February 7, 1997
To: Xxxxxx Xxxxxxx
Xxxxxx X. Xxxxxxxx
c/o Xxxx Xxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
As you know, UBS Partners, Inc. ("UBS"), Fenway Partners,
Inc. ("Fenway") and members of management of Xpedite Systems, Inc.
(the "Company") who are signatories to this letter have been
discussing a proposal for the acquisition of the Company. This
letter will serve to express our interest in pursuing such a
transaction. We appreciate your invitation to us to submit this
proposal. The major elements of our proposed transaction are:
1. Acquisition Consideration. Pursuant to the terms of
a definitive acquisition agreement to be negotiated (the
"Acquisition Agreement"), we would acquire all of the outstanding
shares of common stock and options (other than a portion of the
shares held by certain members of management) at a cash price of
$22.50 per share. The Company's current indebtedness will be
refinanced.
2. Structure. The transaction will be structured in a
manner designed to give the continuing business of the Company the
benefits of "recap" accounting; the continuing interest of
management should facilitate such treatment. Appropriate
employment and equity arrangements with management will need to be
put in place. Union Bank of Switzerland and/or its affiliates are
prepared to commit, subject to definitive documentation, legal,
accounting and tax due diligence and other customary terms and
conditions, all of the debt financing required to consummate the
acquisition. We would be pleased to discuss further with you our
proposed structure and financing arrangements, subject to the
Company agreeing to provide UBS and Fenway with topping fees
customary to a deal of this type.
3. Due Diligence. We have completed our business
diligence on the Company and, upon your acceptance of our proposal,
will commence legal, tax, and accounting diligence promptly and
would expect to complete such diligence within 45 days. However,
if we are to proceed, it is important to us that from the date
hereof until the signing of the Acquisition Agreement, the Company
will afford to us and our representatives full access to all books,
records and facilities of the Company, permit us and our
representatives to make such inspections or other inquiries as we
may reasonably require, furnish to us all relevant financial and
operating data for the purpose of confirmatory due diligence, and
otherwise cooperate with us in connection with matters relating to
the acquisition.
4. Definitive Agreement. Notwithstanding anything else
contained herein, neither we nor the Company will have any
obligations with respect to the proposed transaction unless and
until the Acquisition Agreement is executed.
5. Foreign Affiliates. Satisfactory arrangements will
have to be negotiated by us to clarify the put and call option
agreements between the Company and its foreign affiliates to afford
us the opportunity to purchase the German and U.K. affiliates
contemporaneously with the acquisition of the Company, and the
pricing and other terms of such arrangements must be acceptable to
us.
6. Conditions. The consummation of the transactions
contemplated by this letter shall be subject to and conditioned
upon, among other things, the following:
(a) the execution of a mutually acceptable
definitive Acquisition Agreement and the
fulfillment or waiver of the terms and
conditions thereof;
(b) the receipt of all required state,
governmental and third party consents and
approvals (including, without limitation,
approvals that may be required under the Xxxx-
Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended);
(c) the absence of any material adverse change in
the business, financial condition, properties
or prospects of the Company from the date of
the most recent financial statements of the
Company provided to us to the closing;
(d) approval of the acquisition by the Board of
Directors of the Company;
(e) due diligence with respect to the Company's
German and U.K. affiliates, with the results
being satisfactory to us; and
(f) waiver by the Company of the application of
Section 203 of the Delaware General
Corporation Law.
7. Termination of Offer. The offer contained in this
letter will terminate on March 7, 1997 unless prior to such date
the Acquisition Agreement has been executed.
We are ready and eager to meet with you and your advisors
to begin working on the Acquisition Agreement. We believe that
your shareholders should find our proposal to be attractive.
Very truly yours,
UBS PARTNERS, INC.
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxxxxxxx
Xxxxx X. Xxxxxxxxxxxx
FENWAY PARTNERS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxxx
MANAGEMENT:
/s/ Xxx X. Xxxxxxxx, Xx.
Xxx X. Xxxxxxxx, Xx.
/s/ Xxxxxx Xxxxxx
Xxxxxx X. Xxxxxx
/s/ Xxxxxx Abi Xxxx
Xxxxxx Xxx Xxxx
/s/ Xxx X. Xxxxxx
Xxx Xxxxxx
/s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx
