EXHIBIT 10.17
FOUNDER'S STOCK REPURCHASE AGREEMENT
This Agreement is made as of the 7th day of July 1995, by and between
Metawave Communications, Inc., a Delaware corporation (the "Company") and Thomas
S. Huseby ("Founder").
WHEREAS, Founder is one of the principal stockholders of the Company, and
WHEREAS, the Company proposes to enter into a Series A Preferred Stock
Purchase Agreement (the "Series A Purchase Agreement") with certain investors
(the "Investors"), and
WHEREAS, Founder, as one of the principal stockholders of the Company,
expects to derive benefit from the Investors' investment in the Company, and
WHEREAS, execution of this Agreement by the Company and Founder is a
condition to the Investors' obligation to buy stock under the Series A Purchase
Agreement; and Founder is willing to enter into this Agreement;
NOW THEREFORE, in consideration of the mutual covenants and representations
herein set forth, and in consideration of the Investors' agreement to purchase
Series A Preferred Stock pursuant to the Series A Purchase Agreement, the
Company and Founder agree as follows:
1. Purchase Option.
(a) Founder is the holder of 1,100,000 shares of the Company's Common
Stock (the "Stock"). A maximum of 825,000 shares of the Stock shall be subject
to the right and option of the Company to repurchase such shares ("Purchase
Option") as set forth in this paragraph 1. In the event Founder shall cease to
be employed by the Company (including a parent or subsidiary of the Company) for
any reason, or no reason, with or without cause, including involuntary
termination, death or temporary or permanent disability (the "Termination"), the
Purchase Option shall come into effect. Except as set forth in subparagraphs (c)
and (d) below, following a Termination, the Company shall have the right, as
provided in subparagraph (b) hereof, to purchase from Founder or his personal
representative, as the case may be, at the purchase price per share determined
pursuant to subparagraph (f) hereof (the "Option Price") that number of shares
of the Stock which have not vested (the "Unvested Shares") as provided in
subparagraph (e) hereof.
(b) Within 90 days following a Termination, the Company shall notify
Founder by written notice delivered or mailed as provided in subparagraph 6(c),
as to whether it wishes to purchase the Unvested Shares pursuant to exercise of
the Purchase Option. If the Company elects to purchase the Unvested Shares
hereunder, it shall set a date for the closing of the transaction at a place and
time specified by the Company or, at Company's option, such closing may be
consummated by mail as provided in Section 6(c) hereof. At such closing, the
Company shall tender payment for the Unvested Shares and the certificates
representing the Unvested Shares so purchased shall be canceled. The Option
Price shall be payable, at the option of the Company, in cash or by certified or
cashier's check.
(c) Notwithstanding subparagraph (a) above, if the Company (i) merges
with or into any other corporation (other than a merger in which the holders of
the outstanding voting equity securities of the Company immediately prior to the
merger hold securities representing more than 50% of the voting power of the
surviving entity immediately following such merger), (ii) sells, leases, or
conveys all or substantially all of its property or business, or (iii) issues
additional capital stock in one or more transactions, as a result of which
existing shareholders cease to own more than 50% of the voting power of the
Company, or any successor, (collectively, a "Change of Control") the Purchase
Option shall lapse and be of no further force or effect if, following such
Change of Control, the Company or its successor terminates Founder's employment
without cause as defined in Section 6(c) of the employment agreement entered
into between the Founder and the Company as of the date hereof (the "Employment
Agreement").
(d) Notwithstanding anything in this Agreement to the contrary, the
Company shall not be entitled to purchase more than 50% of the Stock if such
Termination occurs prior to the first anniversary of the execution of this
Agreement, unless such Termination is for cause, as defined in Section 6(c) of
the Employment Agreement.
(e) The Stock held by the Founder, and subject to the terms of this
Agreement, shall vest and no longer be subject to the Purchase Option as set
forth in subparagraph (a) hereof, at the rate of 8.33% of the shares of Stock
subject to the Purchase Option as of the date hereof on the last day of
September, December, March and June of each year, with all such shares of Stock
to be fully vested, and no longer subject to the Company's Purchase Option, on
June 30, 1998. In addition, the Shares shall vest during each full fiscal
quarter commencing after June 30, 1996, if any, during which Founder is entitled
to severance payments or is subject to the non-competition provisions under the
terms of the Employment Agreement, whichever is longer.
(f) The Option Price to be paid by the Company upon exercise of the
Purchase Option shall be equal to the price per share paid by Founder for such
Stock.
2. Stock Splits, Etc. If, from time to time during the term of this
Agreement:
(a) There is any stock dividend or liquidating dividend of cash
and/or property, stock split or other change in the character or amount of any
of the outstanding securities of the Company; or
(b) There is any consolidation, merger or sale of all, or
substantially all, of the assets of the Company;
then, in such event, a proportionate amount of such new, substituted or
additional securities or other property to which Founder is entitled by reason
of his ownership of Stock shall be immediately subject to this Agreement and be
included in the words "Stock" and "Unvested Shares," as the case may be, for all
purposes with the same force and effect as the shares of Stock presently subject
to the Purchase Option, right of first refusal and other terms of this
Agreement. While the aggregate Option Price shall remain the same after each
such event, the Option Price per share of Stock payable upon execution of the
Purchase Option shall be appropriately adjusted.
3. Restriction on Transfer; Right of First Refusal. Founder shall not
sell, transfer, pledge, hypothecate or otherwise dispose of any Unvested Shares
and the Company shall not be required (i) to transfer on its books any unvested
Shares or (ii) to treat any such transferee as owner of such shares or to accord
the right to vote to such transferee or to pay dividends to any transferee to
whom such shares shall have been so transferred.
4. Legends. All certificates representing any of the shares of Stock
subject to the provisions of this Agreement shall have endorsed thereon the
following legends:
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS UPON TRANSFER, INCLUDING A STANDOFF AGREEMENT, AND RIGHTS
OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE CORPORATION AND THE
REGISTERED HOLDER, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE
CORPORATION. SUCH TRANSFER RESTRICTIONS, INCLUDING THE STANDOFF AGREEMENT, ARE
BINDING ON TRANSFEREES OF THESE SHARES."
(b) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THESE SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT
COVERING THE
PURCHASE OF THESE SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO
COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
CORPORATION."
(c) Any legend required to be placed thereon by applicable blue sky
laws of any state.
5. Escrow. As security for the faithful performance of the terms of this
Agreement and to insure the availability for delivery of the Unvested Shares
upon exercise of the Purchase Option herein provided for, Founder agrees to
deliver to and deposit with the Assistant Secretary of the Company, or such
other person designated by the Company, as escrow agent in this transaction
("Escrow Agent"), two Stock Assignments duly endorsed (with date and number of
shares blank) in substantially the form attached hereto as Exhibit A, together
with the certificate or certificates evidencing the Stock; said documents are to
be held by the Escrow Agent and delivered by said Escrow Agent pursuant to the
Joint Escrow Instructions of the Company and Founder set forth in Exhibit B
attached hereto and incorporated by this reference, which instructions shall
also be delivered to the Escrow Agent at the closing hereunder.
6. Miscellaneous.
(a) Subject to the provisions and limitations hereof, Founder may,
during the term of this Agreement, exercise all rights and privileges of a
stockholder of the Company with respect to the Stock deposited in said escrow.
(b) The parties agree to execute such further instruments and to take
such further action as may reasonably be necessary to carry out the intent of
this Agreement.
(c) Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery, or
delivery by facsimile transmission or overnight courier, or upon deposit in the
United States Post Office, by registered or certified mail with postage and fees
prepaid, addressed to Founder at his address shown in the Company's employment
records and to the Company at the address of its principal corporate offices
(attention: President) or at such other address as such party may designate by
ten days' advance written notice to the other party hereto.
(d) Subject to the terms and conditions of this Agreement, the
Company may assign its rights and delegate its duties under this Agreement,
including paragraphs 1 and 3 hereof. This Agreement shall inure to the benefit
of the successors and assigns of the Company and, subject to
the restrictions on transfer herein set forth, be binding upon Founder, his
heirs, executors, administrators, successors and assigns.
(e) Nothing in this Agreement shall affect in any manner whatsoever
the right or power of the Company, or a parent or subsidiary of the Company, to
terminate Founder's employment, for any reason, with or without cause.
7. Standoff Agreement. Founder agrees, in connection with the Company's
initial public offering of its equity securities, and upon request of the
Company or the underwriters managing such offering, not to sell, make any short
sale of, loan, grant any option for the purchase of or otherwise dispose of any
securities of the Company (other than those included in the registration, if
any) without the prior written consent of the Company or such underwriters, as
the case may be, for such period of time (not to exceed 180 days) from the
effective date of such registration as may be requested by the Company or such
underwriters.
8. Governing Law. This Agreement shall be governed by, and shall be
construed and enforced in accordance with the laws of the State of Washington
without giving effect to the conflicts of laws principles thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY:
METAWAVE COMMUNICATIONS
CORPORATION, a Delaware corporation
By /s/ Douglas O. Reudink
________________________________
Title President/C.E.O.
FOUNDER:
By /s/ Thomas S. Huseby
________________________________
Thomas S. Huseby
Address: c/o Riddell Williams
1001 Fourth Avenue Plaza
Suite 4400
Seattle, Washington 98154
EXHIBIT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Founder's Stock Repurchase
Agreement dated as of _______________, _____ (the"Agreement")
___________________("Founder") hereby sells, assigns and transfers unto
________________________________________ (__________) shares of the Common Stock
of Metawave Communications Corporation, a Delaware corporation, standing in the
undersigned's name on the books of said corporation represented by certificate
no. _________ herewith, and does hereby irrevocably constitute and appoint
______________________ attorney to transfer the said stock on the books of the
said corporation with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS
THERETO.
Dated: /s/ Thomas Huseby
_______________________________
Signature
_____________________________________
Instruction: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Corporation to exercise its
"Purchase Option" as set forth in the Agreement without requiring additional
signatures on the part of Founder.
EXHIBIT B
JOINT ESCROW INSTRUCTIONS
July 7, 1995
Secretary
Metawave Communications Corporation
c/o Riddell, Williams, Bullitt & Walkinshaw
1001 Fourth Avenue Plaza, Suite 4400
Seattle, WA 98154
Dear Sir or Madam:
As Escrow Agent for both Metawave Communications Corporation, a Delaware
corporation ("Company"), and Thomas Huseby ("Founder"), you are hereby
authorized and directed to hold the documents delivered to you pursuant to the
terms of that certain Founder's Stock Repurchase Agreement ("Agreement") between
the Company and the undersigned, to which a copy of these Joint Escrow
Instructions is attached as Exhibit B, in accordance with the following
instructions:
1. In the event the Company and/or any assignee of the Company (referred
to collectively for convenience herein as the "Company") exercises the Purchase
Option set forth in the Agreement, the Company shall give to Founder and you a
written notice specifying the number of shares of stock to be purchased, the
purchase price, and the time for a closing hereunder at the principal office of
the Company. Founder and the Company hereby irrevocably authorize and direct you
to close the transaction contemplated by such notice in accordance with the
terms of said notice.
2. At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company or its
assignee, in accordance with the Agreement, against the simultaneous delivery to
you of the purchase price (by check) for the number of shares of stock being
purchased pursuant to the exercise of the Purchase Option.
3. Founder irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement. Founder
does hereby irrevocably constitute and appoint you as his attorney-in-fact and
agent for the term of this escrow to execute with respect to such securities all
documents necessary or appropriate to make such securities negotiable and to
complete any transaction herein contemplated. Subject to the provisions of this
paragraph 3, Founder shall exercise all rights and privileges of a shareholder
of the Company while the stock is held by you.
4. Upon written request of the Founder, but no more than once per
calendar year, unless the Purchase Option has been exercised, you will deliver
to Founder a certificate or certificates representing so many shares of stock as
are not then subject to the Purchase Option. Within 100 days after cessation of
Founder's continuous employment by the Company, or any parent or subsidiary of
the Company, you will deliver to Founder a certificate or certificates
representing the aggregate number of shares sold and issued pursuant to the
Agreement and not purchased by the Company or its assignees pursuant to exercise
of the Purchase Option.
5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Founder,
you shall deliver all of same to Founder and shall be discharged of all further
obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact for Founder while acting in good faith, and
any act done or omitted by you pursuant to the advice of your own or the
Company's attorneys shall be conclusive evidence of such good faith.
8. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
9. You shall not be liable for the expiration of any rights under the
Statute of Limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
10. You shall be entitled to employ such legal counsel and other experts
as you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor. The Company will reimburse you
for your reasonable legal fees and expenses.
11. Your responsibilities as Escrow Agent hereunder shall terminate if you
shall cease to be an officer of the Company or if you shall resign by written
notice to each party. In the event of any such termination, the Company shall
appoint a successor Escrow Agent.
12. If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
13. It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the securities held
by you hereunder, you are authorized and directed to retain in your possession
without liability to anyone all or any part of said securities until such
disputes shall have been settled either by mutual written agreement of the
parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
14. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery or upon deposit in
the United States Post Office, by registered or certified mail with postage and
fees prepaid, addressed to each of the other parties thereunto entitled at the
following addresses, or at such other addresses as a party may designate by ten
days' advance written notice to each of the other parties hereto.
COMPANY: Metawave Communications Corporation
c/o Riddell, Williams, Bullitt & Walkinshaw
1001 Fourth Avenue Plaza, Suite 4400
Seattle, WA 98154
FOUNDER: __________________________________
__________________________________
__________________________________
ESCROW AGENT: Secretary
Metawave Communications Corporation
c/o Riddell, Williams, Bullitt & Walkinshaw
1001 Fourth Avenue Plaza, Suite 4400
Seattle, WA 98154
15. By signing these Joint Escrow Instructions, you become a party hereto
only for the purpose of said Joint Escrow instructions; you do not become a
party to the Agreement.
16. This instrument shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and permitted assigns.
Very truly yours,
COMPANY
METAWAVE COMMUNICATIONS CORPORATION
a Delaware corporation
By: /s/ Douglas O. Reudink
-------------------------------
FOUNDER:
/s/ Thomas S. Huseby
-----------------------------------
Thomas S. Huseby
ESCROW AGENT:
________________________________,
Secretary