REPLACEMENT REVOLVING NOTE
$25,000,000 Dated as of June 28, 2000
Due: June 28, 2001
On or before June 28, 2001, CDW COMPUTER CENTERS, INC. (the
"Undersigned"), for value received, promises to pay to the order of LASALLE BANK
NATIONAL ASSOCIATION, formerly known as 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
principal sum of Twenty Five Million and 00/100 Dollars ($25,000,000) or if
less, the aggregate unpaid principal amount of all loans made by the Bank to the
Undersigned hereunder (this "Note"). The unpaid principal 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 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 borrowings 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, or (B) the Federal Funds Rate plus
one-half of one percent (+ 1/2%) per annum, for borrowings 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 quotations 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 or 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 it
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 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.
2. Interest on that portion of the outstanding principal amount hereof
bearing interest at the Prime Rate shall be payable from the date hereof on such
aggregate unpaid principal amount on the last day of each month, commencing on
June 30, 2000, and at maturity hereof. Interest on LIBOR borrowings 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 principal 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 deposits of sufficient amount and maturity for
funding any LIBOR Loan 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 Loan shall automatically convert on the last 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 governmental authority or any central bank or
other fiscal, monetary or other authority having jurisdiction over the Bank or
its lending office (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 deposits 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 payments to the Bank of principal 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 condition 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 foregoing is to increase the cost to the Bank of
making or maintaining such LIBOR Loan or to reduce the amount of principal or
interest received by the Bank hereunder, then the Undersigned 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. Principal 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 laws 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. This Note evidences a revolving line of credit under which the
Undersigned is indebted to the Bank and evidences the aggregate unpaid principal
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
principal 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 principal
amount of the liabilities together with all interest accruing thereon. This Note
may be used for direct advances or letters 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 June 28, 2001. 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 fees 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 expenses (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 of 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 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, attachment,
garnishment or other process, or the filing of any lien against the Undersigned
or any guarantor, or any other party liable with respect to the Obligations, or
accommodation 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
statement of the Undersigned furnished to the Bank, or from the financial
condition of the Undersigned most recently disclosed to the Bank in any manner
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;; or (h) the
Undersigned fails to have, at the end of each of its fiscal quarters (1) a
Tangible Net Worth of at least $100,000,000, 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 purposes hereof, "Tangible Net Worth" shall mean the sum of
shareholders' equity plus debt subordinated to the Undersigned's 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 collection and reasonable
attorneys' and paralegals' fees, and in such order of application as the Bank
may, from time to time, elect, any balances, credits, deposits, accounts or
monies of the Undersigned in possession, control or custody of, or in transit to
the Bank.
11. THE UNDERSIGNED WAIVES THE BENEFIT OF ANY LAW THAT WOULD OTHERWISE
RESTRICT OR LIMIT THE BANK IN THE EXERCISE OF ITS RIGHTS, WHICH IS HEREBY
ACKNOWLEDGED, TO APPROPRIATE WITHOUT NOTICE, AT ANY TIME FOLLOWING DEFAULT
(AFTER GIVING EFFECT TO APPLICABLE GRACE OR CURE PERIODS, IF ANY), ANY
INDEBTEDNESS 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
BALANCES, CREDITS, DEPOSITS, ACCOUNTS, MONIES, CASH EQUIVALENTS AND OTHER ASSETS
OF OR IN THE NAME OF THE UNDERSIGNED, THEN OR THEREAFTER WITH THE BANK.
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 NOTE OR ANY OF THE OTHER OBLIGATIONS, RATIFIES
AND CONFIRMS WHATEVER THE BANK MAY DO PURSUANT TO THE TERMS HEREOF AND AGREES
THAT BANK SHALL NOT BE LIABLE FOR ANY ERROR OF JUDGMENT OR MISTAKES 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
TRIAL 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 ACCOMMODATION 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 intentions of the
Undersigned and the Bank; and (iv) supersedes all negotiations, representations,
warranties, commitments, offers, contracts (of any kind or nature, whether or al
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 in connection with the execution hereof. No
modification, 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, reasonable
legal expenses, reasonable 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.
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 LITIGATED 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 this 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 signing this Note and their respective successors
and assigns, and such parties shall, as the case may be, be jointly and
severally obligated hereunder.
<PAGE>
17. The Undersigned represents and warrants to the Bank that the
execution and delivery of this Note has been duly authorized by resolutions
heretofore adopted by its Board of Directors and in accordance with law and its
bylaws, that said resolutions 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 exits and that the
Undersigned has not relied and is not relying on any such fiduciary relationship
in consummating the loan evidenced 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. The Undersigned has reviewed the areas within its business and
operations which could be adversely affected by, and has developed or is
developing a program to address on a timely basis, the "Year 2000 Problem" (that
is, the risk that computer applications used by the Undersigned may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999), and has made related appropriate
inquiry of material suppliers and vendors. Based on such review and program, the
Undersigned believes that the Year 2000 Problem will not have a material adverse
effect on the Undersigned. Upon the request of the Bank from time to time, the
Undersigned shall provide the Bank with such updated information or
documentation as the Bank may request indicating the status of its efforts to
resolve the Year 2000 Problem.
21. This Note is in replacement and substitution for, but not a
repayment of, that certain $25,000,000 Revolving Note dated as of June 28, 1999
of the Undersigned payable to the order of the Bank and does not and shall not
be deemed to constitute a novation therefor.
IN WITNESS WHEREOF, the Undersigned has executed this Note on the date
above set forth.
CDW COMPUTER CENTERS, INC.
By: _______________________________
Name: Michael P. Krasny
Title: Chairman & Chief Executive Officer
By: _______________________________
Name: Harry J. Harczak, Jr.
Title: Chief Financial Officer
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