EXHIBIT 99.3
EXECUTION COPY
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of June 4, 1997 (this "Agreement"),
among INTERMEDIA COMMUNICATIONS INC., a Delaware corporation ("Purchaser"), and
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the individuals and entities whose names and addresses are set forth at the foot
of this Agreement (collectively, the "Stockholders", and each, individually, a
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"Stockholder"), it being understood that the Stockholders are executing this
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Agreement in their capacity as stockholders of the Company (as defined below)
and not in their capacity as directors and officers of the Company.
WHEREAS, Purchaser and its wholly owned subsidiary, Daylight Acquisition
Corp. (the "Subsidiary"), propose to enter into an Agreement and Plan of Merger,
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dated as of the date hereof (the "Merger Agreement"), with DIGEX, Incorporated,
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a Delaware corporation (the "Company"), which Merger Agreement provides, among
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other things, for the acquisition of the Company by Subsidiary through (i) a
tender offer (the "Offer") for any and all shares of Common Stock of the
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Company, par value $.01 per share ("Company Common Stock") for $13.00 per share
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(the "Per Share Amount") and (ii) the second step merger pursuant to which
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Subsidiary will merge with and into the Company (the "Merger") and all
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outstanding shares of Company Common Stock other than shares held by Purchaser
and Subsidiary will be converted into the right to receive not less than the Per
Share Amount in cash; and
WHEREAS, as of the date hereof, the Stockholders own (both beneficially and
of record) the number of shares of Company Common Stock set forth opposite their
respective names at the foot of this Agreement; and
WHEREAS, as a condition to the willingness of Purchaser and the Subsidiary
to enter into the Merger Agreement, Purchaser and the Subsidiary have required
that the Stockholders agree, and in order to induce Purchaser and the Subsidiary
to enter into the Merger Agreement, the Stockholders have agreed, to enter into
this Agreement governing the voting and disposition of the shares of Company
Common Stock now owned and which may hereafter be acquired by any of the
Stockholders (the "Shares").
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NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
1. Tender of Shares Pursuant to the Offer. Each Stockholder hereby
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irrevocably agrees to tender and sell (and not withdraw), pursuant to and in
accordance with the terms of the Offer as amended from time to time, all of
such Stockholder's Shares (provided, that the consideration offered in any
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such amendment is in cash and in an amount equal to the Per Share Amount).
2. Grant of Option. Each Stockholder hereby grants to Purchaser an exclusive
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and irrevocable option (each an "Option", and together the "Options") to
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purchase from such Stockholder any and all Shares held by such Stockholder
(the "Option Shares") at a price equal to the Per Share Amount per Option
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Share. Purchaser may assign to any subsidiary or affiliate of Purchaser
(including Subsidiary) the right to exercise the Option. Each Option may be
exercised individually from each Stockholder, in whole or in part, at any
time or from time to time, on or after the date hereof and prior to the
Termination Date (as defined below). No Stockholder shall, prior to the
termination of the Option, take, or refrain from taking, any action which
would have the effect of preventing or disabling such Stockholder from
delivering the Option Shares or otherwise performing its obligations under
this Agreement. In the event Purchaser wishes to purchase any Option Shares
from any Stockholder, the following procedures shall be followed:
(a) Purchaser shall send a written notice to such Stockholder specifying
the number of Option Shares Purchaser will purchase and the place and
date (on or before the later of ten business days from the date such
notice is mailed and the date of expiration or termination of any
applicable waiting period under Title II of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 0000 (xxx "XXX Xxx")) of closing of such
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purchase. If such closing is to occur sooner than two business days
from the date such notice is mailed, notice shall also be given at the
time such written notice is given by telephone or telecopy.
(b) At the closing of such purchase, (i) Purchaser (or any affiliate or
subsidiary of Purchaser) shall pay to such Stockholder the aggregate
price for the Option Shares so purchased by certified or cashier's
check or wire transfer of immediately available funds and (ii) such
Stockholder shall deliver to Purchaser (or, at the option of Purchaser,
an affiliate or subsidiary of
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Purchaser) a certificate or certificates, duly endorsed in blank or
accompanied by stock powers duly executed in blank, representing the
number of Option Shares purchased.
3. Voting of Shares. Each Stockholder shall, until the Termination Date, cause
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the Shares owned by such Stockholder to be voted at any meeting of the
stockholders of the Company or in any consent in lieu of such a meeting in
favor of the consummation of the transactions contemplated by the Merger
Agreement, against any transactions inconsistent therewith, and as otherwise
reasonably requested by Purchaser in order to carry out the purposes of the
Merger Agreement. For the purposes of this Agreement, "Termination Date"
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shall mean the earlier of (i) the termination of the Merger Agreement in
accordance with its terms, (ii) the Effective Time (as defined in the Merger
Agreement), and (iii) the termination of this Agreement by the mutual
written agreement of the parties hereto or pursuant to the terms of Section
10 of this Agreement.
4. Irrevocable Proxy. Each Stockholder hereby irrevocably appoints Purchaser,
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until the Termination Date, as its attorney and proxy pursuant to the
provisions of Section 212 of the General Corporation Law of the State of
Delaware, with full power of substitution, to vote and take other actions
(by written consent or otherwise) in favor of the consummation of the
transactions contemplated by the Merger Agreement, against any transactions
inconsistent therewith, and as otherwise reasonably required in order to
carry out the purposes of the Merger Agreement, with respect to the Shares
(and all other securities issued to the Stockholder in respect of the
Shares) which each Stockholder is entitled to vote at any meeting of
stockholders of the Company (whether annual or special and whether or not an
adjourned or postponed meeting) or in respect of any consent in lieu of any
such meeting or otherwise. This proxy and power of attorney is irrevocable
and coupled with an interest in favor of Purchaser. Each Stockholder hereby
revokes all other proxies and powers of attorney with respect to the Shares
(and all other securities issued to the Stockholder in respect of the
Shares) which it may have heretofore appointed or granted, and no subsequent
proxy or power of attorney shall be given or written consent executed (and
if given or executed, shall not be effective) by the Stockholder with
respect thereto.
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5. No Disposition or Encumbrance of Shares. Each Stockholder hereby covenants
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and agrees that, until the expiration of the Options as provided in Section
2 of this Agreement, except as contemplated by this Agreement, the
Stockholder shall not, and shall not offer or agree to, sell, transfer,
tender, assign, hypothecate or otherwise dispose of, or create or permit to
exist any security interest, lien, claim, pledge, option, right of first
refusal, agreement, limitation on the Stockholder's voting rights, charge or
other encumbrance of any nature whatsoever with respect to the Shares.
6. No Solicitation of Transactions. Each Stockholder shall not, directly or
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indirectly, through any agent or representative or otherwise, (i) solicit,
initiate or encourage the submission of any proposal or offer from any
individual, corporation, partnership, limited partnership, syndicate, person
(including, without limitation, a "person" as defined in Section 13(d)(3) of
the Securities Exchange Act of 1934 as amended), trust, association or
entity or government, political subdivision, agency or instrumentality of a
government (collectively, other than Purchaser and any affiliate of
Purchaser, a "Person") relating to (a) any acquisition or purchase of all or
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any of the Shares or (b) any acquisition or purchase of all or any portion
of the assets of, or any equity interest in, the Company or any subsidiary
of the Company or any business combination with the Company or any
subsidiary of the Company or (ii) participate in any negotiations regarding,
or furnish to any Person any information with respect to, or otherwise
cooperate in any way with, or assist or participate or facilitate or
encourage, any effort or attempt by any Person to do or seek any of the
foregoing. Each Stockholder immediately shall cease and cause to be
terminated all existing discussions or negotiations of the Stockholder and
its agents or other representatives with any Person conducted heretofore
with respect to any of the foregoing. Each Stockholder shall notify
Purchaser promptly if any such proposal or offer, or any inquiry or contact
with any Person with respect thereto, is made and shall, in any such notice
to Purchaser, indicate in reasonable detail the identity of the Person
making such proposal, offer, inquiry or contact and the terms and conditions
of such proposal, offer, inquiry or contact. The provisions of this Section
4 shall not apply to or restrict any action that may be taken by the
Stockholder in its capacity as an officer or director of the Company.
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7. Legend on Certificates. The certificate(s) evidencing the Shares shall be
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endorsed with a restrictive legend substantially as follows:
The shares evidenced by this certificate are subject to a stock
purchase agreement dated as of June 4, 1997 between the registered
holder hereof and Intermedia Communications Inc., a copy of which is on
file at the principal office of the Company. The holder of this
certificate, by his acceptance hereof, agrees to be bound by all the
terms of such agreement, as the same is in effect from time to time.
8. Representations and Warranties of the Stockholders. Each Stockholder hereby
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severally represents and warrants with respect to itself and its ownership
of the Shares to Purchaser and the Subsidiary as follows:
(a) Authority Relative to this Agreement. The Stockholder has all
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necessary power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by the Stockholder and the consummation by the Stockholder
of the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of the Stockholder.
This Agreement has been duly and validly executed and delivered by the
Stockholder and, assuming the due authorization, execution and
delivery by Purchaser, constitutes a legal, valid and binding
obligation of the Stockholder, enforceable against the Stockholder in
accordance with its terms, except that such enforceability may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally.
(b) No Conflict. The execution and delivery of this Agreement by the
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Stockholder does not, and the performance of this Agreement by the
Stockholder will not, (i) require any consent, approval, authorization
or permit of, or filing with or notification to (other than pursuant
to the HSR Act and the Securities Exchange Act of 1934, as amended),
any governmental or regulatory authority, domestic or foreign, (ii)
conflict with or violate the Certificate of Incorporation or By-laws
of the Stockholder, (iii) conflict with or violate any law, rule,
regulation, order, judgment
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or decree applicable to the Stockholder or by which any property or
asset of the Stockholder is bound, or (iv) result in any breach of or
constitute a default (or an event which with notice or lapse of time
or both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or other encumbrance of any nature whatsoever
on any property or asset of the Stockholder pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the
Stockholder is a party or by which the Stockholder or any property or
asset of the Stockholder is bound.
(c) Title to the Shares. The Shares owned by the Stockholder (as set
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forth on the signature pages hereto) are all the equity securities of
the Company owned, either of record or beneficially, by the
Stockholder. The Stockholder owns all such Shares free and clear of
all security interests, liens, claims, pledges, options, rights of
first refusal, agreements, limitations on the Stockholder's voting
rights, charges and other encumbrances of any nature whatsoever, and,
except as provided in this Agreement, the Stockholder has not
appointed or granted any proxy, which appointment or grant is still
effective, with respect to the Shares.
(d) Brokers. Other than Friedman, Billings, Xxxxxx & Co., Inc., no
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broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on
behalf of the Stockholder.
9. Representations and Warranties of Purchaser. Purchaser hereby represents
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and warrants to the Stockholders as follows:
(a) Purchaser has all necessary power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by Purchaser and the consummation of the
transactions contemplated hereby have been duly authorized by
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all necessary action on the part of Purchaser. This Agreement has been
duly and validly executed and delivered by Purchaser and, assuming the
due authorization, execution and delivery by the Stockholders,
constitutes a legal, valid and binding obligation of Purchaser,
enforceable against the Purchaser in accordance with its terms, except
that such enforceability may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally.
(b) No Conflict. The execution and delivery of this Agreement by
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Purchaser does not, and the performance of this Agreement by Purchaser
will not, (i) require any consent, approval, authorization or permit
of, or filing with or notification to (other than pursuant to the HSR
Act and the Securities Exchange Act of 1934, as amended), any
governmental or regulatory authority, domestic or foreign, (ii)
conflict with or violate the Certificate of Incorporation or By-laws
of Purchaser, (iii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Purchaser or by
which any property or asset of Purchaser is bound, or (iv) result in
any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to
others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other
encumbrance of any nature whatsoever on any property or asset of
Purchaser pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which Purchaser is a party or by which Purchaser or any
property or asset of Purchaser is bound.
(c) Brokers. Other than Bear, Xxxxxxx & Co., Inc., no broker, finder or
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investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated hereby
based upon arrangements made by or on behalf of Purchaser.
10. Termination of Agreement. Purchaser reserves the right in its sole
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discretion at any time hereafter to terminate this Agreement, the Options
and all irrevocable proxies granted to it hereunder.
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11. Miscellaneous.
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(a) Expenses. Except as otherwise provided herein or in the Merger
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Agreement, all costs and expenses incurred in connection with the
transactions contemplated by this Agreement shall be paid by the party
incurring such expenses.
(b) Further Assurances. Purchaser and the Stockholders will execute and
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deliver all such further documents and instruments and take all such
further action as may be necessary in order to consummate the
transactions contemplated hereby.
(c) Specific Performance. The parties hereto agree that irreparable
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damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with the terms hereof and
that the parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy to which they may be
entitled at law or in equity.
(d) Entire Agreement. This Agreement constitutes the entire agreement
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between Purchaser and the Stockholders with respect to the subject
matter hereof and supersedes all prior agreements and understandings,
both written and oral, between Purchaser and the Stockholders with
respect to the subject matter hereof.
(e) Assignment. This Agreement shall not be assigned by operation of law
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or otherwise, except that Purchaser may assign all or any of its
rights and obligations hereunder to any affiliate of Purchaser,
provided that no such assignment shall relieve Purchaser of its
obligations hereunder if such assignee does not perform such
obligations.
(f) Obligations of Successors; Parties in Interest. This Agreement shall
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be binding upon, inure solely to the benefit of, and be enforceable
by, the successors and permitted assigns of the parties hereto.
Nothing in this Agreement, express or implied, is intended to or shall
confer upon any other person any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement.
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(g) Amendment; Waiver. This Agreement may not be amended or changed
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except by an instrument in writing signed by the parties hereto. Any
party hereto may (i) extend the time for the performance of any
obligation or other act of the other party hereto, (ii) waive any
inaccuracy in the representations and warranties contained herein or
in any document delivered pursuant hereto and (iii) waive compliance
with any agreement or condition contained herein. Any such extension
or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
(h) Severability. The invalidity or unenforceability of any provision of
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this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement, which shall remain in full force
and effect.
(i) Notices. All notices, requests, claims, demands and other
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communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in
person, by cable, telecopy, telegram or telex or by registered or
certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address
for a party as shall be specified in a notice given in accordance with
this Section 8(i)):
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if to Purchaser:
Intermedia Communications Inc.
0000 Xxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
with a copy to:
Kronish, Lieb, Weiner & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
if to any Stockholder:
at the respective addresses of such Stockholder set forth at the foot
of this Agreement
(j) Governing Law. This Agreement shall be governed by, and construed in
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accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State.
(k) Headings. The descriptive headings contained in this Agreement are
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included for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
(l) Parties in Interest. This Agreement shall be binding upon and inure
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solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any
other person any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
(m) Counterparts. This Agreement may be executed in one or more
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counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the
same agreement.
(n) WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ANY RIGHT IT MIGHT
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HAVE TO A JURY TRIAL OF ANY DISPUTE ARISING IN CONNECTION WITH THIS
AGREEMENT.
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IN WITNESS WHEREOF, Purchaser has caused this Agreement to be executed by
its officers thereunto duly authorized and the Stockholders have duly executed
this Agreement, as of the date first written above.
PURCHASER:
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INTERMEDIA COMMUNICATIONS INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
SHAREHOLDERS: NUMBER OF SHARES OWNED:
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GROTECH PARTNERS IV, L.P. 1,438,361
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By: GROTECH CAPITAL GROUP IV, LLC
General Partner
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: President & CEO
Address: 0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Telecopy: 000-000-0000
GROTECH PARTNERS III, L.P. 229,050
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By: Grotech Capital Group, Inc.
General Partner
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: President & CEO
Address: 0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Telecopy: 000-000-0000
[Signature Pages Continue on Next Page]
GROTECH III COMPANION FUND, L.P. 24,952
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By: Grotech Capital Group, Inc.
General Partner
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: President & CEO
Address: 0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Telecopy: 000-000-0000
GROTECH III PENNSYLVANIA FUND, L.P. 14,228
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By: Grotech Capital Group, Inc.
General Partner
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: President & CEO
Address: 0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Telecopy: 000-000-0000
VENROCK ASSOCIATES 794,229
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By: /s/ Xxx X. Xxxxxxxx
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Name: Xxx X. Xxxxxxxx
Title: General Partner
Address: 00 Xxxxxxxxxxx Xxxxx, Xxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 000-000-0000 (F)
000-000-0000 (P)
[Signature Pages Continue on Next Page]
VENROCK ASSOCIATES II, L.P. 382,051
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By: /s/ Xxx X. Xxxxxxxx
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Name: Xxx X. Xxxxxxxx
Title: General Partner
Address: 00 Xxxxxxxxxxx Xxxxx, Xxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 000-000-0000 (F)
000-000-0000 (P)
SOUTHERN VENTURE FUND II, L.P. 840,198
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By: /s/ Xxxxxxx X. Xxxxxxxx III
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Name: Xxxxxxx X. Xxxxxxxx III
Title: General Partner
Address: 000 00xx Xxxxxx X.
Xxxxxxxxx, XX 00000
Telecopy: 000-000-0000
BLUE CHIP CAPITAL FUND LIMITED 429,285
PARTNERSHIP -------------
By: BLUE CHIP VENTURE COMPANY
General Partner
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: President
Address: 0000 XXX Xxxxx
Xxxxxxxxxx, XX 00000
Telecopy: 000-000-0000
DIGEX INVESTORS, LTD. 107,321
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By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: President
Address: 000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Telecopy: 000-000-0000
[Signature Pages Continue on Next Page]
XXXXXXX X. XXXXXXXX 970,744
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/s/ Xxxxxxx X. Xxxxxxxx
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Address: 000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy: 000-000-0000 (F)
000-000-0000 (P)
XXXXXXX X. XXXXXXXX 647,163
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/s/ Xxxxxxx X. Xxxxxxxx
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Address: Xxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telecopy: 000-000-0000
