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
conversion of such shares), each other Investor and each Current
Stockholder shall vote its Investor Shares and Current Stockholder
Shares at any annual or special meeting of stockholders, and give
written consent with respect to such Shares, to approve such
transaction and to authorize the Company and its officers to take
all other actions reasonably necessary for its
completion:
(a)
a Liquidating Transaction
yielding proceeds per share of Common Stock, as adjusted for
splits, reverse spli
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