Exhibit 10.4

LIMITED LIABILITY COMPANY AGREEMENT

OF

HARTMAN RICHARDSON HEIGHTS PROPERTIES, LLC

Dated effective as of December 16, 2010

 
 

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LIMITED LIABILITY COMPANY AGREEMENT
OF
HARTMAN RICHARDSON HEIGHTS PROPERTIES, LLC

THIS LIMITED LIABILITY COMPANY AGREEMENT (this "Company Agreement"), dated
effective as of December 16, 2010 (the "Effective Date"), is between HARTMAN
SHORT TERM INCOME PROPERTIES XIX, INC., a Texas corporation, HARTMAN SHORT TERM
INCOME PROPERTIES XX, INC., a Maryland corporation, as the initial Members, and
Hartman Income REIT Management, Inc., as the initial Manager.

ARTICLE I
GENERAL

1.1           Formation.  The Members have formed a limited liability company
under the Texas Business Organizations Code, as amended (the "TBOC"). The name
of the limited liability company shall be HARTMAN RICHARDSON HEIGHTS PROPERTIES,
LLC (the "Company").  The Members hereby ratify the formation of the company
under the provisions of the TBOC and confirm their admission to the company as
the initial members.

1.2           Certificate of Formation.  The Manager has caused the certificate
of formation of the Company, which complies with the requirements of the TBOC,
to be filed with the Texas Secretary of State on December 16, 2010.  The Manager
shall execute such further documents (including amendments to the certificate of
formation) and take such further action as shall be appropriate or necessary to
comply with the requirements of law for the qualification and operation of a
limited liability company in all jurisdictions where the Company elects to carry
on its business.

1.3           Purpose and Power. The purpose and business of the Company shall
be the conduct of any business or activity that may be lawfully conducted by a
limited liability company organized pursuant to the TBOC, and the Company shall
have all of the powers of a limited liability company conferred by the
TBOC.  Any or all of the foregoing activities may be conducted directly by the
Company or indirectly through another Company, joint venture or other
arrangement.

1.4           Term.  The Company shall have perpetual existence and shall
continue until it is dissolved by the written consent of the Members.  Upon the
dissolution or termination of a Member, its legal representative or successor
shall become a member of the Company and shall exercise all rights and powers
conferred upon the Member by this Company Agreement.

1.5           Company Agreement.  To the full extent permitted by the TBOC, this
Company Agreement shall control as to any conflict between this Company
Agreement and the TBOC or as to any matter provided for in this Company
Agreement that is also provided for in the TBOC.

 
 

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1.6           Office; Agent.

(a)           The principal office of the Company shall be at 2909 Hillcroft,
Suite 420,
Houston, Texas 77057.  The principal office may be changed by the Manager from
time to time in accordance with the applicable provisions of the TBOC and any
other applicable law.  The Manager shall promptly notify the Members of any
change in such principal office.

(b)           The location of the registered office of the Company shall be 2909
Hillcroft, Suite 420, Houston, Texas 77057, or such other location as the
Members may designate.  The Company's registered agent at such address shall be
James H. Stokes, Jr.

1.7           Additional Members.  Additional Members shall be admitted by
written amendment of this Company Agreement executed by the Members.

ARTICLE II
CAPITAL CONTRIBUTIONS

2.1           Initial Capital Contribution.  As its initial capital contribution
to the Company, each Member has contributed to the Company the amounts, property
or services set forth in Schedule 2.1 attached hereto.

2.2           Additional Capital Contributions.  The Members may, but shall not
be required to, make additional capital contributions to the Company.

2.3           Member Loans and Other Debt. The Company may, with the consent of
the Members, borrow funds from any source, including the Members.  Any loan made
by a Member to the Company shall be represented by a promissory note and shall
be payable out of the first available funds, including proceeds from the sale of
all or any portion of the assets of the Company.

2.4           Return of Capital Contributions.  Capital contributions shall be
expended in furtherance of the business of the Company.  All costs and expenses
of the Company shall be paid from its funds.  No interest shall be paid on
capital contributions.  No Manager shall have any personal liability for the
repayment of any capital contribution to the Members.

2.5           Enforcement of Capital Contribution Obligations.  Except as
expressly agreed in writing by the Members, no person other than a Member shall
have the right to enforce any obligation the Members may undertake to contribute
capital to the Company, and specifically no lender or other third party shall
have any such right.

ARTICLE III
DISTRIBUTIONS

The Company may make distributions of cash or other assets of the Company to the
Members at such times and in such amounts as the Manager shall determine.

 
 

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ARTICLE IV
ALLOCATION OF PROFIT AND LOSS

4.1           Determination of Profit and Loss.  Profit or loss shall be
determined on an annual basis and for such other periods as may be required.

4.2           Allocation of Profit and Loss.  Except as may be required by
Section 704(c) of the Internal Revenue Code and Treasury Regulations §
1.704-1(b)(2)(iv)(f)(4), all items of income, gain, loss, deduction and credit
of the Company shall be allocated among the Members in accordance with their
Percentage Interests.

ARTICLE V
MANAGEMENT

5.1           Management Authority.  Management of the Company shall be vested
in the person or entity appointed by the Members as the "Manager" of the
Company.  The initial Manager of the Company is set forth in the introductory
paragraph of this Company Agreement.  The Manager shall have the power and
authority to conduct the business of the Company and is hereby expressly
authorized on behalf of the Company to make all decisions with respect to the
Company's business and to take all actions necessary to carry out such
decisions.  The Manager shall sign all documents executed on behalf of the
Company.

5.2.           Reliance by Third Parties.  No third party dealing with the
Company shall be required to ascertain whether the Manager is acting in
accordance with the provisions of this instrument.  All third parties, other
than a third party who is an affiliate of the Manager, may rely upon a document
signed by the Manager as binding the Company.  If the Manager acts without
authority, the Manager shall be liable to the Members for all damages arising
out of his unauthorized actions.

5.3           Transactions Between Company and Manager.  The Company may
contract and deal with the Manager, or any person or entity affiliated with the
Manager, provided that such contracts and dealings are fully disclosed in
advance to the Members and approved by the Members.

5.4           Management Fees and Reimbursements.  The Manager shall be entitled
to such compensation for managing the operations of the Company as the Manager
and the Members shall agree.  The Manager shall be entitled to reimbursement by
the Company for reasonable out-of-pocket expenses incurred on behalf of the
Company.
5.5           Removal.  The Manager shall serve at the pleasure of the Members
and may be removed at any time, with or without cause, by the Members.

5.6           Resignation.  The Manager may resign at any time by giving written
notice of resignation to the Members.  Unless otherwise specified in the notice,
the resignation shall take effect upon receipt by the Members and an acceptance
of the resignation by it shall not be necessary to make it effective.

 
 

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5.7           Duties.  The Manager shall carry out his duties in good faith, in
a manner he believes to be in the best interests of the Company, and with such
care as an ordinarily prudent person in a like position would use under similar
circumstances.  A Manager who so performs his duties shall not have any
liability by reason of being or having been a Manager.  The Manager shall devote
such time to the business of the Company as the Members deems necessary for the
efficient carrying on of the Company's business.

ARTICLE VI
OFFICERS

6.1           Qualification.  The Manager may, from time to time, designate one
or more persons to be officers of the Company.  Any officers so designated shall
have such authority and perform such duties as the Manager may, from time to
time, delegate to them.  Each officer shall hold office until his successor
shall be duly designated and qualify for such office, until his death, or until
he shall resign or shall have been removed in the manner hereinafter
provided.  Any vacancy occurring in any office of the Company (other than
Manager) may be filled by the Manager.  Any number of offices may be held by the
one person.

6.2           Compensation.  The salaries or other compensation, if any, of the
officers and agents of the Company shall be fixed from time to time by the
Manager.  However, election or appointment of an officer or agent shall not of
itself, nor shall anything in this Company Agreement, create contract rights.

6.3           Resignation.  Any officer may resign as such at any time.  Such
resignation shall be made in writing and shall take effect at the time specified
therein, or if no time be specified, at the time of its receipt by the
Manager.  The acceptance of a resignation shall not be necessary to make it
effective, unless expressly so provided in the resignation.

6.4           Removal.  Any officer may be removed as such, either with or
without cause, by the Manager whenever in their judgment the best interests of
the Company will be served thereby; provided, however, that such removal shall
be without prejudice to the contract rights, if any, of the person so removed.

ARTICLE VII
MEMBERS

7.1           Admission of Additional Members.  Except as provided in Section
7.5, a person may be admitted as an additional member of the Company only with
the written consent of the Members.

7.2           Participation.  Except as set forth in this Company Agreement,
each Member, in its capacity as a member of the Company, shall take no part in
the control, management, direction, or operation of the affairs of the
Company.  Each Member, in its capacity as a member of the Company, shall have no
power to bind the Company.

7.3           Liability. The Members shall have no liability under a judgment,
decree, or order of a court, or in any other manner, for any debt, obligation,
or liability of the Company.

 
 

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7.4           Meetings.  Meetings of the Members shall not be required for any
purpose.  All actions of the Members may be evidenced by a written consent
describing the action taken, signed by the Members.  Any action evidenced by
such a written consent is effective on the date the consent is signed by the
Members, unless the consent specifies a different effective date.

7.5           Transfer of Interest.  The interest of the Members in the Company
may be transferred by the Members voluntarily or by operation of law.  Upon
transfer of the entirety of a Member's interest in the Company, the transferee
shall, without further documentation or action, become a member of the Company.

7.6           Conflicts of Interest.  The Members and Manager shall be entitled
to engage in other activities and businesses, including, without limitation,
activities and businesses competitive with the activities and business of the
Company.  Neither the Members nor the Manager shall be required to give the
Company the opportunity to participate in, or benefit from, any such activities
or businesses.  Neither the Members nor Manager shall be deemed to violate any
duty or obligation to the Company merely because a Member's or Manager's conduct
furthers a Member's or Manager's own interest.  The Members or Manager may lend
money to, borrow money from, act as a surety, guarantor or endorser for,
guarantee or assume one or more obligations of, provide collateral for, and
transact other business with, the Company, and have the same rights and
obligations with respect to any such matters as those of a person who is not a
member of the Company.

ARTICLE VIII
INDEMNIFICATION

8.1           Exculpation.  The Manager shall have no liability under a
judgment, decree, or order of a court, or in any other manner, for any debt,
obligation, or liability of the Company.  The Company shall indemnify and hold
harmless the Manager, its agents, officers, directors, and employees against and
from any personal loss, liability, or damage incurred in the conduct of the
Company's business as a result of any act or omission, or any error of judgment,
unless such loss, liability, or damage results from such person's willful
misconduct or gross negligence.  Any such indemnification shall be paid only
from the assets of the Company, and no Manager, employee, or third party shall
have recourse against the Members for such indemnification.

8.2           Right to Indemnification.  Subject to the limitations and
conditions as provided in this Article, each person who was or is made a party
or is threatened to be made a party to or is involved in any proceeding, or any
appeal in such a proceeding, or any inquiry or investigation that could lead to
such a Proceeding, by reason of the fact that he or she, or a person of whom he
or she is the legal representative, is or was a Member, Manager, officer,
employee, or agent of the Company shall be indemnified by the Company to the
fullest extent permitted by the TBOC, as the same exist or may hereafter be
amended, against judgments, penalties, fines, settlements and reasonable
expenses (including, without limitation, attorney's fees) actually incurred by
such person in connection with such Proceeding, and indemnification under this
Article shall continue as to a person who has ceased to serve in the capacity
which initially entitled such person to indemnity hereunder.  The rights granted
pursuant to this Article shall be deemed contract rights, and no amendments,
modification or repeal of this Article shall have the effect of limiting or
denying any such rights with respect to actions taken or proceeding arising
prior to any such amendment, modification or repeal.  It is expressly
acknowledged that the indemnification provided in this Article could involve
indemnification for negligence or under theories of strict liability.

 
 

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8.3           Savings Clause. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify and hold harmless each Member or Manager or
any other person indemnified pursuant to this Article as to costs, charges, and
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or Proceeding, whether civil,
criminal, administrative or investigative to the full extent permitted by any
applicable portion of this Article that shall not have been invalidated and to
the fullest extent permitted by applicable law.
 
ARTICLE IX
ACCOUNTING AND REPORTING

9.1           Books.  The Manager shall maintain complete and accurate books of
account at the registered office of the Company.  The Company shall provide the
Members with any information requested by the Members relating to the business
of the Company.

9.2           Reports.  The books of account shall be closed promptly after the
end of each calendar year.  As soon as practicable thereafter, the Manager shall
prepare a written report which shall include a statement of receipts,
expenditures, profits and losses for the year, and such additional statements
with respect to the status of the Company's assets and the distribution of
Company funds as are necessary to advise the Members properly about its
investment in the Company.

ARTICLE X
DISSOLUTION AND TERMINATION

10.1           Final Accounting.  In the event of the dissolution of the
Company, a proper accounting shall be made as provided in Section 10.2 from the
date of the last previous accounting to the date of dissolution.

10.2           Liquidation.  Upon the dissolution of the Company, the Manager,
or if the Manager is unable to act, a person selected by the Members, shall act
as liquidator to wind up the Company.  The liquidator shall have full power and
authority to sell, assign, and encumber any or all of the Company's assets and
to wind up and liquidate the affairs of the Company in an orderly and
businesslike manner.  All proceeds from liquidation shall be distributed in the
following order of priority: (i) to the payment of debts and liabilities of the
Company and the expenses of liquidation (including loans made by the Members to
the Company); (ii) to the setting-up of such reserves as the liquidator may
reasonably deem necessary for any contingent liabilities of the Company; and
(iii) to the Members.

 
 

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10.3           Distribution in Kind.  The liquidator, in its absolute
discretion, may distribute one or more of the Company's assets in kind to the
person or entity entitled to receive the proceeds from such asset.

10.4           Certificate of Cancellation.  Upon the complete distribution of
the Company's assets as provided in this Article X, the Company shall be
terminated and the person acting as liquidator shall file a certificate of
cancellation and take such other actions as may be necessary to terminate the
Company.

ARTICLE XI
GENERAL PROVISIONS

11.1           Amendment.  This Company Agreement may not be amended except by a
written instrument signed by the Members.

11.2           Applicable Law.  This Company Agreement shall be construed in
accordance with and governed by the laws of the State of Texas.

11.3           No Third Party Beneficiaries.  This Company Agreement is for the
sole benefit of the Members and the Manager, and no other person is intended to
be a beneficiary of this Company Agreement or shall have any rights hereunder.

11.4           Counterparts.  This Company Agreement may be executed in any
number of counterparts, each of which shall be considered an original.

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IN WITNESS HEREOF, the Members have adopted this Company Agreement and the
Manager has executed this Company Agreement, as of the Effective Date.

   
MANAGER:
         
Hartman Income REIT Management, Inc.,
   
a Texas corporation
             
By:
     
Allen R. Hartman, President
         
MEMBERS:
         
Hartman Short Term Income Properties XIX, Inc.,
   
a Texas corporation
             
By:
     
Allen R. Hartman, President
         
Hartman Short Term Income Properties XX, Inc.,
   
a Maryland corporation
             
By:
     
Allen R. Hartman, President

 
 
 

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Schedule 2.1
Members of Hartman Richardson Heights Properties, LLC

 
Member's Name and Address
 
Initial Capital Contribution
 
Initial
Percentage Interest
Hartman Short Term Income Properties XIX, Inc.
2909 Hillcroft, Ste. 420
Houston, Texas 77057
 
 
$17,235,000
 
90%
Hartman Short Term Income Properties XX, Inc.
2909 Hillcroft, Ste. 420
Houston, Texas 77057
 
 
$1,915,000
 
10%

 
 
 

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