Exhibit 3
---------
LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT ("Agreement") is dated as of February 25, 2002, by and
among ViryaNet Ltd., an Israeli corporation (the "Parent") and the parties named
on Exhibit A hereto (collectively, with their permitted transferees who become
bound by this Agreement, the "Stockholders"), which parties were, prior to the
Closing of the Merger Agreement (as defined below) the holders of all issued and
outstanding shares of capital stock of iMedeon Inc., a Georgia corporation (the
"Company").
RECITALS
A. This Agreement is being delivered in connection with the Agreement and Plan
of Merger (the "Merger Agreement") dated as of February 25, 2002 by and among
the Company, the Stockholders, the Parent and ViryaNet Acquisition, Inc. (the
"Merger Sub"), a Georgia corporation and wholly owned subsidiary of ViryaNet,
Inc., a wholly owned subsidiary of Parent ("US Sub"), pursuant to which the
Merger Sub shall merge with and into the Company, the Company shall thereby
become a wholly owned subsidiary of US Sub and the Stockholders shall be issued
Ordinary Shares of the Parent.
B. The Parent and the Stockholders believe it to be in their best interests that
certain transfer restrictions be imposed on the Ordinary Shares of the Parent to
be issued pursuant to the Merger Agreement.
NOW, THEREFORE, in consideration of the mutual covenants of the
parties set forth in this Agreement and in the Merger Agreement and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms shall
have the meanings ascribed to them below:
1.1 "Initial Consideration" shall have the meaning set forth in the
Merger Agreement and shall also include any Ordinary Shares issued as a dividend
or in connection with a stock split, recapitalization, reclassification,
subdivision, combination or exchange of Ordinary Shares of the Parent.
1.2 "Additional Consideration Shares" shall have the meaning set
forth in the Merger Agreement and shall also include any Ordinary Shares issued
as a dividend or in connection with a stock split, recapitalization,
reclassification, subdivision, combination or exchange of Ordinary Shares of the
Parent.
1.3 "Ordinary Shares" shall mean the ordinary shares, par value NIS
0.10 each, of the Parent.
1.4 "Registration Rights Agreement" shall mean that certain
Registration Rights Agreement entered as of the date of this Agreement by and
among the Parent and the Stockholders.
1.5 "Subject Shares" shall mean the Ordinary Shares issued to the
Stockholders pursuant to the Merger Agreement, including, without limitation,
Ordinary Shares issued as part of the Initial Consideration and the Additional
Consideration and Ordinary Shares which may be issued upon the exercise of the
Parent options issued under the Merger Agreement, and shall also include any
Ordinary Shares issued as a dividend or in connection with a stock split,
recapitalization, reclassification, subdivision, combination or exchange of
Ordinary Shares of the Parent.
1.6 "Transfer" shall mean to transfer, sell, assign, pledge,
hypothecate, give, create a security interest in or lien on, place in trust
(voting or otherwise), transfer by operation of law (other than by way of a
merger or consolidation of the Parent) or in any other way encumber or dispose
of, directly or indirectly and whether or not voluntarily, other than (i) a
transfer of Ordinary Shares by a Stockholder in connection with the exercise of
its piggyback registration rights as set forth in Section 4 of the Registration
Rights Agreement or (ii) a transfer of Ordinary Shares by a Stockholder to an
Affiliate of such Stockholder who executes a written agreement, which is
reasonably satisfactory to Parent, agreeing to be bound by the terms and
provisions of this Agreement. For the avoidance of doubt, a change in the
control of a holder of Subject Shares shall not be deemed to be a Transfer under
this Agreement. Additionally, any transfer of Ordinary Shares by a Stockholder
pursuant to any Change of Control to the party acquiring such control shall not
be a Transfer.
1.7 "Affiliate" shall mean (a) any general, special or limited
partner, member, shareholder or any other person or entity who holds a
beneficial interest in such Stockholder, (b) an "affiliate," as defined in Rule
144(a)(1) prescribed by the Securities and Exchange Commission, of such
Stockholder or (c) any entity managed by such Stockholder.
1.8 "Change of Control" shall mean (i) any consolidation or merger of
Parent in which Parent is not the continuing or surviving corporation, or
pursuant to which the capital stock of Parent is converted to cash, other
securities or other property, or (ii) a sale of all or substantially all of the
outstanding capital stock of Parent to one party.
2. Restrictions on Transfer of Subject Shares. No Stockholder shall Transfer any
Subject Shares prior to the date that is six (6) months after the date of this
Agreement (such six month period referred to as the "Initial Period"). During
the six (6) month period following the Initial Period (the "Second Period"),
each Stockholder shall be entitled to Transfer up to fifty percent (50%) of the
Subject Shares issued to such respective Stockholder, and following the
completion of the Second Period such Ordinary Shares shall not be subject to
Transfer limitations under this Agreement. Notwithstanding the foregoing, each
Stockholder shall be free to Transfer any Subject Shares which are Registrable
Securities (as defined in the Registration Rights Agreement) pursuant to the
terms of the Registration Rights Agreement.
3. Obligations of the Parent. Notwithstanding the foregoing, in the event that
within six (6) months following the date of this Agreement, Parent issues any of
its securities in a private placement, and the lock-up obligations agreed with
2
the purchasers of such securities are more favorable to such purchasers
(compared to the lock-up obligations agreed to by the Stockholders, as set forth
under Section 2 above) then the lock-up obligations imposed on the Stockholders
shall be automatically amended to be equal to those agreed with such new
purchasers.
4. "Market Stand-Off" Agreement. Each Stockholder hereby agrees that for a
period of up to 90 days or such lesser period of time as requested by the
underwriters of an underwritten offering of the Parent's securities, following
the effective date of a registration statement of the Parent filed under the
Securities Act of 1933, it shall not, to the extent requested by the Parent and
such underwriter and so long as (i) Xxxxxx XxXxxxx, (ii) Win Xxxxx and Xx
Xxxxxxxxx (provided that they are employed by the Parent or its Affiliates),
(iii) the Parent's VP Sales, (iv) and other person serving as the Chairman, CEO,
CFO and VP Sales of the Parent, and (v) three percent stockholders of Parent,
have also signed similar agreements, directly or indirectly sell, offer to sell,
contract to sell (including, without limitation, any short sale), grant any
option to purchase or otherwise transfer or dispose of any securities of the
Parent held by it at any time during such period except for securities included
in such registration, provided, however, a Stockholder shall not be prevented by
reason of this Section 4 from Transferring any Subject Shares at any time after
the expiration of the fifteen month period commencing on the date hereof.
5. Compliance with Law. Notwithstanding anything to the contrary contained
herein, all Transfers shall be in compliance with the United States Securities
Act of 1933, as amended, and all other applicable securities law and legal
requirements.
6. Legend. The Stockholders agree that any certificates evidencing Subject
Shares shall be stamped or endorsed with a legend in substantially the following
form; provided, that the Parent shall upon termination of this Agreement
promptly, upon request, deliver replacement certificates without the legend
below in exchange for the legended certificates:
THE TRANSFER OF THE ORDINARY SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT
TO RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS SET FORTH IN A LOCK-UP
AGREEMENT DATED AS OF FEBRUARY 25, 2002, AMONG THE COMPANY AND CERTAIN
STOCKHOLDERS NAMED THEREIN, A COPY OF WHICH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICE OF THE COMPANY AND MAY BE OBTAINED WITHOUT CHARGE UPON WRITTEN
REQUEST TO THE COMPANY.
7. Representations and Warranties of each Stockholder. Each Stockholder
represents and warrants to the Parent as follows: The Stockholder has the
necessary power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Stockholder, and constitutes a valid and binding agreement of
the Stockholder enforceable against the Stockholder in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights and to
general equity principles.
3
8. Integration. This Agreement, the Merger Agreement (including the Exhibits
thereto) and the agreements, documents, certificates and instruments referred to
herein and therein constitute the entire agreement and supersede all prior
agreements and understandings between the parties with respect to its subject
matter. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to its subject matter other
than those expressly set forth or referred to herein.
9. Captions. The Article, Section and paragraph captions herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
10. Severability. If any term or provision of this Agreement or any application
thereof shall be declared or held invalid, illegal or unenforceable, in whole or
in part, whether generally or in any particular jurisdiction, such provision
shall be deemed amended to the extent, but only to the extent, necessary to cure
such invalidity, illegality or unenforceability, and the validity, legality and
enforceability of the remaining provisions, both generally and in every other
jurisdiction, shall not in any way be affected or impaired thereby.
11. Amendment; Waiver. This Agreement may be amended only by a written
instrument duly executed by each party hereto. No failure by any party to insist
upon the strict performance of any covenant, duty, agreement or condition of
this Agreement or to exercise any right or remedy consequent upon breach thereof
shall constitute a waiver of any such breach or of any other covenant, duty,
agreement or condition, any such waiver being effective only if contained in a
writing executed by the party against whom the waiver is sought to be enforced.
12. Notices. Any notice, request, instruction or other document to be given
hereunder by any party to the others shall be in writing and delivered in
person, by cable, facsimile, telegram or telex or by registered or certified
mail (postage prepaid, return receipt requested):
If to Parent:
ViryaNet Limited
0 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX, 00000
Attention: Win Xxxxx, Chief Executive Officer
With a copy to:
Meitar, Liquornik, Geva & Co.
00 Xxxx Xxxxxx Xxxxxx Xx.
Xxxxx Xxx, 00000
Israel
Attention: Xxx Xxxx, Adv.
If to the Stockholders, to the addresses set forth on Exhibit A hereto.
4
or to such other persons or addresses as may be designated in writing by the
party to receive such notice.
13. Assignment. This Agreement shall be binding upon and inure to the benefit of
the respective successors, heirs, executors and other legal representatives and
permitted assigns of the parties hereto. This Agreement and the rights hereunder
shall not be assignable or transferable by the Parent or the Stockholders
without the prior written consent of the other parties hereto, provided, that
the Parent may assign this Agreement and its rights hereunder to any
successor-in-interest.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without giving effect to
principles of conflicts of laws).
15. Further Assurances. From time to time, as and when requested by any party
hereto and without further consideration, the other parties shall execute and
deliver, or cause to be executed and delivered, all such documents and
instruments and shall take, or cause to be taken, all such further or other
actions, as may be necessary or desirable to consummate the transactions
contemplated by this Agreement.
16. Counterparts. For the convenience of the parties hereto, this Agreement may
be executed in any number of counterparts, each such counterpart being deemed to
be an original instrument, and all such counterparts shall together constitute
the same agreement.
5
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date set forth above.
VIRYANET LTD.
BY:
---------------------------------
Name:
Title:
6
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
GE CAPITAL EQUITY INVESTMENTS, INC.
By:
---------------------------------
Name:
Title:
7
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
ECTMI TRUTTA HOLDINGS LP
By:
---------------------------------
Name:
Title:
8
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
AETHER SYSTEMS INC.
By:
---------------------------------
Name:
Title:
9
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
VALENTIS INVESTORS LLC
By:
---------------------------------
Name:
Title:
10
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
IMPRIMIS SB, L.P.
By: Imprimis SB G.P. LLC
Its General Partner
By:
-----------------------------
Name:
Title:
11
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
INSIGHT CAPITAL PARTNERS II, L.P.
By: InSight Venture Associates II, L.L.C.
Its General Partner
By:
---------------------------------
Name:
Title: Its Managing Member
InSight Capital Partners
(Cayman) II, L.P.
12
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
INSIGHT CAPITAL PARTNERS
(CAYMAN) II, L.P.
By: InSight Venture Associates II, LLC
Its General Partner
By:
----------------------------------
Name:
Title:
13
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXXXX MEDIATE
14
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
MEDIATE INVESTMENTS, LLLP
By:
---------------------------------
Name:
Title:
15
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXXXXXX XXXXXXXXX
16
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXX BLEND
17
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXXXXX XXXXX
18
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXXX XXXXXX
19
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXXXXX XXXXXXXXX
20
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXXX XXXXXX
21
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXXXXX XXXXXX
22
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXXX XXXXXX
23
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXX XXXXXXX
24
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
DONO KABILOVA
25
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXXXXX XXXXXX
26
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXXX XXXX
27
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXXXXX XXXX
28
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXX X'XXXXXX
29
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
AOUS ARIAM
30
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXXXXX XXXXX
31
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXXXX XXXXXX
32
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXXXX XXXXXXXXX
00
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
---------------------------------
XXXXXXX XXXXX
34
Exhibit A
Addresses of the Stockholders
[SIGNATURES OF ALL COMPANY STOCKHOLDERS TO BE ADDED]
35
Exhibit A
Addresses of the Stockholders
36
