Exhibit 3
LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT ("Agreement") is dated as of August 4, 2003, by
and among ViryaNet Ltd., an Israeli corporation (the "Company") and Telvent GIT,
S.A., a company organized under the laws of Spain ("Stockholder").
RECITALS
--------
A. This Agreement is being delivered in connection with the Share Purchase
Agreement (the "Share Purchase Agreement") dated as of July 28th, 2003 by and
among the Company and the Stockholder.
B. The Company and the Stockholder believe it to be in their best
interests that certain transfer restrictions be imposed on the Ordinary Shares
of the Company to be issued pursuant to the Share Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual covenants of the parties
set forth in this Agreement and in the Share Purchase 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 "Ordinary Shares" shall mean the ordinary shares, par value NIS
1.00 each, of the Company.
1.2 "Registration Rights Agreement" shall mean that certain
Registration Rights Agreement entered as of the date of this Agreement by and
between the Company and the Stockholder.
1.3 "Subject Shares" shall mean the Ordinary Shares issued to the
Stockholder pursuant to the Share Purchase Agreement and 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
Company.
1.4 "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 Company) or in any other way encumber or dispose
of, directly or indirectly and whether or not voluntarily, other than a transfer
of Ordinary Shares by the Stockholder to an Affiliate of such Stockholder who
executes a written agreement, which is reasonably satisfactory to Company,
agreeing to be bound by the terms and provisions of this Agreement.
1.5 "Affiliate" shall mean (a) any general, special or limited partner,
member, shareholder or any other person or entity who holds a beneficial
interest in the Stockholder, (b)
/s/ SH /s/ S
an "affiliate," as defined in Rule 144(a)(1) prescribed by the Securities and
Exchange Commission, of such Stockholder.
2. Restrictions on Transfer of Subject Shares. The Stockholder shall not
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 "Period").
Following the completion of the Period such Ordinary Shares shall not be subject
to Transfer limitations under this Agreement. Notwithstanding the foregoing the
Shareholder 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. "Market Stand-Off" Agreement. The 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 Company's securities, following
the effective date of a registration statement of the Company filed under the
Securities Act of 1933, it shall not, to the extent requested by the Company and
such underwriter, 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 Company held by it at any
time during such period except for securities included in such registration,
provided, however, the Stockholder shall be prevented by reason of this Section
3 from Transferring only as long as (A)(i) Xxxxxx XxXxxxx, (ii) Win Xxxxx and Xx
Xxxxxxxx (provided that they are employed by the Company or its Affiliates),
(iii) the Company's VP Sales, (iv) and other person serving as Chairman, CEO,
CFO and VP Sales of the parent, and (v) three percent (3%) shareholders of the
Company, have also signed a similar agreement, and (B) the underwriters shall
not release any party from any lock-up agreement or similar agreement (a "Lock
Up Release") without (x) providing the undersigned at least three (3) business
days' prior written notice of the effective date of the Lock Up Release and (y)
simultaneously releasing the undersigned and its Affiliates to the same extent
from any lock-up letter or similar agreement to which they are a party. The
Stockholder shall not be prevented by reason of this Section 3 from Transferring
any Subject Shares at any time after the expiration of the fifteen month period
commencing on the date hereof.
4. 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.
5. Legend. The Stockholder agrees that any certificates evidencing Subject
Shares shall be stamped or endorsed with a legend in substantially the following
form; provided, that the Company 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 AUGUST 4, 2003, AMONG THE COMPANY AND TELVENT GIT, S.A., A
COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND
-2-
/s/ SH /s/ S
MAY BE OBTAINED WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY.
6. Representations and Warranties of the Stockholder. The Stockholder
represents and warrants to the Company as follows: The Stockholder has the
necessary corporate 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.
7. Integration. This Agreement, the Share Purchase Agreement and the
Registration Rights 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.
8. 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.
9. 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.
10. 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.
11. 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 Company:
ViryaNet Ltd.
c/o ViryaNet Inc.
0 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX, 00000
-3-
/s/ SH /s/ S
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.
or to such other persons or addresses as may be designated in writing by the
party to receive such notice.
12. 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 Stockholder,
except as provided for herein, without the prior written consent of the Company,
which consent shall not be unreasonably withheld, delayed or conditioned. The
Company may assign this Agreement and its rights hereunder to any
successor-in-interest.
13. 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). Each party to this Agreement consents to the
exclusive jurisdiction and venue of the courts of the State of New York.
14. 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.
15. 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.
16. Limitation of Liability. In no event shall either the Company or the
Stockholder be liable to the other party for any consequential, indirect,
special or incidental costs, damages or loss (including, without limitation,
lost profits, loss of business), regardless of the nature, arising out of or
relating in any way to this Agreement.
-4-
/s/ SH /s/ S
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.
VIRYANET LTD.
BY: /s/ Xxxxxx X. XxXxxxx
-------------------------------
Name: Xxxxxx X. XxXxxxx
-----------------
Title: Chairman
-----------------
TELVENT GIT, S.A.
BY: /s/ Xxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxx
--------------
Title: C.E.O.
--------------
[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
-5-
