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Exhibit 10.51
SECURITY AGREEMENT
THIS
SECURITY AGREEMENT (this "Agreement") is made and entered into as
of
February 6, 2006, by and between Cole Operating Partnership II, LP,
a Delaware
limited partnership ("Grantor"), whose address is 2555 East
Camelback Road,
Suite 400, Phoenix, Arizona 85016, and Series C, LLC, a Delaware
limited
liability company ("Lender"), whose address is 2555 East Camelback
Road, Suite
400, Phoenix, Arizona 85016.
1. SECURITY
INTEREST
Grantor, as collateral security for the payment and performance of
the
Secured Obligations (as defined below), hereby grants to Lender a
security
interest (the "Security Interest") in all of Grantor's right, title
and interest
in the limited liability company membership interests of Cole MT
Denver CO, LLC,
a Delaware limited liability company (the "Cole MT Denver"),
whether now owned
or hereafter acquired, whether now existing or hereafter arising,
and wherever
located, together with all of the following, whether now owned or
hereafter
acquired, whether now existing or hereafter arising, and wherever
located: (a)
all of Grantor's membership interests, or any other interest, in
the Cole MT
Denver; (b) all rights, benefits and privileges held by Grantor
under the
Limited Liability Company Agreement of Cole MT Denver CO, LLC dated
as of
February 6, 2006, as it may be amended, modified or restated from
time to time,
including all voting rights and rights to receive dividends,
distributions and
other payments from the Cole MT Denver; (c) all proceeds of the
above-described
property; and (d) all books and records pertaining to the
above-described
property, including any computer readable memory and computer
hardware or
software necessary to process such memory (collectively, the
"Collateral").
2. SECURED
OBLIGATIONS
The
Collateral shall secure, in such order of priority as Lender may
elect,
the following (collectively, the "Secured Obligations"):
(a) payment and performance of all obligations of Grantor under
the
terms of the Promissory Note of even date herewith (the "Note"), in
the original
principal amount of $2,275,000.00, executed by the Grantor in favor
of Lender,
together with all extensions, modifications, substitutions or
renewals thereof,
or other advances made thereunder;
(b) payment and performance of every obligation, covenant and
agreement of Grantor contained in this Agreement, together with all
extensions,
modifications, substitutions or renewals hereof; and
(c) payment and performance of every obligation, covenant and
agreement of Grantor and Cole MT Denver contained in each of the
Loan Documents
(as defined in the Note), together with all extensions,
modifications,
substitutions or renewals thereof.
3.
REPRESENTATIONS AND WARRANTIES OF GRANTOR
Grantor hereby represents and warrants to Lender that:
3.1
Other Agreements. The execution, delivery and performance by
Grantor of
this Agreement and all other documents and instruments relating to
the Secured
Obligations will not result in any breach of the terms and
conditions or
constitute a default under any agreement or instrument under which
Grantor is a
party or is obligated.
3.2 Priority. The
Security Interest in the Collateral granted to Lender
constitutes, and hereafter will constitute, a security interest of
first
priority.
3.3
Title. Grantor is the owner of, and has good title to, the
Collateral
free of all security interests or other encumbrances, and no
financing statement
covering the Collateral is filed or recorded in any public
office.
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3.4
Authority. Grantor has the full power, authority and legal right
to
grant to Lender the Security Interest, and no further consent,
authorization,
approval or other action is required for the grant of the Security
Interest or
for Lender's exercise of its rights and remedies under this
Agreement, except as
may be required in connection with the sale of the Collateral by
Lender by the
laws affecting the offering and sale of securities.
3.5
State of Organization; Name. Grantor is organized under the laws of
the
State of Delaware and the exact legal name of Grantor is "Cole
Operating
Partnership II, LP".
4. COVENANTS OF
GRANTOR
4.1
Transfers. Grantor shall not sell, transfer, assign or
otherwise
dispose of any Collateral or any interest therein (except as
permitted herein)
without obtaining the prior written consent of Lender and shall
keep the
Collateral free of all security interests or other
encumbrances.
4.2
Payments of Charges. Grantor shall pay when due all taxes,
assessments
and other charges which may be levied or assessed against the
Collateral.
4.3
Notice to Lender. Grantor shall give Lender 45 days' prior
written
notice of any change of the names under which it does business or
the state of
its organization.
4.4
Defense of Collateral. Grantor, at its cost and expense, shall
protect
and defend this Agreement, all of the rights of Lender hereunder,
and the
Collateral against all claims and demands of other parties,
including defenses,
setoffs, claims and counterclaims asserted by any Obligor against
Grantor and/or
Lender. Grantor shall pay all claims and charges that in the
reasonable opinion
of Lender might prejudice, imperil or otherwise affect the
Collateral or the
Security Interest.
4.5
Perfection of Security Interest. The Security Interest, at all
times,
shall be perfected and shall be prior to any other interests in the
Collateral.
Grantor shall act and perform as necessary and shall execute and
file all
security agreements, financing statements, continuation statements,
control
agreements, and other documents requested by Lender to establish,
maintain and
continue the perfected Security Interest. Grantor further
authorizes Lender to
file an initial financing statement, including all necessary
amendments, without
any signature of Grantor, to perfect the Security Interest in the
Collateral.
Grantor, on written demand, shall promptly pay all costs and
expenses of filing
and recording, including the costs of any searches, deemed
necessary by Lender
from time to time to establish and determine the validity and the
continuing
priority of the Security Interest.
4.6
Payment of Charges. If Grantor fails to pay any taxes,
assessments,
expenses or charges, or fails to keep all of the Collateral free
from other
security interests, encumbrances or to perform otherwise as
required herein,
Lender may advance the monies necessary to pay the same or to so
perform.
5. EVENTS OF
DEFAULT; REMEDIES
5.1
Events of Default. The occurrence of any of the following events
or
conditions shall constitute an "Event of Default":
(i) Any failure to pay any principal or interest or any other
part of the Secured Obligations when the same shall become due and
payable.
(ii) The occurrence of an "Event of Default" under and as
defined
in the Note or any of the other Loan Documents.
5.2
Remedies. Upon the occurrence of any Event of Default, and at any
time
while such Event of Default is continuing, Lender shall have the
following
rights and remedies and may do one or more of the following:
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(i
