SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-l(a) AND AMENDMENTS THERETO FILED PURSUANT
TO RULE 13d-2(a)
(Amendment No. 2)*
Daleen Technologies, Inc.
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
23427N 10-4
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(CUSIP Number)
Behrman Capital II, L.P.
Attn: Grant G. Behrman
126 East 56th Street, 27th Floor
New York, New York 10022
(212) 980-6500
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
May 7, 2004
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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 that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box [_].
Note. Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
(Continued on the following pages)
(Page 1 of 10 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 be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act.
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CUSIP No. 23427N 10-4 13D Page 2 of 10 Pages
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1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Behrman Capital II, L.P. 13-3952825
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2. Check the Appropriate Box if a Member of a Group (a) [_]
(b) [_]
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3. SEC Use Only
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4. Source of Funds
OO
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5. Check Box if Disclosure of Legal Proceedings 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
BENEFICIALLY -0-
OWNED BY ---------------------------------------------------------------
EACH 8. Shared Voting Power
REPORTING
PERSON 59,652,646
WITH ---------------------------------------------------------------
9. Sole Dispositive Power
-0-
---------------------------------------------------------------
10. Shared Dispositive Power
59,652,646
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
59,652,646
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12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares [_]
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13. Percent of Class Represented by Amount in Row (11)
70.0%
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14. Type of Reporting Person
PN
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CUSIP NO. 23427N 10-4 13D Page 3 of 10 Pages
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1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Strategic Entrepreneur Fund II, L.P.
13-3959212
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2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [_]
(b) [_]
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3. SEC Use Only
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4. Source of Funds (See Instructions)
OO
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5. Check Box if Disclosure of Legal Proceedings 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
BENEFICIALLY -0-
OWNED BY -------------------------------------------------------------
EACH 8. Shared Voting Power
REPORTING
PERSON 808,939
WITH -------------------------------------------------------------
9. Sole Dispositive Power
-0-
-------------------------------------------------------------
10. Shared Dispositive Power
808,939
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
808,939
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12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [_]
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13. Percent of Class Represented by Amount in Row (11)
1.7%
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14. Type of Reporting Person (See Instructions)
PN
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CUSIP No. 23427N 10-4 13D Page 4 of 10 Pages
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1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Behrman Brothers, L.L.C.
13-3952711
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2. Check the Appropriate Box if a Member of a Group (a) [_]
(b) [_]
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3. SEC Use Only
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4. Source of Funds
OO
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5. Check Box if Disclosure of Legal Proceedings 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
BENEFICIALLY -0-
OWNED BY -----------------------------------------------------------
EACH 8. Shared Voting Power
REPORTING
PERSON 59,652,646
WITH -----------------------------------------------------------
9. Sole Dispositive Power
-0-
-----------------------------------------------------------
10. Shared Dispositive Power
59,652,646
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
59,652,646
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12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares [_]
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13. Percent of Class Represented by Amount in Row (11)
70.0%
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14. Type of Reporting Person
OO
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CUSIP No. 23427N 10-4 13D Page 5 of 10 Pages
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1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Grant G. Behrman
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2. Check the Appropriate Box if a Member of a Group (a) [_]
(b) [_]
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3. SEC Use Only
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4. Source of Funds (See Instructions)
OO
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5. Check Box if Disclosure of Legal Proceedings 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
BENEFICIALLY -0-
OWNED BY --------------------------------------------------------------
EACH 8. Shared Voting Power
REPORTING
PERSON 60,461,585
WITH --------------------------------------------------------------
9. Sole Dispositive Power
-0-
--------------------------------------------------------------
10. Shared Dispositive Power
60,461,585
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
60,461,585
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12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares [_]
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13. Percent of Class Represented by Amount in Row (11)
70.5%
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14. Type of Reporting Person
IN
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5
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CUSIP No. 23427N 10-4 13D Page 6 of 10 Pages
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1. Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
William M. Matthes
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2. Check the Appropriate Box if a Member of a Group (a) [_]
(b) [_]
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3. SEC Use Only
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4. Source of Funds
OO
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5. Check Box if Disclosure of Legal Proceedings 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
BENEFICIALLY -0-
OWNED BY -------------------------------------------------------------
EACH 8. Shared Voting Power
REPORTING
PERSON 59,652,646
WITH -------------------------------------------------------------
9. Sole Dispositive Power
-0-
-------------------------------------------------------------
10. Shared Dispositive Power
59,652,646
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
59,652,646
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12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares [_]
-------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
70.0%
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14. Type of Reporting Person
IN
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CUSIP NO. 23427N 10-4 13D Page 7 of 10 Pages
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This Amendment No. 2 amends and supplements the report on Schedule 13D
originally filed with the Securities and Exchange Commission (the "SEC") on
October 17, 2002 (together with Amendment No. 1 filed on December 20, 2002, the
"Original 13D") by Behrman Capital II, L.P. ("Behrman Capital"), Strategic
Entrepreneur Fund II, L.P. ("SEF"), Behrman Brothers L.L.C. ("Behrman
Brothers"), Grant G. Behrman and William M. Matthes (each a "Reporting Person"
and, collectively, the "Reporting Persons") with respect to the shares of common
stock, par value $0.01 per share ("Common Stock"), of Daleen Technologies, Inc.
(the "Company"). This Amendment No. 2 is filed jointly on behalf of the
Reporting Persons in accordance with Rule 13d-1(k)(1) under the Securities
Exchange Act of 1934 pursuant to a Joint Filing Agreement set forth on Exhibit A
hereto.
This Amendment No. 2 amends the Original 13D with respect to the items set
forth below. Unless otherwise indicated, each capitalized term used but not
otherwise defined herein shall have the meaning assigned to such term in the
Original 13D.
ITEM 4. Purpose of Transaction
The response set forth in Item 4 of the Original 13D is hereby amended and
supplemented by adding the following paragraphs:
On May 7, 2004, Behrman and SEF entered into an Agreement and Plan of
Merger and Share Exchange (the "Merger Agreement") with the Company, Daleen
Holdings, Inc., a newly formed Delaware corporation ("Daleen Holdings") and
Parallel Acquisition, Inc., a wholly-owned subsidiary of Daleen Holdings
("Parallel"), pursuant to which the Company agreed to merge with Parallel to
become a privately-held company and wholly-owned subsidiary of Daleen Holdings
(the "Merger"). The Merger may be deemed to constitute a "going private"
transaction that is subject to the requirements of Rule 13e-3 under the
Securities Exchange Act of 1934. The Merger Agreement requires the Company to
file certain materials with the SEC, including a proxy statement and a Schedule
13E-3, and, after review of those materials by the SEC, to distribute such
materials to its stockholders. The consummation of the Merger is subject to
certain closing conditions, including the approval of the Company's stockholders
and the satisfaction of the conditions to closing of certain related
transactions, including the purchase by Daleen Holdings of all of the
outstanding stock of Protek Telecommunications Solutions Limited (the "Protek
Acquisition") and the investments contemplated by the Investment Agreement (as
discussed below), all as more fully described in the Merger Agreement. Under the
Merger Agreement, Behrman and SEF have agreed to exchange their shares of Series
F convertible preferred stock ("Series F Stock") of the Company for a
combination of shares of Series A-1 convertible preferred stock and shares of
common stock of Daleen Holdings, that, in the aggregate, have been valued at
approximately $7,664,700 pursuant to the terms of the Merger Agreement. In
addition, Behrman, SEF and the other holders of shares of Common Stock, will
have the right to receive cash in exchange for their shares of Common Stock at
an exchange ratio of $0.0384 per share of Common Stock. All descriptions herein
of the terms of the Merger and the Merger Agreement are qualified in their
entirety by reference to the Merger Agreement, a copy of which is filed as
Exhibit 1 to Amendment No. 2 and is incorporated herein by reference in its
entirety.
In connection with the Merger Agreement, Behrman and SEF entered into a
Voting Agreement on May 7, 2004 (the "Voting Agreement") with Quadrangle Capital
Partners LP ("QCP"), Quadrangle Select Partners LP and Quadrangle Capital
Partners-A LP (together, the "Quadrangle Parties"). Pursuant to the terms of the
Voting Agreement, Behrman and SEF agreed, until the consummation of the closing
of the Merger or the earlier termination of the Merger Agreement, (a) not to
transfer any of their shares of Common Stock or Series F Stock and (b) to vote
all of such shares in favor of the Merger Agreement at any meeting of the
stockholders of the Company and against (i) any proposal made in opposition to
the Merger, (ii) any liquidation or winding up of the Company, (iii) any
extraordinary dividend by the Company, (iv) any amendment of the Company's
certificate or incorporation or bylaws, (v) any change in the capital structure
of the Company and (vi) any other action that
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CUSIP NO. 23427N 10-4 13D Page 8 of 10 Pages
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might impede, interfere with, delay, postpone or attempt to discourage the
consummation of the Merger and the transactions related thereto. In addition,
Behrman and SEF have granted an irrevocable proxy to Michael Huber, in his
capacity as managing partner of QCP, to vote all such shares in favor of the
Merger Agreement. All descriptions herein of the terms of the Voting Agreement
are qualified in their entirety by reference to the Voting Agreement, a copy of
which is filed as Exhibit 2 to Amendment No. 2 and is incorporated herein by
reference in its entirety.
Contemporaneously with the execution of the Merger Agreement, Behrman, SEF,
the Quadrangle Parties and Daleen Holdings entered into an Investment Agreement
dated May 7, 2004 (the "Investment Agreement"), pursuant to which Behrman and
SEF have agreed to invest $5 million and the Quadrangle Parties have agreed to
invest $25 million in Daleen Holdings, with the obligations of the parties to
make such investments being conditioned upon certain events, including the
satisfaction of the conditions to closing set forth the Merger Agreement. Also
on May 7, 2004, Behrman and SEF entered into a Subordinated Bridge Loan
Agreement with the Company (the "Loan Agreement"), pursuant to which Behrman
and SEF agreed to lend the Company up to an aggregate maximum amount of $5.1
million. To satisfy its payment obligations under the Investment Agreement,
Behrman may transfer any notes it receives from the Company under the Loan
Agreement to Daleen Holdings. Also in connection with the Loan Agreement, the
Company agreed to direct the release from escrow (the "Escrow Release") of all
shares of Common Stock and Series F Stock and all warrants underlying shares of
Common Stock that have been held in escrow pursuant to the transactions
contemplated by an Asset Purchase Agreement dated October 7, 2002 among the
Company, Daleen Solutions, Inc. and Abiliti Solutions, Inc., the terms of which
are more fully described in the Original 13D. All descriptions herein of the
terms of the Investment Agreement and the Loan Agreement are qualified in their
entirety by reference to such agreements, copies of which are filed as Exhibits
3 and 4 to Amendment No. 2 and are incorporated herein by reference in their
entirety.
Pursuant to the terms of a Transaction Support Agreement dated May 7, 2004
(the "Support Agreement"), Behrman, SEF, the Quadrangle Parties and the Company
have agreed to effect a simultaneous closing of the Merger, the Protek
Acquisition and the investments under the Investment Agreement and to otherwise
coordinate the performance and consummation of those transactions. The
description herein of the terms of the Support Agreement is qualified in its
entirety by reference to the Support Agreement, a copy of which is filed as
Exhibit 5 to Amendment No. 2 and is incorporated herein by reference in its
entirety.
Except as set forth in this Item 4, the Reporting Persons do not presently
have any plans or proposals concerning the Company with respect to any of the
matters set forth in subparagraphs (a) through (j) of the instructions
accompanying Item 4 of Schedule 13D.
ITEM 5. Interest in Securities of the Issuer
The response set forth in Item 5 of the Original 13D is hereby amended and
supplemented by adding the following paragraphs:
As of May 7, 2004, after giving effect to the Escrow Release, Behrman
Capital directly beneficially owned (i) 21,342,454 shares of Common Stock, (ii)
220,596 shares of Series F Stock (which are convertible into 27,012,046 shares
of Common Stock) and (iii) warrants to purchase up to an aggregate of
11,298,146 shares of Common Stock. Therefore, Behrman Capital directly
beneficially owned an aggregate of 59,652,646 shares of Common Stock, which is
equivalent to approximately 70.0% of the total number of shares of Common Stock
outstanding, based on the number of outstanding shares of Common Stock reported
in the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 2003 (the "Company 10-K"). As of May 7, 2004, after giving effect to the
Escrow Release, SEF directly beneficially owned (i) 289,379 shares of Common
Stock, (ii) 2,992 shares of Series F Stock (which are convertible into 366,371
shares of Common Stock) and (iii)
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CUSIP NO. 23427N 10-4 13D Page 9 of 10 Pages
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warrants to purchase up to an aggregate of 153,189 shares of Common Stock.
Therefore, SEF directly beneficially owned an aggregate of 808,939 shares of
Common Stock, which is equivalent to approximately 1.7% of the total number of
shares of Common Stock outstanding, based on the number of outstanding shares
of Common Stock reported in the Company 10-K.
In accordance with the rules governing determination of beneficial
ownership, the foregoing percentages have been separately calculated assuming
that Behrman Capital or SEF, as applicable, converted its shares of Series F
Stock and exercised its warrants to purchase Common Stock.
Behrman Brothers is the general partner of Behrman Capital and, as such,
shares the power to vote or direct the vote and to dispose or direct the
disposition of all shares of Common Stock and Series F Stock and warrants to
purchase shares of Common Stock held by Behrman Capital. Accordingly, Behrman
Brothers may be deemed to have beneficial ownership of the 59,652,646 shares of
Common Stock deemed to be beneficially owned by Behrman Capital. Mr. Behrman
and Mr. Matthes are the managing members of Behrman Brothers and, as such, have
the power to direct the actions of Behrman Brothers. Accordingly, Mssrs.
Behrman and Matthes each may be deemed to have beneficial ownership of the
59,652,646 shares of Common Stock deemed to be beneficially owned by Behrman
Brothers. Mr. Behrman is also the general partner of SEF and, as such, shares
the power to vote or direct the vote and to dispose or direct the disposition
of all share of Common Stock and Series F Stock and warrants to purchase shares
of Common Stock held by SEF. Therefore, Mr. Behrman also may be deemed to
beneficially own the 808,939 shares of Common Stock deemed to be beneficially
owned by SEF for an aggregate deemed beneficial ownership of 60,461,585, or
approximately 70.5% of the total number of shares of Common Stock outstanding,
based on the number of outstanding shares of Common Stock reported in the
Company 10-K. In light of the relationships between the Reporting Persons
described herein and the effect of the terms of the Voting Agreement, each
Reporting Person is deemed to have both shared voting power and shared
dispositive power with respect to the shares of Common Stock such Reporting
Person is deemed to beneficially own.
ITEM 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
The information set forth under Items 4 and 5 above and the Exhibits
attached hereto is incorporated herein by reference in its entirety.
ITEM 7. Materials to be Filed as Exhibits
The following documents are filed as exhibits to this Amendment No. 2 to the
Original 13D:
Exhibit A Joint Filing Agreement dated May 17, 2004
Exhibit 1 Agreement and Plan of Merger and Share Exchange dated May 7, 2004.
Exhibit 2 Voting Agreement dated May 7, 2004.
Exhibit 3 Series A Convertible Redeemable PIK Preferred Stock Investment
Agreement dated May 7, 2004.
Exhibit 4 Subordinated Bridge Loan Agreement dated May 7, 2004.
Exhibit 5 Transaction Support Agreement dated May 7, 2004.
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CUSIP NO. 23427N 10-4 13D Page 10 of 10 Page
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, each of
the undersigned hereby certifies that the information set forth in this
statement is true, complete and correct.
EXECUTED as a sealed instrument this 17th day of May, 2004.
Behrman Capital II, L.P.
By: Behrman Brothers, L.L.C.,
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
Behrman Brothers, L.L.C.
By: /s/ Grant G. Behrman
---------------------------------
Name: Grant G. Behrman
Title: Managing Member
/s/ Grant G. Behrman
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Grant G. Behrman
/s/ William M. Matthes
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William M. Matthes
EXHIBIT A
Joint Filing Agreement
In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934,
as amended, each of the persons named below agrees to the joint filing of a
Statement on Schedule 13D (including amendments thereto) with respect to the
common stock, par value $0.01 per share, of Daleen Technologies, Inc, a Delaware
corporation, and further agrees that this Joint Filing Agreement be included as
an exhibit to such filings, provided that, as contemplated by Section
13d-1(k)(1)(ii), no person shall be responsible for the completeness or accuracy
of the information concerning the other persons making the filing, unless such
person knows or has reason to believe that such information is inaccurate.
This Joint Filing Agreement may be executed in two or more counterparts,
any one of which need not contain the signature of more than one party, but all
of which taken together will constitute one and the same agreement.
In evidence thereof, the undersigned, being duly authorized, hereby execute
this Agreement on this May 17, 2004.
Behrman Capital II, L.P.
By: Behrman Brothers, L.L.C., 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
Behrman Brothers, L.L.C.
By: /s/ Grant G. Behrman
-----------------------------------
Name: Grant G. Behrman
Title: Managing Member
/s/ Grant G. Behrman
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Grant G. Behrman
/s/ William M. Matthes
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William M. Matthes