EX-10.45






Prepared by and after recording


return to:



Lynn W. Strott, Esq.


715 St. Paul Street


Baltimore, MD 21202



	 	 	 
	Project Name:

Project Number:

	 	Nursecare Nursing & Rehab Center

064-22037






ASSUMPTION, MODIFICATION AND RELEASE AGREEMENT




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

10, 2012, by and among RED RIVER ASSOCIATES, L.P., a Georgia limited partnership (“Original

Borrower”), G&E HC REIT II SHREVEPORT 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 Eleven
Million One Hundred Twenty Thousand Four Hundred and 00/100 Dollars ($11,120,400.00) to Original
Borrower. To evidence the Loan, Original Borrower executed and delivered to Lender that certain
Mortgage 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 Mortgage and Assignment
of Lease dated as of July 1, 2010 and executed by Original Borrower for the benefit of Lender (the
“Mortgage”). The Mortgage was recorded on July 12, 2010 at Mortgage Book 5063, Page 652 of the
Records of Caddo Parish, Louisiana (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
12, 2010 at Mortgage Book 5063, Page 666 of 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 $10,868,299.35
and the monthly principal and interest due and payable under the Note is $57,008.10.




(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:

	 	$148,639.90

n/a

$320,326.43







(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) All statements in the Loan Documents of the legal description of the Project shall
be hereby deleted in their entirety and the text of Exhibit A to this Agreement
shall be substituted in lieu thereof.




(f) 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.



(remainder of page intentionally left blank)





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



	 	 	 
	Signed, sealed and
	 	LENDER:

	delivered in the presence

of:

WITNESSES:

/s/ Michael Burchell
	 	—

CAPITAL FUNDING, LLC,

a Maryland limited liability company

By: /s/ Kelly M. Sparwasser

	 
	 	 

	Typed Name: Michael

Burchell, Director




/s/ Amanda Harvey




Typed Name: Amanda Harvey
	 	Name: Kelly M. Sparwasser

—

Title: Assistant Vice President

—

In the presence of the undersigned competent

witnesses, who sign their names with the said

appearers and me, Notary, after due reading of the

whole.

/s/ Krista M. Boblitz

	 	 	 

	 	 	Notary Public

My Commission Expires: 7/20/15

	 
	 	 







[signatures continue on following page]





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	Signed, sealed and
	 	ORIGINAL BORROWER:

	delivered in the presence

of:

WITNESSES:

/s/ Philip M. Rees
	 	—

RED RIVER ASSOCIATES, L.P., a Georgia limited

partnership

By: /s/ James J. Andrews

	 
	 	 

	Typed Name: Philip M. Rees




/s/ Lisa M. Strader




Typed Name Lisa M. Strader
	 	James J. Andrews, President

In the presence of the undersigned competent

witnesses, who sign their names with the said

appearers and me, Notary, after due reading of

the whole.

/s/ Janet C. Guy

	 	 	 

	 	 	Notary Public

My Commission Expires: 4/1/14

	 
	 	 







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4




5




	 	 	 
	Signed, sealed and	 	 	NEW BORROWER:	 
	delivered in the	 	 
	presence of:	 	 	G&E HC REIT II SHREVEPORT SNF, LLC, a Delaware	 
	WITNESSES:	 	 	limited liability company	 
	/s/	 	Phil Han	 	 	By: /s/	 	 	Danny Prosky
	Typed Name:	Phil Han	Danny Prosky, Authorized Signatory
	 	 	 	 	 	In the presence of the undersigned competent
	/s/	 	Paul S. Baker	 	 	witnesses, who sign their names with the said
	 	 	 	 	 	appearers and me, Notary, after due reading of the
	Typed Name: Paul S. Baker	whole.
	 	 	 	 	 	See next page
	 	 	 	 	 	Notary Public
	 	 	 	 	 	My Commission Expires:____________
	 	 	





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



	 	 	 
	Signed, sealed and delivered in

the presence of:

WITNESSES:

/s/ Linda J. Monger




Typed Name: Linda J. Monger




/s/ Catherine A. Worley

	 	In the presence of the undersigned competent

witnesses, who sign their names with the said

appearers and me, Notary, after due reading of

the whole.

/s/ Markham W. Stickney

—

Notary Public

My Commission Expires: 4/19/15
	 

	 	

	Typed Name: Catherine A. Worley

	 	

	 

	 	 






EXHIBIT A

TO

ASSUMPTION, MODIFICATION AND RELEASE AGREEMENT




Legal Description




Lot 1, Texarkana Annex, Unit No. 2, a subdivision of the City of Shreveport, Caddo Parish,
Louisiana, as per plat thereof recorded in Book 7000, Page 75 of the Conveyance Records of Caddo
Parish, Louisiana.




6