EXHIBIT 10.47
OPERATING AGREEMENT
OF
CRIT-SC, LLC
This OPERATING AGREEMENT of CRIT-SC, LLC (the "LLC") is made as of
December 22, 1999, between Cornerstone Realty Income Trust, Inc. (the "Member")
and the LLC.
ARTICLE I
FORMATION, PURPOSES, AND MEMBERS
1.1 FORMATION. The Member acknowledges the formation of the LLC under
the Virginia Limited Liability Company Act, as amended from time to time (the
"Act"). The Virginia State Corporation Commission issued the Certificate of
Organization on December 22, 1999.
1.2 PURPOSES.
(A) BUSINESS PURPOSE. The purpose of the LLC is to engage in
investment activities and any and all lawful business.
(B) TAX CLASSIFICATION. The Member intends that this LLC be
treated as a proprietorship for federal income tax purposes as long as it has a
single owner, and that it be treated as a partnership for federal income tax
purposes whenever it has more than one owner, and this Agreement shall be
interpreted accordingly.
(C) LIMITED LIABILITY. No Member or Manager shall have any
personal obligation for any liabilities of the LLC solely by reason of being a
Member or Manager, except as provided by law.
ARTICLE II
MEMBER
2.1 GENERAL. The term "Member" means the undersigned initial Member and
any Person subsequently admitted as a Member. The term "Person" includes
entities as well as individuals.
2.2 MEMBER LIST. The LLC shall maintain at its principal office a
current list showing the name, address, percentage interest in profits and
losses, and capital contribution of each Member.
2.3 CONSENT OR APPROVALS OF MEMBERS; MEETINGS.
(A) MEETINGS; WRITTEN CONSENT. Except as is otherwise provided
in this Agreement, any action which requires the consent or approval of all, or
any portion, of the Members shall be obtained at a meeting of the Members, or
shall be evidenced by the written consent of Members holding the requisite
voting power.
(B) MAJORITY VOTE. Unless this Agreement provides otherwise,
any action which requires the consent or approval of Members must be consented
to or approved by Members owning a majority of the then aggregate value of the
Capital Accounts of the Members.
2.4 ADMISSION OF MEMBERS. A Person acquiring an interest in the LLC
from the LLC may be admitted as a Member only by unanimous written consent of
the Members.
ARTICLE III
MANAGEMENT
3.1 MANAGEMENT BY MANAGERS. The LLC shall be managed by a person or
persons who shall have full responsibility for managing the business and affairs
of the LLC (the "Manager"). All references to the "Manager" shall refer to the
Manager or Managers serving at the time.
3.2 POWERS OF MANAGER. The Manager shall have all the powers set forth
in Section 13.1-1009 of the Act. Multiple Managers shall act unanimously.
3.3 DESIGNATION OF MANAGER. S. J. Olander, Jr., is designated as the
initial Manager.
3.4 SUCCESSOR MANAGER. In the event of the death, resignation, removal,
or incapacity of the Manager, the Members shall have the right to appoint a
Successor Manager. The Members may remove a Manager at any time.
3.5 COMPENSATION. A Manager shall receive reasonable compensation for
any services rendered as Manager. A Member who is not acting as a Manager shall
not be entitled to any compensation as a Member.
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ARTICLE IV
REIMBURSEMENT OF EXPENSES
4.1 EXPENSES; REIMBURSEMENT. The LLC shall bear all expenses and
liabilities incurred with respect to the operation and management of the LLC. A
Member or Manager shall be entitled to reimbursement from the LLC for any LLC
expenses or liabilities incurred by the Member or Manager, provided that the
expenses or liabilities did not arise as a result of the Member's or Manager's
willful misconduct or a knowing violation of the criminal law.
ARTICLE V
CONTRIBUTIONS AND DISTRIBUTIONS
5.1 CONTRIBUTIONS. The initial Member has contributed to the LLC the
property described on Exhibit A in exchange for all of the interests in the LLC.
5.2 DISTRIBUTIONS OF CASH. The Manager may distribute to the Members,
annually or more frequently, cash and non-cash assets not required for LLC
operations or reserves.
ARTICLE VI
DISSOLUTION
6.1 EVENTS OF DISSOLUTION. The LLC shall dissolve upon the written
election of the Members.
6.2 CONTINUATION UNDER CERTAIN CIRCUMSTANCES. Notwithstanding anything
to the contrary in this Agreement, if at any time there ceases to be at least
one Member of the LLC, within 90 days of such date any person who holds an
interest in the LLC may elect to become a Member by written notice mailed to the
principal office of the LLC (to be effective as of the date on which there
ceased to be at least one Member), and in such event the LLC shall continue and
shall not be dissolved or wound up until otherwise required under this
Agreement.
6.3 WINDING UP. Upon the dissolution of the LLC, the Manager shall wind
up the affairs of the LLC. The Manager shall determine the time, manner, and
terms of any sale or sales of LLC property pursuant to such winding up, having
due regard to the activity and the condition of the LLC and relevant market and
economic conditions.
6.4 CERTIFICATE OF CANCELLATION. Upon completion of the winding up of
the LLC, the LLC shall terminate and a Certificate of Cancellation shall be
filed with the Virginia State Corporation Commission, together with any other
documents required to effectuate the termination.
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ARTICLE VII
ADMINISTRATIVE PROVISIONS
7.1 OFFICES. The initial principal office, registered office, and
registered agent shall be as set forth in the Articles of Organization. The
Manager may change the principal office, the registered office or the registered
agent at any time.
7.2 INFORMATION AND RECORDS. The Manager shall keep full and accurate
books of account, records, and supporting documents at the principal office of
the LLC. Upon reasonable notice, a Member or a Member's designated
representative shall have access to such books, records, and documents during
reasonable business hours and may inspect and make copies of any of them at the
Member's expense.
ARTICLE VIII
MISCELLANEOUS
8.1 AMENDMENT. This Agreement may be amended at any time by the
unanimous written consent of the Members.
8.2 DEFINITIONS. Unless the context otherwise requires, the terms used
in this Agreement shall have the same definitions set forth in the Act.
8.3 GOVERNING LAW. This Agreement shall be governed by the Act and
other applicable laws of the Commonwealth of Virginia, without giving effect to
its conflicts of laws rules.
IN WITNESS WHEREOF, the Member and the LLC have executed this Agreement
on the day and date indicated above.
CORNERSTONE REALTY INCOME TRUST, INC.
By: /s/ S. J. Olander, Jr.
---------------------------------
S. J. Olander, Jr., Secretary
Member
CRIT-SC, LLC
By: /s/ S. J. Olander, Jr.
---------------------------------
S. J. Olander, Jr., Manager
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EXHIBIT A
TO THE
OPERATING AGREEMENT
OF
CRIT-SC, LLC
Name and Business Percentage
Address of Member Capital Contribution Interest
- ----------------- -------------------- --------
Cornerstone Realty Income $1,000.00 100%
Trust, Inc.
306 East Main Street
Richmond, VA 23219
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