EX-10.5






(The above space is reserved for recording purposes only)


This is a mortgage amendment as defined in Minnesota Statutes, Section 287.01, Subdivision 2, and
as such, it does not secure a new or an increased amount of debt. Minn. Stat. § 287.05, Subd. 8.



MODIFICATION OF THIRD-PARTY MORTGAGE, SECURITY AGREEMENT, FIXTURE FINANCING STATEMENT AND
ASSIGNMENT OF LEASES AND RENTS



THIS MODIFICATION OF THIRD-PARTY MORTGAGE, SECURITY AGREEMENT, FIXTURE FINANCING STATEMENT AND
ASSIGNMENT OF LEASES AND RENTS (the “Modification Agreement”), effective March 31, 2010, is by and
between G&E HEALTHCARE REIT II SARTELL MOB, LLC, a Delaware limited liability company (the
“Mortgagor”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (the
“Mortgagee”).



RECITALS




FIRST: Sylvan Holdings, LLC granted the Mortgagee that certain Mortgage, Security Agreement,
Fixture Financing Statement and Assignment of Leases and Rents dated September 16, 2005, and
recorded in the office of the County Recorder for Stearns County, Minnesota on September 28, 2005,
as Document No. 1169890 which was assumed (as mortgagor) by Stingray Properties, LLC (the
“Borrower”) under a Consent and Assumption Agreement dated July 1, 2006 recorded in the office of
the County Recorder for Stearns County, Minnesota on September 28, 2006, as Document No. 1207487
(collectively, the “Mortgage”). The Mortgage is a lien on the real property legally described on
Exhibit A attached hereto (the “Property”).



SECOND: The Borrower has conveyed the Property to Mortgagor and Mortgagor has assumed the
Borrower’s obligations under the Mortgage to the extent provided in a Consent and Assumption
Agreement dated the date hereof (as the same may be amended, restated or replaced from time to
time, the “Consent Agreement”).



THIRD: The Mortgagee has consented to such conveyance, subject, however, to certain terms and
conditions, including this Modification Agreement.



NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Mortgagor and the Mortgagee hereby agrees as follows:



1. Non-Borrower Mortgagor Rider. The following covenant and agreement is hereby inserted
into the Mortgage. Mortgagor agrees to and agrees to perform the covenants and agreements
contained in a rider attached hereto as Exhibit B.



2. Additional Events of Default. In addition to the existing Events of Default, each of
the following shall be an Event of Default under the Mortgage:




	 	(a)	 	If, following written notice from Mortgagee and twenty (20) days thereafter
during which Mortgagor may cure, Mortgagor fails to perform or observe any obligation
under the Consent and Assumption Agreement.






	 	(b)	 	If, following written notice from Mortgagee and twenty (20) days thereafter
during which Mortgagor may cure, Mortgagor fails to perform or observe any obligation
under the Replacement Reserve Agreement (as such term is defined in the Consent and
Assumption Agreement).






	 	(c)	 	If, following written notice from Mortgagee and twenty (20) days thereafter
during which Mortgagor may cure, Mortgagor fails to perform or observe any obligation
under contract, instrument or agreement with the Borrower or any guarantor of the
Indebtedness (each, a “Guarantor”).






	3.	 	Deletion. Section 16(g) of the Mortgage is hereby deleted in its entirety.






	4.	 	All Other Terms in Full Force and Effect. Except as expressly modified by this
Modification Agreement, all terms and conditions of the Mortgage shall remain unchanged and in
full force and effect.






	5.	 	Counterparts. This Modification Agreement may be executed in multiple counterparts,
each of which shall be deemed an original.





[The remainder of this page is intentionally blank. Signature page follows.]



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IN WITNESSETH WHEREOF, the Mortgagor and the Mortgagee have executed this Modification Agreement as
of the dates set forth below.



MORTGAGEE:


WELLS FARGO BANK, NATIONAL ASSOCIATION



By: /s/ Roxanne Muehebauer

Its: Assistant Vice President




	 	 	 	 	 
	STATE OF MINNESOTA
	 	 	)	 
	 
	 	) ss






COUNTY OF Sterns)



The foregoing instrument was acknowledged before me this 30th day of March 2010 by
Roxanne Muehebauer, the Assistant Vice President of Wells Fargo Bank, National Association, a
national banking association, on behalf of the association.



/s/ Nancy L. Spaeth


Notary Public



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MORTGAGOR:



G&E HEALTHCARE REIT II SARTELL MOB, LLC,





a Delaware limited liability company



By: /s/ Danny Prosky


Name: Danny Prosky


Its: Authorized Signatory



Address: c/o Grubb & Ellis Equity Advisors, LLC





1551 North Tustin Avenue, Suite 200


Santa Ana, California 92705


Attn: Danny Prosky



	 	 	 	 	 
	STATE OF CALIFORNIA
	 	 	)	 
	 
	 	) ss
	COUNTY OF ORANGE
	 	 	)	 






The foregoing instrument was acknowledged before me this 30th day of March, 2010 by
Danny Prosky in his capacity as the Authorized Signatory of G&E Healthcare REIT II Sartell MOB,
LLC, a Delaware limited liability company.



/s/ P.C. Han


Notary Public


This Instrument was drafted by:



Nilsson Midness, P.A.


900 Flour Exchange Building


310 Fourth Avenue South


Minneapolis, MN 55415



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EXHIBIT A




Legal Description




Lots One (1), Two (2) and Three (3), Block One (1), REGIONAL MEDICAL ARTS CAMPUS, according to the
plat and survey thereof on file and of record in the office of the County Recorder in and for
Stearns County, Minnesota.



Abstract Property








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EXHIBIT B




NON-BORROWER MORTGAGOR RIDER




Exhibit B to Mortgage assumed by G&E HEALTHCARE REIT II SARTELL MOB, LLC, as Mortgagor, to WELLS
FARGO BANK, NATIONAL ASSOCIATION, as Mortgagee, dated as of September 16, 2005.



To the extent the Mortgage secures a promissory note and other loan documents (“Loan Documents”)
made by a party or parties (“Borrower”) not identical to the party or parties constituting
Mortgagor, the party or parties constituting Mortgagor agree as follows:




	1.	 	CONDITIONS TO EXERCISE OF RIGHTS. Mortgagor hereby waives any right it may now or
hereafter have to require Mortgagee, as a condition to the exercise of any remedy or other
right against Mortgagor hereunder or under any other document executed by Mortgagor in
connection with any Indebtedness: (a) to proceed against any Borrower or other person, or
against any other collateral assigned to Mortgagee by Mortgagor or any Borrower or other
person; (b) to pursue any other right or remedy in Mortgagee’s power; (c) to give notice of
the time, place or terms of any public or private sale of real or personal property collateral
assigned to Mortgagee by any Borrower or other person (other than Mortgagor), or otherwise to
comply with the UCC (as modified or recodified from time to time) with respect to any such
personal property collateral; or (d) to make or give (except as otherwise expressly provided
in the Loan Documents) any presentment, demand, protest, notice of dishonor, notice of protest
or other demand or notice of any kind in connection with any Indebtedness or any collateral
(other than the Mortgaged Property) for any Indebtedness.






	2.	 	DEFENSES. Mortgagor hereby waives any defense it may now or hereafter have that
relates to: (a) any disability or other defense of any Borrower or other person; (b) the
cessation, from any cause other than full performance, of the obligations of Borrower or any
other person; (c) the application of the proceeds of any Indebtedness, by any Borrower or
other person, for purposes other than the purposes represented to Mortgagor by any Borrower or
otherwise intended or understood by Mortgagor or any Borrower; (d) any act or omission by
Mortgagee which directly or indirectly results in or contributes to the release of any
Borrower or other person or any collateral for any Indebtedness; (e) the unenforceability or
invalidity of any collateral assignment (other than this Mortgage) or guaranty with respect to
any Indebtedness, or the lack of perfection or continuing perfection or lack of priority of
any lien (other than the lien hereof) which secures any Indebtedness; (f) any failure of
Mortgagee to marshal assets in favor of Mortgagor or any other person; (g) any modification of
any Indebtedness, including any renewal, extension, acceleration or increase in interest rate;
(h) any and all rights and defenses arising out of an election of remedies by Mortgagee, even
though that election of remedies, has destroyed Mortgagor’s rights of subrogation and
reimbursement against the principal; (i) any law which provides that the obligation of a
surety or guarantor must neither be larger in amount nor in other respects more burdensome
than that of the principal or which reduces a surety’s or guarantor’s obligation in proportion
to the principal obligation; (j) any failure of Mortgagee to file or enforce a claim in any
bankruptcy or other proceeding with respect to any person; (k) the election by Mortgagee, in
any bankruptcy proceeding of any person, of the application or non-application of Section
1111(b)(2) of the United States Bankruptcy Code; (l) any extension of credit or the grant of
any lien under Section 364 of the United States Bankruptcy Code; (m) any use of cash
collateral under Section 363 of the United States Bankruptcy Code; or (n) any agreement or
stipulation with respect to the provision of adequate protection in any bankruptcy proceeding
of any person. Without limiting the generality of the foregoing or any other provision
hereof, Mortgagor further expressly waives to the extent permitted by law until such time as
all Indebtedness is fully performed any and all rights and defenses, including without
limitation any rights of subrogation, reimbursement, indemnification and contribution, which
might otherwise be available to Mortgagor.






	3.	 	SUBROGATION. Mortgagor hereby waives, until such time as all Indebtedness are fully
performed: (a) any right of subrogation against any Borrower that relates to any Indebtedness;
(b) any right to enforce any remedy Mortgagor may now or hereafter have against any Borrower
that relates to any Indebtedness; and (c) any right to participate in any collateral now or
hereafter assigned to Mortgagee with respect to any Indebtedness other than the receipt of
Permitted Payments. So long as no Event of Default has occurred and is continuing, Mortgagor
may receive regularly scheduled payments under leases of the Mortgaged Property in compliance
with Section 22 of the Mortgage (“Permitted Payments”).






	4.	 	BORROWER INFORMATION. Mortgagor warrants and agrees: (a) that Mortgagee would not
consent to the transfer of the Property to Mortgagor but for Mortgagor’s assumption of this
Mortgage; (b) that Mortgagor has not relied, and will not rely, on any representations or
warranties by Mortgagee to Mortgagor with respect to the credit worthiness of any Borrower or
the prospects of repayment of any Indebtedness from sources other than the Mortgaged Property;
(c) that if Mortgagor deems it necessary of advisable to do so, Mortgagor has established
and/or will establish adequate means of obtaining from each Borrower on a continuing basis
financial and other information pertaining to the business operations, if any, and financial
condition of each Borrower; (d) that Mortgagor assumes full responsibility for keeping
informed with respect to each Borrower’s business operations, if any, and financial condition;
(e) except as expressly set forth in the Copies of Notices paragraph of the Consent Agreement,
Mortgagee shall have no duty to disclose or report to Mortgagor any information now or
hereafter known to Mortgagee with respect to any Borrower, including, without limitation, any
information relating to any of Borrower’s business operations or financial condition; and (f)
that Mortgagor is familiar with the terms and conditions of the Loan Documents and consents to
all provisions thereof.






	5.	 	Reserved.






	6.	 	SUBORDINATION. Until all of the Indebtedness have been fully paid and performed: (a)
Mortgagor hereby agrees that all existing and future indebtedness and other obligations of
each Borrower and each Guarantor to Mortgagor and any guaranties thereof from any party in
favor of Mortgagor (collectively, the “Subordinated Debt”) shall be and are hereby
subordinated to all Indebtedness which constitute obligations of the applicable Borrower and
guarantor, and except for Permitted Payments the payment thereof is hereby deferred in right
of payment to the prior payment and performance of all such Indebtedness; (b) other than
receiving Permitted Payments, Mortgagor shall not collect or receive any cash or non-cash
payments from any obligor on any Subordinated Debt or transfer all or any portion of the
Subordinated Debt; and (c) in the event that, notwithstanding the foregoing, any payment
(other than Permitted Payment) by, or distribution of assets of, any obligor with respect to
any Subordinated Debt is received by Mortgagor, such payment or distribution shall be held in
trust and immediately paid over to Mortgagee, is hereby assigned to Mortgagee as security for
the Indebtedness, and shall be held by Mortgagee in an interest bearing account until all
Indebtedness have been fully paid and performed or applied to the Indebtedness as permitted
under the Loan documents.





7. HAZARDOUS MATERIALS.




	 	a.	 	Special Representations and Warranties. Without in any way limiting the
other representations and warranties set forth in this Mortgage, and after reasonable
investigation and inquiry, Mortgagor hereby specifically represents and warrants to the
best of Mortgagor’s knowledge as of the date of this Rider as follows:






	 	(i)	 	Hazardous Materials. Except for commercially reasonable amounts,
the Mortgaged Property is not and has not been a site for the use, generation,
manufacture, storage, treatment, release, threatened release, discharge,
disposal, transportation or presence of any oil, flammable explosives, asbestos,
urea formaldehyde insulation, radioactive materials, hazardous wastes, toxic or
contaminated substances or similar materials, including, without limitation, any
substances which are “hazardous substances,” “hazardous wastes,” “hazardous
materials,” “toxic substances,” “wastes,” “regulated substances,” “industrial
solid wastes,” or “pollutants” under the Hazardous Materials Laws, as described
below, and/or other applicable environmental laws, ordinances and regulations
(collectively, the “Hazardous Materials”).






	 	(ii)	 	Hazardous Materials Laws. The Mortgaged Property is in material
compliance with all applicable laws, ordinances and regulations relating to
Hazardous Materials (“Hazardous Materials Laws”), including, without limitation:
the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.;
the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251
et seq.; the Resource Conservation and Recovery Act of 1976, as
amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive
Environment Response, Compensation and Liability Act of 1980, as amended
(including the Superfund Amendments and Reauthorization Act of 1986, “CERCLA”),
42 U.S.C. Section 9601 et seq.; the Toxic Substances Control Act,
as amended, 15 U.S.C. Section 2601 et seq.; the Occupational
Safety and Health Act, as amended, 29 U.S.C. Section 651, the Emergency Planning
and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et
seq.; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C.
Section 801 et seq.; the Safe Drinking Water Act, as amended, 42
U.S.C. Section 300f et seq.; and all applicable comparable state
and local laws, laws of other jurisdictions or orders and regulations.






	 	(iii)	 	Hazardous Materials Claims. There are no claims or actions
(“Hazardous Materials Claims”) pending or threatened against Mortgagor or the
Mortgaged Property by any governmental entity or agency or by any other person or
entity relating to Hazardous Materials or pursuant to the Hazardous Materials
Laws.






b. Hazardous Materials Covenants. Mortgagor agrees as follows:




	 	(i)	 	No Hazardous Activities. Mortgagor shall not cause or permit the
Mortgaged Property to be used as a site for the use, generation, manufacture,
storage, treatment, release, discharge, disposal, transportation or presence of
any Hazardous Materials.






	 	(ii)	 	Compliance. Mortgagor shall comply and cause the Mortgaged Property
to comply in all material respects with all Hazardous Materials Laws.






	 	(iii)	 	Notices. Mortgagor shall immediately notify Mortgagee in writing
of: (A) the discovery of any Hazardous Materials on, under or about the Mortgaged
Property which may have a material, adverse affect on the Mortgaged Property; (B)
any knowledge by Mortgagor that the Mortgaged Property does not comply with any
Hazardous Materials Laws; and (C) any Hazardous Materials Claims.






	 	(iv)	 	Remedial Action. In response to the presence of any Hazardous
Materials on, under or about the Mortgaged Property, Mortgagor shall immediately
take, at Mortgagor’s sole expense, all remedial action required by any Hazardous
Materials Laws or any judgment, consent decree, settlement or compromise in
respect to any Hazardous Materials Claims.






	 	c.	 	Inspection By Mortgagee. Upon reasonable prior notice to Mortgagor,
Mortgagee, its employees and agents, may from time to time (whether before or after the
commencement of a nonjudicial or judicial foreclosure proceeding) enter and inspect the
Mortgaged Property for the purpose of determining the existence, location, nature and
magnitude of any past or present release or threatened release of any Hazardous
Materials into, onto, beneath or from the Mortgaged Property.






	 	d.	 	Hazardous Materials Indemnity. MORTGAGOR HEREBY AGREES TO DEFEND,
INDEMNIFY AND HOLD HARMLESS MORTGAGEE, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
SUCCESSORS AND ASSIGNS FROM AND AGAINST ANY AND ALL LOSSES, DAMAGES, LIABILITIES,
CLAIMS, ACTIONS, JUDGMENTS, COURT COSTS AND LEGAL OR OTHER EXPENSES (INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS’ FEES AND EXPENSES) WHICH MORTGAGEE MAY INCUR AS A
DIRECT OR INDIRECT CONSEQUENCE OF THE USE, GENERATION, MANUFACTURE, STORAGE, DISPOSAL,
THREATENED DISPOSAL, TRANSPORTATION OR PRESENCE OF HAZARDOUS MATERIALS IN, ON, UNDER OR
ABOUT THE SUBJECT PROPERTY. MORTGAGOR SHALL IMMEDIATELY PAY TO MORTGAGEE UPON DEMAND
ANY AMOUNTS OWING UNDER THIS INDEMNITY, TOGETHER WITH INTEREST FROM THE DATE THE
INDEBTEDNESS ARISES UNTIL PAID AT THE RATE OF INTEREST APPLICABLE TO THE PRINCIPAL
BALANCE OF THE NOTE. MORTGAGOR’S DUTY AND OBLIGATIONS TO DEFEND, INDEMNIFY AND HOLD
HARMLESS MORTGAGEE SHALL SURVIVE THE CANCELLATION OF THE NOTE AND THE RELEASE OR PARTIAL
RECONVEYANCE OF THE MORTGAGE.






	 	e.	 	Legal Effect of Section. Mortgagor and Mortgagee agree that Mortgagor’s
duty to indemnify Mortgagee hereunder shall survive: (i) any judicial or non-judicial
foreclosure under the Mortgage, or transfer of the Mortgaged Property in lieu thereof,
(ii) the release or cancellation of the Mortgage; and (iii) the satisfaction of all of
Mortgagor’s obligation under the Loan Documents.






	8.	 	LAWFULNESS AND REASONABLENESS. Mortgagor warrants that all of the waivers in this
Mortgage are made with full knowledge of their significance, and of the fact that events
giving rise to any defense or other benefit waived by Mortgagor may destroy or impair rights
which Mortgagor would otherwise have against Mortgagee, Borrower and other persons, or against
collateral. Mortgagor agrees that all such waivers are reasonable under the circumstances and
further agrees that, if any such waiver is determined (by a court of competent jurisdiction)
to be contrary to any law or public policy, the other waivers herein shall nonetheless remain
in full force and effect.






	9.	 	ENFORCEABILITY. Mortgagor hereby acknowledges that: (a) the obligations undertaken
by Mortgagor in this Mortgage are complex in nature, and (b) numerous possible defenses to the
enforceability of these obligations may presently exist and/or may arise hereafter, and (c) as
part of Mortgagee’s consideration for entering into this transaction, Mortgagee has
specifically bargained for the waiver and relinquishment by Mortgagor of all such defenses,
and (d) Mortgagor has had the opportunity to seek and receive legal advice from skilled legal
counsel in the area of financial transactions of the type contemplated herein. Given all of
the above, Mortgagor does hereby represent and confirm to Mortgagee that Mortgagor is fully
informed regarding, and that Mortgagor does thoroughly understand: (i) the nature of all such
possible defenses, and (ii) the circumstances under which such defenses may arise, and (iii)
the benefits which such defenses might confer upon Mortgagor, and (iv) the legal consequences
to Mortgagor of waiving such defenses. Mortgagor acknowledges that Mortgagor makes this
Mortgage with the intent that this Mortgage and all of the informed waivers herein shall each
and all be fully enforceable by Mortgagee, and that Mortgagee is induced to enter into this
transaction in material reliance upon the presumed full enforceability thereof.






	10.	 	DISCLOSURE OF INFORMATION; PARTICIPATIONS. Mortgagor understands and agrees that
Mortgagee may elect, at any time, to sell, assign, or participate all or any part of
Mortgagee’s interest in the Loan, and that any such sale, assignment or participation may be
to one or more financial institutions, private investors, and/or other entities, at
Mortgagee’s sole discretion. Mortgagor further agrees that Mortgagee may disseminate to any
such potential purchaser(s), assignee(s) or participant(s) all documents and information
(including, without limitation, all financial information) which has been or is hereafter
provided to or known to Mortgagee with respect to: (a) the Mortgaged Property and its
operation; (b) any party connected with the Loan (including, without limitation, the
Mortgagor, the Borrower, any partner of Borrower and any guarantor); and/or (c) any lending
relationship other than the Loan which Mortgagee may have with any party connected with the
Loan.






	11.	 	WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS MORTGAGE, AND BY ITS ACCEPTANCE
HEREOF, MORTGAGEE, HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION (a) ARISING UNDER THE LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION,
ANY PRESENT OR FUTURE MODIFICATION THEREOF OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THE LOAN
DOCUMENTS (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO,
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY AND MORTGAGEE HEREBY AGREES AND CONSENTS THAT ANY PARTY TO
THIS MORTGAGE AND MORTGAGEE MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO AND MORTGAGEE TO THE WAIVER
OF THEIR RIGHT TO TRIAL BY JURY.






	12.	 	INTEGRATION; INTERPRETATION. This Mortgage and the other Loan Documents contain or
expressly incorporate by reference the entire agreement of the parties with respect to the
matters contemplated therein and supersede all prior negotiations or agreements, written or
oral. This Mortgage and the other Loan Documents shall not be modified except by written
instrument executed by all parties. Any reference to the Loan Documents includes any
amendments, renewals or extensions now or hereafter approved by Mortgagee in writing.






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