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Starwood Lodging Trust / Philadelphia Authority for Industrial Development - Installment Sale Agreement
Closing Item No. A-2
1997A
AMENDED AND RESTATED INSTALLMENT SALE AGREEMENT
Between
PHILADELPHIA AUTHORITY FOR INDUSTRIAL DEVELOPMENT
and
SLT REALTY LIMITED PARTNERSHIP
Dated as of February 1, 1997
(Relating to a Project situate in
the City of Philadelphia, Pennsylvania) 2
TABLE OF CONTENTS
Page
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I. Background, Representations and Findings............................. 1 1.1 Background........................................................... 1 1.2 Company Representations.............................................. 2 1.3 Issuer Representations and Findings.................................. 3
II. Project Facilities................................................... 4 2.1 Transfer of Project Facilities....................................... 4 2.2 Construction of Future Improvements to Project Facilities............ 4 2.3 Provisions with Respect to Title..................................... 4 2.4 Administration of Contracts.......................................... 5 2.5 Notices and Permits.................................................. 5 2.6 Additions and Changes to the Project Facilities...................... 5
III. Financing the Project................................................ 5 3.1 Issuance of Bonds; Additional Financing.............................. 5 3.2 Bond Fund............................................................ 6 3.3 Bonds Not to Become Arbitrage Bonds.................................. 6 3.4 Restriction on Use of Bond Fund...................................... 6
IV. Sale and Purchase of the Project Facilities.......................... 6 4.1 Sale and Purchase of the Project Facilities.......................... 6 4.2 Security Interest.................................................... 7 4.3 Payment of Purchase Price............................................ 7 4.4 Acceleration of Payment to Redeem Bonds.............................. 7 4.5 No Defense or Set-Off................................................ 7 4.6 Settlement........................................................... 8 4.7 Assignment of Issuer's Rights........................................ 8
V. Covenants of the Company............................................. 9 5.1 Maintenance and Operation of the Project Facilities.................. 9 5.2 Maintenance of Existence............................................. 9 5.3 Payment of Trustee's and Remarketing Agent's Compensation and
Expenses........................................................... 10 5.4 Payment of Issuer's Fees and Expenses................................ 10 5.5 Condemnation of Project Facilities................................... 10 5.6 Damage to Project Facilities......................................... 10 5.7 Indemnity Against Claims............................................. 11 5.8 Taxes, Other Governmental Charges and Utility Charges................ 12 5.9 Insurance............................................................ 13 5.10 Prohibition of Liens................................................. 13
(i) 3
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---- 5.11 Granting of Easements................................................ 14 5.12 Compliance with Laws................................................. 15 5.13 Recording Instruments................................................ 15 5.14 Filing of Financing Statements....................................... 15 5.15 Notice and Certification With Respect to Bankruptcy Proceedings...... 16 5.16 Continuing Disclosure................................................ 16 5.17 Representations as to Environmental Matters.......................... 17 5.18 Covenants as to Environmental Matters................................ 17 5.19 Certain Definitions.................................................. 17 5.20 Covenants of the Company with Respect to Federal Tax-Exempt Status
of Bonds........................................................... 18 5.21 Annual Certificate of the Company.................................... 19
VI. Events of Default and Remedies....................................... 19 6.1 Events of Default; Acceleration...................................... 19 6.2 Payment of Purchase Price on Default; Suit Therefor.................. 21 6.3 Other Remedies....................................................... 22 6.4 Waiver............................................................... 23 6.5 Cumulative Rights.................................................... 23
VII. Miscellaneous........................................................ 23 7.1 Receipt of Indenture................................................. 23 7.2 Limitation of Liability of the Issuer................................ 23 7.3 Notices.............................................................. 24 7.4 Severability......................................................... 24 7.5 Applicable Law....................................................... 24 7.6 Assignment........................................................... 24 7.7 Amendments........................................................... 25 7.8 Term of Agreement.................................................... 25 7.9 No Warranty of Condition or Suitability by the Issuer................ 25 7.10 Adjustments.......................................................... 25 7.11 Zoning............................................................... 26 7.12 Company's Federal Income Taxation.................................... 26 7.13 Amounts Remaining in Debt Service Fund............................... 26 7.14 Survival of Covenants, Conditions and Representations................ 26 7.15 Headings............................................................. 26 7.16 Exculpatory Clause................................................... 26 7.17 Waiver of Distraint.................................................. 26 7.18 Survival of Agreement................................................ 27
I. Background, Representations and Findings............................. 1 1.1 Background........................................................... 1
(ii) 4
Page
---- 1.2 Company Representations.............................................. 2 1.3 Issuer Representations and Findings.................................. 3
II. Project Facilities................................................... 4 2.1 Transfer of Project Facilities....................................... 4 2.2 Construction of Future Improvements to Project Facilities............ 4 2.3 Provisions with Respect to Title..................................... 4 2.4 Administration of Contracts.......................................... 5 2.5 Notices and Permits.................................................. 5 2.6 Additions and Changes to the Project Facilities...................... 5
III. Financing the Project................................................ 5 3.1 Issuance of Bonds; Additional Financing.............................. 5 3.2 Bond Fund............................................................ 6 3.3 Bonds Not to Become Arbitrage Bonds.................................. 6 3.4 Restriction on Use of Bond Fund...................................... 6
IV. Sale and Purchase of the Project Facilities.......................... 6 4.1 Sale and Purchase of the Project Facilities.......................... 6 4.2 Security Interest.................................................... 7 4.3 Payment of Purchase Price............................................ 7 4.4 Acceleration of Payment to Redeem Bonds.............................. 7 4.5 No Defense or Set-Off................................................ 7 4.6 Settlement........................................................... 8 4.7 Assignment of Issuer's Rights........................................ 8
V. Covenants of the Company............................................. 9 5.1 Maintenance and Operation of the Project Facilities.................. 9 5.2 Maintenance of Existence............................................. 9 5.3 Payment of Trustee's and Remarketing Agent's Compensation and
Expenses........................................................... 10 5.4 Payment of Issuer's Fees and Expenses................................ 10 5.5 Condemnation of Project Facilities................................... 10 5.6 Damage to Project Facilities......................................... 10 5.7 Indemnity Against Claims............................................. 11 5.8 Taxes, Other Governmental Charges and Utility Charges................ 12 5.9 Insurance............................................................ 13 5.10 Prohibition of Liens................................................. 13 5.11 Granting of Easements................................................ 14 5.12 Compliance with Laws................................................. 15 5.13 Recording Instruments................................................ 15 5.14 Filing of Financing Statements....................................... 15
(iii) 5
Page
---- 5.15 Notice and Certification With Respect to Bankruptcy Proceedings...... 15 5.16 Continuing Disclosure................................................ 16 5.17 Representations as to Environmental Matters.......................... 16 5.18 Covenants as to Environmental Matters................................ 17 5.19 Certain Definitions.................................................. 17 5.20 Covenants of the Company with Respect to Federal Tax-Exempt Status
of Bonds............................................................. 18 5.21 Annual Certificate of the Company.................................... 19
VI. Events of Default and Remedies....................................... 19 6.1 Events of Default; Acceleration...................................... 19 6.2 Payment of Purchase Price on Default; Suit Therefor.................. 21 6.3 Other Remedies....................................................... 21 6.4 Waiver............................................................... 23 6.5 Cumulative Rights.................................................... 23
VII. Miscellaneous........................................................ 23 7.1 Receipt of Indenture................................................. 23 7.2 Limitation of Liability of the Issuer................................ 23 7.3 Notices.............................................................. 23 7.4 Severability......................................................... 24 7.5 Applicable Law....................................................... 24 7.6 Assignment........................................................... 24 7.7 Amendments........................................................... 25 7.8 Term of Agreement.................................................... 25 7.9 No Warranty of Condition or Suitability by the Issuer................ 25 7.10 Adjustments.......................................................... 25 7.11 Zoning............................................................... 25 7.12 Company's Federal Income Taxation.................................... 26 7.13 Amounts Remaining in Debt Service Fund............................... 26 7.14 Survival of Covenants, Conditions and Representations................ 26 7.15 Headings............................................................. 26 7.16 Exculpatory Clause................................................... 26 7.17 Waiver of Distraint.................................................. 26 7.18 Survival of Agreement................................................ 26
(iv) 6
THIS AMENDED AND RESTATED INSTALLMENT SALE AGREEMENT, dated as of February 1, 1997 (this "Agreement"), by and between THE PHILADELPHIA AUTHORITY FOR INDUSTRIAL DEVELOPMENT (the "Issuer") and SLT REALTY LIMITED PARTNERSHIP, a Delaware limited partnership (the "Company"), provides as follows:
I. Background, Representations and Findings.
1.1 Background.
(a) The Issuer is a public instrumentality of the Commonwealth of Pennsylvania and a body corporate and politic organized and existing under the Pennsylvania Economic Development Financing Law, Act of August 23, 1967, P.L. 251, as amended and supplemented, 73 P.S. Sections 371 et seq. (the "Act"). Under the Act, the Issuer is authorized to enter into agreements providing for the acquisition of industrial and commercial development projects and the sale thereof to occupants for the public purposes of alleviating unemployment and maintaining employment at a high level and creating and developing employment opportunities by the acquisition and financing of industrial, commercial, manufacturing and research and development enterprises.
(b) The Issuer has undertaken the financing of the costs of a project (the "Project") consisting of the acquisition of certain real property and the improvements thereon fronting on Island Avenue and otherwise abutting a loop egress ramp from Interstate 95 in Philadelphia, Pennsylvania (the "Premises"), the construction and installation of certain improvements and equipment in and on the Premises (the Premises, together with such improvements and equipment being hereinafter referred to as the "Project Facilities"), and the sale of the Project Facilities to the Company for use and operation by the Company or its designee as a suite hotel. A more complete description of the Project Facilities and the Premises are set forth in Exhibit "A" attached to this Agreement. The Issuer and Philadelphia HSR Limited Partnership, a Massachusetts limited partnership ("HSR"), entered into an Installment Sale Agreement (the "Original Agreement"), dated as of October 1, 1983, for the sale of the Project Facilities to HSR on an installment basis. To finance the Project, the Issuer issued its Commercial Development Revenue Bonds (Suite Hotel Project), Series A in the aggregate principal amount of $27,275,000 (the "Prior Bonds") under a Mortgage and Trust Indenture dated as of October 1, 1983 between the Issuer and Mellon Bank, N.A. (as successor trustee to CoreStates Bank, N.A., which was successor by merger to First Pennsylvania Bank, N.A.), as trustee (the "Prior Trustee"), as amended and supplemented by a Supplemental Mortgage and Trust Indenture dated as of June 1, 1991 (collectively, the "Original Indenture") between the Issuer and the Prior Trustee. 7
(c) HSR transferred its equity interests in the Project Facilities to the Company and has assigned to the Company all of its rights, title, interests and obligations in, to and under the Original Agreement and the Original Indenture pursuant to an Assignment and Assumption Agreement dated as of June 3, 1996 between HSR and the Company.
(d) The Company has requested and the Issuer has proposed to provide for the current refunding of the Prior Bonds through the issuance of up to $27,820,000 aggregate principal amount of the Issuer's Commercial Development Revenue Refunding Bonds (Doubletree Guest Suites Project) Series 1997A (the "Bonds"). The Issuer and the Company intend that the interest on the Bonds will not be included in gross income under the Internal Revenue Code of 1986, as amended.
(e) The Issuer and First Union National Bank, as trustee (the "Trustee"), have simultaneously herewith entered into an Amended and Restated Mortgage and Trust Indenture dated as of the date hereof (the "Indenture") for the purposes of amending and restating in its entirety the Original Indenture and to provide for the issuance of and security for the Bonds.
(f) The Issuer has requested and SLT Realty Limited Partnership, a Delaware limited partnership (the "Guarantor"), has proposed to irrevocably and unconditionally guaranty the full and prompt payment of the principal of, interest on, and premium, if any, on the Bonds by entering into a Guaranty Agreement dated as of February 1, 1997 between the Guarantor and the Trustee.
(g) The Issuer and the Company hereby enter into this Agreement for the purposes of amending and restating in its entirety the Original Agreement and providing for the sale of the Project Facilities to the Company for purchase price amounts sufficient to pay the principal, interest and premium, if any, due on the Bonds.
1.2 Company Representations. The Company represents that:
(a) The Company is a limited partnership duly organized and existing in good standing under the laws of the State of Delaware, is authorized to conduct business in the Commonwealth of Pennsylvania and has full power and legal right to enter into this Agreement and perform its obligations hereunder. The making and performance of this Agreement on the Company's part have been duly authorized by all requisite action and will not violate or conflict with its Partnership Agreement or any governmental rule or regulation or with any agreement, instrument or document by which the Company or any of its properties is bound.
2 8
(b) The refinancing of the Project Facilities, as provided under this Agreement, will tend to promote the employment and general welfare of the residents of the City of Philadelphia and the Commonwealth of Pennsylvania by promoting the continuation and expansion of gainful employment opportunities for such residents.
(c) The Company intends to operate the Project Facilities as a commercial development project within the meaning of the Act.
1.3 Issuer Representations and Findings. The Issuer hereby confirms its findings and represents that:
(a) The Issuer is a public body corporate and politic established in the Commonwealth of Pennsylvania pursuant to the Act, is authorized and empowered by the provisions of the constitution and laws of the Commonwealth of Pennsylvania (including the Act) and its resolutions dated January 21, 1997 and February 18, 1997, to enter into the transactions contemplated by this Agreement and to carry out its obligations hereunder. The Project Facilities constitute and will constitute a commercial development project within the meaning of the Act.
(b) The Company as the equitable owner of the Project Facilities is engaged in commercial activities in the Commonwealth of Pennsylvania requiring substantial capital and creating substantial employment opportunities, and its operations contribute to economic growth and the creation of employment opportunities in the Commonwealth of Pennsylvania. The Company is financially responsible to assume its obligations prescribed by this Agreement and the Act and is qualified to be a commercial occupant for purposes of the Act.
(c) The Project Facilities will promote the health, safety and general welfare of the people of the Commonwealth of Pennsylvania and the public purposes of the Act by alleviating unemployment and by maintaining employment at a high level and creating and developing employment opportunities in the Commonwealth of Pennsylvania.
(d) The Project Facilities are located wholly within the boundaries of the City of Philadelphia, Pennsylvania.
(e) The Project Facilities have been approved by the Pennsylvania Department of Community and Economic Development (formerly the Pennsylvania Department of Commerce) as required by the Act.
(f) The Project Facilities have been approved by a publicly elected local official as required by the Act, after a public hearing held upon reasonable notice.
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(g) The issuance of the Bonds and the execution of this Agreement and the Indenture have been approved by the Issuer at a duly constituted meeting.
(h) Except as otherwise permitted by this Agreement, the Issuer covenants that it has not and will not pledge the income and revenues derived from this Agreement other than to secure the Bonds.
II. Project Facilities.
2.1 Transfer of Project Facilities. The Company hereby grants, conveys and assigns to the Issuer and the Trustee all of the right, title and interest which it may have in and to the Project Facilities. Upon request of the Issuer or the Trustee, the Company will grant, convey and assign, or cause to be granted, conveyed and assigned, to the Issuer and the Trustee, by deed, bill of sale, lease, assignment, license, grant of easement or other appropriate instrument, such interest as it may have in the Project Facilities and such additional rights as the Issuer or the Trustee shall require in order to comply with the Act. The Company will be entitled to physical possession and control of the Project Facilities, the Premises and all machinery, equipment, improvements, fixtures and all other tangible personal property thereon, at all times prior, during and subsequent to such granting, conveyance and assignment, and will be liable at all such times for all risks, losses and damages with respect to the Project Facilities and the Premises. The Issuer and the Trustee agree that, without the prior written consent of the Company, it will not create any lien, encumbrance, charge, easement, license, covenant, reversion, condition or restriction upon the Project Facilities other than the security intended to be given under the Indenture.
2.2 Construction of Future Improvements to Project Facilities. The Company may award contracts and purchase orders covering construction for future improvements of the Project Facilities. Any contracts and purchase orders so awarded are hereinafter called the "Contracts." Each Contract for construction will contain a valid waiver by the contractor of the right to file and maintain any mechanic's liens on the Project Facilities, which waiver shall be filed before commencement of work in the office of the Prothonotary of the City of Philadelphia. The Company will pay all sums required to complete the same to the extent that the cost thereof is not provided pursuant to the Indenture.
2.3 Provisions with Respect to Title. Any Contracts will provide that legal title to the equipment included in the Project Facilities shall pass directly from the Contractor to the Issuer, and at no time shall legal title to any portion of the Project Facilities vest in, nor become the property of, the Company. The Company agrees that title to the Project Facilities will remain in the Issuer until settlement pursuant to Section 4.6 hereof, and that the Issuer's title to the Project Facilities shall constitute ownership and not a security interest; provided, however, that the Company alone shall be entitled to deduct all depreciation on,
4 10 and take any available tax credits in respect of, the Project Facilities on the Company's income tax returns.
2.4 Administration of Contracts. The Company will have full responsibility for preparing, administering, amending and enforcing any Contracts and litigating or settling claims thereunder, and will be entitled to all warranties, guaranties and indemnities provided under any Contracts and by law. Subject to the provisions of Section 2.6 hereof, the Company may make additions to or changes in the Project Facilities without prior consultation with the Issuer or the Trustee (as hereinafter defined).
2.5 Notices and Permits. The Company shall give or cause to be given all notices and comply or cause compliance with all laws, ordinances, municipal rules and regulations and requirements of public authorities applying to or affecting the conduct of work on the Project Facilities, and the Company will defend and save the Issuer, its officers, members, agents and employees, harmless from all fines due to failure to comply therewith. The Company shall procure or cause to be procured all permits and licenses necessary for the prosecution of the work.
2.6 Additions and Changes to the Project Facilities. The Company may, at its option and at its own cost and expense, at any time and from time to time, make such improvements, additions and changes to the Project Facilities as it may deem to be desirable for its uses and purposes, provided that: (i) such improvements, additions and changes shall constitute part of the Project Facilities and be subject to the liens and security interests created by the Indenture; and (ii) the Company shall not permit any removal, demolition, substitution, improvement, alteration or deterioration of the Project Facilities or any other act which would materially impair or reduce the usefulness or value thereof, or the Issuer's interest therein, or the security provided under the Indenture without the prior written consent of the Issuer and the Trustee. The Company will revise Exhibit "A" from time to time to reflect any material additions to, deletions from and changes in the Project Facilities and will notify the Issuer and the Trustee of the nature, location and estimated costs of such modifications. Upon written request of the Company, the Issuer shall give a bill of sale to the Company, and the Trustee shall execute termination statements for any filings made to perfect the security interests created by the Indenture and by Section 4.2 hereof for any chattel or fixture permanently removed from the Project Facilities by the Company.
III. Financing the Project.
3.1 Issuance of Bonds; Additional Financing. In order to refinance the Project Facilities, the Issuer, upon request of the Company, will use its best efforts to issue and sell, in one or more series, $27,820,000 aggregate principal amount of its Commercial Development Revenue Refunding Bonds (Doubletree Guest Suites Project) Series 1997A.
5 11 The Bonds will be issued under and secured by the Indenture, intended to be recorded in the Department of Records in and for the City of Philadelphia prior to the recordation of this Agreement. The Company agrees that its interest in the Project Facilities and its rights hereunder are and shall be subordinate to the rights of the Trustee under the Indenture, and agrees to comply with and be bound by all of the provisions thereof that are binding upon the Issuer. The Company hereby agrees to make all payments of the Purchase Price (as defined in Section 4.3 hereof) and other amounts due hereunder to enable the Issuer to make all payments required of it under the Bonds and the Indenture. The Bonds will be payable solely from payments made by the Company pursuant to the terms hereof, or from other moneys available for such purpose under the terms of the Indenture. The net proceeds of the Bonds shall be applied pursuant to Section 3.2 hereof and Section 4.02 of the Indenture.
3.2 Bond Fund. Upon the issuance of the Bonds, the Company will provide the Prior Trustee $1,207,356.64 which, together with the proceeds of the Bonds in the amount of $27,264,712.80, will be used to pay the principal of and accrued interest on the Prior Bonds on February 20, 1997. The Company shall deposit monies with the Trustee in the Bond Fund in amounts sufficient for the payment of Costs of issuance as provided in Section 3.04 of the Indenture.
3.3 Bonds Not to Become Arbitrage Bonds. As provided in Article V of the Indenture, the Trustee will invest moneys held by the Trustee as directed by the Company. The Issuer and the Company hereby covenant to each other and to the holders of the Bonds that, notwithstanding any other provision of this Agreement or any other instrument, they will neither make nor instruct the Trustee to make any investment or other use of the Debt Service Fund or other proceeds of the Bonds which would cause the Bonds to be arbitrage bonds under Section 148 of the Code and the regulations thereunder, and that they will comply with the requirements of such Section and regulations throughout the terms of the Bonds. The Company shall not resell any Bonds purchased by it pursuant to Section 6.06 of the Indenture at a price in excess of the principal amount thereof unless it shall have first delivered to the Trustee an opinion of nationally recognized bond counsel satisfactory to the Trustee to the effect that such resale will not cause interest on the Bonds to become subject to Federal income tax under the Code, as then enacted and construed.
3.4 Restriction on Use of Bond Fund. The Company shall not use or direct the use of moneys from the Bond Fund in any way, or take or omit to take any other action, so as to cause the interest on any Bonds to become subject to Federal income tax, and shall use all of the spendable proceeds of the Bonds to refund the Prior Bonds.
IV. Sale and Purchase of the Project Facilities.
4.1 Sale and Purchase of the Project Facilities. The Issuer hereby agrees to sell to the Company, who hereby agrees to purchase, the Project Facilities under and subject
6 12 nevertheless, to all easements, covenants, reversions, conditions and restrictions existing at the time of settlement pursuant to Section 4.6 hereof, for the Purchase Price set forth in Section 4.3 hereof.
4.2 Security Interest. In order to secure its obligations hereunder, the Company hereby assigns, transfers, sets over and grants to the Issuer and the Trustee a security interest in all of the Company's right, title and interest which it may have in and to the Project Facilities consisting of equipment, including without limitation all equipment described in Exhibit A whether now owned or hereafter acquired by the Company, and in all fixtures, fittings, furnishings, furniture, machinery, appliances, apparatus, equipment, rents, contracts, permits, licenses, leases, income and accounts now owned or hereafter acquired by the Company and located in or on the Project Facilities, all substitutions and replacements therefor, and all proceeds thereof, including all insurance and condemnation proceeds. The terms of this Section 4.2 shall constitute a security agreement within the meaning of the Pennsylvania Uniform Commercial Code. The terms of this Section 4.2 shall not apply to any such equipment or other personal property which is now or hereafter leased by the Company or is subject to a purchase money security interest.
4.3 Payment of Purchase Price. The Company shall pay or cause to be paid as set forth in this Section 4.3 the purchase price (the "Purchase Price") for the Project Facilities. The Purchase Price will be an amount equal to the principal or applicable redemption price of, and interest on, the Bonds. The Purchase Price shall be payable in installments which, as to amount, correspond to the payments of the principal or applicable redemption price of, and interest on, the Bonds. All such installments of the Purchase Price are to be made to the Trustee on or prior to the corresponding principal, redemption or interest payment dates of the Bonds in funds available for payment, on such Bond payment dates. If the Company fails to make any payment or fails to make any complete payment required pursuant to this Section 4.3, the Trustee shall demand payment of such deficiency or non-payment from the Guarantor under the Guaranty. Payments of the principal or applicable redemption price of and interest on the Bonds from any moneys held by the Trustee in the Debt Service Fund established under the Indenture shall constitute payments of Purchase Price on behalf of the Company.
4.4 Acceleration of Payment to Redeem Bonds. Whenever any Bonds are subject to optional redemption pursuant to the Indenture, the Issuer will, upon receipt of written direction of the Company, direct the Trustee to call the same for redemption as provided in the Indenture. Whenever any Bonds are subject to mandatory redemption pursuant to the Indenture, the Company will cooperate with the Issuer and the Trustee in effecting such redemption.
4.5 No Defense or Set-Off. Except as provided in Section 7.16 hereof, the obligations of the Company to make or cause to be made payments of the Purchase Price
7 13 shall be absolute and unconditional without defense or set-off (except for the defense of actual payment) by reason of any default by the Issuer under this Agreement or under any other agreement between the Company and the Issuer or for any other reason, including without limitation, any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Project Facilities, commercial frustration of purpose, or failure of the Issuer to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with this Agreement, it being the intention of the parties that the payments required of or on behalf of the Company hereunder will be paid in full when due without any delay or diminution whatsoever. Payments of the Purchase Price and additional sums required to be paid by or on behalf of the Company hereunder shall be received by the Issuer or its assigns as net sums and the Company agrees to pay or cause to be paid all charges against or which might diminish such net sums.
4.6 Settlement. Settlement for the Project Facilities shall take place within 60 days after (i) the Company shall have paid or caused to be paid all amounts to be paid by or on behalf of the Company under the terms of this Agreement and (ii) the Indenture shall have been released pursuant to Section 12.01 thereof; provided that no Event of Default as defined herein has occurred and is continuing, and provided that settlement shall be held only after the Company gives 10 days prior written notice to the Issuer of said settlement, said notice to be given by the Company not later than 10 days prior to the expiration of said 60-day period. In the event the Company refuses to take and record title to the Project Facilities within the aforesaid 60-day period, the Company shall pay to the Issuer, or its agent, a service charge of $100.00 per month until such time as the Company accepts and records title to the Project Facilities. At settlement, the Issuer will convey to the Company by special warranty deed and bill of sale the Project Facilities excepting, however, any part of the Project Facilities taken by eminent domain (or conveyed by a bona fide sale in lieu thereof) during the term of this Agreement and subject, nevertheless, to all easements, covenants, reversions, conditions and restrictions, existing at the time of the conveyance to the Issuer pursuant to the Original Indenture and the Original Agreement, or thereafter created or agreed to by the Company. The Company agrees to pay all taxes, charges and costs, including but not limited to reasonable legal fees, recording fees, notary fees and any other similar fees and charges which must be paid in order to complete settlement and in connection with the conveyance of the interest of the Issuer in the Project Facilities from the Issuer to the Company hereunder and, with respect to the Indenture and any other mortgage lien created by the Issuer with the Company's consent, all mortgage satisfaction costs and fees.
4.7 Assignment of Issuer's Rights. As security for the payment of the Bonds, the Issuer will assign to the Trustee all the Issuer's rights under this Agreement (except the rights of the Issuer under Sections 5.4 and 5.7 hereof). The Company consents to such assignment and agrees to make or cause to be made payments of the Purchase Price under Sections 4.3 and 4.4 hereof directly to the Trustee without defense or set-off by reason
8 14 of any dispute between the Company and the Trustee. Whenever the Company is required to obtain the consent of the Issuer hereunder, the Company shall also obtain the consent of the Trustee.
V. Covenants of the Company.
5.1 Maintenance and Operation of the Project Facilities.
(a) During the term of this Agreement, the Company will at its own cost and expense keep and maintain, or cause to be kept and maintained, in good repair and condition (excepting reasonable wear and tear) the Project Facilities and all additions and improvements thereto, and pay, or cause to be paid, any utility charges and other costs and expenses arising out of its use of the Project Facilities, and will maintain and cause to be operated the Project Facilities as a "commercial facility" (as defined in the Act), provided this c...
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