STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT dated as of June 1, 1999 by and
between INERTIA OPTICAL TECHNOLOGY APPLICATIONS, INC., a Delaware corporation
("Company") and STANDARD MICROSYSTEMS CORPORATION ("SMSC"), and the other
stockholders of Company listed on the signature page hereof (together with SMSC
to be referred to collectively as the "Stockholders").
The parties agree as follows:
1. Voting.
a. Until SMSC shall own less than 10% of Company's outstanding
Common Stock, Stockholders agree that they shall at all times vote their
Company stock such that the number of directors constituting Company's entire
board of directors shall be not more than seven and to elect as directors two
individuals nominated by SMSC ("SMSC Nominees"); and thereafter, until SMSC
shall own less than 5% of Company's outstanding Common Stock, Stockholders
agree that they shall at all times vote their Company stock such that the
number of directors constituting Company's entire board of directors shall be
not more than seven and to elect as a director one individuals nominated by
SMSC ("SMSC Nominees").
b. So long as SMSC shall have the right hereunder to nominate
one or more directors, the right of the "Principal Common Stockholders" (as
defined in the Stockholders Agreement dated as of March 10, 1999, by and among
Company and certain of its stockholders (the "March 10 Agreement")) to nominate
directors shall instead be exercised (to the extent of SMSC's right to nominate
directors as provided in Section 1(a) hereof) by SMSC.
2. TRANSFER RESTRICTIONS. SMSC agrees that it will not,
directly or indirectly, sell, give a security interest in, or otherwise
transfer any share of Company Common Stock or any interest in any share of
Company Common Stock (any such transaction to be referred to as "sell" or term
of like import) any of its Company Common Stock, except as expressly permitted
by, and in accordance with, this Agreement.
a. If SMSC shall receive from a financially responsible
unaffiliated person (the "Offeror") a written, binding bona fide offer (the
"Bona Fide Offer") to purchase for cash any of SMSC's Company Common Stock,
("Offered Stock"), other than in a public offering, which Bona Fide Offer
otherwise shall be in accordance with this Agreement and which SMSC shall
desire to accept, SMSC shall give written notice (the "Notice") to such effect
to Company and the other Stockholders. The Notice shall also set forth the name
and address of the Offeror, the price and other terms of the Bona Fide Offer,
and shall contain an offer (the "Notice Offer"), irrevocable during the Option
Period (as defined in Section 2.b) to Sell the Offered Shares to Company
at the price and on the other terms contained in the Bona Fide Offer
and pursuant to the other provisions of this Agreement. The Notice shall
be accompanied by a copy of the Bona Fide Offer. SMSC agrees reasonably to
consult with Company regarding the Bona Fide Offer.
b. Company shall have the option to accept the Notice Offer
with respect to all, but not less than all, of the Offered Stock, exercisable
by delivery to SMSC of a written notice of acceptance within 15 days after
delivery of the Notice ("Option Period"). If Company shall fail to exercise
its option, SMSC shall be entitled, for a period of ten days following the
expiration of the Option Period, to close the sale of all, but not less
than all, of the Offered Stock to the Offeror on the terms and conditions
set forth in the Bona Fide Offer.
c. Without limiting the generality of the foregoing
provisions of this Section 2, SMSC agrees that it shall not, without the
prior written consent of Company (to be given or withheld at Company's
discretion), sell its Company Common Stock to any person or entity that is a
competitor or Company.
3. LEGEND. SMSC agrees that any certificate evidencing its
ownership of Company stock shall bear a legend to the effect that such stock is
subject to this Agreement.
4. Registration of SMSC Company Stock. SMSC and each of up to
two direct transferees of SMSC's Company stock shall have the right to sell its
Company stock in any public offering by Company of any of its capital stock on
terms substantially equivalent to those of the Company stockholder having the
most favorable (as determined by SMSC in its sole discretion) registration
rights applicable to such public offering. IOTA represents and warrants to SMSC
that IOTA is not bound by, and IOTA covenants with SMSC that IOTA will not
grant to any person, registration rights preferential to those granted in the
preceding sentence.
5. Miscellaneous.
a. All notices, requests and other communications hereunder
shall be in writing and shall be delivered by courier or other means of
personal service (including by means of a nationally recognized courier
service or a professional messenger service), or sent by telex or telecopy
or mailed first class, postage prepaid, by certified mail, return receipt
requested, in all cases, addressed to:
SMSC:
Standard Microsystems Corporation
80 Arkay Drive
P.O. Box 18047
Hauppauge, New York 11788-8847
Telecopy: (516) 273-5550
Attention: Steven J. Bilodeau, President and
Chief Executive Officer
With copies to:
Standard Microsystems Corporation
80 Arkay Drive
P.O. Box 18047
Hauppauge, New York 11788-8847
Telecopy: (516) 273-5550
Attention: George W. Houseweart, Senior Vice President
and General Counsel
Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
Telecopy: (212) 407-4990
Attention: David C. Fischer, Esq.
Company:
Inertia Optical Technology Applications, Inc.
24 New England Executive Park
Burlington, Massachusetts 01803
Telecopy: (781) 229-6794
Attention: Nicholas E. Ortyl III
With a copy to:
Morrison & Foerster LLP
1290 Avenue of the Americas
New York, New York 10104
Telecopy: (212) 468-7900
Attention: Charles B. Friedman, Esq.
Any Stockholder other than SMSC:
The address(s) specified on the signature page hereof.
All notices, requests and other communications shall be deemed given on the
date of actual receipt or delivery as evidenced by written receipt,
acknowledgement or other evidence of actual receipt or delivery to the
addressee. In case of service by telecopy, a confirmation copy of such notice
shall be sent, on the date notice is given, by certified mail as set forth
above. Either party hereto may from time to time by notice in writing served as
set forth above designate a different address or a different or additional
person to which all such notices or communications thereafter are to be sent or
given.
b. This Agreement sets forth the parties' entire
agreement with respect to the subject matter hereof, superseding all prior
or contemporaneous agreements, understandings, or discussions, other than
the March 10 Agreement, which except as expressly provided in Section 1(b)
hereof, shall remain in full force and effect.
c. This agreement may be amended, and any provision hereof
may be waived or otherwise modified, only by a writing signed by each party.
d. This agreement shall be governed by the laws of the state
of Delaware.
e. Each party consents to specific performance of this
Agreement.
f. The losing party in any court proceeding hereunder shall
pay to the prevailing party the prevailing party's legal fees and expenses
incurred in connection with such proceeding.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first written above.
STANDARD MICROSYSTEMS
INCORPORATED
By:
Steven J. Bilodeau
President and Chief Executive Officer
INERTIA OPTICAL TECHNOLOGY
APPLICATIONS, INC.
By:
Nicholas E. Ortyl III
President and Chief Executive Officer
Donald Weiss:
Address:
Nicholas E. Ortyl
Address:
Stanley Young
Address:
YOUNG TECHNOLOGY FUND, L.L.P.
By:
Name:
Title:
Margot Muller
Address:
Henrik Muller
Address:
NEWLIGHT ASSOCIATES, L.P.
By: Newlight Partners, LLC
By:
NEWLIGHT ASSOCIATES (BVI), L.P.
By: Newlight Partners, Ltd.
By: