ASSIGNMENT OF MANAGEMENT AGREEMENT
Exhibit 10.5
THIS ASSIGNMENT OF MANAGEMENT AGREEMENT (“Assignment”) is made and entered into as of this
22nd day of December, 2010, by SIR Park Place, LLC, an Iowa limited liability company, with offices
at 00000 Xxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx (“Borrower”) (“Borrower”), in favor of
Xxxx Community Bank, with offices at 000 Xxxxxxx Xxxxx, Xxxxxx, Xxxx 00000 (“Lender”).
W I T N E S S E T H:
WHEREAS, Borrower and Steadfast Management Company, Inc., a California corporation (the
“Manager”) are parties to that certain Property Management Agreement (“Management Agreement”) dated
as of December 22, 2010; and
WHEREAS, Borrower has executed and delivered to Lender a certain Promissory Note dated of even
date herewith (the “Note”), payable to the order of Lender in the amount of $5,000,000.00, which
Note evidences a loan made by Lender to Borrower (the “Loan”); and
WHEREAS, the Loan is secured in part by a Mortgage, Assignment of Leases and Rents, Security
Agreement, and Fixture Financing Statement (the “Mortgage”). The Mortgage encumbers all right,
title and interest in and to the certain tracts of property legally described therein (the
“Mortgaged Property”); and
WHEREAS, as additional security for the Loan, Lender has required an assignment of the
interest of Borrower in, to and under the Management Agreement; and
WHEREAS, Borrower is willing to assign its rights, privileges, powers and interests in, to and
under the Management Agreement to Lender upon the conditions herein imposed; and
WHEREAS, Manager is willing to consent to this Assignment and to attorn to Lender upon a
default by Borrower under the documents evidencing and securing the Loan, and perform its
obligations under the Management Agreement for Lender, or its successors in interest, or to permit
Lender to terminate the Management Agreement without liability.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Borrower agrees as follows:
1. Borrower hereby transfers, assigns and sets over to Lender, its successors and assigns, all
right, title and interest of Borrower in and to the Management Agreement. Manager hereby consents
to the foregoing assignment. The foregoing assignment is being made by Borrower to Lender as
collateral security for the full payment and performance by Borrower of all of its obligations
under the loan documents evidencing and securing the Loan. However, until the occurrence of an
Event of Default (as such term is defined in the loan documents
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evidencing and securing the Loan) Borrower may exercise all rights as owner of the Mortgaged
Property under the Management Agreement, except as otherwise provided in this Assignment. The
foregoing assignment shall remain in effect as long as the Loan, or any part thereof, remains
unpaid, but shall automatically terminate upon the release of the Mortgage as a lien on the
Mortgaged Property.
2. Borrower and Manager represent and warrant to Lender that (i) the Management Agreement is
unmodified and is in full force and effect, (ii) the Management Agreement is a valid and binding
agreement enforceable against the parties in accordance with its terms, and (iii) neither party is
in default in performing any of its obligations under the Management Agreement.
3. Borrower hereby covenants with Lender that during the term of this Assignment: (a) Borrower
shall not transfer the responsibility for management of the Mortgaged Property from Manager to any
other person or entity without the prior written consent of Lender, which shall not be unreasonably
withheld; (b) Borrower shall not terminate or amend any of the terms or provisions of the
Management Agreement without the prior written consent of Lender, which shall not be unreasonably
withheld; and (c) Borrower shall give Lender written notice of any notice or information that
Borrower receives which indicates that Manager is terminating the Management Agreement or that
Manager is otherwise discontinuing its management of the Mortgaged Property.
4. Upon receipt by Manager of written notice from Lender that an Event of Default (as that
term is defined in the loan documents evidencing and securing the Loan) has occurred and is
continuing, Lender shall have the right to exercise all rights as owner of the Mortgaged Property
under the Management Agreement.
5. After the occurrence of an Event of Default, Lender (or its nominee) shall have the right
any time thereafter to terminate the Management Agreement, without cause and without liability, by
giving written notice to Manager of its election to do so. Lender’s notice shall specify the date
of termination, which shall not be less than 30 days after the date of such notice.
6. On the effective date of termination of the Management Agreement, Manager shall turn over
to Lender all books and records relating to the Mortgaged Property (copies of which may be retained
by Manager, at Manager’s expense), together with such authorizations and letters of direction
addressed to tenants, suppliers, employees, banks and other parties as Lender may reasonably
require. Manager shall cooperate with Lender in the transfer of management responsibilities to
Lender or its designee. A final accounting of unpaid fees (if any) due to Manager under the
Management Agreement shall be made within 60 days after the effective date of termination, but
Lender shall not have any liability or obligation to Manager for unpaid fees or other amounts
payable under the Management Agreement which accrue before Lender (or its nominee) acquires title
to the Mortgaged Property, or Lender becomes a mortgagee in possession.
7. Manager’s address for notice is 00000 Xxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx.
All notices to be given by Lender to Manager shall be given in the same manner as notices to
Borrower pursuant to the notice provisions contained in the Mortgage.
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8. This Assignment may be executed in any number of counterparts, each of which shall be
considered an original for all purposes; provided, however, that all such counterparts shall
constitute one and the same instrument.
IN WITNESS WHEREOF, Borrower, Lender and Manager have executed this Assignment as of the day
and year first above written.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY
THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS
WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY
ANOTHER WRITTEN AGREEMENT.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
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EXECUTED as of the date first above written.
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BORROWER: SIR Park Place, LLC, an Iowa limited liability company by: Steadfast Income Advisor, LLC, its Manager |
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| By: | /s/ Xxxxx Xxxxx | |||
| Name: | Xxxxx Xxxxx | |||
| Title: | Chief Financial Officer | |||
STATE OF
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) | ||||
| ) | SS. | ||||
COUNTY OF
|
) |
This instrument was acknowledged before me on this ___ day of December, 2010 by as
of Steadfast Income Advisor, LLC, the Manager of SIR Park Place, LLC.
[See
Attached Certificate]
Notary Public in and for the State of ______
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| LENDER: Xxxx Community Bank |
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| By: | /s/ Xxxx Xxxxxx | |||
| Name: | Xxxx Xxxxxx | |||
| Title: | Vice President | |||
STATE OF IOWA
|
) | |||||
| ) | SS. | |||||
COUNTY
OF POLK |
) |
This
instrument was acknowledged before me on this 20th day of
December, 2010 by Xxxx
Xxxxxx as Vice President of Xxxx Community Bank.
/s/ Xxxx
Xxxxxxx
Notary Public in and for the State of Iowa
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|
MANAGER: Steadfast Management Company, Inc., a California corporation |
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| By: | ./s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Chief Executive Officer | |||
STATE OF IOWA
|
) | |||||
| ) | SS. | |||||
COUNTY OF
|
) |
This instrument was acknowledged before me on this ___ day of December, 2010 by
____________ as
____________ of ____________.
[See
Attached Certificate]
Notary Public in and for the State of Iowa
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