Highland 2000, L.P.
ONE NORTH MAIN STREET
COUDERSPORT, PA 16915
November 9, 2001
Adelphia Communications Corporation
One North Main Street
Coudersport, Pennsylvania 16915
Re: Purchase of 2,000,000 Shares of Adelphia Communications Corporation's
7.5% Series E Mandatory Convertible Preferred 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), 2,000,000 shares (the "Shares") of 7.5% Series E Mandatory
Convertible Preferred Stock, of Adelphia Communications Corporation, a Delaware
corporation (the "Company"). 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 underwritten public offering of the 7.5% Series E Mandatory
Convertible Preferred Stock for which the Company has executed an Underwriting
Agreement with Goldman, Sachs & Co. as of the date hereof (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, any 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, any 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.
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 been consummated, 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 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 three 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 close, 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 the Shares 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 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 per Share 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 for contracts made and to be fully
performed in such state without giving effect to the principles of conflicts of
law thereof.
Very truly yours,
HIGHLAND 2000, L.P., a Delaware limited
partnership
By: Highland 2000, LLC, General Partner,
a Delaware limited liability company
By: /s/ Michael J. Rigas
--------------------
Authorized Member
Agreed to and accepted on this 9th day of November, 2001 by
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ Michael J. Rigas
--------------------
Name: Michael J. Rigas
Title: Executive Vice President
Stock Purchase Agreement (Series E Preferred) - Adelphia Communications Corp. and Highland 2000 LP
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