EXHIBIT 10.02
TAG-ALONG RIGHTS AGREEMENT
THIS TAG-ALONG RIGHTS AGREEMENT (this "Agreement") is dated as of July
12, 1999 among Adelphia Communications Corporation, a Delaware corporation
("Adelphia"), the Century Class B Holders (as defined below), Xx. Xxxxxx Xxx
("Xx. Xxx") and the holders (the "Adelphia Class B Holders") of the outstanding
shares of Class B Common Stock, par value $.01 per share (the "Adelphia Class B
Stock") of Adelphia listed on Schedule B.
RECITALS
A. Adelphia, its wholly-owned subsidiary Adelphia Acquisition
Subsidiary, Inc., a Delaware corporation ("Merger Sub"), and Century
Communications Corp., a New Jersey corporation ("Century"), are parties to an
Agreement and Plan of Merger, dated as of March 5, 1999 (the "Merger
Agreement"), pursuant to which Century will merge (the "Merger") into Merger Sub
on the terms and conditions provided therein.
B. Pursuant to the Merger Agreement, the Century Class B Holders
entered into a Voting Agreement, dated as of March 5, 1999, obligating them, on
the terms and conditions therein set forth, to vote in favor of the Merger.
C. The Century Class B Holders required, as a condition to their
willingness to sign the Voting Agreement and to approve the Merger, that
Adelphia grant certain tag-along rights to the Century Holders, all as provided
herein.
In consideration of the recitals above and the agreements and covenants
contained in this Agreement, Adelphia, the Century Holders and the Adelphia
Class B Holders agree as follows:
1. Definitions. The following capitalized terms have the
following meanings:
"Adelphia" has the meaning set forth in the Parties paragraph.
"Adelphia Class A Stock" means the Class A Common Stock, par
value $.01 of Adelphia.
"Adelphia Class B Holders" has the meaning set forth in the
Parties paragraph.
"Adelphia Class B Stock" has the meaning set forth in the
Recitals.
"Adelphia Common Stock" means the Adelphia Class A Stock and
the Adelphia Class B Stock.
"Adelphia Share Price" means (i) in the case of a Tag-Along
Sale consisting solely of Adelphia Class B Stock, the highest price per
share received by any Adelphia Class B Holder in such Tag-Along Sale on
account of his or her Adelphia Class B Stock, less a discount to agreed
upon by such Adelphia Class B Holder and Century Holder and (ii) in the
case of all other Tag-Along Sales not covered by clause (i) above, the
highest price per share received by the Adelphia Class B Holder in such
Tag-Along Sale on account of his or her Adelphia Class A Stock. In the
event that the parties cannot agree upon the discount to be applied
pursuant to clause (i) above, the determination of a fair market
discount by an investment banker of national standing chosen by the
Board of Directors of Adelphia shall be deemed to be the discount
agreed upon by the Adelphia Class B Holder and the Century Holder.
Notwithstanding the foregoing, in the event of a Tag-Along Sale
consisting of a combination of Adelphia Class A Stock and Adelphia
Class B Stock in which the price paid by any third party for either the
Adelphia Class A Stock or the Adelphia Class B Stock does not represent
a bona fide purchase price for such shares as determined in good faith
by the Board of Directors of Adelphia, then the Adelphia Share Price
shall equal the highest price per share received by any Adelphia Class
B Holder in such Tag-Along Sale on account of his or her Adelphia
Common Stock.
"Adelphia Shares" includes (i) all shares of Adelphia Class A
Stock issued to the Century Holders pursuant to the Merger Agreement
and (ii) all securities of Adelphia or any other entity issued as a
dividend or other distribution with respect to, or in exchange or
replacement of any such shares.
"Agreement" has the meaning set forth in the Parties
paragraph.
"Century" has the meaning set forth in the Recitals.
"Century Class B Holders" means the holders of the Class B
Century Shares listed on Schedule A.
"Century Holders" means the Century Class B Holders, Ms. Tow
and any other person to whom the Tag-Along Rights have been
transferred in accordance with Section 11.
"Class B Century Shares" means the Class B Common Stock of
Century, par value $.01 per share.
"Merger" has the meaning set forth in the Parties paragraph.
"Merger Agreement" has the meaning set forth in the Parties
paragraph.
"Other Century Holders" is defined in Section 2(e).
"Reference Shares" has the meaning set forth in Section 2(a).
"Securities Act" means the Securities Act of 1933, as amended.
"Tag-Along Pro Rata Amount" means for each Century Holder,
that number of Adelphia Shares derived by multiplying the aggregate
number of Adelphia Shares owned by such Century Holder at the time of
the proposed Transfer by a fraction, the numerator of which is equal to
the aggregate number of Reference Shares proposed to be sold pursuant
to the Tag-Along Sale and the denominator of which is the aggregate
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number of shares of Adelphia Common Stock owned by the Adelphia Class B
Holders at the time of the proposed Transfer.
"Tag-Along Offer" is defined in Section 2(a).
"Tag-Along Sale" is defined in Section 2(a).
"Tag-Along Rights" means the rights of co-sale provided in
Section 2.
"Transfer" means with respect to any Reference Shares, the
sale, assignment or, conveyance, provided however that (i) no bona fide
pledge or hypothecation of Adelphia Common Stock by Adelphia Class B
Holders or any entity controlled by one or more of the Adelphia Class B
Holders shall be deemed to be a Transfer; (ii) no sale or other
conveyance of Adelphia Common Stock by Adelphia Class B Holders or any
entity controlled by one or more of the Adelphia Class B Holders to
other Adelphia Class B Holders or any entity controlled by one or more
of the Adelphia Class B Holders shall be deemed to be a Transfer, so
long as such transferee complies with Section 2(b); and (iii) no sale
or other conveyance of Adelphia Common Stock by Adelphia Class B
Holders or any entity controlled by one or more of the Adelphia Class B
Holders to immediate family members or descendants of any Adelphia
Class B Holder or trusts created for the benefit of any such persons
for estate planning or similar purposes shall be deemed to be a
Transfer, so long as such transferee complies with Section 2(b).
"Unaccepted Shares" is defined in Section 2(e).
2. Tag-Along Rights.
(a) If any Adelphia Class B Holder, or any entity directly or
indirectly controlled by any Adelphia Class B Holder, at any time or from time
to time after the Effective Date, in one transaction or in a series of related
transactions, intends to Transfer (a "Tag-Along Sale") (i) any shares of
Adelphia Class B Stock, (ii) any shares of Adelphia Class A Stock in a
transaction not involving a sale of Adelphia Class A Stock made publicly
pursuant to a registration statement filed under the Securities Act or Rule 144
under the Securities Act (other than sales of Adelphia Class A Stock in excess
of 500,000 shares) or (iii) any shares of Adelphia Common Stock in a transaction
involving a combination of clause (i) and clause (ii) above, (collectively,
"Reference Shares"), such Adelphia Class B Holder will be required to make an
offer, or will cause such controlled entity to make an offer (a "Tag-Along
Offer"), to each Century Holder of Adelphia Shares, upon the terms and
conditions set forth in Section 2(c), to permit such Century Holder to
participate in such Tag-Along Sale and sell up to its Tag-Along Pro Rata Amount
(plus any Unaccepted Shares as provided in Section 2(e)) for the Adelphia Share
Price, on the same terms and conditions applicable to such Adelphia Class B
Holder or such entity directly or indirectly controlled by such Adelphia Class B
Holder.
(b) Unless and until the Century Holders have transferred all of their
Adelphia Shares pursuant to this Agreement, to transferees other than those
named in Section 3 of this Agreement, or pursuant to the Registration Rights
Agreement by and among Adelphia and the Class B Holders of even date herewith,
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if any Adelphia Class B Holder, or any entity directly or indirectly controlled
by any Adelphia Class B Holder, intends to Transfer (other than by sale) any
Reference Shares to any third party, such Adelphia Class B Holder will, or will
cause such controlled entity to, obtain from such third party its agreement to
be bound by this Section 2 as if such third party were an Adelphia Class B
Holder and to obtain from such third party's transferees a similar agreement to
be so bound and to obtain similar agreements.
(c) If any Adelphia Class B Holder, or any entity directly or
indirectly controlled by any Adelphia Class B Holder, is required by the terms
of Section 2(a) to make a Tag-Along Offer, it shall promptly (but in any event
at least thirty business days prior to the closing of any sale of Reference
Shares) give written notice of its intention to sell Reference Shares to each
Century Holder. Such notice shall indicate that a Tag-Along Offer is being made
pursuant to this Section 2 and describe in reasonable detail:
(i) the price at which it intends to sell such Reference
Shares (broken out separately for Adelphia Class A Stock and Adelphia
Class B Stock),
(ii) the number of Reference Shares to be sold (broken out
separately for Adelphia Class A Stock and Adelphia Class B Stock),
(iii) the Tag-Along Pro Rata Amount for each Century Holder
and
(iv) the general terms upon which such Adelphia Class B Holder
proposes to effect the sale (including, without limitation, the name of
the proposed buyer and the form of consideration).
(d) The Tag-Along Offer may be accepted by any Century Holder holding
Adelphia Shares within ten business days from the date of receipt by such
Century Holder of such notice by delivering notice of such Century Holder's
agreement to sell all or part of such Century Holder's Tag-Along Pro Rata Amount
(plus any Unaccepted Shares) for the Adelphia Share Price, upon the terms and
conditions pursuant to which the Adelphia Class B Holder's shares are to be sold
subject to purchase documentation substantially identical to that accepted by
the Adelphia Class B Holder in the proposed transaction, except to the extent
that the purchase price differs in accordance with this Agreement.
(e) In the event that any of the Century Holders elects not to accept
the Tag-Along Offer to the fullest extent permitted by his Tag-Along Pro Rata
Amount, then all the Adelphia Shares for which such Century Holder does not
accept the Tag-Along Offer (the "Unaccepted Shares") shall be aggregated and
made available to the other Century Holders (the "Other Century Holders") for
sale by such Other Century Holders pursuant to the Tag-Along Offer. The
Unaccepted Shares shall be allocated to the Other Century Holders (excluding in
each case each Century Holder which has not accepted the Tag-Along Offer to the
fullest extent available to it) based on the ratio of Adelphia Shares then owned
by the Other Century Holders, one to the other, and shall be in addition to any
Adelphia Shares that such Other Century Holder may otherwise be permitted to
sell pursuant to the Tag-Along Offer based on his Tag-Along Pro Rata Amount.
Notice may be given by the Other Century Holder or Holders of acceptance for
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sale in the Tag-Along Offer of applicable Unaccepted Shares within five business
days after the termination of the aforesaid ten day period. In the event any
Other Century Holder does not accept all of the Unaccepted Shares available to
him in a particular Tag-Along Offer, the aforesaid procedure shall be repeated
until there are no Other Century Holders, with each five-day notice period to
commence at the end of the immediately preceding five-day period.
(f) No Adelphia Class B Holder will sell any Reference Shares without
obtaining the agreement of the transferee thereof to purchase shares of Adelphia
Common Stock from the Century Holders as provided in this Section 2, provided,
however, that in the event that an acquiror is unwilling to purchase each
Century Holder's Tag-Along Pro Rata Amount (including any Unaccepted Shares as
provided in Section 2(e)), the Adelphia Class B Holders will have the right to
purchase such Adelphia Shares from such Century Holder for the Adelphia Share
Price on the same terms and conditions as the Tag-Along Sale, which purchase is
a prerequisite to such sale of Reference Shares by an Adelphia Class B Holder.
Any Transfer or attempt to Transfer any Adelphia Common Stock by any Adelphia
Class B Holder in violation of the terms and conditions of this Agreement shall
be null and void and of no force and effect.
3. Transfer Rights. The Tag-Along Rights of the Century Holders under
Section 2 may be transferred to any transferee or devolve upon any person who is
(i) a nominee or descendant of such Century Holder or a trust (including any
subtrusts thereof) of which such Century Holder is the Trustor so long as the
beneficial owner of the Adelphia Shares being transferred is the Trustor or any
relative of the Trustor or any charitable foundation or other eleemosynary
institution or charitable remainder trusts, (ii) the beneficial owner of any
Century Holder which is a trust, (iii) an entity controlled by such Century
Holder, (iv) a shareholder or partner, as the case may be, of any Century
Holder, (v) a bona fide purchaser for value from such Century Holder of Adelphia
Common Stock having a market value at the time of sale of more than $10,000,000,
(vi) charitable donees or family donees, (vii) a beneficial owner of an existing
trust controlled by any Century Holder and otherwise to third parties for estate
planning or similar purposes. Adelphia will be given written notice by the
Century Holder at the time of any transfer stating the name and address of any
transferee and identifying the securities with respect to which the rights
hereunder are being transferred.
4. No Inconsistent Agreements. Neither Adelphia nor any Adelphia Class
B Holder will enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Century Holders in this Agreement or
otherwise conflicts with the provisions hereof.
5. Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, without the prior written consent of
Adelphia and at least the Century Holders holding a majority of the Adelphia
Shares.
6. Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telecopier or air courier guaranteeing overnight delivery:
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(a) if to a Century Holder, at the most current address given
by such Century Holder to Adelphia in accordance with the provisions
hereof, which address at the date hereof is set forth on Schedule A;
and
(b) if to Adelphia or any Adelphia Class B Holder, at the
address set forth on Schedule B.
All such notices and communications shall be deemed to have been dully
given at the time delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery. Adelphia will promptly
provide a list of the most current addresses of the Century Holders of Adelphia
Shares given to it in accordance with the provisions hereof to any such Century
Holder for the purpose of enabling such Century Holder to communicate with other
Century Holders in connection with this Agreement.
7. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties.
8. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
conflict of laws provisions thereof.
10. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
11. Entire Agreement. This Agreement is intended by the parties as the
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
12. Voting Rights. Each of the Adelphia Class B Holders agree that, so
long as the Century Class B Holders and the Century Permitted Assignees and
Transferees (as defined in the Merger Agreement) own at least 10% of the
outstanding Adelphia common stock, each Adelphia Class B Holder will vote or
cause to be voted his Adelphia common stock so as to (i) elect Xxxxxxx Xxx,
Xxxxx Xxxxxxxxx and Xxxxxxx Xxxxxxxxx to the Board of Directors of Adelphia and
(ii) subject to the reasonable discretion of each Adelphia Class B Holder, elect
such other Century Designees (as defined in the Merger Agreement) as may be
nominated.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title:
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CENTURY HOLDERS
THE XXXXXX XXX TRUST
By: /s/ Xxxxxxx Xxx
Xxxxxxx Xxx, Trustee
By: /s/ Xxxxxx Xxx
Xxxxxx Xxx, Trustee
By: /s/ Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx, Trustee:
Title:
THE TRUST CREATED BY XXXXXX XXX UNDER DATE OF DECEMBER 10, 1979
By: /s/ Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx, Trustee
XXXXXXX XXX
/s/ Xxxxxxx Xxx
XXXXXX XXX
/s/ Xxxxxx Xxx
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ADELPHIA CLASS B HOLDERS
/s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
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SCHEDULE A
CENTURY CLASS B HOLDERS
Xxxxxxx Xxx
000 Xxxxxxx Xxxxx Xxxx
Xxx Xxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Trust dated December 10, 1979 by Xxxxxx
Xxx as Grantor
000 Xxxxxxx Xxxxx Xxxx
Xxx Xxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
The Xxxxxx Xxx Trust, created under date of
July 1973 by Xxxxxxx Xxx as Grantor
000 Xxxxxxx Xxxxx Xxxx
Xxx Xxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
in each case with copies to:
Xxxxx, Xxxxxxxxxx & Xxxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000 000-0000
Attention: Xxxxx X. Xxxxxxxxxx
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SCHEDULE B
ADELPHIA CLASS B HOLDERS
Xxxx X. Xxxxx
Adelphia Communications Corporation
Main at Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Xxxxxxx X. Xxxxx
Adelphia Communications Corporation
Main at Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Xxxxxxx X. Xxxxx
Adelphia Communications Corporation
Main at Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Xxxxx X. Xxxxx
Adelphia Communications Corporation
Main at Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
in each case with copies to:
Xxxxxxxx Xxxxxxxxx Professional Corporation
20th Floor, 000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx and Xxxx Xxxxxxxxxxxx
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