Exhibit 10.9

 

Freddie Mac Loan Number: 708556663

Property Name: Century Palms at World Gateway

 

ASSIGNMENT OF MANAGEMENT AGREEMENT AND
SUBORDINATION OF MANAGEMENT FEES

 

(Revised 5-1-2015)

 

THIS ASSIGNMENT OF MANAGEMENT AGREEMENT AND SUBORDINATION OF MANAGEMENT FEES
(“Assignment”) is made effective as of the 20th day of August, 2015, by and
among BR CARROLL WORLD GATEWAY, LLC, a Delaware limited liability company
(“Borrower”), JONES LANG LASALLE OPERATIONS, L.L.C., an Illinois limited
liability company (“Lender”), and CARROLL MANAGEMENT GROUP, LLC, a Georgia
limited liability company (“Property Manager”).

 

RECITALS:

 

A.Borrower has requested that Lender make a loan to Borrower (“Loan”). The Loan
will be evidenced by an Amended and Restated Multifamily Note from Borrower to
Lender effective as of the date of this Assignment (“Note”). The Note is secured
by, among other things, a Multifamily Loan and Security Agreement (“Loan
Agreement”) and an Amended and Restated Multifamily Mortgage, Assignment of
Rents and Security Agreement (“Security Instrument”), dated as of the date of
this Assignment, which grants Lender a first lien on the property encumbered by
the Security Instrument (“Mortgaged Property”). The Note, the Loan Agreement,
the Security Instrument, this Assignment and any of the other documents
evidencing the Loan are collectively referred to as the “Loan Documents”. Other
capitalized terms used but not defined in this Assignment will have the meanings
given to those terms in the Loan Agreement.

 

B.Pursuant to a Management Agreement between Borrower and Property Manager
(“Management Agreement”) (a true and correct copy of which is attached as
Exhibit A), Borrower employed Property Manager exclusively to lease, operate and
manage the Mortgaged Property, and Property Manager is entitled to certain
management fees (“Management Fees”) pursuant to the Management Agreement.

 

C.Lender requires as a condition to the making of the Loan that Borrower assign
the Management Agreement and that Property Manager subordinate its interest in
the Management Fees in lien and payment to the Loan as set forth below.

 

For good and valuable consideration the parties agree as follows:

 

1.Assignment of Management Agreement. As additional collateral security for the
Loan, Borrower conditionally transfers, sets over, and assigns to Lender all of
Borrower’s right, title and interest in and to the Management Agreement and all
extensions and renewals. This transfer and assignment will automatically become
a present, unconditional assignment, at Lender’s option, upon a default by
Borrower under the Note, the Loan Agreement, the Security Instrument or any of
the other Loan Documents (each, an “Event of Default”), and the failure of
Borrower to cure such Event of Default within any applicable grace period.

 

Assignment of Management Agreement and

Subordination of Management Fees

 

  

2.Subordination of Management Fees. The Management Fees and all rights and
privileges of Property Manager to the Management Fees are and will at all times
continue to be subject and unconditionally subordinate in all respects in lien
and payment to the lien and payment of the Loan Agreement, the Security
Instrument, the Note, and the other Loan Documents, and to any renewals,
extensions, modifications, assignments, replacements, or consolidations of the
Loan Documents and the rights, privileges, and powers of Lender under the Note,
the Loan Agreement, the Security Instrument, or any of the other Loan Documents.

 

3.Estoppel. Property Manager and Borrower represent and warrant that all of the
following are true as of the date of this Assignment:

 

(a)The Management Agreement is in full force and effect and has not been
modified, amended or assigned other than pursuant to this Assignment.

 

(b)Neither Property Manager nor Borrower is in default under any of the terms,
covenants or provisions of the Management Agreement and Property Manager knows
of no event which, but for the passage of time or the giving of notice or both,
would constitute an event of default under the Management Agreement.

 

(c)Neither Property Manager nor Borrower has commenced any action or given or
received any notice for the purpose of terminating the Management Agreement.

 

(d)The Management Fees and all other sums due and payable to the Property
Manager under the Management Agreement have been paid in full.

 

4.Agreement by Borrower and Property Manager. Borrower and Property Manager
agree that if there is an Event of Default by Borrower (continuing beyond any
applicable grace period) under the Note, the Loan Agreement, the Security
Instrument or any of the other Loan Documents during the term of this Assignment
or upon the occurrence of any event which would entitle Lender to terminate the
Management Agreement in accordance with the terms of the Loan Documents, Lender
may terminate the Management Agreement without payment of any cancellation fee
or penalty and require Property Manager to transfer its responsibility for the
management of the Mortgaged Property to a management company selected by Lender
in Lender’s sole discretion, effective as of the date set forth in Lender’s
notice to Property Manager. Following any such termination, Property Manager
agrees to apply all rents, security deposits, issues, proceeds and profits of
the Mortgaged Property in accordance with Lender’s written directions to
Property Manager.

 

5.Lender’s Right to Replace Property Manager. If Lender, in Lender’s reasonable
discretion, at any time during the term of this Assignment, determines that the
Mortgaged Property is not being managed in accordance with generally accepted
management practices for properties similar to the Mortgaged Property, Lender
will deliver written notice to Borrower and Property Manager, which notice will
specify with particularity the grounds for Lender’s determination. If Lender
reasonably determines that the conditions specified in Lender’s notice are not
remedied to Lender’s reasonable satisfaction by Borrower or Property Manager
within 30 days from receipt of such notice or that Borrower or Property Manager
have failed to diligently undertake correcting such conditions within such
30-day period, Lender may direct Borrower to terminate Property Manager as
manager of the Mortgaged Property and terminate the Management Agreement without
payment of any cancellation fee or penalty and to replace Property Manager with
a management company acceptable to Lender in Lender’s sole discretion pursuant
to a management agreement acceptable to Lender in Lender’s sole discretion.

 

Assignment of Management Agreement and

Subordination of Management Fees

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6.Receipt of Management Fees. Property Manager will not be obligated to return
or refund to Lender any Management Fees or other fee, commission or other amount
received by Property Manager prior to the occurrence of the Event of Default,
and to which Property Manager was entitled under the Management Agreement. If
the Property Manager receives any Management Fees after it has received notice
of an Event of Default, Property Manager agrees that such Management Fees will
be received and held in trust for Lender, to be applied by Lender to amounts due
under the Loan Documents.

 

7.Consent and Agreement by Property Manager. Property Manager acknowledges and
consents to this Assignment and agrees that Property Manager will act in
conformity with the provisions of this Assignment and Lender’s rights under this
Assignment or otherwise related to the Management Agreement. If the
responsibility for the management of the Mortgaged Property is transferred from
Property Manager in accordance with the provisions of this Assignment, then
Property Manager will fully cooperate in transferring its responsibility to a
new management company and complete such transfer no later than 30 days from the
date the Management Agreement is terminated. Further, Property Manager agrees as
follows:

 

(a)It will not contest or impede the exercise by Lender of any right Lender has
under or in connection with this Assignment.

 

(b)It will give at least 30 days prior written notice to Lender of its intention
to terminate the Management Agreement or otherwise discontinue its management of
the Mortgaged Property, in the manner provided for in this Assignment.

 

(c)It will not amend any of the provisions or terms of the Management Agreement
without the prior consent of Lender.

 

8.Termination. When the Loan is paid in full and the Security Instrument is
released or assigned of record, this Assignment and all of Lender’s right, title
and interest hereunder with respect to the Management Agreement will terminate.

 

9.Notices.

 

(a)All notices under or concerning this Assignment (“Notice”) will be in
writing. Each Notice will be deemed given on the earliest to occur of: (i) the
date when the Notice is received by the addressee, (ii) the first Business Day
after the Notice is delivered to a recognized overnight courier service, with
arrangements made for payment of charges for next Business Day delivery, or
(iii) the third Business Day after the Notice is deposited in the United States
mail with postage prepaid, certified mail, return receipt requested. Addresses
for Notice are as follows:

 

If to Lender: Jones Lang LaSalle Operations, L.L.C.
3344 Peachtree Road NE, Suite 1100
Atlanta, Georgia 30326
Attention:  Servicing Department

 

Assignment of Management Agreement and

Subordination of Management Fees

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If to Borrower:

BR Carroll World Gateway, LLC

c/o Carroll Organization, LLC

3340 Peachtree Road, Suite 1620

Atlanta, Georgia 30326

Attention: Josh Champion

 

If to Property Manager:

Carroll Management Group, LLC
c/o Carroll Organization, LLC
3340 Peachtree Road, Suite 1620
Atlanta, Georgia 30326
Attention: Josh Champion

 

(b)Any party to this Assignment may change the address to which Notices intended
for it are to be directed by means of Notice given to the other parties in
accordance with this Section 9. Each party agrees that it will not refuse or
reject delivery of any Notice given in accordance with this Section 9, that it
will acknowledge, in writing, the receipt of any Notice upon request by the
other party and that any Notice rejected or refused by it will be deemed for
purposes of this Section 9 to have been received by the rejecting party on the
date so refused or rejected, as conclusively established by the records of the
U.S. Postal Service or the courier service.

 

10.Governing Law; Consent to Jurisdiction and Venue.

 

(a)This Assignment will be construed in accordance with and governed by the laws
of the Property Jurisdiction.

 

(b)Borrower and Property Manager agree that any controversy arising under or in
relation to this Assignment may be litigated in the Property Jurisdiction. The
state and federal courts and authorities with jurisdiction in the Property
Jurisdiction will have jurisdiction over all controversies that may arise under
or in relation to this Assignment. Borrower and Property Manager irrevocably
consent to service, jurisdiction and venue of such courts for any such
litigation and waive any other venue to which it might be entitled by virtue of
domicile, habitual residence or otherwise. However, nothing in this Section 10
is intended to limit Lender’s right to bring any suit, action or proceeding
relating to matters under this Assignment in any court of any other
jurisdiction.

 

11.Captions, Cross References and Exhibits. The captions assigned to provisions
of this Assignment are for convenience only and will be disregarded in
construing this Assignment. Any reference in this Assignment to an “Exhibit” or
a “Section,” unless otherwise explicitly provided, will be construed as
referring, respectively, to an Exhibit attached to this Assignment or to a
section of this Assignment. All Exhibits attached to or referred to in this
Assignment are incorporated by reference into this Assignment.

 

12.Number and Gender. Use of the singular in this Assignment includes the
plural, use of the plural includes the singular, and use of one gender includes
all other genders, as the context may require.

 

13.No Partnership. This Assignment is not intended to, and will not, create a
partnership or joint venture among the parties, and no party to this Assignment
will have the power or authority to bind any other party except as explicitly
provided in this Assignment.

 

Assignment of Management Agreement and

Subordination of Management Fees

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14.Severability. The invalidity or unenforceability of any provision of this
Assignment will not affect the validity of any other provision, and all other
provisions will remain in full force and effect.

 

15.Entire Assignment. This Assignment contains the entire agreement among the
parties as to the rights granted and the obligations assumed in this Assignment.

 

16.No Waiver; No Remedy Exclusive. Any forbearance by a party to this Assignment
in exercising any right or remedy given under this Assignment or existing at law
or in equity will not constitute a waiver of or preclude the exercise of that or
any other right or remedy. Unless otherwise explicitly provided, no remedy under
this Assignment is intended to be exclusive of any other available remedy, but
each remedy will be cumulative and will be in addition to other remedies given
under this Assignment or existing at law or in equity.

 

17.Third Party Beneficiaries. Neither any creditor of any party to this
Assignment, nor any other person, is intended to be a third party beneficiary of
this Assignment.

 

18.Further Assurances and Corrective Instruments. To the extent permitted by
law, the parties will, from time to time, execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, such supplements to this
Assignment and such further instruments as may reasonably be required for
carrying out the intention of or facilitating the performance of this
Assignment.

 

19.Counterparts. This Assignment may be executed in multiple counterparts, each
of which will constitute an original document and all of which together will
constitute one agreement.

 

20.Indemnity. By executing this Assignment Borrower agrees to indemnify and hold
harmless Lender and its successors and assigns from and against any and all
losses, claims, damages, liabilities and expenses including Attorneys’ Fees and
Costs, which may be imposed or incurred in connection with this Assignment.

 

21.Costs and Expenses. Wherever pursuant to this Assignment it is provided that
Borrower will pay any costs and expenses, such costs and expenses will include
Lender’s Attorneys’ Fees and Costs.

 

22.Determinations by Lender. In any instance where the consent or approval of
Lender may be given or is required, or where any determination, judgment or
decision is to be rendered by Lender under this Assignment, the granting,
withholding or denial of such consent or approval and the rendering of such
determination, judgment or decision will be made or exercised by Lender (or its
designated representative) at its sole and exclusive option and in its sole and
absolute discretion and will be final and conclusive, except as may be otherwise
expressly and specifically provided in this Assignment.

 

23.Successors and Assigns. This Assignment will be binding upon and inure to the
benefit of Borrower, Lender and Property Manager and their respective successors
and assigns forever.

 

24.Secondary Market.  Lender may sell, transfer and deliver the Note and assign
the Loan Agreement, the Security Instrument, this Assignment and the other Loan
Documents to one or more investors in the secondary mortgage market
(“Investors”). In connection with such sale, Lender may retain or assign
responsibility for servicing the Loan, including the Note, the Loan Agreement,
the Security Instrument, this Assignment and the other Loan Documents, or may
delegate some or all of such responsibility and/or obligations to a servicer
including any subservicer or master servicer, on behalf of the Investors. All
references to Lender in this Assignment will refer to and include any such
servicer to the extent applicable.

 

Assignment of Management Agreement and

Subordination of Management Fees

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IN WITNESS WHEREOF the undersigned have executed this Assignment as of the date
and year first written above.

 

Assignment of Management Agreement and

Subordination of Management Fees

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  BORROWER:       BR CARROLL WORLD GATEWAY, LLC, a Delaware limited liability
company         By: /s/ Jordan Ruddy     Jordan Ruddy     Chief Executive
Officer

 

Assignment of Management Agreement and

Subordination of Management Fees

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  LENDER:       JONES LANG LASALLE OPERATIONS, L.L.C., an Illinois limited
liability company         By: /s/ Faron G. Thompson     Faron G. Thompson    
Managing Director, Capital Markets-Real Estate Investment Banking

 

Assignment of Management Agreement and

Subordination of Management Fees

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  PROPERTY MANAGER:       CARROLL MANAGEMENT GROUP, LLC, a Georgia limited
liability company         By: /s/ Josh Champion     Name: Josh Champion    
Title: President

 

Assignment of Management Agreement and

Subordination of Management Fees

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EXHIBIT A

MANAGEMENT AGREEMENT

 

See Attached

 

Assignment of Management Agreement and

Subordination of Management Fees

Page A-1