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EXHIBIT 10 (mm)
REVOLVING NOTE BETWEEN THE COMPANY
AND LASALLE NATIONAL BANK
DATED JUNE 29, 1997
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REPLACEMENT REVOLVING NOTE
$15,000,000 Dated as of June 29, 1997
Due: June 28, 1998
On or before June 28, 1998, CDW COMPUTER CENTERS, INC. (The
"Undersigned"), for value received, promise to pay to the order of LASALLE
NATIONAL BANK, a national banking association (hereinafter, together with any
holder thereof, called "Bank"), whose address is 135 S. LaSalle Street, Chicago,
Illinois 60603, the principle sum of Fifteen Million and 00/100 Dollars
($15,000,000) or if less, the aggregate unpaid principle amount of all loans
made by the Bank to the Undersigned hereunder (this "Note"). The unpaid
principle amount hereof shall bear interest at the Undersigned's option of the
following:
(i) a fixed rate equal to the greater of (A) the "Prime Rate"
(hereinafter defined) minus two and one-half of one percent (-2
1/2%) per annum, or (B) the "Federal Funds Rate" (hereinafter
defined) plus one-half of one percent (+1/2%) per annum, for
borrowing not to exceed thirty (30) days, such rate to be fixed at
the beginning of the term of such borrowing (the "Fixed Prime
Rate'); or
(ii) a floating rate equal to the greater of (A) the Prime Rate minus
two and one-half percent (-2 1/2%) per annum, for borrowing in
excess of thirty (30) days (the "Floating Prime Rate"); the
Floating Prime Rate and the Fixed Prime Rate are referred to
herein collectively as the "Prime Rate"); or
(iii) "Adjusted LIBOR" (hereinafter defined).
1. For purposes hereof the following terms shall have the following
definitions:
"Prime Rate" shall mean the rate in effect from time to time as set by
the Bank and called its Prime Rate. The effective date of any change in said
Prime Rate shall for purposes hereof be the date the rate is changed by the
Bank. The Bank shall not be obligated to give notice of any change in the Prime
Rate.
"Federal Funds Rate" shall mean, for any day, the daily effective
Federal Funds rate for such day as published in the Federal Reserve Statistical
Release H.15 ("H.15") (or, if such Release is not published, the successor
thereto or closest approximation thereto, as determined by the Bank) for such
day; provided that, the Federal Funds Rate for any day on which the Federal
Reserve Bank of New York, (the "New York Fed") is not open for business shall be
the Federal Funds Rate for the next preceding day on which the New York Fed was
open for business; and provided, further, that if the Bank determines, in good
faith, that it is unable to determine the Federal Funds Rate on the basis of
H.15, then the Bank shall determine the Federal Funds Rate based on the
quotation of three (3) dealers in Federal Funds in New York City, as reasonably
selected by the Bank, and the Bank's determination of such rate shall be binding
and conclusive absent manifest error.
"Adjusted LIBOR" means a rate of interest equal to one-half of one
percent (1/2%) per annum in excess of the per annum rate of interest at which
U.S. dollar deposits in an amount comparable to the amount of the relevant
"LIBOR Loan" (hereinafter defined) and for a period equal to the relevant
"Interest Period" (hereinafter defined) are offered generally to the Bank
(rounded upward, if necessary, to the nearest 1/16 of 1.00%) in the London
Interbank Eurodollar market at 11:00 a.m. (London time) two (2) banking days
prior to the commencement of each Interest Period, such rate to remain fixed for
such Interest Period.
"Interest Period" shall mean successive one, two or three-month periods
as selected from time to time by the Undersigned by notice given to the Bank not
less than three (3) business days prior to the first day of each respective
Interest Period; provided that: (i) each such one, two, three-month period
occurring after such initial period shall commence on the day on which the next
preceding period expires; (ii) the final Interest Period shall be such that its
expiration occurs on or before the stated maturity date of the Note; and (iii)
if for any reason the Undersigned shall fail to select timely a period, then
shall be deemed to have selected a LIBOR Loan with a one (1) month Interest
Period; provided that, at any time any Interest Period expires less than one (1)
month before the maturity date of the Note, then, for the period commencing on
such expiration date and ending on the maturity date such LIBOR Loan shall
convert to a loan bearing interest at the Floating Prime Rate.
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2. Interest on that portion of the outstanding principle amount
hereof bearing interest at the Prime Rate shall be payable from
the date hereof on such aggregate unpaid principle amount on the
last day of each month, commencing on July 31, 1997, and at
maturity hereof. Interest on LIBOR borrowing shall be payable at
the end of each respective Interest Period. Interest after
maturity (whether by reason of acceleration or otherwise) shall be
paid on the unpaid balance at the rate of the Floating Prime Rate
plus two percent (2%) per annum (the "Default Rate"). Interest
shall be computed on the basis of a year consisting of 360 days
and shall be paid for the actual number of days elapsed, unless
otherwise specified herein.
3. Each LIBOR borrowing hereunder (each, a "LIBOR Loan") must equal
$100,000 or an integral multiple thereof. Interest on each LIBOR
Loan shall be payable on the last banking day of each Interest
Period with respect thereto, commencing on the first such date to
occur after the date hereof, at maturity, after maturity on
demand, and on the date of any payment hereon on the amount paid.
The Undersigned hereby further promises to pay to the order of the
Bank, on demand, interest on the unpaid principle amount hereof
after maturity (whether by acceleration or otherwise) at the
Default Rate.
4. Provisions applicable to LIBOR Loans:(a) The Bank's determination
of Adjusted LIBOR as provided above shall be conclusive, absent
manifest error. Furthermore, if the Bank determines, in good
faith (which determination shall be conclusive, absent manifest
error), prior to the commencement of any Interest Period that (a)
U.S. dollar deposit of sufficient amount and maturity for funding
any LIBOR Loans are not available to the Bank in the London
Interbank Eurodollar market in the ordinary course of business, or
(b) by reason of circumstances affecting the London Interbank
Eurodollar market, adequate and fair means do not exist for
ascertaining the rate of interest to be applicable to the relevant
LIBOR Loan, the Bank shall promptly notify the Undersigned and
such LIBOR shall automatically convert on the day of its
then-current Interest Period to a loan bearing interest at the
Floating Prime Rate.
(b) If, after the date hereof, the introduction of, or any change in
any applicable law, treaty, rule, regulation or guideline or in
the interpretation or administration thereof by any government
authority or any central bank or other fiscal, monetary or other
authority having jurisdiction over the Bank or its lending offices
(a "Regulatory Change"), shall, in the opinion of counsel to the
Bank, makes it unlawful for the Bank to make or maintain any LIBOR
Loan evidenced hereby, then the Bank shall promptly notify the
Undersigned and such LIBOR Loan shall automatically convert on the
last day of its then-current Interest Period to a loan bearing
interest at the Floating Prime Rate.
(c) If, for any reason, any LIBOR Loan is paid prior to the last
business day of its then-current Interest Period, the Undersigned
agrees to indemnify the Bank against any loss (including any loss
on redeployment of the funds repaid), cost or expense incurred by
the Bank as a result of such prepayment.
(d) If any Regulatory Change (whether or not having the force of law)
shall (a) impose, modify or deem applicable any assessment,
reserve, special deposit or similar requirement against assets
held by, or deposited in or for the account of or loans by, or any
other acquisition of funds or disbursements by, the Bank: (b)
subject the Bank or any LIBOR Loan to any tax, duty, charge, stamp
tax, or fee or change the basis of taxation of payment to the Bank
principle or interest due from the Undersigned to the Bank
hereunder (other than a change in taxation of the overall net
income of the Bank); or (c) impose on the Bank any other
conditions regarding such LIBOR Loan or the Bank's funding
thereof, and the Bank shall determine (which determination shall
be conclusive, absent manifest error) that the result of the
forgoing is to increase the cost to the Bank of making or
maintaining such LIBOR Loan or to reduce the amount of principle
or interest received by the Bank hereunder, then the Undersigned
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shall pay to the Bank, on demand and presentation of satisfactory
documentation therefor, such additional amounts as the Bank shall,
from time to time, determine are sufficient to compensate and
indemnify the Bank for such increased cost or reduced amount.
5. The Undersigned hereby authorizes the Bank to charge any account
of the Undersigned for all sums due hereunder. Principle payments
submitted in funds not available until collected shall continue to
bear interest until collected. If payment hereunder becomes due
and payable on a Saturday, Sunday or legal holiday under the law
of the United States or the State of Illinois, the due date
thereof shall be extended to the next succeeding business day, and
interest shall be payable thereon at the rate specified during
such extension.
6. The Note evidences a revolving line of credit under which the
Undersigned is indebted to the Bank and evidences the aggregate
unpaid principle amount of all advances made or to be made by the
Bank to the Undersigned under the Note. All advances and
repayments hereunder shall be evidenced by entries on the books
and records of the Bank which shall be presumptive evidence of the
principle amount and interest owing and unpaid on this Note, or
any renewal or extension hereof. The failure to so record any
such amount or any error so recording any such amount shall not,
however, limit or otherwise affect the obligations of the
Undersigned hereunder or under any not to repay the principle
amount of the liabilities together with all interest accruing
thereon. This Note may be used for direct advances or letter of
credit. Each letter of credit requested by the Undersigned shall
be subject to the terms and conditions of the Bank's standard
letter of credit application, which application is incorporated
herein by this reference. The amount available to the
Undersigned under this Note shall be reduced by the face amount of
all letters of credit issued and outstanding hereunder. All
letters of credit issued hereunder shall have an expiry date no
later than the maturity date of this Note. The Undersigned and
the Bank agree that each draw under any letter of credit shall
constitute, and shall be repaid by, a direct advance under this
Note on the date of such draw. Each letter of credit requested by
the Undersigned hereunder shall be issued by the Bank only after
the Bank has received a fully executed letter of credit
application on the Bank's standard form and the Bank's customary
fee for issuance of letters of credit.
7. Advances under this Note may be made by the Bank upon the written
request of any two (2) authorized officers of the Undersigned
whose authority to so act has not been revoked by the Undersigned
in writing theretofore received by the Bank at its main office.
Any such advances shall be conclusively presumed to have been made
by the Bank to or for the benefit of the Undersigned. The
Undersigned does hereby irrevocably confirm, ratify and approve
all such advances by the Bank and does hereby indemnify the Bank
against loss and reasonable expense (including court costs,
attorneys' and paralegals' fees) and shall hold the Bank harmless
with respect thereto.
8. The Undersigned shall be in default hereunder if: (a) any amount
payable on this and any and all other liabilities or obligations
of the Undersigned to the Bank, howsoever created, arising or
evidenced, whether now existing or hereafter arising, whether now
due or to become due, whether direct, indirect, absolute,
contingent, joint, several, or joint and several (all such
liabilities and obligations, including this Note, are hereinafter
referred to as the "Obligations") or on the obligations of any
obligor hereunder, it not paid within five (5) days or when due;
or (b) the Undersigned shall otherwise fail to perform any of the
promises to be performed by the Undersigned hereunder or under any
other security agreement or other agreement with the Bank and the
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same is not cured within thirty (30) days of notice thereof by the
Bank; or (c) the Undersigned, or any other party liable with
respect to the Obligations, or any guarantor or accommodation
endorser or third party pledgor, shall make any assignment for the
benefit of creditors, or there shall be commenced any bankruptcy,
receivership, insolvency, reorganization, dissolution or
liquidation proceedings by or against, or the entry of any
judgment, levy, garnishment, or other process (except for any
judgment, levy, attachment, garnishment or other process entered
pursuant to certain litigation instituted by John Marks, as
described in the Undersigned's 1997 proxy statement, as amended
from time to time), or the filing of any lien against the
Undersigned or any guarantor, or any other party liable with
respect to the Obligations, or accommodations endorser or third
party pledgor for any of the Obligations which has a material
adverse effect on such party; or (d) the determination by the Bank
that a material adverse change has occurred in the financial
condition of the Undersigned from the condition set forth in the
most recent financial statements of the Undersigned furnished to
the Bank, or from the financial condition of the Undersigned most
recently disclosed to the Bank in any matter and the same is not
cured within thirty (30) days of notice thereof by the Bank; or
(e) any oral or written warranty, representation, certificate or
statement of the Undersigned to the Bank is untrue in any material
respect; or (f) failure of the Undersigned, within thirty (30)
days after a request by the Bank, to furnish financial information
or to permit inspection by the Bank of the Undersigned's books and
records; or (g) the occurrence of any material adverse event which
causes a change in the financial condition of the Undersigned, or
which would have a material adverse effect on the business of the
Undersigned and the same is not cured within thirty (30) days
notice thereof by the Bank; provided, that any event relation to
the John Marks litigation as set forth in subsection (3) above
shall not be deemed to violate this subsection (g); or (h) the
Undersigned fails to have, at the end of each of its fiscal
quarters (1) a Tangible Net Worth of at least $35,000,000 or (2) a
ratio of Liabilities to Tangible Net Worth of no greater than
2.0:1.0 and a default of either (1) or (2) shall not be cured by
the Undersigned within thirty (30) days.
9. For purpose hereof, "Tangible Net Worth" shall mean the sum of
shareholders' equity plus debt subordinated to the Undersigned
liabilities to the Bank, minus intangibles, including, but not
limited to, goodwill, customer lists, prepaid items, deferred
charges, debts owed by officers and other affiliates and such
"Other Assets" as set forth on the financial statements of the
Undersigned, "Liabilities" shall mean all liabilities of the
Undersigned that would be shown on a balance sheet of the
Undersigned prepared in accordance with generally accepted
accounting principles consistently applied.
10. Whenever the Undersigned shall be in default as aforesaid, without
demand or notice of any kind except as set forth herein, the
entire unpaid amount of all Obligations shall become immediately
due and payable, and the Bank may exercise, from time to time, any
and all rights and remedies available to it under the Uniform
Commercial Code of Illinois, or otherwise, including those
available under any written instrument (in addition to this Note)
relating to any of the Obligations and may, without demand or
notice of any kind, appropriate and apply toward the payment of
such of the Obligations, whether matured or unmatured including
reasonable costs of collections and reasonable attorneys' and
paralegals' fees, and in such order of application as the Bank
may, from time to time, elect, balance, credits, deposits,
accounts or monies of the undersigned in possession, control or
custody of, or in transit of the Bank.
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11. THE UNDERSIGNED WAIVES THE BENEFIT OF ANY LAW THAT WOULD OTHERWISE
RESTRICT OR LIMIT THE BANK IN THE EXERCISE OF ITS RIGHTS, WHICH
HEREBY ACKNOWLEDGED, TO APPROPRIATE WITHOUT NOTICE, AT ANY TIME
HEREAFTER, ANY INDEBTNESS MATURED OR UNMATURED, OWING FROM THE
BANK TO THE UNDERSIGNED. THE BANK MAY, FROM TIME TO TIME, WITHOUT
DEMAND OR NOTICE OF ANY KIND, APPROPRIATE AND APPLY TOWARD THE
PAYMENT OF SUCH OF THE OBLIGATIONS, AND IN SUCH ORDER OF
APPLICATION, AS THE BANK MAY, FROM TIME TO TIME, ELECT ANY AND ALL
SUCH BALANCE, CREDITS, DEPOSITS, ACCOUNTS, MONIES, CASH
EQUIVALENTS AND OTHER ASSETS OF OR IN THE NAME OF THE UNDERSIGNED,
THEN OR THEREAFTER WITH THE BANK. THE UNDERSIGNED DOES HEREBY
ASSIGN AND TRANSFER TO THE BANK ANY AND ALL CASH, NEGOTIABLE
INSTRUMENTS, DOCUMENTS OF TITLE, CHATTEL PAPER, SECURITIES,
CERTIFICATES OF DEPOSIT, DEPOSIT ACCOUNTS, OTHER CASH EQUIVALENTS
AND OTHER ASSETS OF THE UNDERSIGNED IN THE POSSESSION OR CONTROL
OF THE BANK FOR ANY PURPOSE.
12. THE UNDERSIGNED WAIVES EVERY DEFENSE, CAUSE OF ACTION,
COUNTERCLAIM OR SET OFF WHICH THE UNDERSIGNED MAY NOT HAVE OR
HEREAFTER MAY HAVE TO ANY ACTION BY BANK IN ENFORCING THIS NOT OR
ANY OF THE OTHER OBLIGATIONS, RATIFIES AND CONFIRMS WHATEVER THE
BANK MAY DO PURSUANT TO THE TERMS HEREOF AND AGREES THAT THE BANK
SHALL NOT BE LIABLE FOR ANY ERROR OF JUDGEMENT OR MISTAKE OF FACT
OR LAW EXCEPT FOR THOSE ERRORS OR MISTAKES WHICH RESULT FROM THE
BANK'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. THE BANK AND THE
UNDERSIGNED, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
IRREVOCABLY THE RIGHT EITHER MAY HAVE TO TRAIL BY JURY WITH
RESPECT TO ANY LEGAL PROCEEDING BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OF THE OTHER
OBLIGATIONS, OR ANY AGREEMENT, EXECUTED OR CONTEMPLATED TO BE
EXECUTED IN CONJUNCTION HEREWITH OR ANY COURSE OF CONDUCT OR
COURSE OF DEALING IN WHICH THE BANK AND THE UNDERSIGNED ARE
ADVERSE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
BANK GRANTING ANY FINANCIAL ACCOMMODATIONS TO THE UNDERSIGNED.
13. The Undersigned, and any other party liable with respect to the
Obligations, including any guarantors, and any and all endorsers
and accommodation parties, and each one of them, waive any and all
presentment, demand, notice of dishonor, protest, and all other
notices and demands in connection with the enforcement of the
Bank's right hereunder, and hereby consent to, and waive notice of
release, with or without consideration, of the Undersigned. No
default shall be waived by the Bank except in writing. No delay
on the part of the Bank in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial
exercise by the bank of any right or remedy shall preclude other
or further exercise thereof, or the exercise of any other right or
remedy. This Note: (i) is valid, binding and enforceable in
accordance with its provisions, and no conditions exist to the
legal effectiveness of this Note; (ii) contains the entire
agreement between the Undersigned and the Bank; (iii) is the final
expression of the intention of the Undersigned and the Bank; and
(iv) superseded all negotiations, representations, warranties,
commitments, offers, contracts (of any kind of nature, whether
oral or written) prior to or contemporaneous with the execution
hereof. No prior or contemporaneous representation, warranties,
understandings, offers or agreements of any kind or nature,
whether oral or written, have been made by the Bank or relied upon
by the Undersigned is connection with the execution hereof. No
modifications, discharge, termination or waiver of any of the
provisions hereof shall be binding upon the Bank, except as
expressly set forth in a writing duly signed and delivered on
behalf of the Bank.
14. The Undersigned agrees to pay all reasonable costs, legal
expenses, attorneys' fees and paralegals' fees of every kind, paid
or incurred by the Bank in enforcing its rights hereunder,
including, but not limited to, litigation or proceedings initiated
under the United States Bankruptcy Code, or in respect to any
other of the Obligations, or in defending against any defense,
cause of action, counterclaim, set off or crossclaim based on any
act of commission or omission by the Bank with respect to this
Note or any other of the Obligations, promptly on demand of the
Bank or other person paying or incurring the same.
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15. TO INDUCE THE BANK TO MAKE THE LOAN EVIDENCED BY THIS NOTE, THE
UNDERSIGNED IRREVOCABLY AGREES THAT ALL ACTIONS ARISING DIRECTLY
OR INDIRECTLY AS A RESULT OR IN CONSEQUENCE OF THIS NOTE OR ANY
OTHER AGREEMENT WITH THE BANK SHALL BE INSTITUTED AND LITIGATION
ONLY IN COURTS HAVING SITUS IN THE CITY OF CHICAGO, ILLINOIS, AND
THE UNDERSIGNED HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION AND
VENUE OF ANY STATE OR FEDERAL COURT LOCATED AND HAVING ITS SITUS
IN SAID CITY, AND WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS. THE UNDERSIGNED HEREBY WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS, AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY
BE MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO
THE UNDERSIGNED AT THE ADDRESS INDICATED IN THE BANK'S RECORDS IN
THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF COURT OF
OTHERWISE.
16. The loan evidenced hereby has been made and this Note has been
delivered at the Bank's main office. This Note shall be governed
and construed in accordance with the laws of the State of
Illinois, in which state it shall be performed, and shall be
binding upon the Undersigned and its successors and assigns. If
this Note contains any blanks when executed by the Undersigned,
the Bank is hereby authorized, without notice to the Undersigned,
to complete any such blanks according to the terms upon which the
loan or loans were granted. Wherever possible, each provision of
the Note shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Note
shall be prohibited by or be invalid under such law, such
provision shall be severable, and be deemed ineffective to the
extent of such prohibition or invalidity without invalidating the
remaining provisions of this Note. If more than one party shall
execute this Note, the term "Undersigned" as used herein shall
mean all parties signed this Note and their respective successors
and assigns, and such parties shall, as the case may be, be
jointly and severally obligated hereunder.
17. The Undersigned represents and warrants to the Bank that the
execution and delivery of this Note has been duly authorized by
resolution heretofore adopted by its Board of Directors and in
accordance with law and its bylaws, that said resolution have not
been amended or rescinded are in full force and effect and that
the officer or officers executing and delivering this Note for and
on behalf of the Undersigned are duly authorized so to act. The
Bank, in extending financial accommodations to the Undersigned, is
expressly acting and relying upon the aforesaid representations
and warranties.
18. The undersigned acknowledges and agrees that the lending
relationship hereby created with the Bank is and has been
conducted on an open and arm's length basis in which no fiduciary
relationship exists and that the Undersigned has not relied and is
not relying on any such fiduciary relationship in consummating the
loan evidence by this Note.
19. As used herein, all provisions shall include the masculine,
feminine, neuter, singular and plural thereof, wherever the
context and facts require such construction and in particular the
word "Undersigned" shall be so construed.
20. This Note is in replacement and substitution for, but not a
repayment of, that certain $15,000,000 Revolving Note dated June
30, 1996 of the Undersigned payable to the order of the Bank and
does not and shall not be deemed to constitute a novation
therefor.
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IN WITNESS WHEREOF, the Undersigned has executed this Note on the date
above set forth.
CDW COMPUTER CENTERS, INC.
By /s/ Michael P. Krasny
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Name: Michael P. Krasny
Title: Chairman & Chief Executive
Officer
By /s/ Harry J. Harczak, Jr.
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Name: Harry J. Harczak, Jr.
Title: Chief Financial Officer
HJM:mm
July 14, 1997
67315-1
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