STANDSTILL AGREEMENT
Standstill Agreement ("Agreement") dated as of ____________ __, 1998
between Advanced Communications Group, Inc. (the "Company"), a Delaware
corporation and Xx. Xxx X. Xxxxxxxxx, a resident in the State of Texas.
WHEREAS, the Company intends to conduct an initial public offering of
its shares of common stock ("Shares") in conjunction with the consummation of
the acquisition of certain target companies (the "Transaction").
WHEREAS, the Company and Xxxxxxxxx are entering into this Agreement to
establish certain arrangements with respect to the relationships between them.
WHEREAS, the Company and Xxxxxxxxx believe that these arrangements
will be in the best interests of the Company and all of its stockholders
including Xxxxxxxxx.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
1.1 The terms "beneficial ownership", "person" and "group" shall have
the respective meanings ascribed to such terms pursuant to Regulation 13D-G
adopted by the Securities and Exchange Commission (the "SEC") under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect
on the date hereof. The term "affiliate" shall have the meaning ascribed to
such term pursuant to Rule 12b-2 under the Exchange Act, as in effect on the
date hereof.
1.2 "Company Voting Securities" shall mean, collectively, common
stock, any preferred stock of the Company that is entitled to vote generally
for the election of directors, any other class or series of Company securities
that is entitled to vote generally for the election of directors and any other
securities, warrants, options or rights of any nature (whether or not issued by
the Company) that are convertible into, exchangeable for, or exercisable for
the purchase of, or otherwise give the holder thereof any rights in respect of,
common stock, Company preferred stock that is entitled to vote generally for
the election of directors, or any other class or series of Company securities
that is entitled to vote generally for the election of directors.
1.3 "Consolidation Partners" shall mean Consolidation Partners L.L.C.,
a Texas limited liability company.
1.4 "CPFF" shall mean Consolidated Partners Founding Fund, L.L.C., a
Texas limited liability company.
1.5 "Xxxxxxxxx" shall mean (i) Xxx X. Xxxxxxxxx, and (ii) any
affiliate of Xxx X. Xxxxxxxxx (excluding any member of his immediate family)
1.6 "Disinterested Directors" means directors of the Company who have
no financial interest in and are not otherwise associated with CPFF,
Consolidated Partners and any other affiliate of Xxxxxxxxx, and who are
"disinterested directors" as that term is used in Section 144 of the Delaware
General Corporate Law.
1.7 "Effective Date" means the Closing Date as defined in the
Underwriting Agreement, dated as of 1998 between the Company and PaineWebber
Incorporated and CIBC Xxxxxxxxxxx Corp., as Representatives of the several
Underwriters.
1.8 The "Maximum Permitted Voting Power" at any measurement date shall
mean all Company Voting Securities owned by Xxxxxxxxx, that are outstanding as
of the date hereof or issued by the Company after the date hereof, pursuant to
a stock split or a stock dividend or upon exercise of options granted under the
Company's Non-Qualified Stock Option Plan for Non-Employee Directors.
1.9 The "Termination Date" means the earliest of (i) the third
anniversary of the Effective Date, (ii) the date on which Xxx X. Xxxxxxxxx is
removed as a director of the Company without his prior written consent, or
(iii) unless he has previously tendered his written resignation as a director
of the Company or a statement that he does not wish to stand for election as a
director of the Company in the year 2000, the date in the year 2000 on which
Xxx X. Xxxxxxxxx ceases to be a member of the Board of Directors of the
Company.
ARTICLE II
STANDSTILL
2.1 Acquisition of Company Voting Securities. Prior to the Termination
Date, Xxxxxxxxx shall not, directly or indirectly (through CPFF, Consolidation
Partners or otherwise), acquire, offer to acquire, agree to acquire, become the
beneficial owner of or obtain any rights in respect of any Company Voting
Securities, by purchase or otherwise, or take any action in furtherance
thereof, if the effect of such acquisition, agreement or other action would be
(either immediately or upon consummation of any such acquisition, agreement or
other action, or expiration of any period of time provided in any such
acquisition, agreement or other action) to increase the aggregate beneficial
ownership of Company Voting Securities by Xxxxxxxxx to such number of Company
Voting Securities that have greater than the Maximum Permitted Voting Power.
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2.2 Proxy Solicitations, etc. Prior to the Termination Date, Xxxxxxxxx
shall not solicit proxies, assist any other person in any way, directly or
indirectly (through CPFF, Consolidation Partners or otherwise), in the
solicitation of proxies, become a "participant" in a "solicitation" or assist
any "participant" in a "solicitation" (as such terms are defined in Rule 14a-1
of Regulation 14A under the Exchange Act) in opposition to nominees for
directors proposed by the Board of Directors of the Company or submit any
proposal for the vote of stockholders of the Company.
2.3 No Voting Trusts, Pooling Agreements, or Formation of "Groups".
Prior to the Termination Date, Xxxxxxxxx shall not (i) form, join or in any
other way participate in a partnership, pooling agreement, syndicate, voting
trust or other "group" with respect to Company Voting Securities (other than
Consolidation Partners) or (ii) enter into any agreement or arrangement or
otherwise act in concert with any other person other than the Company or
Consolidation Partners for the purpose of acquiring, holding, voting or
disposing of Company Voting Securities.
2.4 No Solicitation of Bidders. Prior to the Termination Date,
Xxxxxxxxx shall not directly or indirectly (through CPFF, Consolidation
Partners or otherwise) assist, encourage or induce any person to bid for or
acquire outstanding Company Voting Securities in any transaction or series of
related transactions (except or may be approved by a majority of the
Disinterested Directors).
2.5 Non-Circumvention. Prior to the Termination Date, Xxxxxxxxx shall
not take any action, alone or in concert with any other person to circumvent
the limitations of the provisions of Articles II and III of this Agreement.
Prior to the Termination Date, Xxxxxxxxx shall not (i) present to the Company
or to any third party any proposal that can reasonably be expected to result in
any increase beyond the Maximum Permitted Voting Power of Company Voting
Securities beneficially owned in the aggregate by Xxxxxxxxx, (ii) publicly
suggest or announce his willingness or desire to engage in a transaction or
group of transactions that would result in any increase beyond the Maximum
Permitted Voting Power of Company Voting Securities beneficially owned in the
aggregate by Xxxxxxxxx, or (iii) initiate, request, induce or attempt to induce
or give encouragement to any other person to initiate any proposal that can
reasonably be expected to result in any increase beyond the Maximum Permitted
Voting Power of Company Voting Securities beneficially owned in the aggregate
by Xxxxxxxxx.
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ARTICLE III
VOTING OF COMPANY SECURITIES AND RELATED MATTERS
3.1 Board Election. Prior to the Termination Date, Xxxxxxxxx shall
vote all Company Voting Securities owned of record by Xxxxxxxxx, and shall
cause all Company Voting Securities owned beneficially by Xxxxxxxxx to be
voted, with respect to the election or removal of directors of Company, or any
other matter that may be presented to the stockholders of the Company that
would relate to a possible change of control of the Company in accordance with
the recommendations of a majority of Disinterested Directors.
3.2 Stockholders Meetings. Prior to the Termination Date, Xxxxxxxxx
shall be present, in person or by proxy, at all meetings of stockholders of the
Company so that all Company Voting Securities owned of record or beneficially
owned by Xxxxxxxxx may be counted for the purpose of determining the presence
of a quorum at such meetings.
ARTICLE IV
MISCELLANEOUS
4.1 Term of Agreement; Certain Provisions Regarding Termination. This
Agreement shall have a term from the Effective Date until the Termination Date,
and shall not be terminated for whatever reason until the Termination Date.
4.2 Remedies.
(1) Xxxxxxxxx and the Company acknowledge and agree that (i) the
provisions of this Agreement are reasonable and necessary to protect the proper
and legitimate interests of the parties hereto, and (ii) the parties would be
irreparably damaged in the event any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that each party shall be entitled to
preliminary and permanent injunctive relief to prevent breaches of the
provisions of this Agreement by the other party (or its affiliates) without the
necessity of proving actual damages or of posting any bond, and to enforce
specifically the terms and provisions hereof and thereof in any court of the
United States or any state thereof having jurisdiction, which rights shall be
cumulative and in addition to any other remedy to which the parties may be
entitled hereunder or at law or equity.
(2) In addition to any other remedy the Company may have under this
Agreement or in law or equity, if Xxxxxxxxx shall acquire or transfer any
Company Voting Securities in violation of this Agreement, such Company Voting
Securities which are in excess of the number permitted to be owned or
controlled by Xxxxxxxxx or which have been transferred by Xxxxxxxxx in
violation of the provisions of this Agreement may not be voted by the owner
thereof or any proxy therefor.
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4.3 Additional Xxxxxxxxx Parties; Several Obligations. All of the
liabilities and obligations under this Agreement of Xxxxxxxxx shall be joint
and several. Each member of Xxxxxxxxx that shall become or have the right to
become the beneficial owner, within the meaning and scope of Section 1.1
hereof, of Company Voting Securities shall, promptly upon becoming such owner
or holder, execute and deliver to the Company a joinder agreement, agreeing to
be legally bound by this Agreement to the same extent as if it had signed this
Agreement as an original signatory as a member of Xxxxxxxxx; provided that
failure to execute such an agreement shall not excuse such member's
non-compliance with any provision of this Agreement. No member of Xxxxxxxxx
shall transfer securities to another member of Xxxxxxxxx unless the transferee
shall agree to be bound by this Agreement in the manner specified above in this
Section 4.3.
4.4 Notices. All notices, and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, sent by
documented overnight delivery service or, to the extent receipt is confirmed,
facsimile, to the appropriate address or facsimile number set forth below (or
at such other address or facsimile number for a party as shall be specified by
like notice):
if to Xxxxxxxxx:
with copy to:
if to the Company:
4.5 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. The parties hereto agree that they will use
their best efforts at all times to support and defend this Agreement.
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4.6 Amendments. This Agreement may be amended only by an agreement in
writing signed by each of the parties hereto; provided, however, that any
amendment executed by the Company must prior thereto be approved by a majority
of the Disinterested Directors.
4.7 Governing Law. This Agreement shall be governed and controlled as
to validity, enforcement, interpretation, construction, effect and in all other
respects by the internal laws of the State of Delaware without regard to its
conflict of law rules and principles.
4.8 Descriptive Headings. Descriptive headings are for convenience
only and shall not control or affect the meaning or construction of any
provision of this Agreement.
4.9 Counterparts; Facsimile Signatures. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
bears the signatures of each of the parties hereto. This Agreement may be
executed in any number of counterparts, each of which shall be an original as
against the party whose signature appears thereon, or on whose behalf such
counterpart is executed, but all of which taken together shall be one and the
same agreement. A facsimile copy of a signature of a party to this Agreement or
any such counterpart shall be fully effective as if an original signature.
4.10 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the successors and assigns of the
parties hereto, but in no event shall be binding upon the purchaser of any
Company Voting Securities from Xxxxxxxxx.
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IN WITNESS WHEREOF, Advanced Communications Group, Inc. and Xxx X.
Xxxxxxxxx have executed this Standstill Agreement as of the date first above
written.
Xxxxxxxxx
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By: Xxx X. Xxxxxxxxx
Advanced Communications Group, Inc.
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By: Xxxxxxx X. Xxxxxxx, Chairman,
President and Chief Executive
Officer
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