Ex-10.1



 




Exhibit 10.01


Transaction Restructuring Agreement



     This is a Transaction Restructuring Agreement (this “Agreement”) by and
among (a) Daleen Technologies Inc., a Delaware corporation (“Daleen”), (b)
Daleen Holdings, Inc, a Delaware corporation (“Holdings”), (c) Parallel
Acquisition, Inc, a Delaware corporation, (“Acquisition Sub”), (d) Protek
Telecommunications Solutions Limited, a corporation organized under the laws of
England and Wales, whose principal place of business is located at 1 York Road,
Maidenhead, Berkshire, United Kingdom (“Protek”), (e) Paul A. Beaumont, Geoff
Butcher, Ian Watterson, Michael White, Michael Kersten and Barbara Krystyna
Kalinowska (each, a “Protek Seller”), (f) Quadrangle Capital Partners LP, a
Delaware limited partnership (“QCP”), Quadrangle Select Partners LP, a Delaware
limited partnership (“QSP”), Quadrangle Capital Partners-A LP, a Delaware
limited partnership (“QCP-A” and together with QCP and QSP, the “Quadrangle
Entities”), (g) Behrman Capital II, L.P., a Delaware limited partnership
(“Behrman”), (h) Strategic Entrepreneur Fund II, L.P., a Delaware limited
partnership (“SEF”), (i) Protek Network Management (UK) Limited, a company
formed under the laws of England and Wales, that is a wholly-owned subsidiary
of Protek and (j) Quadrangle Advisors LLC, a Delaware limited liability
company.



     Reference is made to the following agreements, each dated as of May 7,
2004: the Stock Purchase Agreement by and among Protek, the Protek Sellers and
Holdings (together with the exhibits and schedules thereto, the “Stock Purchase
Agreement”); the Investment Agreement by and among Holdings, the Quadrangle
Entities, Behrman and SEF (together with the exhibits and schedules thereto,
the “Investment Agreement”); the Agreement and Plan of Merger and Share
Exchange by and among Daleen, Holdings, Acquisition Sub, Behrman and SEF
(together with the exhibits and schedules thereto, the “Merger Agreement”); and
the Transaction Support Agreement by and among the Quadrangle Entities,
Behrman, SEF, Daleen, Holdings, Protek and certain of the Protek Sellers (the
"Transaction Support Agreement” and, together with the Stock Purchase
Agreement, the Merger Agreement and the Investment Agreement, the “Transaction
Agreements”). Capitalized terms used without further definition in this
Agreement have the meaning given to them in the respective Transaction
Agreement in respect of which such term is used below.



     This Agreement is intended to implement the agreed upon amendments to the
Transaction Agreements and related agreements referenced therein collectively
set forth in the Preliminary Proposed Term Sheet, dated as of September 24,
2004, referencing the Investment Agreement, the Merger Agreement and the
Transaction Support Agreement, by and among certain of the parties to this
Agreement (the “Daleen Term Sheet”) and in the Preliminary Proposed Term Sheet,
dated as of September 24, 2004, referencing the Stock Purchase Agreement by and
among certain of the parties to this Agreement (the “Protek Term Sheet,” and
collectively with the Daleen Term Sheet, the “Term Sheets”). Except as
expressly set forth in Section F below, upon execution and delivery of this
Agreement by all parties hereto, the Term Sheets shall be superceded and will
be of no further force or effect.



 









 





          In consideration of the foregoing premises and the mutual promises set
forth below, the undersigned parties hereby agree as follows:



     A. Modification of Stock Purchase Agreement. The Stock Purchase Agreement
is amended as follows:



          1. Section 3.1 of the Stock Purchase Agreement shall be deleted and
replaced in its entirety with the following:




     “Purchase Price. As full payment of the purchase price for (a) the
Shares and (b) the conversion of all options held by the Converting
Optionholders (the “Purchase Price”), Buyer shall, at Closing, (a)
deliver to the Selling Shareholders an aggregate of 166,414 shares of
Common Equity of Buyer (the “Common Equity Consideration”), to be
allocated among the Selling Shareholders and Converting Optionholders as
set forth on Exhibit J attached hereto, together with certificates
representing the same, the further transfer of which shall be restricted
under the United States Securities Act of 1933, as amended (the
“Securities Act”), (b) deliver $200,000 in cash to Butcher, and (c)
deliver to the Converting Optionholders fully vested options in respect
of an aggregate of 47,120 shares of the Common Equity of Buyer as set
forth on Exhibit J attached hereto. The parties hereto agree that each
share of Common Equity of Buyer shall be deemed, solely for purposes of
this Agreement, to have a value per share of Common Equity of $25.




     Twenty-four thousand (24,000) shares of the Common Equity Consideration
and shares of Common Equity of the Buyer underlying the fully-vested
options shall not be distributed at Closing and shall be held by Daleen
Holdings for release upon receipt of cash under certain arrangements as
set forth on Exhibit J-1 attached hereto. Upon receipt of any amounts
(as a result of full or partial payment) referenced on Exhibit J-1,
shares of, and options to acquire, Daleen Holdings’ Common Stock (valued
as set forth above) representing the dollar value of the cash so received
(based on the exchange rate at that time) shall be distributed amongst
the Sellers pro rata in accordance with the “Escrow Equity” set forth
beside each such Sellers’ name on Exhibit J. No fractional shares or
options to purchase fractional shares shall be distributed pursuant to
the foregoing and any such fractional shares shall be subject to
distribution upon the next distribution event. Upon receipt of all
amounts by September 24, 2005, all such “Escrow Equity” set forth beside
the name of each such Seller on Exhibit J attached hereto shall be
released without regard to aggregate dollar values of cash so received.
If any amounts set forth on Exhibit J-1 attached hereto are not received
by September 24, 2005, Common Equity Consideration and options to acquire
Common Equity of the Buyer with a value equal to the amounts so not
received, pro rata among the Sellers, shall be deemed returned to Daleen
Holdings as indemnification therefor and promptly cancelled and the
balance (if any) of any such shares or options still being held by Daleen
Holdings shall be distributed to the appropriate Sellers.




     In addition to the foregoing, Buyer shall assume, pay and perform
the Company’s obligations (i) set forth on Exhibit K attached hereto,
(ii) arising under all executory
contracts and leases, (iii) statutory contributions required under
the laws of the United


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Kingdom to be made by the Company’s optionholders
in connection with the exercise of options upon consummation of the
transactions contemplated by this Agreement, (iv) described in Section
7.1(o)(i) and (v) incurred after September 24, 2004 and approved by
Quadrangle (collectively, the “Assumed Liabilities”). Notwithstanding
the foregoing, the Buyer shall not assume, pay or discharge any of the
Liabilities of the Company, whether fixed, unliquidated, contingent or
otherwise, which arise out of or relate to periods prior to the Closing
other than the Assumed Liabilities (the “Retained Liabilities”) and the
Retained Liabilities shall hereby be assigned to the Sellers concurrent
with the Closing. The Assumed Liabilities shall hereby be assigned to
the Buyer concurrent with the Closing. The Buyer hereby agrees to assume
and timely pay and discharge the Assumed Liabilities and the Sellers
hereby agree to assume and timely pay and discharge the Retained
Liabilities on and after the Closing. In addition to the obligations set
forth in Section 11 hereof, each of the Buyer and the Sellers shall
defend, protect, indemnify, and hold harmless the others and its
affiliates from and against any and all loss, cost, liability, expense,
claim, action, damages, and fines (including those arising from the loss
of life, personal injury and/or property damage), including reasonable
attorneys’ fees, directly or indirectly arising from or out of any
failure by such party to perform his or its obligations, or any breach or
violation of his or its obligations, with respect to the foregoing
assignment and assumption from and after the Closing Date.”




     Schedule A attached hereto shall be attached to the Stock Purchase
Agreement as Exhibit J thereto, Schedule A-1 attached hereto shall be
attached to the Stock Purchase Agreement as Exhibit J-1 and Schedule B
attached hereto shall be attached to the Stock Purchase Agreement as
Exhibit K thereto.



          2. The second sentence of Section 3.8 shall be deleted and replaced with
the following:




     “Of this amount, Protek and the Buyer agree that $500,000 (such
amount, the “Deposit”) shall be treated, and Protek shall cause PNM(UK)L
to treat such amount, as follows: The full amount of the Deposit shall
be deemed additional purchase price payable to the Company under Section
3.1 at Closing.”



          3. Section 6.4 shall be amended by replacing (a) the reference to
“300,000” with “208,000”, (b) the reference to “50,000” with “24,789” and (c)
the reference to “504,000” with “347,257.”



          4. Section 7.1(a) shall be amended by adding the following sentence to the
end of such section:




     “The parties hereby agree and acknowledge that no material business
decision shall be made or effected by Protek or any of its Subsidiaries
between September 24, 2004 and Closing without the prior written consent
of the chief executive officer of Daleen and that any business decision
that affects the revenue, expenses, cash flow and balance sheet (and
items comprising the same) must be subject to prior coordination with
the chief executive officer of Daleen. To better effect this
coordination and consent and


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in addition to the obligations set forth in
Section 7.1(b) hereof, the management of Protek shall provide to the
chief executive officer of Daleen current (at least once a week or, more
frequently, if similar reports are produced more frequently by Daleen)
and detailed (in accordance with past practice and custom and containing,
at the very least, information which is equivalent to that similarly
included in reports internally by Daleen’s management) financial reports.
The chief executive officer of Daleen shall meet by teleconference with
the chief executive officer and chief financial officer of Protek no less
than once a week to discuss ordinary course business matters of Protek
(such meetings to be in addition to and not in lieu of discussions in
respect of preparations for closing and post-closing combined
operations).”



          5. The first sentence of the second paragraph of Section 7.1(d) shall be
amended to replace the reference to “the date hereof” with “September 24,
2004.”



          6. Clause (b) of Section 7.1(n)(ii) shall be deleted and replaced in its
entirety with the following:




     “(b) the Company shall, and the Sellers shall cause the Company to,
offer to pay in cash to each holder of Options, in consideration of the
consensual cancellation thereof, an amount equal to (a) the aggregate
value of the Buyer Common Equity (determined in accordance with Section
3.1) delivered at Closing in respect of each Non-Voting Ordinary Share
held by a Converting Optionholder times (b) the number of Non-Voting
Ordinary Shares subject to such Option;”



          7. Section 7.1(o) shall be deleted and shall be replaced in its entirety
with the following:




     “Liabilities of the Company. At the Closing, the only Liabilities
of the Company and the Company Subs shall be (i) trade payables of an
amount and type consistent with the Ordinary Course of the Company’s and
the Company Subs’ business and the Company’s and the Company Subs’ past
practice, (ii) Assumed Liabilities and (iii) such Retained Liabilities as
shall have been jointly and severally assumed by the Sellers pursuant to
Section 3.1 hereof.”



          8. Section 7.1(r)(iii)(3) shall be deleted and replaced in its entirety
with the following:



               “waives the application of Article 7 of the Articles of Association of the
Company to the deliveries to be made at Closing;”



          9. Section 7.2(b) shall be amended by deleting the first sentence and
replacing in its entirety with the following:



               “The Sellers and their respective Affiliates and Associates shall not,
from the date of this Agreement until the six-month anniversary of the Closing
(with respect to
Butcher and Kalinowska, until the Closing), directly or indirectly own, manage,
operate, join,


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control or participate in the ownership, management, operation
or control of, or be employed or retained by, render services to, provide
financing or advice to, or otherwise be connected in any manner with any
Restricted Business.”



          10. Section 8.2 shall be amended by inserting the following parenthetical
“(other than those set forth in Sections 4.13 and 5.3 and without reference to
the term “prospects” in Section 4.7(i))” after the word “Agreement” and before
the words “, or otherwise.”



          11. Section 8.11 shall be amended by replacing the reference to “February
29, 2004” therein with “September 24, 2004.”



          12. Section 9.5 shall be amended by deleting its title and replacing the
same with “Delivery of Common Equity Consideration and other Consideration” and
deleting the words “the Total Cash Purchase Price and” therein and replacing
them with “the cash payable pursuant to Section 3.1 hereof”.



          13. Section 10 shall be deleted and replaced in its entirety with the
following:




     “None of the representations or warranties in this Agreement (other
than those set forth in Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.21, 5.1 and
5.2, which shall survive the Closing indefinitely) shall survive the
Closing. Following consummation of the Closing, any breach of
representations or warranties by any party shall be deemed to be waived
by all other parties, and such other parties shall be deemed to fully
release and forever discharge the breaching party on account of any and
all claims, demands or charges, known or unknown with respect to the
same, except that nothing in this Section 10 shall be construed so as to
limit the ability of any party to bring a claim or action against any
other person for fraud committed directly by such person. The foregoing
provision shall not limit any covenant or agreement of any of the parties
which by its terms contemplates performance after the Closing.”



          14. Section 12.1(ii) shall be revised by replacing the reference to
“September 30, 2004” therein with “January 31, 2005.”



          15. Section 12.1(iii) shall be deleted and replaced in its entirety with
the following:



          “by Buyer, if there shall have occurred, on the part of the Company or the
Sellers, a breach of any representation, warranty, covenant or agreement
contained in this Agreement (other than those set forth in Sections 4.13 and
5.3 and without reference to the term “prospects” in Section 4.7(i)) that (x)
would result in a failure of a condition set forth in Section 8.1 or 8.2 and
(y) which is not curable or, if curable, is not cured within thirty (30)
calendar days after written notice of such breach is given by Buyer to the
Company;”



          16. The definition of “Company Material Adverse Effect” shall be amended
by adding the following new clauses to the end of such definition:



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     (g) any effect on the Company or its Affiliates as a result of
the public announcement of the Term Sheets or this Agreement and
the pendency of the transactions contemplated by the Transaction
Agreements;




     (h) any effects arising out of matters disclosed in the
disclosure schedules delivered by the Company other than those
arising out of or related to the Russian Investigation which have
not been disclosed as anticipated or expected in such schedules;
and




     (i) any changes arising out of economic or business conditions
generally applicable to companies in the Company’s and its
Subsidiaries’ line of business.



          19. Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.9, 3.10, 7.1(n)(iii), 7.1(h),
7.2(h), 8.18, 9.7 and 11 of the Stock Purchase Agreement shall be deleted,
together with all references thereto. Exhibits B, D and I to the Stock
Purchase Agreement shall be deleted and all references thereto shall be
deleted. The second sentence of Section 7.1(m) and the last sentence of
Section 13.6 shall be deleted.



     B. Modifications to the Protek Bridge Agreement. The Protek Bridge
Agreement (as defined in the Stock Purchase Agreement) is hereby amended as
follows:



          1. Clause (c) under the definition of “Repayment Date” shall be deleted
and replaced in its entirety with “31 January 2005.”



          2. “Sub-Facility A Amount” shall be revised to mean and refer to
US$4,000,000.”



          3. Section 5.1 shall be amended by adding the following clause to the end
thereof:




“(g) Quadrangle (as defined in the Definitive Agreement) has consented to
such Advance.”



     C. Modification of Investment Agreement. The Investment Agreement is
hereby amended as follows:



          1. The number of shares of Series A Preferred Stock set forth next to the
name of each Quadrangle Investor and each Behrman Investor shall be amended to
reflect the number of shares of Series A Preferred Stock set forth next to the
names of each Quadrangle Investor and each Behrman Investor on Schedule C to
this Agreement, subject to adjustment as contemplated by Section 1(c) of the
Investment Agreement.



          2. Section 1(a) shall be amended by inserting the words “or by assignment
of the promissory notes made by Daleen in favor of the Quadrangle Investors”
after the word “funds” and before “at the Closing.”



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          3. Section 1(b) shall be amended by adding the following to the end of
such section, “and the right to receive $827,391.59 under Section 1.1(d) of the
Merger Agreement.”



          4. Section 1(c) shall be amended by (a) replacing the reference to “the
date hereof” with “September 24, 2004”, (b) replacing the reference to “ten
(10) days” with “five (5) days” and (c) the term “Additional Investors Maximum
Purchase Amount” shall be amended to mean and refer to an aggregate Offering
Price of $3,428,676.



          5. The penultimate sentence of Section 2 shall be amended by inserting the
words “in a manner permitted by Section 1” after the words “wire transfer” and
before the words “, or any combination thereof.”



          6. The term “Minimum Offering Amount” shall mean and refer to $20,800,000.



          7. Section 6.1(c) shall be amended by replacing the words “the date
hereof” with “September 24, 2004.”



          8. Sections 6.3(c), 9.3(b) and 9.3(g)(ii) shall be deleted.



          9. Section 9.3(g) shall be amended to replace the reference to “September
30, 2004” with “January 31, 2005.”



          10. Section 9.3(f) shall be deleted and replaced in its entirety with the
following:




     “may be terminated by the Quadrangle Investors, if, prior to
any termination of the Protek Stock Purchase Agreement or delivery
of a termination notice under the Protek Stock Purchase Agreement,
each in accordance with its terms, there shall have occurred, on
the part of Protek or any Seller, a breach of any representation,
warranty, covenant or agreement contained in the Protek Stock
Purchase Agreement (other than those set forth in Sections 4.13 and
5.3 thereof and without reference to the term “prospects” in
Section 4.7(i) thereof) that (x) would result in a failure of a
condition set forth in Section 8.1 or 8.2 thereof and (y) which is
not curable or, if curable, is not cured within thirty (30)
calendar days after written notice of such breach is given by the
Company to Protek;”


The parties hereto acknowledge and agree that this revision is not intended to
condition the transactions contemplated in the Investment Agreement and the
Merger Agreement upon consummation of the transactions contemplated by the
Stock Purchase Agreement.



          11. “Material Adverse Effect” shall be amended by adding the following to
the end of the definition “, any effect on the Company or its Affiliates as a
result of the public announcement of the Term Sheets or this Agreement and the
pendency of the transactions contemplated by the Transaction Documents, any
effects arising out of matters disclosed in the



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Protek Stock Purchase Agreement
and Daleen Merger Agreement (including the disclosure schedules thereto updated
as of September 24, 2004), any changes arising out of economic or business
conditions generally to companies in the Company’s line of business and any
change of effect relating to or arising out of the Protek Stock Purchase
Agreement, including any termination thereof.”



          12. The Certificate of Designations (Exhibit B to the Investment
Agreement) shall be amended by deleting the second, third, penultimate and last
sentences of Section 2(a) thereof and deleting clause (A)(1)(y) of the
definition of “Additional Shares of Common Stock.”



          13. The Stockholders’ Agreement (Exhibit C to the Investment Agreement)
shall be amended by (a) revising the definition of “Exempted Issuance” by
replacing the word “including” in clause (i) thereof with the words “other
than” and adding “Daleen Merger Agreement (as defined in the Investment
Agreement) and” immediately after the words “pursuant to” in clause (i) and (b)
revising Section 3.2 by inserting the parenthetical, “(after taking into
account, and subject to, liquidation preferences set forth in the Certificate
of Designations (as defined in the Investment Agreement) such that amounts
distributed in respect of different classes of stock need not be the same if
such difference arises as a result of observation of the liquidation
preferences reflected therein)” after the words “at the same price per share.”



          14. The Registration Rights Agreement (Exhibit D to the Investment
Agreement) shall be revised by deleting clauses (i) and (ii) of Section 3.1(d)
and replacing the same with “all Registrable Securities requested to be
included in such registration by the Selling Holders holding securities set
forth in clauses (a), (b) and (c) of the definition of “Registrable
Securities,” in each case, allocated pro rata, as nearly as practical, to the
respective amounts of Registrable Securities held by the Selling Holders (with
all calculations pursuant to this sentence to be made excluding any Selling
Holders who withdraw its request for registration as provided in the
immediately following sentence).”



     D. Modifications to the Bridge Loan Agreement (as defined in the
Investment Agreement). The Bridge Loan Agreement is hereby amended as
follows:



          1. The Quadrangle Entities shall be added as Lenders under the Bridge Loan
Agreement. The Borrower shall deliver Notes to the Quadrangle Entities in the
amounts set forth herein concurrently with the execution of this Agreement.



          2. Section 1.1 of the Bridge Loan Agreement shall be amended by replacing
the reference to “$5.1 million” to “$14.3 million” and replacing the reference
to “May 25, 2005” with “January 25, 2005.” The maximum principal amount set
forth beneath each Lender’s respective signature shall be amended to reflect
the amounts set forth on Schedule D attached
hereto. Section 1.1 shall be further amended by adding the following
sentence to the end of such section:



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          “The Quadrangle Entities agree to fund $7,500,000 on September 24, 2004
and thereafter all additional loans shall be funded 50% by Behrman and SEF and
50% by the Quadrangle Entities.”



          3. The second sentence of Section 1.2(b) is deleted.



          4. Section 1.2(d) shall be amended be replacing the reference to “Lenders”
therein with “Behrman, on behalf of the Lenders”.



          5. A new Section 1.2(e) shall be inserted to read as follows:



          “Behrman hereby holds the security interest granted in Section 1.2(d)
above under and subject to the terms and conditions set forth in this Section
1.2(e) for the benefit of the Lenders. Behrman shall take such action with
respect to the security interest granted herein as mutually agreed to by the
Lenders. Behrman shall be responsible to disburse all proceeds from the
security interests granted herein to the Lenders, pro rata based on the amounts
extended hereunder, promptly upon receipt. Behrman shall not be personally
liable for any acts, omissions, errors of judgment or mistakes of fact or law
made, taken or omitted to be made or taken by it in accordance with this
Agreement in respect of the security interests granted hereunder (including,
without limitation, acts, omissions, errors or mistakes with respect to the
collateral), except for those arising out of or in connection with Behrman’s
gross negligence or willful misconduct.”



          6. All references to “Lender” or “Lenders” in Section 1.3 shall be amended
to refer instead to “Behrman and/or SEF.”



          7. Section 3(a) shall be amended by replacing the reference to
“$1,500,000” with “$4,000,000” and by adding “; provided, that, any such
advances under the Protek Facility on or after September 24, 2004 shall require
the consent of the Quadrangle Entities.”



          8. The following shall be inserted as new sections under Section 8:




     “8.4 Daleen Merger Agreement. The Borrower shall not take any of
the actions prohibited by (nor omit to take any of the actions required
by) Article V of the Daleen Merger Agreement as in effect as of the date
hereof (it being understood that a termination of the Daleen Merger
Agreement shall not affect this covenant or the terms contained therein).




     8.5 Affirmative Covenants. The Borrower shall (a) timely pay its
taxes when due, (b) maintain its good standing in its jurisdiction or
organization and in all jurisdictions in which it is qualified to do
business, and (c) be bound by Section 9 of the Registration Rights
Agreement (Exhibit D to the Investment Agreement) as if the covenants of
Daleen Holdings therein were, mutatis mutandi, covenants of the Borrower
(excluding, however, the covenants in paragraphs (d) (reservation of
stock), (e) (restrictive covenant agreements), (f) (indemnification
agreements), (g) (subsidiary boards), (h) (equity incentive plan) and (i)
(insurance),
and the Lenders shall be entitled



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to all of the rights of
the Qualified Holders and holders of Registrable Securities contemplated
thereunder.”



          9. Exhibit A to the Bridge Loan Agreement shall be amended by replacing
the reference to “May 1, 2005” in clause (a) of the definition of “Maturity
Date” therein with “January 1, 2005.”



     E. Modifications to the Merger Agreement. The Merger Agreement shall
hereby be amended as follows:



          1. Section 1.01(c) shall be amended by (a) replacing clauses (x) and (y)
thereof with “0.1113 shares of Parent PIK Preferred”, (b) deleting the proviso
after clause (y), (c) amending the definition of “Series F Value” to mean and
refer to “11.13 per share of Daleen Series F Preferred Stock” and (d) deleting
the words “and Common Stock” in the penultimate sentence thereof. Exhibit A to
the Merger Agreement shall be replaced in its entirety with Exhibit A attached
hereto.



          2. Section 2.01(a) shall be amended by deleting clauses (i) and (ii)
therein and the language thereafter and replacing the same with “0.4452 shares
of fully paid and nonassessable shares of Parent Common Stock.”



          3. Sections 2.02, 2.05, 7.02(c)(ii), 7.02(d) and 7.02(e) shall be deleted.



          4. Section 4.02 shall be amended by deleting the third sentence therein
and replacing the same in its entirety with the following:




     “Immediately after Closing, the issued shares of capital stock of
Parent shall consist solely of (a) the shares of Parent PIK Preferred and
Parent Common Stock to be issued under this Agreement, (b) 208,000 shares
of Parent Series A PIK Preferred to be issued under the Investment
Agreement, (c) 246,414 shares of Parent Common Stock to be issued under
the Protek Agreement and the Side Purchase Agreements referenced therein,
(d) shares of Parent Common Stock subject to options to be granted under
the Management Incentive Plan of Parent and under the Protek Agreement,
and (e) 100 shares of Parent’s Junior Preferred Stock.”



          5. Section 7.03(a) shall be amended by inserting the parenthetical “(other
than Section 3.10)” immediately before clause (i) therein.



          6. Section 7.04(a) shall be amended by inserting the parenthetical “(other
than Section 4.05)” immediately before clause (i) therein.



          7. Section 7.04(e) shall be amended by replacing the reference to “the
date hereof” with “September 24, 2004” and deleting the words after “Company
Material Adverse Effect.”



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          8. Section 8.01(c) shall be amended by replacing the reference to
“September 30, 2004” therein with “January 31, 2005.”



          9. Article IX shall be deleted in its entirety.



          10. The first sentence Section 10.01 shall be deleted and replaced in its
entirety with the following:




     “None of the representations or warranties in this Agreement
shall survive the Closing. Following consummation of the Closing,
any breach of representations or warranties by any party shall be
deemed to be waived by all other parties, and such other parties
shall be deemed to fully release and forever discharge the
breaching party on account of any and all claims, demands or
charges, known or unknown with respect to the same, except that
nothing in this Section 10.01 shall be construed so as to limit the
ability of any party to bring a claim or action against any other
person for fraud committed directly by such person. The foregoing
provision shall not limit any covenant or agreement of any of the
parties which by its terms contemplates performance after the
Closing.”



          11. The definition of “Company Material Adverse Effect” shall be amended
by inserting the following clauses at the end of such definition:




     “(g) any effect on Company or its Subsidiaries as a result of
the public announcement of the Term Sheets or this Agreement and
the pendency of the transactions contemplated by the Transaction
Agreements;




     (h) any effects arising out of matters disclosed in this
Agreement and the schedules hereto;




     (i) any changes arising out of economic or business conditions
generally to companies in the Company’s line of business; or




     (j) any change or effect relating to or arising out of the
Protek Agreement, including any termination thereof.”



     F. Modification to Transaction Support Agreement. Section 1 of the
Transaction Support Agreement is hereby amended by inserting “if not otherwise
terminated prior thereto,” after the words “Daleen Agreement” and immediately
prior to “Sections 8 and 9 of the Protek Agreement.” Section 3 shall be
amended by inserting “(other than the Protek Agreement)” after the first
reference to “Transaction Agreement” therein. A new Section 13 shall be
inserted to read as follows:



          “13. Termination. Upon termination of the Protek Agreement in accordance
with the terms set forth therein, Protek, Beaumont, Butcher and Watterson shall
no longer have any rights or obligations under this Agreement. In addition,
upon any such termination of the Protek Agreement, the remaining parties hereby
agree to use all commercially reasonable efforts



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to amend the Transaction
Agreements and related agreements to reflect the terms set forth in the term
sheet among the other parties hereto dated as of September 24, 2004, in the
event of an acquisition of Daleen without Protek.”



     G. Other Corresponding Modifications to Transaction Agreements. The
recitals contained in the Transaction Agreements and cross-references in the
Transaction Agreements are hereby modified in accordance with the amendments to
the Transaction Agreements and the related agreements contemplated herein.
Schedules attached hereto shall be incorporated by reference into the document
in which they are so referenced pursuant to the terms contained in this
Agreement. The Schedules to the Stock Purchase Agreement referenced, and
intended to qualify representations set forth, in Article 4 thereof shall be
modified to reflect the revisions set forth in Schedule E attached hereto (as
so modified, the “Updated Protek Schedules”) and the Company Disclosure
Schedules shall be modified to reflect the revisions set forth in Schedule F
attached hereto (as so modified, the “Updated Daleen Schedules”). Defined
terms no longer used shall be deleted and references to terms defined in
sections which have been deleted shall continue to have the meaning set forth
in such deleted section, such deletion notwithstanding. All references to the
Transaction Agreements and the related agreements herein and therein shall mean
and refer to such agreement, as amended by this Agreement (including amendments
to the schedules and exhibits thereto).



     H. Modifications to Voting Agreements. The parties to this Agreement
acknowledge that the Voting Agreements (as defined in the Merger Agreement)
have been amended as contemplated by the Daleen Term Sheet.



     I. Modifications to Transaction Fee. The side letter by and among Daleen,
Daleen Holdings and Quadrangle Advisors LLC shall be hereby amended by
replacing the reference to “$400,000” therein with “$300,000.”



     I. No Admissions. This Agreement is entered into in order to effect the
premises set forth above, to compromise and settle certain disputed claims and
to avoid litigation, and nothing contained in this Agreement shall constitute
or be deemed an admission of breach, default, liability or fault on the part of
any party hereto, each of which specifically denies any such breach, default,
liability or fault. This Agreement does not constitute a release of any claim
that any party may have under the Transaction Agreements, as amended hereby.
Notwithstanding, the parties agree and acknowledge that upon execution and
delivery of this Agreement, no claims may be made with respect to the
provisions and disclosures which have been superceded specifically hereby. It
is understood and acknowledged by all parties that the settlement and
compromise contemplated by this Agreement shall be effective only upon the
consummation of the transactions contemplated by this Agreement.



     J. Representations and Warranties. Protek and the Sellers hereby make the
representations and warranties set forth in Sections 4 and 5 (without taking
into account the
reference to the word “prospects” in Section 4.7(i)) of the Stock Purchase
Agreement, as modified by the Updated Protek Schedules. In addition, Protek
and the Sellers confirm that they have complied to date with the obligations
set forth in Section 7.1(n)(ii) of the Stock Purchase



12









 




Agreement. Daleen hereby
makes the representations and warranties set forth in Article III of the Merger
Agreement, as modified by the Updated Daleen Schedules.



     K. Miscellaneous. Except as modified or amended by this Agreement, each
of the Transaction Agreements shall continue unaltered and in full force and
effect. This Agreement shall be governed by the law of the State of New York
(but, in respect of the amendments made to the Investment Agreement, by the law
of the State of Delaware), without regard to any principles of conflict of laws
that would require the application of the law of another jurisdiction. The
undersigned consent to the jurisdiction of and venue in any state or federal
court located in the City of New York, State of New York in any action relating
to this Agreement. Together with the Transaction Agreements, this Agreement
constitutes the entire understanding of the parties in respect of the subject
matter of this Agreement and may only be amended in writing by a document
signing by each party hereto. This Agreement may be signed in counterparts.



[Remainder of page left blank; signature pages follow]




13









 





     Intending to be bound hereby, the undersigned have executed and delivered
this Agreement as of this 24th day of September, 2004.



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	QUADRANGLE CAPITAL PARTNERS LP
	 	 	 	 	By:	 	Quadrangle GP Investors LP, its General Partner
	 	 	 	 	 	 	By:	 	Quadrangle GP Investors
LLC, its General Partner
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	/s/ MICHAEL HUBER
	 	 	 	 	 	 	 	 	 	 	

	

	 	 	 	 	 	 	 	 	 	Name:
	 	Michael Huber
	

	 	 	 	 	 	 	 	 	 	 	 	

	

	 	 	 	 	 	 	 	 	 	Title:
	 	Managing Principal
	

	 	 	 	 	 	 	 	 	 	 	 	

	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	QUADRANGLE SELECT PARTNERS LP
	 	 	 	 	By:	 	Quadrangle GP Investors LP, its General Partner
	 	 	 	 	 	 	By:	 	Quadrangle GP Investors LLC, its General Partner
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	/s/ MICHAEL HUBER
	 	 	 	 	 	 	 	 	 	 	

	

	 	 	 	 	 	 	 	 	 	Name:
	 	Michael Huber
	

	 	 	 	 	 	 	 	 	 	 	 	

	

	 	 	 	 	 	 	 	 	 	Title:
	 	Managing Principal
	

	 	 	 	 	 	 	 	 	 	 	 	

	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	QUADRANGLE CAPITAL PARTNERS-A LP
	 	 	 	 	By:	 	Quadrangle GP Investors LP, its General Partner
	 	 	 	 	 	 	By:	 	Quadrangle GP Investors LLC, its General Partner
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	/s/ MICHAEL HUBER
	 	 	 	 	 	 	 	 	 	 	

	

	 	 	 	 	 	 	 	 	 	Name:
	 	Michael Huber
	

	 	 	 	 	 	 	 	 	 	 	 	

	

	 	 	 	 	 	 	 	 	 	Title:
	 	Managing Principal
	

	 	 	 	 	 	 	 	 	 	 	 	


















 






     Intending to be bound hereby, the undersigned have executed and delivered
this Agreement as of this 24th day of September, 2004.



	 	 	 	 	 
	 	 	DALEEN TECHNOLOGIES, INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ GORDON QUICK
	

	 	 	 	
 
	

	 	Name:
	 	Gordon Quick
	

	 	 	 	
 
	

	 	Title:
	 	Pres. & CEO
	

	 	 	 	
 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	DALEEN HOLDINGS, INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ GORDON QUICK
	

	 	 	 	
 
	

	 	Name:
	 	Gordon Quick
	

	 	 	 	
 
	

	 	Title:
	 	CEO & Treas.
	

	 	 	 	
 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	PARALLEL ACQUISITION, INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ GORDON QUICK
	

	 	 	 	
 
	

	 	Name:
	 	Gordon Quick
	

	 	 	 	
 
	

	 	Title:
	 	CEO & Treas.
	

	 	 	 	
 

















 






     Intending to be bound hereby, the undersigned have executed and delivered
this Agreement as of this 24th day of September, 2004.



	 	 	 	 	 
	 	 	BEHRMAN CAPITAL II, L.P.
	 
	 	 	 	 
	 	 	By: Behrman Brothers, LLC, its General Partner
	 
	 	 	 	 
	

	 	By:
	 	/s/ GRANT G. BEHRMAN
	

	 	 	 	

	

	 	Name:
	 	Grant G. Behrman
	

	 	 	 	

	

	 	Title:
	 	Managing Member
	

	 	 	 	

	 
	 	 	 	 
	 
	 	 	 	 
	 	 	STRATEGIC ENTREPRENEUR FUND II, L.P.
	 
	 	 	 	 
	

	 	By:
	 	/s/ GRANT G. BEHRMAN
	

	 	 	 	

	

	 	Name:
	 	Grant G. Behrman
	

	 	 	 	

	

	 	Title:
	 	General Partner
	

	 	 	 	


















 






     Intending to be bound hereby, the undersigned have executed and delivered
this Agreement as of this 24th day of September, 2004.



	 	 	 	 	 
	 	 	PROTEK TELECOMMUNICATIONS SOLUTIONS LIMITED
	 
	 	 	 	 
	

	 	By:
	 	/s/ P. A. BEAUMONT
	

	 	 	 	
 
	

	 	Name:
	 	P. A. Beaumont
	

	 	 	 	
 
	

	 	Title:
	 	CEO
	

	 	 	 	
 
	 
	 	 	 	 
	 	 	PROTEK NETWORK MANAGEMENT (UK) LIMITED
	 
	 	 	 	 
	

	 	By:
	 	/s/ P. A. BEAUMONT
	

	 	 	 	
 
	

	 	Name:
	 	P. A. Beaumont
	

	 	 	 	
 
	

	 	Title:
	 	Director
	

	 	 	 	
 
	 
	 	 
	

	 	PAUL A. BEAUMONT
	 
	 	 
	

	 	     /s/ PAUL A. BEAUMONT
	

	 	

	 
	 	 
	

	 	GEOFF BUTCHER
	 
	 	 
	

	 	     /s/ GEOFF BUTCHER
	

	 	

	 
	 	 
	

	 	IAN WATTERSON
	 
	 	 
	

	 	     /s/ IAN WATTERSON
	

	 	

	 
	 	 
	

	 	MICHAEL WHITE
	 
	 	 
	

	 	     /s/ MICHAEL WHITE
	

	 	

	 
	 	 
	

	 	MICHAEL KERSTEN
	 
	 	 
	

	 	     /s/ MICHAEL KERSTEN
	

	 	

	 
	 	 
	

	 	BARBARA KRYSTYNA KALINOWSKA
	 
	 	 
	     /s/ MARTIN COAKLEY


	 	Acting by her attorney Martin Coakley


















 






     Intending to be bound hereby, the undersigned have executed and delivered
this Agreement as of this 24th day of September, 2004.



	 	 	 	 	 
	 	 	QUADRANGLE ADVISORS LLC
	 
	 	 	 	 
	

	 	By:
	 	/s/ DAVID TANNER
	

	 	 	 	
 
	

	 	Name:
	 	David Tanner
	

	 	 	 	
 
	

	 	Title:
	 	Managing Member
	

	 	 	 	
 

















 






EXHIBIT A




Exchanged Shares




	 	 	 	 	 	 	 	 	 
	 	 	Daleen Common Stock
	 	Daleen Series F Preferred Stock

	Behrman Capital II, L.P.
	 	 	21,258,417	 	 	 	219,744	 
	Strategic Entrepreneurship
Fund II, L.P.
	 	 	288,239	 	 	 	2,980