Document:

Exhibit 10.10

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT is made on this 20th day of May,
2002, between MISSION COMMUNITY BANK, N.A. (“Bank”), having a principal place
of business at 581 Higuera Street, San Luis Obispo, California 93406, and ANITA
M. ROBINSON (“Executive”), whose residence is 8570 Corriente Road, Atascadero,
California 93422, with reference to the following:

 

W I T N E S S E T H

 

WHEREAS, Bank is a national
banking association duly organized, validly existing, and in good standing under
the laws of the United States of America, with power to own property and carry
on its business as it is now being conducted;

 

WHEREAS, Bank
desires to continue to avail itself of the skill, knowledge and experience of
Executive in order to insure the successful management of its business; and

 

WHEREAS, the
parties hereto desire to specify the terms of Executive’s continued employment
by Bank;

 

NOW, THEREFORE, in
consideration of the mutual covenants hereafter set forth, it is agreed that
effective January 1, 2002 (the “Effective Date”), the following tems and
condition shall apply to Executive’s employment:

 

A G R E E M E N T

 

A.                                                                                   TERM
OF EMPLOYMENT

 

1.  Term.  Bank hereby
employs Executive and Executive hereby accepts employment with Bank for the
period of five (5) years (the “Term”) commencing with the Effective Date;
subject, however, to prior termination of this Agreement as hereinafter
provided. Where used herein, “Term” shall refer to the entire period of
employment of Executive by Bank hereunder, whether for the period provided
above, including any extensions thereof, or whether terminated earlier as
hereinafter provided.

 

B.                                                                                     DUTIES
OF EXECUTIVE

 

1.                                       Duties.  Executive shall perform the duties of
President and Chief Executive Officer of Bank, which includes, but are not
limited to those duties specified on Bank’s Job Description for the position of
President and Chief Executive Officer, subject to the powers by law vested in
the Board of Directors of Bank and in Bank’s shareholders. However, the duties of
Executive may be changed from time to time by the mutual consent of Executive
and Bank without resulting in a recission of this Agreement. Notwithstanding
any such change from the duties originally assigned and specified above, or
hereafter assigned, the employment of

 

 

Executive shall be construed as continuing
under this Agreement as modified; provided, however, any material changes in
Executive’s duties, without Executive’s consent, shall be construed as a
termination of Executive without cause. During the Term, Executive shall
perform exclusively the services herein contemplated to be performed by
Executive faithfully, diligently and to the best of Executive’s ability,
consistent with the highest and best standards of the banking industry and in compliance
with all applicable laws and Bank’s Articles of Association and Bylaws.

 

2.  Conflicts of Interests.  Except as permitted by the prior written
consent of the Board of Directors of Bank, Executive shall devote Executive’s entire productive time, ability and attention to the business of
Bank during the Term and Executive shall not directly or indirectly render any
services of a business, commercial or professional nature to any other person,
firm or corporation, whether for compensation or otherwise, which are in
conflict with Bank’s interests.

 

C.                                                                                     COMPENSATION

 

1.                                       Base Salary.  For Executive’s services
hereunder, Bank shall pay or cause to be paid as base salary to Executive the
amount of Ten Thousand Eight Hundred Thirty-Three Dollars ($10,833) per calendar
month. Said base salary shall be payable in conformity with Bank’s normal
payroll periods. Executive’s base salary shall be reviewed by the Board of
Directors from time to time, at its discretion, and Executive shall receive such base salary increases, if any, as the
Board of Directors, in its sole discretion, shall determine.

 

2.                                       Initial Bonus. 
Upon entering into this Agreement Bank shall pay Executive an initial
bonus equal to the difference between Executive’s base salary set forth in Paragraph C.1. above and the actual base salary paid
to Executive for the period from January 1 2002 until the date of this
Agreement.

 

3.                                       First Year
Bonus.  Bank shall pay Executive a
bonus of Ten Thousand Dollars ($10,000) during December, 2002.

 

4.                                        Discretionary
Bonus.  In addition, Executive may
receive such discretionary bonuses, if any, as the Board of Directors, in its
sole discretion, shall determine.

 

D.                                                                                    EXECUTIVE BENEFITS

 

1.                                        Vacation and Sick Pay. 
Executive shall be entitled to four (4) weeks vacation per year during
the Term, in accordance with Bank’s Personnel Policy; provided, however, that each year of the Term Executive is
required to and shall take at least two (2) weeks of said vacation (the
“Mandatory Vacation”), which shall be taken consecutively. Any vacation time
not used in excess of the Mandatory Vacation may be accumulated in accordance
with Bank’s Personnel Policy. Executive shall also be entitled to sick pay in
accordance with Bank’s Personnel Policy.

 

2

 

2.                                       Group Medical and Life Insurance Benefits. 
Pursuant to Bank’s policies, Bank shall continue to provide for
Executive’s participation in Bank’s group medical, dental, vision and life
insurance benefits, as provided to Bank’s other officers; provided, however, that Executive shall continue to be
provided $250,000 in life insurance benefits. Said insurance coverage shall
continue throughout the Term. Bank’s liability to Executive for any breach of
this Paragraph D.2 shall be limited to the amount of premiums payable by Bank
to obtain the coverage contemplated herein.

 

3.                                       Automobile Allowance. 
During the Term Bank shall provide Executive with a Six Hundred Fifty
Dollars ($650) per month automobile allowance.

 

4.                                       Additional Benefits. 
Executive shall be entitled to participate in all programs, rights and
benefits for which Executive is otherwise entitled under any 401(k) plan, bonus
plan, incentive plan, participation plan, extra compensation plan, pension
plan, profit sharing plan, savings plan, life, medical, dental, other health
care, disability or other insurance plan or policy or other plan or benefit
Bank may provide for senior executives or for employees of Bank generally, from
time to time, in effect during the Term. Bank further agrees to investigate a
life insurance-based annuity program for Executive’s benefit.

 

E.                                                                                      BUSINESS EXPENSES AND REIMBURSEMENT

 

1.                                       Business Expenses. 
Executive shall be entailed to reimbursement by Bank for any ordinary
and necessary business expenses incurred by Executive in the performance of
Executive’s duties and in acting for Bank during the Term, which types of
expenditures shall be determined by the Board of Directors, provided that:

 

(a)                                   Each such expenditure is of a nature
qualifying it as a proper deduction on the federal and state income tax returns
of Bank as a business expense and not as deductible compensation to Executive;
and

 

(b)                                Executive furnishes to Bank adequate records
and other documentary evidence required by federal and state statutes and
regulations issued by the appropriate taxing authority for the substantiation
of such expenditures as deductible business expenses of Bank and not as
deductible compensation to Executive.

 

2.                                      Reimbursement. 
Executive agrees that, if at any time payment made to Executive by Bank
for business expense reimbursement shall be disallowed in whole or in part as a
deductible business expense by the appropriate taxing authorities, the amount
so disallowed shall be treated as taxable compensation to Executive.

 

F.                                                                                      TERMINATION

 

1.                                     Termination.  Bank may terminate
Executive’s employment at any time without further obligation or liability to
Executive, by action of the Board of Directors:

 

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(a)                                 If
Executive fails to perform
Executive’s duties or habitually neglects Executive’s duties;

 

(b)                                If
Executive engages in illegal
activity which materially adversely affects Bank’s reputation in the community
or which evidences the lack of Executive’s fitness or ability to perform
Executive’s duties as determined by the Board of Directors in good faith;

 

(c)                                If Executive has committed any act which
would cause termination of coverage under Bank’s Bankers Blanket Bond as to
Executive or as to Bank as a whole;

 

(d)                               If
Executive is deceased; or

 

(e)                                If Executive is found to be physically or
mentally incapable of performing Executive’s duties for a period of ninety (90)
days or greater by the Board of Directors, in good faith. Such termination
shall not prejudice any remedy which Bank may have at law, in equity, or under
this Agreement.  Termination pursuant to
this Paragraph F.1 shall become effective two (2) days after written notice of
termination.

 

2.                                       Action by Supervisory Authority. 
Executive’s employment shall terminate immediately without further
liability or obligation to Executive:

 

(a)                                 If Bank is closed or taken over by the
Comptroller of the Currency or other supervisory authority, including the
Federal Deposit Insurance Corporation; or

 

(b)                                If such supervisory authority should exercise
its statutory powers of removal to remove Executive from office.

 

3.                                        Merger or
Transfer of Assets.  This Agreement
shall not be terminated due to: (a) a merger where Bank is not the surviving
corporation; (b) a consolidation; or (c) a transfer of all or substantially all
of the assets of Bank. Bank shall take all actions necessary to insure that the
surviving or resulting corporation, if other than Bank, or transferee of Bank’s
assets is bound by and shall have the benefit of the provisions of this
Agreement. In the case of dissolution, this Agreement shall be terminated.

 

4.                                       Termination Without Cause. 
Notwithstanding anything to the contrary herein, Executive’s employment
may be terminated at any time without cause by Bank upon five (5) days’ written
notice of termination to Executive and by Executive upon sixty (60) days’
written notice of termination to Bank. In the event Bank elects to terminate
this Agreement pursuant to this Paragraph F.4, Executive shall be entitled to
compensation equal to six (6) months’ base salary, payable in equal
installments over a six (6) month period in conformity with Bank’s normal
payroll periods; provided, however, in the event Bank or its successor elects
to terminate this Agreement pursuant to the provisions hereof and there has
been a “Corporate Reorganization,” or in the event Executive elects to
terminate this Agreement for “Good Cause” after a “Corporate Reorganization,”
Executive shall be entitled to: (i) compensation equal to sixty (60) months’
base salary, payable in a lump sum; and (ii) payment by Bank of premiums for
Executive’s insurance coverages required pursuant to Paragraph D.2 hereof and
payment by

 

4

 

Bank
of Executive’s automobile allowance required pursuant to Paragraph D.3 hereof
for a period of sixty (60) months, payable in a lump sum. In the event
Executive elects to terminate this Agreement pursuant to the provisions hereof
without “Good Cause” after a “Corporate Reorganization,” Bank and Executive
shall not be entitled to any compensation.

 

For purposes of this
Paragraph F.4, a “Corporate Reorganization” shall be deemed to have occurred:
(i) in the event of a merger or consolidation where Bank or its parent holding
company is not the surviving corporation, except where Bank’s sole shareholder
or its parent holding company’s shareholders exchange its or their interests
for more than fifty percent (50%) control of the surviving corporation; (ii) in
the event of a transfer of all or substantially all of the assets of Bank; or
(iii) in the event of any other corporate reorganization where there is a
change in ownership of Bank or its parent holding company of more than fifty
percent (50%), except as may result from a transfer of shares to another corporation
in exchange for more than fifty percent (50%) control of that corporation.
Thus, for example, a Corporate Reorganization will not be deemed to have
occurred if one hundred percent (100%) ownership of Bank’s corporate parent is
transferred, so long as those individuals who were shareholders of Bank’s
corporate parent prior to the transfer own more than fifty percent (50%) of the
new holding company after the transfer.

 

For purposes of this
Paragraph F.4, the following shall constitute “Good Cause”: (i) subsequent to a
“Corporate Reorganization,” and without Executive’s express written consent,
the assignment to Executive of any duties substantially inconsistent with
Executive’s positions, duties, responsibilities and status with Bank
immediately prior to the “Corporate Reorganization,” or a substantial change in
Executive’s reporting responsibilities, titles or offices as in effect
immediately prior to the “Corporate Reorganization,” or any removal of
Executive from or any failure to re-elect Executive to any of such positions,
except in connection with the termination of Executive’s employment pursuant to
Paragraphs F.1 or F.2 hereof, or as a result of Executive’s retirement, or by
Executive other than for “Good Cause”; (ii) subsequent to a “Corporate
Reorganization,” a 10% or greater reduction by Bank in Executive’s base salary
and benefits as in effect on the Effective Date or as the same may be increased
from time to time; (iii) subsequent to a “Corporate Reorganization” and without
Executive’s express written consent, Bank’s requiring Executive to be based
anywhere other than within 15 miles of Bank’s present main office location,
exclusive of required travel on Bank business; or (iv) subsequent to a
“Corporate Reorganization,” the failure by Bank to obtain the assumption of the
agreement to perform this Agreement by any successor as contemplated in
Paragraph G.5 hereof.

 

5.                                        Effect of Termination.  In
the event of termination of Executive’s employment prior to the completion of
the original Term or any extension for any of the reasons specified in
Paragraphs F.1 through F.4, Executive shall be entitled to the salary earned by
Executive prior to the date of termination as provided for in this Agreement,
computed pro rata up to and including that date and accrued but unused vacation
time; but Executive shall be entitled to no further compensation for services
rendered after the date of termination.

 

6.                                         Resignation
From Board of Directors.  In the
event Executive’s employment as President and Chief Executive Officer of Bank
is terminated for any reason or Executive otherwise becomes unaffiliated with
Bank, Executive shall, and does hereby agree to,

 

5

 

tender
her written resignation from the Board of Directors of Bank effective on the
date of termination, resignation or nonaffiliation.

 

G.                                                                                     GENERAL
PROVISIONS

 

1.                                         Trade Secrets. 
During the Term, Executive will have access to and become acquainted
with what Executive and Bank
acknowledge are trade secrets, to wit, knowledge or data concerning Bank,
including its operations and business, and the identity of customers of Bank,
including knowledge of their financial condition, their financial needs, as
well as their methods of doing business. Executive shall not disclose any of
the aforesaid trade secrets, directly or indirectly, or use them in any way,
either during the Term or for a period of five (5) years after the termination
of Executive’s employment, except as required in the course of Executive’s
employment with Bank.

 

2.                                        Covenant Not to Interfere. 
Executive hereby covenants and agrees that Executive will not now, or
for the period during which Executive receives any compensation from Bank,
whether pursuant to Paragraph F.4 hereof or otherwise, plus an additional
period of one year, disrupt, damage, impair or interfere with the business of
Bank, whether by way of interfering with or raiding its employees, disrupting
its relationships with customers and their agents, representatives or vendors,
or otherwise. After termination of employment, Executive is not, however,
restricted from being employed by or engaged in a competing business.

 

3.                                         Return of Documents. 
Executive expressly agrees that all manuals, documents, files, reports,
studies, instruments or other materials used and/or developed by Executive
during Executive’s employment with Bank are solely the property of Bank, and
that Executive has no right, title or interest therein. Upon termination of
Executive’s employment, Executive or Executive’s representative shall promptly
deliver possession of all of said property to Bank in good condition.

 

4.                                         Notices.  Any notice, request, demand or other
communication required or permitted hereunder shall be deemed to be properly
given when personally served in writing or by facsimile, when deposited in the
United States mail, postage prepaid, or when communicated to a public telegraph
company for transmittal, addressed to the party at the address appearing at the
beginning of this Agreement. Either party may change its address by written
notice in accordance with this paragraph.

 

5.                                         Benefit of
Agreement.  This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective executors, administrators, successors and assigns.

 

6.                                         Applicable
Law.  Except to the extent governed
by the laws of the United States, this Agreement is to be governed by and
construed under the laws of the State of California.

 

6

 

7.                                         Captions and Paragraph Headings. 
Captions and paragraph headings used herein are for convenience only and are not a part of this Agreement
and shall not be used in construing it.

 

8.                                         Invalid Provisions. 
Should any provisions of this Agreement for any reason be declared
invalid, void, or unenforceable by a court of competent jurisdiction, the
validity and binding effect of any remaining portion shall not be affected, and
the remaining portions of this Agreement shall remain in full force and effect
as if this Agreement had been executed with said provision eliminated.

 

9.                                          Entire Agreement. Except for a Stock Option Agreement and an
incentive compensation plan which may be entered into by and between Bank and
Executive, this Agreement contains the entire agreement of the parties and supersedes
any and all other agreements, either oral or in writing, between the parties
hereto with respect to the employment of Executive by Bank. Each party to this
Agreement acknowledges that no representations, inducements, promises, or
agreements, oral or otherwise, have been made by any party, or anyone acting on
behalf of any party, which are not embodied herein, and that no other
agreement, statement, or promise not contained in this Agreement shall be valid
or binding. This Agreement may not be modified or amended by oral agreement,
but only by an agreement in writing signed by Bank and Executive.

 

IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first above
written.

 

 

	
   

  	
  MISSION COMMUNITY BANK, N.A.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary E.
  Stemper

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William
  B. Coy

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Anita M. Robinson

  	
   

  
	
   

  	
  ANITA M. ROBINSON

  	
   

  

 

7EXHIBIT 10.21

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered
into as of June 30, 2003, by and between DATALINK CORPORATION, a Minnesota
corporation (“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”).

 

RECITALS

 

WHEREAS, Borrower is currently indebted to Bank pursuant to the terms
and conditions of that certain Credit Agreement between Borrower and Bank dated
as of June 30, 2002, as amended from time to time (“Credit Agreement”).

 

WHEREAS, Bank and Borrower have agreed to certain changes in the terms
and conditions set forth in the Credit Agreement and have agreed to amend the
Credit Agreement to reflect said changes.

 

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree that the Credit
Agreement shall be amended as follows:

 

1.             Section
1.1 (a) is hereby amended by deleting “June 30, 2003” as the last day on which
Bank will make advances under the Line of Credit, and by substituting for said
date “June 30, 2004,” with such change to be effective upon the execution and
delivery to Bank of a promissory note substantially in the form of
Exhibit ”A” attached hereto (which promissory note shall replace and be
deemed the Revolving Line of Credit Note defined in and made pursuant to the
Credit Agreement) and all other contracts, instruments and documents required
by Bank to evidence such change.

 

2.             The
following is hereby added to the Credit Agreement as Section 1.4.

 

“SECTION 1.4       COLLECTION OF
PAYMENTS.  Borrower authorizes Bank to
collect all interest and fees due under each credit subject hereto by charging
Borrower’s deposit account number 0001701765 with Wells Fargo Bank Minnesota,
National Association, or any other deposit account maintained by Borrower with
Bank or Wells Fargo Bank Minnesota, National Association, for the full amount
thereof.  Should there be insufficient
funds in any such deposit account to pay all such sums when due, the full
amount of such deficiency shall be immediately due and payable by Borrower.”

 

3.             Section 4.3
(d) is hereby deleted in its entirety, and the following substituted therefore:

 

“SECTION 4.3. (d) not later than 120 days after the end of each
fiscal year, an annual projection of Budget of Borrower, to include an income
statement, balance sheet, and statement of cashflows for said period.”

 

4.             Section 4.9
(b) is hereby deleted in its entirety, and the following substituted therefore:

 

“SECTION 4.9 (b) Tangible Net Worth as of the
end of each fiscal quarter, not less than $16,000,000.00, with “Tangible Net
Worth” defined as the aggregate of total stockholders’ equity plus subordinated
debt less any intangible assets.”

 

5.             Except
as specifically provided herein, all terms and conditions of the Credit
Agreement remain in full force and effect, without waiver or modification.  All terms defined in the Credit Agreement
shall have the same meaning when used in this Amendment.  This Amendment and the Credit Agreement
shall be read together, as one document.

 

6.             Borrower
hereby remakes all representations and warranties contained in the Credit
Agreement and reaffirms all covenants set forth therein.  Borrower further certifies that as of the
date of this Amendment there exists no Event of Default as defined in the
Credit Agreement, nor any condition, act or event which with the giving of
notice or the passage of time or both would constitute any such Event of
Default.

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.

 

	
   

  	
  WELLS FARGO BANK,

  
	
  DATALINK
  CORPORATION

  	
  NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
  By:  

  	
  /s/ Daniel J. Kinsella

  	
   

  	
  By: 

  	
  /s/ Richard J. Hancock

  	
   

  
	
  Title:  VP Finance & Chief
  Financial Officer

  	
  Title: Vice President

  
						

 

 

REVOLVING LINE OF CREDIT NOTE

 

 

	
  $8,000,000.00

  	
   

  	
  Minneapolis,
  Minnesota

  
	
   

  	
   

  	
  June 30, 2003

  

 

FOR VALUE RECEIVED, the undersigned DATALINK CORPORATION (“Borrower”)
promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”)
at its office at Sixth and Marquette, Minneapolis, Minnesota, or at such other
place as the holder hereof may designate, in lawful money of the United States
of America and in immediately available funds, the principal sum of Eight
Million Dollars ($8,000,000.00), or so much thereof as may be advanced and be
outstanding, with interest thereon, to be computed on each advance from the
date of its disbursement as set forth herein.

 

DEFINITIONS:

 

As used herein, the following terms shall have the meanings set forth
after each, and any other term defined in this Note shall have the meaning set
forth at the place defined:

 

(a)           “Business Day” means
any day except a Saturday, Sunday or any other day on which commercial banks in
Minnesota are authorized or required by law to close.

 

(b)           “Fixed Rate Term”
means a period commencing on a Business Day and continuing for 1, 2 or 3
months, as designated by Borrower, during which all or a portion of the
outstanding principal balance of this Note bears interest determined in
relation to LIBOR; provided however, that no Fixed Rate Term may be selected
for a principal amount less than One Hundred Thousand Dollars ($100,000.00);
and provided further, that no Fixed Rate Term shall extend beyond the scheduled
maturity date hereof.  If any Fixed Rate
Term would end on a day which is not a Business Day, then such Fixed Rate Term
shall be extended to the next succeeding Business Day.

 

(c)           “LIBOR” means the
rate per annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%)
and determined pursuant to the following formula:

 

	
  LIBOR =

  	
   

  	
  Base
  LIBOR

  	
   

  
	
   

  	
   

  	
  100%
  - LIBOR Reserve Percentage

  	
   

  

 

(i)            “Base LIBOR” means
the rate per annum for United States dollar deposits quoted by Bank as the
Inter-Bank Market Offered Rate, with the understanding that such rate is quoted
by Bank for the purpose of calculating effective rates of interest for loans
making reference thereto, on the first day of a Fixed Rate Term for delivery of
funds on said date for a period of time approximately equal to the number of
days in such Fixed Rate Term and in an amount approximately equal to the
principal amount to which such Fixed Rate Term applies.  Borrower understands and agrees that Bank
may base its quotation of the Inter-Bank Market Offered Rate upon such offers
or other market indicators of the Inter-Bank Market as Bank in its discretion
deems appropriate including, but not limited to, the rate offered for U.S.
dollar deposits on the London Inter-Bank Market.

 

(ii)           “LIBOR Reserve
Percentage” means the reserve percentage prescribed by the Board of Governors
of the Federal Reserve System (or any successor) for “Eurocurrency Liabilities”
(as defined in Regulation D of the Federal Reserve Board, as amended), adjusted
by Bank for expected changes in such reserve percentage during the applicable
Fixed Rate Term.

 

(d)           “Prime Rate” means
at any time the rate of interest most recently announced within Bank at its
principal office as its Prime Rate, with the understanding that the Prime Rate
is one of Bank’s base rates and serves as the basis upon which effective rates
of interest are calculated for those loans making reference thereto, and is
evidenced by the recording thereof after its announcement in such internal
publication or publications as Bank may designate.

 

INTEREST:

 

(a)           Interest.  The outstanding principal balance of this
Note shall bear interest (computed on the basis of a 360-day year, actual days
elapsed) either (i) at a fluctuating rate per annum one percent (1.0%) below
the Prime Rate in effect from time to time, or (ii) at a fixed rate per annum
determined by Bank to be one and one tenth percent (1.10%) above LIBOR in
effect on the first day of the applicable Fixed Rate Term.  When interest is determined in relation to
the Prime Rate, each change in the rate of interest hereunder shall become
effective on the date each Prime Rate change is announced within Bank.  With respect to each LIBOR selection
hereunder, Bank is hereby authorized to note the date, principal amount,
interest rate and Fixed Rate Term applicable thereto and any payments made
thereon on Bank’s books and records (either manually or by electronic entry)
and/or on any schedule attached to this Note, which notations shall be prima
facie evidence of the accuracy of the information noted.

 

2

 

(b)           Selection of
Interest Rate Options.  At any time
any portion of this Note bears interest determined in relation to LIBOR, it may
be continued by Borrower at the end of the Fixed Rate Term applicable thereto
so that all or a portion thereof bears interest determined in relation to the
Prime Rate or to LIBOR for a new Fixed Rate Term designated by Borrower.  At any time any portion of this Note bears
interest determined in relation to the Prime Rate, Borrower may convert all or
a portion thereof so that it bears interest determined in relation to LIBOR for
a Fixed Rate Term designated by Borrower. 
At such time as Borrower requests an advance hereunder or wishes to
select a LIBOR option for all or a portion of the outstanding principal balance
hereof, and at the end of each Fixed Rate Term, Borrower shall give Bank notice
specifying: (i) the interest rate option selected by Borrower; (ii) the
principal amount subject thereto; and (iii) for each LIBOR selection, the length
of the applicable Fixed Rate Term.  Any
such notice may be given by telephone (or such other electronic method as Bank
may permit) so long as, with respect to each LIBOR selection, (A) if requested
by Bank, Borrower provides to Bank written confirmation thereof not later than
three (3) Business Days after such notice is given, and (B) such notice is
given to Bank prior to 10:00 a.m. on the first day of the Fixed Rate Term, or
at a later time during any Business Day if Bank, at it’s sole option but
without obligation to do so, accepts Borrower’s notice and quotes a fixed rate
to Borrower.  If Borrower does not
immediately accept a fixed rate when quoted by Bank, the quoted rate shall
expire and any subsequent LIBOR request from Borrower shall be subject to a
redetermination by Bank of the applicable fixed rate.  If no specific designation of interest is made at the time any
advance is requested hereunder or at the end of any Fixed Rate Term, Borrower
shall be deemed to have made a Prime Rate interest selection for such advance
or the principal amount to which such Fixed Rate Term applied.

 

(c)           Taxes and
Regulatory Costs.  Borrower shall
pay to Bank immediately upon demand, in addition to any other amounts due or to
become due hereunder, any and all (i) withholdings, interest equalization
taxes, stamp taxes or other taxes (except income and franchise taxes) imposed
by any domestic or foreign governmental authority and related in any manner to
LIBOR, and (ii) future, supplemental, emergency or other changes in the LIBOR
Reserve Percentage, assessment rates imposed by the Federal Deposit Insurance
Corporation, or similar requirements or costs imposed by any domestic or
foreign governmental authority or resulting from compliance by Bank with any
request or directive (whether or not having the force of law) from any central
bank or other governmental authority and related in any manner to LIBOR to the
extent they are not included in the calculation of LIBOR.  In determining which of the foregoing are
attributable to any LIBOR option available to Borrower hereunder, any
reasonable allocation made by Bank among its operations shall be conclusive and
binding upon Borrower.

 

(d)           Payment of
Interest.  Interest accrued on this
Note shall be payable on the first day of each month, commencing August 1,
2003.

 

(e)           Default Interest.  From and after the maturity date of this
Note, or such earlier date as all principal owing hereunder becomes due and
payable by acceleration or otherwise, the outstanding principal balance of this
Note shall bear interest until paid in full at an increased rate per annum
(computed on the basis of a 360-day year, actual days elapsed) equal to four
percent (4%) above the rate of interest from time to time applicable to this
Note.

 

BORROWING AND REPAYMENT:

 

(a)           Borrowing and
Repayment.  Borrower may from time
to time during the term of this Note borrow, partially or wholly repay its
outstanding borrowings, and reborrow, subject to all of the limitations, terms
and conditions of this Note and of any document executed in connection with or
governing this Note; provided however, that the total outstanding borrowings
under this Note shall not at any time exceed the principal amount stated
above.  The unpaid principal balance of
this obligation at any time shall be the total amounts advanced hereunder by
the holder hereof less the amount of principal payments made hereon by or for
any Borrower, which balance may be endorsed hereon from time to time by the
holder.  The outstanding principal
balance of this Note shall be due and payable in full on June 30, 2004.

 

(b)           Advances.  Advances hereunder, to the total amount of
the principal sum stated above, may be made by the holder at the oral or
written request of (i)
                            ,
or (ii)
                            ,
any one acting alone, who are authorized to request advances and direct the
disposition of any advances until written notice of the revocation of such
authority is received by the holder at the office designated above, or (ii) any
person, with respect to advances deposited to the credit of any deposit account
of any Borrower, which advances, when so deposited, shall be conclusively
presumed to have been made to or for the benefit of each Borrower regardless of
the fact that persons other than those authorized to request advances may have
authority to draw against such account. 
The holder shall have no obligation to determine whether any person
requesting an advance is or has been authorized by any Borrower.

 

(c)           Application of
Payments.  Each payment made on this
Note shall be credited first, to any interest then due and second, to the
outstanding principal balance hereof. 
All payments credited to principal shall be applied first, to the
outstanding principal balance of this Note which bears interest determined in
relation to the Prime Rate, if any, and second, to the outstanding principal
balance of this Note which bears interest determined in relation to LIBOR, with
such payments applied to the oldest Fixed Rate Term first.

 

3

 

PREPAYMENT:

 

(a)           Prime
Rate.  Borrower may prepay principal
on any portion of this Note which bears interest determined in relation to the
Prime Rate at any time, in any amount and without penalty.

 

(b)           LIBOR.  Borrower may prepay principal on any portion
of this Note which bears interest determined in relation to LIBOR at any time
and in the minimum amount of One Hundred Thousand Dollars ($100,000.00);
provided however, that if the outstanding principal balance of such portion of
this Note is less than said amount, the minimum prepayment amount shall be the
entire outstanding principal balance thereof. 
In consideration of Bank providing this prepayment option to Borrower,
or if any such portion of this Note shall become due and payable at any time
prior to the last day of the Fixed Rate Term applicable thereto by acceleration
or otherwise, Borrower shall pay to Bank immediately upon demand a fee which is
the sum of the discounted monthly differences for each month from the month of
prepayment through the month in which such Fixed Rate Term matures, calculated
as follows for each such month:

 

(i)                                     Determine
the amount of interest which would have accrued each month on the amount
prepaid at the interest rate applicable to such amount had it remained
outstanding until the last day of the Fixed Rate Term applicable thereto.

 

(ii)                                  Subtract from
the amount determined in (i) above the amount of interest which would have
accrued for the same month on the amount prepaid for the remaining term of such
Fixed Rate Term at LIBOR in effect on the date of prepayment for new loans made
for such term and in a principal amount equal to the amount prepaid.

 

(iii)                               If the result obtained
in (ii) for any month is greater than zero, discount that difference by LIBOR
used in (ii) above.

 

Each Borrower acknowledges that prepayment of such amount may result in
Bank incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or liabilities.  Each Borrower, therefore, agrees to pay the
above-described prepayment fee and agrees that said amount represents a
reasonable estimate of the prepayment costs, expenses and/or liabilities of
Bank.  If Borrower fails to pay any
prepayment fee when due, the amount of such prepayment fee shall thereafter
bear interest until paid at a rate per annum two percent (2.0%) above the Prime
Rate in effect from time to time (computed on the basis of a 360-day year,
actual days elapsed).  Each change in the
rate of interest on any such past due prepayment fee shall become effective on
the date each Prime Rate change is announced within Bank.

 

EVENTS OF DEFAULT:

 

This Note is made pursuant to and is subject to the terms and
conditions of that certain Credit Agreement between Borrower and Bank dated as
of June 30, 2002, as amended from time to time (the “Credit Agreement”).  Any default in the payment or performance of
any obligation under this Note, or any defined event of default under the
Credit Agreement, shall constitute an “Event of Default” under this Note.

 

MISCELLANEOUS:

 

(a)           Remedies.  Upon the occurrence of any Event of Default,
the holder of this Note, at the holder’s option, may declare all sums of
principal and interest outstanding hereunder to be immediately due and payable
without presentment, demand, notice of nonperformance, notice of protest,
protest or notice of dishonor, all of which are expressly waived by each
Borrower, and the obligation, if any, of the holder to extend any further credit
hereunder shall immediately cease and terminate.  Each Borrower shall pay to the holder immediately upon demand the
full amount of all payments, advances, charges, costs and expenses, including
reasonable attorneys’ fees (to include outside counsel fees and all allocated
costs of the holder’s in-house counsel), expended or incurred by the holder in
connection with the enforcement of the holder’s rights and/or the collection of
any amounts which become due to the holder under this Note, and the prosecution
or defense of any action in any way related to this Note, including without
limitation, any action for declaratory relief, whether incurred at the trial or
appellate level, in an arbitration proceeding or otherwise, and including any
of the foregoing incurred in connection with any bankruptcy proceeding
(including without limitation, any adversary proceeding, contested matter or
motion brought by Bank or any other person) relating to any Borrower or any
other person or entity.

 

(b)           Obligations Joint
and Several.  Should more than one
person or entity sign this Note as a Borrower, the obligations of each such
Borrower shall be joint and several.

 

(c)           Governing Law.  This Note shall be governed by and construed
in accordance with the laws of the State of Minnesota.

 

4

 

IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first written above.

 

DATALINK CORPORATION

 

	
  By:

  	
  /s/ Daniel J. Kinsella

  	
   

  
	
  Daniel J. Kinsella, VP Finance & Chief Financial Officer

  

 

5

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