SERIES C PREFERRED STOCK PURCHASE AGREEMENT
between
ADELPHIA COMMUNICATIONS CORPORATION
and each of
THE PURCHASERS WHO ARE PARTIES HERETO
JUNE 22, 1997
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES C PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is
made as of June 22, 1997, between ADELPHIA COMMUNICATIONS CORPORATION, a
Delaware corporation (the "Company"), and each of the Purchasers listed on the
signature pages hereof (each a "Purchaser" and collectively, the "Purchasers").
PREAMBLE
The Company proposes to issue and sell to the Purchasers, and the
Purchasers propose to purchase from the Company, the number of shares of the
Company's Series C Convertible Preferred Stock, par value $.0l per share (the
"Series C Preferred Stock"), set forth opposite their respective names on
Schedule 2.1 attached hereto.
Therefore, in consideration of the mutual promises set forth herein and
intending to be legally bound hereby, the parties agree as follows:
1. CERTAIN DEFINITIONS
Capitalized terms used herein and not otherwise defined shall have the
following meanings:
"Affiliate" shall mean, with respect to any specified Person, a Person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with the Person specified, including
without limitation any director, partner or principal of the Person specified.
"Business Day" shall mean any day other than a Saturday, Sunday, legal
holiday or other day on which banks are not open in Pittsburgh, Pennsylvania.
"Closing" shall mean the consummation of the transactions contemplated
hereby and by the other Transaction Documents to be consummated on the Closing
Date.
"Closing Date" shall mean the date when the Closing occurs which shall
be the same date as the date of the closing of the Proposed Offerings.
"Commission" shall mean the United States Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
"Common Stock" shall mean all classes and categories of the common
stock of the Company whether issued or issuable, including without limitation
the Company's Class A Common Stock, par value $.01 per share.
"Final Offering Memorandum" means the final offering memorandum
prepared in conjunction with the Proposed Offerings.
"GAAP" shall mean United States generally accepted accounting
principles, which shall include without limitation official interpretations
thereof by the Financial Accounting Standards Board and its successors.
"Governmental Person" shall mean any governmental, quasi-governmental,
judicial, public or statutory instrumentality, authority, agency, bureau, body
or entity of the United States of America or of any state, county, municipality
or other political subdivision located therein.
"Governmental Rule" shall mean any law (including common law), statute,
rule, regulation, ordinance, code, order, writ, judgment, injunction, decree,
guideline, directive or decision of any Governmental Person, whether now or
hereafter existing, as any of the same may be amended.
"Material Adverse Effect" shall have the meaning assigned to that term
in Section 3.3.
"Offering Documents" shall mean the Company's Annual Report on Form
10-K for fiscal year 1997 as filed with the Commission, the Company's
Registration Statement on Form S-4 at File No. 333-26467, the Offering
Memorandum and such other documents as have been delivered to the Purchasers by
the Company in connection with this Agreement.
"Offering Memorandum" shall mean the Preliminary Offering Memorandum,
or the latest draft thereof available as of the date of this Agreement, relating
to the Proposed Offerings.
"Person" shall mean any individual, partnership, corporation, trust,
joint venture, unincorporated organization or other entity, including without
limitation any Governmental Person.
"Proposed Offerings" shall mean the proposed offerings by the Company
of senior notes due 2007 and cumulative exchangeable preferred stock due 2012.
"Register," "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act and the declaration or ordering of the effectiveness of such
registration statement by the Commission.
"Registration Rights Agreement" shall have the meaning assigned to that
term in Section 5.1.
"Securities Act" shall mean the Securities Act of 1933 and all rules,
regulations and orders issued thereunder, as any of the same may be amended.
"Transaction Documents" shall mean the Registration Rights Agreement
and this Agreement.
2. SERIES C PREFERRED STOCK PURCHASE TERMS
Purchase of Series C Preferred Stock.
Purchase and Sale. Subject to the terms and
conditions and in reliance upon the representations and warranties set forth
herein, the Company shall issue and sell to each of the Purchasers, and each of
the Purchasers shall purchase from the Company, the number of shares of Series C
Preferred Stock (collectively, the "Shares") for the consideration (the
"Purchase Price") set forth opposite their respective names on Schedule 2.1.
Payment. Each Purchaser shall pay in full the
Purchase Price in cash at the Closing.
Closing. The Closing shall take place immediately prior to
the closing of the Proposed Offerings or at such time or place, as the parties
may mutually agree upon and shall be subject to the conditions set forth in
Section 5 hereof.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each of the Purchasers as
follows:
The Offering Documents and any amendments or supplements
thereto did not and will not, as of their respective dates, contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that this representation and
warranty and others made herein by the Company shall not apply to any statements
or omissions made in reliance upon and in conformity with information furnished
in writing to the Company by a Purchaser concerning such Purchaser expressly for
use therein (the "Purchaser Information"). The Offering Documents, as of their
respective dates, contain all the information specified in, and meeting the
requirements of, Rule 144A(d)(4) under the Act and the Final Offering Memorandum
as of the Closing Date will not contain an untrue statement of a material fact
or omit to state a matierial fact necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading;
The Company has not sustained since March 31, 1997 any
material loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Documents; and since the respective dates as of
which information is given in the Offering Documents, there has not been any
reduction in the consolidated stockholders' equity or change in the capital
stock, as applicable (other than reductions in the ordinary course of business
consistent with prior periods), material increase in the total amount of
short-term debt (excluding trade payables) and long-term debt of the Company or
any of its material subsidiaries (the "Subsidiaries") or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position, partners'
equity, shareholders' equity or results of operations of the Company and its
Subsidiaries, otherwise than as set forth or contemplated in the Offering
Documents;
Each of the Company and its Subsidiaries has good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the Offering
Documents or such as do not affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its Subsidiaries; and any real property and buildings held under
lease by the Company and its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries; except in any case that would not
have a material adverse effect on the business, general affairs, management or
financial position (other than reductions in the ordinary course of business
consistent with prior periods), results of operations or prospects of the
Company and its Subsidiaries, taken as a whole (a "Material Adverse Effect");
(i) Each of the Subsidiaries that are partnerships has been
duly formed and is validly existing as a partnership in good standing under the
laws of its state of formation, with full power and authority (partnership and
other) to own its properties and conduct its business as described in the
Offering Documents, and has been duly qualified as a foreign partnership for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such jurisdiction
except where the failure to so qualify would not have a Material Adverse Effect;
and (ii) each of the Company and the Subsidiaries that are corporations has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of its state of incorporation, with full power and authority
(corporate and other) to own its properties and conduct its business as
described in the Offering Documents, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so qualified in
any such jurisdiction except where the failure to so qualify would not have a
Material Adverse Effect;
Each of the Company and its Subsidiaries has the ownership or
authorized capitalizations, as the case may be, as set forth in the Offering
Documents except as otherwise set forth on Schedule 3.26, and all of the
partnership interests of the Subsidiaries that are partnerships and all of the
issued shares of capital stock of its Subsidiaries that are corporations have
been duly and validly authorized and issued and with respect to shares of
capital stock are fully paid and nonassessable; and all of the partnership
interests of the Subsidiaries disclosed in the Offering Documents as being owned
directly or indirectly by the Company and all of the issued shares of capital
stock of the Subsidiaries that are corporations have been duly and validly
authorized and issued, are fully paid and nonassessable and are owned directly
or indirectly by the Company free and clear of all liens, encumbrances, equities
or claims (other than liens to secure indebtedness under credit facilities
disclosed in the Offering Documents);
The Shares have been duly authorized and, upon delivery of
and payment for such Shares as herein provided, each Purchaser will acquire good
and valid title thereto, free and clear of any claim, suit, proceedings, call,
voting trust, proxy, restriction, security interest, lien or other encumbrance
of any kind or nature whatsoever; and the shares of Class A Common Stock
issuable upon conversion of the Series C Preferred Stock have been duly and
validly reserved and, when issued in accordance with the conversion rights
applicable to the Series C Preferred Stock, will be duly authorized, validly
issued, fully paid and nonassessable with no personal liability attaching to the
ownership thereof, and free and clear of all liens, charges, restrictions
(except those imposed by applicable state and federal securities laws), claims
and encumbrances; and neither the issuance, sale or delivery of the Series C
Preferred Stock nor the issuance or delivery of the shares of Common Stock
issuable upon conversion of the Series C Preferred Stock is subject to any
preemptive right of shareholders of the Company or to any right of first refusal
or other right in favor of any Person;
None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of the
Shares) will violate or result in a violation of Section 7 of the Exchange Act,
or any regulation promulgated thereunder, including, without limitation,
Regulations G, T, U and X of the Board of Governors of the Federal Reserve
System;
Prior to the date hereof, neither the Company nor any of its
Subsidiaries (other than the Purchasers or any Person acting on its behalf as to
which the Company makes no representation) has taken, directly or indirectly,
any action which is designed to or which has constituted or which might have
been expected to cause or result in stabilization or manipulation of the price
of any security of the Company in connection with the offering of the Shares;
This Agreement has been duly authorized by the Company and,
when executed and delivered by the Company and the Purchasers, will constitute a
valid and legally binding instrument, enforceable against the Company in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
The issue and sale of the Shares and the compliance by the
Company with all of the provisions of the Registration Rights Agreement and this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any material
indenture, mortgage, deed of trust, sale/leaseback agreement, loan agreement or
other similar financing agreement or instrument or other agreement or instrument
(including, without limitation, any license or franchise granted to the Company
or one of its Subsidiaries by a local franchising governmental body) to which
the Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries is bound or has rights under or to which any of the property
or assets of the Company or any of its Subsidiaries is subject, nor will such
action result in any violation of the provisions of the certificate of
incorporation or bylaws of the Company or its Subsidiaries that are corporations
or the certificates of limited partnership or the partnership agreements of its
Subsidiaries that are partnerships or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its Subsidiaries or any of their properties; and, except
as related to the Xxxx-Xxxxx-Xxxxxx Act (as defined) and necessary approvals
thereunder relating to the conversion of the Shares, no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the Shares or
the consummation by the Company of the transactions contemplated by this
Agreement, or the Registration Rights Agreement, other than (i) such consents,
approvals, authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Purchasers, (ii) the filing of a registration
statement by the Company with the Commission pursuant to the Securities Act
pursuant to the Registration Rights Agreement, and (iii) such other consents,
approvals, authorizations, registrations or qualifications as may be required
under the Securities Act, state or foreign securities or Blue Sky laws in
connection with the offer or resale registration contemplated in the
Registration Rights Agreement in connection with the resale of the Shares by the
Purchasers;
None of the Company or its Subsidiaries is in violation of
its certificate of incorporation or bylaws, as the case may be, or in default in
the performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, sale/leaseback
agreement, loan agreement or other similar financing agreement or instrument or
other agreement or instrument (including, without limitation, any license or
franchise granted to the Company or a Subsidiary by a local franchising
governmental body) to which the Company or a Subsidiary is a party or by which
it or any of its properties may be bound, except for such defaults as would not
have individually or in the aggregate a Material Adverse Effect, nor is the
Company or any of its Subsidiaries in violation of a Governmental Rule, order or
permit, or license of any Governmental Person which violation would result in a
Material Adverse Effect;
The statements set forth herein, including Exhibit A, insofar
as they describe the terms of the Shares, and those statements set forth under
the captions "Business" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" of the Offering Documents, insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair in all material respects;
None of the Company or its Subsidiaries is or, after giving
effect to the offering and sale of the Shares, will be an "investment company,"
or an entity "controlled" by an "investment company," as such terms are defined
in the United States Investment Company Act of 1940, as amended (the "Investment
Company Act");
None of the Company or any Person acting on its behalf (other
than the Purchasers or Affiliates of the Purchasers, as to which the Company
makes no representation or warranty) has offered or sold the Shares by means of
any general solicitation or general advertising within the meaning of Rule
502(c) under the Securities Act;
Within the preceding six months, none of the Company or any
other Person acting on behalf of the Company (other than the Purchasers or
Affiliates of the Purchaser, as to which the Company makes no representation or
warranty) has offered or sold to any Person any Shares, or any securities of the
same or a similar class as the Shares, other than the Shares offered or sold to
the Purchasers hereunder and other than as described in the Offering Documents;
Neither the Company nor any of its Affiliates does business
with the government of Cuba or with any Person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;
Other than as set forth in the Offering Documents (including
those matters referred to therein relating to general rulemakings and similar
matters relating generally to the cable television industry), there are no legal
or governmental proceedings pending to which the Company or any of its
Subsidiaries is a party or of which any property of the Company or any of its
Subsidiaries is the subject which, if determined adversely to the Company or any
of its Subsidiaries, would individually or in the aggregate have a Material
Adverse Effect, and to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or by others; and
except with respect to general rulemakings and similar matters relating
generally to the cable television industry, during the time the Systems (as
defined below) have been owned by the Company or a subsidiary (i) there has been
no adverse judgment, order or decree issued by the United States Federal
Communications Commission (the "FCC") relating to any of the Systems that has
not been disclosed in the Offering Documents that would be required to be
disclosed in a public offering registered under the Act, and (ii) there are no
actions, suits, proceedings, inquiries or investigations by the FCC pending or
threatened in writing against or affecting the Company, any of its Subsidiaries
or any System;
Deloitte & Touche LLP, who has reported on the financial
statements of the Company, is an independent public accountant as required by
the Securities Act and the rules and regulations of the Commission thereunder;
and the financial statements set forth in the Offering Documents fairly present
the financial position of the Company as of the respective dates thereof and
have been prepared in conformity with generally accepted accounting principles
(GAAP) except as otherwise indicated in the independent auditor's report
thereon;
Except for matters covered by Section 3.22 or with respect to
matters that would not individually or in the aggregate have a Material Adverse
Effect, (i) the Company and its Subsidiaries have made all filings, recordings
and registrations with, and possess all validations or exemptions, approvals,
orders, authorizations, consents, licenses, certificates and permits from, the
FCC, applicable public utilities and other federal, state and local regulatory
or governmental bodies and authorities or any subdivision thereof, including,
without limitation, cable television franchises, pole attachment agreements and
cable antenna relay service, broadcast auxiliary, earth station, business radio,
microwave or special safety radio service licenses issued by the FCC
(collectively, the "Authorizations") necessary or appropriate to own, operate
and construct the cable communication systems owned by them (the "Systems") or
otherwise for the operation of their businesses and are not in violation
thereof; (ii) all such Authorizations are in full force and effect, and no event
has occurred that permits, or after notice or lapse of time could permit, the
revocation, termination or modification of any Authorization which is necessary
or appropriate to own, operate and construct the Systems or otherwise for the
operation of any such business; (iii) none of the Company or any of its
Subsidiaries is in violation of any duty or obligation required by the United
States Communications Act of 1934, as amended (the "Communications Act"), or any
FCC rule or regulation applicable to the operation of any portion of any of the
Systems; (iv) none of the Company or any of its Subsidiaries is in violation of
any duty or obligation required by state or local laws, or local rules or
regulations, applicable to the operation of any portion of any of the Systems;
(v) there is not pending or, to the best knowledge of the Company or any of its
Subsidiaries, threatened any action by the FCC or state or local regulatory
authority to modify, revoke, cancel, suspend or refuse to renew any
Authorization; (vi) other than as described in the Offering Documents, there is
not now issued or outstanding or, to the best knowledge of the Company or any of
its Subsidiaries, threatened any notice of any hearing, material violation or
material complaint against the Company or any of its Subsidiaries with respect
to the operation of any portion of the Systems, and none of the Company or its
Subsidiaries has any knowledge that any Person intends to contest renewal of any
material Authorization;
(i) (A) The Company and its Subsidiaries have entered into,
or have rights under, all required programming agreements (including, without
limitation, all nonbroadcast affiliation agreements under which the Company and
its Subsidiaries are accorded retransmission rights relating to programming that
the Systems provide to their customers) that are material to the conduct of
their business as described in the Offering Documents; and (B) all such material
agreements are in full force and effect, and none of the Company, any of its
Subsidiaries or any of its affiliates has received any written notice of
revocation or material modifications of such material agreements; and (ii) (A)
either the Company or its Subsidiaries have entered into agreements with the
television stations that have notified the Company or its Subsidiaries that such
station's respective consent is required to carry such stations on the Systems
or has ceased carrying such stations without resulting in a Material Adverse
Effect; (B) all such agreements grant the Company or one of its Subsidiaries
retransmission consent in exchange for various noncash consideration; and (C)
all such agreements are in full force and effect and are not subject to
revocation (except in the case of material breach by the Company or its
Subsidiaries) or material modifications, and no event has occurred that permits,
or after notice or lapse of time could permit, the revocation, termination or
material modification of any such agreement, except where the failure of such
agreements to be in full force and effect or such revocation would not, in
either case, individually or in the aggregate have a Material Adverse Effect;
Except for matters that would not individually or in the
aggregate have a Material Adverse Effect, (i) all registration statements and
all other documents (including but not limited to annual reports) required by
the FCC in connection with the operation of the Systems have been filed with the
FCC; (ii) all frequencies within the restricted aeronautical and navigational
bands (i.e., 108-136 MHz and 225-400 MHz) which are currently being used in
connection with the operation of the Systems have been authorized for such use
by the FCC; (iii) each of the Systems subject to Equal Employment Opportunity
Commission ("EEO") compliance certification by the FCC has been certified by the
FCC for annual EEO compliance during the time such Systems have been owned by
the Company or its Subsidiaries; and (iv) all towers associated with the Systems
are in compliance with the rules and regulations of the United States Federal
Aviation Administration;
Except for matters that would not individually or in the
aggregate have a Material Adverse Effect, none of the Company or any of its
Subsidiaries is in breach or violation of, or in default under, any of the
terms, conditions or provisions of the Communications Act or the rules,
regulations or policies of the FCC thereunder;
(i) Except for matters that would not individually or in the
aggregate have a Material Adverse Effect, all statements of accounts and any
other filings that are required under Section 111 of the United States Copyright
Act of 1976, as amended, in connection with the retransmission of any broadcast
television and radio signals on the Systems have been timely filed with the
United States Copyright Office, and indicated royalty payments have been made
for each System for each accounting period during which such Systems have been
owned by the Company or its Subsidiaries; (ii) none of the Company, any of its
Subsidiaries or any System has received any inquiry or request from the United
States Copyright Office or from any other party challenging or questioning any
such statements of account or royalty payments; and (iii) no claim of copyright
infringement has been made or threatened in writing against the Company, any of
its Subsidiaries or any System;
Neither the execution and delivery of this Agreement or the
Registration Rights Agreement nor the consummation of the transactions
contemplated hereby and thereby nor compliance with the terms, conditions and
provisions thereof by the Company will conflict with the Communications Act or
the rules, regulations or policies of the FCC thereunder, or will cause any
suspension, revocation, impairment, forfeiture, nonrenewal or termination of any
material license, permit, franchise, certificate, consent, authorization,
designation, declaration, filing, registration or qualification;
Neither the execution and delivery of this Agreement or the
Registration Rights Agreement nor the execution, delivery, offer, issuance and
sale of the Shares nor compliance with the terms, conditions and provisions
thereof by the Company requires any license, permit, franchise, certificate,
consent, authorization, designation, declaration, filing, registration or
qualification by or with the FCC; and
The capitalization as of the date hereof the Company is set
forth on Schedule 3.26.
No finders, brokers, agents, financial advisors, investment
bankers or other intermediaries have been employed by or otherwise acted on
behalf of the Company, and the Company has not incurred any liability to pay any
fees or other amounts to any such Person, in connection with any of the
transactions contemplated by the Transaction Documents.
Assuming the closing of this Agreement and the transactions
contemplated herein, the Company would be in a position such that it would be
able to begin making the dividend payments on the Series C Preferred Stock as
provided in the Certificate of Designations.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each of the Purchasers, severally and not jointly, represents and
warrants to the Company as follows:
(a) Each Purchaser represents that the Series C Preferred
Stock to be received by it hereunder will be acquired for investment for its own
account, not as a nominee or agent, and not with a view to the sale or other
transfer of any part thereof or interest therein, and that it has no present
intention of selling or otherwise transferring the same or any of the Class A
Common Stock into which such Series C Preferred Stock is convertible, but
subject nevertheless to any requirement of law that the disposition of its
property shall at all times be within its control. Each Purchaser further
represents that it does not have any contract, undertaking, agreement or
arrangement with any Person relating to the sale or other transfer of any part
of or interest in any of such Series C Preferred Stock or Class A Common Stock
other than as contemplated hereby.
Each Purchaser understands that the Series C
Preferred Stock to be received by it hereunder is not, and that the Class A
Common Stock into which such Series C Preferred Stock is convertible is not and
may not at the time of its issuance be, registered under the Securities Act, on
the ground that the sale provided for in this Agreement and the issuance of the
Series C Preferred Stock is exempt from registration under the Securities Act,
and that the Company's reliance on such exemption is predicated in part on each
Purchaser's representations set forth herein.
Each Purchaser represents that (i) its domicile
(if it is an individual) or its principal place of business (if it is an entity)
is located in the state set forth below its name on the signature page hereof,
(ii) it is an "accredited investor" as defined in Regulation D under the
Securities Act or, in the alternative, (iii) it is experienced in evaluating and
investing in companies such as the Company, has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of its investment hereunder and has the ability to bear the economic risks
of such investment.
Each Purchaser understands that (i) the Company will
permit transfers of the Series C Preferred Stock purchased hereunder and the
Class A Common Stock into which such Series C Preferred Stock is convertible
only when such securities have been registered under the Securities Act and any
other applicable federal or state securities law or when the request for
transfer is accompanied by an opinion of counsel, which opinion and counsel
shall be reasonably acceptable to the Company, to the effect that the proposed
transfer does not require any such registration; provided, however, that a
holder may transfer such securities to an Affiliate of such holder without the
need for an opinion of counsel, (ii) any transfer made or purportedly made in
violation of the foregoing restrictions shall be null and void, and the Company
shall not register or record such attempted transfer in its books and records,
and (iii) the following legend shall be placed on the certificates representing
any of such Preferred or Class A Common Stock:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY OTHER APPLICABLE FEDERAL OR STATE SECURITIES LAW AND MAY
NOT BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS,
EXCEPT AS PROVIDED IN THE PREFERRED STOCK PURCHASE AGREEMENT,
THE HOLDER HEREOF DELIVERS TO THE ISSUER HEREOF AN OPINION OF
COUNSEL, WHICH OPINION AND COUNSEL SHALL BE SATISFACTORY TO
THE ISSUER, TO THE EFFECT THAT THE PROPOSED TRANSFER DOES NOT
REQUIRE ANY SUCH REGISTRATION.
Each Purchaser which is not an individual has the power and
authority to own its properties and assets, to conduct its business as presently
conducted and as presently planned to be conducted, to execute and deliver the
Transaction Documents, to consummate the transactions contemplated thereby and
to perform its obligations thereunder. The execution and delivery by each
Purchaser which is not an individual of the Transaction Documents, the
consummation of the transactions contemplated thereby and the performance by
such Purchaser of its obligations thereunder have been duly and validly
authorized by all necessary proceedings on its part.
This Agreement has been, and on the Closing Date the
Registration Rights Agreement will be, duly and validly executed and delivered
by each Purchaser and constitute, and on the Closing Date will constitute,
legal, valid and binding obligations of each Purchaser enforceable against each
such Purchaser in accordance with their respective terms, except as
enforceability may be affected by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and by general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law).
The execution and delivery by each Purchaser of the
Transaction Documents, the consummation of the transactions contemplated thereby
and the performance by each Purchaser of its obligations thereunder do not and
will not:
in the case of any Purchaser which is not an
individual, violate any of its organizational documents; or
breach or result in a default (or an event which,
with the giving of notice or the passage of time, or both, would constitute a
default) under, require any consent under or give to others any rights of
termination, acceleration, suspension, revocation, cancellation or amendment of
any material agreement, instrument or document to which any Purchaser is a party
or by which any Purchaser or any of its assets is bound.
Except as may relate to the Xxxx-Xxxxx-Xxxxxx Act and any
necessary approvals thereunder relating to the conversion of the Shares, the
execution and delivery by each Purchaser of the Transaction Documents, the
consummation of the transactions contemplated thereby and the performance by
each Purchaser of its obligations thereunder are not prohibited by, and do not
and will not subject any such Purchaser to any fine, penalty or similar sanction
under, any Governmental Rule.
Except as may relate to the Xxxx-Xxxxx-Xxxxxx Act and any
necessary approvals thereunder relating to the conversion of the Shares, no
consent, authorization, approval, exemption or other action by, and no filing,
registration or qualification with, any Governmental Person or other third party
is or will be necessary or advisable in connection with the execution and
delivery by each Purchaser of the Transaction Documents, the consummation of the
transactions contemplated thereby or the performance by each Purchaser of its
obligations thereunder.
There is no pending or, to the best of any Purchaser's
knowledge, threatened action or proceeding of any nature whatsoever seeking to
restrain, prohibit or invalidate any of the transactions contemplated by the
Transaction Documents, or which could result in any of the foregoing, and no
Purchaser has any knowledge of any basis for any such action or proceeding.
No finders, brokers, agents, financial advisors, investment
bankers or other intermediaries have been employed by or otherwise acted on
behalf of any Purchaser, and no Purchaser has incurred any liability to pay any
fees or other amounts to any such Person, in connection with any of the
transactions contemplated by the Transaction Documents.
5. CONDITIONS TO CLOSING
Conditions to the Purchasers' Obligations to Purchase. The
obligation of a Purchaser to purchase the Series C Preferred Stock hereunder is
subject to the fulfillment by the Company to such Purchaser's satisfaction, at
or prior to the Closing Date any of which may be waived in whole or in part by
such Purchaser:
Representations and Warranties. The representations
and warranties of the Company contained herein shall be true and correct in all
material respects as of the date hereof and as of the Closing Date with the same
force and effect as if made on each of such dates.
Performance. The Company shall have performed and
fulfilled all obligations and conditions herein required to be performed or
fulfilled by it on or prior to the Closing Date, and all documents delivered in
connection herewith shall be satisfactory in form and content to each
Purchasers.
Consents; Corporate Action. The Company shall (i)
obtain all consents, authorizations, approvals and exemptions from, and make all
filings, registrations and qualifications with, Governmental Persons and third
Persons and (ii) take all corporate action, in each case as necessary in
connection with the execution and delivery by the Company of the Transaction
Documents, the consummation of the transactions contemplated thereby or the
performance by the Company of its obligations thereunder, and the Purchasers
shall receive copies of all documents and instruments reflecting or evidencing
the same as soon as reasonably practicable.
No Litigation. There shall not be pending or
threatened any action or proceeding seeking to restrain, enjoin, prohibit or
invalidate any of the transactions contemplated by the Transaction Documents,
and no Governmental Order shall have been issued which has any such effect.
No Material Adverse Change. No Material Adverse
Effect with respect to the Company shall have occurred since March 31, 1997, and
no event shall have occurred or condition exist which, in the reasonable
judgment of the Purchasers, is likely to result in a Material Adverse Effect.
Amended Certificate of Incorporation. The Company's
Certificate of Incorporation shall be amended by the filing of a Certificate of
Designation for the Series C Preferred Stock of the Company in substantially the
form attached hereto as Exhibit A subject to such changes as to which the
parties shall in good faith negotiate and mutually agree, which shall have been
filed and become effective.
Officer's Certificate. The Company shall have
delivered to each Purchaser a certificate executed by the President of the
Company certifying as to the matters set forth in subsections (a), (b), (c),
(d), (e), (f), (i) and (j) hereof.
Secretary's Certificate. The Company shall have
delivered to each Purchaser a Certificate signed by the Secretary of the Company
certifying as to the amendment of the Certificate of Incorporation, as amended
pursuant to subsection (f) above, By-Laws, resolutions and incumbency.
Registration Rights Agreement. The Company, the Purchasers and any other parties
thereto shall each have executed and delivered a Registration Rights Agreement
between the Company and the Purchasers in substantially the form of Exhibit B
hereto.
Share Certificates. The Company shall have
delivered to the Purchasers duly authorized and executed certificates evidencing
the shares of Series C Preferred Stock purchased by them hereunder on the
Closing Date.
Conditions to the Company's Obligation to Sell. The
obligation of the Company to issue and sell the Series C Preferred Stock to a
Purchaser hereunder is subject to the fulfillment by such Purchaser, to the
Company's satisfaction, on or before the Closing Date, of each of the following
conditions, any of which may be waived in whole or in part by the Company:
Representations and Warranties. The representations
and warranties of such Purchaser contained herein shall be true and correct as
of the date hereof and as of the Closing Date with the same force and effect as
if made on each such date.
Performance. Such Purchaser shall have performed
and fulfilled all obligations and conditions herein required to be performed or
fulfilled by it on or prior to the Closing Date.
Payment of Purchase Price. Such Purchaser shall
have tendered that portion of the Purchase Price which is payable at the Closing
in accordance with Section 2.1 hereof.
6. ADDITIONAL COVENANTS OF THE COMPANY
Notices.
Commission Filings. Promptly upon transmission
thereof, the Company shall provide to each Purchaser copies of all reports,
definitive proxy statements and registration statements filed by the Company
with the Commission.
Notice of Other Events. Promptly upon becoming
aware thereof, the Company shall give notice to each Purchaser of any breach of
the Company's covenants, representations or warranties set forth in any
Transaction Document.
Reserve for Conversion Shares. If at any time the number of
authorized but unissued shares of Class A Common Stock shall not be sufficient
to effect the conversion of the Series C Preferred Stock or otherwise to comply
with the terms of this Agreement, the Company will forthwith take such corporate
action as may be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purposes.
The Company will obtain any authorization, consent, approval or other action by,
and make any filing with, any court or administrative body that may be required
under applicable state securities laws in connection with the issuance of shares
of Common Stock upon conversion of the Series C Preferred Stock.
Use of Proceeds. The net proceeds from the sale of all Series
C Preferred Stock sold hereunder shall be contributed to certain subsidiaries of
Adelphia and used substantially in the manner and for the purposes of repaying
the senior notes of such subsidiaries..
Expenses. The Company and the Purchasers shall each bear all
of its own respective expenses in connection with the Transaction Documents,
including without limitation the reasonable legal fees and disbursements of
counsel, except as expressly otherwise set forth in the Transaction Documents.
7. MISCELLANEOUS
Good Faith by Company. The Company will not, by amendment to
its Certificate of Incorporation or through any reorganization,
reclassification, consolidation, merger, sale of assets, dissolution, issue or
sale of securities or other action, avoid or seek to avoid the observance or
performance of any of the terms of this Agreement or the terms of the Series C
Preferred Stock, but will at all times in good faith carry out all such terms
and take all such action as may be necessary or appropriate to protect the
rights of the Purchasers under the Transaction Documents or the terms of the
Series C Preferred Stock.
Amendments. This Agreement may be amended or terminated only
by a writing signed by the Company and the Purchasers affected by such
amendment, and any such amendment or termination shall be effective only to the
extent specifically set forth in such writing.
Counterparts; Telefacsimile Execution. This Agreement may be
executed in any number of counterparts, and by each of the parties on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all of which shall constitute but one and the same instrument. Delivery of an
executed counterpart of this Agreement by telefacsimile shall be equally as
effective as delivery of a manually executed counterpart of this Agreement, but
the failure to deliver a manually executed counterpart (in addition to a
counterpart delivered by telefacsimile) shall not affect the validity,
enforceability or binding effect of this Agreement.
Entire Agreement. This Agreement, including the Exhibits and
Schedules hereto, contains the entire agreement of the parties with respect to
the subject matter hereof and supersedes all prior written and oral agreements,
and all contemporaneous oral agreements, relating to such matters.
Equitable Relief. The parties acknowledge and agree that
money damages may not be an adequate remedy for any breach of the provisions
hereof and that any party may apply to a court of competent jurisdiction for
specific performance or injunctive relief in order to enforce or prevent a
breach of this Agreement.
Governing Law. This Agreement shall be a contract under the
laws of the Commonwealth of Pennsylvania and for all purposes shall be governed
by and construed and enforced in accordance with the laws of said Commonwealth.
Indemnification.
Following the Closing and subject to the other terms
and conditions of this Agreement, each party agrees to indemnify, defend and
hold harmless each of the other parties, and their respective successors and
assigns (each an "Indemnified Party") from and against any and all losses,
claims, damages or liabilities, joint or several, including reasonable legal and
other fees and expenses incurred in the investigation and defense of claims and
actions, and amounts paid as indemnification to directors, officers, employees
or agents, whether such claims and actions are brought by third parties or
parties hereto, incurred by an Indemnified Party and arising out of or resulting
from (i) any breach of any of such party's representations or warranties in this
Agreement or (ii) any failure to perform by such party any of its covenants or
agreements contained in this Agreement.
Promptly after receipt by an Indemnified Party under
this paragraph of notice of the commencement of any action, such Indemnified
Party will, if a claim in respect thereof is to be made against any indemnifying
party under this paragraph, notify the indemnifying party in writing of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties. The failure to notify
an indemnifying party promptly of the commencement of any such action, if
prejudicial to such party's ability to defend such action, shall relieve such
indemnifying party of liability to the Indemnified Party under this paragraph to
the extent of such prejudice, but the omission so to notify the indemnifying
party will not relieve the indemnifying party of any liability that the
indemnifying party may have to the Indemnified Party otherwise than under this
paragraph.
Notices. All notices, consents, requests, demands and other
communications required or permitted hereunder:
shall be in writing;
shall be sent by messenger, certified or registered
U.S. mail, a reliable express delivery service or telecopier (with a copy sent
by one of the foregoing means), charges prepaid as applicable, to the
appropriate address(es) or number(s) set forth below; and
shall be deemed to have been given on the date of
receipt by the addressee (or, if the date of receipt is not a Business Day, on
the first Business Day after the date of receipt), as evidenced by (i) a receipt
executed by the addressee (or a responsible Person in his or her office), the
records of the Person delivering such communication or a notice to the effect
that such addressee refused to claim or accept such communication, if sent by
messenger, U.S. mail or express delivery service, or (ii) a receipt generated by
the sender's telecopier showing that such communication was sent to the
appropriate number on a specified date, if sent by telecopier.
All such communications shall be sent to the following addresses or numbers, or
to such other addresses or numbers as any party may inform the others by giving
five Business Days' prior notice:
If to the Company: With copies to:
Adelphia Communications Xxxxxxxx Xxxxxxxxx P.C.
Corporation 00xx Xxxxx, Xxx Xxxxxx Xxxxxx
Xxxx: Chief Financial Officer 000 Xxxxx Xxxxxx
Main at Water Street Pittsburgh, PA 15219
Xxxxxxxxxxx, XX 00000 Attn: Xxxx Xxxxxxxxxxxx, Esq.
Fax: (000) 000-0000 Fax: (000) 000-0000
If to any Purchaser: With copies to:
To the address or number To the individual at the set
forth below such Purchaser's address or number set forth below name
on the signature page hereto such Purchaser's name on the
signature page hereto
Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of each of the parties and their respective
heirs, successors and permitted assigns. Any Purchaser may assign this Agreement
to an Affiliate of such Purchaser ("Assignee"); provided however that (i) such
Assignee shall be deemed to have made the representations and warranties of the
assigning Purchaser as provided in this Agreement and (ii) such assignment shall
not be effective until the Assignee delivers to the non-assigning parties an
executed assumption and undertaking pursuant to which the Assignee agrees to be
bound by and perform all of the obligations of the assigning Purchaser
hereunder.
Waivers. The due performance or observance by the parties of
their respective obligations hereunder shall not be waived, and the rights and
remedies of the parties hereunder shall not be affected, by any course of
dealing or performance or by any delay or failure of any party in exercising any
such right or remedy. The due performance or observance by a party of any of its
obligations hereunder may be waived only by a writing signed by the party or
parties against whom enforcement of such waiver is sought, and any such waiver
shall be effective only to the extent specifically set forth in such writing.
Exhibits and Schedules. The Exhibits and Schedules attached
hereto are an integral part hereof, and all references herein to this Agreement
shall include such Exhibits and Schedules.
Further Assurances. The parties shall from time to time do
and perform such additional acts and execute and deliver such additional
documents and instruments as may be required by applicable Governmental Rules,
including without limitation the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 (the "Xxxx-Xxxxx-Xxxxxx Act"), or reasonably requested by any party to
establish, maintain or protect its rights and remedies or to effect the intents
and purposes of this Agreement.
SIGNATURE PAGE TO SERIES C PREFERRED STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
COMPANY
ADELPHIA COMMUNICATIONS
CORPORATION
By: /s/ Xxxxx Xxxxx
Its: Vice President of Finance
[Purchaser signature pages are attached.]
SIGNATURE PAGE TO SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASER
HIGHLAND HOLDINGS
By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, a general partner
Address: Main at Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Telecopier No.: 814/274-7098
Copies of Notices to:
Name: Xxxx Xxxxxxxxxxxx, Esq.
Address: Xxxxxxxx Ingersoll P.C.
00xx Xxxxx, Xxx Xxxxxx Xxxxxx
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Telecopier No.: 412/562-1041
SIGNATURE PAGE TO SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASER
TELESAT CABLEVISION, INC.
By: /s/ X. X. Xxxxxx
Its: Vice President
Address: 00000 X.X. Xxxxxxx Xxx
Xxxxx 000
X. Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Telecopier No.: 561/691-3615
Copies of Notices to:
Name: Xxxxxxx Xxxxx-Xxxxxxxxxx
Address: Steel Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxxxxx Xxxx.
Xxxxx, Xxxxxxx 00000
Telecopier No.: 305/577-7001
SCHEDULE 2.1
Purchaser No. of Shares Purchase Price
Highland Holdings 80,000 $77,600,000
Telesat Cablevision, Inc. 20,000 $19,400,000
SCHEDULE 3.26
CAPITALIZATION OF COMPANY
The capitalization of the Company is as set forth in the Offering Memorandum.
EXHIBIT A
CERTIFICATE OF DESIGNATION
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
