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
the individuals and entities whose names and addresses are set forth at the foot
of this Agreement (collectively, the "Stockholders", and each, individually, a
"Stockholder"), it being understood that the Stockholders are executing this
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, dated as of the date hereof (the "Merger Agreement"), with
DIGEX, Incorporated, a Delaware corporation (the "Company"), which Merger
Agreement provides, among 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 Company, par value $.01 per share ("Company Common Stock")
for $13.00 per share (the "Per Share Amount") and (ii) the second step merger
pursuant to which Subsidiary will merge with and into the Company (the "Merger")
and all 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").
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
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 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 and irrevocable option (each an "Option", and together the
"Options") to 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 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 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
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 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" 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, 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.
5. No Disposition or Encumbrance of Shares. Each Stockholder hereby
covenants 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 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 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.
7. Legend on Certificates. The certificate(s) evidencing the Shares shall
be 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 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
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
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 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
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
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 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 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
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 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
discretion at any time hereafter to terminate this Agreement, the
Options and all irrevocable proxies granted to it hereunder.
11. Miscellaneous.
(a) Expenses. Except as otherwise provided herein or in the Merger
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 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
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
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 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 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.
(g) Amendment; Waiver. This Agreement may not be amended or changed
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 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
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)):
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 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 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 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
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
HAVE TO A JURY TRIAL OF ANY DISPUTE ARISING IN CONNECTION WITH
THIS AGREEMENT.
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:
INTERMEDIA COMMUNICATIONS INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
SHAREHOLDERS: NUMBER OF SHARES OWNED:
------------- -----------------------
GROTECH PARTNERS IV, L.P. 1,438,361
By: GROTECH CAPITAL GROUP IV, LLC
General Partner
By: /s/ Xxxxx X. Xxxxx
------------------------
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
By: Grotech Capital Group, Inc.
General Partner
By: /s/ Xxxxx X. Xxxxx
----------------------
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
By: Grotech Capital Group, Inc.
General Partner
By: /s/ Xxxxx X. Xxxxx
----------------------
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
By: Grotech Capital Group, Inc.
General Partner
By: /s/ Xxxxx X. Xxxxx
-----------------------
Name: Xxxxx X. Xxxxx
Title: President & CEO
Address: 0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Telecopy: 000-000-0000
VENROCK ASSOCIATES 794,229
By: /s/ Xxx X. Xxxxxxxx
----------------------------
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
By: /s/ Xxx X. Xxxxxxxx
----------------------------
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
By: /s/ Xxxxxxx X. Xxxxxxxx III
--------------------------------
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
------------------------
Name: Xxxx X. Xxxxx
Title: President
Address: 0000 XXX Xxxxx
Xxxxxxxxxx, XX 00000
Telecopy: 000-000-0000
DIGEX INVESTORS, LTD. 107,321
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
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
/s/ Xxxxxxx X. Xxxxxxxx
Address: 000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy: 000-000-0000 (F)
000-000-0000 (P)
XXXXXXX X. XXXXXXXX 647,163
/s/ Xxxxxxx X. Xxxxxxxx
Address: Xxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telecopy: 000-000-0000
