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EXHIBIT 10.7
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") dated July
14, 1998, is by and among Datalink Corporation, a Minnesota corporation
(hereinafter referred to as "Datalink"), DCS Acquisition Corporation, a
Minnesota corporation (hereinafter referred to as the "Subsidiary"), Direct
Connect Systems, Inc., a Georgia corporation (hereinafter referred to as "DCS")
and Xxxxxx X. Xxxxxxx, Xx., Xxxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxxxx, Xx. and A.
Xxxxxxx Xxxxxxxx (hereinafter referred to as the "Stockholders").
RECITALS:
A. Datalink, Subsidiary and DCS desire to cause the merger of DCS with and
into Subsidiary (the "Merger"), pursuant to the Plan of Merger set
forth in Exhibit A hereto (the "Plan of Merger") and the transactions
contemplated hereby, in accordance with the applicable provisions of
the statutes of the States of Minnesota and Georgia, which permit such
Merger.
B. For federal income tax purposes, it is intended that the Merger shall
qualify as a reorganization with the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended and interpreted by treasury
regulations (the "Code").
C. Each of the parties to this Agreement desires to make certain
representations, warranties and agreements in connection with the
Merger and also to prescribe various conditions thereto.
AGREEMENT
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement and any exhibits hereto, the following words and
phrases shall have the meanings set forth below:
"Act" shall mean the Securities Act of 1933, as amended.
"Authorization" and "Authorizations" shall have the meanings ascribed to them in
Section 5.23 below.
"Base Balance Sheet" shall have the meaning ascribed to it in Section 5.5 below.
"Buy-Sell Agreement" shall have the meaning ascribed to it in Section
3.10(a)(iii) below.
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"Closing" shall mean the consummation of the transactions contemplated herein as
described in Section 3.7 below.
"Closing Date" shall be the date of the Closing as described in Section 3.7
below.
"Closing Date Balance Sheet" shall mean the audited balance sheet for DCS as of
the close of business on the Closing Date (determined in accordance with
generally accepted accounting principles consistently applied on a pro forma
basis as though the parties had not consummated the Merger contemplated by this
Agreement), subject to adjustments as provided in Section 4.2(a) below.
"Code" shall mean the Internal Revenue Code of 1986, as amended and interpreted
by treasury regulations.
"Constituent Corporations" shall refer to Subsidiary and DCS.
"Conversion Ratio" shall have the meaning ascribed to it in Section 3.1(b)
below.
"Datalink" shall mean Datalink Corporation, a Minnesota corporation.
"Datalink Common Stock" shall mean the Common Stock of Datalink, par value $.001
per share.
"DCS" shall mean Direct Connect Systems, Inc., a Georgia corporation.
"DCS Common Stock" shall mean the Common Stock of DCS, par value $.01 per share.
"DCS Unpaid Sales and Use Tax Assessment" shall mean a post-Closing assessment
by any taxing authority against DCS for any state or local sales or use taxes
imposed on DCS's pre-Closing sales and/or installations of tangible personal
property for DCS's customers, which taxes DCS failed to collect from its
customers, and any interest, penalty or addition thereto, whether disputed or
not.
"Effective Time" shall have the meaning ascribed to it in Section 2.2 below.
"Employee Benefit Plans" shall have the meaning ascribed to it in Section
5.25(a) below.
"Environmental Law" shall mean any environmental or health and safety-related
law, regulation, rule, ordinance, or by-law at the federal, foreign, state, or
local level, whether existing as of the date hereof, previously enforced or
subsequently enacted.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" shall mean Resource Trust Bank, Minneapolis, Minnesota.
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"Escrow Agreement" shall mean the Escrow Agreement by and among Datalink, each
of the Stockholders and the Escrow Agent.
"Excess Payables" shall mean the amount of accounts payable due by DCS to its
vendors as of the Closing Date which have been outstanding for longer than
forty-five (45) days.
"Financial Statements" shall have the meaning ascribed to it in Section 5.5
below.
"Fraud" shall require a showing of an intent to deceive and, with respect to a
claim of misrepresentation, that the party to be charged had knowledge of the
falsity of the representation; and with respect to an omission, that the party
to be charged knowingly failed to disclose.
"Funded Debt" shall mean the sum of any short or long-term bank or other third
party debt (exclusive of the Permitted Transaction Expenses), capital lease
obligations and Excess Payables.
"GBCC" shall mean the Georgia Business Corporation Code.
"Hazardous Materials" shall mean and include any hazardous waste, hazardous
material, hazardous substance, petroleum product, oil toxic substance or
pollutant as defined in or pursuant to the Resource Conservation and Recovery
Act, as amended, the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, the Hazardous Materials Transportation Act or any
other foreign, federal, state or local law, regulation, ordinance, rule or
by-law, whether existing as of the date hereof, previously enforced or
subsequently enacted pertaining to environmental or health and safety matters.
"Intellectual Property" shall have the meaning ascribed to it in Section 5.13(a)
below.
"IPO" shall mean an initial public offering of Datalink Common Stock.
"Knowledge" shall mean actual knowledge after reasonable investigation.
"MBCA" shall mean the Minnesota Business Corporation Act.
"Merger" shall mean the merger of DCS with and into Subsidiary with Subsidiary
being the Surviving Corporation as described in this Agreement.
"Merger Consideration" shall have the meaning ascribed to it in Section 3.1(b)
below.
"Permitted Transaction Expenses" shall have the meaning ascribed to it in
Section 4.2(a)(iii) below.
"Person" shall mean an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization
or a governmental entity (or any department, agency or political subdivision
thereof).
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"Plan of Merger" shall refer to the Plan of Merger set forth in Exhibit A of
this Agreement.
"Post-Merger Notice" shall have the meaning ascribed to it in Section 3.3 below.
"Preliminary Purchase Price" shall have the meaning ascribed to it in Section
4.1 below.
"Purchase Price" shall have the meaning ascribed to it in Section 4.1 below.
"Qualified Plan" shall have the meaning ascribed to it in Section 5.25(b) below.
"Registration Statement" shall mean Datalink's Registration Statement with the
SEC on Form S-1, SEC File No. 333-55935, as filed with the SEC on June 3, 1998.
"SEC" shall mean the Securities and Exchange Commission.
"Stockholders" shall refer collectively to Xxxxxx X. Xxxxxxx, Xx., Xxxxxxx X.
Xxxxxxx, Xxxxxxx X. Xxxxxxxx, Xx. and A. Xxxxxxx Xxxxxxxx.
"Subsidiary" shall mean DCS Acquisition Corporation, a Minnesota corporation.
"Surviving Corporation" shall mean Subsidiary.
"Taxes" shall mean any federal, state, local or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental, customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration,
value-added, alternative or add-on minimum, estimated or other tax of any kind
whatsoever, including any interest, penalty or addition thereto, whether
disputed or not.
"Tax Return" shall mean any return, declaration, report, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Valuation Price" shall have the meaning ascribed to it in Section 3.2 below.
SECTION 2. THE MERGER
2.1 The Merger. At the Effective Time (as defined in Section 2.2) and
subject to the terms and conditions of this Agreement and the Plan of Merger,
DCS shall be merged with and into Subsidiary and the separate existence of DCS
shall thereupon cease, in accordance with the applicable provisions of the MBCA
and the GBCC.
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(a) Subsidiary will be the Surviving Corporation in the
Merger and will continue to be governed by the laws
of the State of Minnesota, and the separate corporate
existence of Subsidiary and all of its rights,
privileges, immunities and franchises, public or
private, and all its duties and liabilities as a
corporation organized under the MBCA, will continue
unaffected by the Merger.
(b) The Merger will have the effects specified by the
MBCA and the GBCC.
2.2 Effective Time. As soon as practicable following the Closing
hereunder, the Constituent Corporations will cause Articles of Merger (the
"Articles of Merger") together with the Plan of Merger and such other documents
as are required by the MBCA and the GBCC to be filed with the office of the
Secretary of State of the State of Minnesota and the Secretary of State of the
State of Georgia. Subject to and in accordance with the laws of the States of
Minnesota and Georgia, the Merger will become effective at the date and time the
Articles of Merger are filed with the office of the Secretary of State of the
State of Minnesota, or such later time or date as may be specified in the
Articles of Merger (the "Effective Time"). Each of the parties will use its best
efforts to cause the Merger to be consummated as soon as practicable following
the Closing.
SECTION 3. CONVERSION OF SHARES
3.1 Conversion of DCS Shares in the Merger. Pursuant to the Plan of
Merger, at the Effective Time, by virtue of the Merger and without any action on
the part of any holder of any capital stock of DCS:
(a) Each share of DCS Common Stock owned by Stockholders shall, be
converted into, and become exchangeable for, the number of
shares of validly issued, fully paid and nonassessable
Datalink Common Stock equal to the Conversion Ratio.
(b) In this Agreement, the term "Conversion Ratio" means a
fraction, the numerator of which is equal to $2,000,000
divided by the Valuation Price as defined in Section 3.2
herein, and the denominator of which is equal to the total
number of shares of DCS Common Stock issued and outstanding
immediately prior to the Effective Time. The consideration
referred to in this Section 3.1, together with the cash
payment pursuant to Section 4 as provided herein, is
hereinafter referred to as the "Merger Consideration."
3.2 Datalink Common Stock Valuation Price in Merger. The "Valuation
Price" of the Datalink Common Stock is $10.00 per share, subject to adjustment
as provided in Section 3.3.
3.3 Post-Merger Adjustments. If Datalink within two (2) years from the
Closing Date of the Merger withdraws its Registration Statement for the IPO, the
total number of shares issued to the Stockholders under Section 3.1 shall be
adjusted, effective as of the Effective Time, so that
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the Valuation Price will be $8.70 per share (such per share price to be
adjusted proportionally for any Datalink Common Stock split or dividend or
reverse split or combination occurring after the Closing Date and through the
date of any such adjustment). If an IPO initially closes within two (2) years
from the Closing Date of the Merger, the total number of shares issued to the
Stockholders under the Valuation Price as described in Section 3.2 or the
preceding sentence shall be adjusted, effective as of the Effective Time, so
that the Valuation Price will be the IPO price per share as stated on the cover
of the definitive Prospectus for the IPO as filed with the SEC pursuant to Rule
424(b) of the Act.
If an event occurs requiring an adjustment by the preceding paragraph,
Datalink shall give written notice within ten (10) business days to the
Stockholders describing the event and Datalink's computation of the number of
shares to be issued or canceled (a "Post-Merger Notice"). If Datalink fails
timely to give the Post-Merger Notice, the Stockholders may, upon learning of
the triggering event, give written notice thereof to Datalink, which notice
shall constitute the Post-Merger Notice as to such event. If the event requires
the issuance of additional shares, then within ten (10) business days after
giving the Post-Merger Notice, Datalink shall issue (or shall cause its transfer
agent to issue) to each Stockholder a certificate representing the additional
shares. If the event requires the cancellation of shares, then within ten (10)
business days after Datalink has given the Post-Merger Notice, each Stockholder
shall return for cancellation to Datalink a certificate or certificates
representing a number of shares of Datalink Common Stock equal to or greater
than the number of shares to be canceled, together with a stock power endorsed
in blank with signature guaranteed covering such certificate or certificates.
Within ten (10) business days after receipt of the certificate(s) and stock
power, Datalink shall cancel (or cause its transfer agent to cancel) the
certificate(s) so tendered and shall issue (or cause its transfer agent to
issue) to the Stockholder a certificate representing the balance, if any, of the
shares remaining after the adjustment. The Stockholders shall be jointly and
severally liable for the return of shares for cancellation to Datalink as
provided herein.
3.4 Status of Subsidiary Shares. At the Effective Time, by virtue of
the Merger and without any action on the part of any holder of any capital stock
of Subsidiary, each issued and outstanding share of common stock of Subsidiary
shall continue unchanged and remain outstanding as a share of Common Stock of
the Surviving Corporation.
3.5 Exchange of Stock Certificates.
(a) At the Closing, the Stockholders shall deliver the
certificates representing all issued and outstanding shares of
DCS Common Stock, duly endorsed in blank with signature
guaranteed, in exchange for the certificates representing
shares of Datalink Common Stock required to effect the
exchange referred to in Section 3.1 (based upon the Valuation
Price computed pursuant to Section 3.2) and the cash payments
referred to in Section 4. Shares of Datalink Common Stock into
which shares of DCS Common Stock shall be converted in the
Merger shall be deemed to have been issued at the Effective
Time.
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(b) From and after the Effective Time, each holder of a
certificate which immediately prior to the Effective Time
represented outstanding shares of DCS Common Stock, shall be
entitled to receive in exchange therefor, upon surrender
thereof to Datalink, a certificate or certificates
representing the number of shares of Datalink Common Stock as
computed by Sections 3.1 and 3.2 (to be later adjusted by
Section 3.3) and cash pursuant to Section 4. From and after
the Effective Time, Datalink shall be entitled to treat the
certificates which immediately prior to the Effective Time
represented shares of DCS Common Stock and which have not yet
been surrendered for exchange as evidencing the ownership of
the number of full shares of Datalink Common Stock into which
the shares of DCS Common Stock represented by such
certificates shall have been converted pursuant to Section
3.1, notwithstanding the failure to surrender such
certificates. However, notwithstanding any other provision of
this Agreement, until holders or transferees of certificates
which immediately prior to the Effective Time represented
shares of DCS Common Stock have surrendered them for exchange
as provided herein, no dividends shall be paid with respect to
any shares represented by such certificates and no cash
payments pursuant to Section 4 shall be made. Upon surrender
of a certificate which immediately prior to the Effective Time
represented outstanding shares of DCS Common Stock, there
shall be paid to the holder of such certificate the amount of
any dividends which theretofore became payable, but which were
not paid by reason of the foregoing, with respect to the
number of whole shares of Datalink Common Stock represented by
the certificate or certificates issued upon such surrender. If
any certificate for shares of Datalink Common Stock is to be
issued in a name other than that in which the certificate,
which immediately prior to the Effective Time represented
shares of DCS Common Stock, surrendered in exchange therefor
is registered, it shall be a condition of such exchange that
the person requesting such exchange shall pay any transfer or
other taxes required by reason of the issuance of certificates
for such shares of Datalink Common Stock in a name other than
that of the registered holder of any such certificate
surrendered.
(c) Notwithstanding any other provision of this Agreement or the
Plan of Merger, and in order to avoid the issuance of any
certificates for fractional shares of Datalink Common Stock,
Datalink shall issue a full share of its Common Stock in lieu
of any such fractional share.
3.6 Closing of Transfer Books. From and after the Effective Time, the
stock transfer books of DCS shall be closed and no transfer of shares of DCS
Common Stock shall thereafter be made. If, after the Effective Time, DCS Common
Stock certificates are presented to Datalink, they shall be canceled and
exchanged for the Merger Consideration in accordance with the procedures set
forth in this Section 3.
3.7 Closing. The closing (the "Closing") of the transactions
contemplated by this Agreement shall take place (a) at the offices of Xxxxxxxx &
Xxxxxx P.A. at 10:00 a.m., local time,
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on July 14, 1998 or at such other time and place and on such other date as
Datalink and DCS shall agree (the "Closing Date").
3.8 Allocation of Purchase Price. The Merger Consideration shall be
allocated among the assets of DCS in accordance with the Schedule of Purchase
Price Allocation attached hereto as Exhibit 3.8.
3.9 Escrow of Certain Datalink Common Stock Received in the Merger.
Despite anything in this Agreement to the contrary, 50,000 shares of the
Datalink Common Stock issued to the Stockholders in the Merger shall be
delivered to the Escrow Agent as provided in the Escrow Agreement substantially
in the form of Exhibit 3.9 hereto, 10,000 of such shares which shall be held by
the Escrow Agent for a period of 120 days after the Closing Date for purposes of
Section 4.2(b) below. The remaining 40,000 of such shares shall be held by the
Escrow Agent for a period of two (2) years after the Closing Date for purposes
of Section 7.2 below.
3.10 Deliverables at Closing. The parties shall deliver the following
instruments, documents and property at the Closing:
(a) By Datalink and the Subsidiary. Datalink shall deliver the
following instruments, documents and property to the
Stockholders at the Closing:
(i) the Merger Consideration;
(ii) an opinion of Xxxxxxxx & Xxxxxx P.A., counsel to
Datalink and the Subsidiary, substantially in the
form of Exhibit 3.10(a)(ii) hereto;
(iii) a copy of the buy-sell agreement in the form attached
hereto as Exhibit 3.10(a)(iii) as executed by
Datalink and its stockholders (the "Buy-Sell
Agreement");
(iv) an executed copy of the Plan of Merger;
(v) resolutions of the Board of Directors of Datalink and
the Subsidiary authorizing the Merger and the
transactions contemplated hereby;
(vi) agreements by the Subsidiary (which may be oral) to
employ Xxxxxx X. Xxxxxxx, Xx. as Eastern Regional
Sales Manager at an initial base salary of $67,500
plus a commission plan substantially similar to that
of Datalink's other senior sales management and to
employ Xxxxxxx X. Xxxxxxxx, Xx. as Director of
Engineering Services at an initial base salary of
$100,000;
(vii) evidence that Datalink has retired DCS's outstanding
indebtedness under a Receivables and Inventory
Financing Agreement and related Promissory
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Note each dated April 23, 1998, in favor of Premier
Lending Corporation; and
(viii) a copy of the Escrow Agreement as executed by
Datalink and the Escrow Agent.
(b) By DCS and the Stockholders. DCS and the Stockholders shall
deliver the following instruments, documents and property to
Datalink and the Subsidiary at the Closing:
(i) stock certificates representing all outstanding
shares of DCS Common Stock in accordance with this
Section 3, together with all necessary stock powers
endorsed in blank with signatures guaranteed;
(ii) an opinion of Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P.,
counsel for DCS and the Stockholders, substantially
in the form of Exhibit 3.10(b)(ii) hereto;
(iii) a copy of the Buy-Sell Agreement as executed by the
Stockholders;
(iv) non-competition agreements in substantially the form
of Exhibit 3.10(b)(iv) attached hereto as executed by
each of Xxxxxx X. Xxxxxxx, Xx., Xxxxxxx X. Xxxxxxxx,
Xx. and Xxxx Xxxxxxxxx;
(v) a copy of the Escrow Agreement as executed by the
Stockholders, together with the Datalink Common Stock
certificates and stock powers endorsed in blank with
signature guaranteed as provided by Section 3.9 above
and the Escrow Agreement;
(vi) all consents, approvals, documents and certificates
contemplated by this Agreement or reasonably
requested by Datalink or its counsel and copies of
all contracts, commitments, leases and other
documents required to be identified on the Schedules
hereto;
(vii) the original stock record and minute books of DCS;
(viii) the resignations, dated as of the Closing Date, of
all of the officers and directors of DCS;
(ix) resolutions of the Board of Directors and the
Stockholders of DCS authorizing the Merger and the
transactions contemplated hereby;
(x) a letter from Xxxx Xxxxx indicating his intention to
move into DCS's sales organization and out of DCS's
engineering organization; and
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(xi) an executed copy of the Plan of Merger.
(c) Additional Matters. Each party agrees to execute and deliver such
additional instruments, documents and property, and to take such
additional action, as may reasonably be requested by another party
hereto, or his, her or its counsel, in order to effectuate the
transactions contemplated by this Agreement.
SECTION 4. CASH PAYMENTS TO DCS STOCKHOLDERS
4.1 Cash Purchase Price and Payment. The Cash Purchase Price in the
Merger to be paid for the Stockholders' shares of DCS (the "Preliminary Purchase
Price") is $2,000,000, which amount shall be subject to adjustment as provided
in Section 4.2 hereof, with the adjusted amount being referred to as the
"Purchase Price." The Preliminary Purchase Price shall be paid at Closing in
cash to the Stockholders, to be allocated among the Stockholders prorata based
on each Stockholder's percentage of shares owed in DCS immediately prior to the
Merger. Such payments shall be made by wire transfer in accordance with wire
transfer instructions provided in writing to Datalink by each of the
Stockholders prior to the Closing Date.
4.2 Purchase Price Adjustment.
(a) Preparation of Closing Date Balance Sheet. Within ninety (90)
days after the Closing Date, Datalink will prepare at its
expense and deliver to each of the Stockholders the Closing
Date Balance Sheet for DCS. Datalink will direct its
independent auditors to prepare the Closing Date Balance Sheet
by excluding the following assets and liabilities to the
extent that they otherwise would be included on such balance
sheet:
(i) the respective automobiles being driven by each of
Xxxxxx X. Xxxxxxx, Xx. and Xxxxxxx X. Xxxxxxxx, Xx.
(as described in the Schedule of Excluded Assets and
Liabilities that is Exhibit 4.2(a) hereto), any debt
or capital lease obligations owed by DCS in
connection with the acquisition of such vehicles;
(ii) the life insurance contracts on certain DCS officers
and key employees (as described in the Schedule of
Excluded Assets and Liabilities), and any debt owed
by DCS for premiums thereon; and
(iii) up to $300,000 of expenses as described on the
attached Exhibit 4.2(a)(iii) associated with the
transactions contemplated by this Agreement or any
other previously proposed sale of substantially all
the assets or capital stock of DCS (the "Permitted
Transaction Expenses").
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(b) Adjustments. Datalink shall promptly deliver a copy of the
Closing Date Balance Sheet to the Stockholders after receiving
it from the auditors. If the Closing Date Balance Sheet of DCS
does not demonstrate stockholders' equity as of the Closing
Date of at least $1,000,000, the Preliminary Purchase Price
will be reduced dollar-for-dollar to the extent that the
Closing Date Balance Sheet stockholder's equity is less than
$1,000,000. If the Closing Date Balance Sheet of DCS
demonstrates Funded Debt in excess of $1,300,000, then the
Preliminary Purchase Price shall further be reduced
dollar-for-dollar for each dollar of Funded Debt greater than
$1,300,000. Nothing in this Agreement shall prohibit DCS from
using available cash to reduce Funded Debt to the required
level prior to the Closing so long as the effect thereof is
not to increase Excess Payables.
The Stockholders shall have 30 days after receipt of
the Closing Date Balance Sheet to give Datalink written notice
that the Stockholders intend to dispute the auditors'
determination of DCS's Closing Date stockholders' equity
and/or Funded Debt. Within 30 days after receipt of the
Stockholders' written notice, Datalink shall attempt to settle
the dispute with the Stockholders. If the Shareholders and
Datalink do not reach settlement of Datalink's claim within
such 30 days, the dispute may at any time thereafter be
submitted by the Stockholders or Datalink to arbitration in
Atlanta, Georgia, before a single arbitrator selected by the
American Arbitration Association and in accordance with the
rules and procedures of the American Arbitration Association
then in effect and which arbitrator is a certified public
accountant practicing with a "Big 5" accounting firm other
than PricewaterhouseCoopers LLP. The Stockholders and Datalink
agree that the arbitrator's award shall be final and binding
upon them with respect to the dispute and may be entered in
any court having jurisdiction thereof. All costs of the
arbitration (including the reasonable legal expenses of all
parties thereto) shall be borne by the Stockholders and/or
Datalink in the amounts determined by the arbitrator, which
shall base such determination upon the relative merits of the
respective positions of the Stockholders and Datalink in the
dispute. Following the resolution of such dispute by the
arbitrator, Datalink shall submit a copy of the arbitrator's
award or decision to the Escrow Agent, which shall be entitled
to rely upon such copy.
Any reductions in the Preliminary Purchase Price as
determined above shall be made first by cancellation of
Datalink Common Stock held in the 10,000 share escrow referred
to in Section 3.9 above, which shall continue to be held by
the Escrow Agent until resolution of the dispute described
above. Any further required reduction in the Preliminary
Purchase Price shall be effected by the DCS Stockholders
delivering to Datalink, within ten (10) business days after
written demand, shares of Datalink Common Stock for
cancellation. In determining the number of shares of Datalink
Common Stock to be canceled under this subsection (b), such
shares shall be valued at the Valuation Price per share on the
Closing Date
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of the Merger determined pursuant to Section 3.2 as adjusted
pursuant to Section 3.3 for any events requiring an adjustment
thereunder occurring on or prior to the date that Datalink
delivers the Closing Date Balance Sheet of DCS to the
Stockholders. If all shares of Datalink Common Stock owned by
the Stockholders have been returned for cancellation, any
additional reduction in the Preliminary Purchase Price shall
be effected by the Stockholders tendering cash to Datalink
within ten (10) business days after written demand. The
Stockholders are jointly and severally liable to Datalink for
any reduction in the Preliminary Purchase Price.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF DCS AND THE STOCKHOLDERS
As a material inducement to Datalink to enter into this Agreement and
to consummate the transactions contemplated hereby, DCS and each of the
Stockholders jointly and severally hereby make to Datalink each of the
representations and warranties set forth in this Section 5. Certain exceptions
to such representations and warranties are set forth on the Schedule of
Exceptions attached hereto as Exhibit 5(a) and incorporated herein. Any matter
which would constitute a breach of such representations and warranties shall not
constitute a breach if it is set forth under the appropriate heading on the
Schedule of Exceptions; provided, however, that disclosure of such a matter on
the Schedule of Exceptions shall not relieve the Stockholders of their
indemnification obligations regarding such matter under Section 7.2 hereof if so
indicated on Exhibit 5(b), the Schedule of Indemnifiable Exceptions.
5.1 Organization and Qualification. DCS is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Georgia and has full power and authority to own or lease its properties and to
conduct its business in the manner and in the places where such properties are
owned or leased or as such business is currently conducted. The copies of DCS's
Articles of Incorporation, as amended to date (hereinafter referred to as its
"Articles"), certified by the Secretary of State of the State of Georgia, and of
DCS's Bylaws, as amended to date (hereinafter referred to as its "Bylaws"),
certified by DCS's Secretary, both as attached under Exhibit 5.1(a) hereto, are
complete and correct and no amendments thereto have been filed or are pending.
DCS is and has been at all times in compliance with its Articles and Bylaws. DCS
is duly qualified or licensed to conduct business as a foreign corporation in
and is in good standing in each jurisdiction in which the nature of the business
conducted by DCS or the character and nature of the property or assets owned or
leased by DCS makes such qualification necessary, all of which jurisdictions are
listed on the Schedule of Foreign Qualifications attached hereto as Exhibit
5.1(b).
5.2 Authority. DCS has full right, power and authority to enter into
this Agreement and each agreement, document and instrument to be executed and
delivered by DCS pursuant to this Agreement and to carry out the transactions
contemplated hereby and thereby. The execution, delivery and performance of this
Agreement and each such other agreement, document and instrument by DCS has been
duly and validly authorized and approved by all necessary action on the part of
DCS and no other action on the part of DCS or the Stockholders is required in
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connection therewith. This Agreement and each agreement, document and instrument
to be executed and delivered by DCS pursuant to this Agreement constitutes, or
when executed and delivered will constitute, the legal, valid and binding
obligation of DCS, each enforceable in accordance with their respective terms,
except to the extent that enforcement is limited by bankruptcy, insolvency,
moratorium, conservatorship, receivership or similar laws of general application
affecting creditors' rights or by the application by a court of equity
principles. The execution, delivery and performance by DCS of this Agreement and
each such agreement, document and instrument:
(a) does not and will not violate any foreign, federal, state,
local or other laws, regulations or ordinances applicable to
DCS;
(b) does not or will not violate any term or provision of the
Articles or Bylaws of DCS; and
(c) except as set forth on Exhibit 5.2(c), does not and will not
result in a breach of, constitute or result in a default
under, accelerate any obligation under or give rise to a right
of termination of, any indenture or loan or credit agreement
or any other agreement, contract, instrument, mortgage, lien,
lease, permit, authorization, order, writ, judgment,
injunction, decree, determination or arbitration award to
which DCS is a party or by which the property of DCS is bound
or affected, or result in the creation or imposition of any
mortgage, pledge, lien, security interest or other charge or
encumbrance on any of DCS's assets.
Except as set forth on Exhibit 5.2(c), no consent or waiver by,
approval of, or designation, declaration or filing with, any Person is required
in connection with the execution, delivery and performance by DCS and the
Stockholders of this Agreement and each agreement, document and instrument to be
executed and delivered by DCS or the Stockholders pursuant to this Agreement.
5.3 Capitalization. DCS's authorized capital stock consists solely of
shares of DCS Common Stock, of which 1,000 shares are issued and outstanding and
of which 99,000 shares are authorized but unissued. All shares of DCS Common
Stock are owned of record and beneficially by the Stockholders in the amounts
set forth in Exhibit 5.3 hereto. There are no outstanding dividends, whether
current or accumulated, due or payable on any of the capital stock of DCS. None
of the DCS Common Stock has been issued or transferred in violation of any
federal or state law, including without limitation the Act. The DCS Common Stock
is, and when delivered to Datalink or its designee pursuant to this Agreement
will be, (i) duly authorized, validly issued and outstanding, (ii) fully paid,
non-assessable and free of preemptive rights and (iii) free and clear of any and
all pledges, claims, restrictions, charges, liens, security interests,
encumbrances or other interests of third parties of any nature whatsoever. There
are no outstanding options, warrants, rights, commitments or agreements of any
kind for the issuance or sale of, or outstanding securities convertible into,
any additional shares of capital stock of any class of DCS, and there are no
voting
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trusts, voting agreements, proxies or other agreements, instruments or
undertakings with respect to the voting of any DCS Common Stock to which DCS or
any of the Stockholders is a party.
5.4 Subsidiaries. DCS has no subsidiaries, has not had any subsidiaries
during the preceding five years and does not own any securities issued by any
business organization or governmental authority except for United States
government securities, bank certificates of deposit or other cash equivalents.
DCS does not own or have any direct or indirect interest in or control over any
corporation, partnership, joint venture or other entity of any kind.
5.5 Financial Statements. For each of the past five fiscal years, DCS's
fiscal year end has been December 31. Exhibit 5.5 contains the unaudited balance
sheets of DCS as of December 31, 1995, 1996 and 1997, and the related unaudited
statements of income, changes in stockholders' equity and cash flows of DCS for
the fiscal years then ended, and the interim unaudited balance sheet of DCS as
of May 31, 1998 and the related unaudited income statement of DCS for the five
months then ended (all such financial statements being referred to collectively
herein as the "Financial Statements"). The unaudited balance sheet of DCS as of
December 31, 1997 is referred to herein as the "Base Balance Sheet." To the
Knowledge of DCS or any of the Stockholders, there are no material modifications
that are required to be made to any of the Financial Statements (including the
notes thereto) in order that they be in accordance with generally accepted
accounting principles applied consistently during the periods covered thereby.
Without limiting the foregoing, to the Knowledge of DCS or any of the
Stockholders, the Financial Statements are complete and correct, present fairly
the financial condition of DCS at the dates of said statements and the results
of its operations for the periods covered thereby and are consistent with the
books and records of DCS.
5.6 Title to Properties; Liens; Condition of Properties.
(a) DCS does not own any real property. The Schedule of Leases
(Exhibit 5.6(a)) contains a copy of and an accurate and
complete list of all of DCS's leasehold interests in real and
personal property including a brief description of each
leasehold interest (including the duration and financial terms
thereof) and, if applicable, all liens, mortgages or other
encumbrances upon each leasehold interest. All leases to which
DCS is a party are currently in full force and effect and each
party thereto has performed all of its obligations under each
of such leases and is not in default thereunder, and DCS is
not aware of any event or condition which could result in a
default under any such lease after notice or lapse of time or
both, nor has DCS received notice of any alleged default under
any such lease. Except as set forth on the Schedule of Leases,
the consummation of the transactions contemplated by this
Agreement will not result in any modification, termination,
breach or default or require any consent under any such lease.
(b) DCS does not own any machinery, equipment, furniture, fixtures
or improvements (collectively, the "Fixed Assets") with an
original cost per unit in excess of $500 or
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with a fair market value in excess of $5,000, except as set
forth on the Schedule of Fixed Assets (Exhibit 5.6(b))
attached hereto. DCS has good and marketable title to all of
its personal property; and none of the personal property or
assets of DCS is subject to any mortgage, pledge, lien,
conditional sales agreement, security interest, encumbrance or
other charge except as specifically reflected in the Base
Balance Sheet.
(c) Except as set forth on Exhibit 5.6(c), all machinery and
equipment owned or leased by DCS is in good repair and in
working order.
5.7 Taxes.
(a) Returns and Payments. DCS has filed all Tax Returns that it
was required to file. All such Tax Returns were correct and
complete in all respects. Except as set forth on Exhibit
5.7(c) hereto, all Taxes owed by DCS (whether or not shown on
any Tax Return) have been paid or provided for in DCS's
Financial Statements. DCS currently is not the beneficiary of
any extension of time within which to file any Tax Return.
Except as set forth on Exhibit 5.7(c) hereto, no claim has
ever been made by an authority in a jurisdiction where DCS
does not file Tax Returns that it is or may be subject to
taxation by that jurisdiction. There are no actual, pending or
threatened liens, encumbrances or charges against any of the
assets of DCS arising in connection with any failure (or
alleged failure) to pay any Tax.
(b) Withholding Taxes. Except as set forth on Exhibit 5.7(c)
hereto, DCS has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor,
Stockholder or other third party.
(c) Tax Liabilities. None of DCS, the Stockholders or any of DCS's
officers, directors, or employees responsible for Tax matters
has Knowledge of any facts that would lead them to expect any
authority to assess any additional Taxes for any period for
which Tax Returns have been filed. Except as set forth on the
Schedule of Tax Matters (Exhibit 5.7(c) hereto), there is no
dispute or claim concerning any Tax liability of DCS either
claimed or raised by any authority in writing or as to which
any of DCS, the Stockholders or any of DCS's, officers,
directors, or employees responsible for Tax matters has
Knowledge based upon personal contact with any agent of such
authority. The Schedule of Tax Matters also includes all Tax
Returns filed for taxable periods ended on or after, and all
examination reports, closing agreements and statements of
deficiencies assessed against or agreed to by DCS since
December 31, 1992, indicates those Tax Returns that have been
audited and indicates those Tax Returns that currently are the
subject of audit. DCS has disclosed on its federal income Tax
Returns all positions taken therein that could give rise to a
substantial understatement of federal income Tax within the
meaning
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of Code Section 6662.
(d) Statute of Limitations. DCS has not waived any statute of
limitations in respect of Taxes or agreed to any extension of
time with respect to a Tax assessment or deficiency.
(e) Affiliated Group. DCS has not been a member of an affiliated
group filing a consolidated federal income Tax Return or has
any liability for the Taxes of any other person or entity
under Treasury Regulations Section 1.1502-6 (or similar
provision of state, local, or foreign law), as a transferee or
successor, by contract or otherwise. DCS is not a party to any
Tax allocation or sharing agreement.
(f) Tax Attributes. The Schedule of Tax Matters sets forth, as of
December 31, 1997, (i) the basis of DCS in its assets and (ii)
the amount of any net operating loss, net capital loss and
unused investment or other credit. DCS is not, and on the
Closing Date shall not be, an S Corporation within the meaning
of Code Section 1361(a).
5.8 Absence of Undisclosed Liabilities. To the Knowledge of DCS or any
of the Stockholders, as of the date of the Base Balance Sheet and the date
hereof, DCS had and has no indebtedness, liabilities or obligations of any
nature or kind, whether accrued, absolute, contingent or otherwise asserted or
unasserted, and whether due or to become due (including, without limitation,
potential liabilities relating to products or services provided by DCS or the
conduct of DCS's business prior to the date of the Base Balance Sheet regardless
of whether claims in respect thereof had been asserted as of such date), except
liabilities which are reflected on the Base Balance Sheet, are otherwise
expressly disclosed in the Schedules to this Agreement or that have been
incurred since the date of the Base Balance Sheet in the ordinary course of
business.
5.9 Accounts Receivable. A complete and accurate listing of all
accounts receivable of DCS as of July 13, 1998 accurately reflecting the aging
thereof is attached hereto as the Schedule of Accounts Receivable (Exhibit 5.9).
DCS has no accounts receivable or loans receivable from any person, firm or
corporation which is affiliated with it or from any of its directors, officers,
employees or stockholders and all accounts and loans receivable from any such
person, firm or corporation shall be paid in cash prior to the Closing Date.
5.10 Inventories. Except as set forth in the Schedule of Slow Moving
Raw Materials Inventory (Exhibit 5.10(a)) or the Schedule of Slow Moving
Finished Goods Inventory, (Exhibit 5.10(b)) the inventories (including
finished goods, work-in-progress and raw materials) of DCS reflected on the
Base Balance Sheet or existing on the date hereof are of a quality and quantity
saleable in the ordinary course of the business of DCS. Complete and accurate
listings of all such inventories of DCS and the pricing thereof are attached
hereto as the Schedule of Raw Materials Inventories (Exhibit 5.10(c)) and the
Schedule of Finished Goods Inventories (Exhibit 5.10(d)). The values of the
inventories stated in the Base Balance Sheet reflect DCS's normal inventory
valuation policies and were determined in accordance with generally accepted
accounting
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principles, practices and methods consistently applied. Purchase commitments for
raw materials and parts are not, individually or in the aggregate, in excess of
normal requirements. The Schedule of Slow Moving Raw Materials Inventory lists,
as of the date hereof, all raw materials inventory items that have not been used
in production within 90 days of their receipt and for which DCS has neither a
purchase order from a customer, ongoing active usage in a direct customer
account, nor is retaining the item in inventory to satisfy an ongoing
maintenance contract with a customer, and is complete and accurate. The Schedule
of Slow Moving Finished Goods Inventory lists, as of the date hereof, all
finished goods inventory items which (i) have not been included in a bona fide
sale to a customer within the last six months or (ii) have been produced for a
customer which has terminated its relationship with DCS or otherwise indicated
to DCS its intention not to accept and pay for such items, and is complete and
accurate.
5.11 Absence of Certain Changes. Except as provided in the Schedule of
Changes (Exhibit 5.11 hereto), since the date of the Base Balance Sheet, there
has not been:
(a) any operation of DCS out of the ordinary course of business or
any change in the financial condition, properties, assets,
liabilities, business, prospects or operations of DCS which
change, by itself or in conjunction with all other such
changes, has been or is likely to be materially adverse with
respect to DCS;
(b) any purchase, sale, license or other disposition, or any
agreement or other arrangement for the purchase, sale, license
or other disposition, of any part of DCS's properties or
assets (including any patents, trademarks and copyrights)
other than purchases for and sales from inventory in the
ordinary course of business;
(c) any damage, destruction or loss, whether or not covered by
insurance, adversely affecting DCS's properties, assets or
business in excess of $5,000 per single occurrence;
(d) any change with respect to DCS's officers, management or
supervisory personnel;
(e) any payment or discharge of a lien or liability of DCS which
has been paid or incurred other than in the ordinary course of
business;
(f) any obligation or liability incurred by DCS to any bank, to
any officer, director, employee or stockholder of DCS, or,
other than in the ordinary course of business, to any other
individual; or any loans or advances made by DCS to any
officer, director, employee or stockholder of DCS, except for
normal compensation and expense allowances payable to such
persons;
(g) any capital expenditure by DCS in excess of $10,000 for any
one item;
(h) any contracts entered into by DCS which obligate DCS for more
than $10,000 with
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respect to any one contract or more than $25,000 with respect
to the aggregate of all such contracts;
(i) any change in the accounting methods or practices followed by
DCS or any change in depreciation or amortization policies or
rates theretofore adopted;
(j) any material change in the manner in which inventory of DCS is
marketed or any increase in inventory levels in excess of
historical levels for comparable periods;
(k) any acceleration, termination, modification or cancellation of
any agreement, contract, lease or license (or series of
related agreements, contracts, leases or licenses) involving
more than $10,000 to which DCS is a party or by which it is
bound;
(l) any issuance of any evidence of indebtedness or creation,
incurring, assumption or guaranteeing of any indebtedness for
borrowed money or capital lease obligations involving in
excess of $10,000 singly or $25,000 in the aggregate;
(m) subject to the last sentence of the first paragraph of Section
4.2(b) above, any delay or postponement of payment of any
accounts payable or other liabilities outside the ordinary
course of business;
(n) any declaration, setting aside or payment of any dividend or
distribution with respect to its capital stock, or redemption,
purchase or other acquisition of its capital stock;
(o) any change in the employment terms or employment-related
benefits for any independent sales representative or employee
outside the ordinary course of business; or
(p) any agreement or understanding, whether in writing or
otherwise, for DCS to take any of the actions specified in
paragraphs (a) through (o) above.
5.12 Banking Relations. All of the arrangements which DCS has with any
banking institutions are described in the Schedule of Arrangements with Banking
Institutions (Exhibit 5.12) attached hereto, indicating with respect to each of
such arrangements the type of arrangement maintained and the person or persons
authorized to act on behalf of DCS in respect thereof.
5.13 Intellectual Property.
(a) All domestic and foreign patents, patent applications,
copyrighted works, copyright applications and registrations,
trade names, trademarks and service marks, registered
trademarks and trademark applications, registered service
marks and
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service xxxx applications which are used by, owned
by or licensed to DCS (collectively, the "Intellectual
Property") are listed in the Schedule of Intellectual Property
(Exhibit 5.13) attached hereto, which Schedule indicates, with
respect to each, the nature of DCS's interest therein and the
expiration date thereof or the date on which DCS's interest
therein terminates. Except as set forth on the Schedule of
Intellectual Property, all registered copyrights, patents,
trademarks and service marks which are owned by or licensed to
DCS have been duly registered in, filed in or issued by, as
the case may be, the United States Patent and Trademark
Office, the United States Register of Copyrights or the
corresponding offices of other countries identified on said
Schedule, and have been properly maintained and renewed in
accordance with all applicable provisions of law and
administrative regulations in the United States and each such
country.
(b) The Intellectual Property is the only intellectual property
used in or otherwise necessary to operate the business and
operations of DCS as currently conducted or proposed to be
conducted.
(c) Except as set forth on the Schedule of Intellectual Property,
to the Knowledge of DCS or any of the Stockholders, (i) use of
the Intellectual Property and any other intellectual property
used by DCS does not require the consent of any other person
and the same is freely transferable (except as otherwise
provided by law or pursuant to the applicable license or use
agreement); (ii) the Intellectual Property is owned
exclusively by DCS, free and clear of any attachments, liens,
encumbrances or adverse claims; and (iii) neither DCS's
present or contemplated activities, products or services
infringe, misappropriate, dilute, impair or constitute unfair
competition with respect to any patent, tradename, trademark,
copyright or other proprietary rights of others.
(d) Except as set forth on the Schedule of Intellectual Property,
no other person has an interest in or right or license to use,
or the right to license others under, the Intellectual
Property. There are no claims or demands of any other person
pertaining thereto and no proceedings have been instituted,
are pending or, to the Knowledge of DCS or any of the
Stockholders, are threatened which challenge the rights of DCS
in respect thereof and DCS, and the Stockholders have no
Knowledge of any facts which could be the basis of any such
claims. To the Knowledge of DCS or any of the Stockholders,
there is no infringement of any of the Intellectual Property
by others nor is any of the Intellectual Property subject to
any outstanding order, decree, judgment, stipulation,
settlement, lien, charge, encumbrance or attachment. No claim
or demand has been made and no proceeding has been filed or,
to the Knowledge of DCS or any of the Stockholders, is
threatened to be filed charging DCS with infringement of any
patent, trade name, trademark, service xxxx or copyright and
DCS and the Stockholders do not know of any facts which could
be the basis of any such claims. To the Knowledge of
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DCS or any of the Stockholders, there are no royalties,
honoraria, fees or other payments payable by or on behalf of
DCS to any person with respect to any of the Intellectual
Property.
5.14 Trade Secrets and Customer Lists. DCS owns or has the right to
use, free and clear of any claims or rights of others, all trade secrets,
inventions, developments, customer lists, manufacturing and secret processes,
hardware designs, programming processes, software and other information and
know-how (if any) required for or used in the manufacture or marketing of all
products formerly or presently sold, manufactured, licensed, under development
or produced by DCS, including products licensed from others. There are no
payments which are required to be made by or on behalf of DCS for the use of
such trade secrets, inventions, developments, customer lists, copyrighted
materials, manufacturing and secret processes and know-how. To the Knowledge of
DCS or any of the Stockholders, DCS is not using or in any way making any
unlawful or wrongful use of any confidential information, copyrighted materials,
know-how or trade secrets of any third party, including, without limitation, any
former employer of any present or past employee of DCS or of any of DCS's
predecessors. Except as set forth on Exhibit 5.14, none of the Stockholders is a
party to any non-competition or confidentiality agreement with any party other
than DCS or Datalink.
5.15 Contracts. Except for contracts, commitments, plans, agreements
and licenses attached to and described in the Schedule of Contracts and
Commitments (Exhibit 5.15) attached hereto, DCS is not a party to or subject to:
(a) any plan or contract providing for compensation or benefits of
any type in connection with services rendered to DCS by its
employees or independent contractors having an aggregate value
with respect to any one individual in excess of $25,000 (other
than those providing for employment at will), or involving any
interest in the capital stock of DCS;
(b) any contract or agreement for the purchase of any commodity,
material or Fixed Asset, other than purchase orders entered
into in the ordinary course of business;
(c) any contract or agreement for the sale of any product,
material, Fixed Assets or service, other than contracts with
customers entered into in the ordinary course of business;
(d) any contract or agreement providing for the purchase of all or
substantially all of its requirements of a particular product
from a supplier, or for periodic minimum purchases of a
particular product from a supplier;
(e) any contract or agreement which by its terms does not
terminate or is not terminable without penalty by DCS and any
successor or assignee of DCS on 30 days' notice, other than
purchase orders and sales orders entered into in the
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ordinary course of business for goods to be delivered within
90 days;
(f) any contract containing covenants limiting in any material
respect DCS's freedom to compete in any line of business or
with any Person;
(g) any license agreement (as licensor or licensee);
(h) any contract or agreement with any present or former officer,
director or stockholder of DCS or with any persons or
organizations controlled by or affiliated with any of them;
(i) any contract, agreement or arrangement providing for a
guarantee or indemnification by DCS;
(j) any agreement concerning a partnership or joint venture; or
(k) any agreement under which the consequences of a default or
termination could have a material adverse effect on the
business, financial conditions or prospects of DCS.
Copies of all contracts, commitments, plans, agreements or licenses
attached to and described in the Schedule of Contracts and Commitments are true,
correct and complete, and have been subject to no amendment, extension or other
modification as of the date hereof. Each contract, commitment, plan agreement
and license described in the Schedule of Contracts and Commitments or the
Schedule of Customers, Distributors and Independent Sales Representatives
(Exhibit 5.28) is binding and enforceable in accordance with its terms and is in
full force or effect without any default thereunder by DCS or, to the Knowledge
of DCS or any Stockholder, by any other party thereto (a "default" being defined
for purposes hereof as an actual default or any set of facts which would, upon
receipt of notice or passage of time, or both, constitute a default). Except as
set forth in the Schedules to this Agreement, the execution, delivery and
performance of this Agreement, and the agreements, documents and instruments
contemplated hereby, by DCS and the Stockholders and the change in control of
DCS effected hereby does not and will not affect the validity or enforceability
of, or in any way modify DCS's rights or obligations under any contract, lease,
commitment, plan, agreement or license to which DCS is a party or under which it
is entitled to benefits.
5.16 Litigation. Except as set forth on the Schedule of Litigation
(Exhibit 5.16 hereto), there are no suits, actions or administrative,
arbitration or other proceedings or governmental investigations pending or
threatened against or relating to DCS or DCS's properties or business. Except as
set forth on the Schedule of Litigation, DCS is not otherwise engaged as a party
in any suit, action or administrative, arbitration or other proceeding. DCS has
not entered into or been subject to any consent decree, compliance order or
administrative order with respect to any property owned, operated, leased or
used by DCS. DCS has not received any request for information, notice, demand
letter, administrative inquiry or formal or informal complaint or claim
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with respect to any property owned, operated, leased or used by DCS or any
facilities or operations thereon. DCS has not been named by the U.S.
Environmental Protection Agency or a state environmental agency as a potentially
responsible party (or similar designation under applicable state law) in
connection with any site at which hazardous substances, hazardous materials,
toxic substances, oil or petroleum products have been released or are threatened
to be released. Except as set forth on the Schedule of Litigation, there are no
existing or, to the Knowledge of DCS or any of the Stockholders, threatened
product liability, warranty or other similar claims, or any facts upon which a
claim of such nature could be based, against DCS for services or products which
are defective or fail to meet any service or product warranties. Neither DCS nor
any Stockholder is aware of any facts providing a basis for any matter addressed
in this Section 5.16 or has any Knowledge that any such matters will be
forthcoming.
5.17 Compliance with Laws. DCS is not in material violation of any
laws, rules or regulations which apply to the conduct of its business or any
facilities or property owned, leased, operated or used by DCS, which violation
has had or may be expected to have a material adverse effect on DCS's business,
financial condition or results of operations. There has never been any citation,
fine or penalty imposed, asserted or threatened against DCS under any foreign,
federal, state, local or other law or regulation relating to employment,
immigration, occupational safety, zoning or environmental matters and neither
DCS nor the Stockholders is aware of any circumstances, occurrences or
conditions likely to result in the imposition or assertion of such a citation,
fine or penalty, nor has DCS or any Stockholder received any notice to the
effect that DCS is in violation of any such laws or regulations.
5.18 Insurance. The physical properties and assets of DCS are insured
to the extent disclosed in the Schedule of Insurance (Exhibit 5.18) attached
hereto and all other insurance policies and arrangements of DCS are disclosed in
said Schedule, including present product liability insurance policies and
product liability insurance policies held by DCS over the past five years. All
such present policies of insurance are in full force and effect, all premiums
with respect thereto are currently paid and DCS is in compliance with the terms
thereof. To the Knowledge of DCS or any of the Stockholders, such insurance
policies are sufficient for compliance by DCS with all requirements of law and
all agreements and leases to which DCS is a party and provide insurance coverage
for the properties, assets, operations and employees of DCS generally comparable
in type and amount to that which is customarily carried by other corporations
engaged in similar businesses and of approximately the same size and similarly
situated as DCS. The workers' compensation insurance of DCS complies with
applicable statutory requirements as to the amount of such coverage. Neither
this Agreement nor the consummation of the transactions contemplated hereby will
cause any such insurance policy not to be in full force and effect.
5.19 Product Warranty. To the Knowledge of DCS or any of the
Stockholders, each product manufactured, sold, leased or delivered by DCS has
been in conformity with all applicable contractual commitments and all express
and implied warranties. To the Knowledge of DCS or any of the Stockholders, DCS
has no liability (and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand which may
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give rise to any liability) for replacement or repair thereof or other damages
in connection therewith, subject only to the reserve for product warranty claims
set forth in the Base Balance Sheet as adjusted for the passage of time through
the Closing Date in accordance with the past custom and practice of DCS, and
provided that liabilities arising from a recall required by a vendor and not
arising from any action or inaction on the part of DCS are not included within
this Section 5.19. To the Knowledge of DCS or any of the Stockholders, no
product manufactured, sold, leased or delivered by DCS is subject to any
guaranty, warranty or other indemnity beyond the applicable standard terms and
conditions of sale or lease, all of which are included in the Schedule of
Warranties (Exhibit 5.19) in addition to copies of the standard terms and
conditions of sale or lease for DCS containing applicable guaranty, warranty,
and indemnity provisions.
5.20 Product Liability. To the Knowledge of DCS or any of the
Stockholders, DCS has no liability (and there is no basis for any present or
future action, suit, proceeding, hearing, investigation, charge, complaint,
claim or demand against it giving rise to any liability) arising out of any
injury to individuals or property as a result of the ownership, possession or
use of any product manufactured, sold, leased or delivered by DCS.
5.21 Powers of Attorney. Except as set forth on the Schedule of Powers
of Attorney (Exhibit 5.21 hereto), neither DCS nor any Stockholder has entered
into any outstanding power of attorney relating to DCS or its business or
assets.
5.22 Finders' Fees. Neither DCS nor any of the Stockholders has
incurred or will incur or become liable for any broker's commission or finder's
fee relating to or in connection with the transactions contemplated by this
Agreement, except as described on the Schedule of Finders' Fees (Exhibit 5.22
hereto).
5.23 Authorizations. DCS has obtained and is in material compliance
with all federal, foreign, state, provincial, municipal, local or other
governmental consents, certifications, licenses, permits, registrations, grants
and other authorizations (collectively the "Authorizations" and individually an
"Authorization") which are necessary to permit it to conduct its business as
presently conducted and for which the failure to comply with has had or may be
expected to have a material adverse effect on DCS's business, financial
condition or results of operations. No proceeding is pending or, to the
Knowledge of DCS or any of the Stockholders, is threatened in which any Person
or governmental authority is seeking to revoke or deny the renewal of any
Authorization. All Authorizations are listed in the Schedule of Authorizations
(Exhibit 5.23). Each Authorization is in full force and effect without any
default thereunder by DCS (a "default" being defined for purposes hereof as an
actual default or any set of facts which would, upon receipt of notice or
passage of time, or both, constitute a default), will remain in full force and
effect after giving effect to the transactions contemplated by this Agreement
and DCS has not received notice of any claim or charge that DCS has breached any
Authorization.
5.24 Transactions with Interested Persons. Neither the Stockholders nor
any officer, supervisory employee or director of DCS nor any of their respective
spouses or children, owns,
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directly or indirectly, on an individual or joint basis, any material interest
in, or serves as an officer or director or in another similar capacity of,
any customer, competitor or supplier of DCS, or any organization which has a
material contract or arrangement with DCS.
5.25 Employee Benefit Plans.
(a) All employee benefit plans, as that term is defined in Section
3(3) of ERISA, and fringe benefit plans, as that term is
defined in Section 6039D(d) of the Code, which now are or ever
have been maintained by DCS (or any subsidiary of DCS) or to
which DCS (or any subsidiary of DCS) now has or has ever had
an obligation to contribute (the "Employee Benefit Plans") are
described in the Schedule of Employee Benefit Plans (Exhibit
5.25) attached hereto. No event has occurred nor has there
been any omission which would result in violation of any laws,
rulings or regulations applicable to any Employee Benefit
Plan. There are no claims pending or, to the Knowledge of DCS
or any of the Stockholders, threatened with respect to any
Employee Benefit Plan, other than claims for benefits by
employees, beneficiaries or dependents arising in the normal
course of the operation of any such plan.
(b) Each Employee Benefit Plan that is intended to be qualified
under Section 401(a) or 401(k) of the Code is identified as a
"Qualified Plan" on the Schedule of Employee Benefit Plans and
has in fact been so qualified from the effective date of its
establishment and continues to be so qualified (unless such
plan has been terminated, in which case such plan continued to
be so qualified until its date of termination). Except as set
forth on the Schedule of Employee Benefit Plans, no event or
omission has occurred which would cause any such plan to lose
its qualification under Section 401(a) or 401(k) of the Code,
or which would cause DCS to incur liability for any excise tax
under the Code with respect to the maintenance, operation or
any other aspect of any such Qualified Plan.
(c) Neither DCS nor any member of any group of trades or
businesses under common control with DCS, within the meaning
of Section 4001(b)(1) of ERISA, (i) has ever had an obligation
to contribute to a multiemployer plan, within the meaning of
Section 3(37) of ERISA, (ii) has incurred any liability under
Title IV of ERISA, which will not be paid in full prior to the
Closing Date or (iii) has ever made contributions to or has
had an obligation to contribute to an association established
under Section 501(c)(9) of the Code. With respect to each
Employee Benefit Plan (as that term is defined in Section 3(3)
of ERISA) maintained by DCS or maintained by any member of any
"controlled group" (as defined in Section 412(n) of the Code)
of which DCS is or has been a member (a "Controlled Group")
and to which DCS or any member of any Controlled Group has had
an obligation to contribute, there are no "accumulated funding
deficiencies" within the meaning of Section 302 of ERISA or
Section 412 of the Code, or contributions or premiums required
to be
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made which have not been either paid or accrued as a
liability by DCS. All payments and contributions required to
be made under any and all collective bargaining agreements, or
any other agreements, to which DCS or any member of any
Controlled Group is a party or is otherwise subject, have been
made on a timely basis.
(d) With respect to each "group health plan" (as defined in
Section 607(1) of ERISA) that has been maintained by DCS or
any member of any Controlled Group, all notices required
pursuant to Section 606 of ERISA have been provided on a
timely basis and each such plan has otherwise complied in all
material respects with the requirements of Sections 606
through 608 of ERISA. Except as required by Section 601 of
ERISA, neither DCS nor any member of any Controlled Group has
made any commitment or is otherwise obligated to provide any
non-pension benefits to any employee, former employee or
spouse or dependent of any such employee or former employee.
(e) With respect to each Employee Benefit Plan (as that term is
defined in Section 3(3) of ERISA) maintained by DCS (or any
subsidiary of DCS) within the three years preceding the
Closing, complete and correct copies of the following
documents (if applicable to such Employee Benefit Plan) are
attached as part of the Schedule of Employee Benefit Plans:
(i) all documents embodying or governing such Employee Benefit
Plan, as they may have been amended to the date hereof; (ii)
the most recent IRS determination letter with respect to such
Employee Benefit Plan and any applications for determination
subsequently filed with the IRS; (iii) the three most recently
filed IRS Forms 5500, with all applicable schedules attached
thereto; (iv) the three most recent actuarial valuation
reports completed with respect to such Employee Benefit Plan;
(v) the summary plan description for such Employee Benefit
Plan and all modifications thereto; and (vi) any insurance
policy (including any fiduciary liability insurance policy)
related to such Employee Benefit Plan.
5.26 Hazardous Materials; Environmental Compliance; Disclosure of
Environmental Information. DCS has never generated, used, stored or handled any
Hazardous Materials nor has it treated, stored, disposed of, spilled or released
any Hazardous Materials at any site presently or formerly owned, leased,
operated or used by DCS or shipped any Hazardous Materials for treatment,
storage or disposal at any other site or facilities. To the Knowledge of DCS or
any of the Stockholders, no other person has ever generated, used, handled,
stored or disposed of any Hazardous Materials at any site presently or formerly
owned, leased, operated or used by DCS, nor has there been or is there
threatened any release of any Hazardous Materials on or at any such site. To the
Knowledge of DCS or any of the Stockholders, DCS does not presently own or
lease, nor has it previously owned or leased, any site on which underground
storage tanks are or were located. No lien has been imposed by any governmental
agency on any property, facility, machinery, or equipment owned, operated,
leased or used by DCS in connection with the presence of any Hazardous
Materials.
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To the Knowledge of DCS or any of the Stockholders, DCS has no
liability under nor has it ever violated any Environmental Law with respect to
any property owned, operated, leased, or used by DCS and any facilities and
operations thereon. In addition, DCS, any property owned, operated, leased, or
used by DCS, and any facilities and operations thereon are presently in material
compliance with all applicable Environmental Laws. DCS has not entered into or
been subject to any consent decree, compliance order or administrative order
with respect to any environmental or health and safety matter or received any
request for information, notice, demand letter, administrative inquiry, or
formal or informal complaint or claim with respect to any environmental or
health and safety matter or any enforcement of any Environmental Law; and DCS
and the Stockholders have no Knowledge that any of the above will be
forthcoming.
The Schedule of Environmental Matters (Exhibit 5.26 hereto) contains
copies of all documents, records, and information available to DCS concerning
any environmental or health and safety matter relevant to DCS, whether generated
by DCS or others, including, without limitation, environmental audits,
environmental risk assessments, site assessments, documentation regarding
off-site disposal of Hazardous Materials, spill control plans, and reports,
correspondence, permits, licenses, approvals, consents or other authorizations
issued by any environmental agency.
5.27 Backlog. As of July 10, 1998, DCS has a backlog of firm orders for
the sale of products or services, for which revenues have not been recognized by
DCS, as set forth in the Schedule of Backlog of Firm Orders (Exhibit 5.27)
attached hereto.
5.28 Customers, Distributors and Independent Sales Representatives. The
Schedule of Customers, Distributors and Independent Sales Representatives
(Exhibit 5.28) sets forth the names of all customers to which, and independent
sales representatives and distributors through which, DCS has sold or
distributed in excess of $50,000 of its products or services during any of the
last three fiscal years of DCS. Such schedule also indicates all customers,
distributors and independent sales representatives with which DCS has entered
into a contract or agreement. Except as set forth on the Schedule of Customers,
Distributors and Independent Sales Representatives, during the last three fiscal
years and through the date hereof, no such customer or distributor has canceled
or otherwise terminated its relationship with DCS or decreased materially its
usage or purchase of the products or services of DCS. To the Knowledge of DCS or
any of the Stockholders, no such customer or distributor has any plan or
intention to terminate, cancel or otherwise modify its relationship with DCS in
a manner which would be materially adverse to DCS.
5.29 Labor Relations; Employees. DCS employs 34 employees as of the
date hereof and generally enjoys a good employer-employee relationship. Each
employee of DCS who is compensated in the aggregate in excess of $25,000
annually and his or her current rate of compensation is listed, together with a
copy of any employment agreement, in the Schedule of Employee Compensation
(Exhibit 5.29) attached hereto. DCS is not delinquent in payments to any of its
employees for any wages, salaries, commissions, bonuses or other direct
compensation for any services performed for it to the date hereof or amounts
required to be reimbursed to such
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employees. Upon termination of the employment of any of DCS's employees, neither
DCS nor Datalink will by reason of anything done prior to the Closing be liable
to any of such employees for "severance pay" or any other payments. To the
Knowledge of DCS or any of the Stockholders, DCS is in compliance with all
applicable laws and regulations respecting labor, employment, fair employment
practices, terms and conditions of employment and wages and hours. Except as set
forth on Exhibit 5.29, to the Knowledge of DCS or any of the Stockholders, there
are no charges of employment or age discrimination, sexual harassment or unfair
labor practices, claims by employees against DCS the asserted value of which
exceeds $5,000 individually or $15,000 in the aggregate or strikes, slowdowns,
stoppages of work or any other concerted interference with normal operations
existing, pending or threatened against or involving DCS. No question concerning
representation exists respecting the employees of DCS. No grievance which might
have a material adverse effect on DCS or the conduct of its business or any
arbitration proceeding arising out of or under collective bargaining agreements
is pending and no claim therefor has been asserted. No collective bargaining
agreement is in effect or is currently being or is about to be negotiated by
DCS.
5.30 Other Agreements. Except as set forth in the Schedule of Other
Agreements (Exhibit 5.30) attached hereto, there are no material agreements or
arrangements not contained herein, or disclosed in any Schedule hereto, to which
any Stockholder, or any individual serving as director or officer of DCS, is a
party relating to the business of DCS or to such Stockholder's, director's or
officer's rights and obligations as a stockholder, director or officer of DCS.
5.31 Copies of Documents. Except as described in the Schedules and
Exhibits to this Agreement, DCS has included in the Schedules and Exhibits
attached hereto true and correct copies of (a) all documents referred to in this
Section 5 including, without limitation, those referred to in the Schedules
delivered to Datalink pursuant to this Agreement, and (b) all other corporate
books and records including, without limitation, all stock record books, all
minutes of stockholders' and directors' meeting and all consents in lieu of such
meetings, which accurately record all action taken by its stockholders and Board
of Directors and committees thereof from the date of organization of DCS through
the date hereof. However, if DCS has previously provided a copy of any documents
to Datalink, DCS's obligations hereunder will be satisfied by describing the
document on any Schedule or Exhibit hereto and indicating its prior delivery to
Datalink.
The representations, warranties and statements contained in this
Agreement and in the certificates, exhibits and schedules delivered by DCS to
Datalink pursuant to this Agreement, when taken together, do not and shall not
contain any untrue statement of a material fact, and do not and shall not omit
to state a material fact required to be stated therein or necessary in order to
make such representations, warranties or statements not misleading in light of
the circumstances in which they were made.
5.32 Disclosure of Material Information and Potentially Adverse
Developments. DCS and the Stockholders have reported to Datalink any and all
material information of which DCS or
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any of the Stockholders has Knowledge as to potentially materially adverse
factors in the business of DCS, other than factors affecting the industry
generally.
5.33 DCS Common Stock. Each Stockholder owns of record and beneficially
the number of shares of DCS Common Stock set forth opposite his or her name in
Exhibit 5.3 hereto, free and clear of any and all restrictions on transfer
(other than any restrictions under the Act and state securities laws which do
not prohibit the transfer of DCS Common Stock to Datalink as contemplated
herein), pledges, claims, restrictions, charges, liens, security interests,
encumbrances or other interests of third parties of any nature whatsoever. No
Stockholder is a party to any contract or commitment that could require such
Stockholder to sell, transfer, or otherwise dispose of any capital stock of DCS
(other than this Agreement). No Stockholder is a party to any voting trust,
proxy or other agreement or understanding with respect to the voting of any
capital stock of DCS.
5.34 Authority. Each Stockholder has full right, authority, power and
capacity: (i) to enter into this Agreement and each agreement, document and
instrument to be executed and delivered by or on behalf of him or her pursuant
to this Agreement; (ii) to carry out the transactions contemplated hereby and
thereby; and (iii) to transfer, sell and deliver the DCS Common Stock to
Datalink (or its designee) in the Merger pursuant to this Agreement. This
Agreement and each agreement, document and instrument executed and delivered by
each Stockholder pursuant to this Agreement constitutes, or when executed and
delivered will constitute, the legal, valid and binding obligation of such
Stockholder, each enforceable in accordance with their respective terms, except
to the extent that enforcement is limited by bankruptcy, insolvency, moratorium,
conservatorship, receivership or similar laws of general application affecting
creditors' rights or by the application by a court of equity principles. Except
as expressly disclosed in the Schedules to this Agreement, the execution,
delivery and performance of this Agreement and each such agreement, document and
instrument by each Stockholder: (i) does not and will not violate any foreign,
federal, state, local or other laws, regulations or ordinances applicable to
such Stockholder or require such Stockholder to obtain any approval, consent or
waiver of, or make any filing with, any Person or authority (governmental or
otherwise) that has not been obtained or made and (ii) does not and will not
result in a breach of, constitute a default under, accelerate any obligation
under or give rise to a right of termination of, any indenture or loan or credit
agreement or any other agreement, contract, instrument, mortgage, lien, lease,
permit, authorization, order, writ, judgment, injunction, decree, determination
or arbitration award to which such Stockholder is a party or by which the
property of such Stockholder is bound or affected, or result in the creation or
imposition of any mortgage, pledge, lien, security interest or other charge or
encumbrance on any of the property or assets of DCS.
5.35 Certain Securities Law Matters. Each Stockholder is an "accredited
investor" within the meaning of Rule 501(a) under the Act and has such knowledge
and experience in financial business matters that he or she is capable of
evaluating the merits and risks of an investment in Datalink Common Stock to be
received pursuant to this Agreement and the Merger. Each Stockholder
acknowledges being furnished by Datalink with a copy of Datalink's Registration
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Statement and being offered the opportunity to ask questions of, and receive
answers from, Datalink's officers with respect to Datalink's business and
financial affairs. Each Stockholder hereby acknowledges and agrees that the
Datalink Common Stock to be acquired pursuant to this Agreement is being
acquired for his or her own account and not for any other person, or with a view
to distribution or sale thereof, and that such securities have not been
registered under the Act or applicable state securities or "Blue Sky" laws, and
therefore cannot be resold unless so registered or exempted therefrom. The
Stockholders understand that certificates representing the Datalink Common Stock
will bear the following legend reflecting the foregoing restrictions on
transfer:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act") or
under any applicable state securities laws (the "Laws"). The shares may
not be sold, transferred, assigned, pledged or otherwise disposed of at
any time unless they are registered under such Act and laws or unless
in the opinion of legal counsel for the Company such disposition will
not result in a violation of such Act or any such Laws."
Each Stockholder agrees to deliver to Datalink at the Closing an
undertaking in the form of Exhibit 5.35 hereto (the "Lock-Up Agreement")
addressed to the managing underwriters of Datalink's proposed IPO. In the event
that Datalink withdraws the Registration Statement for the IPO after the
Closing, but thereafter determines at any time in the future to proceed with an
IPO, the Stockholders further agree to furnish to the managing underwriter or
underwriters of the revived IPO, upon their request, a similar undertaking to
the Lock-Up Agreement containing the same restrictions on the resale of Datalink
Common Stock by the Stockholders as are requested by such underwriters of
Datalink's officers, directors and principal stockholders.
No Stockholder (i) is or controls a member of the National Association
of Securities Dealers, Inc. (the "NASD"), (ii) is a registered representative
with a NASD member firm or (iii) is the parent, brother or sister,
brother-in-law or sister-in-law, son or daughter or son-in-law or
daughter-in-law of an NASD member or of a registered representative of a NASD
member firm.
5.36 Director, Stockholder and Officer Claims. Except as described on
DCS's balance sheet as of May 31, 1998, no Stockholder, director or officer of
DCS has any claim of any kind arising out of or with respect to his or her
relationship to DCS, except claims for compensation and benefits accrued at
DCS's normal and customary rates in the ordinary course of business since the
date of such balance sheet, but unpaid as of the date hereof.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF DATALINK AND SUBSIDIARY
Datalink and the Subsidiary jointly and severally hereby make to each
of the Stockholders each of the representations and warranties set forth in this
Section 6 as follows:
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6.1 Organization and Good Standing. Datalink and the Subsidiary are
corporations duly organized, validly existing and in good standing under the
laws of the State of Minnesota with full corporate power to conduct their
business as now being conducted.
6.2 Authority. Datalink and the Subsidiary have full right, power and
authority to enter into this Agreement and each agreement, document and
instrument to be executed and delivered by them pursuant to this Agreement and
to carry out the transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement and each such other agreement,
document and instrument by them has been duly and validly authorized and
approved by all necessary action on the part of each of them and no other action
on the part of each of them is required in connection therewith. This Agreement
and each agreement, document and instrument to be executed and delivered by each
of them pursuant to this Agreement constitutes, or when executed and delivered
will constitute, the legal, valid and binding obligation of each of them, each
enforceable in accordance with their respective terms, except to the extent that
enforcement is limited by bankruptcy, insolvency, moratorium, conservatorship,
receivership or similar laws of general application affecting creditors' rights
or by the application by a court of equity principles. The execution, delivery
and performance by Datalink and Subsidiary of this Agreement and each such
agreement, document and instrument:
(a) does not and will not violate any foreign, federal, state,
local or other laws, regulations or ordinances applicable to
Datalink;
(b) does not or will not violate any term or provision of the
Articles of Incorporation or Bylaws of Datalink and
Subsidiary; or
(c) except as set forth on the Schedule of Datalink Exceptions
(Exhibit 6.2(c) hereto), does not and will not result in a
breach of, constitute or result in a default under, accelerate
any obligation under or give rise to a right of termination
of, any indenture or loan or credit agreement or any other
agreement, contract, instrument, mortgage, lien, lease,
permit, authorization, order, writ, judgment, injunction,
decree, determination or arbitration award to which Datalink
or the Subsidiary is a party or by which the property of
Datalink or the Subsidiary is bound or affected, or result in
the creation or imposition of any mortgage, pledge, lien,
security interest or other charge or encumbrance on any of
Datalink's or the Subsidiary's assets.
No consent or waiver by, approval of, or designation, declaration or
filing with, any Person or authority (governmental or otherwise) is required in
connection with the execution, delivery and performance by Datalink or the
Subsidiary of this Agreement and each agreement, document and instrument to be
executed and delivered by Datalink or the Subsidiary pursuant to this Agreement.
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6.3 Datalink Registration Statement. The Registration Statement,
including a preliminary prospectus, in the form filed with the SEC was prepared
by Datalink in material conformity with the requirements of the Act and the
applicable rules and regulations of the SEC under the Act. Except as disclosed
on Exhibit 6.3, the Registration Statement as of its date and as of the date
hereof did not include any untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that Datalink makes no representation as to information contained in or omitted
from the Registration Statement in reliance upon, and in conformity with,
written information relating to any underwriter furnished to Datalink by or on
behalf of such underwriter specifically for use in the preparation of the
Registration Statement.
6.4 Absence of Undisclosed Liabilities. To the Knowledge of Datalink,
as of the date of the most recent balance sheet contained in the Registration
Statement and as of the date hereof, Datalink had and has no indebtedness,
liabilities or obligations of any nature or kind, whether accrued, absolute,
contingent or otherwise asserted or unasserted, and whether due or to become due
(including, without limitation, potential liabilities relating to products or
services provided by Datalink or the conduct of Datalink's business prior to the
date of the most recent balance sheet contained in the Registration Statement
regardless of whether claims in respect thereof had been asserted as of such
date), except liabilities which are reflected on the most recent balance sheet
contained in the Registration Statement or that have been incurred since the
date thereof in the ordinary course of business.
6.5 Reservation of Datalink Common Stock. Datalink has reserved and
will continue to reserve a sufficient number of shares of Datalink Common Stock
from Datalink's authorized, but unissued shares for the purposes of this
Agreement, including but not limited to additional shares which may be required
to be issued pursuant to Section 3.3 above.
6.6 Availability of Rule 144 Under the Act. Commencing upon the
effective date of any registration statement filed with the SEC for an IPO of
Datalink Common Stock, and continuing for the longer of (i) 90 days after such
effective date or (ii) the longer of (a) two years following the Closing Date of
the Merger or (b) 90 days following the date that the last of the Stockholders
ceases to be an "affiliate" of Datalink within the meaning of the Act, Datalink
will use its best efforts to make available the current public information
required by Rule 144(c) under the Act.
6.7 Release of Stockholder Guarantees. Promptly after the Closing,
Datalink will use its best efforts to cause the obligees under the the DCS
obligations described on the attached Exhibit 7.2(f)(ii) to release the
Stockholders from their personal guarantees thereof.
6.8 Datalink Common Stock. The Datalink Common Stock being issued to
the Stockholders hereunder will be (i) duly authorized, validly issued and
outstanding, (ii) fully paid, non-assessable and free of preemptive rights and
(iii) except as otherwise provided by this
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Agreement, free and clear of any and all pledges, claims, restrictions, charges,
liens, security interests, encumbrances or other interests of third parties of
any nature whatsoever.
6.9 Completeness. The representations, warranties and statements
contained in this Agreement and in the certificates, exhibits and schedules
delivered by Datalink to DCS and its Stockholders pursuant to this Agreement,
when taken together, do not and shall not contain any untrue statement of a
material fact, and do not and shall not omit to state a material fact required
to be stated therein or necessary in order to make such representations,
warranties or statements not misleading in light of the circumstances in which
they were made.
SECTION 7. INDEMNIFICATION
7.1 Materiality; Survival. All representations, warranties, agreements,
covenants and obligations herein or in any schedule, certificate or financial
statement delivered by any party incident to the transactions contemplated
hereby are material, shall be deemed to have been relied upon by the parties and
shall survive the Closing hereof.
7.2 Indemnification.
(a) The Stockholders jointly and severally agree to defend,
indemnify and hold Datalink and the Subsidiary and their
respective subsidiaries and affiliates and the persons serving
as officers, directors, partners, employees or agents thereof
harmless from and against any damages, liabilities, losses,
fines, penalties, clean-up costs, study costs and expenses
(including, without limitation, reasonable counsel fees and
expenses as the same are incurred; together referred to as
"Losses") of any kind or nature whatsoever which may be
sustained or suffered by any of them arising out of, based
upon or in connection with any of the following matters:
(i) a breach of any representation, warranty, agreement,
covenant or obligation made by DCS or any of the
Stockholders in this Agreement or in any Exhibit,
Schedule, certificate or financial statement
delivered hereunder or in connection herewith or by
reason of any claim, action or proceeding asserted or
instituted growing out of any matter or thing
constituting a breach of such representations,
warranties or covenants;
(ii) Fraud in connection with the making by DCS or any
Stockholder of any representation, warranty, covenant
or obligation or an intentional misrepresentation by
DCS or any Stockholder of any representation,
warranty, covenant or obligation; or
(iii) any matters described on Exhibit 5(b), the Schedule
of Indemnifiable Exceptions.
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(b) Datalink shall give prompt written notice to the Stockholders
and, if the Escrow Agreement is still in effect, the Escrow
Agent, of any claim, liability or expense to which the
indemnification obligations hereunder would apply. Such notice
shall state the information then available regarding the
amount of such claim, liability or expense and shall specify
the provision or provisions of this Agreement under which the
claim, liability or expense is asserted. The failure to
promptly notify the Stockholders and the Escrow Agent (if
applicable) as provided above shall not relieve the
Stockholders of any liability hereunder except to the extent
that the rights of the Stockholders have been materially and
adversely prejudiced as a result of the failure to give, or
the delay in giving, such notice.
(c) If such indemnification claim, liability or expense is the
subject of litigation, the Stockholders shall have the right
to participate at their own expense in the defense of any such
litigation, or if in the opinion of Datalink, the financial
condition or business of DCS would not be impaired thereby,
Datalink may authorize the Stockholders, if they so desire, to
take over the defense of such litigation so long as such
defense is expeditious and is undertaken by counsel reasonably
acceptable to Datalink.
(d) Upon resolution of the indemnification claim, whether by final
judicial decision after all periods for appeal have lapsed,
settlement, arbitration decision or otherwise, Datalink shall
give the Stockholders written notice of the Losses incurred by
Datalink with respect to the claim (the "Datalink Final
Notice"). Thereafter, the Stockholders shall have 30 days to
give Datalink written notice that the Stockholders intend to
dispute the amount of Datalink's claimed Losses. Within 30
days after receipt of the Stockholders' written notice,
Datalink shall attempt to settle the dispute with the
Stockholders. If the Shareholders and Datalink do not reach
settlement of Datalink's claim within such 30 days, the
dispute may at any time thereafter be submitted by the
Stockholders or Datalink to arbitration in Atlanta, Georgia,
before three arbitrators, one of which is selected by the
Stockholders as a group, one of which is selected by Datalink
and the third of which is selected by the first two
arbitrators. The arbitration shall be conducted by the
American Arbitration Association in accordance with the rules
and procedures of the American Arbitration Association then in
effect. The Stockholders and Datalink agree that the
arbitrators' award (which shall be agreed to unanimously by
the arbitrators) shall be final and binding upon them with
respect to the dispute and may be entered in any court having
jurisdiction thereof. All costs of the arbitration (including
the reasonable legal expenses of all parties thereto) shall be
borne by the Stockholders and/or Datalink in the amounts
determined by the arbitrators, which shall base such
determination upon the relative merits of the respective
positions of the Stockholders and Datalink in the dispute. The
judgment upon the award may be entered in any court having
jurisdiction thereof. There shall be added to the amount of
any arbitration award interest at the rate of 10% per annum on
the amount
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required to be paid pursuant to such award. This
interest will be computed from the date payment would have
been paid if not disputed by the Stockholders to the date paid
and the arbitrators shall include provisions therefor in any
award rendered. Following the resolution of such dispute by
the arbitrators, Datalink shall submit a copy of the
arbitrators' award or decision to the Escrow Agent, which
shall be entitled to rely upon such copy.
Any claims as determined above in favor of Datalink
first shall be resolved by cancellation of Datalink Common
Stock held in the 40,000 share escrow referred to in Section
3.9, which shares shall continue to be held by the Escrow
Agent despite the scheduled two year term thereof until
resolution of the dispute. If Datalink's claim cannot be
resolved with the number of shares of Datalink Common Stock
remaining in escrow, then the Stockholders shall deliver to
Datalink, within ten (10) business days after written demand,
additional shares of Datalink Common Stock for cancellation.
In determining the number of shares of Datalink Common Stock
to be canceled from escrow or otherwise under this subsection
(d), such shares shall be valued as follows. If the Datalink
Final Notice is given prior to the date that Datalink
initially closes on an IPO and is not disputed by the
Stockholders, or if an arbitrators' award on Datalink's claim
is granted prior to the date that Datalink initially closes on
an IPO, then the shares to be canceled shall be valued at the
Valuation Price per share on the Closing Date of the Merger
determined pursuant to Section 3.2 as adjusted pursuant to
Section 3.3 for any events requiring an adjustment thereunder
occurring on or prior to the date of the Datalink Final Notice
(if not disputed by the Stockholders) or arbitrators' award
(if disputed by the Stockholders), as the case may be. If the
Datalink Final Notice is given on or after the date that
Datalink initially closes on an IPO and is not disputed by the
Stockholders, or if an arbitrators' award on Datalink's claim
is granted on or after the date that Datalink initially closes
on an IPO, then the shares to be canceled shall be valued at
the average of the high closing bid prices per share for the
Datalink Common Stock as reported by the Nasdaq National
Market system (or such other exchange on which the Datalink
Common Stock may be listed) for the ten (10) trading days (or
if the Datalink Common Stock has not yet traded for 10 days,
the full number of trading days) ending on the trading day
immediately prior to the date of the Datalink Final Notice (if
not disputed by the Stockholders) or arbitrators' award (if
disputed by the Stockholders), as the case may be.
If all shares of Datalink Common Stock owned by the
Stockholders have been returned for cancellation, any
additional resolution of Datalink's claim shall be effected by
the Stockholders tendering cash to Datalink within ten (10)
business days after written demand.
Despite the above provisions of this subsection (d),
the Stockholders may resolve any claim by paying cash to
Datalink. In such case, the shares of Datalink
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Common Stock that otherwise would have been released from
escrow to Datalink for cancellation shall instead be released
to the Stockholders, and Datalink shall join with the
Stockholders in so instructing the Escrow Agent.
(e) Notwithstanding anything else in this Section 7 to the
contrary, no claim by Datalink under Sections 7.2(a)(i) or
7.2(a)(iii) may be enforced against the Stockholders (i)
unless Datalink gives the Stockholders written notice of such
claim under Section 7.2(b) above within two (2) years from the
Closing Date, (ii) if it is part of the first $10,000 (in the
aggregate) of claims asserted from time to time against the
Stockholders under Section 7.2(a)(i), (iii) to the extent that
the claim relates to the first $100,000 (in the aggregate) or
50% of the third $100,000 (in the aggregate) of DCS Unpaid
Sales and Use Tax Assessments or (iv) to the extent that the
claim, when aggregated with all other claims previously
enforced against the Stockholders, exceeds $2,000,000.
Further notwithstanding anything else in this Section 7 to the
contrary, no claim by Datalink under Section 7.2(a)(ii) may be
enforced against the Stockholders unless (i) Datalink gives
the Stockholders written notice of such claim under Section
7.2(b) above within four (4) years from the Closing Date and
(ii) to the extent that the dollar amount of such claim, when
aggregated with all claims previously enforced against the
Stockholders under Sections 7.2(a)(i), 7.2(a)(ii) and
7.2(a)(iii), exceeds $4,000,000. If Datalink makes a claim
under Section 7.2(a)(ii) and the arbitrators determine that
there has been no showing of Fraud, then Datalink shall pay
the expenses of any such arbitration and shall further pay the
Stockholders $100,000 in the aggregate as liquidated damages
for the wrongful bringing of such claim.
(f) Datalink and the Subsidiary jointly and severally agree to
defend, indemnify and hold the Stockholders harmless (in the
same manner as described with respect to the Stockholders in
subsections (b) through (e) above) from and against any Losses
of any kind or nature whatsoever which may be sustained or
suffered by any of them arising out of, based upon or in
connection with any of the following matters:
(i) a breach of any representation, warranty, agreement,
covenant or obligation made by Datalink in this
Agreement or in any Exhibit, Schedule, certificate or
financial statement delivered hereunder or in
connection herewith (notwithstanding any
investigation by or Knowledge of any of the
indemnified parties) or by reason of any claim,
action or proceeding asserted or instituted growing
out of any matter or thing constituting a breach of
such representations, warranties or covenants;
(ii) the DCS obligations for which the Stockholders have
previously provided a personal guarantee to the
obligee as described on the attached Exhibit
7.2(f)(ii); or
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(iii) the first $100,000 (in the aggregate) and 50% of the
third $100,000 (in the aggregate) of DCS Unpaid Sales
and Use Tax Assessments, and all of such Assessments
in excess of the first $300,000 (in the aggregate)
thereof.
SECTION 8. MISCELLANEOUS
8.1 S Corporation Matters. If at the time of the Closing, Datalink has
not yet initially closed on an IPO, the Stockholders agree to execute any
consents reasonably requested by Datalink to the continued tax election of
Datalink as an S Corporation pursuant to Code Section 1361. From and after the
Closing, and for so long as Datalink continues to be an S Corporation, the
Stockholders shall share prorata based on their percentage ownership with the
other Datalink stockholders in any S Corporation distributions made by Datalink.
Despite the foregoing, if Datalink declares one or more S Corporation
distributions payable to its stockholders of any of Datalink's pre-Closing
undistributed earnings and profits, whether in contemplation of an IPO, a
recapitalization or any other event, the Stockholders hereby waive any right to
the receipt of any such distributions and agree to execute a written
confirmation of such waiver if requested by Datalink.
8.2 Fees and Expenses. Except as otherwise provided herein, each of the
parties to this Agreement will bear its own expenses in connection with the
negotiation and consummation of the transactions contemplated by this Agreement.
All sales and transfer taxes, fees and duties under applicable law (including
all stock transfer taxes, fees and duties, if any) incurred in connection with
this Agreement or the transactions contemplated thereby will be borne and paid
by the Stockholders.
8.3 Confidentiality. DCS and the Stockholders agree that they will
treat the existence and terms of this Agreement and the transactions
contemplated hereby as strictly confidential and will not disclose them to any
Person without the prior written consent of Datalink or unless Datalink publicly
discloses such information.
8.4 Law Governing. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia without reference to the choice
of law provisions thereof. The parties hereby irrevocably and unconditionally
consent to the exclusive jurisdiction of the courts of the State of Georgia and
of the United States of America located in the State of Georgia in connection
with any suit, action or proceeding relating to this Agreement and the
transactions contemplated hereby (without, however, derogating from the
exclusivity of the arbitration procedures set forth in subparagraph 7.2(d)
hereof) and agree not to commence any action, suit or proceeding relating
thereto except in such courts.
8.5 Notices. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given if delivered by hand, sent by
certified or registered mail
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(postage prepaid and with return receipt requested), by overnight courier
service, or by telecopy or other written form of electronic confirmation:
To: DATALINK CORPORATION: Xxxx X. Xxxxxx, Chief Executive Officer
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
(000) 000-0000 (telefax)
With a copy to: Xxxxxx X. Xxxxxx, Esq.
Xxxxxxxx & Xxxxxx P.A.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
(000) 000-0000 (telefax)
To: DCS ACQUISITION CORPORATION: Xxxx X. Xxxxxx, Chief Executive Officer
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
(000) 000-0000 (telefax)
With a copy to: Xxxxxx X. Xxxxxx, Esq.
Xxxxxxxx & Xxxxxx P.A.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
(000) 000-0000 (telefax)
To: DIRECT CONNECT SYSTEMS, INC.: Attn: Xxxxxx X. Xxxxxxx, Xx.
0000 X.X. Xxxxxxx, Xxxxx X
Xxxxxxxx, Xxxxxxx 00000
(000) 000-0000 (telefax)
With a copy to: Xxxxxxxxx Xxxxxxxx, Esq.
Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P.
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
(000) 000-0000 (telefax)
To the STOCKHOLDERS: c/o Xxxxxx X. Xxxxxxx, Xx.
Direct Connect Systems, Inc.
0000 X.X. Xxxxxxx, Xxxxx X
Xxxxxxxx, Xxxxxxx 00000
(000) 000-0000 (telefax)
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With a copy to: Xxxxxxxxx Xxxxxxxx, Esq.
Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P.
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
(000) 000-0000 (telefax)
or to such other address of which any party may notify the other parties as
provided above. Notices are effective upon receipt or, if mailed, five (5)
business days after the placing thereof in the United States mail in the manner
provided above.
8.6 Entire Agreement. This Agreement, including the Schedules and
Exhibits referred to herein, constitutes the entire agreement between the
parties with respect to its subject matters and supersedes all previous written
or oral negotiations, commitments and writings; no promises, representations,
understandings, warranties and agreements have been made by any of the parties
hereto except as referred to herein or in such Schedules and Exhibits or in such
other writings; and all inducements to the making of this Agreement relied upon
by all the parties hereto have been expressed herein or in said Schedules or
Exhibits or in such other writings.
8.7 Assignability. This Agreement shall be binding upon, and shall be
enforceable by and inure to the benefit of, the parties named herein and their
respective successors and permitted assigns; provided, however, that (a) an
assignment of this Agreement may be made by Datalink to an affiliate of Datalink
upon written notice to the Stockholders, although no such assignment shall
relieve Datalink of any liabilities or obligations under this Agreement and (b)
this Agreement may not be assigned by DCS or any Stockholder without the prior
written consent of Datalink.
8.8 Waivers; Severability. The failure of any of the parties to this
Agreement to require the performance of a term or obligation under this
Agreement or the waiver by any of the parties to this Agreement of any breach
hereunder shall not prevent subsequent enforcement of such term or obligation or
be deemed a waiver of any subsequent breach hereunder. If any one or more of the
provisions of this Agreement are held to be invalid, illegal or unenforceable,
the validity, legality or enforceability of the remaining provisions of this
Agreement will not be affected thereby, and the parties will use all reasonable
efforts to substitute for such invalid, illegal or unenforceable provisions one
or more valid, legal and enforceable provisions which, insofar as practicable,
implement the purposes and intents hereof. To the extent permitted by applicable
law, each party waives any provision of law which renders any provision of this
Agreement invalid, illegal or unenforceable in any respect.
8.9 Specific Performance. Each of the parties acknowledges and agrees
that the other parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the parties agrees that
the other parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the
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terms and provisions hereof in any action instituted in any court of the United
States or any state thereof having jurisdiction over the Parties and the matters
covered by this Agreement (subject to the provisions set forth in Section 7.2),
in addition to any other remedy to which they may be entitled, at law or in
equity.
8.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same agreement.
8.11 Amendments. This Agreement may not be amended or modified, nor may
compliance with any condition or covenant set forth herein be waived, except by
a writing duly and validly executed by each party hereto, or in the case of a
waiver, the party waiving compliance.
8.12 Reporting of Reorganization. The parties agree that they will
report the transactions contemplated hereby as a reorganization within the
meaning of Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code for purposes of
federal, state and local income tax reporting.
SECTION 9. POST-CLOSING COVENANTS OF THE PARTIES
9.1 Post-Closing Covenants of DCS and the Stockholders. DCS and the
Stockholders will use their best efforts following the Closing promptly to
obtain (a) estoppel certificates acceptable in form and substance to Datalink
from each DCS landlord (a "Landlord") providing that (i) each lease is in full
force and effect and has not been modified, altered or supplemented in any way;
(ii) on the date of such estoppel certificate, there are no existing defenses,
off-sets or credits which the Landlord has against DCS under the lease, and the
Landlord is not aware of any action or inaction that has occurred or failed to
occur that by the passage of time or upon notice duly given, or both, would
constitute a defense to the lease or create a right of off-set or to a credit,
or if such an action or inaction has occurred, the nature of the action or
inaction; and (iii) stating the amount of rent and the date through which such
rent has been paid; and (b) a written undertaking by the trustees of DCS's
retirement and profit sharing plans to resign as trustees thereof upon the
request of Datalink. In addition, DCS and the Stockholders will promptly after
the Closing deliver to Datalink evidence satisfactory to Datalink's counsel that
all qualifications listed as incomplete on the Schedule of Foreign
Qualifications (Exhibit 5.1(b)) have been obtained.
[continued on next page]
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9.2 Post-Closing Covenant of Datalink. During the balance of 1998,
Datalink shall as much as practicable maintain the compensation and benefit
plans of DCS for such of DCS's employees as Datalink hires after the Closing and
will make any changes only upon the agreement with Messrs. Xxxxxxx and Westwood.
IN WITNESS WHEREOF, the undersigned have hereto affixed their
signatures.
DATALINK CORPORATION
a Minnesota corporation
By: /s/ Xxxx X. Xxxxxx
--------------------------------------------
Xxxx X. Xxxxxx, Chief Executive Officer
DCS ACQUISITION CORPORATION
a Minnesota corporation
By: /s/ Xxxx X. Xxxxxx
--------------------------------------------
Xxxx X. Xxxxxx, Chief Executive Officer
DIRECT CONNECT SYSTEMS, INC.
a Georgia corporation
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxxx, Xx., President
STOCKHOLDERS:
/s/ Xxxxxx X. Xxxxxxx, Xx.
-----------------------------------------------
Xxxxxx X. Xxxxxxx, Xx.
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------------
Xxxxxxx X. Xxxxxxx
[signatures continued on next page]
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/s/ Xxxxxxx X. Xxxxxxxx, Xx.
-----------------------------------------------
Xxxxxxx X. Xxxxxxxx, Xx.
/s/ A. Xxxxxxx Xxxxxxxx
-----------------------------------------------
A. Xxxxxxx Xxxxxxxx
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SCHEDULE OF EXHIBITS
Exhibit A Plan of Merger
Exhibit 3.8 Schedule of Purchase Price Allocation
Exhibit 3.9 Form of Escrow Agreement
Exhibit 3.10(a)(ii) Form of Opinion of Xxxxxxxx & Xxxxxx P.A.
Exhibit 3.10(a)(iii) Form of Buy-Sell Agreement
Exhibit 3.10(b)(ii) Form of Opinion of Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P.
Exhibit 3.10(b)(iv) Form of Non-Competition Agreement
Exhibit 4.2(a) Schedule of Excluded Assets and Liabilities
Exhibit 4.2(a)(iii) Schedule of Permitted Transaction Expenses
Exhibit 5(a) Schedule of Exceptions
Exhibit 5(b) Schedule of Indemnifiable Exceptions
Exhibit 5.1(a) Articles of Incorporation and Bylaws of DCS
Exhibit 5.1(b) Schedule of Foreign Qualifications
Exhibit 5.2(c) Schedule of Breaches and Defaults
Exhibit 5.3 Schedule of Stockholders
Exhibit 5.5 Financial Statements
Exhibit 5.6(a) Schedule of Leases
Exhibit 5.6(b) Schedule of Fixed Assets
Exhibit 5.6(c) Schedule of Defective Machinery and Equipment
Exhibit 5.7(c) Schedule of Tax Matters
Exhibit 5.9 Schedule of Accounts Receivable
Exhibit 5.10(a) Schedule of Slow Moving Raw Materials
Exhibit 5.10(b) Schedule of Slow Moving Finished Goods Inventory
Exhibit 5.10(c) Schedule of Raw Materials Inventories
Exhibit 5.10(d) Schedule of Finished Goods Inventories
Exhibit 5.11 Schedule of Changes
Exhibit 5.12 Schedule of Arrangements with Banking Institutions
Exhibit 5.13 Schedule of Intellectual Property
Exhibit 5.14 Schedule of Certain Non-Competition and
Confidentiality Agreements
Exhibit 5.15 Schedule of Contracts and Commitments
Exhibit 5.16 Schedule of Litigation
Exhibit 5.18 Schedule of Insurance
Exhibit 5.19 Schedule of Warranties
Exhibit 5.21 Schedule of Powers of Attorney
Exhibit 5.22 Schedule of Finders' Fees
Exhibit 5.23 Schedule of Authorizations
Exhibit 5.25 Schedule of Employee Benefit Plans
Exhibit 5.26 Schedule of Environmental Matters
Exhibit 5.27 Schedule of Backlog of Firm Orders
Exhibit 5.28 Schedule of Customers, Distributors and Independent
Sales Representatives
Exhibit 5.29 Schedule of Employee Compensation
Exhibit 5.30 Schedule of Other Agreements
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Exhibit 5.35 Form of Lock-Up Agreement
Exhibit 6.2(c) Schedule of Datalink Exceptions
Exhibit 6.3 Schedule of Matters on Datalink Registration
Statement
Exhibit 7.2(f)(ii) Schedule of Outstanding Stockholder Personal
Guarantees
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