Exhibit 10.5

PROMISSORY NOTE

 

Date of Note: As of December 6, 2011    Maturity Date: December 31, 2021

THIS PROMISSORY NOTE (this “Note”), is made as of December 6, 2011 by the
undersigned as borrower (“Borrower), in favor of Carter/Validus Operating
Partnership, LP, a Delaware limited partnership, and its successors or assigns,
as lender (“Lender”).

R E C I T A L S:

A. This Note evidences a loan (the “Loan”) made by Lender to Borrower in the
original principal amount of up to $517,716 (the “Loan Amount”) and made in
accordance with the Loan Agreement of even date herewith (as the same may
hereafter be amended modified or supplemented, the “Loan Agreement”) from
Borrower, as borrower, in favor of and for the benefit of Lender, as lender;

B. Borrower and Lender intend these recitals to be a material part of this Note.

NOW, THEREFORE, FOR VALUE RECEIVED, Borrower does hereby covenant and promise to
pay to the order of Lender, without any counterclaim, setoff or deduction
whatsoever, on the Maturity Date (as hereinafter defined), in immediately
available funds, at Carter Validus Mission Critical REIT, Inc., 4211 West Boy
Scout Blvd., Suite 500, Tampa, Florida 33607, or at such other place as Lender
may designate to Borrower in writing from time to time, in legal tender of the
United States of America, the Loan Amount and all other amounts due or becoming
due hereunder, to the extent not previously paid in accordance herewith,
together with all interest accrued thereon through the date the Loan is repaid
in full, at the cumulative rate of twelve percent (12%) per annum, compounded
annually (the “Interest Rate”) to be computed on the basis of the actual number
of days elapsed in a 365 day year.

DEFINITIONS

Defined terms in this Note shall include in the singular number the plural and
in the plural number the singular. All capitalized terms not otherwise defined
herein shall have the meaning ascribed to them in the Loan Agreement.

 

1. PAYMENTS AND LOAN TERMS

1.1 Payments. The indebtedness evidenced by this Note is payable only from
Surplus Cash (as defined in the Loan Agreement).

Commencing on the Payment Date occurring on March 31, 2012, and on each Payment
Date thereafter until this Note is paid in full on the Maturity Date or
otherwise, and subject to the provisions of Section 2.2 below, to the extent
there is available Surplus Cash, Borrower shall pay quarterly payments of
interest only at the Interest Rate (defined above), based on the outstanding
principal amount of the Loan; provided, however, the Borrower shall only be
required to pay such sum on a current basis to the extent of the net

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cash flow of Borrower (determined as the cash flow that would otherwise be
available for distribution to the partners of the Borrower under Section 14 of
the Partnership Agreement) for the applicable Interest Accrual Period. To the
extent that interest which accrues hereunder is in excess of such net cash flow
available for such purpose, the Interest Shortfall shall be carried over to
subsequent Interest Accrual Periods and shall be paid on the earliest possible
Payment Date to the extent of available net cash flow of Borrower available for
such purpose. For avoidance of doubt, (i) subject to Section 2.2 below, Borrower
shall have no obligation to make any payment of interest in excess of its net
cash flow (determined as the cash flow that would otherwise be available for
distribution to the partners of the Borrower under Section 14 of the Partnership
Agreement) and (ii) the amount of any Interest Shortfall shall not be added to
the Principal Amount except as necessary to provide for interest to be
calculated on an annual compounding basis. For purposes of calculating interest
to be paid on each December 31 Payment Date, Borrower shall make a good faith
estimate of net cash flow for the Interest Accrual Period ending on such date.

The entire outstanding Debt, to the extent not previously paid, shall be due and
payable on December 31, 2021 (the “Maturity Date”) by Borrower. All payments due
hereunder shall be made without any counterclaim, setoff or deduction
whatsoever.

To the extent Payments (as hereinafter defined) are or become due and payable
under this Note or under any of the other Loan Documents on a day (the “Due
Date”) which is not a Business Day, such Payments are and shall be due and
payable on the first Business Day immediately following the Due Date for such
Payments. In the event that any Payment is received after 2:00 p.m. Eastern Time
on any day, it shall be deemed received and paid on the subsequent Business Day.

1.2 Application of Payments

1.2.1 Each and every payment (a “Payment”) made by Borrower to Lender in
accordance with the terms of this Note and/or the terms of any one or more of
the other Loan Documents and all other proceeds received by Lender with respect
to the Debt, shall be applied as follows: (i) first, to all Late Charges,
Default Rate Interest or other premiums and other sums payable hereunder or
under the other Loan Documents (other than those sums included in clauses
(ii) and (iii) of this Section 1.2.1 in such order and priority as determined by
Lender in its sole discretion (ii) second, to all interest (other than Default
Rate Interest) which shall be due and payable with respect to the Loan Amount
pursuant to the terms hereof as of the date the Payment is received (including
any Interest Shortfalls), and (iii) third, to the Loan Amount until the Loan
Amount has been paid in full.

1.2.2 To the extent that Borrower makes a Payment or Lender receives any Payment
or proceeds for Borrower’s benefit, which are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, debtor in possession, receiver, custodian or any other party under any
bankruptcy law, common law or equitable cause, then, to such extent, the
obligations of Borrower hereunder intended to be satisfied shall be revived and
continue as if such Payment or proceeds had not been received by Lender.

 

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1.3 Prepayments.

The Debt may be prepaid, in whole or in part at any time without any prepayment
fee and/or compensation and/or penalty. Upon prepayment, Borrower shall only be
required to pay interest accrued thereon – with respect to the relevant prepaid
portion – until the date of such prepayment. No principal amounts repaid may be
re-borrowed.

 

2. DEFAULTS

2.1 Events of Default.

This Note evidences the Loan which is made pursuant to the Loan Agreement which
specifies various Events of Default, upon the happening of which all or portions
of the sums owing under this Note may be declared immediately due and payable as
more specifically provided therein. Each Event of Default under the Loan
Agreement or any one or more of the other Loan Documents shall be an Event of
Default hereunder.

2.2 Remedies.

If an Event of Default shall occur hereunder or under any other Loan Document,
the Principal Amount and, to the extent permitted by applicable law, all accrued
but unpaid interest on the Principal Amount shall, commencing on the date of the
occurrence of such Event of Default, at the option of Lender, immediately and
without notice to Borrower, accrue interest at the Default Rate until such Event
of Default is cured or if not cured or such cure is not accepted by Lender,
until the repayment of the Debt. The foregoing provision shall not be construed
as a waiver by Lender of its right to pursue any other remedies available to it
under the Loan Agreement, or any other Loan Document, nor shall it be construed
to limit in any way the application of the Default Rate. For avoidance of doubt,
the Loan is unsecured, and Lender has no recourse against the Property or any
direct or indirect ownership interest of Borrower and, notwithstanding the
exercise of Lender’s remedies hereunder, all Surplus Cash shall be made
available to Lender only to the extent available to be distributed under
Section 14 of the Partnership Agreement.

 

3. EXCULPATION

3.1 Exculpation.

Notwithstanding anything to the contrary contained in this Note or the other
Loan Documents, (i) the obligations of Borrower hereunder shall be payable
solely from net cash flow of Borrower (determined as the cash flow that would
otherwise be available for distribution to the partners of the Borrower under
Section 14 of the Partnership Agreement); (ii) except as so limited, the
obligations of Borrower hereunder shall be fully recourse to the Borrower; and
(iii) Lender shall not enforce the liability and obligation of Borrower herein
against any of Borrower’s general and/or limited partners including, without
limitation, for purposes of recovering any Loan repayments previously made to
such partners.

 

4. MISCELLANEOUS

4.1 Further Assurances.

 

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Borrower shall execute and acknowledge (or cause to be executed and
acknowledged) and deliver to Lender all documents, and take all actions,
required by Lender from time to time to confirm the rights created or now or
hereafter intended to be created under this Note and the other Loan Documents,
to protect and further the validity, priority and enforceability of this Note
and the other Loan Documents, to subject to the Loan Documents any property of
Borrower intended by the terms of any one or more of the Loan Documents to be
encumbered by the Loan Documents, or otherwise carry out the purposes of the
Loan Documents and the transactions contemplated thereunder; provided, however,
that no such further actions, assurances and confirmations shall increase
Borrower’s obligations under this Note or any other Loan Documents.

4.2 Modification, Waiver in Writing.

No modification, amendment, extension, discharge, termination or waiver (a
“Modification”) of any provision of this Note, the Loan Agreement or any one or
more of the other Loan Documents, nor consent to any departure by Borrower
therefrom, shall in any event be effective unless the same shall be in a writing
signed by the party against whom enforcement is sought, and then such waiver or
consent shall be effective only in the specific instance, and for the purpose,
for which given. Except as otherwise expressly provided herein, no notice to, or
demand on, Borrower shall entitle Borrower to any other or future notice or
demand in the same, similar or other circumstances. Lender does not hereby agree
to, nor does Lender hereby commit itself to, enter into any Modification.
However, in the event Lender does ever agree to a Modification, such
Modification shall only be upon the terms and conditions set forth in the Loan
Agreement.

4.3 Costs of Collection.

Borrower agrees to pay all costs and expenses of collection incurred by Lender,
in addition to principal, interest and late or delinquency charges (including,
without limitation, reasonable attorneys’ fees and disbursements) and including
all costs and expenses incurred in connection with the pursuit by Lender of any
of its rights or remedies referred to in Section 3 hereof or its rights or
remedies referred to in any of the Loan Documents, provided same shall be
payable solely from Surplus Cash.

4.4 Maximum Amount.

4.4.1 It is the intention of Borrower and Lender to conform strictly to the
usury and similar laws relating to interest and the collection of other charges
from time to time in force, and all agreements between Borrower and Lender,
whether now existing or hereafter arising and whether oral or written, are
hereby expressly limited so that in no contingency or event whatsoever, whether
by acceleration of maturity hereof or otherwise, shall the amount paid or agreed
to be paid in the aggregate to Lender as interest or other charges hereunder or
under the other Loan Documents, or in any other document evidencing or
pertaining to the Debt, exceed the maximum amount permissible under applicable
usury or such other laws (the “Maximum Amount”). If under any circumstances
whatsoever fulfillment of any provision hereof, or any of the other Loan
Documents, at the time performance of such provision shall be due, shall involve
transcending the Maximum Amount, then ipso facto, the obligation to be fulfilled
shall be reduced to the Maximum Amount. For the purposes of calculating the
actual amount of interest or other charges paid and/or payable hereunder, in
respect of laws pertaining to usury or such other laws, all charges and other
sums paid or agreed to be paid hereunder to

 

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the holder hereof for the use, forbearance or detention of the Debt, outstanding
from time to time shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread from the date of disbursement of the
proceeds of this Note until payment in full of all of the Debt, so that the
actual rate of interest on account of the Debt is uniform throughout the term
hereof. The terms and provisions of this Section 4.4.1 shall control and
supersede every other provision of all agreements between Borrower or any
endorser and Lender.

4.4.2 If under any circumstances Lender shall ever receive an amount which would
exceed the Maximum Amount, such amount shall be deemed a payment in reduction of
the Loan Amount owing hereunder and any other obligation of Borrower in favor of
Lender, and shall be so applied in accordance with Section 1.2 hereof, or if
such excessive interest exceeds the unpaid balance of the Loan Amount and any
other obligation of Borrower in favor of Lender, the excess shall be deemed to
have been a payment made by mistake and shall be refunded to Borrower.

4.5 Waivers.

Borrower hereby expressly and unconditionally waives presentment, demand,
protest, notice of protest or notice of any kind, including, without limitation,
any notice of intention to accelerate and notice of acceleration, except as
expressly provided herein, and in connection with any suit, action or proceeding
brought by Lender on this Note, any and every right it may have to (a) a trial
by jury, (b) interpose any counterclaim therein (other than a counterclaim which
can only be asserted in the suit, action or proceeding brought by Lender on this
Note and cannot be maintained in a separate action) and (c) have the same
consolidated with any other or separate suit, action or proceeding.

4.6 Governing Law.

This Note and the obligations arising hereunder shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts made and performed in such State and any applicable law of the United
States of America.

4.7 Headings.

The Section headings in this Note are included herein for convenience of
reference only and shall not constitute a part of this Note for any other
purpose.

4.8 Assignment.

Neither this Note nor the Loan Agreement or any interest herein or therein, or
the obligations hereunder or thereunder, may be transferred, sold or assigned
without the prior consent of Borrower and the Mortgage Lender; provided that as
a condition precedent to any such transfer, the assignee shall be required to
execute a joinder to the existing Intercreditor Agreement among Borrower’s
existing lenders. Any attempted sale, assignment or transfer in violation of
this provision shall be null and void ab initio.

4.9 Severability.

Wherever possible, each provision of this Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Note shall be

 

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prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Note.

4.10 Loan Participations. Subject to the provisions of Section 4.8 and this
Section 4.10, nothing contained in this Note shall be construed as preventing
Lender, at any time after the date hereof, from selling, pledging, assigning or
transferring this Note and in connection with any such sale, pledge, assignment
or transfer from assigning the Loan Agreement to the purchaser of this Note;
provided that as a condition precedent to any such transfer, the assignee shall
be required to execute a joinder to the existing Intercreditor Agreement among
Borrower’s existing lenders. Notwithstanding the foregoing, this Note is issued
as a fully registered instrument within the meaning of Treas. Reg. Sec.
1.871-14(c)(1)(i)(A) and will be registered to the Lender on the books of
Borrower. The Borrower as registrar of this Note shall treat the Lender as the
absolute owner hereof (unless the Borrower has been given notice of the transfer
of this Note, in accordance with the provisions of the following sentence) for
all purposes, including the right to receive payments of principal of, and
interest on, the Note. The right to receive the principal of, and interest on,
the Note may be transferred only upon the delivery to the Borrower of written
notice of such transfer, duly executed by the registered owner of the Note (or
its attorney-in-fact or legal representative) containing information sufficient
to enable the Borrower to identify each owner of an interest in this Note and
the surrender of the existing instrument and the reissuance by Borrower to the
new holder of such instrument or a replacement instrument. Each successor holder
shall acknowledge that in order to obtain the benefit of the “portfolio interest
exemption,” such holder shall provide the necessary withholding certificates
(i.e., form W-8). Each permitted transfer of ownership of an interest in this
Note shall be reflected by an entry on the books of the Borrower after receipt
of such notice of transfer. Upon any such sale, pledge, assignment or transfer
of the Note and upon assignment of this Agreement to the purchaser of the Note,
Lender shall be released and discharged from any liability or responsibility
with respect to the Loan Documents and references to “Lender” in this Note
shall, with respect to any matters thereafter occurring, be deemed to be
references to the purchaser of this Note.

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IN WITNESS WHEREOF, this Note has been duly executed by the Borrower the day and
year first written above.

 

BORROWER:

MM PEACHTREE HOLDINGS, LP,

a Delaware limited partnership

By:  

CARTER/VALIDUS OPERATING PARTNERSHIP, LP,

a Delaware limited partnership, as General Partner

  By:  

CARTER VALIDUS MISSION CRITICAL REIT, INC., a Maryland corporation,

as General Partner

    By:  

/s/    Todd M. Sakow

    Name:  

Todd M. Sakow

    Title:  

Chief Financial Officer

    Date:  

12/6/11

 

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