EXHIBIT 10.6


 





ASSIGNMENT OF MANAGEMENT AGREEMENT AND


SUBORDINATION OF MANAGEMENT FEES


 


THIS ASSIGNMENT OF MANAGEMENT AGREEMENT
AND SUBORDINATION OF MANAGEMENT FEES (“Assignment”), is made as of the 5th day of April, 2012, by DT STONE RIDGE,
LLC, a South Carolina limited liability company, having its principal place of business at 11132 Ventura Boulevard, Suite 415,
Studio City, California 91604, (“Borrower”), and PEGASUS RESIDENTIAL, LLC, having its principal place of business
at 2300 Lakeview Parkway, Suite 700, Alpharetta, Georgia 30009 (“Agent”), for the benefit of PRIP STONE RIDGE, LLC,
a Delaware limited liability company, having an address, c/o Paladin Realty Partners, LLC, at 10880 Wilshire Boulevard, Suite 1400,
Los Angeles, California 90024 (“Lender”).


 


RECITALS:


 


A.Borrower by its
promissory note of even date herewith given to Lender (the note together with all extensions, renewals, modifications, substitutions
and amendments thereof shall collectively be referred to as the “Note”) is indebted to Lender in the principal sum
of $3,500,000 in lawful money of the United States of America, with interest from the date thereof at the rates set forth in the
Note (the indebtedness evidenced by the Note, together with such interest accrued thereon, shall collectively be referred to as
the “Loan”), principal and interest to be payable in accordance with the terms and conditions provided in the Note.


 


B.The Loan is secured
by, among other things, the Security Instrument (as defined in the Note), which grants Lender a first lien on the property encumbered
thereby (the “Property”).


 


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


 


D.Lender requires
as a condition to the making of the Loan that Borrower assign the Management Agreement and that Agent subordinate its interest
in the Management Fees in lien and payment to the Security Instrument as set forth below.


 


AGREEMENT:


 


For good and valuable
consideration the parties hereto agree as follows:


 


1.Assignment of
Management Agreement. As additional collateral security for the Loan, Borrower hereby conditionally transfers, sets over and
assigns to Lender all of Borrower’s right, title and interest in and to the Management Agreement, said transfer and assignment
to automatically become a present, unconditional assignment, at Lender’s option, in the event of a default by Borrower under
the Note, the Security Instrument or any of the other Loan Documents (as defined in the Note) and the failure of Borrower to cure
such default within any applicable grace period.


 






    	



    	 



    
 


 


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


 


3.Termination.
At such time as 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 shall terminate.


 


4.Estoppel.
Agent represents and warrants that (a) the Management Agreement is in full force and effect and has not been modified, amended
or assigned with respect to the Property, (b) neither Agent nor Borrower is in default under any of the terms, covenants or provisions
of the Management Agreement with respect to the Property and Agent 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 with respect to the Property, (c)
neither Agent nor Borrower has commenced any action or given or received any notice for the purpose of terminating the Management
Agreement with respect to the Property and (d) the Management Fees and all other sums due and payable to the Agent under the Management
Agreement have been paid in full with respect to the Property.


 


5.Borrower’s
Covenants. Borrower hereby covenants with Lender that during the term of this Assignment: (a) Borrower shall not transfer the
responsibility for the management of the Property from Agent to any other person or entity without prior written notification to
Lender and the prior written consent of Lender, which consent may be withheld by Lender in Lender’s sole discretion; (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 consent may be withheld by Lender in Lender’s sole discretion; and (c) Borrower shall, in the manner provided
for in this Assignment, give notice to Lender of any notice or information that Borrower receives which indicates that Agent is
terminating the Management Agreement or that Agent is otherwise discontinuing its management of the Property. Borrower shall exercise
each individual option, if any, to extend or renew the term of the Management Agreement while the Loan is outstanding.


 


6.Agreement by
Borrower and Agent. Borrower and Agent hereby agree that upon the occurrence of an Event of Default (as defined in the Security
Instrument) may exist during the term of this Assignment, at the option of Lender exercised by written notice to Borrower and Agent:
(a) all rents, security deposits, issues, proceeds and profits of the Property collected by Agent, after payment of all costs and
expenses of operating the Property (including, without limitation, operating expenses, real estate taxes, insurance premiums and
repairs and maintenance) shall be applied in accordance with Lender’s written directions to Agent; (b) Agent shall not collect
or be entitled to any Management Fee or other fee or commission due under the Management Agreement; and (c) Lender may exercise
its rights under this Assignment and may immediately terminate the Management Agreement and require Agent to transfer its responsibility
for the management of the Property to a management company selected by Lender in Lender’s sole and absolute discretion.


 






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7.Lender’s
Right to Replace Agent. In addition to the foregoing, in the event that the Debt Service Coverage Ratio (as defined in the
Security Instrument shall fall below 1.45:1, or if Agent shall be in default beyond any applicable cure periods under the Management
Agreement, Lender may exercise its rights under this Assignment and direct Borrower to terminate the Management Agreement and to
replace Agent with a management company acceptable to Lender in Lender’s sole and absolute discretion.


 


8.Receipt of Management
Fees. Borrower and Agent hereby agree that Agent shall not be entitled to receive any Management Fees or other fee, commission
or other amount payable to Agent under the Management Agreement for and during any period of time that any Event of Default exists;
provided, however, that Agent shall not be obligated to (i) return or refund to Lender any Management Fee or other fee, commission
or other amount already received by Agent prior to the occurrence of the Event of Default, and to which Agent was entitled under
the Management Agreement, or (ii) render any services pursuant to the Management Agreement during any period in which the Agent’s
right to receive Management Fees and other fees, commissions and other amounts payable to Agent under the Management Agreement
has been suspended pursuant to this Assignment.


 


9.Consent and
Agreement by Agent. Agent hereby acknowledges and consents to this Assignment and agrees that Agent will act in conformity
with the provisions of this Assignment and Lender’s rights hereunder or otherwise related to the Management Agreement. In
the event that the responsibility for the management of the Property is transferred from Agent in accordance with the provisions
hereof, Agent shall, and hereby agrees to, fully cooperate in transferring its responsibility to a new management company and effectuate
such transfer no later than thirty (30) days from the date the Management Agreement is terminated. Further, Agent hereby agrees
(a) not to contest or impede the exercise by Lender of any right it has under or in connection with this Assignment; and (b) that
it shall, in the manner provided for in this Assignment, give at least thirty (30) days prior written notice to Lender of its intention
to terminate the Management Agreement or otherwise discontinue its management of the Property.


 


10.Governing Law.
This Assignment shall be governed, construed, applied and enforced in accordance with the laws of the state in which the Property
is located and the applicable laws of the United States of America.


 


11.Notices.
All notices or other written communications hereunder shall be deemed to have been properly given (i) upon delivery, if delivered
in person, (ii) one (1) Business Day (hereinafter defined) after having been deposited for overnight delivery with any reputable
overnight courier service, or (iii) three (3) Business Days after having been deposited in any post office or mail depository regularly
maintained by the U.S. Postal Service and sent by registered or certified mail, postage prepaid, return receipt requested, addressed
as follows:


 


If to Borrower:


DT STONE RIDGE, LLC


11132 Ventura Boulevard, Suite
415


Studio City, California 91604


Attention: Daniel Markel


 






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With a copy to:


Welch Law Firm, P.C.


1299 Farnum Street


Suite 1220


Omaha, Nebraska 68102


Attention: Ryan Scott, Esq.


 


If to Lender:


PRIP Stone Ridge, LLC


do Paladin Realty Partners, LC


10880 Wilshire Boulevard, Suite
1400


Los Angeles, California 90024


Attention: Jay Hartman


 


With a copy to:


King & Spalding
LLP


1185 Avenue of the Americas


New York, New York 10036


Attention: Timothy Tucker, Esq.


 


If to Agent:


Pegasus Residential, LLC


2300 Lakeview Parkway, Suite
700


Alpharetta, Georgia 30009


Attention: Debbie Conley


 


or addressed as such party may from time
to time designate by written notice to the other parties. For purposes of this Section 11, the term “Business Day”
shall mean a day on which commercial banks are not authorized or required by law to close in New York, New York.


 


Any party by notice to
the others may designate additional or different addresses for subsequent notices or communications.


 


12.No Oral Change.
This Assignment, and any provisions hereof, may not’be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act or failure to act on the part of Borrower or Lender, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought.


 


13.Liability.
If Borrower consists of more than one person, the obligations and liabilities of each such person hereunder shall be joint and
several. This Assignment shall be binding upon and inure to the benefit of Borrower and Lender and their respective successors
and assigns forever.


 


14.Inapplicable
Provisions. If any term, covenant or condition of this Assignment is held to be invalid, illegal or unenforceable in any respect,
this Assignment shall be construed without such provision.


 


15.Headings, etc.
The headings and captions of various paragraphs of this Assignment are for convenience of reference only and are not to be construed
as defining or limiting, in any way, the scope or intent of the provisions hereof.


 






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16.Duplicate Originals;
Counterparts. This Assignment may be executed in any number of duplicate originals and each duplicate original shall be deemed
to be an original. This Assignment may be executed in several counterparts, each of which counterparts shall be deemed an original
instrument and all of which together shall constitute a single Assignment. The failure of any party hereto to execute this Assignment,
or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder.


 


17.Number and
Gender. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural and vice versa.


 


18.Exculpation.
Borrower’s obligations under this Assignment are subject to the provisions of Article 13 of the Security Instrument.


 


19.Miscellaneous.
Wherever pursuant to this Assignment (i) Lender exercises any right given to it to approve or disapprove, (ii) any arrangement
or term is to be satisfactory to Lender, or (iii) any other decision or determination is to be made by Lender, the decision of
Lender to approve or disapprove, all decisions that arrangements or terms are satisfactory or not satisfactory and all other decisions
and determinations made by Lender, shall be in the sole and absolute discretion of Lender and shall be final and conclusive, except
as may be otherwise expressly and specifically provided herein.


 


 





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


 


 


BORROWER:


 


DT STONE RIDGE, LLC, a South Carolina limited
liability company


 


 


 By: DT Columbia SC Management, LLC,


a Delaware limited liability company, its Operating Member


 


By:  DT Group Development, Inc., its sole manager


 


By:_______________________


James Markel, Secretary


 


 





AGENT:


 


PEGASUS RESIDENTIAL, LLC


 





 


By:____________________________________


Name:


Title:


 






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EXHIBIT A


 


MANAGEMENT AGREEMENT


 


[ATTACHED]