Carter Validus Mission Critical REIT 425 Business combination disclosure | SEC 11 Apr 19

Exhibit 10.4

CONSENT AND SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT

THIS CONSENT AND SECONDAMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT(this “Consent and Amendment”) made as of this 11th day of April, 2019, by and amongCARTER/VALIDUS OPERATING PARTNERSHIP, LP, a Delaware limited partnership (the “Borrower”),CARTER VALIDUS MISSION CRITICAL REIT, INC., a Maryland corporation (“REIT”),THE ENTITIES LISTED ON THE SIGNATURE PAGES HEREOF AS SUBSIDIARY GUARANTORS (hereinafter referred to individually as a “Subsidiary Guarantor” and collectively, as “Subsidiary Guarantors”; REIT and the Subsidiary Guarantors are sometimes hereinafter referred to individually as a “Guarantor” and collectively as “Guarantors”),KEYBANK NATIONAL ASSOCIATION, a national banking association (“KeyBank”),THE OTHER LENDERS LISTED ON THE SIGNATURES PAGES HEREOF AS LENDERS (KeyBank and the other lenders are listed on the signatures pages hereof as Lenders, collectively, the “Lenders”), andKEYBANK NATIONAL ASSOCIATION, a national banking association, as administrative agent for the Lenders (the “Agent”).

W I T N E S S E T H:

WHEREAS, Borrower and KeyBank, individually and as administrative agent, and the Lenders entered into that certain Third Amended and Restated Credit Agreement dated as of February 1, 2018, as amended by that certain First Amendment to Third Amended and Restated Credit Agreement dated as of August 13, 2018 (as amended, the “Credit Agreement”); and

WHEREAS, each of the Guarantors are a party to that certain Second Amended and Restated Unconditional Guaranty of Payment and Performance in favor of Agent and the Lenders dated as of February 1, 2018 (the “Guaranty”);

WHEREAS, Borrower and Guarantors have requested that the Agent consent to the following:

(a)

to the execution and delivery of that certain Agreement and Plan of Merger dated April 11, 2019, by and among Borrower, REIT, Carter Validus Operating Partnership II, LP, a Delaware limited partnership, Carter Validus Mission Critical REIT II, Inc., a Maryland corporation and Lightning Merger Sub, LLC, a Maryland limited liability company, a copy of which is attached hereto asExhibit “A” (the “Merger Agreement”); and

(b)

to the execution and delivery of that certain Amendment to REIT I Operating Partnership Agreement, a copy of which is attached as Exhibit B to the Merger Agreement (the “Amendment to Borrower Partnership Agreement”), which Amendment to Borrower Partnership Agreement amends the existing limited partnership agreement of Borrower effective as of the consummation of the merger contemplated by the Merger Agreement; and

WHEREAS, Borrower and Guarantors have also requested that the Agent and the Lenders make certain modifications to the Credit Agreement; and

WHEREAS, the Agent and the Majority Lenders have agreed to the requested consents and modifications, subject to the execution and delivery of this Consent and Amendment.

NOW, THEREFORE, for and in consideration of the sum of TEN and NO/100 DOLLARS ($10.00), and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby covenant and agree as follows:

1. Definitions. All terms used herein which are not otherwise defined herein shall have the meanings set forth in the Credit Agreement.

2. Consents and Agreements. (a) The Agent hereby consents to the execution and delivery, but not the consummation of, the Merger Agreement. Borrower acknowledges and agrees that upon the consummation of the transaction contemplated pursuant to the Merger Agreement, all of the Obligations are due and payable, all Commitments shall terminate and the Lenders shall be relieved of all obligations to make Loans or issue Letters of Credit to the Borrower.

(b) The Agent hereby consents to the execution and delivery of the Amendment to Borrower Partnership Agreement.

3. Modification of the Credit Agreement. The Agent, the Lenders and the Borrower hereby amend the Credit Agreement by deleting §8.7 of the Credit Agreement in its entirety, and inserting in lieu thereof the following:

“§8.7Distributions.

(a) The Borrower shall not pay any Distribution to the partners, members or other owners of the Borrower, and REIT shall not pay any Distribution to its partners, members or other owners, if such Distribution by Borrower or REIT:

(i) for each calendar quarter in 2019 and the first calendar quarter of 2020, is in excess of a rate equal to the daily rate of $0.000876713 per share of the REIT (which equates to $0.32 per annum per share of the REIT on an annualized basis); and

(ii) for the second calendar quarter in 2020, is in excess, when added to the amount of all other Distributions paid in such calendar quarter annualized, of ninety-five percent (95%) of such Person’s Funds from Operations for the period of the fourth calendar quarter in 2019 and the first calendar quarter in 2020, annualized.

(b) Notwithstanding the foregoing, so long as no Default or Event of Default has occurred and is continuing or would result therefrom, including a Default or an Event of Default related to any financial covenant set forth in this Agreement, the Borrower and REIT may make Distributions to allow REIT to make payments for share repurchase programs in connection with the listing of REIT on NASDAQ, the New York Stock Exchange or another nationally recognized exchange, provided that such payments shall be made within ninety (90) days of such listing and shall not exceed $100,000,000.00 and such Distributions shall be excluded from the limitations contained in §8.7(a).

(c) If a Default or Event of Default shall have occurred and be continuing, the Borrower shall make no Distributions, and REIT shall not pay any Distribution to its partners, members or other owners, other than Distributions in an amount equal to the minimum distributions required under the Code to maintain the REIT Status of REIT, as evidenced by a certification of the principal financial or accounting officer of REIT containing calculations in detail reasonably satisfactory in form and substance to the Agent.

(d) Notwithstanding the foregoing, at any time when an Event of Default under §12.1(a) or (b) shall have occurred, an Event of Default as to Borrower or REIT under §12.1(g), (h) or (i) shall have occurred, or the maturity of the Obligations has been accelerated, neither the Borrower nor REIT shall make any Distributions whatsoever, directly or indirectly.”

4. References toCredit Agreement. All references in the Loan Documents to the Credit Agreement amended in connection with this Consent and Amendment shall be deemed a reference to the Credit Agreement as modified and amended herein.

5. Consent of Borrower and Guarantors. By execution of this Consent and Amendment, Guarantors hereby expressly consent to the modifications and amendments relating to the Credit Agreement as set forth herein, and Borrower and Guarantors hereby acknowledge, represent and agree that the Credit Agreement, as modified and amended herein, and the other Loan Documents, remain in full force and effect and constitute the valid and legally binding obligation of Borrower and Guarantors, respectively, enforceable against such Persons in accordance with their respective terms, and that the Guaranty extends to and applies to the foregoing documents as modified and amended.

6. Representations. Borrower and Guarantors represent and warrant to Agent and the Lenders as follows:

(a) Authorization. The execution, delivery and performance of this Consent and Amendment and the transactions contemplated hereby (i) are within the authority of Borrower and Guarantors, (ii) have been duly authorized by all necessary proceedings on the part of such Persons, (iii) do not and will not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which any of such Persons is subject or any judgment, order, writ, injunction, license or permit applicable to such Persons, (iv) do not and will not conflict with or constitute a default (whether with the passage of time or the giving of notice, or both) under any provision of the partnership agreement or certificate, certificate of formation, operating agreement, articles of incorporation or other charter documents or bylaws of, or any mortgage, indenture, agreement, contract or other instrument binding upon, any of such Persons or any of its properties or to which any of such Persons is subject, and (v) do not and will not result in or require the imposition of any lien or other encumbrance on any of the properties, assets or rights of such Persons, other than the liens and encumbrances created by the Loan Documents.

(b) Enforceability. The execution and delivery of this Consent and Amendment are valid and legally binding obligations of Borrower and Guarantors enforceable in accordance with the respective terms and provisions hereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and the effect of general principles of equity.

(c) Approvals. The execution, delivery and performance of this Consent and Amendment and the transactions contemplated hereby do not require the approval or consent of or approval of any Person or the authorization, consent, approval of or any license or permit issued by, or any filing or registration with, or the giving of any notice to, any court, department, board, commission or other governmental agency or authority other than those already obtained.

(d) Reaffirmation. Borrower and Guarantors reaffirm and restate as of the date hereof each and every representation and warranty made by the Borrower, the Guarantors and their respective Subsidiaries in the Loan Documents or otherwise made by or on behalf of such Persons in connection therewith except for representations or warranties that expressly relate to an earlier date.

7. No Default. By execution hereof, the Borrower and Guarantors certify that the Borrower and Guarantors are and will be in compliance with all covenants under the Loan Documents after the execution and delivery of this Consent and Amendment, and that no Default or Event of Default has occurred and is continuing.

8. Waiver of Claims. Borrower and Guarantors acknowledge, represent and agree that Borrower and Guarantors as of the date hereof have no defenses, setoffs, claims, counterclaims or causes of action of any kind or nature whatsoever with respect to the Loan Documents, the administration or funding of the Loans or with respect to any acts or omissions of Agent or any of the Lenders, or any past or present officers, agents or employees of Agent or any of the Lenders, and each of Borrower and Guarantors does hereby expressly waive, release and relinquish any and all such defenses, setoffs, claims, counterclaims and causes of action, if any.

9. Ratification. Except as hereinabove set forth or in any other document previously executed or executed in connection herewith, all terms, covenants and provisions of the Credit Agreement, the Guaranty and the other Loan Documents remain unaltered and in full force and effect, and the parties hereto do hereby expressly ratify and confirm the Credit Agreement, the Guaranty and other Loan Documents as modified and amended herein and therein. Guarantors hereby consent to the terms of this Consent and Amendment and ratify the Guaranty. Nothing in this Consent and Amendment or any other document delivered in connection herewith shall be deemed or construed to constitute, and there has not otherwise occurred, a novation, cancellation, satisfaction, release, extinguishment or substitution of the indebtedness evidenced by the Notes or the other obligations of Borrower and Guarantors under the Loan Documents (including without limitation the Guaranty). This Consent and Amendment shall constitute a Loan Document.

10. Counterparts. This Consent and Amendment may be executed in any number of counterparts which shall together constitute but one and the same agreement.

11. Miscellaneous. THIS CONSENT AND AMENDMENT SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION5-1401, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. This Consent and Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective permitted successors,successors-in-title and assigns as provided in the Credit Agreement.

12. Effective Date. The obligations of the undersigned parties under Section 2 and 3 of this Consent and Amendment shall be deemed effective and in full force and effect (the “Effective Date”) only upon confirmation by the Agent of the satisfaction of the following conditions:

(a) the execution and delivery of this Consent and Amendment by Borrower, Guarantors, Agent and the Majority Lenders; and

(b) if required by Agent, that the Borrower shall pay contemporaneously with the Effective Date all fees (including legal fees) due and payable with respect to this Consent and Amendment.

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IN WITNESS WHEREOF, the parties hereto have hereto set their hands and affixed their seals as of the day and year first above written.


BORROWER:

CARTER/VALIDUS OPERATING PARTNERSHIP, LP, a Delaware limited partnership

By:	Carter Validus Mission Critical REIT, Inc.,
	a Maryland corporation, its general partner

	By:	/s/ Todd M. Sakow
	Name:	Todd M. Sakow
	Title:	Chief Financial Officer

		(CORPORATE SEAL)

REIT:

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

By:	/s/ Todd M. Sakow
Name:	Todd M. Sakow
Title:	Chief Financial Officer

		(CORPORATE SEAL)