EX-10.43






Prepared by and after recording


return to:



Lynn W. Strott, Esq.


715 St. Paul Street


Baltimore, MD 21202



	 	 	 
	Project Name:

Project Number:

	 	Millington Health Care Center

081-22010






The maximum principal indebtedness for Tennessee recording tax purposes is $4,794,803.49.



ASSUMPTION, MODIFICATION AND RELEASE AGREEMENT




THIS ASSUMPTION, MODIFICATION AND RELEASE AGREEMENT (this “Agreement”) is made as of January

10, 2012, by and among WEST POINT ROAD ASSOCIATES, L.P., a Georgia limited partnership (“Original

Borrower”), G&E HC REIT II MILLINGTON SNF, LLC, a Delaware limited liability company (“New

Borrower”), and CAPITAL FUNDING, LLC, a Maryland limited liability company (“Lender”). The

SECRETARY OF HOUSING AND URBAN DEVELOPMENT (“HUD” or the “Secretary”) joins this Agreement for the

purpose of acknowledging the transactions set forth herein and as a party to the Regulatory

Agreement (as defined below) and for such other purposes as may be set forth herein.




R E C I T A L S:




A. On July 12, 2010 Lender made a loan (the “Loan”) in the original principal amount of Four
Million Eight Hundred Seventy-Seven Thousand and 00/100 Dollars ($4,877,000.00) to Original
Borrower. To evidence the Loan, Original Borrower executed and delivered to Lender that certain
Deed of Trust Note, dated as of July 1, 2010 (the “Note”), payable to the order of Lender and
endorsed and insured by HUD, bearing interest and being payable as therein provided.



B. Payment of the Note is secured by, among other things, that certain Deed of Trust dated as
of July 1, 2010 and executed by Original Borrower for the benefit of Lender (the “Mortgage”). The
Mortgage was recorded on July 9, 2010 as Instrument No. 10070214 in the Register’s Office of Shelby
County, Tennessee (the “Records”). The Mortgage encumbers that certain parcel of real property
described on Exhibit A attached hereto and incorporated herein for all purposes, together
with the improvements and fixtures located thereon (the “Project”).



C. Original Borrower is liable for the payment and performance of all of its obligations under
the Note, the Mortgage, and all other documents evidencing, securing, guaranteeing or otherwise
pertaining to the Loan (collectively, together with all of the other documents evidencing and
securing the Loan, as the same are modified by this Agreement and any other agreement with Lender
and HUD in connection with the Assumption (as defined below), are hereinafter referred to,
collectively, as the “Loan Documents”). The Loan Documents include, without limitation, (a) that
certain Security Agreement dated July 1, 2010 by and between Original Borrower and Lender (the
“Borrower Security Agreement”) and (b) that certain Regulatory Agreement for Multifamily Housing
Projects dated July 1, 2010 by and between Original Borrower and the Secretary and recorded on July
9, 2010 as Instrument No. 10070215 in the Records (the “Regulatory Agreement”).



D. Original Borrower desires to sell, convey and transfer all of its interest in and to the
Project to New Borrower, and New Borrower desires to lease the Project to Warsaw Road, L.P., a
Georgia limited partnership and an affiliate of Original Borrower and the current master tenant
under the Loan Documents (“Master Tenant”), pursuant to a new master lease (the “New Master Lease”)
by and among New Borrower and certain of its affiliates, as landlord, and Master Tenant, as tenant
(the “Transfer”), subject to New Borrower’s express assumption as provided hereinafter of all of
Original Borrower’s obligations under the Note and the other Loan Documents arising after the date
hereof (the “Assumption”), and Original Borrower and New Borrower have requested Lender and HUD’s
consent to the Transfer and Assumption.



NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Original Borrower, New Borrower and Lender hereby agree as follows:



1. Incorporation of Recitals. The foregoing recitals are incorporated herein as a
substantive, contractual part of this Agreement.



2. Assumption by New Borrower. New Borrower hereby assumes all of the payment and
performance obligations of Original Borrower under the Loan Documents accruing or arising after the
date hereof in accordance with their respective terms and conditions as the same may be expressly
modified by this Agreement, including without limitation, payment of all sums due and payable under
the Note, subject, however, to any limitations set forth in the Loan Documents with respect to
recourse against the Original Borrower in the event of a default.



3. Reaffirmation by Original Borrower. Original Borrower hereby reaffirms, ratifies
and confirms its payment and performance obligations under the Loan Documents and confirms that it
will remain liable for all payment and performance obligations arising under the Loan Documents on
or prior to the date hereof.



4. Certifications of Original Borrower and Lender. Original Borrower and Lender
hereby certify, individually, and not jointly, to New Borrower that:




(a) As of the date hereof, the principal balance due under the Note is $4,794,803.49
and the monthly principal and interest due and payable under the Note is $23,383.68.




(b) Subject to this Section 4 below and to Lender’s knowledge, there are no
other penalties, fees, interest or other charges accruing under the Loan.




(c) As of the date hereof, the following impounds, reserves and escrows are being held
by or behalf of Lender and/or HUD in connection with the Loan:



	 	 	 	 	 
	(1)

(2)

(3)
	 	Taxes and Insurance:

Repair Reserve:

Replacement Reserve:

	 	$81,632.33

n/a

$184,133.14







(d) To Original Borrower’s knowledge, there are no defaults, events of defaults, or
events or conditions that have occurred which after the passage of time or giving of notice
will constitute a default or an event of default under the Loan Documents. To Lender’s
knowledge, no monetary defaults or events of default exist under the Loan Documents, and
Lender has not delivered notice to Original Borrower of any defaults, events of defaults, or
events or conditions that have occurred which after the passage of time or giving of notice
will constitute a default or an event of default under the Loan Documents.



5. Representations and Warranties of New Borrower. New Borrower represents and
warrants to Original Borrower, Lender and HUD that:




(a) New Borrower is a limited liability company, duly organized and validly existing
under the laws of the State of Delaware, has all necessary licenses, authorizations,
registrations and approvals, and full power and authority to enter into this Agreement and
to own and lease the Project.




(b) This Agreement constitutes the legal, valid and binding agreement of New Borrower,
enforceable against New Borrower in accordance with its terms, subject only to (i) the
effect of any bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditor’s rights generally and (ii) general principles of equity.



6. Representations and Warranties of Original Borrower. Original Borrower represents
and warrants to New Borrower, Lender and HUD that:




(a) Original Borrower is a limited partnership, duly organized and validly existing
under the laws of the State of Georgia, has all necessary licenses, authorizations,
registrations and approvals, and full power and authority to enter into this Agreement.




(b) This Agreement constitutes the legal, valid and binding agreements of Original
Borrower, enforceable against Original Borrower in accordance with its terms, subject only
to (i) the effect of any bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditor’s rights generally, and (ii) general principles of
equity.




(c) There are no subordinate liens of any kind covering or relating to the Project, nor
are there any mechanics liens or liens for unpaid taxes or assessments encumbering the
Project, nor has notice of a lien or notice of intent to file a lien been received.



7. Release of Original Borrower. Effective as of the recordation of this Agreement,
Original Borrower is released by Lender and HUD from its obligations as set forth in the Loan
Documents arising after the date of hereof, except for recourse obligations for which it expressly
has personal liability under the Note and other Loan Documents (“Recourse Obligations”), if any, to
the extent such Recourse Obligations arise out of acts or events occurring or obligations arising
prior to or on the date hereof. Nothing in this Agreement shall waive, compromise, impair or
prejudice any right that the Lender or the Secretary might have to seek judicial, administrative or
other recourse for any breach of the Loan Documents that may have occurred or accrued prior to or
may occur subsequent to the date of this Agreement.



8. No Impairment of Liens. The Project is and shall remain in all respects subject to
the lien, charge or encumbrance of the Mortgage and other Loan Documents and/or the conveyance of
title contained in the Loan Documents. Nothing in this Agreement shall affect or be construed to
affect (a) the warranty of title in the Mortgage or (b) the lien, charge or encumbrance of the
Mortgage or other Loan Documents or the priority thereof over all other liens, charges,
encumbrances or conveyances, or (c) release or affect the liability of any party or parties under
or on account of the Loan Documents, except to the extent Original Borrower is expressly released
under Section 7 of this Agreement. Nothing in this Agreement shall affect or be construed
to affect any other security or instrument, if any, held by Lender in connection with or to
evidence the Loan.



9. Consent to Transfer and Assumption. Lender and the Secretary hereby consent to the
Transfer and Assumption and agree that such Transfer and Assumption shall not constitute a default
under the Mortgage or any of the other Loan Documents. However, neither Lender nor the Secretary
waives any other default, whether now in existence or occurring hereafter, whether known or
unknown. This waiver applies only to this particular Transfer and not to any future transfer or
sale. New Borrower and Original Borrower agree that they will not sell or attempt to sell or
transfer or otherwise dispose of the Project without the written consent of Lender and Secretary,
their respective successors or assigns, except for the sale and leaseback referred to herein.



10. Amendments to Loan Documents. The Loan Documents are hereby modified and amended
(and no further amendment document shall be required) to reflect the Transfer and Assumption
provided for herein. In furtherance of the foregoing, the Loan Documents are hereby amended
effective as of the date hereof as follows:




(a) The term “Owners” as used in the Regulatory Agreement and any of the other Loan
Documents means New Borrower and its successors, heirs and assigns.




(b) The address of New Borrower is c/o Grubb & Ellis Healthcare REIT II, Inc., 1551 N.
Tustin Avenue, Suite 300, Santa Ana, CA 92705, Attention: President and Chief Operating
Officer.




(c) Paragraph 6(e)(1) is hereby deleted in its entirety and the following is
substituted in lieu thereof:



“(1) All distributions shall be made only as of and after the end of a
quarterly, semiannual or annual fiscal period, and only as permitted by the
law of the applicable jurisdiction.”




(d) All references in the Loan Documents to the master lease and the sublease shall be
hereby amended to mean and refer to the New Master Lease and the new sublease by and between
Master Tenant and the current operator of the Project.




(e) The following is added to the end of Section 7 of the Security Agreement:



“(d) Debtor violates any provision of (i) this Security Agreement; or
(ii) any other instrument related to the indebtedness evidenced by the HUD
Loan Documents to which Debtor is a party; provided, however, that an event
of default shall not occur unless such violation is not cured within
applicable cure periods, if any, as may be provided in said documents; or



(e) There occurs any actual or threatened demolition of or injury or
waste to the Project, not covered by insurance, or not replaced or restored
by Debtor, which may impair the value of the Collateral; or



(f) A receiver is appointed for or a petition in bankruptcy is filed by
or against Debtor, its successors or its assigns, which receiver or
involuntary bankruptcy petition is not removed, vacated or stayed within
sixty (60) days from the first date of appointment or filing thereof; or



(g) Debtor is dissolved and liquidation of Debtor is commenced in
accordance with Debtor’s organizational documents and/or the law of the
state.”



11. Reaffirmation. Except as expressly modified by this Agreement, the terms and
conditions of the Loan Documents remain unchanged and are reaffirmed, ratified and confirmed by all
of the parties hereto, and remain in full force and effect. New Borrower acknowledges that, as of
the date hereof and subject to the terms hereof, it has no defenses, rights of set off or
counterclaims of any type to the Loan or the Loan Documents.



12. Indemnification.




(a) Notwithstanding any language to the contrary in this Agreement or in the other Loan
Documents, Original Borrower hereby reaffirms to New Borrower and its affiliates any and all
indemnity obligations by Original Borrower, Master Tenant or any of their affiliates arising
in favor of New Borrower or its affiliates in connection with the Transfer and the
Assumption and Original Borrower, HUD and Lender hereby acknowledge and agree that this
Agreement shall not be deemed a waiver of any such additional indemnity obligations.




(b) Nothing in this Section 12 shall be construed to constitute a waiver by any
party of the right to enforce the provisions of this Agreement in accordance with its terms.



13. No Satisfaction or Release of Loan Documents. All parties to this Agreement
specifically confirm and agree that nothing in this Agreement shall be understood or construed to
amount to a satisfaction or release in whole or in part of any of the Loan Documents or of the
Project.



14. No Waiver. Except as expressly provided herein, the execution of this Agreement
by the Lender and Secretary does not and shall not constitute a waiver of any rights or remedies to
which Lender and Secretary is entitled pursuant to the Loan Documents, nor shall the same
constitute a waiver of any default which may have heretofore occurred or which may hereafter occur
with respect to the Loan Documents.



15. Counterparts. This Agreement may be executed in any number of counterparts with
the same effect as if all parties hereto had signed the same document. All such counterparts shall
be construed together and shall constitute one instrument, but in making proof hereof it shall only
be necessary to produce one such counterpart.



16. Severability of Provisions. If any one or more of the provisions contained in
this Agreement are for any reason invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision hereof, and this
Agreement will be construed as if such invalid, illegal or unenforceable provision had never been
contained in this Agreement.



17. Governing Law. The terms and conditions of this Agreement shall be governed by
the applicable internal laws of the State where the Project is located, without regard to the
principles of conflict of laws.



18. Interpretation of Agreement. Within this Agreement, words of any gender shall be
held and construed to include any other gender, and words in the singular number shall be held and
construed to include the plural, unless the context otherwise requires. The parties acknowledge
that the parties and their counsel have reviewed and revised this Agreement and that the normal
rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of this Agreement or any exhibits or amendments
hereto.



19. Entire Agreement. This Agreement contains the entire agreement between the
parties hereto with respect to the assumption of the Loan and fully supersedes all prior agreements
and understanding between the parties pertaining to such subject matter.



20. Binding Provisions. The terms and conditions of this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto, their successors and permitted assigns.



21. Equal Opportunity in Housing. New Borrower agrees that it shall fully comply with
the provisions of (1) any laws prohibiting discrimination in housing on the basis of race, color,
creed or national origin; and (2) with the Regulations of the Department of Housing and Urban
Development providing for nondiscrimination and equal opportunity in housing. New Borrower
understands and agrees that New Borrower’s failure or refusal to comply with any such provisions
shall be a proper basis for the Secretary to take any corrective action he may deem necessary,
including, but not limited to, the rejection of future applications for FHA mortgage insurance and
the refusal to enter into future contracts of any kind with which New Borrower is identified; and
further, the Secretary shall have a similar right to corrective action (1) with respect to any
individuals who are officers, directors, principal stockholders, trustees, manager, partners or
associates of New Borrower and (2) with respect to any corporation or any other type of business
association or organization with which the officers, directors, principal stockholders, trustees,
manager, partners, or associates of New Borrower may be identified.



(remainder of page intentionally left blank)





1






IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement to be
effective as of the day and year first above written.




LENDER:




CAPITAL FUNDING, LLC, a Maryland limited liability
company




By: /s/ Kelly M. Sparwasser

Name: Kelly M. Sparwasser

Title: Assistant Vice President




	 	 	 	 	 
	STATE OF MARYLAND	 	)	ss
	COUNTY OF BALTIMORE

	 	 	)	 






I, Krista M. Boblitz, a notary public in and for said County in said State, hereby certify that
Kelly M. Sparwasser, whose name as AVP of CAPITAL FUNDING, LLC signed the foregoing Assumption and
Modification Agreement and who is known to me, acknowledged before me on this day that, being
informed of the contents of the Assumption and Modification Agreement, he as such officer and with
full authority executed the same voluntarily for and as the act of said corporation.



Witness my hand and official seal this 30th day of December, 2011.



/s/ Krista M. Boblitz Notary Public)



My commission expires July 20th  2015.



[signatures continue on following page]





2






ORIGINAL BORROWER:




WEST POINT ROAD ASSOCIATES, L.P.




a Georgia limited partnership




By: /s/ James J. Andrews

James 

J. Andrews, President




	 	 	 	 	 
	STATE OF GEORGIA	 	)	ss
	COUNTY OF FULTON

	 	 	)	 






I, Janet C. Guy, a notary public in and for said County in said State, hereby certify that James
J. Andrews, whose name as President of WEST POINT ROAD ASSOCIATES, L.P. signed the foregoing
Assumption and Modification Agreement and who is known to me, acknowledged before me on this day
that, being informed of the contents of the Assumption and Modification Agreement, he as such
officer and with full authority executed the same voluntarily for and as the act of said
corporation.



Witness my hand and official seal this 28th day of December, 2011.



/s/ Janet C. Guy (Notary Public)



My commission expires April 1, 2014



[signatures continue on following page]





3






NEW BORROWER:





G&E HC REIT II MILLINGTON SNF, LLC, a Delaware
limited liability company




By: /s/ Danny Prosky




	 	 	Danny Prosky, Authorized Signatory





	 	 	 	 	 	 	 
	STATE OF CALIFORNIA	 	) ss
	COUNTY OFORANGE

	 	 	)	 	 	







I, Rex Morishita , a notary public in and for said County in said State, hereby certify that Danny
Prosky, whose name as Authorized Signatory of G&E HC REIT II MILLINGTON SNF, LLC signed the
foregoing Assumption and Modification Agreement and who is known to me, acknowledged before me on
this day that, being informed of the contents of the Assumption and Modification Agreement, he as
such officer and with full authority executed the same voluntarily for and as the act of said
limited liability company.



Witness my hand and official seal this 24th day of December, 2011.



/s/ Rex Morishita (Notary Public)



My commission expires May 1, 2015



[signatures continue on following page]





4






IN WITNESS WHEREOF, the Secretary joins in this Agreement for the purposes of acknowledging the
transactions set forth herein and as a party to the Regulatory Agreement and for such other
purposes as may be set forth herein.



SECRETARY OF HOUSING AND



URBAN DEVELOPMENT




By: /s/ Roger A. Lewis




	 	 	Roger A. Lewis, Authorized Agent






Office of Residential Care Facilities


National Director,


Section 232 Development,


Office Healthcare Programs



	 	 	 
	STATE OF WASHINGTON

COUNTY OF KING

	 	) ss

)






On this 29TH day of December, 2011, before me appeared Roger A. Lewis, who, being
by me duly sworn, did say that she is a duly appointed HUD/FHA official and the person who executed
the foregoing instrument and acknowledged the same to be her free and voluntary act and deed as
duly appointed HUD/FHA official for and on behalf of the Secretary of Housing and Urban
Development.



IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notarial seal on the day and year
last above written.




/s/ Markham W. Stickney




	 	 	Notary Public





My commission expires: 04/19/15



EXHIBIT A

TO

ASSUMPTION, MODIFICATION AND RELEASE AGREEMENT










5