Exhibit 10.17
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JOINT VENTURE AGREEMENT
AGREEMENT, made this 16th day of December, 1999, by and between Global
NAPS, Inc., a duly organized and existing Delaware corporation having a usual
place of business at 00 Xxxxxxxxxx Xx., Xxxxxx, Xxxxxxxxxxxxx ("Global"),
B.A.B.P., LLC, a Massachusetts Limited Liability Company having a usual place of
business at 00 Xxxxxxxxxx Xx., Xxxxxx, Xxxxxxxxxxxxx ("BABP") and Convergent
Networks, Inc., a duly organized and existing Delaware corporation having a
usual place of business at 000 Xxxxxxxxxx Xxxxxx, Tower Three, 11th Floor,
Lowell, MA 01851, ("Convergent").
Whereas, Convergent is in the process of developing a next generation,
Telephony-Grade switching platform that will deliver full service inter-
operability and inter-working between any mix of access and network technologies
like TDM and ATK based on native ATM switching technology;
Whereas, Global is a certificated Competitive Local Exchange Carrier with
facilities in Massachusetts, Xxx Xxxxxxxxx, Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxx and
Florida;
Whereas, technical assistance from Global and access to Global's strategic
alliances is essential for Convergent to bring its switching platform to market
in an expeditious manner;
Whereas; Global wishes to provide said assistance to Convergent for
consideration; and,
Whereas, Global wishes to own Four Hundred Twenty Thousand (420,000) shares
(the "Shares") of Convergent's Series C Convertible Preferred Stock, $.01 par
value per share (the "Series C Preferred Stock") through its designee, BABP;
NOW, THEREFORE, in consideration of the agreements contained herein and for
other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Global shall provide technical assistance and testing facilities to
convergent through December 31, 1999.
2. Global's designee BABP shall acquire Four Hundred Twenty Thousand
(420,000) shares of Series C Preferred Stock in Convergent as set forth
below:
(a) BABP shall purchase One Hundred Fifty Five Thousand One Hundred
Forty-Seven (155,147) shares of Series C Preferred Stock on the
Closing Date (as defined below) for a purchase price of One Million
Three Thousand Eight Hundred ($1,003,800.00) Dollars (the "Cash
Purchase Price").
(b) BABP shall receive Two Hundred Sixty Four Thousand Eight Hundred
Fifty-Three (264,853) shares of Series C Preferred Stock in
Convergent on the Closing Date for services rendered under Section
1 of this Agreement.
3. The closing ("Closing") of the sale and purchase of the Shares under
this Agreement shall take place at the offices of Xxxxxxxx, Xxxxxxx &
Xxxxxxx, A Professional Corporation, 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 at 9:00 a.m. on the date hereof, or at such other
time, date and place as are mutually agreeable to the Convergent and
Global. The date of the Closing is hereinafter referred to as the
"Closing Date."
4. At the Closing, Convergent shall deliver to BABP a certificate for the
Shares being purchased by BABP, registered in the name of BABP.
5. At the Closing, Global and BABP shall deliver:
(a) this Agreement executed by both Global and BABP;
(b) Amendment No. 3 to Investor Rights Agreement executed by BABP;
(c) Amendment No. 2 to the Right of First Refusal and Co-Sale
Agreement executed by BABP; and
(d) the Cash Purchase Price by wire transfer, check or other method
acceptable to Convergent.
6. (a) If at any time following the date hereof, the stockholders of
Convergent holding a majority of the capital stock then held by
all stockholders of Convergent (the "Majority Stockholders") shall
vote or otherwise enter into an agreement to (A) sell all of the
shares (and all securities convertible into and exercisable or
exchangeable for shares) of capital stock in Convergent owned by
the Majority Stockholders to any person or group of persons who
are not affiliated with the Majority Stockholders, (B) enter into
a transaction pursuant to which Convergent agrees to merge with or
into another entity or agrees to sell all or substantially all of
the assets of Convergent (in each case a "Corporate Transaction"),
then the Majority Stockholders may require that BABP sell all of
the securities of the Company owned by BABP, including, but not
limited to, the Shares, to such person or group of persons at the
same price per share and on the same terms and conditions as are
applicable to the proposed sale by such Majority Stockholders
and/or vote such securities in favor of the Corporate Transaction,
provided that the BABP shall not be required in connection with
any such Corporate Transaction to make any representation,
warranty or covenant other than a representation as to the BABP's
power and authority to effect such sale and as to the BABP's title
to the securities to be sold by it. BABP hereby grants to the
President of Convergent an irrevocable proxy, coupled with an
interest, to vote all shares of capital stock owned by BABP and to
take such other actions to the extent necessary to carry out the
provisions of this Section 6(a) in the event of any breach by BABP
of its obligations hereunder.
(b) In order to exercise the rights under Section 6(a), the Majority
Stockholders must give notice to BABP not less than 15 days prior
to the proposed date upon which the contemplated Corporate
Transaction is to be effected. In addition, the Majority
Stockholders shall furnish to BABP all such agreements, documents
and instruments to be executed in connection with such transaction
and shall afford BABP a reasonable period of time (but in any
event not less than 10 business days) within which to review such
agreements, documents and instruments."
7. Any term of this Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), with
the written consent of Convergent, Global and BABP.
8. This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original instrument, but all of which
shall be one and the same document.
9. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.
IN WITNESS WHEREOF the parties hereto have executed this Agreement on the
date first above written.
CONVERGENT NETWORKS, INC.
By: /s/ Xxxx Xxxx
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Title: President
GLOBAL NAPS, INC.
By: /s/ [signature illegible]
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Title: President
B.A.B.P., LLC.
By: /s/ [signature illegible]
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its Managing Partner
