,000 (Fifty Thousand) (subject to adjustment as provided herein) fully paid and non-assessable shares of Common Stock (as defined below) (the “Warrant Shares”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 16. This Warrant is one of the Warrants to Purchase Common Stock (the “SPA Warrants”) issued pursuant to Section 1 of that certain Securities Purchase Agreement, dated as of March 14, 2011, by and among the Company and the investors (the “Buyers”) referred to therein (the “Securities Purchase Agreement”).

 

	
1.

	
EXERCISE OF WARRANT.

(a)           Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)), this Warrant may be exercised by the Holder on any day on or after the Initial Exercise Date, in whole or in part, by delivery (whether via facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount equal to the Exercise Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant was so exercised (the “Aggregate Exercise Price”) in cash or via wire transfer of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise was made pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original of this Warrant in order to effect an exercise hereunder. Execution and delivery of an Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance with the terms hereof. On or before the first (1st) Trading Day following the date on which the Company has received an Exercise Notice, the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the Holder and the Company’s transfer agent (the “Transfer Agent”). On or before the third (3rd) Trading Day following the date on which the Company has received such Exercise Notice, the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/ Withdrawal at Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver to the Holder or, at the Holder’s instruction pursuant to the Exercise Notice, the Holder’s agent or designee, in each case, sent by reputable overnight courier to the address as specified in the applicable Exercise Notice, a certificate, registered in the Company’s share register in the name of the Holder or its designee (as indicated in the applicable Exercise Notice), for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise. Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares (as the case may be). If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then, at the request of the Holder, the Company shall as soon as practicable and in no event later than three (3) Business Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all taxes and fees which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant.

 

  

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(b)           Exercise Price. For purposes of this Warrant, “Exercise Price” means $2.6058, subject to adjustment as provided herein.

 

(c)           Company’s Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, to issue to the Holder within three (3) Trading Days after receipt of the applicable Exercise Notice, a certificate for the number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’s share register or to credit the Holder’s balance account with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise of this Warrant (as the case may be), then, in addition to all other remedies available to the Holder, the Company shall pay in cash to the Holder on each day after such third (3rd) Trading Day that the issuance of such shares of Common Stock is not timely effected an amount equal to 1% of the product of (A) the aggregate number of shares of Common Stock not issued to the Holder on a timely basis and to which the Holder is entitled and (B) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the last possible date on which the Company could have issued such shares of Common Stock to the Holder without violating Section 1(a). In addition to the foregoing, if within three (3) Trading Days after the Company’s receipt of the applicable Exercise Notice, the Company shall fail to issue and deliver a certificate to the Holder and register such shares of Common Stock on the Company’s share register or credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may be), and if on or after such third (3rd) Trading Day the Holder (or any other Person in respect, or on behalf, of the Holder) purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock, issuable upon such exercise that the Holder so anticipated receiving from the Company, then, in addition to all other remedies available to the Holder, the Company shall, within three (3) Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s obligation to so issue and deliver such certificate or credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may be) (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable Exercise Notice and ending on the date of such issuance and payment under this clause (ii).

 

  

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(d)           Cashless Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), if at the time of exercise hereof a Registration Statement (as defined in the Registration Rights Agreement (as defined in the Securities Purchase Agreement)) is not effective (or the prospectus contained therein is not available for use) for the resale by the Holder of all of the Warrant Shares, then the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula (a “Cashless Exercise”):

 

	
Net Number =

	
  (A x B) - (A x C)

	
 

	
 B

 

For purposes of the foregoing formula:

 

A= the total number of shares with respect to which this Warrant is then being exercised.

 

B= as applicable: (i) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the Bid Price of the Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if such Exercise Notice is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter pursuant to Section 1(a) hereof or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof after the close of “regular trading hours” on such Trading Day.

 

C= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

 

(e)           Disputes.  In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant Shares to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 13.

 

(f)            Limitations on Exercises.  Notwithstanding anything to the contrary contained in this Warrant, this Warrant shall not be exercisable by the Holder hereof to the extent (but only to the extent) that the Holder or any of its affiliates would beneficially own in excess of  4.9% (the “Maximum Percentage”) of the Common Stock. To the extent the above limitation applies, the determination of whether this Warrant shall be exercisable (vis-à-vis other convertible, exercisable or exchangeable securities owned by the Holder or any of its affiliates) and of which such securities shall be exercisable (as among all such securities owned by the Holder) shall, subject to such Maximum Percentage limitation, be determined on the basis of the first submission to the Company for conversion, exercise or exchange (as the case may be). No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. For the purposes of this paragraph, beneficial ownership and all determinations and calculations (including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the 1934 Act (as defined in the Securities Purchase Agreement) and the rules and regulations promulgated thereunder. The provisions of this paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage limitation. The limitations contained in this paragraph shall apply to a successor Holder of this Warrant. The holders of Common Stock shall be third party beneficiaries of this paragraph and the Company may not waive this paragraph without the consent of holders of a majority of its Common Stock. For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding, including by virtue of any prior conversion or exercise of convertible or exercisable securities into Common Stock, including, without limitation, pursuant to this Warrant or securities issued pursuant to the Securities Purchase Agreement.

 

  

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(g)           Insufficient Authorized Shares. The Company shall at all times keep reserved for issuance under this Warrant a number of shares of Common Stock as shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock hereunder (without regard to any limitation otherwise contained herein with respect to the number of shares of Common Stock that may be acquirable upon exercise of this Warrant). If, notwithstanding the foregoing, and not in limitation thereof, at any time while any of the SPA Warrants remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of the SPA Warrants at least a number of shares of Common Stock equal to the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of all of the SPA Warrants then outstanding (the “Required Reserve Amount”) (an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for all the SPA Warrants then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than seventy five (75) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal.

 

2.             ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 2.

 

(a)           Stock Dividends and Splits. If the Company, at any time on or after the date of the Securities Purchase Agreement, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event.  Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.

 

(b)           Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) of this Section 2, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein).

 

  

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(c)           Calculations. All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

 

3.             RIGHTS UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distributions would result in the Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (or the beneficial ownership of any such shares of Common Stock as a result of such Distribution to such extent) and such Distribution to such extent shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage).

 

	
4.

	
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

(a)           Purchase Rights.  In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage).

 

(b)           Fundamental Transactions.  The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined in the Securities Purchase Agreement) in accordance with the provisions of this Section 4(b) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction). Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder.

 

  

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(c)           Black Scholes Value. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request of the Holder delivered at any time commencing on the earliest to occur of (x) the public disclosure of any Fundamental Transaction, (y) the consummation of any Fundamental Transaction and (z) the Holder first becoming aware of any Fundamental Transaction (including, without limitation, a Fundamental Transaction that is publicly disclosed, consummated or of which the Holder first becomes aware (as the case may be) prior to the Initial Exercise Date) through the date that is ninety (90) days after the public disclosure of the consummation of such Fundamental Transaction by the Company pursuant to a Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase this Warrant from the Holder on the date of such request by paying to the Holder cash in an amount equal to the Black Scholes Value.

(d)           Application. The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum Percentage, applied however with respect to shares of capital stock registered under the 1934 Act and thereafter receivable upon exercise of this Warrant (or any such other warrant)).

 

5.             NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation (as defined in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the SPA Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the exercise of the SPA Warrants, the maximum number of shares of Common Stock as shall from time to time be necessary to effect the exercise of the SPA Warrants then outstanding (without regard to any limitations on exercise).

 

  

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6.             WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant.  In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.

 

	
7.

	
REISSUANCE OF WARRANTS.

 

(a)           Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

 

(b)           Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.

 

(c)           Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for fractional shares of Common Stock shall be given.

 

(d)           Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.

 

8.             NOTICES.  Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment(s) and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to all holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental Transaction.  To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of its Subsidiaries, the Company shall simultaneously file such notice with the SEC (as defined in the Securities Purchase Agreement) pursuant to a Current Report on Form 8-K. It is expressly understood and agreed that the time of execution specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.

 

  

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9.             AMENDMENT AND WAIVER.  Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(f)) may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder. The Holder shall be entitled, at its option, to the benefit of any amendment of (i) any other similar warrant issued under the Securities Purchase Agreement or (ii) any other similar warrant. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.

 

10.           SEVERABILITY.  If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

11.           GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accor­dance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

12.           CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof.  The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant. Terms used in this Warrant but defined in the other Transaction Documents shall have the meanings ascribed to such terms on the Closing Date (as defined in the Securities Purchase Agreement) in such other Transaction Documents unless otherwise consented to in writing by the Holder.

 

  

8

  

 

13.           DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price, the Closing Sale Price, the Bid Price or fair market value or the arithmetic calculation of the Warrant Shares (as the case may be), the Company or the Holder (as the case may be) shall submit the disputed determinations or arithmetic calculations (as the case may be) via facsimile (i) within two (2) Business Days after receipt of the applicable notice giving rise to such dispute to the Company or the Holder (as the case may be) or (ii) if no notice gave rise to such dispute, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to agree upon such determination or calculation (as the case may be) of the Exercise Price, the Closing Sale Price, the Bid Price or fair market value or the number of Warrant Shares (as the case may be) within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Company or the Holder (as the case may be), then the Company shall, within two (2) Business Days submit via facsimile (a) the disputed determination of the Exercise Price, the Closing Sale Price, the Bid Price or fair market value (as the case may be) to an independent, reputable investment bank selected by the Holder that is reasonably acceptable to the Company or (b) the disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause at its expense the investment bank or the accountant (as the case may be) to perform the determinations or calculations (as the case may be) and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives such disputed determinations or calculations (as the case may be). Such investment bank’s or accountant’s determination or calculation (as the case may be) shall be binding upon all parties absent demonstrable error.

 

14.           REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, exercises and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including, without limitation, compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.

 

15.           TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, except as may otherwise be required by Section 2(g) of the Securities Purchase Agreement.

This Warrant certificate completely replaces and supersedes Warrant Certificate No. CRA-004 dated March 16, 2011, which has been cancelled on the books of the Company.

 

16.           CERTAIN DEFINITIONS.  For purposes of this Warrant, the following terms shall have the following meanings:

 

(a)           “Bid Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange or trading market for such security, the bid price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply, the bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination, the average of the bid prices of any market makers for such security as reported in the “pink sheets” by OTC Markets Inc. (formerly Pink Sheets LLC) as of such time of determination. If the Bid Price cannot be calculated for a security as of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 13. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.

 

  

9

  

 

(b)           “Black Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the Holder’s request pursuant to Section 4(c), which value is calculated using the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest Closing Sale Price of the Common Stock during the period beginning on the Trading Day immediately preceding the earliest to occur of (x) the public disclosure of the applicable Fundamental Transaction, (y) the consummation of the applicable Fundamental Transaction and (z) the date on which the Holder first became aware of the applicable Fundamental Transaction and ending on the Trading Day of the Holder’s request pursuant to Section 4(c) and (2) the sum of the price per share being offered in cash in the applicable Fundamental Transaction (if any) plus the value of the non-cash consideration being offered in the applicable Fundamental Transaction (if any), (ii) a strike price equal to the Exercise Price in effect on the date of the Holder’s request pursuant to Section 4(c), (iii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the greater of (1) the remaining term of this Warrant as of the date of the Holder’s request pursuant to Section 4(c) and (2) the remaining term of this Warrant as of the date of consummation of the applicable Fundamental Transaction or as of the date of the Holder’s request pursuant to Section 4(c) if such request is prior to the date of the consummation of the applicable Fundamental Transaction and (iv) an expected volatility equal to the greater of 65% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the earliest to occur of (x) the public disclosure of the applicable Fundamental Transaction, (y) the consummation of the applicable Fundamental Transaction and (z) the date on which the Holder first became aware of the applicable Fundamental Transaction.

 

(c)           “Bloomberg” means Bloomberg, L.P.

 

(d)           “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

 

(e)           “Closing Sale Price” means, for any security as of any date, the last closing trade price for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing trade price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last trade price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing does not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average of the ask prices of any market makers for such security as reported in the “pink sheets” by OTC Markets Inc. (formerly Pink Sheets LLC). If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 13. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.

 

(f)            “Common Stock” means (i) the Company’s shares of common stock, no par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

(g)           “Convertible Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock.

 

  

10

  

 

(h)           “Eligible Market” means The New York Stock Exchange, the NYSE Amex, the Nasdaq Global Select Market, the Nasdaq Capital Market, the OTC Bulletin Board or the Principal Market.

 

(i)            “Expiration Date” means the date that is the fifth (5th) anniversary of the Initial Exercise Date or, if such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”), the next date that is not a Holiday.

 

(j)            “Fundamental Transaction” means that (i) the Company or any of its Subsidiaries shall, directly or indirectly, in one or more related transactions, (1) consolidate or merge with or into (whether or not the Company or any of its Subsidiaries is the surviving corporation) any other Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its respective properties or assets to any other Person, or (3) allow any other Person to make a purchase, tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares of Voting Stock of the Company held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares of Voting Stock of the Company held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination), or (5) reorganize, recapitalize or reclassify the Common Stock, or (ii) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Voting Stock of the Company.

 

(k)           “Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

(l)            “Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

 

(m)           “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.

 

(n)           “Principal Market” means the Nasdaq Global Market.

 

(o)           “Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been entered into.

 

(p)           “Trading Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder.

 

  

11

  

 

(q)           “Voting Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

 

(r)            “VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets Inc. (formerly Pink Sheets LLC). If VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 13. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.

 

[signature page follows]

 

  

12

  

 

IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

 

	
 

	
USA TECHNOLOGIES, INC.

	 
	
 

	  	 
	
 

	
By:

	/s/ Stephen P. Herbert	 
	
 

	
Name:

	
Stephen P. Herbert

	 
	
 

	
Title:

	
Chief Executive Officer

	 

 

  

13

  

 

EXHIBIT A

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

USA TECHNOLOGIES, INC.

 

The undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”) of USA Technologies, Inc., a Pennsylvania corporation (the “Company”), evidenced by Warrant to Purchase Common Stock No. _______ (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

 

1.           Form of Exercise Price.  The Holder intends that payment of the Exercise Price shall be made as:

 

____________     a “Cash Exercise” with respect to _________________ Warrant Shares; and/or

 

____________     a “Cashless Exercise” with respect to _______________ Warrant Shares.

 

In the event that the Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the date set forth below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.

 

2.           Payment of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant.

 

3.           Delivery of Warrant Shares.  The Company shall deliver to Holder, or its designee or agent as specified below, __________ Warrant Shares in accordance with the terms of the Warrant.  Delivery shall be made to Holder, or for its benefit, to the following address:

 

_______________________

_______________________

_______________________

_______________________

 

Date: _______________ __, ______

 

   Name of Registered Holder

	
By:

	
 

	 
	
 

	
Name:

	 
	
 

	
Title:

	 

 

  

  

  

 

EXHIBIT B

 

ACKNOWLEDGMENT

 

The Company hereby acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated _________, 20__, from the Company and acknowledged and agreed to by _______________.

 

	
 

	
USA TECHNOLOGIES, INC.

	 
	
 

	  	 
	
 

	
By:

	
 

	 
	
 

	
Name:

	  	 
	
 

	
Title:Exhibit 10.1

 

LIMITED PARTNERSHIP AGREEMENT

OF

WCRT OPERATING PARTNERSHIP, L.P.

 

 

 

Dated as of October [__], 2012

 

 

 

    	 

    	 

    

 

TABLE OF CONTENTS

	 	 	Page
	 	 	 
	ARTICLE 1 DEFINED TERMS	 	4
	ARTICLE 2 PARTNERSHIP FORMATION AND IDENTIFICATION	 	9
	2.1 Formation	 	9
	2.2 Name, Office and Registered Agent	 	9
	2.3 Partners	 	9
	2.4 Term and Dissolution	 	10
	2.5 Filing of Certificate and Perfection of Limited Partnership	 	10
	2.6 Certificates Describing Partnership Units	 	10
	ARTICLE 3 BUSINESS OF THE PARTNERSHIP	 	11
	ARTICLE 4 CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS	 	11
	4.1 Capital Contributions	 	11
	4.2 Additional Capital Contributions and Issuances of Additional Partnership Interests	 	11
	4.3 Additional Funding	 	13
	4.4 Capital Accounts	 	13
	4.5 Percentage Interests	 	13
	4.6 No Interest on Contributions	 	13
	4.7 Return of Capital Contributions	 	13
	4.8 No Third Party Beneficiary	 	13
	ARTICLE 5 PROFITS AND LOSSES; DISTRIBUTIONS	 	14
	5.1 Allocation of Profit and Loss	 	14
	5.2 Distribution of Cash	 	15
	5.3 REIT Distribution Requirements	 	16
	5.4 No Right to Distributions In Kind	 	16
	5.5 Limitations on Return of Capital Contributions	 	16
	5.6 Distributions Upon Liquidation	 	16
	5.7 Substantial Economic Effect	 	16
	ARTICLE 6 RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER	 	17
	6.1 Management of the Partnership	 	17
	6.2 Delegation of Authority	 	19
	6.3 Indemnification and Exculpation of Indemnitees	 	19
	6.4 Liability of the General Partner	 	20
	6.5 Reimbursement of General Partner	 	21
	6.6 Outside Activities	 	21
	6.7 Employment or Retention of Affiliates	 	21
	6.8 General Partner Participation	 	22
	6.9 Title to Partnership Assets	 	22
	6.10 Miscellaneous	 	22
	ARTICLE 7 CHANGES IN GENERAL PARTNER	 	22
	7.1 Transfer of the General Partner’s Partnership Interest	 	22
	7.2 Admission of a Substitute or Additional General Partner	 	23

  

    	2

    	 

    

 

	7.3 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner	 	24
	7.4 Removal of a General Partner	 	24
	ARTICLE 8 RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS	 	25
	8.1 Management of the Partnership	 	25
	8.2 Power of Attorney	 	25
	8.3 Limitation on Liability of Limited Partners	 	25
	8.4 Exchange Right	 	26
	8.5 Admission of Additional Limited Partners	 	27
	ARTICLE 9 TRANSFERS OF LIMITED PARTNERSHIP INTERESTS	 	27
	9.1 Purchase for Investment	 	27
	9.2 Restrictions on Transfer of Limited Partnership Interests	 	28
	9.3 Admission of Substitute Limited Partner	 	29
	9.4 Rights of Assignees of Partnership Interests	 	29
	9.5 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner	 	30
	9.6 Joint Ownership of Interests	 	30
	9.7 Redemption of Partnership Units	 	30
	ARTICLE 10 BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS	 	30
	10.1 Books and Records	 	30
	10.2 Custody of Partnership Funds; Bank Accounts	 	30
	10.3 Fiscal and Taxable Year	 	31
	10.4 Annual Tax Information and Report	 	31
	10.5 Tax Matters Partner; Tax Elections; Special Basis Adjustments	 	31
	10.6 Reports Made Available to Limited Partners	 	31
	ARTICLE 11 AMENDMENT OF AGREEMENT; MERGER	 	31
	ARTICLE 12 GENERAL PROVISIONS	 	32
	12.1 Notices	 	32
	12.2 Survival of Rights	 	32
	12.3 Additional Documents	 	32
	12.4 Severability	 	32
	12.5 Entire Agreement	 	33
	12.6 Pronouns and Plurals	 	33
	12.7 Headings	 	33
	12.8 Counterparts	 	33
	12.9 Governing Law	 	33
	12.10 Waivers	 	33
	EXHIBIT A - General Partner And Original Limited Partner, Capital Contributions And Percentage Interests	 	 
	EXHIBIT B - Notice Of Exercise Of Exchange Right	 	 

  

    	3

    	 

    

 

LIMITED PARTNERSHIP AGREEMENT

OF

WCRT OPERATING PARTNERSHIP, L.P.

 

WCRT Operating Partnership, L.P. (the “Partnership”)
was formed as a limited partnership under the laws of the State of Delaware, pursuant to a Certificate of Limited Partnership filed
with the Office of the Secretary of State of the State of Delaware on March 22, 2012. This Limited Partnership Agreement (“Agreement”)
is entered into as of October [__], 2012 (the “Effective Date”), by and between West Coast Realty Trust, Inc. a Maryland
corporation (the “General Partner”) and the Limited Partners set forth on Exhibit A hereto. Capitalized terms
used herein but not otherwise defined shall have the meanings given them in Article 1.

 

NOW, THEREFORE, in consideration of the
foregoing, of mutual covenants between the parties hereto, and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE 1

DEFINED TERMS

 

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

 

Act means the Delaware Revised Uniform Limited
Partnership Act, as it may be amended from time to time.

 

Additional Funds has the meaning set forth
in Section 4.3.

 

Additional Limited Partner means
a Person that has executed and delivered an additional limited partner signature page in the form attached hereto, has been admitted
to the Partnership as a Limited Partner pursuant to Section 4.2(a) hereof and that is shown as such on the books and records
of the Partnership.

 

Additional Securities means any additional
REIT Shares (other than REIT Shares issued in connection with an exchange pursuant to Section 8.4 hereof or REIT Shares issued
pursuant to a dividend reinvestment plan of the General Partner) or rights, options, warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase REIT Shares, as set forth in Section 4.2(a)(ii).

 

Administrative Expenses means (i)
all administrative and operating costs and expenses incurred by the Partnership, (ii) those administrative costs and expenses of
the General Partner, including any salaries or other payments to directors, officers or employees of the General Partner, and any
accounting and legal expenses of the General Partner, which expenses, the Partners have agreed, are expenses of the Partnership
and not the General Partner, and (iii) to the extent not included in clause (ii) above, REIT Expenses; provided, however, that
Administrative Expenses shall not include any administrative costs and expenses incurred by the General Partner that are attributable
to Properties or partnership interests in a Subsidiary Partnership (other than this Partnership) that are owned by the General
Partner directly.  

 

Advisor or Advisors means the Person
or Persons, if any, appointed, employed or contracted with by the General Partner and responsible for directing or performing the
day-to-day business affairs of the General Partner, including any Person to whom the Advisor subcontracts substantially all of
such functions.

 

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Affiliate or Affiliated means, as
to any individual, corporation, partnership, trust, limited liability company or other legal entity (other than this Partnership),
(i) any Person, directly or indirectly through one or more intermediaries controlling, controlled by, or under common control with
another person; (ii) any Person, directly or indirectly owning, controlling, or holding with power to vote ten percent (10%) or
more of the outstanding voting securities of another Person; (iii) any officer, director, general partner or trustee of such Person;
(iv) any Person ten percent (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) if such other Person is an officer, director, general partner, or trustee
of a Person, the Person for which such Person acts in any such capacity.  For purposes of this definition, “under common
control” shall mean that one Person or group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended) owns 10% or more of the outstanding voting securities of two or more Persons, in which case the Person so owned would
be affiliates of each other.

 

Agreement means this Limited Partnership
Agreement, as amended, modified supplemented or restated from time to time, as the context requires.

 

Articles of Incorporation means the
Articles of Amendment and Restatement of the General Partner filed with the Maryland State Department of Assessments and Taxation,
as amended or restated from time to time.

 

Auburn & Douglas LLC Purchase Agreement
means the LLC Membership Interest Purchase Agreement for Auburn & Douglas LLC, dated May 9, 2012, by and among Roger A. Dreyer,
University Capital Management, Inc., Richard P. Bernstein and the Partnership.

 

Capital Account has the meaning provided
in Section 4.4 hereof.

 

Capital Contribution means the total
amount of cash, cash equivalents, and the fair market value of any Property or other asset (other than cash) contributed or agreed
to be contributed, as the context requires, to the Partnership by each Partner pursuant to the terms of this Agreement. Any reference
to the Capital Contribution of a Partner shall include the Capital Contribution made by a predecessor holder of the Partnership
Interest of such Partner.

 

Cash Amount means an amount of cash
per Partnership Unit equal to the Value of the REIT Shares Amount on the date of receipt by the General Partner of a Notice of
Exchange.

 

Certificate means any instrument
or document that is required under the laws of the State of Delaware, or any other jurisdiction in which the Partnership conducts
business, to be signed and sworn to by the Partners of the Partnership (either by themselves or pursuant to the power-of-attorney
granted to the General Partner in Section 8.2 hereof) and filed for recording in the appropriate public offices within the State
of Delaware or such other jurisdiction to perfect or maintain the Partnership as a limited partnership, to effect the admission,
withdrawal, or substitution of any Partner of the Partnership, or to protect the limited liability of the Limited Partners as limited
partners under the laws of the State of Delaware or such other jurisdiction.

 

Class A Common Units means the Partnership
Units owned by the General Partner, as set forth on Exhibit A.

 

Class B Common Units means the Partnership
Units owned by the Limited Partners, as set forth on Exhibit A.

 

Code means the Internal Revenue Code
of 1986, as amended, and as hereafter amended from time to time. Reference to any particular provision of the Code shall mean that
provision in the Code at the date hereof and any successor provision of the Code.

 

    	5

    	 

    

 

Conversion Factor means 1.0, provided
that in the event that the General Partner (i) declares or pays a dividend on its outstanding REIT Shares in REIT Shares or makes
a distribution to all holders of its outstanding REIT Shares in REIT Shares, (ii) subdivides its outstanding REIT Shares, or (iii)
combines its outstanding REIT Shares into a smaller number of REIT Shares, the Conversion Factor shall be adjusted by multiplying
the Conversion Factor then in effect by a fraction, the numerator of which shall be the number of REIT Shares issued and outstanding
on the record date for such dividend, distribution, subdivision or combination (assuming for such purposes that such dividend,
distribution, subdivision or combination has occurred as of such time), and the denominator of which shall be the actual number
of REIT Shares (determined without the above assumption) issued and outstanding on such date and, provided further, that in the
event that an entity other than an Affiliate of the General Partner shall become General Partner pursuant to any merger, consolidation
or combination of the General Partner with or into another entity (the “Successor Entity”), the Conversion Factor shall
be adjusted by multiplying the Conversion Factor by the number of shares of the Successor Entity into which one REIT Share is converted
pursuant to such merger, consolidation or combination, determined as of the date of such merger, consolidation or combination.
Any adjustment to the Conversion Factor shall become effective immediately after the effective date of such event retroactive to
the record date, if any, for such event; provided, however, that if the General Partner receives a Notice of Exchange after the
record date, but prior to the effective date of such dividend, distribution, subdivision or combination, the Conversion Factor
shall be determined as if the General Partner had received the Notice of Exchange immediately prior to the record date for such
dividend, distribution, subdivision or combination.

 

Event of Bankruptcy as to any Person
means the filing of a petition for relief as to such Person as debtor or bankrupt under the Bankruptcy Code of 1978 or similar
provision of law of any jurisdiction, as the same may be amended from time to time, or any successor law (except if such petition
is contested by such Person and has been dismissed within 90 days); insolvency or bankruptcy of such Person as finally determined
by a court proceeding; filing by such Person of a petition or application to accomplish the same or for the appointment of a receiver
or a trustee for such Person or a substantial part of his assets; commencement of any proceedings relating to such Person as a
debtor under any other reorganization, arrangement, insolvency, adjustment of debt or liquidation law of any jurisdiction, whether
now in existence or hereinafter in effect, either by such Person or by another, provided that if such proceeding is commenced by
another, such Person indicates his approval of such proceeding, consents thereto or acquiesces therein, or such proceeding is contested
by such Person and has not been finally dismissed within 90 days.

 

Exchange Right has the meaning provided
in Section 8.4(a) hereof.

 

Exchanging Partner has the meaning
provided in Section 8.4(a) hereof.

 

General Partner means West Coast
Realty Trust, Inc., a Maryland corporation, and any Person who becomes a substitute or additional General Partner as provided herein,
and any of their successors as General Partner.

 

General Partnership Interest means
a Partnership Interest held by the General Partner that is a general partnership interest.

 

Howe & University LLC Purchase Agreement
means the LLC Membership Interest Purchase Agreement for Howe & University LLC, dated May 9, 2012, as amended as of August
1, 2012, by and among Roger A. Dreyer, Dreyer Properties, Inc., University Capital Management, Inc., Richard P. Bernstein and the
Partnership.

 

Indemnitee means (i) the General
Partner or a director, officer or employee of the General Partner or Partnership, (ii) the Advisor or a director, officer, employee
of the Advisor or another agent of the Advisor if such agent is an Affiliate of the Advisor and (iii) such other Persons (including
Affiliates of the General Partner, the Advisor or the Partnership) as the General Partner may designate from time to time, in its
sole and absolute discretion.

 

Independent Director means a director
of the General Partner who (i) is not an officer or employee of the General Partner, and (ii) has been deemed independent
by the General Partner’s Board of Directors.

 

Initial Limited Partners means (i)
University Capital Management, Inc., a California corporation, and (ii) Richard P. Bernstein.

 

Limited Partner means, prior to the
admission of the first Additional Limited Partner to the Partnership, the Initial Limited Partners, and thereafter any Person named
as a Limited Partner in Exhibit A, as such Exhibit may be amended from time to time by the General Partner, upon the execution
and delivery by such Person of an additional limited partner signature page, or any Substitute Limited Partner or Additional Limited
Partner, in such Person’s capacity as a Limited Partner of the Partnership.

 

    	6

    	 

    

 

Limited Partnership Interest means
the ownership interest of a Limited Partner in the Partnership at any particular time, including the right of such Limited Partner
to any and all benefits to which such Limited Partner may be entitled as provided in this Agreement and in the Act, together with
the obligations of such Limited Partner to comply with all the provisions of this Agreement and of such Act.

 

Listing means the listing of the
REIT Shares on a national securities exchange.  Upon Listing, the shares shall be deemed Listed.

 

Loss has the meaning provided in
Section 5.1(f) hereof.

 

Notice of Exchange means the Notice
of Exercise of Exchange Right substantially in the form attached as Exhibit B hereto.

 

Offer has the meaning set forth in
Section 7.1(b)(ii) hereof.

 

Ownership Entities means Auburn &
Douglas LLC and Howe & University LLC, each of which is a California limited liability company.

 

Partner means any General Partner
or Limited Partner, including the Initial Limited Partners, any Additional Limited Partner or any Substitute Limited Partner.

 

Partner Nonrecourse Debt Minimum Gain
has the meaning set forth in Regulations Section 1.704-2(i). A Partner’s share of Partner Nonrecourse Debt Minimum Gain shall
be determined in accordance with Regulations Section 1.704-2(i)(5).

 

Partnership means WCRT Operating
Partnership, L.P., a Delaware limited partnership.

 

Partnership Interest means any ownership
interest in the Partnership held by either a Limited Partner or the General Partner and includes any and all benefits to which
the holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such
Person to comply with the terms and provisions of this Agreement.

 

Partnership Minimum Gain has the
meaning set forth in Regulations Section 1.704-2(d). In accordance with Regulations Section 1.704-2(d), the amount of Partnership
Minimum Gain is determined by first computing, for each Partnership nonrecourse liability, any gain the Partnership would realize
if it disposed of the property subject to that liability for no consideration other than full satisfaction of the liability, and
then aggregating the separately computed gains. A Partner’s share of Partnership Minimum Gain shall be determined in accordance
with Regulations Section 1.704-2(g)(1).

 

Partnership Record Date means the
record date established by the General Partner for the distribution of cash pursuant to Section 5.2 hereof, which record date shall
be the same as the record date established by the General Partner for a distribution to its shareholders of some or all of its
portion of such distribution.

 

Partnership Units means fractional,
undivided shares of the Partnership Interests of all Partners issued hereunder, including both Class A Common Units and Class B
Common Units. The number of Partnership Units owned by each Partner is set forth on Exhibit A, as the same may be amended
from time to time by the General Partner pursuant to this Agreement.

 

Percentage Interest means the percentage
ownership interest in the Partnership of each Partner, as determined by dividing the Partnership Units owned by a Partner by the
total number of Partnership Units then outstanding.  The Percentage Interest of each Partner shall be as set forth on Exhibit
A, as such Exhibit may be amended from time to time.

 

Person means any individual, partnership,
limited liability company, corporation, joint venture, trust or other entity.

 

    	7

    	 

    

 

Profit has the meaning provided in
Section 5.1(f) hereof.

 

Property means any office or industrial
property or other investment in which the Partnership holds an ownership interest.

 

Purchase Agreements means the Auburn
& Douglas LLC Purchase Agreement and the Howe & University LLC Purchase Agreement.

 

Regulations means the Federal income
tax regulations promulgated under the Code, as amended and as hereafter amended from time to time. Reference to any particular
provision of the Regulations shall mean that provision of the Regulations on the date hereof and any successor provision of the
Regulations.

 

Regulatory Allocations has the meaning
set forth in Section 5.1(h) hereof.

 

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

 

REIT Expenses means (i) costs and
expenses relating to the formation and continuity of existence and operation of the General Partner and any Subsidiaries thereof
(which Subsidiaries shall, for purposes hereof, be included within the definition of General Partner), including taxes, fees and
assessments associated therewith, any and all costs, expenses or fees payable to any director, officer, or employee of the General
Partner, (ii) costs and expenses relating to any public offering and registration of securities by the General Partner and all
statements, reports, fees and expenses incidental thereto, including, without limitation, underwriting discounts and selling commissions
applicable to any such offering of securities, and any costs and expenses associated with any claims made by any holders of such
securities or any underwriters or placement agents thereof, (iii) costs and expenses associated with any repurchase of any securities
by the General Partner, (iv) costs and expenses associated with the preparation and filing of any periodic or other reports and
communications by the General Partner under federal, state or local laws or regulations, including filings with the SEC, (v) costs
and expenses associated with compliance by the General Partner with laws, rules and regulations promulgated by any regulatory body,
including the SEC and any securities exchange, (vi) costs and expenses associated with any 401(k) plan, incentive plan, bonus plan
or other plan providing for compensation for the employees of the General Partner, (vii) costs and expenses incurred by the General
Partner relating to any issuing or redemption of Partnership Interests, and (viii) all other operating or administrative costs
of the General Partner incurred in the ordinary course of its business on behalf of or in connection with the Partnership.

 

REIT Share means a share of common
stock, par value $0.01 per share, in the General Partner (or successor entity, as the case may be).

 

REIT Shares Amount means a number
of REIT Shares equal to the product of the number of Partnership Units offered for exchange by an Exchanging Partner, multiplied
by the Conversion Factor as adjusted to and including the Specified Exchange Date; provided that in the event the General Partner
issues to all holders of REIT Shares rights, options, warrants or convertible or exchangeable securities entitling the shareholders
to subscribe for or purchase REIT Shares, or any other securities or property (collectively, the “rights”), and the
rights have not expired at the Specified Exchange Date, then the REIT Shares Amount shall also include the rights issuable to a
holder of the REIT Shares Amount on the record date fixed for purposes of determining the holders of REIT Shares entitled to rights.

 

SEC means the U.S. Securities and
Exchange Commission.

 

Service means the United States Internal
Revenue Service.

 

Specified Exchange Date means the
first business day of the month that is at least 60 business days after the receipt by the General Partner of the Notice of Exchange.

 

    	8

    	 

    

 

Subsidiary means, with respect to
any non-individual Person, any corporation or other entity of which a majority of (i) the voting power of the voting equity securities
or (ii) the outstanding equity interests is owned, directly or indirectly, by such Person.

 

Subsidiary Partnership means any
partnership or limited liability company of which the partnership or membership interests therein are owned by the General Partner
or a direct or indirect subsidiary of the General Partner.

 

Substitute Limited Partner means
any Person admitted to the Partnership as a Limited Partner pursuant to Section 9.3 hereof.

 

Successor Entity has the meaning
provided in the definition of “Conversion Factor” contained herein.

 

Surviving General Partner has the
meaning set forth in Section 7.1(c) hereof.

 

Transaction has the meaning set forth
in Section 7.1(b) hereof.

 

Transfer has the meaning set forth
in Section 9.2(a) hereof.

 

Value means, with respect to REIT
Shares, the average of the daily market price of such REIT Share for the ten (10) consecutive trading days immediately preceding
the date of such valuation. The market price for each such trading day shall be: (i) if the REIT Shares are Listed, the sale price,
regular way, on such day, or if no such sale takes place on such day, the average of the closing bid and asked prices, regular
way, on such day; (ii) if the REIT Shares are not Listed, the last reported sale price on such day or, if no sale takes place on
such day, the average of the closing bid and asked prices on such day, as reported by a reliable quotation source designated by
the General Partner; or (iii) if the REIT Shares are not Listed and no such last reported sale price or closing bid and asked prices
are available, the average of the reported high bid and low asked prices on such day, as reported by a reliable quotation source
designated by the General Partner, or if there shall be no bid and asked prices on such day, the average of the high bid and low
asked prices, as so reported, on the most recent day (not more than ten (10) days prior to the date in question) for which prices
have been so reported; provided that if there are no bid and asked prices reported during the ten (10) days prior
to the date in question, the value of the REIT Shares shall be determined by the General Partner acting in good faith on the basis
of such quotations and other information as it considers, in its reasonable judgment, appropriate. In the event the REIT Shares
Amount includes rights that a holder of REIT Shares would be entitled to receive, then the value of such rights shall be determined
by the General Partner acting in good faith on the basis of such quotations and other information as it considers, in its reasonable
judgment, appropriate.

 

ARTICLE 2 

PARTNERSHIP FORMATION AND IDENTIFICATION

 

2.1          
Formation. The Partnership was formed as a limited partnership pursuant to the Act on March 22, 2012 for the purposes and
upon the terms and conditions set forth in this Agreement. Prior to the date hereof, the General Partner was the sole partner of
the Partnership without an agreement.

 

2.2          
Name, Office and Registered Agent. The name of the Partnership is WCRT Operating Partnership, L.P. The specified office
and place of business of the Partnership shall be 650 Howe Avenue, Suite 730, Sacramento, California 95825. The General Partner
may at any time change the location of such office, provided the General Partner gives notice to the Partners of any such change.
The name and address of the Partnership’s registered agent is The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware 19801. The sole duty of the registered agent as such is to forward to the Partnership any notice
that is served on him as registered agent.

 

2.3          
Partners.

 

(a)          
The General Partner of the Partnership is West Coast Realty Trust, Inc., a Maryland corporation. Its principal place of business
is the same as that of the Partnership.

 

    	9

    	 

    

 

(b)          
The Limited Partners are those Persons identified as Limited Partners on Exhibit A hereto, as amended from time to time.

 

2.4          
Term and Dissolution.

 

(a)          
The Partnership shall have perpetual duration, except that the Partnership shall be dissolved upon the first to occur of any of
the following events:

 

(i)            
The occurrence of an Event of Bankruptcy as to a General Partner or the dissolution, death, removal or withdrawal of a General
Partner unless the business of the Partnership is continued pursuant to Section 7.3(b) hereof; provided that if a General Partner
is on the date of such occurrence a partnership, the dissolution of such General Partner as a result of the dissolution, death,
withdrawal, removal or Event of Bankruptcy of a partner in such partnership shall not be an event of dissolution of the Partnership
if the business of such General Partner is continued by the remaining partner or partners, either alone or with additional partners,
and such General Partner and such partners comply with any other applicable requirements of this Agreement;

 

(ii)           
The passage of 90 days after the sale or other disposition of all or substantially all of the assets of the Partnership (provided
that if the Partnership receives an installment obligation as consideration for such sale or other disposition, the Partnership
shall continue, unless sooner dissolved under the provisions of this Agreement, until such time as such note or notes are paid
in full);

 

(iii)          
The exchange of all Limited Partnership Interests (other than any of such interests held by the General Partner or Affiliates of
the General Partner) for REIT Shares or the securities of any other entity;

 

(iv)         
The election by the General Partner that the Partnership should be dissolved; or

 

(v)An entry of a decree of judicial
dissolution of the Partnership pursuant to the provisions of the Act.

 

(b)          
Upon dissolution of the Partnership (unless the business of the Partnership is continued pursuant to Section 7.3(b) hereof), the
General Partner (or its trustee, receiver, successor or legal representative) shall amend or cancel the Certificate and liquidate
the Partnership’s assets and apply and distribute the proceeds thereof in accordance with Section 5.6 hereof.  Notwithstanding
the foregoing, the liquidating General Partner may either (i) defer liquidation of, or withhold from distribution for a reasonable
time, any assets of the Partnership (including those necessary to satisfy the Partnership’s debts and obligations), or (ii)
distribute the assets to the Partners in kind.

 

2.5          
Filing of Certificate and Perfection of Limited Partnership. The General Partner shall execute, acknowledge, record and
file at the expense of the Partnership, the Certificate, any and all amendments thereto and all requisite fictitious name statements
and notices in such places and jurisdictions as may be necessary to cause the Partnership to be treated as a limited partnership
under, and otherwise to comply with, the laws of each state or other jurisdiction in which the Partnership conducts business.

 

2.6          
Certificates Describing Partnership Units. At the request of a Limited Partner, the General Partner, at its option, may
(but shall not be required to) issue a certificate summarizing the terms of such Limited Partner’s interest in the Partnership,
including the number of Partnership Units owned and the Percentage Interest represented by such Partnership Units as of the date
of such certificate. Any such certificate (i) shall be in form and substance as approved by the General Partner, (ii) shall not
be negotiable and (iii) shall bear a legend to the following effect (together with any additional legends required by applicable
law, including the federal securities laws):

 

This certificate is not negotiable. The
Partnership Units represented by this certificate are governed by and transferable only in accordance with the provisions of the
Agreement of Limited Partnership of WCRT Operating Partnership, L.P., as amended from time to time.

 

    	10

    	 

    

 

ARTICLE 3

BUSINESS OF THE PARTNERSHIP

 

The purpose and nature of the business to
be conducted by the Partnership is (i) to conduct any business that may be lawfully conducted by a limited partnership organized
pursuant to the Act; provided, however, that such business shall be limited to and conducted in such a manner as to permit the
General Partner at all times to qualify as a REIT, unless the General Partner otherwise ceases to qualify as a REIT; (ii) to form,
enter into, manage or otherwise participate in any partnership, entity joint venture or other similar arrangement to engage in
any of the foregoing or the ownership of interests in any entity engaged in any of the foregoing; and (iii) to do anything necessary
or incidental to the foregoing. In connection with the foregoing, and without limiting the General Partner’s right in its
sole and absolute discretion to cease qualifying as a REIT, the Partners acknowledge that the General Partner’s status as
a REIT and the avoidance of income and excise taxes on the General Partner inures to the benefit of all the Partners and not solely
to the General Partner. Notwithstanding the foregoing, the Limited Partners agree that the General Partner may terminate its status
as a REIT under the Code at any time to the full extent permitted under the Articles of Incorporation. The General Partner shall
also be empowered to do any and all acts and things necessary or prudent to ensure that the Partnership will not be classified
as a “publicly traded partnership” for purposes of Section 7704 of the Code.

 

ARTICLE 4

CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS

 

4.1          
Capital Contributions. The General Partner has contributed cash to the Partnership as a capital contribution in the amount
of $[Net Proceeds of the Initial Public Offering]. The capital contributions of each Initial Limited Partner are deemed to constitute
all of their membership interests in the Ownership Entities acquired by the Partnership pursuant to the Purchase Agreements. The
capital contributions of any Additional Limited Partner shall be deemed to constitute all of the contributions made by such Additional
Limited Partnership pursuant to Section 8.5 herein. Each Partner owns Partnership Units in the amount set forth for such Partner
on Exhibit A, as the same may be amended from time to time by the General Partner to the extent necessary to reflect accurately
sales, exchanges or other Transfers, redemptions, Capital Contributions, the issuance of additional Partnership Units, or similar
events having an effect on a Partner’s ownership of Partnership Units.

 

4.2          
Additional Capital Contributions and Issuances of Additional Partnership Interests. Except as provided in this Section 4.2
or in Section 4.3, the Partners shall have no right or obligation to make any additional Capital Contributions or loans to the
Partnership. The General Partner may contribute additional capital to the Partnership, from time to time, and receive additional
Partnership Interests in respect thereof, in the manner contemplated in this Section 4.2.

 

(a)          
Issuances of Additional Partnership Interests.

 

(i)           
General. The General Partner is hereby authorized to cause the Partnership to issue such additional Partnership Interests
in the form of Partnership Units for any Partnership purpose at any time or from time to time, to the Partners (including the General
Partner) or to other Persons for such consideration and on such terms and conditions as shall be established by the General Partner
in its sole and absolute discretion, all without the approval of any Limited Partners. Any additional Partnership Interests issued
thereby may be issued in one or more classes, or one or more series of any of such classes, with such designations, preferences
and relative, participating, optional or other special rights, powers and duties, including rights, powers and duties senior to
Limited Partnership Interests, all as shall be determined by the General Partner in its sole and absolute discretion and without
the approval of any Limited Partner, subject to Delaware law, including, without limitation, (i) the allocations of items of Partnership
income, gain, loss, deduction and credit to each such class or series of Partnership Interests; (ii) the right of each such class
or series of Partnership Interests to share in Partnership distributions; and (iii) the rights of each such class or series of
Partnership Interests upon dissolution and liquidation of the Partnership; provided, however, that no additional Partnership Interests
shall be issued to the General Partner unless:

 

    	11

    	 

    

 

(1)           
(A) the additional Partnership Interests are issued in connection with an issuance of REIT Shares of or other interests in the
General Partner, which shares or interests have designations, preferences and other rights, all such that the economic interests
are substantially similar to the designations, preferences and other rights of the additional Partnership Interests issued to the
General Partner by the Partnership in accordance with this Section 4.2 and (B) the General Partner shall make a Capital Contribution
to the Partnership in an amount equal to the proceeds raised in connection with the issuance of such shares of stock of or other
interests in the General Partner;

 

(2)           
the additional Partnership Interests are issued in exchange for property owned by the General Partner with a fair market value,
as determined by the General Partner, in good faith, equal to the value of the Partnership Interests; or

 

(3)           
the additional Partnership Interests are issued to all Partners holding Partnership Units in proportion to their respective Percentage
Interests.

 

In addition, the General Partner may acquire
Partnership Interests from other Partners pursuant to this Agreement. In the event that the Partnership issues Partnership Interests
pursuant to this Section 4.2(a), the General Partner may take such steps as it, in its sole and absolute discretion, without any
requirement of receiving approval of the Limited Partners, deems necessary or appropriate to reflect the issuance of such additional
Partnership Interests or to admit any Person as an Additional Limited Partner, including, without limitation, amending the Certificate,
Exhibit A or any other provision of this Agreement.

 

Without limiting the foregoing, the General
Partner is expressly authorized to cause the Partnership to issue Partnership Units for less than fair market value, so long as
the General Partner concludes in good faith that such issuance is in the best interests of the General Partner and the Partnership.

 

(ii)          
Upon Issuance of Additional Securities. The General Partner shall not issue any additional REIT Shares (other than REIT
Shares issued in connection with an exchange pursuant to Section 8.4 hereof) or rights, options, warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase REIT Shares (collectively, “Additional Securities”) other
than to all holders of REIT Shares, unless (A) the General Partner shall cause the Partnership to issue to the General Partner,
as the General Partner may designate, Partnership Interests or rights, options, warrants or convertible or exchangeable securities
of the Partnership having designations, preferences and other rights, all such that the economic interests are substantially similar
to those of the Additional Securities, and (B) the General Partner contributes the net proceeds from the issuance of such Additional
Securities and from any exercise of rights contained in such Additional Securities, directly and through the General Partner, to
the Partnership; provided, however, that the General Partner is allowed to issue Additional Securities in connection with an acquisition
of a property to be held directly by the General Partner, but if and only if, such direct acquisition and issuance of Additional
Securities have been approved and determined to be in the best interests of the General Partner and the Partnership by a majority
of the Independent Directors. Without limiting the foregoing, the General Partner is expressly authorized to issue Additional Securities
for less than fair market value, and to cause the Partnership to issue to the General Partner corresponding Partnership Interests,
so long as (x) the General Partner concludes in good faith that such issuance is in the best interests of the General Partner and
the Partnership, including without limitation, the issuance of REIT Shares and corresponding Partnership Units pursuant to an employee
share purchase plan providing for employee purchases of REIT Shares at a discount from fair market value or employee stock options
that have an exercise price that is less than the fair market value of the REIT Shares, either at the time of issuance or at the
time of exercise, and (y) the General Partner contributes all proceeds from such issuance to the Partnership. For example, in the
event the General Partner issues REIT Shares for a cash purchase price and contributes all of the proceeds of such issuance to
the Partnership as required hereunder, the General Partner shall be issued a number of additional Partnership Units equal to the
product of (A) the number of such REIT Shares issued by the General Partner, the proceeds of which were so contributed, multiplied
by (B) a fraction, the numerator of which is 1.0, and the denominator of which is the Conversion Factor in effect on the date of
such contribution.

 

(b)          
Certain Deemed Contributions of Proceeds of Issuance of REIT Shares. In connection with any and all issuances of REIT Shares,
the General Partner shall make Capital Contributions to the Partnership of the proceeds therefrom, provided that if the proceeds
actually received and contributed by the General Partner are less than the gross proceeds of such issuance as a result of any discount,
commissions, fees or other expenses paid or incurred in connection with such issuance, then the General Partner shall be deemed
to have made Capital Contributions to the Partnership in the aggregate amount of the gross proceeds of such issuance and the Partnership
shall be deemed simultaneously to have paid such offering expenses in accordance with Section 6.5 hereof and in connection with
the required issuance of additional Partnership Units to the General Partner for such Capital Contributions pursuant to Section
4.2(a) hereof.

 

    	12

    	 

    

 

4.3          
Additional Funding. If the General Partner determines that it is in the best interests of the Partnership to provide for
additional Partnership funds (“Additional Funds”) for any Partnership purpose, the General Partner may (i) cause the
Partnership to obtain such funds from outside borrowings, or (ii) elect to have the General Partner or any of its Affiliates provide
such Additional Funds to the Partnership through loans or otherwise.

 

4.4          
Capital Accounts. A separate capital account (a “Capital Account”) shall be established and maintained for each
Partner in accordance with Regulations Section 1.704-1(b)(2)(iv). If (i) a new or existing Partner acquires an additional Partnership
Interest in exchange for more than a de minimis Capital Contribution, (ii) the Partnership distributes to a Partner more than a
de minimis amount of Partnership property as consideration for a Partnership Interest, or (iii) the Partnership is liquidated within
the meaning of Regulation Section 1.704-1(b)(2)(ii)(g), the General Partner shall revalue the property of the Partnership to its
fair market value (as determined by the General Partner, in its sole and absolute discretion, and taking into account Section 7701(g)
of the Code) in accordance with Regulations Section 1.704-1(b)(2)(iv)(f). When the Partnership’s property is revalued by
the General Partner, the Capital Accounts of the Partners shall be adjusted in accordance with Regulations Sections 1.704-1(b)(2)(iv)(f)
and (g), which generally require such Capital Accounts to be adjusted to reflect the manner in which the unrealized gain or loss
inherent in such property (that has not been reflected in the Capital Accounts previously) would be allocated among the Partners
pursuant to Section 5.1 if there were a taxable disposition of such property for its fair market value (as determined by the General
Partner, in its sole and absolute discretion, and taking into account Section 7701(g) of the Code) on the date of the revaluation.

 

4.5          
Percentage Interests. If the number of outstanding Partnership Units increases or decreases during a taxable year, each
Partner’s Percentage Interest shall be adjusted by the General Partner effective as of the effective date of each such increase
or decrease to a percentage equal to the number of Partnership Units held by such Partner divided by the aggregate number of Partnership
Units outstanding after giving effect to such increase or decrease.  If the Partners’ Percentage Interests are adjusted
pursuant to this Section 4.5, the Profits and Losses for the taxable year in which the adjustment occurs shall be allocated between
the part of the year ending on the day when the Partnership’s property is revalued by the General Partner and the part of
the year beginning on the following day either (i) as if the taxable year had ended on the date of the adjustment or (ii) based
on the number of days in each part.  The General Partner, in its sole and absolute discretion, shall determine which method
shall be used to allocate Profits and Losses for the taxable year in which the adjustment occurs. The allocation of Profits and
Losses for the earlier part of the year shall be based on the Percentage Interests before adjustment, and the allocation of Profits
and Losses for the later part shall be based on the adjusted Percentage Interests.

 

4.6          
No Interest on Contributions. No Partner shall be entitled to interest on its Capital Contribution.

 

4.7          
Return of Capital Contributions. No Partner shall be entitled to withdraw any part of its Capital Contribution or its Capital
Account or to receive any distribution from the Partnership, except as specifically provided in this Agreement. Except as otherwise
provided herein, there shall be no obligation to return to any Partner or withdrawn Partner any part of such Partner’s Capital
Contribution for so long as the Partnership continues in existence.

 

4.8          
No Third Party Beneficiary. No creditor or other third party having dealings with the Partnership shall have the right to
enforce the right or obligation of any Partner to make Capital Contributions or loans or to pursue any other right or remedy hereunder
or at law or in equity, it being understood and agreed that the provisions of this Agreement shall be solely for the benefit of,
and may be enforced solely by, the parties hereto and their respective successors and assigns. None of the rights or obligations
of the Partners herein set forth to make Capital Contributions or loans to the Partnership shall be deemed an asset of the Partnership
for any purpose by any creditor or other third party, nor may such rights or obligations be sold, transferred or assigned by the
Partnership or pledged or encumbered by the Partnership to secure any debt or other obligation of the Partnership or of any of
the Partners. In addition, it is the intent of the parties hereto that no distribution to any Limited Partner shall be deemed a
return of money or other property in violation of the Act. However, if any court of competent jurisdiction holds that, notwithstanding
the provisions of this Agreement, any Limited Partner is obligated to return such money or property, such obligation shall be the
obligation of such Limited Partner and not of the General Partner. Without limiting the generality of the foregoing, a deficit
Capital Account of a Partner shall not be deemed to be a liability of such Partner nor an asset or property of the Partnership.

 

    	13

    	 

    

 

ARTICLE 5

PROFITS AND LOSSES; DISTRIBUTIONS

 

5.1          
Allocation of Profit and Loss.

 

(a)          
General. Profit and Loss of the Partnership for each fiscal year or other applicable period of the Partnership, as of the
end of such year or period, shall be allocated among the Partners in accordance with their respective Percentage Interests; provided,
however, that until the one year anniversary of the Effective Date, Profits (if any) shall be allocated solely to the General Partner.

 

(b)          
Minimum Gain Chargeback. Notwithstanding any provision to the contrary, (i) any expense of the Partnership that is a “nonrecourse
deduction” within the meaning of Regulations Section 1.704-2(b)(1) shall be allocated in accordance with the Partners’
respective Percentage Interests, (ii) any expense of the Partnership that is a “partner nonrecourse deduction” within
the meaning of Regulations Section 1.704-2(i)(2) shall be allocated to the Partner that bears the “economic risk of loss”
of such deduction in accordance with Regulations Section 1.704-2(i)(1), (iii) if there is a net decrease in Partnership Minimum
Gain within the meaning of Regulations Section 1.704-2(f)(1) for any Partnership taxable year, then, subject to the exceptions
set forth in Regulations Section 1.704-2(f)(2),(3), (4) and (5), items of gain and income shall be allocated among the Partners
in accordance with Regulations Section 1.704-2(f) and the ordering rules contained in Regulations Section 1.704-2(j), and (iv)
if there is a net decrease in Partner Nonrecourse Debt Minimum Gain within the meaning of Regulations Section 1.704-2(i)(4) for
any Partnership taxable year, then, subject to the exceptions set forth in Regulations Section 1.704-(2)(g), items of gain and
income shall be allocated among the Partners in accordance with Regulations Section 1.704-2(i)(4) and the ordering rules contained
in Regulations Section 1.704-2(j). A Partner’s “interest in partnership profits” for purposes of determining
its share of the nonrecourse liabilities of the Partnership within the meaning of Regulations Section 1.752-3(a)(3) shall be such
Partner’s Percentage Interest.

 

(c)          
Qualified Income Offset. If a Partner unexpectedly receives in any taxable year an adjustment, allocation, or distribution
described in subparagraphs (4), (5), or (6) of Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases a deficit balance
in such Partner’s Capital Account that exceeds the sum of such Partner’s shares of Partnership Minimum Gain and Partner
Nonrecourse Debt Minimum Gain, as determined in accordance with Regulations Sections 1.704-2(g) and 1.704-2(i), such Partner shall
be allocated specially for such taxable year (and, if necessary, later taxable years) items of income and gain in an amount and
manner sufficient to eliminate such deficit Capital Account balance as quickly as possible as provided in Regulations Section 1.704-1(b)(2)(ii)(d).
This Section 5.1(c) is intended to constitute a “qualified income offset” under Section 1.704-1(b)(2)(ii)(d) of the
Regulations and shall be interpreted consistently therewith. After the occurrence of an allocation of income or gain to a Partner
in accordance with this Section 5.1(c), to the extent permitted by Regulations Section 1.704-1(b), items of expense or loss shall
be allocated to such Partner in an amount necessary to offset the income or gain previously allocated to such Partner under this
Section 5.1(c).

 

(d)          
Capital Account Deficits. Loss shall not be allocated to a Limited Partner to the extent that such allocation would cause
or increase a deficit in such Partner’s Capital Account at the end of any fiscal year (after reduction to reflect the items
described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of such Partner’s shares of Partnership
Minimum Gain and Partner Nonrecourse Debt Minimum Gain, as determined in accordance with Regulations Sections 1.704-2(g) and 1.704-2(i). 
Any Loss in excess of that limitation shall be allocated to the General Partner.  After the occurrence of an allocation of
Loss to the General Partner in accordance with this Section 5.1(d), to the extent permitted by Regulations Section 1.704-1(b),
Profit shall be allocated to such Partner in an amount necessary to offset the Loss previously allocated to each Partner under
this Section 5.1(d).

 

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(e)          
Allocations Between Transferor and Transferee. If a Partner transfers any part or all of its Partnership Interest, the distributive
shares of the various items of Profit and Loss allocable among the Partners during such fiscal year of the Partnership shall be
allocated between the transferor and the transferee Partner either (i) as if the Partnership’s fiscal year had ended on the
date of the transfer, or (ii) based on the number of days of such fiscal year that each was a Partner without regard to the results
of Partnership activities in the respective portions of such fiscal year in which the transferor and the transferee were Partners.
The General Partner, in its sole and absolute discretion, shall determine which method shall be used to allocate the distributive
shares of the various items of Profit and Loss between the transferor and the transferee Partner.

 

(f)           
Definition of Profit and Loss. “Profit” and “Loss” and any items of income, gain, expense, or loss
referred to in this Agreement shall be determined in accordance with federal income tax accounting principles, as modified by Regulations
Section 1.704-1(b)(2)(iv), except that Profit and Loss shall not include items of income, gain and expense that are specially allocated
pursuant to Sections 5.1(b), 5.1(c) or 5.1(d). All allocations of income, Profit, gain, Loss and expense (and all items contained
therein) for federal income tax purposes shall be identical to all allocations of such items set forth in this Section 5.1, except
as otherwise required by Section 704(c) of the Code and Regulations Section 1.704-1(b)(4).

 

(g)          
Tax Allocations. Except as otherwise provided in this Section 5.1(g), for income tax purposes under the Code and the Regulations,
each Partnership item of income, gain, loss and deduction shall be allocated among the Partners in the same manner as its correlative
item of “book” income, gain, loss or deduction is allocated pursuant to the other provisions of this Section 5.1. Notwithstanding
the foregoing, Profit or Loss with respect to Property that is contributed to the Partnership with a fair market value that varies
from its adjusted tax basis in the hands of the contributing Partner immediately preceding the date of contribution shall be allocated
among the Partners for tax purposes pursuant to Code Section 704(c) and the “traditional method” of allocation as described
in Regulations Section 1.704-3(b) so as to take into account such variation.

 

(h)          Curative
Allocations. The allocations set forth in Section 5.1(b), (c) and (d) of this Agreement (the “Regulatory Allocations”)
are intended to comply with certain requirements of the Regulations. The General Partner is authorized to offset all Regulatory
Allocations either with other Regulatory Allocations or with special allocations of other items of Partnership income, gain, loss
or deduction pursuant to this Section 5.1(h). Therefore, notwithstanding any other provision of this Section 5.1 (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 deems appropriate so that, after such offsetting allocations are made, each Partner’s Capital
Account 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 Section 5.1(a).

 

5.2          
Distribution of Cash.

 

(a)          
The Partnership shall distribute cash on a quarterly (or, at the election of the General Partner, more frequent), including monthly,
basis, in an amount determined by the General Partner in its sole and absolute discretion, to the Partners who are Partners on
the Partnership Record Date with respect to such quarter (or other distribution period) in accordance with their respective Percentage
Interests on the Partnership Record Date; provided, however, that if a new or existing Partner acquires an additional Partnership
Interest in exchange for a Capital Contribution on any date other than the next day after a Partnership Record Date, the cash distribution
attributable to such additional Partnership Interest relating to the Partnership Record Date next following the issuance of such
additional Partnership Interest (or relating to the Partnership Record Date if such Partnership Interest was acquired on a Partnership
Record Date) shall be reduced in the proportion that (i) the number of days such additional Partnership Interest is held by such
Partner bears to (ii) the number of days between such Partnership Record Date (including such Partnership Record Date) and the
immediately preceding Partnership Record Date and provided, further, than all cash distributions during the period beginning on
the Effective Date and ending on the one year anniversary of the Effective Date shall be made solely to the General Partner.

 

    	15

    	 

    

 

(b)          Notwithstanding
any other provision of this Agreement, each Limited Partner hereby authorizes the Partnership to withhold from or pay on behalf
of or with respect to such Limited Partner any amount of federal, state, local or foreign taxes that the General Partner determines
that the Partnership is required to withhold or pay with respect to any amount distributable or allocable to such Limited Partner
pursuant to this Agreement, including, without limitation, any taxes required to be withheld or paid by the Partnership pursuant
to Code Sections 1441, 1442, 1445, 1446, or 1471-1474 and the Treasury Regulations thereunder. Any amount paid on behalf of
or with respect to a Limited Partner, in excess of any withheld amounts shall constitute a loan by the Partnership to such Limited
Partner, which loan shall be repaid by such Limited Partner within 15 days after notice from the General Partner that such
payment must be made unless (i) the Partnership withholds such payment from a distribution that would otherwise be made to
the Limited Partner or (ii) the General Partner determines, in its sole and absolute discretion, that such payment may be
satisfied out of distributable cash of the Partnership that would, but for such payment, be distributed to the Limited Partner
pursuant to Section 5.2(a). Each Limited Partner hereby unconditionally and irrevocably grants to the Partnership a security interest
in such Limited Partner’s Partnership Interest to secure such Limited Partner’s obligation to pay to the Partnership
any amounts required to be paid pursuant to this Section 5.2(b). In the event that a Limited Partner fails to pay any amounts owed
to the Partnership pursuant to this Section 5.2(b) when due, the General Partner may, in its sole and absolute discretion, elect
to make the payment to the Partnership on behalf of such defaulting Limited Partner, and in such event shall be deemed to have
loaned such amount to such defaulting Limited Partner and shall succeed to all rights and remedies of the Partnership as against
such defaulting Limited Partner (including, without limitation, the right to receive distributions). Any amounts payable by a Limited
Partner hereunder shall bear interest at the base rate on corporate loans at large United States money center commercial banks,
as published from time to time in The Wall Street Journal, plus four percentage points (but not higher than the maximum lawful
rate) from the date such amount is due (i.e., 15 days after demand) until such amount is paid in full. Each Limited
Partner shall take such actions as the Partnership or the General Partner shall request in order to perfect or enforce the security
interest created hereunder.

 

(c)          In
no event may a Partner receive a distribution of cash with respect to a Partnership Unit if such Partner is entitled to receive
a cash distribution as the holder of record of a REIT Share for which all or part of such Partnership Unit has been or will be
exchanged.

 

5.3          
REIT Distribution Requirements. The General Partner shall use its commercially reasonable efforts to cause the Partnership
to distribute amounts sufficient to enable the General Partner to pay shareholder dividends that will allow the General Partner
to (i) meet its distribution requirement for qualification as a REIT as set forth in Section 857 of the Code and (ii) avoid any
federal income or excise tax liability imposed by the Code.

 

5.4          
No Right to Distributions In Kind. No Partner shall be entitled to demand property other than cash in connection with any
distributions by the Partnership.

 

5.5          
Limitations of Return of Capital Contributions. Notwithstanding any of the provisions of this Article 5, no Partner shall
have the right to receive and the General Partner shall not have the right to make, a distribution that includes a return of all
or part of a Partner’s Capital Contributions, unless after giving effect to the return of a Capital Contribution, the sum
of all Partnership liabilities, other than the liabilities to a Partner for the return of his Capital Contribution, does not exceed
the fair market value of the Partnership’s assets.

 

5.6          
Distributions Upon Liquidation. Upon liquidation of the Partnership, after payment of, or adequate provision for, debts
and obligations of the Partnership, including any Partner loans, any remaining assets of the Partnership shall be distributed to
all Partners with positive Capital Accounts in accordance with their respective positive Capital Account balances. For purposes
of the preceding sentence, the Capital Account of each Partner shall be determined after all adjustments have been made in accordance
with Sections 4.4, 5.1 and 5.2 resulting from Partnership operations and from all sales and dispositions of all or any part of
the Partnership’s assets. To the extent deemed advisable by the General Partner, appropriate arrangements (including the
use of a liquidating trust) may be made to assure that adequate funds are available to pay any contingent debts or obligations.

 

5.7          
Substantial Economic Effect. It is the intent of the Partners that the allocations of Profit and Loss under this Agreement
have substantial economic effect (or be consistent with the Partners’ interests in the Partnership in the case of the allocation
of losses attributable to nonrecourse debt) within the meaning of Section 704(b) of the Code as interpreted by the Regulations
promulgated pursuant thereto. Article 5 and other relevant provisions of this Agreement shall be interpreted in a manner consistent
with such intent.

 

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ARTICLE 6

RIGHTS, OBLIGATIONS AND

POWERS OF THE GENERAL PARTNER

 

6.1          
Management of the Partnership.

 

(a)          
Except as otherwise expressly provided in this Agreement, the General Partner shall have full, complete and exclusive discretion
to manage and control the business of the Partnership for the purposes herein stated, and shall make all decisions affecting the
business and assets of the Partnership.  Subject to the restrictions specifically contained in this Agreement, the powers
of the General Partner shall include, without limitation, the authority to take the following actions on behalf of the Partnership
(in the Partnership’s own capacity directly or indirectly in the Partnership’s capacity as a partner, member, manager
or equity or debt holder of any other Person or Subsidiary Partnership or otherwise on behalf of any such Person or Subsidiary
Partnership, as the case may be):

 

(i)            
to acquire, purchase, own, operate, lease and dispose of any real property and any other property or assets including, but not
limited to notes and mortgages, that the General Partner determines are necessary or appropriate or in the best interests of the
business of the Partnership;

 

(ii)           
to construct buildings and make other improvements on the properties owned or leased by the Partnership;

 

(iii)          
to authorize, issue, sell, redeem or otherwise purchase any Partnership Interests or any securities (including secured and unsecured
debt obligations of the Partnership, debt obligations of the Partnership convertible into any class or series of Partnership Interests,
or options, rights, warrants or appreciation rights relating to any Partnership Interests) of the Partnership;

 

(iv)         
to borrow or lend money for the Partnership, issue or receive evidences of indebtedness in connection therewith, refinance, increase
the amount of, modify, amend or change the terms of, or extend the time for the payment of, any such indebtedness, and secure such
indebtedness by mortgage, deed of trust, pledge or other lien on the Partnership’s assets;

 

(v)          
to pay, either directly or by reimbursement, for all operating costs and general administrative expenses of the Partnership to
third parties or to the General Partner or its Affiliates as set forth in this Agreement;

 

(vi)         
to guarantee or become a co-maker of indebtedness of the General Partner or any Subsidiary thereof, refinance, increase the amount
of, modify, amend or change the terms of, or extend the time for the payment of, any such guarantee or indebtedness, and secure
such guarantee or indebtedness by mortgage, deed of trust, pledge or other lien on the Partnership’s assets;

 

(vii)        
to use assets of the Partnership (including, without limitation, cash on hand) for any purpose consistent with this Agreement,
including, without limitation, payment, either directly or by reimbursement, of all operating costs and general administrative
expenses of the General Partner, the Partnership or any Subsidiary of either, to third parties or to the General Partner as set
forth in this Agreement;

 

(viii)       
to lease all or any portion of any of the Partnership’s assets, whether or not the terms of such leases extend beyond the
termination date of the Partnership and whether or not any portion of the Partnership’s assets so leased are to be occupied
by the lessee, or, in turn, subleased in whole or in part to others, for such consideration and on such terms as the General Partner
may determine;

 

(ix)          
to prosecute, defend, arbitrate, or compromise any and all claims or liabilities in favor of or against the Partnership, on such
terms and in such manner as the General Partner may reasonably determine, and similarly to prosecute, settle or defend litigation
with respect to the Partners, the Partnership, or the Partnership’s assets;

 

    	17

    	 

    

 

(x)           
to file applications, communicate, and otherwise deal with any and all governmental agencies having jurisdiction over, or in any
way affecting, the Partnership’s assets or any other aspect of the Partnership business;

 

(xi)          
to make or revoke any election permitted or required of the Partnership by any taxing authority;

 

(xii)         
to maintain such insurance coverage for public liability, fire and casualty, and any and all other insurance for the protection
of the Partnership, for the conservation of Partnership assets, or for any other purpose convenient or beneficial to the Partnership,
in such amounts and such types, as it shall determine from time to time;

 

(xiii)        
to determine whether or not to apply any insurance proceeds for any property to the restoration of such property or to distribute
the same;

 

(xiv)       
to establish one or more divisions of the Partnership, to hire and dismiss employees of the Partnership or any division of the
Partnership, and to retain legal counsel, accountants, consultants, real estate brokers, and such other persons, as the General
Partner may deem necessary or appropriate in connection with the Partnership business and to pay therefor such reasonable remuneration
as the General Partner may deem reasonable and proper;

 

(xv)        
to retain other services of any kind or nature in connection with the Partnership business, and to pay therefor such remuneration
as the General Partner may deem reasonable and proper;

 

(xvi)       
to negotiate and conclude agreements on behalf of the Partnership with respect to any of the rights, powers and authority conferred
upon the General Partner;

 

(xvii)      
to maintain accurate accounting records and to file promptly all federal, state and local income tax returns on behalf of the Partnership;

 

(xviii)      to
distribute Partnership cash or other Partnership assets in accordance with this Agreement;

 

(xix)        
to form or acquire an interest in, and contribute property to, any further limited or general partnerships, joint ventures or other
relationships that it deems desirable (including, without limitation, the acquisition of interests in, and the contributions of
property to, its Subsidiaries and any other Person in which it has an equity interest from time to time);

 

(xx)         
to establish Partnership reserves for working capital, capital expenditures, contingent liabilities, or any other valid Partnership
purpose;

 

(xxi)        
to merge, consolidate or combine the Partnership with or into another Person;

 

(xxii)       
to do any and all acts and things necessary or prudent to ensure that the Partnership will not be classified as a “publicly
traded partnership” for purposes of Section 7704 of the Code; and

 

(xxiii)      
to take such other action, execute, acknowledge, swear to or deliver such other documents and instruments, and perform any and
all other acts that the General Partner deems necessary or appropriate for the formation, continuation and conduct of the business
and affairs of the Partnership (including, without limitation, all actions consistent with allowing the General Partner at all
times to qualify as a REIT unless the General Partner voluntarily terminates its REIT status) and to possess and enjoy all of the
rights and powers of a general partner as provided by the Act.

 

    	18

    	 

    

 

 (b)         
Except as otherwise provided herein, to the extent the duties of the General Partner require expenditures of funds to be paid to
third parties, the General Partner shall not have any obligations hereunder except to the extent that partnership funds are reasonably
available to it for the performance of such duties, and nothing herein contained shall be deemed to authorize or require the General
Partner, in its capacity as such, to expend its individual funds for payment to third parties or to undertake any individual liability
or obligation on behalf of the Partnership.

 

6.2          
Delegation of Authority. The General Partner may delegate any or all of its powers, rights and obligations hereunder, and
may appoint, employ, contract or otherwise deal with any Person for the transaction of the business of the Partnership, which Person
may, under supervision of the General Partner, perform any acts or services for the Partnership as the General Partner may approve.

 

6.3          
Indemnification and Exculpation of Indemnitees.

 

(a)          The
Partnership shall, to the maximum extent permitted by applicable law in effect from time to time, indemnify, and, without requiring
a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of
final disposition of a proceeding to each Indemnitee; provided, however, that the Partnership shall not indemnify an Indemnitee
(1) for fraud, willful misconduct or a knowing violation of the law or any rule or regulation, (2) for any transaction
for which such Indemnitee received an improper personal benefit in money, property or services in violation or breach of any provision
of this Agreement, or (3) in the case of any criminal proceeding, the Indemnitee had reasonable cause to believe that the
act or omission was unlawful. Without limitation, the foregoing indemnity shall extend to any liability of any Indemnitee, pursuant
to a loan guaranty or otherwise (unless otherwise provided by the terms of any such guaranty or other instrument), for any indebtedness
of the Partnership or any Subsidiary of the Partnership (including, without limitation, any indebtedness which the Partnership
or any Subsidiary of the Partnership has assumed or taken subject to), and the General Partner is hereby authorized and empowered,
on behalf of the Partnership, to enter into one or more indemnity agreements consistent with the provisions of this Section 6.3
in favor of any Indemnitee having or potentially having liability for any such indebtedness. The termination of any proceeding
by judgment, order or settlement does not create a presumption that the Indemnitee did not meet the requisite standard of conduct
set forth in this Section 6.3(a). The termination of any proceeding by conviction of an Indemnitee or upon a plea of nolo
contendere or its equivalent by an Indemnitee, or an entry of an order of probation against an Indemnitee prior to judgment,
does not create a presumption that such Indemnitee acted in a manner contrary to that specified in this Section 6.3(a) with
respect to the subject matter of such proceeding. Any indemnification pursuant to this Section 6.3 shall be made only out
of the assets of the Partnership and any insurance proceeds from the liability policy covering the General Partner and any Indemnitees,
and neither the General Partner nor any Limited Partner shall have any obligation to contribute to the capital of the Partnership
or otherwise provide funds to enable the Partnership to fund its obligations under this Section 6.3.

 

(b)          To
the fullest extent permitted by law, and without requiring a preliminary determination of the Indemnitee’s ultimate entitlement
to indemnification under Section 6.3(a) above, expenses incurred by an Indemnitee who is a party to a proceeding or otherwise
subject to or the focus of or is involved in any proceeding shall be paid or reimbursed by the Partnership as incurred by the Indemnitee
in advance of the final disposition of the proceeding upon receipt by the Partnership of (1) a written affirmation by the
Indemnitee of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Partnership
as authorized in this Section 6.3(b) has been met and (2) a written undertaking by or on behalf of the Indemnitee to
repay the amount if it shall ultimately be determined that the standard of conduct has not been met.

 

(c)          The
indemnification provided by this Section 6.3 shall be in addition to any other rights to which an Indemnitee or any other
Person may be entitled under any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue
as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee unless otherwise provided in a written agreement with such Indemnitee or in the writing pursuant
to which such Indemnitee is indemnified.

 

(d)          The
Partnership may, but shall not be obligated to, purchase and maintain insurance, on behalf of any of the Indemnitees and such other
Persons as the General Partner shall determine, against any liability that may be asserted against or expenses that may be incurred
by such Person in connection with the Partnership’s activities, regardless of whether the Partnership would have the power
to indemnify such Person against such liability under the provisions of this Agreement.

 

    	19

    	 

    

 

(e)          Any
liabilities which an Indemnitee incurs as a result of acting on behalf of the Partnership or the General Partner (whether as a
fiduciary or otherwise) in connection with the operation, administration or maintenance of an employee benefit plan or any related
trust or funding mechanism (whether such liabilities are in the form of excise taxes assessed by the Service, penalties assessed
by the Department of Labor, restitutions to such a plan or trust or other funding mechanism or to a participant or beneficiary
of such plan, trust or other funding mechanism, or otherwise) shall be treated as liabilities or judgments or fines under this
Section 6.3, unless such liabilities arise as a result of (1) willful misconduct or a knowing violation of the law, (2) any
transaction in which such Indemnitee received an improper personal benefit in money, property or services in violation or breach
of any provision of this Agreement or applicable law, or (3) in the case of any criminal proceeding, the Indemnitee having
had reasonable cause to believe that the act or omission was unlawful.

 

(f)          In
no event may an Indemnitee subject any of the Partners to personal liability by reason of the indemnification provisions set forth
in this Agreement.

 

(g)          An
Indemnitee shall not be denied indemnification in whole or in part under this Section 6.3 because the Indemnitee had an interest
in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of
this Agreement.

 

(h)          The
provisions of this Section 6.3 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators
and shall not be deemed to create any rights for the benefit of any other Persons. Any amendment, modification or repeal of this
Section 6.3 or any provision hereof shall be prospective only and shall not in any way affect the obligations of the Partnership
or the limitations on the Partnership’s liability to any Indemnitee under this Section 6.3 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole
or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

 

(i)          If
and to the extent any payments to the General Partner pursuant to this Section 6.3 constitute gross income to the General
Partner (as opposed to the repayment of advances made on behalf of the Partnership) such amounts shall be treated as “guaranteed
payments” for the use of capital within the meaning of Code Section 707(c), shall be treated consistently therewith
by the Partnership and all Partners, and shall not be treated as distributions for purposes of computing the Partners’ Capital
Accounts.

 

6.4          
Liability of the General Partner.

 

(a)          
Notwithstanding anything to the contrary set forth in this Agreement, the General Partner shall not be liable for monetary damages
to the Partnership or any Partners for losses sustained or liabilities incurred as a result of errors in judgment or of any act
or omission if the General Partner acted in good faith. The General Partner shall not be in breach of any duty that the General
Partner may owe to the Limited Partners or the Partnership or any other Persons under this Agreement or of any duty stated or implied
by law or equity provided the General Partner, acting in good faith, abides by the terms of this Agreement.

 

(b)          
The Limited Partners expressly acknowledge that the General Partner is acting on behalf of the Partnership, the Limited Partners
and its own shareholders collectively, that the General Partner is under no obligation to consider the separate interests of the
Limited Partners (including, without limitation, the tax consequences to Limited Partners or the tax consequences of some, but
not all, of the Limited Partners) in deciding whether to cause the Partnership to take (or decline to take) any actions. In the
event of a conflict between the interests of its shareholders on one hand and the Limited Partners on the other, the General Partner
shall endeavor in good faith to resolve the conflict in a manner not adverse to either its shareholders or the Limited Partners;
provided, however, that for so long as the General Partner directly owns a controlling interest in the Partnership, any such conflict
that the General Partner, in its sole and absolute discretion, determines cannot be resolved in a manner not adverse to either
its shareholders or the Limited Partner shall be resolved in favor of the shareholders. The General Partner shall not be liable
for monetary damages for losses sustained, liabilities incurred, or benefits not derived by Limited Partners in connection with
such decisions, provided that the General Partner has acted in good faith.

 

    	20

    	 

    

 

(c)          
Subject to its obligations and duties as General Partner set forth in Section 6.1 hereof, the General Partner may exercise any
of the powers granted to it under this Agreement and perform any of the duties imposed upon it hereunder either directly or by
or through its agents. The General Partner shall not be responsible for any misconduct or negligence on the part of any such agent
appointed by it in good faith.

 

(d)          
Notwithstanding any other provisions of this Agreement or the Act, any action of the General Partner on behalf of the Partnership
or any decision of the General Partner to refrain from acting on behalf of the Partnership, undertaken in the good faith belief
that such action or omission is necessary or advisable in order (i) to protect the ability of the General Partner to continue to
qualify as a REIT or (ii) to prevent the General Partner from incurring any taxes under Section 857, Section 4981, or any other
provision of the Code, is expressly authorized under this Agreement and is deemed approved by all of the Limited Partners.

 

(e)          
Any amendment, modification or repeal of this Section 6.4 or any provision hereof shall be prospective only and shall not in any
way affect the limitations on the General Partner’s liability to the Partnership and the Limited Partners under this Section
6.4 as in effect immediately prior to such amendment, modification or repeal with respect to matters occurring, in whole or in
part, prior to such amendment, modification or repeal, regardless of when claims relating to such matters may arise or be asserted.

 

6.5          
Reimbursement of General Partner.

 

(a)          
Except as provided in this Section 6.5 and elsewhere in this Agreement (including the provisions of Articles 5 and 6 regarding
distributions, payments, and allocations to which it may be entitled), the General Partner shall not be compensated for its services
as general partner of the Partnership.

 

(b)          
The General Partner shall be reimbursed on a monthly basis, or such other basis as the General Partner may determine in its sole
and absolute discretion, for all Administrative Expenses.

 

6.6          
Outside Activities. Subject to the Articles of Incorporation and any agreements entered into by the General Partner or its
Affiliates with the Partnership or a Subsidiary Partnership, any officer, director, employee, agent, trustee, Affiliate or shareholder
of the General Partner shall be entitled to and may have business interests and engage in business activities in addition to those
relating to the Partnership, including business interests and activities substantially similar or identical to those of the Partnership.
Neither the Partnership nor any of the Limited Partners shall have any rights by virtue of this Agreement in any such business
ventures, interest or activities. None of the Limited Partners nor any other Person shall have any rights by virtue of this Agreement
or the partnership relationship established hereby in any such business ventures, interests or activities, and the General Partner
shall have no obligation pursuant to this Agreement to offer any interest in any such business ventures, interests and activities
to the Partnership or any Limited Partner, even if such opportunity is of a character which, if presented to the Partnership or
any Limited Partner, could be taken by such Person.

 

6.7          
Employment or Retention of Affiliates.

 

(a)          
Any Affiliate of the General Partner may be employed or retained by the Partnership and may otherwise deal with the Partnership
(whether as a buyer, lessor, lessee, manager, furnisher of goods or services, broker, agent, lender or otherwise) and may receive
from the Partnership any compensation, price, or other payment therefor which the General Partner determines to be fair and reasonable.

 

(b)          
The Partnership may lend or contribute to its Subsidiaries or other Persons in which it has an equity investment, and such Persons
may borrow funds from the Partnership, on terms and conditions established in the sole and absolute discretion of the General Partner.
The foregoing authority shall not create any right or benefit in favor of any Subsidiary or any other Person.

 

(c)          
The Partnership may transfer assets to joint ventures, other partnerships, corporations or other business entities in which it
is or thereby becomes a participant upon such terms and subject to such conditions as the General Partner deems are consistent
with this Agreement and applicable law.

 

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(d)          
Except as expressly permitted by this Agreement, neither the General Partner nor any of its Affiliates shall sell, transfer or
convey any property to, or purchase any property from, the Partnership, directly or indirectly, except pursuant to transactions
that are on terms that are fair and reasonable to the Partnership.

 

6.8          
General Partner Participation. The General Partner agrees that all business activities of the General Partner, including
activities pertaining to the acquisition, development or ownership of retail property or other property, shall be conducted through
the Partnership or one or more Subsidiary Partnerships; provided, however, that the General Partner is allowed to make a direct
acquisition, but if and only if, such acquisition is made in connection with the issuance of Additional Securities, which direct
acquisition and issuance have been approved and determined to be in the best interests of the General Partner and the Partnership
by a majority of the Independent Directors.

 

6.9          
Title to Partnership Assets. Title to Partnership assets, whether real, personal or mixed and whether tangible or intangible,
shall be deemed to be owned by the Partnership as an entity, and no Partner, individually or collectively, shall have any ownership
interest in such Partnership assets or any portion thereof. Title to any or all of the Partnership assets may be held in the name
of the Partnership, the General Partner or one or more nominees, as the General Partner may determine, including Affiliates of
the General Partner. The General Partner hereby declares and warrants that any Partnership assets for which legal title is held
in the name of the General Partner or any nominee or Affiliate of the General Partner shall be held by the General Partner for
the use and benefit of the Partnership in accordance with the provisions of this Agreement; provided, however, that the General
Partner shall use its best efforts to cause beneficial and record title to such assets to be vested in the Partnership as soon
as reasonably practicable. All Partnership assets shall be recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is held.

 

6.10        
Miscellaneous. In the event the General Partner redeems any REIT Shares (other than REIT Shares redeemed in accordance with
the share redemption program of the General Partner through proceeds received from any dividend reinvestment plan of the General
Partner), the General Partner shall cause the Partnership to purchase from the General Partner a number of Partnership Units as
determined based on the application of the Conversion Factor on the same terms that the General Partner exchanged such REIT Shares.
Moreover, if the General Partner makes a cash tender offer or other offer to acquire REIT Shares, then the General Partner shall
cause the Partnership to make a corresponding offer to the General Partner to acquire an equal number of Partnership Units held
by the General Partner. In the event any REIT Shares are exchanged by the General Partner pursuant to such offer, the Partnership
shall redeem an equivalent number of the General Partner’s Partnership Units for an equivalent purchase price based on the
application of the Conversion Factor.

 

ARTICLE 7

CHANGES IN GENERAL PARTNER

 

7.1          
Transfer of the General Partner’s Partnership Interest.

 

(a)          
The General Partner shall not transfer all or any portion of its General Partnership Interest or withdraw as General Partner except
as provided for in this Agreement or in connection with a transaction contemplated by Section 7.1(b), (c) or (d).

 

(b)          
Except as otherwise provided in Section 7.1(c) or (d) hereof, the General Partner shall not engage in any merger, consolidation
or other combination with or into another Person or sale of all or substantially all of its assets, (other than in connection with
a change in the General Partner’s state of incorporation or organizational form) in each case which results in a change of
control of the General Partner (a “Transaction”), unless:

 

(i)           if
required under applicable law, the Transaction is approved by (x) the stockholders of the General Partner in a vote to determine
whether the General Partner can proceed with the Transaction, and (y) holders of the number of Class B Common Units that is in
the same or greater proportion as the General Partner’s stockholders voted to approve the Transaction;

 

    	22

    	 

    

 

(ii)          
as a result of such Transaction, all Limited Partners will receive for each Partnership Unit an amount of cash, securities, or
other property equal to the product of the Conversion Factor and the greatest amount of cash, securities or other property paid
in the Transaction to a holder of one REIT Share in consideration of one REIT Share; provided that if, in connection with the Transaction,
a purchase, tender or exchange offer (“Offer”) shall have been made to and accepted by the holders of more than 50%
of the outstanding REIT Shares, each holder of Partnership Units shall be given the option to exchange its Partnership Units for
the greatest amount of cash, securities, or other property which a Limited Partner would have received had it (A) exercised its
Exchange Right and (B) sold, tendered or exchanged pursuant to the Offer the REIT Shares received upon exercise of the Exchange
Right immediately prior to the expiration of the Offer; or

 

(iii)        the
General Partner is the surviving entity in the Transaction and either (A) the holders of REIT Shares do not receive cash, securities,
or other property in the Transaction, or (B) all Limited Partners (other than the General Partner or any Subsidiary) receive an
amount of cash, securities, or other property (expressed as an amount per REIT Share) that is no less than the product of the Conversion
Factor and the greatest amount of cash, securities, or other property (expressed as an amount per REIT Share) received in the Transaction
by any holder of REIT Shares.

 

(c)          
Notwithstanding Section 7.1(b), the General Partner may merge with or into or consolidate with another entity if immediately after
such merger or consolidation (i) substantially all of the assets of the successor or surviving entity (the “Surviving General
Partner”), other than Partnership Units held by the General Partner, are contributed, directly or indirectly, to the Partnership
as a Capital Contribution in exchange for Partnership Units with a fair market value equal to the value of the assets so contributed
as determined by the Surviving General Partner in good faith and (ii) the Surviving General Partner expressly agrees to assume
all obligations of the General Partner, as appropriate, hereunder. Upon such contribution and assumption, the Surviving General
Partner shall have the right and duty to amend this Agreement as set forth in this Section 7.1(c). The Surviving General Partner
shall in good faith arrive at a new method for the calculation of the Cash Amount, the REIT Shares Amount and Conversion Factor
for a Partnership Unit after any such merger or consolidation so as to approximate the existing method for such calculation as
closely as reasonably possible. Such calculation shall take into account, among other things, the kind and amount of securities,
cash and other property that was receivable upon such merger or consolidation by a holder of REIT Shares or options, warrants or
other rights relating thereto, and to which a holder of Partnership Units could have acquired had such Partnership Units been exchanged
immediately prior to such merger or consolidation. Such amendment to this Agreement shall provide for adjustment to such method
of calculation, which shall be as nearly equivalent as may be practicable to the adjustments provided for with respect to the Conversion
Factor. The Surviving General Partner also shall in good faith modify the definition of REIT Shares and make such amendments to
Section 8.4 hereof so as to approximate the existing rights and obligations set forth in Section 8.4 as closely as reasonably possible.
The above provisions of this Section 7.1(c) shall similarly apply to successive mergers or consolidations permitted hereunder.

 

In respect of any transaction described
in the preceding paragraph, the General Partner is required to use its commercially reasonable efforts to structure such transaction
to avoid causing the Limited Partners to recognize a gain for federal income tax purposes by virtue of the occurrence of or their
participation in such transaction.

 

(d)          
Notwithstanding Section 7.1(b),

 

(i)           
a General Partner may transfer all or any portion of its General Partnership Interest to (A) a wholly-owned Subsidiary of such
General Partner or (B) the owner of all of the ownership interests of such General Partner, and following a transfer of all of
its General Partnership Interest, may withdraw as General Partner; and

 

(ii)          
the General Partner may engage in Transactions that are not required by law or by the rules of any national securities exchange
on which the REIT Shares are listed to be submitted to the vote of the holders of the REIT Shares.

 

7.2          
Admission of a Substitute or Additional General Partner. A Person shall be admitted as a substitute or additional General
Partner of the Partnership only if the following terms and conditions are satisfied:

 

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(a)          
the Person to be admitted as a substitute or additional General Partner shall have accepted and agreed to be bound by all the terms
and provisions of this Agreement by executing a counterpart thereof and such other documents or instruments as may be required
or appropriate in order to effect the admission of such Person as a General Partner, and a certificate evidencing the admission
of such Person as a General Partner shall have been filed for recordation and all other actions required by Section 2.5 hereof
in connection with such admission shall have been performed;

 

(b)          
if the Person to be admitted as a substitute or additional General Partner is a corporation or a partnership it shall have provided
the Partnership with evidence satisfactory to counsel for the Partnership of such Person’s authority to become a General
Partner and to be bound by the terms and provisions of this Agreement; and

 

(c)          
counsel for the Partnership shall have rendered an opinion (relying on such opinions from other counsel and the state or any other
jurisdiction as may be necessary) that the admission of the person to be admitted as a substitute or additional General Partner
is in conformity with the Act, that none of the actions taken in connection with the admission of such Person as a substitute or
additional General Partner will cause (i) the Partnership to be classified other than as a partnership for federal income tax purposes,
or (ii) the loss of any Limited Partner’s limited liability.

 

7.3          
Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner.

 

(a)          
Upon the occurrence of an Event of Bankruptcy as to a General Partner (and its removal pursuant to Section 7.4(a) hereof) or the
death, withdrawal, removal or dissolution of a General Partner (except that, if a General Partner is on the date of such occurrence
a partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such partnership shall
be deemed not to be a dissolution of such General Partner if the business of such General Partner is continued by the remaining
partner or partners), the Partnership shall be dissolved and terminated unless the Partnership is continued pursuant to Section
7.3(b) hereof. The merger of the General Partner with or into any entity that is admitted as a substitute or successor General
Partner pursuant to Section 7.2 hereof shall not be deemed to be the withdrawal, dissolution or removal of the General Partner.

 

(b)          
Following the occurrence of an Event of Bankruptcy as to a General Partner (and its removal pursuant to Section 7.4(a) hereof)
or the death, withdrawal, removal or dissolution of a General Partner (except that, if a General Partner is on the date of such
occurrence a partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such partnership
shall be deemed not to be a dissolution of such General Partner if the business of such General Partner is continued by the remaining
partner or partners), the Limited Partners holding 50 percent or more of the outstanding Limited Partnership Interests may, within
90 days after such occurrence, elect in writing to continue the business of the Partnership for the balance of the term specified
in Section 2.4 hereof by selecting, subject to Section 7.2 hereof and any other provisions of this Agreement, a substitute General
Partner by consent of a majority in interest of the Limited Partners. If the Limited Partners elect to continue the business of
the Partnership and admit a substitute General Partner, the relationship with the Partners and of any Person who has acquired an
interest of a Partner in the Partnership shall be governed by this Agreement.

 

7.4          
Removal of a General Partner.

 

(a)          
Upon the occurrence of an Event of Bankruptcy as to, or the dissolution of, a General Partner, such General Partner shall be deemed
to be removed automatically; provided, however, that if a General Partner is on the date of such occurrence a partnership, the
withdrawal, death, dissolution, Event of Bankruptcy as to or removal of a partner in such partnership shall be deemed not to be
a dissolution of the General Partner if the business of such General Partner is continued by the remaining partner or partners.
The Limited Partners may not remove the General Partner, with or without cause.

 

    	24

    	 

    

 

(b)          
If a General Partner has been removed pursuant to this Section 7.4 and the Partnership is continued pursuant to Section 7.3 hereof,
such General Partner shall promptly transfer and assign its General Partnership Interest in the Partnership to the substitute General
Partner approved by a majority in interest of the Limited Partners in accordance with Section 7.3(b) hereof and otherwise admitted
to the Partnership in accordance with Section 7.2 hereof. At the time of assignment, the removed General Partner shall be entitled
to receive from the substitute General Partner the fair market value of the General Partnership Interest of such removed General
Partner as reduced by any damages caused to the Partnership by such General Partner. Such fair market value shall be determined
by an appraiser mutually agreed upon by the General Partner and a majority in interest of the Limited Partners within 10 days following
the removal of the General Partner. In the event that the parties are unable to agree upon an appraiser, the removed General Partner
and a majority in interest of the Limited Partners each shall select an appraiser. Each such appraiser shall complete an appraisal
of the fair market value of the removed General Partner’s General Partnership Interest within 30 days of the General Partner’s
removal, and the fair market value of the removed General Partner’s General Partnership Interest shall be the average of
the two appraisals; provided, however, that if the higher appraisal exceeds the lower appraisal by more than 20% of the amount
of the lower appraisal, the two appraisers, no later than 40 days after the removal of the General Partner, shall select a third
appraiser who shall complete an appraisal of the fair market value of the removed General Partner’s General Partnership Interest
no later than 60 days after the removal of the General Partner. In such case, the fair market value of the removed General Partner’s
General Partnership Interest shall be the average of the two appraisals closest in value.

 

(c)          
The General Partnership Interest of a removed General Partner, during the time after default until transfer under Section 7.4(b),
shall be converted to that of a special Limited Partner; provided, however, such removed General Partner shall not have any rights
to participate in the management and affairs of the Partnership, and shall not be entitled to any portion of the income, expense,
profit, gain or loss allocations or cash distributions allocable or payable, as the case may be, to the Limited Partners. Instead,
such removed General Partner shall receive and be entitled only to retain distributions or allocations of such items that it would
have been entitled to receive in its capacity as General Partner, until the transfer is effective pursuant to Section 7.4(b).

 

(d)          
All Partners shall have given and hereby do give such consents, shall take such actions and shall execute such documents as shall
be legally necessary and sufficient to effect all the foregoing provisions of this Section.

 

ARTICLE 8

RIGHTS AND OBLIGATIONS OF THE LIMITED
PARTNERS

 

8.1          
Management of the Partnership. The Limited Partners (in such capacity) shall not participate in the management or control
of Partnership or Partnership Subsidiary business nor shall they transact any business for the Partnership or any Partnership Subsidiary,
nor shall they have the power to sign for or bind the Partnership or any Partnership Subsidiary, such powers being vested solely
and exclusively in the General Partner.

 

8.2          
Power of Attorney. Each Limited Partner (in such capacity) hereby irrevocably appoints the General Partner its true and
lawful attorney-in-fact, who may act for each Limited Partner (in such capacity) and in its name, place and stead, and for its
use and benefit, to sign, acknowledge, swear to, deliver, file or record, at the appropriate public offices, any and all documents,
certificates, and instruments as may be deemed necessary or desirable by the General Partner to carry out fully the provisions
of this Agreement and the Act in accordance with their terms, which power of attorney is coupled with an interest and shall survive
the death, dissolution or legal incapacity of the Limited Partner, or the transfer by the Limited Partner of any part or all of
its Partnership Interest.

 

8.3          
Limitation on Liability of Limited Partners. No Limited Partner shall be liable for any debts, liabilities, contracts or
obligations of the Partnership. A Limited Partner shall be liable to the Partnership only to make payments of its Capital Contribution,
if any, as and when due hereunder. After its Capital Contribution is fully paid, no Limited Partner shall, except as otherwise
required by the Act, be required to make any further Capital Contributions or other payments or lend any funds to the Partnership.

 

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8.4          
Exchange Right.

 

(a)          
Subject to Sections 8.4(b), 8.4(c), 8.4(d), and 8.4(e) and the provisions of any agreements between the Partnership and one or
more Limited Partners with respect to Partnership Units held by them or any other agreement to which a Limited Partner is bound
or the requirements of applicable laws, rules and regulations, each Limited Partner shall have the right (the “Exchange Right”)
to require the Partnership to redeem on a Specified Exchange Date all or a portion of the Partnership Units held by such Limited
Partner at an exchange price equal to and in the form of the Cash Amount to be paid by the Partnership, provided that such Partnership
Units shall have been outstanding for at least one year. The Exchange Right shall be exercised pursuant to a Notice of Exchange
delivered to the Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the Exchange Right (the
“Exchanging Partner”); provided, however, that the Partnership shall not be obligated to satisfy such Exchange Right
if the General Partner elects to purchase the Partnership Units subject to the Notice of Exchange pursuant to Section 8.4(b); and
provided, further, that no Limited Partner may deliver more than two Notices of Exchange during each calendar year. A Limited Partner
may not exercise the Exchange Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership
Units, all of the Partnership Units held by such Partner. The Exchanging Partner shall have no right, with respect to any Partnership
Units so exchanged, to receive any distribution paid with respect to Partnership Units if the record date for such distribution
is on or after the Specified Exchange Date.

 

(b)          
Notwithstanding the provisions of Section 8.4(a), a Limited Partner that exercises the Exchange Right shall be deemed to have offered
to sell the Partnership Units described in the Notice of Exchange to the General Partner, and the General Partner may, in its sole
and absolute discretion, elect to purchase directly and acquire such Partnership Units by paying to the Exchanging Partner either
the Cash Amount or the REIT Shares Amount, as elected by the General Partner (in its sole and absolute discretion), on the Specified
Exchange Date, whereupon the General Partner shall acquire the Partnership Units offered for exchange by the Exchanging Partner
and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. If the Exchanging Partner is also
an officer, director, employee or Affiliate of the General Partner, any election of the General Partner to purchase the applicable
Partnership Units and/or pay the Cash Amount or REIT Shares Amount may only be made on behalf of the General Partner by a majority
of the disinterested Independent Directors. If the General Partner shall elect to exercise its right to purchase Partnership Units
under this Section 8.4(b) with respect to a Notice of Exchange, it shall so notify the Exchanging Partner within five Business
Days after the receipt by the General Partner of such Notice of Exchange. Unless the General Partner (in its sole and absolute
discretion) shall exercise its right to purchase Partnership Units from the Exchanging Partner pursuant to this Section 8.4(b),
the General Partner shall have no obligation to the Exchanging Partner or the Partnership with respect to the Exchanging Partner’s
exercise of the Exchange Right. In the event the General Partner shall exercise its right to purchase Partnership Units with respect
to the exercise of a Exchange Right in the manner described in the first sentence of this Section 8.4(b), the Partnership shall
have no obligation to pay any amount to the Exchanging Partner with respect to such Exchanging Partner’s exercise of such
Exchange Right, and each of the Exchanging Partner, the Partnership, and the General Partner, as the case may be, shall treat the
transaction between the General Partner, as the case may be, and the Exchanging Partner for federal income tax purposes as a sale
of the Exchanging Partner’s Partnership Units to the General Partner, as the case may be. Each Exchanging Partner agrees
to execute such documents as the General Partner may reasonably require in connection with the issuance of REIT Shares upon exercise
of the Exchange Right.

 

(c)          
Notwithstanding the provisions of Section 8.4(a) and 8.4(b), a Limited Partner shall not be entitled to exercise the Exchange Right
if the delivery of REIT Shares to such Partner on the Specified Exchange Date by the General Partner pursuant to Section 8.4(b)
(regardless of whether or not the General Partner would in fact exercise its rights under Section 8.4(b)) would (i) result in such
Partner or any other person owning, directly or indirectly, REIT Shares in excess of the Aggregate Stock Ownership Limit or Common
Stock Ownership Limit (each as defined in the Articles of Incorporation and calculated in accordance therewith), except as provided
in the Articles of Incorporation or as approved by a majority of the disinterested Independent Directors, (ii) result in REIT Shares
being owned by fewer than 100 persons (determined without reference to any rules of attribution), except as provided in the Articles
of Incorporation, (iii) result in the General Partner being “closely held” within the meaning of Section 856(h) of
the Code, or (iv) cause the General Partner to own, directly or constructively, 10% or more of the ownership interests in a tenant
within the meaning of Section 856(d)(2)(B) of the Code. The General Partner, in its sole and absolute discretion, may waive the
restriction on exchange set forth in this Section 8.4(c).

 

(d)          
Any Cash Amount to be paid to an Exchanging Partner pursuant to this Section 8.4 shall be paid on the Specified Exchange Date;
provided, however, that the General Partner may elect to cause the Specified Exchange Date to be delayed for up to an additional
180 days to the extent required for the General Partner to cause additional REIT Shares to be issued to provide financing to be
used to make such payment of the Cash Amount. Notwithstanding the foregoing, the General Partner agrees to use its best efforts
to cause the closing of the acquisition of exchanged Partnership Units hereunder to occur as quickly as reasonably possible.

 

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(e)          
Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability
of the Limited Partners to exercise their Exchange Rights as and if deemed necessary to ensure that the Partnership does not constitute
a “publicly traded partnership” under section 7704 of the Code. If and when the General Partner determines that imposing
such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”)
to each of the Limited Partners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which
states that, in the opinion of such counsel, restrictions are necessary or reasonable in order to avoid the Partnership being treated
as a “publicly traded partnership” under section 7704 of the Code.

 

8.5           Admission of Additional Limited
Partners

 

(a)          
After the admission to the Partnership
of the Initial Limited Partners, a Person who makes a Capital Contribution to the Partnership in accordance with this Agreement
in exchange for a Limited Partnership Interest shall be admitted to the Partnership as an Additional Limited Partner only upon
furnishing to the General Partner (i) evidence of acceptance in form satisfactory to the General Partner of all of the terms and
conditions of this Agreement and the Notice of Exchange, including, without limitation, the power of attorney granted in Section 8.2
hereof; and (ii) such other documents or instruments as may be required in the discretion of the General Partner in order to effect
such Person’s admission as an Additional Limited Partner.

 

(b)          
Notwithstanding anything to the contrary
in this Section 8.5, no Person shall be admitted as an Additional Limited Partner without the consent of the General Partner,
which consent may be given or withheld in the General Partner’s sole and absolute discretion. The admission of any Person
as an Additional Limited Partner shall become effective on the date upon which the name of such Person is recorded on the books
and records of the Partnership, following the consent of the General Partner to such admission.

 

(c)          
If any Additional Limited Partner
is admitted to the Partnership on any day other than the first day of the fiscal year or other applicable period of the Partnership,
then Profit, Loss, each item thereof and all other items allocable among the Partners for such fiscal year or period shall be allocated
among such Additional Limited Partner and all other Partners by taking into account their varying interests during such fiscal
year or period in accordance with Section 706(d) of the Code, using the interim closing of the books method. Solely for purposes
of making such allocations, each of such items for the calendar month in which an admission of any Additional Limited Partner occurs
shall be allocated among all of the Partners, including such Additional Limited Partner. Distributions pursuant to Section 5.2
with respect to which the Partnership Record Date is before the date of such admission shall be made solely to the Partners other
than the Additional Limited Partner, and all distributions pursuant to Section 5.2 thereafter shall be made to all of the
Partners, including such Additional Limited Partner.

 

ARTICLE 9

TRANSFERS OF LIMITED PARTNERSHIP INTERESTS

 

9.1          
Purchase for Investment.

 

(a)          
Each Limited Partner hereby represents and warrants to the General Partner and to the Partnership that the acquisition of his Partnership
Interests is made as a principal for his account for investment purposes only and not with a view to the resale or distribution
of such Partnership Interest.

 

(b)          
Each Limited Partner agrees that he will not sell, assign or otherwise transfer his Partnership Interest or any fraction thereof,
whether voluntarily or by operation of law or at judicial sale or otherwise, to any Person who does not make the representations
and warranties to the General Partner set forth in Section 9.1(a) above and similarly agree not to sell, assign or transfer such
Partnership Interest or fraction thereof to any Person who does not similarly represent, warrant and agree.

 

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9.2          
Restrictions on Transfer of Limited Partnership Interests.

 

(a)          
Subject to the provisions of 9.2(b), (c) and (d), no Limited Partner may offer, sell, assign, hypothecate, pledge or otherwise
transfer all or any portion of his Limited Partnership Interest, or any of such Limited Partner’s economic rights as a Limited
Partner, whether voluntarily or by operation of law or at judicial sale or otherwise (collectively, a “Transfer”) without
the consent of the General Partner, which consent may be granted or withheld in its sole and absolute discretion. Any such purported
Transfer undertaken without such consent shall be considered to be null and void ab initio and shall not be given effect.
The General Partner may require, as a condition of any Transfer to which it consents, that the transferor assume all costs incurred
by the Partnership in connection therewith.

 

(b)          
No Limited Partner may withdraw from the Partnership other than as a result of a permitted Transfer (i.e., a Transfer consented
to as contemplated by clause (a) above or clause (c) below) of all of its Partnership Units pursuant to this Article 9 or pursuant
to an exchange of all of its Partnership Units pursuant to Section 8.4. Upon the permitted Transfer or redemption of all of a Limited
Partner’s Partnership Interest, such Limited Partner shall cease to be a Limited Partner.

 

(c)          
Subject to 9.2(d), (e) and (f) below, a Limited Partner may Transfer, with the consent of the General Partner, all or a portion
of its Partnership Units to (i) a parent or parent’s spouse, natural or adopted descendant or descendants, spouse of such
descendant, or brother or sister, or a trust created by such Limited Partner for the benefit of such Limited Partner and/or any
such person(s), of which trust such Limited Partner or any such person(s) is a trustee, (ii) a corporation controlled by a Person
or Persons named in (i) above, or (iii) if the Limited Partner is an entity, its beneficial owners.

 

(d)          
No Limited Partner may effect a Transfer of its Limited Partnership Interest, in whole or in part, if, in the opinion of legal
counsel for the Partnership, such proposed Transfer would otherwise violate any applicable federal or state securities or blue
sky law (including investment suitability standards).

 

(e)          
No Transfer by a Limited Partner of its Partnership Units, in whole or in part, may be made to any Person if (i) in the opinion
of legal counsel for the Partnership, the transfer would result in the Partnership’s being treated as an association taxable
as a corporation (other than a qualified REIT subsidiary within the meaning of Section 856(i) of the Code), (ii) in the opinion
of legal counsel for the Partnership, it would adversely affect the ability of the General Partner to continue to qualify as a
REIT or subject the General Partner to any additional taxes under Section 857 or Section 4981 of the Code, or (iii) such transfer
is effectuated through an “established securities market” or a “secondary market (or the substantial equivalent
thereof)” within the meaning of Section 7704 of the Code.

 

(f)           
No transfer of any Partnership Units may be made to a lender to the Partnership or any Person who is related (within the meaning
of Regulations Section 1.752-4(b)) to any lender to the Partnership whose loan constitutes a nonrecourse liability (within the
meaning of Regulations Section 1.752-1(a)(2)), without the consent of the General Partner, which may be withheld in its sole and
absolute discretion, provided that as a condition to such consent the lender will be required to enter into an arrangement with
the Partnership and the General Partner to exchange or redeem for the Cash Amount any Partnership Units in which a security interest
is held simultaneously with the time at which such lender would be deemed to be a partner in the Partnership for purposes of allocating
liabilities to such lender under Section 752 of the Code.

 

(g)          
Any Transfer in contravention of any of the provisions of this Article 9 shall be void and ineffectual and shall not be binding
upon, or recognized by, the Partnership.

 

(h)          
Prior to the consummation of any Transfer under this Article 9, the transferor and/or the transferee shall deliver to the General
Partner such opinions, certificates and other documents as the General Partner shall request in connection with such Transfer.

 

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9.3         
Admission of Substitute Limited Partner.

 

(a)          
Subject to the other provisions of this Article 9, an assignee of the Limited Partnership Interest of a Limited Partner (which
shall be understood to include any purchaser, transferee, donee, or other recipient of any disposition of such Limited Partnership
Interest) shall be deemed admitted as a Limited Partner of the Partnership only with the consent of the General Partner and upon
the satisfactory completion of the following:

 

(i)           
The assignee shall have accepted and agreed to be bound by the terms and provisions of this Agreement by executing a counterpart
or an amendment thereof, including a revised Exhibit A, and such other documents or instruments as the General Partner may
require in order to effect the admission of such Person as a Limited Partner.

 

(ii)          
To the extent required, an amended Certificate evidencing the admission of such Person as a Limited Partner shall have been signed,
acknowledged and filed for record in accordance with the Act.

 

(iii)         
The assignee shall have delivered a letter containing the representation set forth in Section 9.1(a) hereof and the agreement set
forth in Section 9.1(b) hereof.

 

(iv)         
If the assignee is a corporation, partnership or trust, the assignee shall have provided the General Partner with evidence satisfactory
to counsel for the Partnership of the assignee’s authority to become a Limited Partner under the terms and provisions of
this Agreement.

 

(v)          
The assignee shall have executed a power of attorney containing the terms and provisions set forth in Section 8.2 hereof.

 

(vi)         
The assignee shall have paid all legal fees and other expenses of the Partnership and the General Partner and filing and publication
costs in connection with its substitution as a Limited Partner.

 

(vii)        
The assignee has obtained the prior written consent of the General Partner to its admission as a Substitute Limited Partner, which
consent may be given or denied in the exercise of the General Partner’s sole and absolute discretion.

 

(b)          
For the purpose of allocating Profits and Losses and distributing cash received by the Partnership, a Substitute Limited Partner
shall be treated as having become, and appearing in the records of the Partnership as, a Partner upon the filing of the Certificate
described in Section 9.3(a)(ii) hereof or, if no such filing is required, the later of the date specified in the transfer documents
or the date on which the General Partner has received all necessary instruments of transfer and substitution.

 

(c)          
The General Partner shall cooperate with the Person seeking to become a Substitute Limited Partner by preparing the documentation
required by this Section and making all official filings and publications. The Partnership shall take all such action as promptly
as practicable after the satisfaction of the conditions in this Article 9 to the admission of such Person as a Limited Partner
of the Partnership.

 

9.4         
Rights of Assignees of Partnership Interests.

 

(a)          
Subject to the provisions of Sections 9.1 and 9.2 hereof, except as required by operation of law, the Partnership shall not be
obligated for any purposes whatsoever to recognize the assignment by any Limited Partner of its Partnership Interest until the
Partnership has received notice thereof.

 

(b)          
Any Person who is the assignee of all or any portion of a Limited Partner’s Limited Partnership Interest, but does not become
a Substitute Limited Partner and desires to make a further assignment of such Limited Partnership Interest, shall be subject to
all the provisions of this Article 9 to the same extent and in the same manner as any Limited Partner desiring to make an assignment
of its Limited Partnership Interest.

 

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9.5          
Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner. The occurrence of an Event of Bankruptcy
as to a Limited Partner, the death of a Limited Partner or a final adjudication that a Limited Partner is incompetent (which term
shall include, but not be limited to, insanity) shall not cause the termination or dissolution of the Partnership, and the business
of the Partnership shall continue if an order for relief in a bankruptcy proceeding is entered against a Limited Partner, the trustee
or receiver of his estate or, if he dies, his executor, administrator or trustee, or, if he is finally adjudicated incompetent,
his committee, guardian or conservator, shall have the rights of such Limited Partner for the purpose of settling or managing his
estate property and such power as the bankrupt, deceased or incompetent Limited Partner possessed to assign all or any part of
his Partnership Interest and to join with the assignee in satisfying conditions precedent to the admission of the assignee as a
Substitute Limited Partner.

 

9.6          
Joint Ownership of Interests. A Partnership Interest may be acquired by two individuals as joint tenants with right of survivorship,
provided that such individuals either are married or are related and share the same home as tenants in common. The written consent
or vote of both owners of any such jointly held Partnership Interest shall be required to constitute the action of the owners of
such Partnership Interest; provided, however, that the written consent of only one joint owner will be required if the Partnership
has been provided with evidence satisfactory to the counsel for the Partnership that the actions of a single joint owner can bind
both owners under the applicable laws of the state of residence of such joint owners. Upon the death of one owner of a Partnership
Interest held in a joint tenancy with a right of survivorship, the Partnership Interest shall become owned solely by the survivor
as a Limited Partner and not as an assignee. The Partnership need not recognize the death of one of the owners of a jointly-held
Partnership Interest until it shall have received notice of such death. Upon notice to the General Partner from either owner, the
General Partner shall cause the Partnership Interest to be divided into two equal Partnership Interests, which shall thereafter
be owned separately by each of the former owners.

 

9.7          
Redemption of Partnership Units. The General Partner will cause the Partnership to redeem Partnership Units, to the extent
it shall have legally available funds therefor, at any time the General Partner redeems shares of beneficial interest in itself.
The number and class or series of Partnership Units redeemed and the redemption price shall equal the number (multiplied by the
Conversion Factor) of shares of beneficial interest the General Partner redeems and the redemption price at which the General Partner
redeems such shares, respectively.

 

ARTICLE 10

BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS

 

10.1        
Books and Records. At all times during the continuance of the Partnership, the Partners shall keep or cause to be kept at
the Partnership’s specified office true and complete books of account in accordance with generally accepted accounting principles,
including: (a) a current list of the full name and last known business address of each Partner, (b) a copy of the Certificate of
Limited Partnership and all certificates of amendment thereto, (c) copies of the Partnership’s federal, state and local income
tax returns and reports, (d) copies of this Agreement and amendments thereto and any financial statements of the Partnership for
the three most recent years and (e) all documents and information required under the Act. Any Partner or its duly authorized representative,
upon paying the costs of collection, duplication and mailing, shall be entitled to inspect or copy such records during ordinary
business hours.

 

10.2        
Custody of Partnership Funds; Bank Accounts.

 

(a)          
All funds of the Partnership not otherwise invested shall be deposited in one or more accounts maintained in such banking or brokerage
institutions as the General Partner shall determine, and withdrawals shall be made only on such signature or signatures as the
General Partner may, from time to time, determine.

 

(b)          
All deposits and other funds not needed in the operation of the business of the Partnership may be invested by the General Partner
in investment grade instruments (or investment companies whose portfolio consists primarily thereof), government obligations, certificates
of deposit, bankers’ acceptances and municipal notes and bonds. The funds of the Partnership shall not be commingled with
the funds of any other Person except for such commingling as may necessarily result from an investment in those investment companies
permitted by this Section 10.2(b).

 

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10.3        
Fiscal and Taxable Year. The fiscal and taxable year of the Partnership shall be the calendar year.  

 

10.4        
Annual Tax Information and Report. Within 75 days after the end of each fiscal year of the Partnership, the General Partner
shall furnish to each person who was a Limited Partner at any time during such year the tax information necessary to file such
Limited Partner’s individual tax returns as shall be reasonably required by law.

 

10.5        
Tax Matters Partner; Tax Elections; Special Basis Adjustments.

 

(a)          
The General Partner shall be the Tax Matters Partner of the Partnership within the meaning of Section 6231(a)(7) of the Code. As
Tax Matters Partner, the General Partner shall have the right and obligation to take all actions authorized and required, respectively,
by the Code for the Tax Matters Partner. The General Partner shall have the right to retain professional assistance in respect
of any audit of the Partnership by the Service and all out-of-pocket expenses and fees incurred by the General Partner on behalf
of the Partnership as Tax Matters Partner shall constitute Partnership expenses. In the event the General Partner receives notice
of a final Partnership adjustment under Section 6223(a)(2) of the Code, the General Partner shall either (i) file a court petition
for judicial review of such final adjustment within the period provided under Section 6226(a) of the Code, a copy of which petition
shall be mailed to all Limited Partners on the date such petition is filed, or (ii) mail a written notice to all Limited Partners,
within such period, that describes the General Partner’s reasons for determining not to file such a petition.

 

(b)          
All elections required or permitted to be made by the Partnership under the Code or any applicable state or local tax law shall
be made by the General Partner in its sole and absolute discretion.

 

(c)          
In the event of a transfer of all or any part of the Partnership Interest of any Partner, the Partnership, at the option of the
General Partner, may elect pursuant to Section 754 of the Code to adjust the basis of the Partnership’s assets. Notwithstanding
anything contained in Article 5 of this Agreement, any adjustments made pursuant to Section 754 of the Code shall affect only the
successor in interest to the transferring Partner and in no event shall be taken into account in establishing, maintaining or computing
Capital Accounts for the other Partners for any purpose under this Agreement. Each Partner will furnish the Partnership with all
information necessary to give effect to such election.

 

10.6        
Reports Made Available to Limited Partners.

 

(a)          
As soon as practicable after the close of each fiscal quarter (other than the last quarter of the fiscal year), upon written request
by a Limited Partner to the General Partner, the General Partner will make available, without cost, to each Limited Partner a quarterly
report containing financial statements of the Partnership, or of the General Partner if such statements are prepared solely on
a consolidated basis with the General Partner, for such fiscal quarter, presented in accordance with generally accepted accounting
principles. As soon as practicable after the close of each fiscal year, upon written request by a Limited Partner to the General
Partner, the General Partner will make available, without cost, to each Limited Partner an annual report containing financial statements
of the Partnership, or of the General Partner if such statements are prepared solely on a consolidated basis with the General Partner,
for such fiscal year, presented in accordance with generally accepted accounting principles.

 

(b)          
Any Partner shall further have the right to a private audit of the books and records of the Partnership at the expense of such
Partner, provided such audit is made for Partnership purposes and is made during normal business hours.

ARTICLE 11

 

AMENDMENT OF AGREEMENT; MERGER

 

11.1          
Amendments By General Partner.
The General Partner’s consent shall be required for any amendment to this Agreement. The General Partner, without the consent
of the Limited Partners, may amend this Agreement in any respect, or merge or consolidate the Partnership with or into any other
Person in a transaction pursuant to Section 7.1(b), (c) or (d) hereof; provided, however, that the following amendments, and any
other merger or consolidation of the Partnership, shall require the consent of the holders of a majority of the Partnership Units
(excluding the Partnership Units held by the General Partner or an Affiliate thereof):

 

    	31

    	 

    

 

(a)          
any amendment affecting the operation of the Conversion Factor or the Exchange Right (except as provided in Section 8.4(d) or 7.1(c)
hereof) in a manner adverse to the Limited Partners;

 

(b)          
any amendment that would adversely affect the rights of the Limited Partners to receive the distributions payable to them hereunder,
other than with respect to the issuance of additional Partnership Units pursuant to Section 4.2 hereof;

 

(c)          
any amendment that would alter the Partnership’s allocations of Profit and Loss to the Limited Partners, other than with
respect to the issuance of additional Partnership Units pursuant to Section 4.2 hereof; or

 

(d)          
any amendment that would impose on the Limited Partners any obligation to make additional Capital Contributions to the Partnership.

 

11.2        Consent Required for Certain
Amendments. Notwithstanding the provisions of Section 11.1, each of the following amendments to this Agreement by the General
Partner must be approved by each of the Limited Partners that would be adversely affected by such amendment:

 

(a)           
Conversion of a Limited Partner’s Limited Partnership Interest into a General Partnership Interest (except as a result of
the General Partner acquiring such interest);

 

(b)           
Modification of the limited liability of a Limited Partner;

 

(c)           
Alteration of the rights of any Partner to receive the distributions to which such Partner is entitled under this Agreement;

 

(d)           
Modification of the Exchange Right of a Limited Partner; or

 

(e)           
Modifications of the provisions in this Agreement governing the transfer of the General Partner’s General Partnership Interest.

 

ARTICLE 12

GENERAL PROVISIONS

 

12.1        
Notices. All communications required or permitted under this Agreement shall be in writing and shall be deemed to have been
given when delivered personally or upon deposit in the United States mail, registered, postage prepaid return receipt requested,
or by overnight delivery or via facsimile to the Partners at the addresses set forth in Exhibit A attached hereto; provided,
however, that any Partner may specify a different address by notifying the General Partner in writing of such different address.
Notices to the Partnership shall be delivered at or mailed to its specified office.

 

12.2        
Survival of Rights. Subject to the provisions hereof limiting transfers, this Agreement shall be binding upon and inure
to the benefit of the Partners and the Partnership and their respective legal representatives, successors, transferees and assigns.

 

12.3        
Additional Documents. Each Partner agrees to perform all further acts and execute, swear to, acknowledge and deliver all
further documents which may be reasonable, necessary, appropriate or desirable to carry out the provisions of this Agreement or
the Act.

 

12.4        
Severability. If any provision of this Agreement shall be declared illegal, invalid, or unenforceable in any jurisdiction,
then such provision shall be deemed to be severable from this Agreement (to the extent permitted by law) and in any event such
illegality, invalidity or unenforceability shall not affect the remainder hereof.

 

    	32

    	 

    

 

12.5        
Entire Agreement. This Agreement and exhibits attached hereto constitute the entire Agreement of the Partners and supersede
all prior written agreements and prior and contemporaneous oral agreements, understandings and negotiations with respect to the
subject matter hereof.

 

12.6        
Pronouns and Plurals. When the context in which words are used in the Agreement indicates that such is the intent, words
in the singular number shall include the plural and the masculine gender shall include the neuter or female gender as the context
may require.

 

12.7        
Headings. The Article headings or sections in this Agreement are for convenience only and shall not be used in construing
the scope of this Agreement or any particular Article.

 

12.8        Counterparts. This Agreement
may be executed in several counterparts, each of which shall be deemed to be an original copy and all of which together shall constitute
one and the same instrument binding on all parties hereto, notwithstanding that all parties shall not have signed the same counterpart.
Delivery of a signed counterpart of this Agreement by facsimile or email/pdf transmission shall constitute
valid and sufficient delivery thereof.

 

12.9        
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware; provided,
however, that causes of action for violations of federal or state securities laws shall not be governed by this Section 12.9.

 

12.10     Waivers. The
failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed or construed
to be a waiver of any such provision, nor to in any way affect the validity of this Agreement or any provision hereof or the right
of any of the parties hereto to thereafter enforce each and every provision of this Agreement.  No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance
or non-fulfillment.

 

IN WITNESS WHEREOF, the parties hereto have
hereunder affixed their signatures to this Limited Partnership Agreement, all as of September __, 2012.

 

	 	GENERAL PARTNER
	 	 
	 	WEST COAST REALTY TRUST, INC.
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	INITIAL LIMITED PARTNERS
	 	 
	 	UNIVERSITY CAPITAL MANAGEMENT, INC.
	 	 
	 	By:	
	 	 	Name:
	 	 	Title:
	 	 	 
	 	RICHARD P. BERNSTEIN
	 	 	 
	 	 	 

 

    	33

    	 

    

 

Corporate/Limited Liability Company Additional Limited Partner
Signature Page to Limited Partnership Agreement of WCRT Operating Partnership L.P., by and among the undersigned and the other
parties thereto. 

 

	Dated:                              , 20    	 	 	 	[Name of Corporation/LLC]
	 	 	 	 	 
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	
        Name:

        Title:

 

Individual Additional Limited Partner Signature Page to Limited
Partnership Agreement of WCRT Operating Partnership L.P., by and among the undersigned and the other parties thereto.

	 	 	 	 	 	 	 	 	 
	Dated:                              , 20    	 	 	 	[Name of Individual]
	 	 	 	 	 
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	
        Name:

        Title:

 

Partnership Additional Limited Partner
Signature Page to Limited Partnership Agreement of WCRT Operating Partnership L.P., by and among the undersigned and the other
parties thereto. 

 

	 	 	 	 	 	 	 	 	 
	Dated:                              , 20    	 	 	 	[Name of Partnership]
	 	 	 	 	 
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	
        Name:

        Title:

 

    	34

    	 

    

 

EXHIBIT A

 

PARTNERSHIP UNITS AND PERCENTAGE INTERESTS

 

	Name and Address	 	Number of	 	Percentage
	of Partner	 	Partnership Units	 	Interest:
	 	 	 	 	 
	General Partner:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	West Coast Realty Trust, Inc. 

650 Howe Avenue, Suite 730 

Sacramento, CA 95825	 	2,200,100 Class A Common Units	 	 	88.95	%
	 	 	 	 	 	 	 
	Initial Limited Partners:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	University Capital Management, Inc. 

2443 Fair Oaks Blvd., Suite 368 

Sacramento, CA 95825	 	186,986 Class B Common Units	 	 	7.56	%
	 	 	 	 	 	 	 
	Richard P. Bernstein

 650 Howe Avenue, Suite 730 

Sacramento, CA 95825	 	86,249 Class B Common Units	 	 	3.49	%
	 	 	 	 	 	 	 
	Total Number of Units
    and Percentage Interests:	 	2,473,335
    Common Units	 	 	100	%

 

    	 

    	 

    

 

EXHIBIT B

 

NOTICE OF EXERCISE OF EXCHANGE RIGHT

 

In accordance with Section 8.4 of the Agreement
of Limited Partnership (the “Agreement”) of WCRT Operating Partnership, L.P., the undersigned hereby irrevocably (i)
presents for exchange ______ Partnership Units in WCRT Operating Partnership, L.P. in accordance with the terms of the Agreement
and the Exchange Right referred to in Section 8.4 thereof, (ii) surrenders such Partnership Units and all right, title and interest
therein, and (iii) directs that the Cash Amount or REIT Shares Amount (as defined in the Agreement) as determined by the General
Partner deliverable upon exercise of the Exchange Right be delivered to the address specified below, and if REIT Shares (as defined
in the Agreement) are to be delivered, such REIT Shares be registered or placed in the name(s) and at the address(es) specified
below.

 

	 	 	Dated:	 	,	 	 

  

	 	 	 
	 	 	 
	 	 	(Name of Limited Partner)
	 	 	 
	 	 	 
	 	 	(Signature of Limited Partner)
	 	 	 
	 	 	 
	 	 	(Mailing Address)
	 	 	 
	 	 	 
	 	 	(City)  (State) (Zip Code)
	 	 	 
	 	 	Signature Guaranteed by:
	 	 	 
	 	 	 

 

	 	 	If REIT Shares are to be issued, issue to:
	 	 	 
	 	 	Name:
	 	 	 
	 	 	 
	 	 	 
	 	 	Social Security or Tax I.D. Number:

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