Exhibit 10.15

 

LIMITED LIABILITY COMPANY AGREEMENT

OF

VILLAS PARTNERS, LLC

 

THIS LIMITED LIABILITY COMPANY AGREEMENT of VILLAS PARTNERS, LLC, a Delaware
limited liability company (as amended from time to time, the “Agreement”) is
entered into among Oak Crest Villas JV, LLC, a Delaware limited liability
company, the sole member of the Company (the “Member”), and Ryan L. Hanks
(“Hanks”) and Jordan Ruddy (“Ruddy”), each, as a Special Member (the “Special
Member”).

 

RECITALS

 

A.           The Company was formed as a Delaware limited liability company in
accordance with the Delaware Limited Liability Company Act, as amended from time
to time (the “Act”).

 

B.           The undersigned desire to execute this Agreement to set forth the
terms and conditions under which the management, business, and financial affairs
of the Company will be conducted.

 

C.           Definitions for this Agreement are set forth in Article XI.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, covenants, and conditions herein contained, the receipt and
sufficiency of which are hereby acknowledged, the undersigned parties hereby
covenant and agree as follows:

 

ARTICLE I

PURPOSE AND POWERS OF COMPANY

 

1.01         Business and Purpose. The sole business and purpose of the Company
is to (a) acquire, own, hold, sell and dispose of the real property, with
improvements thereon, located at 7255 Lee Highway, Chattanooga, Tennessee 37421,
known and commonly referred to as The Villas at Oak Crest Apartments (the
“Property”), and (b) borrow the Loan (as defined in Section 3.05), together with
such other activities permitted by the limited liability company laws of the
State of Delaware as may be necessary, incidental, or appropriate in connection
therewith. Except as noted above, the Company shall not hold or acquire,
directly or indirectly, any ownership interest (legal or equitable) in any real
or personal property or become a shareholder of or member or partner in any
entity which acquires or holds any property, until such time as the Loan has
been fully repaid and all obligations under the Loan are satisfied.

 

1.02         Powers. The Company shall have all powers of a limited liability
company formed under the Act and not prohibited by the Act or this Agreement.

 

1.03         Title to Company Property. All property owned by the Company shall
be owned by the Company as an entity and, insofar as permitted by applicable
law, no Member shall have any ownership interest in any Company property in its
individual name or right, and each Member’s Membership Interest shall be
personal property for all purposes.

 

1.04         Term. This Agreement shall not terminate until the Company is
terminated in accordance with this Agreement.

 

 

 

 

1.05         Registered Office and Registered Agent. The Company’s initial
registered office and initial registered agent shall be as provided in the
Certificate of Formation. The registered office and registered agent may be
changed from time to time by filing the address of the new registered office
and/or the name of the new registered agent pursuant to the Act.

 

1.06         Formation and Authorized Person. The Certificate of Formation has
been filed with the Secretary of State of the State of Delaware in accordance
with and pursuant to the Act. Ryan L. Hanks and Deborah Huet are hereby
designated as an “authorized person” within the meaning of the Act, and has
executed, delivered and filed the Certificate of Formation of the Company with
the Secretary of State of the State of Delaware, and is hereby authorized to
execute, deliver and file any other certificates (and any amendments and/or
restatements thereof) necessary or desirable for the Company to qualify to do
business in any other jurisdiction in which the Company may wish to conduct
business (the “Qualification Papers”). The execution, delivery and filing of the
Qualification Papers by Ryan L. Hanks or Deborah Huet as an “authorized person”
within the meaning of the Act is hereby approved and ratified in all respects.
Upon the filing of all of Qualification Papers, her powers as an “authorized
person” ceased, and the Member thereupon became the designated “authorized
person” and shall continue as the designated “authorized person” within the
meaning of the Act.

 

ARTICLE II

MEMBERS

 

2.01        Initial Member.

 

(a)          The name, address and initial Membership Interest of the initial
Member is as follows:

 

Name   Membership Interest       Oak Crest Villas JV, LLC   100% 1600 Camden
Road     Charlotte, NC  28203    

 

(b)          The Member was admitted to the Company as a member of the Company
upon its execution of a counterpart signature page to this Agreement.

 

2.02         Special Member. Upon the occurrence of any event that causes the
Member to cease to be a member of the Company (other than upon continuation of
the Company without dissolution upon (a) an assignment by the Member of all of
its Membership Interest and the admission of the transferee pursuant to Section
8.01, or (b) the resignation of the Member and the admission of an additional
member of the Company pursuant to Section 8.01), Hanks or, if Hanks is unable to
so perform for any reason, Ruddy as the Special Member shall, without any action
of such Person and simultaneously with the Member ceasing to be a member of the
Company, automatically be admitted to the Company as a member and shall continue
the Company without dissolution. No Special Member may resign from the Company
or transfer its rights as Special Member unless a successor Special Member has
been approved in writing by Lender and has been admitted to the Company as
Special Member by executing a counterpart to this Agreement; provided, however,
a Special Member shall automatically cease to be a member of the Company upon
the admission to the Company of a substitute Member. A Special Member shall be a
member of the Company that has no interest in the profits, losses and capital of
the Company and has no right to receive any distributions of Company assets.
Pursuant to Section 18-301 of the Act, a Special Member shall not be required to
make any capital contributions to the Company and shall not receive a Membership
Interest in the Company. A Special Member, in its capacity as Special Member,
may not bind the Company. Except as required by any mandatory provision of the
Act, a Special Member, in its capacity as Special Member, shall have no right to
vote on, approve or otherwise consent to any action by, or matter relating to,
the Company, including, without limitation, the merger, consolidation or
conversion of the Company. In order to implement the admission to the Company of
each Special Member, the Persons acting as a Special Member shall execute a
counterpart to this Agreement. Prior to admission to the Company as Special
Member, no Person executing this Agreement as a Special Member shall be a member
of the Company.

 

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ARTICLE III

MANAGEMENT BY MEMBER

 

3.01         In General. The powers of the Company shall be exercised by, or
under the authority of, the Member. In addition, the business and affairs of the
Company shall be managed under the direction of the Member. Subject to the
limitations set forth in this Agreement, and the terms of Section 3.06, the
Member shall be entitled to make all decisions and take all actions for the
Company.

 

3.02         Management by Member. Except as otherwise limited by this
Agreement, the Member shall have the power to do any and all acts necessary,
convenient or incidental to or for the furtherance of the purposes described
herein, including all powers, statutory or otherwise. Subject to the terms of
Section 3.06, the Member shall be entitled to make all decisions and take all
actions for the Company, and, subject to Article IV, the Member has the
authority to bind the Company.

 

3.03         Required Approval. Any provision in this Agreement that requires
the approval of the Members, but does not specify the particular percentage
interests or number of Members required for such approval, shall be interpreted
to require the affirmative vote of the Member or Members holding a majority of
the total Membership Interests from time to time, and specifically shall not be
interpreted to require unanimous consent of the Members.

 

3.04         Action By Members. In exercising the voting or other approval
rights as provided herein, the Member may act through meetings and/or written
consents.

 

3.05         Authorization. The Company is authorized to acquire the Property
and to enter into a mortgage loan (the “Loan”) with CBRE Capital Markets, Inc.,
a Texas corporation (together with its successors and assigns, the “Lender”),
and from time to time refinance the Loan. In furtherance of the conduct of the
purposes described herein, the Company shall possess and may exercise all of the
powers and privileges granted by the Act, and the Company is hereby authorized
to do any act, enter into any agreement, contract or other instrument, and
otherwise to engage in any activity and to do any action not prohibited under
the Act or other applicable law which is necessary, useful, desirable or
convenient to the conduct, promotion and attainment of the business and purposes
of the Company. In addition, the Company or the Member on behalf of the Company,
may enter into and perform the Loan Documents and all documents, agreements,
certificates, or financing statements contemplated thereby or related thereto,
all without any further act, vote or approval of any other Person
notwithstanding any other provision of this Agreement, the Act or applicable
law, rule or regulation. The foregoing authorization shall not be deemed a
restriction on the powers of the Member to enter into other agreements on behalf
of the Company in accordance with this Agreement.

 

ARTICLE IV

SEPARATENESS PROVISIONS

 

4.01         Single Purpose Entity Requirements. Until the Loan is paid in full,
the Company will remain a “Single Purpose Entity,” which means a corporation,
limited partnership, or limited liability company which, at all times since its
formation and thereafter will satisfy each of the following conditions:

 

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(1)It will not engage in any business or activity, other than the ownership,
operation and maintenance of the Property and activities incidental thereto.

 

(2)It will not acquire, own, hold, lease, operate, manage, maintain, develop or
improve any assets other than the Property and such personalty as may be
necessary for the operation of the Property and will conduct and operate its
business as presently conducted and operated.

 

(3)It will preserve its existence as an entity duly organized, validly existing
and in good standing (if applicable) under the laws of the jurisdiction of its
formation or organization and will do all things necessary to observe
organizational formalities.

 

(4)It will not merge or consolidate with any other Person.

 

(5)It will not take any action to dissolve, wind-up, terminate or liquidate in
whole or in part; to sell, transfer or otherwise dispose of all or substantially
all of its assets; to change its legal structure; transfer or permit the direct
or indirect transfer of any partnership, membership or other equity interests,
as applicable, other than Transfers permitted under the Loan Documents; issue
additional partnership, membership or other equity interests, as applicable, or
seek to accomplish any of the foregoing.

 

(6)It will not, without the prior unanimous written consent of all of the
Company’s members, take any of the following actions:

 

(A)File any insolvency, or reorganization case or proceeding, to institute
proceedings to have the Company be adjudicated bankrupt or insolvent.

 

(B)Institute proceedings under any applicable insolvency law.

 

(C)Seek any relief under any law relating to relief from debts or the protection
of debtors.

 

(D)Consent to the filing or institution of bankruptcy or insolvency proceedings
against the Company.

 

(E)File a petition seeking, or consent to, reorganization or relief with respect
to the Company under any applicable federal or state law relating to bankruptcy
or insolvency.

 

(F)Seek or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator, custodian, or any similar official for the Company or a
substantial part of its property.

 

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(G)Make any assignment for the benefit of creditors of the Company.

 

(H)Admit in writing Company’s inability to pay its debts generally as they
become due.

 

(I)Take action in furtherance of any of the foregoing.

 

(7)It will not amend or restate its organizational documents if such change
would cause the provisions set forth in those organizational documents not to
comply with the requirements set forth in this Section 4.01.

 

(8)It will not own any subsidiary or make any investment in, any other Person.

 

(9)It will not commingle its assets with the assets of any other Person and will
hold all of its assets in its own name.

 

(10)It will not incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than, (A) the Loan and (B)
customary unsecured trade payables incurred in the ordinary course of owning and
operating the Property provided the same are not evidenced by a promissory note,
do not exceed, in the aggregate, at any time a maximum amount of 2% of the
original principal amount of the Loan and are paid within 60 days of the date
incurred.

 

(11)It will maintain its records, books of account, bank accounts, financial
statements, accounting records and other entity documents separate and apart
from those of any other Person and will not list its assets as assets on the
financial statement of any other Person; provided, however, that the Company’s
assets may be included in a consolidated financial statement of its Affiliate
provided that (A) appropriate notation will be made on such consolidated
financial statements to indicate the separateness of the Company from such
Affiliate and to indicate that Company’s assets and credit are not available to
satisfy the debts and other obligations of such Affiliate or any other Person
and (B) such assets will also be listed on the Company’s own separate balance
sheet.

 

(12)Except for capital contributions or capital distributions permitted under
the terms and conditions of its organizational documents, it will only enter
into any contract or agreement with any general partner, member, shareholder,
principal or Affiliate of Company or any Guarantor of the Loan, or any general
partner, member, principal or Affiliate thereof, upon terms and conditions that
are commercially reasonable and substantially similar to those that would be
available on an arm’s-length basis with third parties.

 

(13)It will not maintain its assets in such a manner that will be costly or
difficult to segregate, ascertain or identify its individual assets from those
of any other Person.

 

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(14)It will not assume or guaranty (excluding any guaranty that has been
executed and delivered in connection with the Loan) the debts or obligations of
any other Person, hold itself out to be responsible for the debts of another
Person, pledge its assets to secure the obligations of any other Person or
otherwise pledge its assets for the benefit of any other Person, or hold out its
credit as being available to satisfy the obligations of any other Person.

 

(15)It will not make or permit to remain outstanding any loans or advances to
any other Person except for those investments permitted under the Loan Documents
and will not buy or hold evidence of indebtedness issued by any other Person
(other than cash or investment-grade securities).

 

(16)It will file its own tax returns separate from those of any other Person,
except to the extent that the Company is treated as a “disregarded entity” for
tax purposes and is not required to file tax returns under applicable law, and
will pay any taxes required to be paid under applicable law.

 

(17)It will hold itself out to the public as a legal entity separate and
distinct from any other Person and conduct its business solely in its own name,
will correct any known misunderstanding regarding its separate identity and will
not identify itself or any of its Affiliates as a division or department of any
other Person.

 

(18)It will maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations and will pay its debts and liabilities from its
own assets as the same become due.

 

(19)It will allocate fairly and reasonably shared expenses with Affiliates
(including shared office space) and use separate stationery, invoices and checks
bearing its own name.

 

(20)It will pay (or cause the Property Manager to pay on behalf of the Company
from Company’s funds) its own liabilities (including salaries of its own
employees) from its own funds.

 

(21)It will not acquire obligations or securities of its partners, members,
shareholders, or Affiliates, as applicable.

 

(22)Except as contemplated or permitted by the Property Management Agreement
with respect to the Property Manager, it will not permit any Affiliate or
constituent party independent access to its bank accounts.

 

(23)It will maintain a sufficient number of employees (if any) in light of its
contemplated business operations and pay the salaries of its own employees, if
any, only from its own funds.

 

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Failure of the Company to comply with any of the foregoing covenants or any
other covenants contained in this Agreement shall not affect the status of the
Company as a separate legal entity or the limited liability of the Members.

 

ARTICLE V

SUBORDINATION OF INDEMNIFICATION PROVISIONS

 

5.01          Notwithstanding any provision hereof to the contrary, any
indemnification claim against the Company arising under the Certificate of
Formation, this Agreement or the laws of the state of organization of the
Company shall be fully subordinate to any obligations of the Company arising
under the Security Instrument or any other Loan Document, and shall only
constitute a claim against the Company to the extent of, and shall be paid by
the Company in monthly installments only from, the excess of net operating
income of the Company for any month over all amounts then due under the Security
Instrument and the other Loan Documents.

 

ARTICLE VI

EFFECT OF BANKRUPTCY, DEATH OR INCOMPETENCY OF A MEMBER

 

6.01         The bankruptcy, death, dissolution, liquidation, termination or
adjudication of incompetency of a member or Special Member shall not cause the
member or Special Member, respectively, to cease to be a member of the Company
and shall not cause the termination or dissolution of the Company and the
business of the Company shall continue. Upon any such occurrence, the trustee,
receiver, executor, administrator, committee, guardian or conservator of such
member shall have all the rights of such member for the purpose of settling or
managing its estate or property, subject to satisfying conditions precedent to
the admission of such assignee as a substitute member. The transfer by such
trustee, receiver, executor, administrator, committee, guardian or conservator
of any Company interest shall be subject to all of the restrictions hereunder to
which such transfer would have been subject if such transfer had been made by
such bankrupt, deceased, dissolved, liquidated, terminated or incompetent
member. Notwithstanding any other provision of the Certificate of Formation or
this Agreement, no member or Special Member of the Company shall have any right
under Section 18-801(b) of the Act to agree in writing to dissolve the Company
upon the bankruptcy of a member or Special Member or the occurrence of any event
that causes a member or Special Member of the Company to cease to be a member of
the Company. The existence of the Company as a separate legal entity shall
continue until the cancellation of its Certificate of Formation as provided in
the Act.

 

ARTICLE VII

CONTRIBUTIONS TO THE COMPANY AND DISTRIBUTIONS

 

7.01         Member Capital Contributions. Upon execution of this Agreement, the
Member shall contribute as the Member’s initial Capital Contribution, $100 in
cash.

 

7.02         Effect of Sale or Exchange. In the event of a permitted sale,
exchange, or other assignment of a Membership Interest, the capital account of
the assignor shall become the capital account of the assignee to the extent it
relates to the assigned Membership Interest.

 

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7.03         Distributions and Allocations. All distributions of cash or other
property (except upon the Company’s dissolution, which shall be governed by the
applicable provisions of the Act and Article IX hereof) and all allocations of
income, profits, and loss shall be made 100% to the Member in accordance with
its Membership Interest. All amounts withheld pursuant to the Code or any
provisions of state or local tax law with respect to any payment or distribution
to the Member from the Company shall be treated as amounts distributed to the
Member pursuant to this Section 7.03. Notwithstanding any provision to the
contrary contained in this Agreement, the Company shall not be required to make
a distribution to the Member on account of its interest in the Company if such
distribution would violate Section 18-607 of the Act or any other applicable
law.

 

ARTICLE VIII

ASSIGNMENTS; RESIGNATIONS

 

8.01          Assignment, Resignation and Admission Generally.

 

(a)          Assignments. Subject to the terms of the Loan Documents and this
Section 8.01(a) of this Agreement, the Member may assign in whole or in part its
Membership Interest in the Company. If the Member transfers all of its
Membership Interest pursuant to this Section 8.01, the transferee shall be
admitted to the Company as a member of the Company upon its execution of an
instrument signifying its agreement to be bound by the terms and conditions of
this Agreement, which instrument may be a counterpart signature page to this
Agreement. Such admission shall be deemed effective immediately prior to the
transfer and, immediately following such admission, the transferor Member shall
cease to be a member of the Company. Notwithstanding anything in this Agreement
to the contrary, any successor to the Member by merger or consolidation in
compliance with the Basic Documents shall, without further act, be the Member
hereunder, and such merger or consolidation shall not constitute an assignment
for purposes of this Agreement and the Company shall continue without
dissolution.

 

(b)          Resignation. So long as any obligation is outstanding under the
Loan, the Member may not resign, except as permitted under the Basic Documents.
If the Member is permitted to resign pursuant to this Section 8.01(b), an
additional member of the Company shall be admitted to the Company upon its
execution of an instrument signifying its agreement to be bound by the terms and
conditions of this Agreement, which instrument may be a counterpart signature
page to this Agreement. Such admission shall be deemed effective immediately
prior to the resignation and, immediately following such admission, the
resigning Member shall cease to be a member of the Company.

 

(c)          Admission of Additional Members. One or more additional members of
the Company may be admitted to the Company with the written consent of the
Member, provided, however, that, notwithstanding the foregoing, except as
otherwise provided in the Loan Documents, so long as any obligation remains
outstanding under the Loan, no additional Member may be admitted to the Company
pursuant to this Section 8.01(c) unless approved by the Lender.

 

8.02         Absolute Prohibition. Notwithstanding any other provision in this
Article VIII, the Membership Interest of the Member, in whole or in part, or any
rights to distributions therefrom, shall not be sold, exchanged, conveyed,
transferred, pledged, hypothecated, subjected to a security interest, or
otherwise assigned or encumbered, if such action would result in a violation of
federal or state securities laws in the opinion of counsel for the Company.

 

8.03         Additional Requirements. In addition to all requirements imposed in
this Article VIII, any admission of a Member or assignment of a Membership
Interest shall be subject to all restrictions relating thereto expressly imposed
by the Act.

 

8.04         Effect of Prohibited Action. Any assignment in violation of this
Article VIII shall be, to the fullest extent permitted by law, void and of no
force or effect whatsoever.

 

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ARTICLE IX

DISSOLUTION AND TERMINATION

 

9.01         Dissolution. Subject to the other provisions of this Agreement, the
Company shall be dissolved upon the first to occur of the following: (a) the
termination of the legal existence of the last remaining member of the Company
or the occurrence of any other event which terminates the continued membership
of the last remaining member of the Company in the Company unless the Company is
continued without dissolution in a manner permitted by this Agreement or the Act
or (b) the entry of a decree of judicial dissolution under Section 18-802 of the
Act. Upon the occurrence of any event that causes the last remaining member of
the Company to cease to be a member of the Company or that causes the Member to
cease to be a member of the Company (other than upon continuation of the Company
without dissolution upon (i) an assignment by the Member of all of its
Membership Interest and the admission of the transferee pursuant to Section
8.01, or (ii) the resignation of the Member and the admission of an additional
member of the Company pursuant to Section 8.01), to the fullest extent permitted
by law, the personal representative of such member is hereby authorized to, and
shall, within 90 days after the occurrence of the event that terminated the
continued membership of such member in the Company, agree in writing (x) to
continue the Company and (y) to admit the personal representative or its nominee
or designee, as the case may be, as a substitute member of the Company,
effective as of the occurrence of the event that terminated the continued
membership of the last remaining member of the Company or the Member in the
Company.

 

9.02         Liquidation. Upon the dissolution of the Company, it shall wind up
its affairs and distribute its assets in accordance with Section 9.04 and the
Act by either or a combination of the following methods as the Member (or the
Person or Persons carrying out the liquidation) shall determine:

 

(a)          selling the Company’s assets and, after the satisfaction of Company
liabilities, distributing the net proceeds therefrom to the Member; and/or

 

(b)          subject to the satisfaction of Company liabilities, distributing
the Company’s assets to the Member in kind, with the Member accepting an
undivided interest in the Company’s assets in satisfaction of its Membership
Interest.

 

9.03         Orderly Liquidation. A reasonable time as determined by the Member
(or the Person or Persons carrying out the liquidation) shall be allowed for the
orderly liquidation of the assets of the Company and the discharge of
liabilities to the creditors so as to minimize any losses attendant upon
dissolution.

 

9.04         Distributions. Upon dissolution, the Company assets (including any
cash on hand) shall be distributed in the following order and in accordance with
the following priorities:

 

(a)          first, the Loan; then

 

(b)          second, to the satisfaction of the other debts and liabilities of
the Company (whether by payment or the making of reasonable provision for
payment thereof) and the expenses of liquidation, including a sales commission
to the selling agent, if any; then

 

(c)          third, to the Member.

 

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9.05         Termination. The Company shall terminate when (i) all of the assets
of the Company, after payment of or due provision for all debts, liabilities and
obligations of the Company shall have been distributed to the Member in the
manner provided for in this Agreement and (ii) the Certificate of Formation
shall have been canceled in the manner required by the Act. The existence of the
Company as a separate legal entity shall continue until cancellation of the
Certificate of Formation as provided in the Act.

 

ARTICLE X

MISCELLANEOUS PROVISIONS

 

10.01         Governing Law. This Agreement shall be construed, enforced, and
interpreted in accordance with the laws of the State of Delaware, without regard
to conflicts of law provisions and principles thereof.

 

10.02         Indemnity. The Company shall indemnify and hold harmless any
person who was or is a party to any proceeding,, including any proceeding
brought by a member in the right of the Company or brought by or on behalf of
any member of the Company, by reason of the fact that he is or was an officer of
the Company, against any liability incurred by him in connection with such
proceedings unless he engaged in willful misconduct or knowing violation of the
criminal law or any federal or state securities laws. Furthermore, in any such
proceedings brought by or on behalf of the Company or bought by or on behalf of
the members of the Company, no officer shall be liable to the Company or its
members for any monetary damages with respect to any transaction, occurrence,
course of conduct or otherwise, except for liability resulting from such
officer’s having engaged in willful misconduct or a knowing violation of the
criminal law or any federal or state securities laws.

 

10.03         Integrated and Binding Agreement; Amendment. This Agreement
contains the entire understanding and agreement among the parties hereto with
respect to the subject matter hereof, and there are no other agreements,
understandings, representations or warranties among the parties hereto other
than those set forth herein. This Agreement may be amended only by written
agreement of the Member and only as provided in this Agreement. Notwithstanding
any other provision of this Agreement, the parties hereto agree that this
Agreement constitutes a legal, valid and binding agreement, and is enforceable
against each of them in accordance with its terms.

 

10.04         Construction. Whenever the singular number is used in this
Agreement and when required by the context, the same shall include the plural,
and the masculine gender shall include the feminine and neuter genders, and vice
versa.

 

10.05         Headings. The headings in this Agreement are inserted for
convenience only and are in no way intended to describe, interpret, define, or
limit the scope, extent, or intent of this Agreement or any provision hereof.

 

10.06         Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which shall constitute one and
the same instrument.

 

10.07         Severability. If any provision of this Agreement or the
application thereof to any Person or circumstance shall be invalid, illegal, or
unenforceable to any extent, the remainder of this Agreement and the application
thereof shall not be affected and shall be enforceable to the fullest extent
permitted by law.

 

10.08         Notices. All notices under this Agreement shall be in writing and
shall be given to the party entitled thereto by personal service or by mail,
posted to the address maintained by the Company for such person or at such other
address as he may specify in writing.

 

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10.09         Rights and Remedies Cumulative; Waivers. The rights and remedies
provided by this Agreement are cumulative and the use of any one right or remedy
by any party shall not preclude or waive the right to use any or all other
remedies, and are given in addition to any other rights the parties may have by
law, statute, ordinance, or otherwise. The failure of any party to seek redress
for violation of or to insist upon the strict performance of any covenant or
condition of this Agreement shall not prevent a subsequent act, which would have
originally constituted a violation, from having the effect of an original
violation.

 

10.10         Heirs, Successors, and Assigns. Each and all of the covenants,
terms, provisions, and agreements herein contained shall be binding upon, and
inure to the benefit of, the parties hereto and, to the extent permitted by this
Agreement, their respective heirs, legal representatives, successors, and
assigns.

 

10.11         Partition. Each Member agrees that the assets of the Company are
not and will not be suitable for partition. Accordingly, each Member hereby
irrevocably waives (to the fullest extent permitted by law) any and all rights
that he may have, or may obtain, to maintain any action for partition of any of
the assets of the Company.

 

10.12         Tax Status. It is the intention of the Member that the Company be
a disregarded entity for federal income tax purposes under Section 7701 of the
Code and the Treasury Regulations promulgated pursuant thereto.

 

10.13         Effective Date. Pursuant to Section 18-201(d) of the Act, this
Agreement shall be effective as of the time of the filing of the Certificate of
Formation with the Office of the Delaware Secretary of State.

 

ARTICLE XI

DEFINITIONS

 

In addition to any other defined terms herein, the following terms used in this
Agreement shall have the following meanings (unless otherwise expressly provided
herein):

 

(a)          “Affiliate” shall mean any Person controlling or controlled by or
under common control with the Company including, without limitation (i) any
person who has a familial relationship, by blood, marriage or otherwise with any
Member or employee of the Company, or any Affiliate thereof and (ii) any Person
which receives compensation for administrative, legal or accounting services
from the Company, or any of its Affiliates. For purposes of this definition,
“control” when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.

 

(b)          “Bankruptcy” shall mean, with respect to any Person, if such Person
(i) makes an assignment for the benefit of creditors, (ii) files a voluntary
petition in bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has
entered against it an order for relief, in any bankruptcy or insolvency
proceedings, (iv) files a petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation or similar
relief under any statute, law or regulation, (v) files an answer or other
pleading admitting or failing to contest the material allegations of a petition
filed against it in any proceeding of this nature, (vi) seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator of the Person
or of all or any substantial part of its properties, or (vii) if 120 days after
the commencement of any proceeding against the Person seeking reorganization,
arrangement, composition, readjustment, liquidation or similar relief under any
statute, law or regulation, if the proceeding has not been dismissed, or if
within 90 days after the appointment without such Person’s consent or
acquiescence of a trustee, receiver or liquidator of such Person or of all or
any substantial part of its properties, the appointment is not vacated or
stayed, or within 90 days after the expiration of any such stay, the appointment
is not vacated. The foregoing definition of “Bankruptcy” is intended to replace
and shall supersede and replace the definition of “Bankruptcy” set forth in
Sections 18-101(1) and 18-304 of the Act.

 

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(c)          “Basic Documents" shall mean this Agreement, the Loan Documents,
the Property Management Agreement and all documents and certificates
contemplated thereby or delivered in connection therewith.

 

(d)          “Capital Contribution” shall mean any contribution to the capital
of the Company by the Member in cash, property, or services, or a binding
obligation to contribute cash, property, or services, whenever made.

 

(e)          “Certificate of Formation” shall mean the Certificate of Formation
of the Company, as amended and in force from time to time.

 

(f)          “Closing Date” shall mean the date on which the Company acquires
the Property.

 

(g)          “Code” shall mean the Internal Revenue Code of 1986, as amended, or
corresponding provisions of subsequent superseding federal revenue laws and the
rules and regulations promulgated thereunder.

 

(h)          “Company” shall mean VILLAS PARTNERS, LLC.

 

(i)          “Entity” shall mean any general partnership, limited partnership,
limited liability company, corporation, joint venture, trust, business trust,
cooperative, association or other entity.

 

(j)          “Loan” is defined in Section 3.05.

 

(k)          “Loan Documents” shall mean any promissory note, mortgage, deed of
trust, guaranty, assignment, indemnity agreement, escrow agreement, assumption
agreement or the functional equivalent of any of the aforementioned, and any and
all other documents evidencing or securing the Loan and any and all documents
related thereto, including the Security Instrument.

 

(l)          “Member” shall mean the Person identified in Article II hereof and
includes any Person admitted as an additional member or a substitute member of
the Company pursuant to the provisions of this Agreement, each in its capacity
as a member of the Company; provided however, the term “Member” shall not
include the Special Member.

 

(m)          “Membership Interest” shall mean the Member’s limited liability
company interest in the Company and the other rights and obligations with
respect thereto as set forth in this Agreement. The Membership Interest is set
forth beside the Member’s name in Article II of this Agreement.

 

(n)          “Person” shall mean any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust (including any beneficiary thereof), unincorporated organization, or
government or any agency or political subdivision thereof.

 

(o)          “Property” is defined in Section 1.01.

 

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(p)          “Property Manager” shall mean Madison Apartment Management Group,
LLC, a Delaware limited liability company, and its successors and assigns.

 

(q)          “Property Management Agreement” shall mean the Apartment Management
Agreement between the Company and the Property Manager with respect to the
management of the Property.

 

(r)          “Security Instrument” shall mean the deed to secure debt and
security agreement securing the Loan.

 

(s)          “Special Member” shall mean, upon such Person’s admission to the
Company as a member of the Company, each of the Persons bound by this Agreement
as Special Member in such Person’s capacity as a member of the Company. A
Special Member shall only have the rights and duties expressly set forth in this
Agreement.

 

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The undersigned hereby agree, acknowledge, and certify that the foregoing
constitutes the sole and entire Limited Liability Company Agreement of the
Company.

 

MEMBER: Oak Crest Villas JV, LLC, a   Delaware limited liability company        
By: Madison Oak Crest, LLC, a Delaware limited liability company, its manager

 

  By: /s/ Ryan L. Hanks     Ryan L. Hanks, Manager

 

SPECIAL MEMBER: /s/ Ryan L. Hanks     Ryan L. Hanks           /s/ Jordan Ruddy  
  Jordan Ruddy  

 

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