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 Consolidation 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,
Consolidation 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.
ARTICLE II
STANDSTILL
2.1 Acquisition of Company Voting Securities. Prior to the third
anniversary of the Effective 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.
2.2 Proxy Solicitations, etc. Prior to the third anniversary of the
Effective 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
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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 third anniversary of the Effective 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 (other than Consolidation Partners) for the purpose of acquiring,
holding, voting or disposing of Company Voting Securities.
2.4 No Solicitation of Bidders. Prior to the third anniversary of the
Effective Date, Xxxxxxxxx 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 as may be approved by a majority of the
Disinterested Directors).
2.5 Non-Circumvention. 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. 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. 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. 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 of three years from the Effective Date and shall
not be terminated for whatever reason until after the third anniversary of the
Effective Date.
4.2 Remedies.
(a) 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.
(b) 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
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violation of the provisions of this Agreement may not be voted by the owner
thereof or any proxy therefor.
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
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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.
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 purchasers 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.
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Xxx X. Xxxxxxxxx
Advanced Communications Group, Inc.
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By: Xxxxxxx X. Xxxxxxx, President and
Chief Executive Officer
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