Exhibit 10.19
Execution Copy
Innovative Micro Technology,
Inc.
Voting Agreement
This Voting Agreement (this “
Agreement ”) is made as of January 25, 2005 by
and among Innovative Micro Technology, Inc., a Delaware corporation
(the “ Company ”), the stockholders listed on
the signature pages hereto (the “ Current Stockholders
”) and the investors listed on Schedule I hereto
(the “ Investors ”).
RECITALS
A. As of the
date of this Agreement, each Current Stockholder owns the number of
shares (the “Shares”) of common stock, par value
$0.0001 per share (the “Common Stock”) of the Company,
and has such rights to acquire additional shares of Common Stock,
as are set forth opposite each such Current Stockholder’s
name on the signature pages hereto.
B. The
Investors and the Company have entered into a Preferred Stock
Purchase Agreement dated as of the date hereof (as the same may be
amended from time to time, the “Purchase Agreement”),
pursuant to which the Company will sell, and the Investors will
buy, 1,000,000 shares of Series A Redeemable Preferred Stock,
1,000,000 shares of Series A-1 Convertible Preferred Stock
(the “Series A-1 Shares”) and warrants to purchase
up to 500,000 shares of Common Stock, for an aggregate purchase
price of $17,000,000.
C. As
a condition to the performance of their obligations under the
Purchase Agreement, the Investors, among other things, will require
the Current Stockholders and the Company to execute and deliver
this Agreement.
D.
Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Purchase Agreement.
NOW, THEREFORE, in consideration of
the mutual premises and covenants set forth herein, the Company,
the Investors and the Current Stockholders hereby agree as
follows:
1.
Definitions
.
“ Board ” means
the Company’s Board of Directors.
“ Conversion Shares
” means shares of Common Stock issued or issuable (on an
as-converted basis) on the conversion of Series A-1 Shares in
accordance with the terms of the Certificate of Designation of the
Series A Redeemable Preferred Stock and Series A-1
Convertible Preferred Stock.
“ Common Stock ”
means the Company’s Common Stock, par value $0.0001 per
share.
“ Current Stockholder
” has the meaning set forth in the first paragraph of this
Agreement, and also includes any Permitted Transferee of a Current
Stockholder.
“ Current Stockholder
Shares ” means shares of Common Stock held by a Current
Stockholder, together with any other voting securities issued with
respect to, on conversion of, or in exchange for such securities,
and any other voting securities acquired by the Current Stockholder
after the date of this Agreement or over which the Current
Stockholder exercises voting power.
“Exchange
Act” means the
Securities Exchange Act of 1934, as amended.
“First Public
Offering ” means
the first underwritten public offering of securities of the
Company, after the date hereof, pursuant to an effective
registration statement under the Securities Act resulting in gross
proceeds of at least thirty-five million dollars ($35,000,000) to
the Company and at a price per share that is at least equal to
$6.00 (as adjusted for stock splits and the like), other than a
registration statement relating either to the sale of securities to
employees, directors or consultants of the Company pursuant to a
stock option, stock purchase or similar plan or a transaction under
Rule 145 under the Securities Act.
“ Investor ”
means a person listed on Schedule I hereto, and, if a
Subsequent Closing takes place under the Purchase Agreement, a
person listed on Schedule II hereto.
“ Investor Shares
” means the Series A Shares, the Series A-1 Shares
and Conversion Shares held by an Investor, together with any other
voting securities issued with respect to, on conversion of, or in
exchange for such securities, and any other voting securities
acquired by the Investor after the date of this Agreement or over
which the Investor exercises voting power.
“ L-3 ” means L-3
Communications Corporation, a Delaware corporation.
“ Liquidating
Transaction ” means either (i) a merger or acquisition of
the Corporation (other than a transaction with a subsidiary) in
which the stockholders of the Corporation prior to such transaction
do not own (in the same relative proportions) a majority of the
outstanding shares of the surviving corporation; (ii) a sale,
transfer or other disposition of all or substantially all of the
assets of the Corporation, or (iii) any other winding up or
dissolution of the Corporation.
“ Majority in Interest of
the Current Stockholders ” means Current Stockholders
holding more than 50% of the Shares held by all Current
Stockholders.
“ Notice ” has
the meaning set forth in Section 12(c).
“ Offeror ” has
the meaning set forth in Section 2.1.
“ Permitted Transferee
” means, as to any person proposing to transfer securities,
any of the following transferees, provided that , such
transferee agrees in writing to be bound by the terms of this
Agreement:
(a)
a partner, retired partner, or
affiliated partner of a transferor that is a
partnership;
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(b)
a member of any transferor that is a
limited liability company;
(c)
a subsidiary or affiliate of any
transferor; or
(d)
an immediate family member of an
individual transferor, or a trust for the benefit of such
transferor or immediate family member;
provided that , such transferee agrees in writing to be bound
by the terms of this Agreement.
“ Securities Act
” means the Securities Act of 1933, as amended.
“ Shares ” means
shares of Common Stock, Series or securities convertible into
Common Stock. Whenever “Shares” refers to
securities convertible into Common Stock, the number of such Shares
shall mean the number of shares of Common Stock into which such
securities are then convertible.
2.
Agreement to Vote
. Each Investor agrees to hold
its Investor Shares, to vote its Investor Shares at any annual or
special meeting of stockholders, and to give written consent with
respect to its Investor Shares, in accordance with the terms of
this Agreement. Each Current Stockholder and each Investor
agrees to hold its Shares, to vote its Shares at any annual or
special meeting of stockholders, and to give written consent with
respect to its Shares, in accordance with the terms of this
Agreement.
3.
Election of Directors
. On all matters relating to
the election of one or more directors of the Company, each of the
Current Stockholders and each Investor shall vote at regular or
special meetings of stockholders and give written consent with
respect to, such number of Current Stockholder Shares and Investor
Shares then owned by them (or as to which they then have voting
power), as follows:
3.1
Series A-1
Director . So long
as any Series A-1 Preferred Stock is outstanding and entitled
to vote as a separate class in the election of directors, each
Investor agrees to vote the Investor Shares held by him, her or it
as may be necessary to nominate and elect to the Board at any
election of Series A-1 Director one (1) representative
designated by Investor Growth Capital (together with Investor AB
and its other affiliates, “IGC,” and such
representative, an “IGC Nominee”).
3.2
Series A
Directors . So long
as any Series A Preferred Stock is outstanding and entitled to
vote as a separate class in the election of directors, each
Investor agrees to vote the Investor Shares held by him, her or it
as may be necessary to nominate and elect the following individuals
to the Board at any election of Series A Directors:
(a)
one representative designated by IGC
(such representative also, an “IGC Nominee” and
together with the Series A-1 Director, the “IGC
Nominees”); and
(b)
one representative designated by
BAVP VII, LP (together with its affiliates, “BAVP” and
such representative, the “BAVP Nominee”).
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3.3
L-3 Director
. The Current Stockholders and
the Investors agree that they shall vote the Current Stockholder
Shares and the Investor Shares as may be necessary to nominate and
elect to the Board, among those directors elected by the holders of
Common Stock, one representative designated by L-3.
3.4
Additional Designation
. In the event that the
Series A Shares are redeemed such that there are no longer any
Series A Shares issued and outstanding, then:
(a)
upon the written request of IGC so
electing, sent by IGC to the Company and to the Current
Stockholders and Investors within twelve (12) months of such
redemption, the Current Stockholders and Investors agree to vote
the Investor Shares or Current Stockholder Shares held by him, her
or it, as may be necessary to elect to the Board at any election of
directors one (1) representative designated by Investor Growth
Capital (such representative also, thereafter an “IGC
Nominee”); and
(b)
upon the written request of BAVP so
electing, sent by BAVP to the Company and to the Current
Stockholders and Investors within twelve (12) months of such
redemption, the Current Stockholders and Investors agree to vote
the Investor Shares or Current Stockholder Shares held by him, her
or it, as may be necessary to elect to the Board at any election of
directors one (1) representative designated by BAVP (such
representative, thereafter the “BAVP
Nominee”)
3.5
Removal; Vacancy
. On all matters relating to
the removal of one or more directors of the Company, each of the
Current Stockholders and each Investor shall vote at regular or
special meetings of stockholders and give written consent with
respect to, such number of shares of Investor Shares and Current
Stockholder Shares then owned by them (or as to which they then
have voting power) as may be necessary to remove from the Board any
director selected for removal by the stockholders entitled to
designate such director pursuant to Sections 3.1, 3.2, 3.3, or, as
applicable, Section 3.4. Any vacancy created by such
removal shall be filled pursuant to Section 3.1, 3.2, 3.3, or,
as applicable, Section 3.4, as appropriate. No director
elected pursuant to Section 3.1, 3.2, 3.3, or, as applicable,
Section 3.4, may be removed without the vote or written
consent of the stockholder(s) entitled to designate such director
pursuant to such section.
3.6
Board Size
. The Investors and the
Current Stockholders shall vote the Investor Shares and Current
Stockholder Shares at regular or special meetings of stockholders,
and shall give written consent with respect to such Shares, to
ensure that the size of the Board shall be set and remain at eight
(8) directors; provided, however, that if the Board, including both
IGC Nominees (or one IGC Nominee if there is then only one IGC
Nominee on the Board) and the BAVP Nominee (if there is then a BAVP
Nominee on the Board), approves a change in the number of
authorized directors, such number may be changed in accordance with
the Bylaws and the Company’s Certificate of Designation, as
then in effect, including, without limitation, Sections I.F(8) and
II.G(8).
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4.
Board Observers
.
4.1
IGC . In the event IGC elects not to nominate
one or both of the IGC Nominees pursuant to Section 3.1,
3.2(a) (and, as applicable 3.4(a)), IGC may designate one person
for each such seat on the Board IGC elects not to fill, which
person shall be entitled to attend all meetings of the Board as a
nonvoting observer (each such person, an “IGC
Observer”). IGC may change either or both IGC Observers
at any time immediately upon notice to the Company.
4.2
Miramar Venture
Partners . Miramar
Venture Partners (together with its affiliates,
“Miramar”) may designate one person to attend all
meetings of the Board as a nonvoting observer (the “Miramar
Observer” and together with the IGC Observers, the
“Observers”). The initial Miramar Observer shall
be Heiner Sussner. Miramar may change the Miramar Observer at
any time immediately upon notice to the Company.
4.3
Notice of Meetings;
Exclusion . The
Company shall provide the Observers copies of all notices and other
materials that it provides to directors (the
“Information”); provided, however, that the Company
reserves the right, which right shall not be unreasonably
exercised, to exclude any Observer from any meeting, or any portion
thereof, and/or to exclude some or all of the materials to be sent
to the Observers, if, upon advice of counsel, the Board determines
in good faith that an Observer’s attendance at such meeting,
or portion thereof, and/or providing such materials or any portion
thereof to an Observer, could adversely affect the attorney-client
privilege between the Company and its counsel.
4.4
Confidentiality
. In connection with
information and access provided to Observers, IGC and Miramar each
agree to treat, and to cause its Observer or Observers to treat,
with confidentiality those materials identified by the Company as
confidential or sensitive. The Company may require, as a
condition to providing to Observers information or access to
meetings, the delivery of a confidentiality agreement as reasonably
necessary for the Company to comply with Regulation FD.
5.
Drag-Along
.
5.1
If any of the following transactions
is (or has been) approved by the Board of Directors and Investors
holding at least a majority of the then-outstanding Series A-1
Shares (including Common Stock issued upon con