HIGHLAND HOLDINGS
MAIN AT WATER STREET
COUDERSPORT, PA 16915
April 9, 1999
Adelphia Communications Corporation
Main at Water Street
Coudersport, Pennsylvania 16915
Re: Purchase of Shares of Adelphia Communications Corporation's
Class B Common Stock, $.01 par value per share (the 'Common Stock')
Gentlemen:
The undersigned hereby agrees to purchase directly from you, and you
agree to sell to the undersigned, upon the terms and subject to the conditions
set forth herein, at a per share price equal to the Purchase Price per Share (as
hereafter defined), that number of shares (the 'Shares') of the Common Stock of
Adelphia Communications Corporation, a Delaware corporation (the 'Company')
which equals the lesser of (a) the number of unissued shares of Common Stock or
(b) the Investment (as hereafter defined) divided by the Purchase Price per
Share. The Purchase Price per Share shall equal the sum of (a) the gross
proceeds less underwriting discount received by the Company per share from the
first underwritten public offering after the date hereof of Class A Common
Stock, $.01 par value per share, of the Company which offering results in gross
proceeds of at least $100 million to the Company (the 'Underwritten Public
Offering') and (b) the Additional Amount (as hereafter defined). The Additional
Amount shall be equal to an amount computed, to the eighth decimal place, as
though interest were paid at the Libor Rate in Effect (as hereafter defined)
plus 75 basis points (0.0075) on the per share amount determined under clause
(a) of the definition of Purchase Price per Share for each period of three
months (or, in the case of the final period, portion thereof if less than three
months) subsequent to the date of the closing of the Underwritten Public
Offering until the date of the closing hereunder. The Libor Rate In Effect shall
mean a rate determined on the first day of each period of three months (or, in
the case of the final period, portion thereof if less than three months)
subsequent to the Underwritten Public Offering equal to the quotient, expressed
as a percentage (rounded to the nearest 1/100th of 1%), resulting from the
division of (x) the average (rounded to the nearest 1/16th of 1%) of the
interest rates per annum at which deposits of United States Dollars are offered
to money center banks in the London interbank market for deposits of three
months by (y) the percentage equal to 100% minus the reserve percentage
applicable on that day under regulations issued by the Board of Governors of the
Federal Reserve System for determining the maximum reserve requirement for a
member bank of the Federal Reserve System with respect to Eurocurrency
liabilities having a three month term. The Company shall determine in good faith
the Libor Rate in Effect for each such period. The Investment shall mean an
amount equal to $250,000,000; provided, however, that the undersigned may
increase the Investment to an amount not to exceed $375,000,000 by delivering a
final written election to such effect to the Company on or before the time at
which the Company executes and delivers the underwriting agreement for the
Underwritten Public Offering. The Underwritten Public Offering shall include
without limitation a transaction in which one or more investment banking firms
purchase Class A Common Stock from Adelphia in a block trade for resale to its
or their customers pursuant to a prospectus or prospectus supplement in addition
to a transaction in which one or more investment bankers are denominated as
'underwriters' for the Company in a prospectus or prospectus supplement filed
with the Securities and Exchange Commission.
Each of the parties hereto represents and warrants that it has full
power and is duly authorized to enter into and perform this agreement; that it
has all necessary corporate or partnership approvals (subject in the case of the
Company to any shareholder approval required by law) necessary to do so; that
the execution and performance of this agreement will not conflict with the
organic corporate or partnership documents of it or any order of a governmental
body or agency (subject to any regulatory approvals or regulatory filings and
expiration of waiting periods required by law) or material agreement to which it
is a party or by which it is bound; and that this Agreement is enforceable in
accordance with it terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, fraudulent conveyance and other laws of general applicability
relating to or affecting creditors rights and to general equity principles. The
parties hereto agree that the undersigned is entitled to rely on the
representations and warranties made by the Company in any underwriting or
purchase agreement entered into by the Company with the investment banking firm
or firms conducting the Underwritten Public Offering; provided, however, that
the undersigned represents and warrants to the Company that such representations
and warranties will be true and correct to the best of its knowledge.
Each party's obligations hereunder shall be conditioned upon the
Underwritten Public Offering having occurred, any required approvals having been
obtained, any required filings having been made and any required waiting periods
having expired, and the other party's representations and warranties being true
and correct on and as of the closing date for the sale of the Shares hereunder
(except (i) for representations and warranties which expressly relate solely to
an earlier date or time, which representations or warranties shall be true and
correct on and as of the specific dates or times referred to therein and (ii)
for representations and warranties which are not true and correct due to matters
subsequent to the date of the closing of the Underwritten Public Offering which
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have occurred in the Company in the ordinary course of its business, which have
occurred in the Company and been authorized by the Board of Directors of the
Company or which have occurred in the Company and been authorized by any
individual affiliate of the undersigned who is an executive officer of the
Company). A closing on the purchase of the Shares hereunder shall be held at the
principal executive offices of the Company at a mutually agreeable date
following the Underwritten Public Offering; provided, however, that the closing
shall occur no later than 270 days from the date of the closing of the
Underwritten Public Offering. At such closing, (i) the Company shall deliver to
the undersigned certificates for the Shares duly executed in such name or names
as the undersigned shall have requested bearing appropriate securities laws
legends, an opinion of counsel that the Shares have been duly authorized, are
validly existing and fully paid and a registration rights agreement for the
Shares in form similar to the existing registration rights agreements, entered
into in the two years prior to the date hereof, between the Company and the
undersigned or its affiliates and (ii) the undersigned shall deliver to the
Company the purchase price for the Shares in immediately available funds. In the
event that the Underwritten Public Offering does not occur and close on or
before the date which is 365 days from the date hereof, this Agreement shall be
null and void and neither party shall have any liability to the other hereunder.
The obligation of the undersigned to consummate the purchase of Common Stock
hereunder will be subject to termination in the discretion of the undersigned
if, prior to consummation, (i) trading in the Company's Class A Common Stock has
been suspended by the Securities and Exchange Commission or the Nasdaq National
Market or trading in securities generally on the New York Stock Exchange or the
Nasdaq National Market has been suspended, (ii) a banking moratorium has been
declared either by Federal or New York State authorities, or (iii) there has
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war or other calamity or crisis the effect of
which on financial markets is such as to make it, in the reasonable judgment of
the undersigned, materially impracticable to proceed with such consummation.
The undersigned agrees not to, and agrees to cause the individual
members of the Rigas family and their affiliates not to, sell any shares of
Class B Common Stock held by it or them for a period of six months after the
closing of the purchase of Class B Common Stock under this Agreement (but such
period shall not in any event terminate later than one year from the closing of
the Underwritten Public Offering), except that such sales shall be permitted (a)
to affiliates of the undersigned or the individual members of the Rigas family,
(b) in connection with a sale of all or substantially all of all outstanding
classes of common stock of the Company, (c) pursuant to the written consent of
the Company authorized by a majority of the members of its Board of Directors
who are not individual members of the Rigas family and who are not financially
interested in such proposed sale of Class B Common Stock, or (d) pursuant to a
default under a bona fide pledge arrangement, provided that the foregoing
provisions and restrictions shall be subject to the terms of any agreement
existing on the date of this Agreement, including without limitation the Class B
Stockholder Agreement among certain holders of Class B Common Stock and the
Company dated July 14, 1986, as amended.
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The aggregate liability of the undersigned and any of its officers,
directors, shareholders, partners or other affiliates (collectively, the
'Undersigned Affiliate Group') for any and all losses, claims, demands whether
for specific performance or otherwise, damages, liabilities, obligations, costs
and expenses (including without limitation, reasonable fees and disbursements of
counsel however sustained or incurred, and including, without limitation, any of
the foregoing enumerated items arising from any action or proceeding involving
any third party) sustained or incurred by or claimed against one or several of
the Undersigned Affiliate Group or otherwise with respect to the subject matter
of this Agreement and the transactions contemplated hereby (collectively,
'Damages') is, and shall be, limited to an amount equal to the greater of (i)
the product determined by multiplying the number of Shares to be purchased
hereunder by the positive excess, if any, of the Purchase Price per Share over
the weighted average trading price during the twenty trading days preceding the
270th day from the date of the closing of the Underwritten Public Offering or
(ii) an amount determined by multiplying the number of Shares to be purchased
hereunder by the Additional Amount per share assuming that a closing on the sale
of the Shares had occurred on the 270th day from the date of the closing of the
Underwritten Public Offering. The Company agrees not to seek any recovery for
Damages or otherwise with respect to the subject matter of this Agreement and
the transactions contemplated hereby which when aggregated with any other
recovery of the Company would result in the Company obtaining from the
Undersigned Affiliate Group an amount in excess of the amount permitted by the
preceding sentence for any and all Damages. In no event shall any of the
Undersigned Affiliate Group be liable for any special, indirect, or
consequential damages sustained by the Company or punitive damages as a result
of a breach of this Agreement or arising out of this Agreement and the
transactions contemplated hereby.
No commissions or discounts shall be paid to any placement agent for
the purchase or sale of the Shares. The Shares shall be purchased and shall be
held for investment.
This Agreement may be assigned by the undersigned to any affiliate of
the undersigned provided that a majority of John Rigas, Michael Rigas, Timothy
Rigas and James Rigas consent in writing to such assignment. This Agreement may
be executed in one or more counterparts each of which, taken together, shall
constitute one and the same agreement.
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This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York without giving effect to the
principles of conflicts of law thereof.
Very truly yours,
Highland Holdings
By /s/ Michael J. Rigas
Name: Michael J. Rigas
Title: General Partner
Agreed to and accepted on this 9th day of April, 1999 by.
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ James P. Rigas
Name: James P. Rigas
Title: Executive Vice President
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Stock Purchase Agreement (Class B) - Adelphia Communications Corp. and Highland Holdings
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