FORM OF PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT, dated as of October 29, 1997, by and between
Charter Communications International, Inc. (the "Seller"), a Nevada corporation,
having an office and place of business at 0000 Xxxxx Xxxxx Xxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxx 00000,
and Connecticut Bank of Commerce ("Buyer"), a Connecticut state banking
corporation having an office and place of business at 000 Xxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000.
WHEREAS, the Seller owns the equipment and accessories thereto (the
"Equipment"), listed and described on Schedule A attached hereto (the "Schedule
A"); and
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell
to Buyer, an undivided senior ownership interest in the Equipment on the terms
and conditions set forth herein (the "Equipment Purchase"); and
WHEREAS, the Buyer is acquiring the senior ownership interest in the
Equipment with the express intent of concurrently entering into a financial
lease transaction with the Seller as the lessee and the Buyer as the lessor with
respect to the Buyer's senior ownership interest in the Equipment as provided in
a certain Equipment Lease Agreement (the "Lease Agreement"), dated the date
hereof, by and between the Buyer and the Seller; and
WHEREAS, in order to induce the Buyer to acquire the Equipment and to enter
into the Lease Agreement with the Seller, the Seller has agreed to furnish the
Buyer with acceptable security against loss with respect to the foregoing
transactions by granting to Buyer a security interest in, and a lien on, the
Seller's residual subordinated ownership interest in the Equipment and the
unsold portion of Seller's receivables pursuant to a Security Agreement, dated
the date hereof, by and between the Seller as grantor and the Buyer as secured
party (the "Security Agreement").
NOW, THEREFORE, in consideration of the premises, the parties hereto, desiring
to be legally bound, hereby agree as follows:
1. Buyer's Purchase From Seller, and Simultaneous Lease to Seller,
--------------------------------------------------------------------
of the Senior Ownership Interest in the Equipment
------------------------------------------------------
1.1 Conveyance of Senior Ownership Interest in the Equipment. Subject
--------------------------------------------------------
to the terms and conditions hereof, on the Closing Date (as defined in Section
7.1 hereof), Seller shall transfer, convey, assign, set over, bargain, sell and
deliver unto Buyer, and Buyer shall purchase from Seller, all right, title and
interest in and to a senior ownership interest in the Equipment (the "Senior
Ownership Interest"), represented by a Senior Ownership Certificate. On the
Closing Date, the Seller shall deliver to Buyer, in exchange for the Buyer's
payment of the Purchase Price (as defined in Section 1.2 hereof), a xxxx of sale
(the "Xxxx of Sale") for the Senior Ownership Interest in the Equipment,
substantially in the form of Exhibit 2 hereto (appropriately completed).
8
1.2 Purchase Price. On the Closing Date, the Buyer shall pay to the
---------------
Seller, by wire transfer, the full purchase price (the "Purchase Price") for the
Equipment, which shall be the amount set forth on Exhibit 1 hereto ("Exhibit
1").
1.3 Buyer's Acquisition of Equipment For Full Payout Lease to Seller.
------------------------------------------------------------------
On the Closing Date of the Equipment Purchase, Buyer shall simultaneously enter
into the Lease Agreement with the Seller. Under the Lease Agreement, commencing
on the Closing Date, the Buyer shall lease to the Seller and the Seller shall
lease from the Buyer the Buyer's undivided Senior Ownership Interest in the
Equipment on a full payout basis. The Buyer's and Seller's execution and
delivery of the Lease Agreement shall be a condition of Buyer's obligation to
close the Equipment Purchase.
1.4 Seller's Pledge of Its Residual Ownership Interest in the
-----------------------------------------------------------------
Equipment and Certain Other Assets. On the Closing Date, the Seller shall
--------------------------------------
assign, set over and convey to the Buyer as collateral security for the Seller's
payment obligations to the Buyer under the Lease Agreement, the Seller's
Residual Ownership Interest in the Equipment and the unsold portion of Seller's
receivables as set forth more fully in the Security Agreement.
2. Representations and Warranties.
--------------------------------
2.1 Representations and Warranties of the Seller. Seller represents
--------------------------------------------
and warrants to, and covenants and agrees with, Buyer as follows:
(a) (i) On the date hereof, neither the sale nor the use of the
Equipment violates or infringes the patent, trademarks, trade name or other
rights of any person and (ii) the Equipment is insured against loss as provided
in Section 3 hereof.
(b) On the Closing Date, Seller has, and by the Xxxx of Sale is
conveying to Buyer, good and marketable title to the Senior Ownership Interest
in the Equipment free and clear of any and all leases, liens, claims and
encumbrances (exclusive of the Seller's Residual Ownership Interest). On the
Closing Date, the Buyer will have a first priority security interest in, and
lien on, the Seller's Residual Ownership Interest in the Equipment.
(c) Seller is duly incorporated and organized, validly existing and in
good standing under the laws of its incorporation or organization and has all
requisite power and authority to own its properties and carry on its business in
the places where such properties are located and such business is conducted.
(d) Seller has the corporate power and authority to enter into this
Agreement and to execute, deliver and receive all other instruments and
documents executed and delivered or received, or to be executed and delivered or
received, in connection with the transactions herein referred to and to carry
out the sale and transfer of the Senior Ownership Interest in the Equipment.
Seller has the corporate power and authority to execute and deliver the Xxxx of
Sale and any other documents and instruments required by the terms hereof or
thereof to be executed and delivered by it. (This Agreement, the Xxxx of Sale
and all such other instruments and documents are sometimes hereinafter referred
to collectively as the "Seller Documents"). There is no action, suit or
proceeding pending against Seller before or by any court, administrative agency
or other governmental authority which brings into question the validity of, or
in any way legally impairs, the execution, delivery or performance by Seller of
any of the Seller Documents.
(e) The execution and delivery of the Seller Documents by Seller, and
the performance by Seller of its obligations thereunder, including, without
limitation, the conveyance of the Senior Ownership Interest in the Equipment,
and the acceptance of the Purchase Price in exchange therefor, have been duly
authorized by all necessary action of Seller and do not violate or conflict with
(i) any provision of Seller's organizational documents, (ii) any law or any
order, writ, injunction, decree, rule or regulation or (iii) any material
agreement to which Seller is a party or by which Seller is bound.
(f) The Seller Documents constitute the valid and binding obligation of
Seller, enforceable against the Seller in accordance with their respective
terms, subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles.
(g) Seller is not subject to any restriction or agreement, which, with
or without the giving of notice, the passage of time, or both, prohibits or
would be violated by, the execution, delivery and consummation of the Seller
Documents and the transactions referred to therein. All consents necessary for
such execution, delivery or consummation by Seller have been or will be
obtained.
(h) All sales, property and other taxes, licenses, tolls, inspection or
other fees, bonds, permits or certificates which were or may be required to be
paid or obtained in connection with the acquisition of the Senior Ownership
Interest in the Equipment by the Buyer have been, or when due will promptly be,
paid in full (or adequate provision for such payment has or shall have been
made) or obtained.
2.2 Representations and Warranties of the Buyer. The Buyer represents
-------------------------------------------
and warrants to, and agrees with, the Seller as follows:
(a) Buyer is duly incorporated and organized, validly existing and in
good standing under the laws of its incorporation or organization and has all
requisite power and authority to own its properties and carry on its businesses
as such business is conducted.
(b) Buyer has the power and authority to enter into this Agreement and
all other instruments and documents executed and delivered or received, or to be
executed and delivered or received, in connection with the transactions herein
referred to and to carry
and thereunder. (This Agreement and all such other instruments and documents
are sometimes hereinafter referred to collectively as the "Buyer Documents").
(c) The execution and delivery of the Buyer Documents by Buyer, and the
performance of its obligations thereunder, have been duly authorized by all
necessary action of Buyer and do not violate or conflict with (i) any provision
of Buyer's organizational document, (ii) any law, or any order, writ,
injunction, decree, rule or regulation of any court, administrative agency or
any other governmental authority, or (iii) any material agreement to which Buyer
is a party or by which Buyer is bound. There is no action, suit or proceeding
against Buyer before any court, administrative agency or other governmental
authority which brings into question the validity of, or might in any way
impair, the execution, delivery or performance by Buyer of any of the Buyer
Documents.
(d) The Buyer Documents constitute the valid and binding obligations of
Buyer enforceable against the Buyer in accordance with their respective terms,
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and general
equitable principles.
(e) Buyer is not subject to any restriction or agreement which, with or
without the giving of notice, the passage of time, or both, prohibits or would
be violated by, the execution, delivery and consummation of the Buyer Documents
and transactions therein referred to. No consents are necessary for such
execution, delivery and consummation by the Buyer.
3. Insurance.
---------
3.1 Insurance. Commencing on the Closing Date and continuing until
---------
the Equipment is delivered by the Buyer to the location or locations specified
by the Lessee in the Lease Agreement, Seller agrees to insure the Equipment
against loss in the amount not less than (i) the Purchase Price, times (ii) 115
percent. Seller shall furnish the Buyer, upon request, with evidence of such
insurance.
4. Delivery and Installation of Equipment. The Seller shall be fully
--------------------------------------
responsible for the delivery and the installation of the Equipment at the
location or locations designated by the Seller as lessee. Any and all costs and
expenses incurred by Seller in transporting and installing the Equipment shall
be the sole responsibility and duty of the Seller. Seller shall indemnify and
hold the Buyer harmless against any and all claims or liabilities arising from
the delivery and installation of the Equipment by the Seller.
5. Indemnification. Each of Seller and Buyer will indemnify the other
---------------
and its subsidiaries, stockholders, partners, directors, officers, employees and
agents (collectively with Seller or Buyer, as the case may be, "Indemnified
Parties") and protect, defend and hold any and all such Indemnified Parties
harmless from and against any and all loss, cost, damage, injury or expense,
together with interest on all amounts expended by any and all such Indemnified
Parties accruing at the rate of ten percent (10%) per annum from the date of
--- -----
disbursement, including, without limitation, reasonable attorneys' fees,
wheresoever and howsoever arising which any of the Indemnified Parties may incur
by reason of any material breach by the indemnifying Party of any of its
representations or obligations set forth in the Seller Documents or Buyer
Documents, as the case may be. In the event any claim for indemnification
hereunder arises on account of a claim or action made or instituted by a third
person against any Indemnified Party, such Indemnified Party shall notify the
Buyer or Seller, as the case may be, promptly after the receipt of notice by
such Indemnified Party that such claim was made or that such action was
commenced, and the indemnifying party shall be relieved from this
indemnification obligations hereunder to the extent it is prejudiced by any
delay in the provision of such notice. The indemnifying party shall be entitled
to assume and control the defense of any such claim or action with counsel of
its own choosing and at its own expense and if the indemnifying party so assumes
the defense of a claim, such party shall have no liability to any Indemnified
Party for legal fees or expenses of investigation, and shall have full
discretion to settle or pursue the claim so long as any settlement includes a
complete release in respect of such claim of the Indemnified Party. If the
indemnifying party does not so elect to assume the defense of such claim or
action, the same shall not be settled without its prior written consent (which
consent shall not be unreasonably withheld or delayed). The Seller also hereby
indemnifies and shall hold the Indemnified Parties harmless against any loss
sustained or reasonable expense incurred by any such Indemnified Party as the
direct result of or arising out of the imposition on the Equipment of any
Federal or other tax lien or the foreclosure thereof by virtue of the failure to
pay or under payment by the indemnifying party.
6. Benefits of Representations, Warranties, etc.. Seller hereby
-------------------------------------------------
assigns to Buyer and to Buyer's lessee (to the extent assignable), and agrees
to use commercially reasonable efforts to enforce (which shall not be
interpreted to require Seller to institute litigation) for Buyer's and the
Seller's benefit, directly or through its predecessors-in-interest (to the
extent not assignable), the benefits of all warranties, representations,
covenants and indemnities made to Seller, by or which Seller is entitled to
enforce against, any predecessor in title to the Senior Ownership Interest in
the Equipment or the manufacturer of the Equipment.
7. The Closing.
------------
7.1 Closing Date. The closing (the "Closing") for the purchase and
------------
sale of the Senior Ownership Interest in the Equipment effected pursuant to this
Agreement shall take place at the main office of the Buyer, at 12:00 noon (New
York City Time) on October 29, 1997 (the "Closing Date"), or at such other time,
date or place as the parties may mutually agree. Unless the Seller and the Buyer
shall agree otherwise in writing, all of the transactions, deliveries and
payments contemplated by Section 1 and this Section 7 shall be deemed to take
place simultaneously and no such transaction, delivery or payment shall be
deemed to have taken place or been made until all such transactions, deliveries
and payments are completed at the Closing.
7.2 Deliveries. At the Closing, the Seller shall deliver to the
----------
Buyer, in exchange for the Buyer's payment of the Purchase Price, the Xxxx of
Sale in the form of Exhibit 1 hereto, executed by an authorized representative
of the Seller, which Xxxx of Sale shall evidence the Seller's conveyance and the
Buyer's purchase of the Senior Ownership Interest in the Equipment. At the
Closing, the Seller shall also deliver to the Buyer as collateral security for
the Seller's payment obligations under the Lease Agreement the Seller's
Residual Ownership Interest and all such other documents, certificates or
instruments required in connection with the Security Agreement.
7.3. Conditions to Buyer's Obligation to Effect Closing. The Buyer's
-----------------------------------------------------
obligation to close the Equipment Purchase transaction shall be subject to each
of the following conditions, which conditions shall be satisfied on or before
the Closing Date:
(a) All of the representations and warranties of the Seller under this
Agreement shall be true and correct as of the Closing Date, and no event shall
have occurred which, with the giving of notice or the passage of time, would
constitute a default by Seller under this Agreement;
(b) Buyer shall have received the Xxxx of Sale, duly executed by the
Seller;
(c) Buyer shall have received the Senior Ownership Certificate
evidencing the Buyer's Senior Ownership Interest in the Equipment;
(d) Buyer shall have received a security interest in, pledge of and
lien on the Seller's Residual Ownership Certificate (evidencing the Seller's
Residual Ownership Interest in the Equipment) and certain other property of the
Seller;
(e) Buyer and Seller shall have entered into the Lease Agreement and
all other documents, agreements and certificates contemplated therein, including
the Security Agreement;
(f) Seller shall have paid the Buyer's legal fees and expenses incurred
in connection with the transactions contemplated herein; and
(g) All other terms and conditions of this Agreement shall have been
complied with.
7.4 Conditions to Seller's Obligation to Effect Closing. The Seller's
---------------------------------------------------
obligation to close the Equipment Purchase Transaction shall be subject to each
of the following conditions, which shall be satisfied on or before the Closing
Date:
(a) All of the representations and warranties of the Buyer under this
Agreement shall be true and correct as of the Closing Date, and no event shall
have occurred which would constitute a default by Buyer under this Agreement;
(b) The Buyer shall have paid the Purchase Price to the Seller; and
(c) All other terms and conditions of this Agreement shall have been
complied with.
8. Miscellaneous.
-------------
8.1 Survival. The covenants, agreements, representations, indemnities
--------
and warranties made herein shall survive the execution and delivery of this
Agreement and the consummation of the transactions described herein.
8.2 Successors and Assigns. The rights and obligations of the parties
-----------------------
hereunder shall inure to the benefit of, and be binding and enforceable upon,
the respective successors, assigns and transferee of either party.
8.3 Notices. Any notice, request or other communication to any of the
-------
parties by the other hereunder shall be given in writing and shall be deemed
given on the earlier of the date the same is (i) personally delivered with
receipt acknowledged, or (ii) mailed by certified mail, return receipt
requested, postage prepaid and addressed to the party for which it is intended
at the address set forth at the head of this Agreement. The place to which
notices or copies of notices are to be given to either party may be changed from
time to time by such party by written notice to the other party.
8.4 Captions. Captions used herein are inserted for reference purposes
--------
only and shall not affect the interpretation or construction of this Agreement.
8.5 Counterparts; Facsimile Execution. This Agreement may be
-----------------------------------
executed in one or more counterparts each of which shall be deemed an original,
but all of which together shall constitute one and the same agreement. Delivery
of an executed counterpart of this Agreement by facsimile shall be equally
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by facsimile also
shall deliver an original executed counterpart of this Agreement, but failure to
deliver an original executed counterpart shall not affect the validity,
enforceability and binding effect of this Agreement.
8.6 Amendments. This Agreement may be amended or varied only by a
----------
document, in writing, of even or subsequent date hereto, executed by Buyer and
Seller.
8.7 Further Assurances. Each party hereto shall execute and deliver
------------------
all such further instruments and documents as may be reasonably requested by the
other party in order to fully carry out the intent and accomplish the purposes
of the Seller and Buyer Documents and the transactions referred to therein.
8.8 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the United States of America and the State of
Connecticut.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
SELLER:
CHARTER COMMUNICATIONS
INTERNATIONAL, INC.
By:___________________________
Name:_________________________
Title:__________________________
BUYER:
CONNECTICUT BANK OF COMMERCE
By:____________________________
Name:_________________________
Title:__________________________
EXHIBIT INDEX
1 - PURCHASE PRICE
2 - FORM OF XXXX OF SALE
A - DESCRIPTION OF EQUIPMENT
B - SENIOR OWNERSHIP CERTIFICATE EVIDENCING THE BUYER'S SENIOR OWNERSHIP
INTEREST IN THE EQUIPMENT
