SUBSCRIPTION AGREEMENT
DATE: February 25, 2000
PARTIES:
Xxxxx X. Xxxxxxxx ("Xxxxxxxx")
Xxxxx X. Xxxxxx, Xx. ("Singer")
Xxxx X. Parenteau ("Parenteau")
Spanlink Acquisition Corp ("SAC")
RECITALS:
A. SAC has entered into an Agreement and Plan of Merger dated the date
hereof between Cisco, SAC and Spanlink Communications, Inc. (the "Merger
Agreement") pursuant to which SAC proposes to make a tender offer (as it may be
amended from time to time as permitted under the Merger Agreement, the "Offer")
to purchase all of the shares of common stock of Spanlink Communications, Inc.
(the "Company"). All capitalized terms not defined in this Agreement shall have
the meanings set forth in the Merger Agreement.
B. SAC has authorized capital stock of 20,000,000 shares of Common
Stock, no par value, (the "SAC Common Stock") and 5,000,000 undesignated shares,
from which SAC's Board of Directors has by resolution created a class of Series
A Preferred Stock (the "SAC Preferred Stock") and no shares of either SAC Common
Stock or SAC Preferred Stock are outstanding.
C. In connection with the transactions contemplated by the Merger
Agreement, Xxxxxxxx, Singer and Parenteau desire to purchase shares of SAC
Common Stock according to the terms set forth herein. Xxxxxxxx, Singer and
Parenteau are herein collectively referred to as the "Subscribers."
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, and for other valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
Stock Subscription
1.1 Purchase of SAC Common Stock. At such time as SAC becomes obligated
pursuant to the Merger Agreement to purchase all shares of the Company's Common
Stock which have been tendered in response to the Offer, and immediately prior
to or concurrently with the closing of such purchase in connection with the
Offer, each of Xxxxxxxx, Singer and Parenteau shall transfer to SAC that number
of shares of the Company's Common Stock set forth opposite his name in the table
below, which represents ninety (90) percent of the issued and outstanding shares
of the Company's Common Stock that he owns of record or beneficially. Such
transfer shall be effected by the delivery to SAC of certificates representing
the shares of the Company's Common Stock to be transferred together with
appropriate stock powers naming SAC as transferee. In exchange for such transfer
of Company Common Stock, SAC shall issue to each of Shockley, Singer, and
Parenteau that number of shares of SAC Common Stock set forth opposite his name
in the table below, which shall result in Xxxxxxxx, Singer and Parenteau having
control of SAC following such transaction. The parties intend that no gain or
loss shall be recognized by Xxxxxxxx, Singer and Parenteau in connection with
this transfer pursuant to ss.351 of the Internal Revenue Code.
Transferor Company Shares to be SAC Shares to be
Contributed to SAC Issued in Exchange
Xxxxx X. Xxxxxxxx 810,000 shares 810,000 shares
Xxxxx X. Xxxxxx, Xx. 810,000 shares 810,000 shares
Xxxx X. Parenteau 810,000 shares 810,000 shares
1.2 Restriction on Tender of Shares. Each of Xxxxxxxx, Singer and
Parenteau shall tender for purchase in the Offer no more than 90,000 of the
issued and outstanding shares of the Company's Common Stock of which he is the
record or beneficial owner.
1.3 Additional Director. Upon closing of the transactions contemplated
by this Article, Xxxxxxxx, Singer and Parenteau, as the holders of all of the
outstanding voting stock of SAC, shall elect a designee to be named by Cisco as
an additional member of SAC's Board of Directors.
ARTICLE II
Representations and Warranties of SAC
SAC represents and warrants to the Subscribers that:
2.1 Organization and Authority. SAC is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Minnesota
and has all requisite corporate power and authority to enter into this
Subscription Agreement and to consummate the transactions contemplated hereby.
SAC has all requisite corporate power and authority to issue and sell the SAC
Common Stock and the SAC Preferred Stock contemplated hereby and otherwise to
carry out the transactions contemplated hereby.
2.2 Capitalization. SAC has authorized capital stock of 20,000,000
shares of SAC Common Stock and 5,000,000 undesignated shares. The Board of
Directors of SAC has adopted a resolution creating a class of Series A Preferred
Stock but has not yet filed such resolution with the Minnesota Secretary of
State. All of the shares of SAC Common Stock issuable hereunder shall be validly
issued, fully paid and nonassessable as and when delivered by SAC in accordance
with Article I.
2.3 Valid, Binding Agreement. This Subscription Agreement is a valid
and binding agreement of SAC, enforceable against SAC in accordance with its
terms.
ARTICLE III
Representations and Warranties of the Subscribers
The Subscribers hereby represent and warrant as follows:
3.1 Access to Information. SAC has made available to the Subscribers,
for a reasonable time prior to the date hereof, an opportunity to ask questions
and receive answers concerning the terms and conditions of the Subscriber's
investment in the SAC Common Stock and the SAC Preferred Stock and to obtain any
additional information which SAC possesses or can acquire without unreasonable
effort or expense, and each Subscriber has received all additional information
requested by the Subscriber. Each Subscriber has had access to such financial
and other information as is necessary in order for the Subscriber to make a
fully-informed decision as to his or its investment in SAC Common Stock or SAC
Preferred Stock.
3.2 No Registration. The Subscribers have been advised that the shares
of SAC Common Stock and SAC Preferred Stock have not been registered under the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(the "1933 ACT") and, therefore, cannot be resold unless they are registered
under the 1933 Act or unless an exemption from registration is available.
3.3 Purchase for Investment. Each Subscriber, with respect to all the
shares of SAC Common Stock or SAC Preferred Stock to be purchased by the
Subscriber, is purchasing the SAC Common Stock or SAC Preferred Stock for such
Subscriber's own account, in each case for investment and not with a view to, or
for resale in connection with, the distribution thereof or with any present
intention of distributing or reselling any thereof.
3.4 Business and Financial Experience, Etc. Each Subscriber has such
knowledge and experience in financial and business matters that the Subscriber
is capable of evaluating the merits and risks of Subscriber's investment in SAC
Common Stock or SAC Preferred Stock and is aware that the Subscriber must bear
the economic risk of such investment for an indefinite period of time.
3.5 Accredited Investor. Each Subscriber is an accredited investor as
that term is defined in Rule 501(a) of Regulation D under the 1933 Act because
each Subscriber is a director of SAC.
ARTICLE IV
Restrictions on Transfer of SAC Common Stock
Each Subscriber hereby agrees that each outstanding certificate
representing shares of SAC Common Stock and SAC Preferred Stock to be delivered
at the Closing shall bear endorsements reading substantially as follows:
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be
transferred, sold or otherwise disposed of except while such a
registration is in effect or pursuant to an exemption from registration
under said Act.
ARTICLE V
Miscellaneous Provisions
5.1 Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Minnesota. This Agreement cannot be
changed orally and can only be changed by an instrument in writing signed by the
parties hereto.
5.2 Notices. All notices, statements, instructions, or other documents
required to be given hereunder shall be in writing and shall be given either
personally or by mailing the same in a sealed envelope, first class mail,
postage pre-paid and either certified or registered, return receipt requested
and addressed to SAC at its principal offices and the Subscribers at their
address as set forth below:
Xxxxx X. Xxxxxxxx
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxxx, XX 00000
Xxxxx X. Xxxxxx, Xx.
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxxx, XX 00000
Xxxx X. Parenteau
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxxx, XX 00000
Each of the Subscribers by written notice given to SAC in accordance
with this Section 5.2 may change the address to which notices, statements,
instructions or other documents are to be sent to such Subscriber. All notices,
statements, instructions, and other documents hereunder that are mailed shall be
deemed to have been given on the date of mailing. Pursuant to this Agreement any
notices required to be given by any Shareholder to any other Shareholder, such
Shareholder may request from SAC a list of address of all Shareholders of SAC,
which list shall be promptly furnished to such Shareholder.
5.3 Counterparts. This Agreement and the Merger Agreement constitute
the entire Agreement between the parties relating to the subject matter hereof
and supersede all other agreements and understandings, both written and oral,
among the parties or any of them with respect to the subject matter hereof. This
Agreement maybe executed by one or more of the parties hereto and any number of
counterparts, each of which shall be deemed an original, and all such
counterparts shall constitute one and the same instrument.
5.4 Assignment. This Agreement is not assignable by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
XXXXX X. XXXXXXXX
/s/ Xxxxx X. Xxxxxxxx
XXXXX X. XXXXXX, XX.
/s/ Xxxxx X. Xxxxxx, Xx.
XXXX X. PARENTEAU
/s/ Xxxx X. Parenteau
SPANLINK ACQUISITION CORP.
/s/ Xxxxx X. Xxxxxxxx
By: Xxxxx X. Xxxxxxxx,
Chief Executive Officer
