SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
Xpedite Systems, Inc.
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
893929100
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(CUSIP Number)
Robert S. Vaters
c/o Xpedite Systems, Inc.
446 Highway 35, Eatontown, New Jersey 07724; Telephone (908) 389-3900
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
July 7, 1997
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. / /
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
(Continued on following pages)
(Page 1 of 36 Pages)
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*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to the "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
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CUSIP No. 893929100 Page 2 of 36 Pages
- ------------------------------------------ -------------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robert S. Vaters; SS. No. ###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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NUMBER OF 7 SOLE VOTING POWER
SHARES 20,000
BENEFICIALLY -------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING -------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 20,000
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
20,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* /X/
Excludes shares beneficially owned by the other persons joining in
the filing of this Schedule 13D as to which beneficial ownership is
disclaimed.
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.2%
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14 TYPE OF REPORTING PERSON*
IN
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<PAGE>
SCHEDULE 13D
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CUSIP No. 893929100 Page 3 of 36 Pages
- ------------------------------------------ -------------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Roy B. Andersen, Jr.; SS. No. ###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
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3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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NUMBER OF 7 SOLE VOTING POWER
SHARES 302,657
BENEFICIALLY -------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING -------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 302,657
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
302,657
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* /X/
Excludes shares beneficially owned by the other persons joining in
the filing of this Schedule 13D as to which beneficial ownership is
disclaimed.
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.3%
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14 TYPE OF REPORTING PERSON*
IN
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<PAGE>
SCHEDULE 13D
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CUSIP No. 893929100 Page 4 of 36 Pages
- ------------------------------------------ -------------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Vincent DeVita; SS. No. ###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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NUMBER OF 7 SOLE VOTING POWER
SHARES 5,000
BENEFICIALLY -------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING -------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 5,000
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
Excludes shares beneficially owned by the other persons joining in
the filing of this Schedule 13D as to which beneficial ownership is
disclaimed.
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
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14 TYPE OF REPORTING PERSON*
IN
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<PAGE>
SCHEDULE 13D
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CUSIP No. 893929100 Page 5 of 36 Pages
- ------------------------------------------ -------------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Max A. Slifer; SS. No. ###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) /X/
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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NUMBER OF 7 SOLE VOTING POWER
SHARES 169,885
BENEFICIALLY -------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING -------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 169,885
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
169,885
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* /X/
Excludes shares beneficially owned by the other persons joining in
the filing of this Schedule 13D as to which beneficial ownership is
disclaimed.
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.8%
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14 TYPE OF REPORTING PERSON*
IN
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<PAGE>
SCHEDULE 13D
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CUSIP No. 893929100 Page 6 of 36 Pages
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1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Dennis Schmaltz; SS. No. ###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b)
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) /X/
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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NUMBER OF 7 SOLE VOTING POWER
SHARES 168,989
BENEFICIALLY -------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING -------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 168,989
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
168,989
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* /X/
Excludes shares beneficially owned by the other persons joining in
the filing of this Schedule 13D as to which beneficial ownership is
disclaimed.
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.8%
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14 TYPE OF REPORTING PERSON*
IN
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<PAGE>
SCHEDULE 13D
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CUSIP No. 893929100 Page 7 of 36 Pages
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1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
UBS Partners LLC; I.R.S. No. 13-3952900
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
Not applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY -------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING -------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* /X/
Excludes shares beneficially owned by the other persons joining in
the filing of this Schedule 13D as to which beneficial ownership is
disclaimed.
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
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14 TYPE OF REPORTING PERSON*
OO
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<PAGE>
SCHEDULE 13D
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CUSIP No. 893929100 Page 8 of 36 Pages
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1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Fenway Partners, Inc.; I.R.S. No. ###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
Not applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY -------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING -------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* /X/
Excludes shares beneficially owned by the other persons joining in
the filing of this Schedule 13D as to which beneficial ownership is
disclaimed.
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
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14 TYPE OF REPORTING PERSON*
CO
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<PAGE>
AMENDMENT NO. 2 TO
SCHEDULE 13D
This Amendment No. 2 amends and supplements (i) the statement on
Schedule 13D dated February 11, 1997 filed by Roy B. Andersen, Jr., Robert S.
Vaters, Dennis Schmaltz, Max A. Slifer and George Abi Zeid and (ii) Amendment
No. 1 to Schedule 13D filed on April 25, 1997 by Roy B. Andersen, Jr., Robert S.
Vaters, Dennis Schmaltz, Max A. Slifer and George Abi Zeid relating to the
common stock, par value $.01 per share (the "Common Stock"), of Xpedite Systems,
Inc., a Delaware corporation ("Xpedite" or the "Company"). Capitalized terms
used herein without definition have the meanings assigned to such terms in the
initial filing.
Item 2 is amended as follows:
Item 2. IDENTITY AND BACKGROUND
This Amendment is being filed by (i) Roy B. Andersen, Jr., (ii) Robert
S. Vaters, (iii) Dennis Schmaltz, (iv) Max A. Slifer, (v) Vincent DeVita, (vi)
UBS Partners LLC ("UBS Partners") and (vii) Fenway Partners, Inc. ("Fenway").
The foregoing persons are collectively referred to herein as the "Reporting
Persons." The Reporting Persons may be deemed to constitute a group within the
meaning of Rule 13d-1(f) under the Securities Exchange Act of 1934, as amended,
by reason of their acting together for the purpose of the proposed transaction
described in Item 4 below.
(i) Information regarding the identity and background of Mr. Andersen,
Mr. Vaters, Mr. Schmaltz and Mr. Slifer is contained in the original filing.
(ii) Mr. DeVita is the Vice President of Operations of Xpedite and has
a business address at 446 Highway 35, Eatontown, New Jersey. During the last
five years, Mr. DeVita has not (a) been convicted in any criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or any findings of any
violation with respect to such laws.
(iii) A list of the managers and executive officers of UBS Partners
appears on Appendix 1. UBS Capital Holdings LLC, a Delaware limited liability
company ("UBS Holdings") owns 100% of the membership interests of UBS Partners.
UBS Inc., a New York corporation, owns 100% of the membership interests of UBS
Holdings. Union Bank of Switzerland, a company organized under the laws of
Switzerland, owns 100% of the capital stock of UBS Inc. Union Bank of
Switzerland is principally engaged in the general banking business, UBS Inc. is
principally engaged in the management services business and UBS Holdings is
primarily a holding company. A list of the managers and executive officers of
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<PAGE>
UBS Holdings and the directors and executive officers of UBS Inc. and Union Bank
of Switzerland appears on Appendix 1.
The address of the principal business office of UBS Partners is 299
Park Avenue, New York, New York 10171. The address of each of the managers and
executive officers of UBS Partners is c/o UBS Partners LLC, 299 Park Avenue, New
York, New York 10171. The address of each of the managers and executive officers
of UBS Holdings is c/o UBS Capital Holdings LLC, 299 Park Avenue, New York, New
York 10171. The address of each of the directors and executive officers of UBS
Inc. is c/o UBS Inc., 299 Park Avenue, New York, New York 10171. The address of
each of the directors and executive officers of Union Bank of Switzerland is c/o
Union Bank of Switzerland, Bahnhofstrasse 45, Zurich, Switzerland.
The present principal occupation or employment of each of the managers
and executive officers of each of UBS Partners and UBS Holdings and each of the
directors and executive officers of each of UBS Inc. and Union Bank of
Switzerland are set forth on Appendix 1.
During the past five years, none of UBS Partners, UBS Holdings, UBS
Inc. or Union Bank of Switzerland nor, to the knowledge of UBS Partners, any of
the executive officers or managers of UBS Partners or UBS Holdings or any of the
executive officers or directors of UBS Inc. or Union Bank of Switzerland, has
been convicted in a criminal proceeding (excluding traffic violations and
similar misdemeanors).
During the past five years, none of UBS Partners, UBS Holdings, UBS
Inc. or Union Bank of Switzerland nor, to the knowledge of UBS Partners, any of
the executive officers or managers of UBS Partners or UBS Holdings or the
executive officers or directors of UBS Inc. or Union Bank of Switzerland has
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which such person was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal and state securities laws or finding
any violation with respect to such laws.
Each of UBS Partners and UBS Holdings is a Delaware limited liability
company. UBS Inc. is a New York corporation. To the knowledge of UBS Partners,
each executive officer and manager of each of UBS Partners and UBS Holdings and
each executive officer and director of UBS Inc. is a citizen of the United
States or of Switzerland. Union Bank of Switzerland is a bank organized under
the laws of Switzerland. To the knowledge of UBS Partners, none of the executive
officers and directors of Union Bank of Switzerland are citizens of the United
States.
(iv) A list of the directors and executive officers of Fenway appears
on Appendix 2. Fenway is principally engaged in the business of providing
private equity for leveraged transactions.
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<PAGE>
The address of the principal business office of Fenway is 152 West
57th Street, 59th Floor, New York, New York 10019. The address of each of the
directors and executive officers of Fenway is c/o Fenway Partners, Inc., 152
West 57th Street, 59th Floor, New York, New York 10019.
The present principal occupation or employment of each of the
directors and executive officers of Fenway is set forth on Appendix 2.
During the past five years, none of Fenway nor any of the directors or
executive officers of Fenway has been convicted in a criminal proceeding
(excluding traffic violations and similar misdemeanors).
During the past five years, none of Fenway nor any of the directors or
executive officers of Fenway has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as a result of which
such person was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
and state securities laws or finding any violation with respect to such laws.
Fenway is a Delaware corporation. The citizenship of each director and
executive officer of Fenway is set forth on Appendix 2.
Item 3 is amended as follows:
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The shares of Common Stock beneficially owned by Messrs. Vaters and
DeVita are in the form of shares issuable upon exercise of options that were
granted by Xpedite pursuant to the terms of their employment and which are
currently exercisable or exercisable within 60 days from the date hereof. The
shares beneficially owned by Messrs. Andersen, Slifer and Schmaltz are shares
acquired pursuant to exercise of options and other compensation arrangements
with the Company since its formation in 1988 and shares issuable upon exercise
of options which are currently exercisable or exercisable within 60 days from
the date hereof.
Item 4 is amended as follows:
Item 4. PURPOSE OF TRANSACTION
On July 7, 1997, at the request of Merrill Lynch & Co. acting on
behalf of the Company, the Reporting Persons submitted a bid proposal to Merrill
Lynch, as representatives of the Company, pursuant to which the Reporting
Persons would acquire the Company and the public stockholders would receive
$22.50 for each of their shares of Common Stock of the Company. The Reporting
Persons who currently own shares of Common Stock of the Company and certain
stockholders to be determined by the Reporting Persons (the "Reporting Person
Designees") would receive the same cash payment as the public stockholders for
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<PAGE>
the portion of their equity holdings not "rolled over" in connection with the
acquisition, as more fully described below. The proposal is conditioned upon,
among other things, (i) the simultaneous or prior acquisition by the Company or
the Reporting Persons of Xpedite Systems Ltd. and Xpedite Systems GmbH, European
affiliates of the Company (the "European Affiliates") on terms acceptable to the
Reporting Persons, (ii) receipt of financing in accordance with the terms of
financing commitments submitted with the proposal as more fully described below,
(iii) receipt by UBS Partners and Fenway of lock-up agreements from the other
Reporting Persons and the Reporting Person Designees, (iv) the transaction being
approved by the Company's stockholders, (v) receipt of regulatory approvals,
(vi) waivers of the provisions of Delaware General Corporation Law Section 203
and (vii) certain other customary conditions.
As directed by Merrill Lynch, the proposal assumes that the combined
purchase price for the European Affiliates will be $93 million. The aggregate
purchase price for the shares of the Company will increase or decrease on a
"dollar-for-dollar" basis to the extent that the combined purchase price of the
European Affiliates is less than or more than, as applicable, $93 million.
The proposed acquisition would be effected through a merger of a newly
formed subsidiary owned by UBS Partners and Fenway with and into the Company.
Immediately prior to the merger, the shares of Common Stock of the Company held
by the Reporting Persons and a portion of the shares of Common Stock of the
Company held by the Reporting Person Designees will be converted into a new
class of common stock ("New Common Stock"); UBS Partners and Fenway will
purchase a portion of the New Common Stock of each of the other Reporting
Persons. In the merger, the New Common Stock will be converted into common stock
of the surviving corporation and all other Common Stock of the Company will be
converted into the right to receive $22.50 per share in cash.
The proposal submitted by the Reporting Persons is fully financed, as
evidenced by commitment letters submitted to the Company for bank financing to
be provided by Goldman Sachs Credit Partners L.P. ("GSCP") and Union Bank of
Switzerland ("UBS"), bridge financing to be provided by Union Bank of
Switzerland, subordinated debt financing to be provided by UBS Securities LLC
and equity financing to be provided by UBS Partners and Fenway.
The bank financing commitment letter provides the Company and/or its
U.K. affiliate up to $130 million of senior secured financing (the "Senior
Facilities"). The Lenders will be GSCP, UBS and/or other financial institutions
selected by GSCP and UBS Securities LLC ("UBS Securities") with the consent of
and in consultation with the Company, not to be unreasonably withheld. Each of
the Company's subsidiaries (collectively, the "Guarantors") (other than any
foreign subsidiaries if a guaranty by such subsidiary would have adverse tax
consequences) will guaranty all obligations under the Senior Facilities. The
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<PAGE>
Syndication Agent is GSCP, the Administrative Agent and Documentation Agent is
UBS and the Arrangers are GSCP and UBS Securities.
The Senior Facilities and each Guarantee will be secured by first
priority security interests in substantially all assets (subject to exceptions
to be mutually agreed upon) of the Company and the Guarantors and a pledge of
the stock of the Company and each of its subsidiaries (subject to exceptions and
limitations as to foreign subsidiaries based on adverse tax consequences). The
Senior Facilities will contain customary and appropriate affirmative and
negative covenants, (including, without limitation, financial covenants with
respect to minimum EBITDA, maximum capital expenditures, minimum interest
coverage and maximum leverage, limitations on other indebtedness, liens,
negative pledge, investments, guarantees, restricted junior payments (dividends,
redemptions and payments on subordinated debt), mergers and sales of assets,
leases, transactions with affiliates, including exceptions and baskets to
mutually agreed upon) and customary and appropriate (and subject to customary
notice and cure provisions to be mutually agreed upon) events of default
including, without limitation, failure to make payments when due, defaults under
other agreements or instruments of indebtedness, noncompliance with covenants,
breaches of representations and warranties, bankruptcy, judgments in excess of
specified amounts, ERISA and pension matters, impairment of security interests
in collateral, invalidity of guarantees, and "changes of control" (to be defined
in a mutually agreed upon manner). The Senior Facilities may be voluntarily
prepaid in whole or in part, without premium or penalty, subject to payment of
breakage costs. Mandatory prepayments will be required upon the occurrence of
certain events, including asset sales, debt and equity sales, the generation of
excess cash flow and the receipt of insurance or condemnation proceeds.
Conditions precedent to initial borrowings under the Senior Facilities
include the following:
(a) The definitive documentation evidencing the Senior Facilities
shall be prepared by counsel to the Arrangers and shall be in form and
substance satisfactory to the Arrangers and the Lenders.
(b) The structure utilized to consummate the proposed acquisition
(including, without limitation, the requisite level of shareholder
consent), the terms thereof, and the definitive documentation relating
thereto (the "Definitive Acquisition Documents") shall be in form and
substance satisfactory to the Arrangers and the Lenders and the
Definitive Acquisition Documents shall be in full force and effect on
the Closing Date. Without limiting the generality of the foregoing,
concurrently with the consummation of the acquisition, the European
Affiliates will become subsidiaries of the Company.
(c) Concurrently with the initial borrowing under the Senior
Facilities, the acquisition shall have been consummated pursuant to
the Definitive Acquisition Documents, no material provision of which
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<PAGE>
shall have been amended, supplemented, waived or otherwise modified in
any material respect without the prior written consent of the
Arrangers and the Lenders.
(d) Concurrently with the initial borrowing under the Senior
Facilities, the Company shall have issued the subordinated debt on
terms and conditions satisfactory to the Arrangers and Lenders and
shall have received gross proceeds of not less than $150 million with
respect thereto and such proceeds (net of fees and transactions costs)
shall have been applied in full to pay a portion of the costs of the
acquisition, to repay certain indebtedness of the Company and the
European Affiliates and to pay transaction costs.
(e) The Company shall have received net proceeds from the issuance of
equity, in an amount and on terms acceptable to Arrangers and Lenders,
to UBS Partners and Fenway Partners and/or their affiliates or other
persons previously identified to Arrangers and Lenders and such cash
proceeds shall have been applied in full to pay a portion of the costs
of Acquisition, to repay certain indebtedness of the Company and the
European Affiliates and to pay transaction costs.
(f) Concurrently with the consummation of the acquisition, (subject to
mutually agreed upon exceptions) pre-existing indebtedness of the
Company and its subsidiaries (including the European Affiliates) shall
have been repaid in full, all commitments relating thereto shall have
been terminated, and all liens or security interests related thereto
shall have been terminated or released, in each case on terms
satisfactory to Arrangers.
(g) The Lenders shall have received a certificate of the chief
financial officer of the Company and an opinion of an independent
valuation consultant, in each case in form and substance satisfactory
to the Arrangers supporting the conclusions that, after giving effect
to the acquisition and the related transactions contemplated thereby,
the Company will not be insolvent or be rendered insolvent by the
indebtedness incurred in connection therewith, or be left with
unreasonably small capital with which to engage in its businesses, or
have incurred debts beyond its ability to pay such debts as they
mature.
(h) The Administrative Agent, for the benefit of the Lenders, shall
have been granted perfected first priority security interests in
assets to the extent described above in form and substance
satisfactory to the Arrangers.
(i) Since December 31, 1996 there shall not have been (x) any adverse
change, in or affecting the general affairs, industry, management,
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<PAGE>
financial position, shareholders' equity or results of operations or
prospects of the Company and its subsidiaries and the European
Affiliates, taken as a whole, or (y) any information submitted to the
Arrangers that proves to have been inaccurate, incomplete or
misleading in any material respect, and which, in the case of either
clause (x) or (y), either Arranger, in its reasonable judgment, deems
material.
(j) There shall not have been any disruption or adverse change in the
financial or capital markets generally or in the market for loan
syndications in particular, which either Arranger, in its reasonable
judgment, deems material.
(k) The Lenders shall have received and be satisfied with (w) the
audited financial statements for Company and its subsidiaries and each
of the European Affiliates for fiscal years 1994, 1995 and 1996, (x)
unaudited financial statements for the Company and its subsidiaries
and for each of the European Affiliates for the period from December
31, 1996 through the month most recently ended prior to the Closing
Date, (y) management letters provided to Company and each of the
European Affiliates by their respective auditors during the last three
years and (z) a pro forma balance sheet for Company and its
subsidiaries giving effect to the acquisition and an income and cash
flow statement for Company and its subsidiaries for the twelve month
period most recently ended prior to the Closing Date.
(l) All necessary governmental and third party approvals in connection
with the Senior Facilities, the Acquisition and the other transactions
contemplated by the Senior Facilities shall have been obtained and
remain in effect, and all applicable waiting periods shall have
expired without any action being taken by any applicable authority.
(m) There shall exist no action, suit, investigation, litigation or
proceeding pending or threatened in any court or before any arbitrator
or governmental instrumentality that (i) in the judgement of either
Arranger would be reasonably likely to have a material adverse effect
on the business, condition (financial or otherwise), operations,
performance, properties or prospects of Company and its subsidiaries
(including the European Affiliates), taken as a whole, or (ii)
purports to materially and adversely affect the Senior Facilities, the
acquisition or any of the other transactions contemplated by the
Senior Facilities.
(n) All costs, fees, expenses (including, without limitation,
reasonable legal fees and expenses) and other compensation required to
be paid on the Closing Date to the Administrative Agent, Syndication
Agent, Documentation Agent, Arrangers or the Lenders shall have been
paid to the extent due.
-15-
<PAGE>
(o) All agreements relating to, and the corporate structure of, the
Company and its subsidiaries and the European Affiliates, all
organizational documents of such entities, the employment contracts of
key employees and executives and all material contracts, licenses,
permits, franchises, insurance policies and other intangible rights
shall be reasonably satisfactory to the Arrangers.
(p) All documents required to be delivered under the definitive
financing documents, (including customary legal opinions), corporate
records and documents from public officials and officers'
certificates, shall have been delivered.
(q) The closing shall have occurred on or prior to November 30, 1997.
(r) Completion to the satisfaction of the Arrangers of due diligence
with respect to foreign regulatory and structural matters relevant to
the transactions described in the commitment letter.
The conditions to all borrowings will include requirements relating to prior
written notice of borrowing, the accuracy, in all material respects, of
representations and warranties, and the absence of any default or potential
event of default, and will otherwise be customary and appropriate for financings
of this type.
The bridge financing commitment letters provide that UBS or an
affiliate of UBS (the "Initial Purchaser") will purchase from the Company $150
million of Unsecured Senior Subordinated Increasing Rate Notes (together with
the pay-in-kind notes described below, the "Bridge Notes"). On the first
anniversary of the date of issue, the Bridge Notes will be exchanged for an
equal principal amount of senior subordinated rollover notes (the "Rollover
Notes") with a maturity of nine years. (Notwithstanding the terms of the bridge
financing commitment letters, the parties intend to consummate an offering of
$150 million of senior subordinated notes in a public offering or private
placement transaction as expeditiously as possible and it is not intended that
the bridge financing be drawn down unless the offering cannot be completed prior
to the closing of the acquisition; the parties have entered into an engagement
letter (the "Engagement") with UBS Securities with respect to such an offering.)
-16-
<PAGE>
Borrowings under the Bridge Notes may be prepaid at any time at par,
plus accrued and unpaid interest. Subject to any required payment under the
Company's Senior Facilities, the Bridge Notes will be required to be repaid at
par plus accrued and unpaid interest upon the occurrence of certain events,
including a change of control, the proceeds of issuances of debt and equity and
certain asset sales.
The Bridge Notes will contain certain financial and operating
covenants customary for unsecured senior subordinated bridge financings
including, but not limited to, limitation of additional debt, limitations on
restricted payments, limitations on liens, limitations on asset sales,
limitations on transactions with affiliates, limitations on mergers and
consolidations and limitations on issuance of stock by subsidiaries,
subordination provisions, and customary events of default for a subordinated
bridge loan (with notice and grace periods to be mutually agreed upon).
Conditions to closing under the Bridge Notes will include conditions
customary for such bridge financings in the reasonable judgment of the bridge
lender and will include the following:
(a) the closing must occur on or prior to November 30, 1997;
(b) the Company shall not have issued securities (the "Alternative
Securities") pursuant to the Engagement;
(c) the Company shall have performed its obligations under the
Engagement; and shall have used its reasonable best efforts to cause
the Alternative Securities to be sold, in a public registration or a
private placement;
(d) the Company shall have entered into documentation for the Bridge
Notes acceptable to the Initial Purchaser and all conditions
thereunder shall have been satisfied;
(e) the Company shall have deposited into escrow certain warrants
which are subject to release to the Initial Purchaser upon the
issuance of the Rollover Notes;
(f) delivery of customary documentation for subordinated bridge loans,
including, without limitation, legal opinions, officers' certificates
and a solvency certificate and opinion;
(g) the absence of a material adverse change in the business, assets,
liabilities (contingent or otherwise), operations, condition
(financial or otherwise), solvency, properties, prospects or material
-17-
<PAGE>
agreements of the Company together with its subsidiaries taken as a
whole and the absence of any dividend or distribution after the date
of the commitment declared or paid by the Company on its capital
stock;
(h) the absence of a material adverse change in the loan syndication
or financial, banking or capital markets from those in effect on the
date of the commitment that in the Initial Purchaser's judgment could
reasonably be expected to adversely affect the ability of the Initial
Purchaser to successfully syndicate the commitment or to place or sell
the Alternative Securities and the absence of a banking moratorium
declared by federal or New York State banking authorities;
(i) the absence of certain litigation or governmental or regulatory
action adverse to the transactions contemplated by the commitment;
(j) the satisfaction by the Initial Purchaser with the capitalization,
corporate and organizational structure of the Company and its
subsidiaries;
(k) the absence of a default under the documentation for the Bridge
Notes, the absence of defaults under material agreements of the
Company resulting from the transactions contemplated by the commitment
letter which are not resolved to the satisfaction of the Initial
Purchaser, the procurement of all material governmental and third
party consents, the expiration of waiting periods for the transactions
under applicable law and the absence of any law or regulation
restraining, prohibiting or imposing materially adverse conditions on
any material component of such transactions;
(l) the agreements for the acquisition and all other agreements
relating to the transactions contemplated by the commitment letter
shall be reasonably satisfactory to the Initial Purchaser and all
conditions precedent thereunder shall have been satisfied;
(m) the Company shall have delivered financial statements for itself
and its subsidiaries (including the European Affiliates which will
become subsidiaries on closing) as may be required for a registration
statement for the Alternative Securities, together with an unqualified
accounting opinion with respect thereto, pro forma financial
statements and other financial information which may be required by
the Initial Purchaser or required under federal securities laws;
(n) the Company shall have entered into the Senior Facilities on terms
and conditions reasonably satisfactory to the Initial Purchaser, all
conditions precedent to borrowing thereunder shall have been satisfied
-18-
<PAGE>
and the initial advances thereunder in amounts satisfactory to the
Initial Purchaser shall have been made;
(o) the Company shall have received equity financing in amounts and
pursuant to conditions and documentation satisfactory to the bridge
lender;
(p) the acquisition shall have been consummated concurrently with the
funding;
(q) all fees payable upon closing to the Initial Purchaser shall have
been paid; and
(r) since the date of the commitment, the Company and its subsidiaries
shall not have sold securities that would in the reasonable judgment
of the Initial Purchaser impair the ability of the Initial Purchaser
to sell the Alternative Securities or to syndicate the Bridge Notes.
UBS Partners and Fenway have provided the Company a commitment letter
stating that each will provide or cause to be provided one-half of the equity
financing (other than the equity being "rolled over" by management and the
Reporting Person Designees) necessary to consummate the proposed acquisition on
the terms set forth in the proposal submitted by the Reporting Persons.
At the present time, other than the actions described in the preceding
paragraph, the Reporting Persons have no specific plans or proposals that would
relate to or result in any of the actions specified in clauses (a) through (j)
of Item 4. However, the Reporting Persons may consider any such plans or
proposals in the future, if deemed appropriate. If the transaction is
consummated it is expected that the membership of the board of directors,
charter, bylaws, and capitalization of the Company would be changed and that the
Common Stock would no longer be listed on NASDAQ or any other public securities
market and that the Common Stock would be deregistered under the Securities
Exchange Act of 1934, as amended.
Item 5 is amended as follows:
Item 5. INTEREST IN SECURITIES OF THE ISSUER
(a) For information with respect to the aggregate number and
percentage of Common Stock owned by each of the Reporting Persons, see Rows 11
and 13, respectively, of the cover page for each Reporting Person. The aggregate
amount of Common Stock deemed to be beneficially owned by the Reporting Persons
by virtue of their being deemed to constitute a "group" is 666,531 shares or
7.18% of the outstanding shares of Common Stock of the Company. Each Reporting
Person disclaims beneficial ownership of the Shares of Common Stock held of
record by each other Reporting Person.
-19-
<PAGE>
(b) For information with respect to the power to vote or direct the
vote and the power to dispose or to direct the disposition of the Common Stock
owned by each of the Reporting Persons, see Rows 7 through 10 of the cover page
for each such Reporting Person.
(c) No transactions in the Common Stock were effected during the past
60 days by any Reporting Person.
(d) Not applicable.
(e) Not applicable.
Item 6 is amended as follows:
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
See the description contained in Item 4 of the intention of the
Reporting Persons.
Item 7 is amended as follows:
Item 7. MATERIAL TO BE FILED AS EXHIBITS
1. Joint filing agreement of the Reporting Persons dated July 7, 1997.
2. Power of Attorney (included in Exhibit 1).
3. Offer Letter dated July 7, 1997 from the Reporting Persons to
Merrill Lynch & Co.
-20-
<PAGE>
SIGNATURE
-----------
After reasonable inquiry and to the best of our knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
Dated: July 7, 1997
/s/ Roy B. Andersen, Jr.
--------------------------------------
Roy B. Andersen, Jr.*
/s/ Robert S. Vaters
--------------------------------------
Robert S. Vaters
/s/ Dennis Schmaltz
--------------------------------------
Dennis Schmaltz*
/s/ Max A. Slifer
--------------------------------------
Max A. Slifer*
/s/ Vincent DeVita
--------------------------------------
Vincent DeVita
*By: Robert S. Vaters
As Attorney-in-Fact
<PAGE>
UBS PARTNERS LLC
/s/ Justin S. Maccarone
By:-----------------------------------
Name: Justin S. Maccarone
Title: President
/s/ Michael Greene
By:-----------------------------------
Name: Michael Greene
Title: Vice President/Treasurer
FENWAY PARTNERS, INC.
/s/ Russell W. Steenberg
By:-----------------------------------
Name: Russell W. Steenberg
Title: Managing Director
-22-
<PAGE>
Appendix 1
UNION BANK OF SWITZERLAND
BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
HONORARY CHAIRMEN
- -----------------
Robert Holzach Kusnachg
Nikolaus Senn Herrliberg
MEMBERS
- -------
Robert Studer Schonenberg, Chairman
Hans Heckmann Schlieren, Vice Chairman
Markus Kundig Zug; Vice Chairman; Publisher
Marc C. Cappis Herisau; Chairman of the Board and
Managing Director of Huber + Suhner
Ltd., Herisau AR/Pfaffikon ZH
Fritz Fahrni Winterthur; President of the Corporate
Executive Management of Sulzer Ltd.,
Winterthur
Kurt E. Feller Wollerau; Managing Director and Chief
Executive Officer of Rieter Holding
Ltd., Winterthur
Charles R. Firmenich Genthod; Vice Chairman of the Board of
Firmenich (International) SA, Geneva
Hannes Goetz Ruschlikon; Chairman of hte Board of
SAir Group, Zurich Airport
Reto Mengiardi Chur; Attorney and Notary Public
Rolf A. Meyer Bach; Chairman of the Board of Ciba
Speciality Chemicles Inc., Basle
Anne-Lise Monnier-Blzile Gland; Pharmacist and Chairwoman of the
Board of Ofac, Geneva
-23-
<PAGE>
Andreas Reinhart Winterthur; Chairman of the Board of
Volkart Brothers Holdign Ltd.,
Winterthur
Maria Reinshagen Zurich; Vice Chairman of Christie's
Europe, Zurich
Rene K. Ruepp Pfaffhausen; Chairman of the Board and
Chief Executive Officer of Forbo
Holding SA, Egilsau
Alfred N. Schindler Hergiswil; Chairman of the Board of
Schindler Holding AG, Hergiswil
Johann-Niklaus
Schneider-Ammann Langenthal; Chairman of the Board and
Managing Director of the Ammann Group,
Langenthal
Manfred Zobl Ruschlikon; Chairman of the Corporate
Executive Board of Swiss
Life/Rentenanstalt, Zurich
SECRETARY
- ---------
Franz Lusser Zug
-24-
<PAGE>
UBS INC.
DIRECTORS
Mathis Cabiallavetta
Richard C. Capone
Robert Mills
Robert C. Dinerstein
OFFICERS
Mathis Cabiallavetta Vice Chairman
Alan Q. Bozian Senior Managing Director
Gary Brown Senior Managing Director
Robert C. Dinerstein Senior Managing Director and Secretary
Markus Rohrbasser Senior Managing Director
James A. Ajello Managing Director
Dick Asjes Managing Director
Lawrence Charleson Managing Director
John W. Clark Managing Director
Mary B. W. Coe Managing Director
Robert W. Dove Managing Director
Donald M. Gray Managing Director
Peter R. Haldorfer Managing Director
Dennis B. Henderson Managing Director
Patrick N. Hoban Managing Director
W. Scott James Managing Director
David A. Kenney Managing Director
David M. Lefever Managing Director
Rudolf Merz Managing Director
Robert Mills Managing Director
L. Thomas Sperry Managing Director
Stephen J. Wade Managing Director
David T. Whitworth Managing Director
Bruce Eatroff Vice President
A. Jane Michaelis Vice President
G. Christian Ullrich Vice President
Stephan Wojcechowskyj Vice President
Samuel Azizo Assistant Vice President
Donna O'Rourke Assistant Vice President
Barbara Perry Assistant Vice President
Julie Saliling Assistant Vice President
Eric Hanson Credit Administration Officer
Daphne Bradshaw-Mack Assistant Treasurer
Lori F. Calamari Assistant Treasurer
Joanne Gotsis Assistant Treasurer
Michael A. Leibrock Assistant Treasurer
Donna Parks Assistant Treasurer
Jayne Travers Assistant Treasurer
Barbara A. Blanck Assistant Secretary
-25-
<PAGE>
UBS CAPITAL HOLDINGS LLC
BOARD OF MANAGERS
Name Address
Michael Greene 299 Park Avenue, New York, NY 10171
Marc Unger 299 Park Avenue, New York, NY 10171
Robert Dinerstein 299 Park Avenue, New York, NY 10171
OFFICERS
<TABLE>
<CAPTION>
<S> <C> <C>
Name Title Address
Justin Maccarone President 299 Park Avenue, New York, NY 10171
Robert Dinerstein Vice President/Secretary 299 Park Avenue, New York, NY 10171
Michael Greene Vice President/Treasurer 299 Park Avenue, New York, NY 10171
Barbara Blanck Assistant Secretary 299 Park Avenue, New York, NY 10171
</TABLE>
-26-
<PAGE>
UBS PARTNERS LLC
BOARD OF MANAGERS
Name Address
Michael Greene 299 Park Avenue, New York, NY 10171
Marc Unger 299 Park Avenue, New York, NY 10171
Robert Dinerstein 299 Park Avenue, New York, NY 10171
OFFICERS
<TABLE>
<CAPTION>
<S> <C> <C>
Name Title Address
Justin Maccarone President 299 Park Avenue, New York, NY 10171
Robert Dinerstein Vice President/Secretary 299 Park Avenue, New York, NY 10171
Michael Greene Vice President/Treasurer 299 Park Avenue, New York, NY 10171
Barbara Blanck Assistant Secretary 299 Park Avenue, New York, NY 10171
</TABLE>
-27-
<PAGE>
Appendix 2
FENWAY PARTNERS, INC.
Directors
- ---------
Peter Lamm
Citizenship: U.S.
Richard C. Dresdale
Citizenship: U.S.
Andrea Geisser
Citizenship: Italy
Executive Officers
- ------------------
Peter Lamm
President
Citizenship: U.S.
Richard C. Dresdale
Managing Director
Citizenship: U.S.
Andrea Geisser
Managing Director
Citizenship: Italy
Russell W. Steenberg
Managing Director
Citizenship: U.S.
Gregory P. Meredith
Managing Director
Citizenship: Canada
-28-
<PAGE>
EXHIBIT INDEX
Exhibit Page
1. Joint filing agreement of the Reporting Persons dated
July 7, 1997. 30
2. Power of Attorney (included in Exhibit 1). 30
3. Offer Letter dated July 7, 1997 from the Reporting
Persons to Merrill Lynch & Co. 33
-29-
Exhibit 1
AGREEMENT TO FILE JOINT
STATEMENT ON SCHEDULE 13D
AGREEMENT, this 7th day of July 1997, by and among Roy B. Andersen,
Jr., Robert S. Vaters, Dennis Schmaltz, Max A. Slifer, Vincent DeVita, UBS
Partners LLC and Fenway Partners, Inc. (collectively, the "Reporting Persons").
W I T N E S S E T H :
WHEREAS, the Reporting Persons may be deemed to have held beneficial
ownership of, in the aggregate, more than five percent of the shares of the
common stock, $.01 par value per share (the "Common Stock"), of Xpedite Systems,
Inc., as of the date hereof;
WHEREAS, the Common Stock has been registered by Xpedite Systems, Inc.
under Section 12(g) of the Securities Exchange Act of 1934, as amended (the
"Act");
WHEREAS, pursuant to Rule 13d-1 under the Act, when any person or group
acquires more than five percent of such a class of registered equity securities
it shall file with the Securities and Exchange Commission a statement on
Schedule 13D or 13G under certain circumstances;
WHEREAS, Rule 13d-1(f) under the Act provides that whenever two or more
persons are required to file a statement with respect to the same securities,
only one such statement need be filed, provided such persons agree in writing
that such statement is filed on behalf of each of them;
WHEREAS, certain of the Reporting Persons have previously executed and
delivered that certain Agreement to File Joint Statement on Schedule 13D dated
February 5, 1997 (the "Original Agreement") and hereby desire to amend and
restate in its entirety the Original Agreement;
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereby agree as follows:
Each of the Reporting Persons hereby agrees, in accordance with Rule
13d-1(f) under the Act, to file statements on Schedule 13D (the "Statements")
with respect to the Common Stock beneficially owned or deemed to be beneficially
owned by each of them pursuant to Section 13(d) of the Act and the rules
thereunder.
Each of the Reporting Persons hereby agrees that those Statements shall
be filed on behalf of each of them and that a copy of this Agreement shall be
filed as an Exhibit thereto in accordance with Rule 13d-(1)(f)(i) under the Act.
Each of Roy B. Andersen, Jr., Robert S. Vaters, Dennis Schmaltz, Max A.
Slifer and Vincent DeVita (i) hereby constitutes and appoints Roy B. Andersen
<PAGE>
and Robert S. Vaters their true and lawful attorney-in-fact and agent, for them
and in their name to sign the Statements and any amendment thereto granting to
such attorneys-in-fact and agents full power to do and perform each and every
act relating to this Statement and any amendment to this Statement, as fully and
to all intents and purposes as such persons might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents may lawfully
do or cause to be done by virtue hereof and (ii) agrees that the Original
Agreement is hereby amended and restated in its entirety.
This Agreement and the filing of the Statements shall not be construed
to be an admission that any of the Reporting Persons is a member of a "group"
pursuant to Section 13(d) of the Act and the rules thereunder consisting of one
or more such persons, except for purposes of acquiring Common Stock as set forth
in the Statement to which this Agreement is an Exhibit.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
/s/ Roy B. Andersen
---------------------------------------
Roy B. Andersen
/s/ Robert S. Vaters
---------------------------------------
Robert S. Vaters
/s/ Dennis Schmaltz
---------------------------------------
Dennis Schmaltz
/s/ Max A. Slifer
---------------------------------------
Max A. Slifer
/s/ Vincent DeVita
---------------------------------------
Vincent DeVita
<PAGE>
UBS PARTNERS LLC
/s/ Justin S. Maccarone
By:-----------------------------------
Name: Justin S. Maccarone
Title: President
/s/ Michael Greene
By:-----------------------------------
Name: Michael Greene
Title: Vice President/Treasurer
FENWAY PARTNERS, INC.
/s/ Russell W. Steenberg
By:-----------------------------------
Name: Russell W. Steenberg
Title: Managing Director
Exhibit 3
July 7, 1997
Mr. John Trousdale
Director
Merrill Lynch & Co.
World Financial Center
North Tower - 30th Floor
New York, New York 10281-1330
Re: XPEDITE SYSTEMS, INC.
Dear Mr. Trousdale:
We are pleased to submit a firm offer (the "Offer") to acquire
Xpedite Systems, Inc. (the "Company"). The principal terms of our Offer are as
follows:
1. PURCHASE PRICE. We are prepared to offer each stockholder of the
Company (other than certain members of management and principal
stockholders who, as explained below, will "roll over" a portion of
their shares) $22.50 per share of common stock in consideration of the
acquisition by us of the Company. Holders of options and warrants to
purchase common stock of the Company will receive such amount, net of
any applicable exercise price. Our purchase price will increase or
decrease on a "dollar-for-dollar" basis to the extent that the
combined purchase price of Xpedite Systems Ltd. and Xpedite Systems
GmbH is less than or more than, as applicable, $93 million, as
outlined in your bid instructions.
2. ASSUMPTIONS REGARDING XPEDITE SYSTEMS LTD. AND XPEDITE SYSTEMS GMBH.
As requested, we have assumed for purposes of our Offer that the
combined purchase price for Xpedite Systems Ltd. and Xpedite Systems
GmbH (the "Foreign Affiliates") will be $93 million. We have obtained
commitments to finance such acquisitions as described in paragraph 4
below.
3. ACQUISITION AGREEMENT. We enclose a copy of the Acquisition Agreement
submitted to us, marked to show proposed changes. We would be prepared
to promptly execute the Acquisition Agreement in the form enclosed,
provided that any schedules not included in the draft Acquisition
Agreement are satisfactory to us.
As you will see, we have made structural changes to the proposed
transaction which do not change the economic benefits to be realized
by the stockholders of the Company; our mark-up does not provide for a
tender offer or a holding company structure. The changes are
principally designed to permit the Company to use "recap accounting"
for purposes of reflecting the transaction in its financial
statements. To accomplish this, we will set up a transitory entity
<PAGE>
("Acquisition Corp."), which will be owned by UBS Partners LLC ("UBS
Partners") and affiliates of Fenway Partners, Inc. ("Fenway
Partners"); the acquisition of the Company will be effected by a
merger of Acquisition Corp. with and into the Company. Immediately
prior to the merger, shares of common stock of the Company held by the
members of management signing this letter and a portion of the shares
(having a value of approximately $5 million, valued at our offer
price) held by David Epstein, Robert Epstein, and/or Stuart Epstein,
and by affiliates of Patricof & Co. Ventures, Inc. will need to be
converted into a new class of common stock ("New Common Stock"); UBS
Partners and affiliates of Fenway Partners will purchase a portion of
each such management member's New Common Stock. In the merger, all New
Common Stock will be "rolled over" -- that is, converted into common
stock of the surviving corporation -- and all other common stock of
the Company will be converted into the right to receive $22.50 per
share in cash. We would be pleased to discuss the basis for these
structural changes with you if you wish further clarification.
4. SOURCES OF FINANCING. We have arranged all necessary financing for the
Offer. Sources of financing include committed bank financing provided
by Goldman Sachs Credit Partners L.P. and Union Bank of Switzerland,
bridge financing provided by Union Bank of Switzerland and
subordinated debt financing provided by UBS Securities LLC. UBS
Partners and Fenway Partners will provide the remainder of the funds
in the form of equity. UBS Partners ($800 million of committed equity
capital) and Fenway Partners ($527 million of committed equity
capital) have available to them sufficient funding for the equity
component of the transaction and both have reputations for
successfully concluding transactions of this type. Commitment letters
with respect to the financing are enclosed.
5. DUE DILIGENCE. We have completed our material due diligence.
6. NECESSARY APPROVALS. UBS Partners and Fenway Partners have received
internal approvals necessary to make the Offer and to consummate the
transaction on the terms contained herein and in the Acquisition
Agreement. Our markup of the Acquisition Agreement identifies
regulatory approvals, required consents and material conditions to
consummation of the acquisition of the Company. In addition, prior to
signing the Acquisition Agreement, we will require a waiver by the
Company of the application of Section 203 of the Delaware General
Corporation Law and receipt by UBS Partners and affiliates of Fenway
Partners of lock-up agreements from the principal management and other
stockholders identified in paragraph 3 above. Those lock-up agreements
will be in form customary for public acquisitions and will include
proxies to vote for and approve the transactions required to
consummate our Offer; the agreements will also contain provisions
binding the parties to take actions necessary to implement the
conversion of shares into New Common Stock and the "roll over" of
stock described in paragraph 3 above.
7. TIME TO CLOSE. We would expect that the timing of consummation of the
transactions will be determined by the actions required to prepare and
gain clearance from the Securities and Exchange Commission of a merger
proxy statement to be submitted to the Company's stockholders for
their approval of the transactions. We are prepared to proceed
<PAGE>
expeditiously. Upon execution of the Acquisition Agreement, we and our
counsel will immediately begin to work with the Company and its
counsel to prepare the proxy statement and seek to hold a meeting of
the Company's stockholders at the earliest practicable time.
8. EFFECT OF THIS LETTER. This letter is not a binding contract. The
parties will be jointly bound only in accordance with the terms and
conditions contained in executed definitive agreements.
We appreciate the opportunity to present this offer to you and
would be pleased to discuss it further with you. If you have any questions
please call Michael Greene, Managing Director at UBS Partners ((212) 821-6380),
James A. Breckenridge, Vice President at UBS Partners ((212) 821-6324), Russell
W. Steenberg, Managing Director at Fenway Partners ((212) 698-9441) or Roy B.
Andersen, Jr., President and Chief Executive Officer of the Company ((908)
389-3900).
Our Offer will remain open through 5:00 p.m. EDT on Monday,
August 4, 1997 (the "Expiration Date"); provided, that it will expire at 5:00
p.m. EDT on July 11, 1997, unless prior to that time the Company has rejected
all other offers it has received (and confirmed to us in writing that it has
done so), has agreed in writing not to solicit any further offers and to
promptly notify us of any inquiries or offers you or it may receive concerning
the acquisition of all or a portion of the capital stock or assets of the
Company and, subject to the fiduciary duties of the Company's directors, has
made arrangements for us to have exclusive rights to negotiate with the Foreign
Affiliates and their shareholders through the Expiration Date with respect to
the acquisition of the Foreign Affiliates.
<PAGE>
We look forward to your favorable response.
Very truly yours,
UBS PARTNERS LLC
/s/ James Breckenridge
By:-----------------------------------
Name: James Breckenridge
Title: Vice President
/s/ Michael Greene
By:-----------------------------------
Name: Michael Greene
Title: Managing Director
FENWAY PARTNERS, INC.
/s/ Russell W. Steenberg
By:-----------------------------------
Name: Russell W. Steenberg
Title: Managing Director
/s/ Roy B. Andersen, Jr.
---------------------------------------
Roy B. Andersen, Jr.
/s/ Robert S. Vaters
---------------------------------------
Robert S. Vaters
/s/ Max Slifer
---------------------------------------
Max Slifer
/s/ Dennis Schmaltz
---------------------------------------
Dennis Schmaltz
/s/ Vincent DeVita
---------------------------------------
Vincent DeVita
cc: Robert Chefitz
Philip A. Campbell
Neil Torpey, Esq.
