EXHIBIT 10.03
PURCHASE AGREEMENT
This Agreement (this "Agreement") is dated as of July 12, 1999 by and
between Adelphia Communications Corporation, a Delaware corporation ("Adelphia")
and Citizens Cable Company, a Delaware corporation ("Citizens").
RECITALS
A. Adelphia, Adelphia Acquisition Subsidiary, Inc. and Century
Communications Corp. ("Century") are parties to an Agreement and Plan of Merger
dated as of March 5, 1999 (as amended from time to time, the "Merger Agreement")
pursuant to which Adelphia has agreed to acquire Century on the terms and
subject to the conditions set forth in the Merger Agreement.
B. Century Telecommunications Venture Corp. ("CTVC"), an indirect
wholly-owned subsidiary of Century, and Citizens are parties to a Joint Venture
Agreement, dated as of September 22, 1994, as amended from time to time (the
"Joint Venture Agreement"), pursuant to which the parties thereto formed a joint
venture named Citizens Century Cable Television Venture (the "Joint Venture").
C. Citizens owns a 50% interest in the Joint Venture (the "Citizens JV
Interest").
D. Citizens desires to sell the Citizens JV Interest to Adelphia, and
pursuant to Section 7.13 of the Merger Agreement, Adelphia has agreed to
purchase the Citizens JV Interest from Citizens at the Effective Time.
E. Capitalized terms used herein and not defined herein have the
meanings given to such terms in the Merger Agreement.
In consideration of the premises and the respective representations,
warranties, covenants, and agreements set forth herein, the parties agree as
follows.
SECTION 1. Purchase and Sale of the Citizens JV Interest. Subject to
the terms and conditions of this Agreement, at the Effective Time, Citizens will
sell, transfer, convey, assign and deliver to Adelphia and Adelphia will
purchase from Citizens, the Citizens JV Interest. The purchase price to be paid
by Adelphia to Citizens for the Citizens JV Interest is (i) cash in an amount
equal to $27,726,609.78821, (ii) 1,852,302 shares of Adelphia Class A Common
Stock and (iii) 0.119666 fractional shares of Adelphia Class A Common Stock to
be treated in accordance with Section 1.09 of the Merger Agreement
(collectively, the "Purchase Price"). On the Closing Date, Adelphia will (i) pay
to Citizens cash in amount equal to $27,726,609.78821 (plus any cash in lieu of
fractional shares) by wire transfer of immediately available funds to an account
designated by Citizens at least three Business Days prior to Closing and (ii)
deliver to Citizens stock certificates representing 1,852,302 shares of Adelphia
Class A Common Stock. Adelphia will cause the Registration Statement to include
the shares of Adelphia Class A Common Stock to be issued to Citizens pursuant to
this Agreement or, if Adelphia reasonably determines that registration on the
Registration Statement is not permitted under the Securities Act, such shares
will be included in a separate effective registration statement at the time such
shares are issued to Citizens. Adelphia agrees that the provisions of Sections
1.08 and 6.03 of the Merger Agreement shall also be applicable to the shares of
Adelphia Class A Common Stock to be issued to Citizens pursuant to this
Agreement. The closing of the purchase and sale of the Citizens JV Interest will
take place at such time, date and place as the Closing of the Merger.
SECTION 2. Citizens Representations and Warranties. Citizens
represents and warrants to Adelphia that:
(a) Citizens has all requisite power and authority to execute
and deliver this Agreement and to consummate the transaction
contemplated hereby. This Agreement has been duly authorized, executed
and delivered by Citizens and (assuming due execution and delivery by
Adelphia) constitutes the legal, valid and binding obligation of
Citizens, enforceable against Citizens in accordance with is terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally or
by general equitable principles.
(b) Citizens has sole power of disposition with respect to the
Citizens JV Interest.
(c) The Citizens JV Interest is now, and at all times prior to
the Closing Date will be, held by Citizens free and clear of all Liens.
(d) The execution and delivery of this Agreement and
consummation of the transactions contemplated hereby does not:
(i) conflict with or contravene the charter documents
of Citizens, contravene, conflict with or violate any agreement to
which Citizens or the Joint Venture is a party or by which either of
them or any of their property is bound, result in a breach or violation
of or constitute a default under or give rise to termination or any
loss of any material right of or material benefit to the Joint Venture,
or result in the creation of any lien on the Citizens JV Interest or on
any asset of the Joint Venture, except in each case (other than with
respect to the charter documents of Citizens or the Joint Venture) for
such contraventions, conflicts, breaches, violations, defaults, rights
of termination, losses or liens that in the aggregate would not have a
material adverse effect on Citizens or the Joint Venture; or
(ii) require the consent of or notice to any
Governmental Entity or of any third party other than (a) consents under
the HSR Act, (b) consents from or notices to relevant Franchising
Authorities or other third parties in connection with a change of
control of the holder of the Franchises and of the FCC in connection
with a change of control or a transfer of assets of the holder of the
FCC licenses, (c) consents from or notices to lenders under the $200
million Credit Agreement dated as of April 15, 1997 among the Joint
Venture, Societe Generale, as Agent and the banks named therein, (d)
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consent from CTVC and (e) such consents or notices that, if not
obtained or given would not in the aggregate have a material adverse
effect on Citizens or the Joint Venture.
(e) At March 31, 1999, the Joint Venture (1) had not less than
91,000 basic subscribers and (2) had not in excess of $47 million of
liabilities (excluding working capital items incurred in the ordinary
course of business).
(f) Following the transfer of the assets and liabilities of
the Joint Venture to the Century-TCI California joint venture and
transfer of an interest (the "TCI JV Interest") in the Century-TCI
California joint venture to the Joint Venture, the Joint Venture will
not (1) pledge, hypothecate, grant a security interest in, lien,
restrict, transfer, assign, distribute, dividend or otherwise encumber
or dispose of, directly or indirectly, the TCI JV Interest, and (2)
incur, assume or guarantee any indebtedness.
SECTION 3. Adelphia Representations and Warranties. Adelphia represents
and warrants to Citizens that Adelphia has all requisite power and authority to
execute and deliver this Agreement and to consummate the transaction
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by Adelphia and (assuming due execution and delivery by Citizens)
constitutes the legal, valid and binding obligation of Adelphia, enforceable
against Adelphia in accordance with is terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally or by general equitable principles. In addition,
Adelphia hereby makes all of the representations and warranties contained in
Article 4 of the Merger Agreement to Citizens as if such representations and
warranties were fully set forth herein.
SECTION 4. Conditions.
(a) The respective obligations of the parties to consummate
the transactions contemplated hereby are subject to the satisfaction,
at or prior to the Effective Time, of each of the following conditions:
(1) The Merger shall have been consummated.
(2) All notices to and authorizations, consents,
orders and approvals from applicable Governmental Entities
necessary to consummate the transactions contemplated hereby
shall have been obtained and shall be in effect.
(b) The obligation of Adelphia to consummate the transactions
contemplated by this Agreement is subject to the condition that each of
the representations and warranties of Citizens contained in this
Agreement shall have been true and correct in all material respects
when made and on and as of the Closing Date as if made on and as of
such date, and Citizens shall have executed the mutual release in the
form attached hereto as Exhibit 1.
(c) The obligation of Citizens to consummate the transactions
contemplated by this Agreement is subject to the condition that each of
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the representations and warranties of Adelphia contained in this
Agreement shall have been true and correct in all material respects
when made and on and as of the Closing Date as if made on and as of
such date, and Adelphia shall have executed the mutual release in the
form attached hereto as Exhibit 1.
SECTION 5. Covenants and Acknowledgments.
(a) CTVC and Citizens hereby waive any and all restrictions on
transfer contained in the Joint Venture Agreement or any other
organizational document of the Joint Venture to the extent required to
consummate the transactions contemplated by this Agreement or any other
aspect of Adelphia's acquisition of the Citizens JV Interest.
(b) The parties hereto acknowledge and agree that the Joint
Venture is a Company Subsidiary as that term is defined and used in the
Merger Agreement.
SECTION 6. Miscellaneous.
(a) This Agreement will automatically terminate on the date of
termination of the Merger Agreement.
(b) Upon the closing of the purchase and sale of the Citizens
JV Interest, the Joint Venture Agreement and related Management
Agreement between Citizens and Century shall automatically terminate.
(c) This Agreement will be construed in accordance with and
governed by the law of the state of Delaware applicable to agreements
entered into and to be performed wholly within such State.
(d) This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
this Agreement will become effective when each party shall have
received counterparts hereof signed by all of the other parties.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed by its respective authorized representative as of the day and year
first above written.
CITIZENS CABLE COMPANY
By: /s/ Xxxxxxx Xxx
Name: Xxxxxxx Xxx
Title: Chairman and CEO
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: Executive Vice President
By executing this signature page, the undersigned agrees to Section 5(a) above:
CENTURY TELECOMMUNICATIONS
VENTURE CORP.
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: CFO
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Exhibit 1
FORM OF MUTUAL RELEASE
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged the undersigned, the Citizens
Century Cable Television Venture (the "Joint Venture") and Adelphia
Communications Corporation, a Delaware corporation ("Adelphia"), hereby each
irrevocably release and forever discharge Citizens Cable Company, a Delaware
corporation ("Citizens") as well as its respective successors, assigns,
affiliates, directors, officers, employees, agents, and shareholders, and
Citizens hereby irrevocably releases and forever discharges the Joint Venture
and Adelphia as well as their respective successors, assigns, affiliates,
directors, officers, employees, agents, shareholders and partners (collectively,
the "Released Parties"), from all liabilities, costs, expenses, obligations,
claims and demands of any nature whatsoever which any of the undersigned ever
had, now has or hereafter may have against any of the Released Parties in
connection with the Joint Venture, the Joint Venture Agreement of the Joint
Venture dated as of September 22, 1994 (as the same may have heretofore been or
hereafter be amended, restated, modified or supplemented the "Joint Venture
Agreement"), or arising out of or relating to Citizen's or Century
Telecommunications Venture Corp.'s status as a partner of the Joint Venture,
other than any such liabilities, costs, expenses, obligations, claims and
demands arising out of (i) Citizens and Adelphia's obligations under the
Purchase Agreement dated as of the date hereof pursuant to which Adelphia has
agreed to purchase Citizens' interest in the Joint Venture and (ii) any breach
of any provision of the Joint Venture Agreement which results in a material
adverse effect on the non-breaching party and is caused by, results from or
arises out of an act of fraud, gross negligence or willful misconduct on the
part of the breaching party (each a "Released Claim").
The undersigned agree to execute and deliver such additional
releases and other documents which may be reasonably necessary to evidence the
release contemplated hereby.
This Mutual Release may be executed in one or more
counterparts which, when taken together, shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the undersigned have executed this Mutual
Release as of the ________ day of July, 1999.
CITIZENS CENTURY CABLE
TELEVISION VENTURE
By: CENTURY TELECOMMUNICATIONS VENTURE CORP., as partner
By:
Name:
Title:
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ADELPHIA COMMUNICATIONS CORP.
By:
Name:
Title:
CITIZENS CABLE COMPANY
By:
Name:
Title:
