EXHIBIT 10.49
LIMITED PARTNERSHIP AGREEMENT
OF
CRIT-CORNERSTONE LIMITED PARTNERSHIP
This LIMITED PARTNERSHIP AGREEMENT (the "Partnership Agreement") is
made as of December 22, 1999, by and between CRIT-SC, Inc, a Virginia
corporation, the general partner ("General Partner"), and CRIT-SC, LLC, a
Virginia limited liability company, the limited partner ("Limited Partner" and
together with the General Partner, the "Partners").
INTRODUCTION
A. The General Partner and the Limited Partner have agreed to form a
limited partnership (the "Partnership") pursuant to the provisions of the
"Virginia Revised Uniform Limited Partnership Act" (the "Act"). The existence of
the Partnership shall commence upon the filing of a certificate of limited
partnership with the Virginia State Corporation Commission (the "Commission").
B. The rights, duties and obligations of the Partners shall be governed
by the Act except as otherwise provided in this Partnership Agreement. The term
"Person," as used herein, means an individual or an entity.
ARTICLE I
ORGANIZATIONAL MATTERS
1.1 NAME. The name of the Partnership is CRIT-Cornerstone Limited
Partnership. The Partnership may trade or transact business under the name
CRIT-Cornerstone Limited Partnership or such other name as shall be selected by
the General Partner.
1.2 PURPOSE. The Partnership is formed to acquire, hold, operate and in
all respects act as owner of real property in South Carolina and to engage in
any and all activities related or incidental thereto or agreed to by the
Partners from time to time provided, however, such activities shall be limited
to and conducted in such a manner as to permit Cornerstone Realty Income Trust,
Inc. (the "Cornerstone REIT") at all times to qualify as a real estate
investment trust ("REIT") under sections 856 through 860 of the Internal Revenue
Code of 1986, as amended (the "Code").
1.3 FILINGS.
(a) The Partnership has filed with the Commission a certificate of
limited partnership (the "Certificate") pursuant to Va Code ss. 50-73.11.
(b) The Certificate designates 306 East Main Street, Richmond,
Virginia 23219 as the principal office (the "Principal Office") of the
Partnership. It designates c/o McGuire, Woods, Battle & Boothe LLP, One James
Center, 901 East Cary Street, Richmond, Virginia 23219 as its registered office
(the "Registered Office") and James W. C. Canup, Esq., at that address, as its
registered agent (the "Registered Agent").
ARTICLE II
MANAGEMENT
2.1 THE GENERAL PARTNER. The General Partner shall have the sole and
exclusive right, duty and power to manage the business of the Partnership,
including, without limitation, the right and power to:
(i) acquire, hold, sell, maintain, encumber, improve, develop or
lease Partnership property, real or personal, and any interest therein
on such terms and conditions as the General Partner deems advisable;
(ii) borrow money on behalf of the Partnership, secure any such
borrowings with Partnership assets, and repay the same at any time or
from time to time;
(iii) establish investment accounts for the Partnership and deposit
and withdraw funds in or from such accounts;
(iv) assign, compromise or release any claim of, or debt due, the
Partnership;
(v) institute and defend actions at law or in equity on behalf of
the Partnership and consent to arbitrate any disputes or controversies
of the Partnership;
(vi) engage and retain accountants, lawyers and other professional
persons to perform services for the Partnership, and purchase such
goods and other services as may be required to conduct the business of
the Partnership; and
(vii) enter into such contracts and perform such other acts as may
be necessary to further the business of the Partnership.
2.2 LIMITATIONS ON POWER AND AUTHORITY. Notwithstanding anything to the
contrary in this Partnership Agreement, the General Partner's rights, authority
and power are subject to and limited by certain provisions of the Bylaws of the
Cornerstone REIT (including Article XIII therein) and actions described in such
Bylaws (including such Article) may only be undertaken in compliance with the
provisions thereof, including the obtaining of any consents referred to therein.
ARTICLE III
LIMITED PARTNERS
3.1 PARTICIPATION IN MANAGEMENT. The Limited Partner shall not
participate in the management or control of the business of the Partnership, and
shall have no power to sign for or bind the Partnership.
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ARTICLE IV
CAPITAL; PROFITS AND LOSSES; COMPENSATION; DISTRIBUTIONS
4.1 CAPITAL CONTRIBUTIONS. Each of the Partners has contributed to the
capital of the Partnership the property set forth on Schedule A. The Partners
shall not be required to make any additional capital contributions except as
required by law, but the Partners may make such additional contributions of cash
or property as they may mutually agree. No Partner shall have any right to
require the return of all or any part of its capital, or to receive interest
with respect thereto.
4.2 CAPITAL ACCOUNTS. A separate capital account ("Capital Account")
shall be maintained for each Partner. The value of each Capital Account shall be
the sum of the cash contributions to the account, the agreed upon value of
contributions of property to the account and the share of Partnership profits
allocated to the account, less all distributions made from the account and the
share of Partnership losses allocated to the account.
4.3 PROFITS AND LOSSES. The net profits and net losses of the
Partnership for any period (except for the profits and losses upon dissolution)
shall be credited or charged to the Capital Accounts of the Partners in the
percentages set forth on Schedule A under the heading "Partners' Percentages"
(as the same may be amended from time to time, the "Partners' Percentages").
4.4 DISTRIBUTIONS. Any cash which, in the opinion of the General
Partner, is not reasonably required for the operation of the business of the
Partnership or for Partnership reserves (other than amounts distributed upon
dissolution) shall be distributed to the Partners in accordance with the
Partners' Percentages not less frequently than each calendar quarter. Other
distributions of assets may be made from time to time in the same manner.
4.5 REIT DISTRIBUTIONS. Notwithstanding anything to the contrary in
this Agreement, the General Partner shall cause the Partnership to distribute
amounts sufficient to enable the Cornerstone REIT to pay its shareholders
dividends that will allow the Cornerstone REIT to (i) meet the distribution
requirement for qualification as a REIT as set forth in Section 857(a)(1) of the
Code and (ii) avoid any federal income or excise tax liability imposed by the
Code.
4.6 LOANS. A loan by a Partner to the Partnership shall not be
considered a capital contribution and shall be repaid as debt of the
Partnership.
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ARTICLE V
INDEMNIFICATION
5.1 INDEMNIFICATION.
(a) The Partnership shall indemnify each Partner (and each director
and officer of a Partner) who was, is or is threatened to be made a party to any
action, suit or proceeding, whether civil, criminal, administrative, arbitrative
or investigative, and whether formal or informal (a "Proceeding"), (i) solely by
reason of being or having been a Partner or a director or officer of a Partner
or (ii) as a result of having served at the request of the Partnership as a
fiduciary for an employee benefit or other plan related to the business of the
Partnership, against any liability and reasonable expenses (including reasonable
attorney's fees), incurred as a result of such Proceeding, except such
liabilities and expenses which are incurred as a result of a breach of this
Partnership Agreement, willful misconduct or a knowing violation of the law.
(b) The Partnership shall promptly make advances or reimbursements
for reasonable expenses (including attorney's fees) incurred by any Partner or a
director or officer of a Partner claiming indemnification under this Article
unless it has been determined that such Partner, director or officer is not
entitled to indemnification. Advances or reimbursements made in advance of any
such determination shall be conditioned upon receipt from the Partner, director
or officer claiming indemnification of a written undertaking to repay the amount
of such advances or reimbursements if it is ultimately determined that such
Partner, director or officer is not entitled to indemnification.
ARTICLE VI
EVENTS OF DISSOLUTION
6.1 EVENTS OF DISSOLUTION. The Partnership shall only be dissolved:
(i) upon the election of the General Partner;
(ii) at such time as there is no General Partner serving
unless, within 90 days, the Limited Partner consents to continue the
business of the Partnership and appoints one or more General Partners;
(iii) upon automatic cancellation of the certificate of limited
partnership for failure to pay annual registration fees, unless steps
to obtain reinstatement are promptly taken; or
(iv) by judicial decree.
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ARTICLE VII
DISSOLUTION, WINDING UP AND TERMINATION
7.1 GENERAL. Upon dissolution without continuation, the business of the
Partnership shall be wound up by the General Partner or, if there is no General
Partner, by a representative designated by the Limited Partner (either of which
or whom is hereinafter referred to as the "Liquidating Representative"). The
Liquidating Representative shall proceed with reasonable promptness to liquidate
the business and assets of the Partnership and may determine whether and to
which Partners properties should be distributed in kind. Partnership assets
shall be distributed in the following order:
(i) to creditors of the Partnership, including Partners who
are creditors, in the order of priority by law;
(ii) to the creation of such reserves for contingencies as the
Liquidating Representative may deem necessary or advisable;
(iii) to the Limited Partner to the extent of its contribution
to capital;
(iv) to the General Partner to the extent of its contribution
to capital;
(v) to the Partners, General and Limited, according to their
Capital Account balances, after all adjustments.
ARTICLE VIII
MISCELLANEOUS
8.1 BOOKS OF ACCOUNT AND RECORDS. The Partnership shall keep complete
books of account at the Principal Office which shall be open to examination by
the Partners, the Cornerstone REIT and their authorized representatives during
normal business hours. The books shall be kept on a cash or accrual basis, as
determined by the General Partner.
8.2 TAX COMPLIANCE. Notwithstanding anything to the contrary contained
in this Partnership Agreement, all actions taken in the conduct of the business
of the Partnership, or on its dissolution, shall comply with the provisions of
Section 704 of the Code and the Regulations thereunder. The General Partner
shall be the "Tax Matters Partner" required by the Code.
8.3 POWER OF ATTORNEY. The Limited Partner hereby appoints the General
Partner its attorney-in-fact, or agent, to execute, acknowledge, deliver and
file in its name any document required by law to be filed by the Partnership or
such Partner with any governmental body or agency. Any such appointment is a
special power, coupled with an interest, and shall remain in effect as long as
the Partner granting it has any interest in the Partnership or remains
responsible for any obligations under this Partnership Agreement.
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8.4 COUNTERPARTS. This Partnership Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
8.5 AMENDMENTS. This Partnership Agreement may be amended only with the
consent of the General Partner and the Limited Partner.
8.6 THIRD PARTIES; SUCCESSORS AND ASSIGNS. The agreements contained
herein are for the benefit of the parties hereto and their permitted successors
and assigns and are not for the benefit of any third parties, including, without
limitation, creditors of the Partnership.
8.7 HEADINGS. The section headings herein are for convenience only and
shall not affect the interpretation of this Partnership Agreement.
8.8 INTERPRETATION. This Partnership Agreement is executed and
delivered in the Commonwealth of Virginia and shall be construed and enforced in
accordance with the laws of such state without giving effect to its choice of
law rules.
WITNESS the following signatures:
GENERAL PARTNER
CRIT-SC, Inc.
By: /s/ S. J. Olander, Jr.
-------------------------------
Name: S. J. Olander, Jr.
Title: President
LIMITED PARTNER:
CRIT-SC, LLC
By: /s/ S. J. Olander, Jr.
-------------------------------
Name: S. J. Olander, Jr.
Title: Manager
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SCHEDULE A
GENERAL PARTNER
Name and Capital Partners'
Business Address Contribution Percentages
CRIT-SC, Inc. $1.00 1%
306 East Main Street
Richmond, Virginia 23219
LIMITED PARTNER
Name and
Business Address
CRIT-SC, LLC $99.00 99%
306 East Main Street
Richmond, Virginia 23219
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