SHAREHOLDERS AGREEMENT
SHAREHOLDERS AGREEMENT dated as of January 31, 1997
among XPEDITE SYSTEMS, INC., a Delaware corporation (the "COMPANY"); XXXXX
XXXXXXX, an individual, XXXXXX XXXXXXX, an individual, XXXXXX XXXXXXX, an
individual (collectively, the "EPSTEINS"); APA EXCELSIOR III, L.P., a Delaware
limited partnership, XXXXXX & CO. (JERSEY), CUSTODIAN FOR APA EXCELSIOR
III/OFFSHORE, L.P., a Channel Islands corporation, CIN VENTURE NOMINEES, LTD., a
United Kingdom corporation and APA/FOSTIN PENNSYLVANIA VENTURE CAPITAL FUND,
L.P., a New York limited partnership (collectively, the "PATRICOF SHAREHOLDERS"
and together with the Epsteins, the "CONTROLLING SHAREHOLDERS").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Controlling Shareholders own an aggregate of
approximately 34% of the issued and outstanding common stock, par value $.01 per
share (the "Common Stock") of the Company; and
WHEREAS, the Board of Directors (the "Board") of the Company
wishes to ensure that, in connection with any sale of shares of Common Stock by
two or more of the Controlling Shareholders, or one or more of the Controlling
Shareholders along with City Trading Corporation, European Trading Corporation,
11313 Yukon Corporation or any other holder of Common Stock whose activities are
under the management of Xxxx Xxxxxx Xxxxxxx (individually, a "Thai Investor"
and, collectively, the "Thai Investors") all shareholders of the Company have an
opportunity to participate in such sale, in view of the fact that such a sale
may involve a "control premium".
NOW, THEREFORE, in consideration of the foregoing, the
parties hereto agree as follows:
1. TRADER OFFER . In the event of a proposed transfer, sale
or other disposition of more than twenty-five percent (25%) of the issued and
outstanding shares of the Common Stock (the number of shares proposed to be
sold, transferred or otherwise disposed of, hereinafter, the "Proposed Sale
Shares") by two or more of the Controlling Shareholders or one or more of the
Controlling Shareholders along with one or more of the Thai Investors (a
"Transfer") to
any individual, corporation, general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, or other
entity or governmental body (each, a "Person") or group of Persons other than
another Controlling Shareholder or group of Controlling Shareholders, whether in
an individual transaction or in a series of related transactions (collectively,
the "Proposed Transfer"):
(a) the Proposed Transferee shall be required
to commence a tender offer (the "Offer") to purchase from the shareholders of
the Company other than the Controlling Shareholders (the "Non-Controlling
Shareholders") their aggregate pro rata portion (determined as the total number
of shares of Common Stock outstanding (on a fully diluted basis) held by the
Non-Controlling Shareholders divided by the total number of shares of Common
Stock outstanding (on a fully diluted basis)), of the Proposed Sale Shares (the
Non- Controlling Shareholders' pro rata portion of the Proposed Sale Shares,
hereinafter, the "NCS Portion"), at the same price and upon terms and conditions
substantially similar (but not less favorable) to those pursuant to which the
Proposed Transferee proposes to purchase shares of Common Stock from the
Controlling Shareholders. Such Offer shall be made in accordance with Regulation
14D and Regulation 14E (the "Tender Offer Rules") promulgated under the
Securities Exchange Act of 1934, as amended;
(b) with respect to the Proposed Sale Shares
which are not required to be the subject of the Offer (i.e., the Proposed Sale
Shares other than the NCS Portion, which shall hereinafter be referred to as the
"CS Portion"), the Proposed Transferee may complete its acquisition of such CS
Portion at any time as long as the Proposed Transferee has (i) provided to the
Board written evidence reasonably satisfactory to the Board to the effect that
the Proposed Transferee has obtained financing commitments in amounts sufficient
to enable the Proposed Transferee to complete the purchase of the NCS Portion
and (ii) executed and delivered to the Company a binding commitment, in form and
substance reasonably satisfactory to the Board, to complete the Offer and to
purchase a number of shares of Common Stock which is at least equal to the NCS
Portion tendered pursuant thereto;
(c) the Board shall (i) cooperate with the
Proposed Transferee in connection with the dissemination of the Offer, (ii)
evaluate and respond to such Offer in accordance with the Tender Offer Rules and
its fiduciary duties to the shareholders of the Company and (iii), subject to
the Board's fiduciary duties to the shareholders of the
-2-
Company, take such steps as may be required by ss.203 of the General Corporation
Law of the State of Delaware in order to enable the Proposed Transferee to
acquire and enjoy the benefits of ownership of the Proposed Sale Shares; and
(d) to the extent a number of shares less than
the NCS Portion is tendered pursuant to the Offer, following the expiration of
the Offer the Proposed Transferee shall be entitled to purchase form the
Controlling Shareholders a number of shares equal to the number of shares in the
NCS Portion which were not tendered by the Non-Controlling Shareholders.
2. REMEDIES. The parties agree and acknowledge that money
damages would not be an adequate remedy for breach of the provisions of this
Agreement and that any party hereto shall be entitled, in its sole discretion,
to apply to any court of competent jurisdiction for specific performance or
injunctive relief in order to enforce or prevent any violation of the provisions
of this Agreement, in addition to its remedies at law.
3. TRANSFER AGENT. The parties agree and acknowledge that
the Company shall have the right to instruct the Company's transfer agent not to
effect any transfer of shares of Common Stock held by the Controlling
Shareholders or the Thai Investors if such transfer would violate any provision
of this Agreement.
4. NOTICES. Any notice given pursuant to this Agreement
shall be in writing and shall be either personally delivered, sent by telex or
facsimile (with confirmation by certified mail, return receipt requested), by a
nationally recognized overnight courier or mailed by certified mail, return
receipt requested:
-3-
To the Company:
Xpedite Systems, Inc.
000 Xxxxxxx 00
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: President
with a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxx
and to any of the Controlling Shareholders at such address as is indicated in
Schedule 1 attached hereto or at such other address or to the attention of such
other person as the recipient party has specified by prior written notice to the
sending party. Notice shall be effective when so personally delivered, one
business day after being sent by courier, facsimile or telex or five (5) days
after being mailed.
5. MODIFICATION, AMENDMENT, WAIVER. No modification,
amendment or waiver of any provision of this Agreement shall be effective unless
approved in writing by the parties hereto. The failure of any party at any time
to enforce any of the provisions of this Agreement shall in no way be construed
as a waiver of such provisions and shall not affect the rights of the party
thereafter to enforce the provisions of this Agreement in accordance with its
terms.
6. TERM; COMPLETE AGREEMENT. This Agreement shall terminate
on July 1, 1998. This document embodies the complete agreement and understanding
between and among the parties hereto with respect to the subject matter hereof,
and supersedes and preempts any prior understandings, agreements, or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof.
7. SUCCESSORS AND ASSIGNS. This Agreement will bind and
inure to the benefit of and be enforceable by the parties and their respective
permitted successors and assigns.
8. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which will be an original and all of which taken together
will constitute one and the same Agreement.
-4-
9. APPLICABLE LAW. All questions concerning this Agreement
will be governed by and interpreted in accordance with the internal laws of the
State of Delaware, without giving effect to principles of conflicts of laws.
10. ACKNOWLEDGEMENT. The parties hereto acknowledge that the
arrangements among them set forth herein have been entered into in lieu of the
adoption by the Company of alternative measures that were contemplated by the
Board (which measures included the adoption of a "poison pill").
* * * *
-5-
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
XPEDITE SYSTEMS, INC.
By: --------------------------------------
Title:
------------------------------------------
Xxxxx Xxxxxxx
------------------------------------------
Xxxxxx Xxxxxxx
------------------------------------------
Xxxxxx Xxxxxxx
APA EXCELSIOR III, L.P.
By: APA Excelsior III Partners, L.P.
General Partner
By: -----------------------------
Name:
Title:
XXXXXX & CO. (JERSEY), LTD.,
CUSTODIAN FOR APA EXCELSIOR
III/OFFSHORE, L.P.
By: APA Excelsior III Partners, L.P.
General Partner
By: -----------------------------
Name:
Title:
CIN VENTURE NOMINEES LTD.
By: Patricof & Co. Ventures, Inc.
Investment Manager
By: ----------------------------
Name:
Title:
APA/FOSTIN PENNSYLVANIA VENTURE
CAPITAL FUND, L.P.
By: APA Pennsylvania Partners, a
New York partnership
General Partner
By: ----------------------------
Name:
Title:
SCHEDULE 1
NAME AND ADDRESS OF CONTROLLING SHAREHOLDERS
--------------------------------------------
Xxxxx Xxxxxxx
Xxxxx Xxxxxxx & Associates
000 Xxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxxx
Xxxxx & Wolf, P.C.
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxxx
Epstein, Fogerty, Xxxxx & Xxxxx
00 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
APA Excelsior III, X.X.
Xxxxxx & Co. (Jersey), Custodian for
APA Excelsior III/Offshore, L.P.
CIN Venture Nominees, Ltd.
APA/Fostin Pennsylvania Venture Capital Fund, L.P.
c/o Patricof & Co. Ventures, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
