IWL SHAREHOLDERS AGREEMENT
AGREEMENT, dated February ___, 1998 (this "Agreement"), is entered into by
and among CapRock Communications Corp., a Texas corporation ("CapRock"), CapRock
Fiber Network, Ltd., a Texas limited partnership (the "Partnership"), and each
of the other parties signatory hereto (each, a "Shareholder" and, collectively,
the "Shareholders").
WITNESSETH:
WHEREAS, concurrently herewith, IWL Communications, Incorporated, a Texas
corporation (the "Company"), IWL Holdings Corp., a Texas corporation and a
direct wholly-owned subsidiary of the Company ("Holdings"), IWL Acquisition
Corp., a Texas corporation and a wholly-owned subsidiary of Holdings ("I-Sub"),
CapRock Acquisition Corp., a Texas corporation and a wholly-owned subsidiary of
Holdings ("C-Sub"), CapRock and the Partnership are entering into an Agreement
and Plan of Merger and Plan of Exchange (as such agreement may hereafter be
amended from time to time, the "Merger Agreement"; capitalized terms used and
not defined herein have the respective meanings ascribed to them in the Merger
Agreement) pursuant to which, among other things, I-Sub will be merged with and
into the Company (the "Company Merger") and C-Sub will be merged with and into
CapRock (together with the Company Merger, the "Mergers");
WHEREAS, each of the Shareholders Beneficially Owns (as defined herein) the
number of shares of common stock, par value $0.01 per share, of the Company (the
"Shares" or "Company Common Stock") set forth opposite such Shareholder's name
on Schedule I hereto;
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, CapRock and the Partnership have required that the Shareholders
agree, and the Shareholders have agreed, to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual premises,
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
1. PROVISIONS CONCERNING COMPANY COMMON STOCK. Each Shareholder
hereby agrees that during the period commencing on the date hereof and
continuing until the first to occur of the Effective Time and the termination
of the Merger Agreement in accordance with its terms, at any meeting of the
holders of Company Common Stock, however called, or in connection with any
written consent of the holders of Company Common Stock, such Shareholder
shall vote (or cause to be voted) the Shares Beneficially Owned by such
Shareholder, whether heretofore owned or hereafter acquired, (i) in favor of
approval of the Company Merger on the terms and subject to the conditions set
forth in the Merger Agreement, the Merger Agreement, and any actions required
in furtherance thereof and hereof, including without limitation the issuance
of shares of Holding Common Stock in connection with the Mergers; (ii)
against any action or agreement that would result in a breach in any respect
of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement (after giving effect to
any materiality or similar qualifications contained therein) and (iii) except
to the extent the action is not prohibited to be taken by the Company under
the Merger Agreement or as otherwise agreed to in writing in advance by
CapRock or the Partnership, against any action which is intended, or could
reasonably be expected, to impede, interfere with, materially delay or
postpone, or materially adversely affect
the Company Merger and the transactions contemplated by this Agreement and
the Merger Agreement. Such Shareholder shall not enter into any agreement or
understanding with any Person (as defined below) the effect of which would be
inconsistent with, or which would violate, the provisions and agreements
contained in Section 1 or 2 hereof. For purposes of this Agreement,
"Beneficially Own" or "Beneficial Ownership" or any derivation thereof with
respect to any securities shall mean having or being a Person who has
"beneficial ownership" of such securities (as determined pursuant to Rule
13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), including pursuant to any agreement, arrangement or understanding,
whether or not in writing. Without duplicative counting of the same
securities by the same holder, securities Beneficially Owned by a Person
shall include securities Beneficially Owned by all other Persons with whom
such Person would constitute a "group" as within the meaning of Section
13(d)(3) of the Exchange Act. For purposes of this Agreement, "Person" shall
mean an individual, corporation, limited liability company, partnership,
joint venture, association, trust, unincorporated organization or other
entity.
2. REPRESENTATIONS AND WARRANTIES. Each Shareholder hereby represents
and warrants to CapRock and the Partnership as follows:
(a) OWNERSHIP OF SHARES. Such Shareholder is the Beneficial Owner of
the number of Shares set forth opposite such Shareholder's name on Schedule I
hereto free and clear of all liens, claims and encumbrances, and on the date
hereof, such Shares constitute all of the Shares Beneficially Owned by such
Shareholder. Such Shareholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in Section 1 hereof, sole
power of disposition, sole power of conversion, sole power to demand
appraisal rights and sole power to agree to all of the matters set forth in
this Agreement, in each case with respect to all of the Shares set forth
opposite such Shareholder's name on Schedule I hereto, with no limitation,
qualification or restriction on such rights or agreement to exercise those
rights in a certain manner or as directed by any other Person, except as
indicated on Schedule I.
(b) POWER; BINDING AGREEMENT. Such Shareholder has the legal capacity,
power and authority to enter into and perform all of such Shareholder's
obligations under this Agreement. The execution, delivery and performance of
this Agreement by such Shareholder will not violate any other agreement to
which such Shareholder is a party including, without limitation, any voting
agreement, shareholder agreement or voting trust. This Agreement has been
duly and validly executed and delivered by such Shareholder and constitutes a
valid and binding agreement of such Shareholder, enforceable against such
Shareholder in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar
laws affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity. There is no beneficiary or
holder of a voting trust certificate or other interest of any trust of which
such Shareholder is Trustee whose consent is required for the execution and
delivery of this Agreement or the consummation by such Shareholder of the
transactions contemplated hereby. If such Shareholder is married and such
Shareholder's Shares constitute community property, this Agreement has been
duly authorized, executed and delivered by, and constitutes a valid and
binding agreement of, such Shareholder's spouse, enforceable against such
person in accordance with its terms.
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(c) NO CONFLICTS. (A) No filing with, and no permit, authorization,
consent or approval of, any state or federal public body or authority is
necessary for the execution of this Agreement by such Shareholder and the
consummation by such Shareholder of the transactions contemplated hereby and
(B) none of the execution and delivery of this Agreement by such Shareholder,
the consummation by such Shareholder of the transactions contemplated hereby
or compliance by such Shareholder with any of the provisions hereof will (1)
result in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any
of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, commitment, arrangement, understanding,
agreement or other instrument or obligation of any kind to which such
Shareholder is a party or by which such Shareholder or any of such
Shareholder's properties or assets may be bound, or (2) violate any order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to such Shareholder or any of such Shareholder's properties or
assets.
(d) RELIANCE BY CAPROCK AND THE PARTNERSHIP. Such Shareholder
understands and acknowledges that CapRock and the Partnership are entering
into the Merger Agreement in reliance upon such Shareholder's execution and
delivery of this Agreement.
3. RESTRICTION ON TRANSFER AND PROXIES.
(a) Each Shareholder hereby agrees that during the period commencing
thirty days prior to the Effective Time and continuing until the first to
occur of the Effective Time and the termination of the Merger Agreement in
accordance with its terms, such Shareholder shall not, directly or
indirectly, except as contemplated by the Merger Agreement, offer for sale,
sell, transfer, tender, pledge, encumber, assign or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding with
respect to or consent to the offer for sale, sale, transfer, tender, pledge,
encumbrance, assignment or other disposition of (collectively, "Transfer"),
any or all of such Shareholder's Shares or any interest therein. In
addition, each Shareholder hereby agrees that during the period commencing on
the date hereof and continuing until the first to occur of the Effective Time
and the termination of the Merger Agreement in accordance with its terms,
such Shareholder shall not, directly or indirectly: (i) grant any proxy or
power of attorney, deposit any Shares into a voting trust or enter into a
voting agreement with respect to any Shares or otherwise agree to vote any of
the Shares in a manner other than as set forth herein; or (ii) take any
action that would make any representation or warranty of such Shareholder
contained herein untrue or incorrect or have the effect of preventing or
disabling such Shareholder from performing such Shareholder's obligations
under this Agreement.
(b) Notwithstanding the provisions of paragraph (a)(i) above, a
Transfer shall not include (A) with respect to any Shareholder, a Transfer to
any other Shareholder, (B) with respect to any Shareholder that is an
individual, a Transfer to (1) a sibling, ancestor or descendant, spouse of
any of the foregoing, spouse of such Shareholder, or descendants of any of
the foregoing or (2) any trust or family partnership for the primary benefit
of such Shareholder or any Persons described in clause (1); or (C) with
respect to any Shareholder that is a trust or family partnership, the
beneficiaries or partners of the trust or family partnership or another trust
or family partnership established for the primary benefit of such
beneficiaries or partners; provided, however, that any Transfer under this
Section 3(b)(B) or (C) shall be void unless the transferee executes a copy of
this Agreement.
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4. FURTHER ASSURANCES. From time to time, at the other party's
reasonable request and without further consideration, each party hereto shall
execute and deliver such additional documents and take all such further
lawful action as may be necessary or desirable to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement.
5. RESTRICTIVE LEGEND. Upon the request of CapRock or the
Partnership, the certificates representing any of such Shareholder's Shares
shall be stamped with the following legend:
"The securities represented by this certificate, including
certain voting rights with respect thereto, are subject to
the terms of a Shareholders Agreement, dated February __,
1998, among CapRock Communications Corp., CapRock Fiber
Network, Ltd., and the parties listed on the signature pages
thereto, a copy of which is on file in the principal office
of the Issuer."
6. TERMINATION. Except as otherwise provided herein, the covenants
and agreements contained herein with respect to the Shares shall terminate
upon the earlier of (a) the termination of the Merger Agreement in accordance
with its terms and (b) the Effective Time.
7. SHAREHOLDER CAPACITY. No person executing this Agreement who is or
becomes during the term hereof a director of the Company makes any agreement
or understanding herein in his or her capacity as such director. Each
Shareholder signs solely in his or her capacity as the record and/or
Beneficial Owner of such Shareholder's Shares.
8. CONFIDENTIALITY. The Shareholders recognize that successful
consummation of the transactions contemplated by this Agreement may be
dependent upon confidentiality with respect to the matters referred to
herein. In this connection, pending public disclosure thereof, each
Shareholder hereby agrees not to disclose or discuss such matters with anyone
not a party to this Agreement (other than such Shareholder's counsel and
advisors, if any) without the prior written consent of CapRock or the
Partnership, except for disclosures such Shareholder's counsel advises are
necessary in order to fulfill such Shareholder's obligations imposed by law,
in which event such Shareholder shall give notice of such disclosure to
CapRock or the Partnership as promptly as practicable so as to enable CapRock
or the Partnership to seek a protective order from a court of competent
jurisdiction with respect thereto.
9. AUTHORITY RELATIVE TO THIS AGREEMENT. Each of CapRock and the
Partnership have the necessary corporate or partnership power and authority
to enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement by CapRock and the Partnership and
the consummation by CapRock and the Partnership of the transactions contemplated
hereby have been duly authorized by all necessary corporate or partnership
action on the part of CapRock and the Partnership, as applicable. This
Agreement has been duly executed and delivered by CapRock and the Partnership
and, assuming the due authorization, execution and delivery thereof by the
other parties hereto, constitutes a legal, valid and binding obligation of
CapRock and the Partnership, enforceable against them in accordance with its
terms, subject to applicable bankruptcy,
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insolvency, fraudulent conveyance, reorganization, moratorium and similar
laws affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity.
10. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement and the Merger Agreement
constitute the entire agreement between the parties with respect to the
subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect to
the subject matter hereof.
(b) CERTAIN EVENTS. Each Shareholder agrees that this Agreement and
the obligations hereunder shall attach to such Shareholder's Shares and shall
be binding upon any person or entity to which legal or beneficial ownership
of such Shares shall pass, whether by operation of law or otherwise,
including, without limitation, such Shareholder's heirs, guardians,
administrators or successors. Notwithstanding any transfer of Shares, the
transferor shall remain liable for the performance of all obligations under
this Agreement of the transferor.
(c) ASSIGNMENT. This Agreement shall not be assigned by operation of
law or otherwise without the prior written consent of the other parties
hereto.
(d) AMENDMENTS, WAIVERS, ETC. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, with
respect to any one or more Shareholders, except upon the execution and
delivery of a written agreement executed by the relevant parties hereto.
(e) NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegrams
telex or telecopy, or by mail (registered or certified mail, postage prepaid,
return receipt requested) or by any courier service, such as Federal Express,
providing proof of delivery. All communications hereunder shall be delivered
to the respective parties at the following addresses:
If to any Shareholder: At the addresses set forth
on Schedule I hereto
with a copy to: Xxxxxx Xxxxx Xxxx Xxxx & Xxxxx, P.C.
0000 Xxxx Xxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: A. Xxxxxxx Xxxxxxxxxxxx, Esq. and
Xxxx X. Xxxxxxxxxxx, Esq.
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If to CapRock: CapRock Communications Corp.
Two Galleria Tower, Suite 1925
00000 Xxxx Xxxx
Xxxxxx, Xxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Xx.
If to Partnership: CapRock Fiber Network, Ltd.
Two Galleria Tower, Suite 1925
00000 Xxxx Xxxx
Xxxxxx, Xxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Xx.
each with a copy to: Xxxxxx & Xxxx, L.L.P.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(f) SEVERABILITY. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of
any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any prevision in such jurisdiction, and
this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision or portion of any
provision had never been contained herein.
(g) SPECIFIC PERFORMANCE. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore
each of the parties hereto agrees that in the event of any such breach the
aggrieved party shall be entitled to the remedy of specific performance of
such covenants and agreements and injunctive and other equitable relief in
addition to any other remedy to which it may be entitled, at law or in equity.
(h) REMEDIES CUMULATIVE. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not
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alternative, and the exercise of any thereof by any party shall not preclude
the simultaneous or later exercise of any other such right, power or remedy
by such party.
(i) NO WAIVER. The failure of any party hereto to exercise any right,
power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of
the parties at variance with the terms hereof, shall not constitute a waiver
by such party of its right to exercise any such or other right, power or
remedy or to demand such compliance.
(j) NO THIRD PARTY BENEFICIARIES. This Agreement is not intended to be
for the benefit of, and shall not be enforceable by, any person or entity who
or which is not a party hereto.
(k) GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Texas, without giving effect to the
principles of conflicts of law thereof.
(l) WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO
A TRIAL BY JURY IN CONNECTION WITH ANY SUCH ACTION, SUIT OR PROCEEDING.
(m) DESCRIPTIVE HEADINGS. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of
or to affect the meaning or interpretation of this Agreement.
(n) COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which, taken together,
shall constitute one and the same Agreement.
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IN WITNESS WHEREOF, CapRock, the Partnership and each Shareholder have
caused this Agreement to be duly executed as of the day and year first above
written.
CAPROCK COMMUNICATIONS CORP.
By:
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Name:
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Title:
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CAPROCK FIBER NETWORK, LTD.
By: CapRock Systems, Inc.
Its: General Partner
By:
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Name:
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Title:
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Xxxxxxxx X. Xxxxxxxx
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Spouse
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Xxxxx X. Xxxxx
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Spouse
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SCHEDULE I TO
SHAREHOLDERS AGREEMENT
Name and Address Number of Shares
of Shareholder Beneficially Owned
---------------- ------------------
Xxxxxxxx X. Xxxxxxxx 1,900,000 (1)
Xxxxx X. Xxxxx 222,200 (2)
c/o: IWL Communications, Incorporated
00000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxx
(1) Includes 6,666 shares held by Xxxxxxxx Xxxxxxxx as custodian for minor
children.
(2) Includes 4,100 shares held by Xxxxx X. Xxxxx as custodian for minor
children and 4,100 shares held by Xx. Xxxxx'x daughters, the voting
investment and disposition power of which are shared by Xx. Xxxxx with his
daughters.
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