Exhibit 10.5







 


ASSIGNMENT
OF LEASES AND RENTS 


 


THIS ASSIGNMENT is
made as of this 8th day of September, 2015, by Pro-Dex Sunfish Lake, LLC, a Delaware limited liability company (“Assignor”),
in favor of Fortitude Income Funds, LLC, a Delaware limited liability company (“Lender”). 


 


RECITALS


 


Assignor desires to
borrow from Lender the sum of Five Hundred Thousand and 00/100 Dollars ($500,000.00), evidenced by a Promissory Note of
even date herewith (the “Note”), and will execute and deliver to Lender to secure the Note, a Combination Mortgage,
Security Agreement and Fixture Financing Statement of even date herewith (the “Mortgage”), covering, in part, real estate
situated in the County of Anoka, State of Minnesota, described in Exhibit A attached hereto and made a part hereof, and
certain fixtures and equipment owned by Assignor now or hereafter located thereon (the “Mortgaged Property”), all as
more fully described in the Mortgage. 


 


Assignor may, from
time to time, during such time as the Obligations Secured Hereby (as hereinafter defined) remain outstanding, enter into leases
and other agreements under which Assignor is entitled to Rents (as hereinafter defined) with respect to all or part of the Mortgaged
Property (all of which leases and agreements are collectively referred to herein as the “Leases”) with various persons
or entities (hereinafter referred to as “Lessees”).


 


Lender, to further
secure the Obligations Secured Hereby, has required execution of this Assignment. 


 


NOW, THEREFORE, in
consideration of the premises, and for further good and valuable consideration, the receipt and adequacy of which is hereby acknowledged,
Assignor does hereby grant, transfer and assign to Lender all of Assignor’s right, title and interest in and to any Leases or
any future Leases or subleases covering all or any part of the Mortgaged Property together with any and all security deposits
made thereunder and all extensions, modifications and renewals, if any, thereof, and any guarantees of Lessees’ obligations under
any thereof. In addition to the foregoing, Assignor does further hereby grant, transfer and assign to Lender all of the rents,
income, issues and profits (the “Rents”), now or hereafter accruing or owing from any 


 






    	 



    	 



    




 


Leases
or any future Leases or otherwise as a result of any use, possession or occupancy of the Mortgaged Property or any part
thereof, whether accruing before or after foreclosure of the Mortgage or during the period of redemption thereof. The Rents
are being hereby granted, transferred and assigned for the purpose of securing (collectively referred to as the
“Obligations Secured Hereby”): 


 


		(1)	Payments of all indebtedness evidenced by the Note (including
any extensions or renewals thereof);



 


		(2)	Payment of all other sums, with interest thereon, becoming
due and payable to Lender pursuant to covenants and agreements contained herein and in the Note and in the Mortgage; and



   


		(3)	Performance and discharge of each and every obligation,
covenant and agreement of Assignor contained herein and in the Note and the Mortgage.






 


ASSIGNOR WARRANTS AND
COVENANTS that Assignor is and will remain the absolute owner of the Rents and Leases free and clear of all liens and encumbrances
other than the lien granted herein and those encumbrances set forth in Exhibit B to the Mortgage (the “Permitted Encumbrances”);
that Assignor has not heretofore assigned or otherwise encumbered its interest in any of the Rents or Leases to any person other
than as set forth in the Permitted Encumbrances; that Assignor has the right under applicable law, under the Leases and otherwise
to execute and deliver this Assignment and keep and perform all of Assignor’s obligations hereunder; that Assignor will warrant
and defend the Leases and Rents against all adverse claims, whether now existing or hereafter arising.





 


			AND TO PROTECT THE SECURITY OF THIS ASSIGNMENT, ASSIGNOR AGREES:



 


1.          Performance
of Leases. To faithfully abide by, perform and discharge each and every obligation, covenant and agreement under any Leases
to be performed by the lessor thereunder; to observe and comply with all provisions of law applicable to the operation and ownership
of the Mortgaged Property, including without limitation, all applicable provisions of Minnesota Statute, Chapter 504B with respect
to any security deposits received by Assignor and all covenants and obligations required of Assignor by the provisions of Minnesota
Statutes, Chapter 504B; to enforce or secure the performance of each and every obligation, covenant, condition and agreement of
any Leases by Lessees to be performed; not to further borrow against, pledge or assign any Rents, or anticipate the Rents or reduce
the amount of Rents or other payments under any Lease, or to waive, excuse, condone or in any manner release or discharge a Lessee
of or from the obligations, covenants, conditions and agreements by a Lessee to be performed, including the obligation to pay
the rental called for thereunder in the manner and at the place and time specified therein unless Assignor has the prior written
permission of Lender;


 






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and not to terminate any lease or accept a surrender thereof except by reason of the expiration of the stated
term of the Lease or unless the prior written permission of Lender has been obtained.


  


2.          Protect
Security. At Assignor’s sole cost and expense, to appear in and defend any action or proceeding arising under, growing out
of or in any manner connected with any Lease or the obligations, duties or liabilities of Assignor and Lessees, and to pay all
costs and expenses of Lender, including attorneys’ fees in a reasonable sum, in any such action or proceeding in which Lender
may appear. Assignor represents and warrants that Assignor is now and will be the absolute owner of any lease with full right
and title to assign the same and the Rents, that there is no outstanding assignment or pledge of any lease or of the Rents; that
no Rents have been waived, anticipated, discounted, compromised or released. During any period of time the Mortgaged Premises
is not occupied by Assignor, Assignor agrees to use Assignor’s best efforts to keep the Mortgaged Property fully leased at rentals
equivalent to or greater than rentals achieved from comparable properties.  


 


3.          Present
Assignment of Rents. This Assignment shall constitute an actual and present assignment, provided, Assignor shall have the
right to collect, but not prior to accrual, all of the Rents, and to retain, use and enjoy the same unless and until a default
shall occur in the payment or performance of the Obligations Secured Hereby. 


 


4.          Remedies.
During any period of time in which the Mortgaged Premises is occupied or leased to parties other than Assignor, and upon or at
any time after default by Assignor in the payment or performance of any Obligations Secured Hereby, Lender may, at its option
and subject to the provisions of the Mortgage, without notice: 


 


		a.	In the name, place and stead of Assignor, (i) enter
upon, manage and operate the Mortgaged Property, or retain the services of an independent contractor to manage and operate the
same, (ii) make, enforce, modify and accept surrender of any Lease, (iii) obtain or evict Lessees, collect, sue for, fix or modify
rents and enforce all rights of Assignor under any Lease, and (iv) perform any and all other acts that may be necessary or proper
to protect the security of this Assignment; or



  


		b.	Apply for, and Assignor hereby consents to, the appointment
of a receiver of the Mortgaged Property, whether or not proceedings for the foreclosure of the Mortgage have been commenced, and
if such proceedings have been commenced, whether or not a foreclosure sale has occurred.






 


The exercise of any of the foregoing rights
or remedies shall not cure or waive any default under the Note or the Mortgage or invalidate any act done by virtue of such default.





 


5.          Application
of Rents. All Rents collected by Lender, or by a receiver, if any, shall be held and applied to the following items in the
manner determined by Lender or the receiver to preserve the value of the Mortgaged Premises:


 






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		a.	To payment of all reasonable fees of the receiver, if
any, approved by the court;



 


		b.	To the repayment when due of all Lessee security deposits,
with interest thereon, pursuant to the provisions of Minnesota Statutes, Section 504B.178;



 


		c.	To payment of all delinquent or current real estate
taxes and special assessments payable with respect to the Mortgaged Property;



 


		d.	To payment of all premiums then due for the insurance
required by the provisions of the Mortgage;



 


		e.	To payment of expenses incurred for normal maintenance
of the Mortgaged Property;



 


		f.	To payment of expenses incurred by Lender or its agents
for the management and operation of the Mortgaged Property, including the cost of any independent contractor retained by Lender
to manage and operate the Mortgaged Property;






 


		g.	All sums remaining shall be applied to the Obligations
Secured Hereby;



 


		h.	If the Mortgaged Property, shall be foreclosed and sold
pursuant to a foreclosure sale, then:



  


		(i)	If Lender is the purchaser at the foreclosure sale, the
rents shall be paid to Lender to be applied to the extent of any deficiency remaining after the sale, the balance to be retained
by Lender, and if the Mortgaged Property be redeemed by Assignor or any other party entitled to redeem, to be applied as a credit
against the redemption price with any remaining excess rents to be paid to Assignor, provided, that if the Mortgaged Property
not be redeemed, any remaining excess rents to belong to Lender, whether or not a deficiency exists.






 


		(ii)	If Lender is not the purchaser at the foreclosure sale,
the rents shall be paid to Lender to be applied first, to the extent of any deficiency remaining after the sale, the balance to
be retained by the purchaser, and if the Mortgaged Property be redeemed by Assignor or any other party entitled to redeem, to
be applied as a credit against the redemption price with any remaining excess rents to be paid to Assignor, provided, if the Mortgaged
Property not be redeemed any remaining excess rents shall be paid first to the purchaser at the foreclosure sale in an amount
equal to the interest accrued upon the sale price pursuant to Minn. Stat. 580.23 or 581.10, then



 






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			to Lender to the extent of any
deficiency remaining unpaid and the remainder to the purchaser.



 


The rights and powers of Lender under this
Assignment, and the application of the Rents pursuant to this paragraph 5, shall continue and remain in full force and effect both
before and after commencement of any action or procedure to foreclose the Mortgage, after the foreclosure sale of the Mortgaged
Property in connection with the foreclosure of the Mortgage, and until expiration of the period of redemption from any such foreclosure
sale, whether or not any deficiency from the unpaid balance of the Obligations Secured Hereby exists after such foreclosure sale.


  


6.          No
Liability for Lender. Lender shall not be obligated to perform or discharge, nor does it hereby undertake to perform or discharge
any obligation, duty or liability under any Lease, nor shall this Assignment operate to place responsibility for the control,
care, management or repair of the Mortgaged Property upon Lender, nor for the carrying out of any of the terms and conditions
of any Lease; nor shall it operate to make Lender responsible or liable for any waste committed on the Mortgaged Property by a
Lessee or any other party, or for any dangerous or defective condition of the Mortgaged Property or for any negligence in the
management, upkeep, repair or control of the Mortgaged Property resulting in loss or injury or death to any Lessee, licensee,
employee or stranger.


 


7.          Assignor
to Hold Lender Harmless. Assignor shall and does hereby agree to indemnify and to hold Lender harmless of and from any and
all liability, loss or damage which it may or might incur under any Lease or under or by reason of this Assignment and of and
from any and all claims and demands whatsoever which may be asserted against it by reason of any alleged obligations or undertakings
on its part to perform or discharge any of the terms, covenants or agreements contained in any Lease. Should Lender incur such
liability, loss or damage under any Lease or under or by reason of this Assignment, or in the defense of any such claims or demands,
the amount thereof, including costs, expenses, and reasonable attorneys’ fees, shall be secured hereby and Assignor shall reimburse
Lender therefor immediately upon demand, and upon the failure of Assignor so to do Lender may declare all Obligations Secured
Hereby immediately due and payable.


 


8.          Specific
Assignment of Subsequent Lease. Assignor covenants, and agrees promptly upon request of Assignee, to transfer and assign to
Lender any specific Lease of all or any part of the Mortgaged Property upon the same terms and conditions as are herein contained. 


 


9.          Remedies
not Exclusive. This Assignment shall in no way operate to prevent Lender from pursuing any remedy which it now has or hereafter
may have under the terms or conditions of the Note or the Mortgage, or any other instrument securing the same, or by law, but
shall be deemed an additional remedy and shall be cumulative with the remedies granted therein.


 






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10.          Authorization
to Lessees. Lessees are hereby irrevocably authorized and directed to recognize the claims of Lender, or its assigns, hereunder
without investigating the reason for any action taken by Lender, or the validity or the amount of indebtedness owing to Lender,
or the existence of any default in the Note, the Mortgage, or under or by reason of this Assignment, or the application of the
Rents to be made by Lender. Assignor hereby irrevocably directs and authorizes Lessees to pay to Lender all sums due under any
Lease and consents and directs that said sums shall be paid to Lender without the necessity for a Judicial determination that
a default has occurred hereunder or under the Note, or the Mortgage, or that Lender is entitled to exercise its rights hereunder,
and to the extent such sums are paid to Lender, Assignor agrees that Lessees shall have no further liability to Assignor for the
same. The sole signature of Lender shall be sufficient for the exercise of any rights under this Assignment and the sole receipt
of Lender for any sums received shall be a full discharge and release therefor to Lessees.


 


11.          Notices.
All notices, demands or other communications which are required or permitted to be given or served by either party hereunder shall
be deemed given when deposited in the United States Mail, certified mail, return receipt requested, postage prepaid, addressed
as follows: 


 


	 	


If to Assignor:

	Pro-Dex Sunfish Lake, LLC	 
	 	 	2361 McGaw Ave	 
	 	 	Irvine, CA 92614	 
	 	 	 	 
	 	If to Lender:	Fortitude Income Fund,
LLC	 
	 	 	


701 Washington Ave North, Suite 550



	 	 	Minneapolis, MN 55401	 






 


Such addresses may be changed from time
to time by either party by at least ten days’ prior written notice to the other party. 


 


12.          Successors
and Assigns. This Assignment and each and every covenant, agreement and other provision hereof shall be binding upon Assignor
and its successors and assigns, including without limitation each and every from time to time record owner of the Mortgaged Property
or any other person having an interest therein, and shall inure to the benefit of Lender and its successors and assigns. 


 


13.          Governing
Law. This Assignment is made and executed in the State of Minnesota and shall be governed by the laws of such State with respect
to procedures and remedies available to Lender in the event of a default. It is the intention of the parties hereto that this
Assignment shall confer upon Lender the fullest rights, remedies and benefits available pursuant to Minnesota Statutes, Sections
576.25 and 559.17. 


 


14.          Severability.
The unenforceability or invalidity of any provision hereof shall not render any other provisions herein contained unenforceable
or invalid.


  



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15.          No
Mortgagee in Possession. Nothing herein contained and no action taken pursuant to this Assignment, shall be construed as constituting
Lender as “Mortgagee in Possession”.


 


IN WITNESS WHEREOF,
Assignor has caused this Assignment of Leases and Rents to be duly executed as of the day and year first above written. 





	 	 	 
	 	Pro-Dex Sunfish Lake, LLC,
	 	a Delaware limited liability company
	 	 	 
	 	By:	/s/ Richard L. Van Kirk
	 	 	Its: President





 


A notary public or other officer completing

this certificate verifies only the identity of

the individual who signed the document to

which this certificate is attached, and not the

truthfulness, accuracy, or validity of that

document. 


 


State of California 


 


County of Orange


 


On September 8, 2015
before me, notary public Mark Nava Fernandez (here insert name and title of officer), personally appeared Richard Lee Jr. Van
Kirk, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. 


 


I certify under PENALTY OF PERJURY under
the laws of the State of California that the foregoing paragraph is true and correct. 


 


WITNESS my hand and official seal. 


	 	 	 
	/s/ Mark Nava Fernandez	 	(Seal)
	Signature	 	 





 



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THIS INSTRUMENT DRAFTED BY:


 


BARNA, GUZY & STEFFEN, LTD. 


400 Northtown Financial Plaza 


200 Coon Rapids Boulevard 


Minneapolis, MN 55433 


(763) 780-8500 (MFH)


 


663308-v1


 






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EXHIBIT A


  


Legal Description





 


The East 500 feet of the South 200 feet
(as measured along the East and South lines respectively) of the Northeast Quarter (NE 1⁄4 of SE 1⁄4) of Section numbered
Twenty-seven (27), Township Thirty-two (32) North of Range Twenty-five(25) West, Anoka County, Minnesota.