CONSENT AND WAIVER
This Consent and Waiver, dated as of June 20, 2000 (this "Consent"),
relating to the Credit Agreement referenced below is entered into by and among
Policy Management Systems Corporation, a South Carolina corporation (the
"Borrower"), the Subsidiaries of the Borrower parties hereto (the "Guarantors"),
the financial institutions parties hereto (collectively, the "Banks";
individually, a "Bank") and Bank of America, N.A. (formerly known as Bank of
America National Trust and Savings Association), as Agent (the "Agent").
RECITALS
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The Borrower, the Guarantors, the Agent and the Banks are parties to a Term
Loan Agreement dated as of November 5, 1999, as amended by a First Amendment to
Term Loan Agreement dated as of February 10, 2000, a Second Amendment to Term
Loan Agreement dated as of March 30, 2000 and a Third Amendment to Term Loan
Agreement dated as of April 24, 2000 (the "Credit Agreement") pursuant to which
the Banks extended a term loan. Capitalized terms used and not otherwise
defined in this Consent shall have the meanings respectively assigned to them in
the Credit Agreement.
The Borrower has requested that the Banks provide a consent and waiver
under the Credit Agreement and the Banks have agreed to do so, all upon the
terms and provisions and subject to the conditions hereinafter set forth.
AGREEMENT
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In consideration of the foregoing and the mutual covenants and agreement
hereinafter set forth, the parties hereto mutually agree as follows:
1. . Pursuant to a Consent and Waiver dated as of June 19, 2000,
the Banks consented to and waived any Default or Event of Default under Section
2.9(c) of the Credit Agreement arising from the Borrower's incurrence of
subordinate indebtedness to CSC (as defined herein) in an aggregate principal
amount of up to $24,000,000 (the "Subordinated Fee Loan") and the Borrower's use
of the proceeds of such Subordinated Fee Loan to pay the fee (together with
related expenses of both Politic Acquisition Corp. and Welsh Xxxxxx Xxxxxxxx &
Xxxxx VIII) to Welsh Xxxxxx Xxxxxxxx & Xxxxx, X.X. or Politic Acquisition Corp.
(or its designated beneficiary) as required under the Amended and Restated
Agreement and Plan of Merger between Politic Acquisition Corp. and the Borrower.
Additionally, the Borrower has informed the Banks that it intends to incur
additional indebtedness in the form of a working capital revolving line of
credit established by Computer Sciences Corporation ("CSC") in connection with
the merger agreement between CSC and the Borrower for an aggregate amount of up
to $30,000,000, which will be subordinate to the indebtedness owing under the
Credit Agreement (the "Term Loan") and the Senior Bank Facility on terms similar
to those of the Subordinated Fee Loan and in all respects acceptable to the
Agent (the "Subordinated Working Capital Loan"). The Borrower has further
requested that the Banks pre-consent to the possible future issuance of
additional subordinated indebtedness by the Borrower to a prospective buyer (the
"Replacement Subordinated Loans"), which Replacement Subordinated Loans would
refinance and replace the Subordinated Fee Loan and the Subordinated Working
Capital Loan in full.
As the use of the proceeds of the Subordinated Working Capital Loan for
working capital purposes and the payment and the refinancing of the Subordinated
Fee Loan and the Subordinated Working Capital Loan with the proceeds of the
Replacement Subordinated Loans by the Borrower would otherwise violate the
provisions of Section 2.9(c) of the Credit Agreement, which requires that the
Borrower apply 100% of the net cash proceeds of any issuance of debt securities
for cash to prepay the Term Loan and, to the extent of any excess, to prepay and
reduce the revolving credit facility under the Senior Bank Facility, the Banks,
effective as of the date hereof, hereby (a) consent to the use of proceeds of
the Subordinated Working Capital Loan for working capital purposes of the
Borrower, (b) consent to the future payment of the Subordinated Fee Loan and the
Subordinated Working Capital Loan with the proceeds of the Replacement
Subordinated Loans, and (c) grant a limited one-time waiver of any Default or
Event of Default that, at such time, otherwise arise pursuant to Section 2.9(c)
as a result of the non-prepayment of the Term Loan and, to the extent of any
excess, to prepay and reduce the revolving credit facility under the Senior Bank
Facility, provided that (A) in the case of the use of proceeds of the
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Subordinated Working Capital Loan, such Subordinated Working Capital Loan shall
be subordinated to the indebtedness owing under the Credit Agreement and the
Senior Bank Facility on terms and conditions and pursuant to documentation
satisfactory in all respects to the Agent, and (B) in the case of the use of
proceeds of the Replacement Subordinated Loans to refinance the Subordinated Fee
Loan and the Subordinated Working Capital Loan, (i) the Replacement Subordinated
Loans refinance the Subordinated Fee Loan and the Subordinated Working Capital
Loan in full, (ii) the Replacement Subordinated Loans are subordinated to the
indebtedness owing under the Credit Agreement and the Senior Bank Facility on
terms and conditions substantively similar to the terms applicable to the
Subordinated Fee Loan and the Subordinated Working Capital Loan and in all
respects acceptable to the Agent; and (iii) the Replacement Subordinated Loans
are in the same aggregate amount as the Subordinated Fee Loan and the
Subordinated Working Capital Loan.
2. The Borrower and the Guarantors hereby represent and warrant to the
Agent and Banks that (i) after giving effect to this Consent, no Default or
Event of Default has occurred and is continuing; (ii) after giving effect to
this Consent, the representations and warranties of the Borrower and the
Guarantors pursuant to the Credit Agreement are true on and as of the date
hereof as if made on and as of said date; and (iii) the making and performance
by the Borrower and the Guarantors of this Consent have been duly authorized by
all necessary corporate action.
3. This Consent may be signed in any number of counterparts, each of
which shall be an original, with same effect as if the signatures thereto and
hereto were upon the same instrument.
4. Except as herein specifically amended, all terms, covenants and
provisions of the Credit Agreement shall remain in full force and effect and
shall be performed by the parties hereto according to its terms and provisions
and all references therein or in the Exhibits shall henceforth refer to the
Credit Agreement as modified by this Consent.
5. This Consent shall be governed by and construed in accordance with
the laws of the State of New York.
6. The parties hereto agree that Policy Management Systems Investments,
Inc. shall execute this Consent by or on June 28, 2000 and the failure by them
to so execute this Consent by such date shall be an Event of Default under the
Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Consent as of the date first written.
BORROWER: POLICY MANAGEMENT SYSTEMS
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CORPORATION
By:_/S/ Xxxxxxx X. Xxxxxxxx
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Title: Executive Vice President
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and General Counsel
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GUARANTORS: MYND CORPORATION F/K/A CYBERTEK
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CORPORATION
MYND INTERNATIONAL, LTD.
MYND PARTNERS, L.P. F/K/A CYBERTEK
SOLUTIONS, L.P.
By: POLICY MANAGEMENT
SYSTEMS CORPORATION, its General
Partner
MYND CORPORATION F/K/A XXXX
TECHNOLOGY GROUP, INC.
MYND CORPORATION F/K/A THE
LEVERAGE GROUP, INC.
SOFTWARE SERVICES HOLDING, INC.
By: /S/ Xxxxxxx X. Xxxxxxxx
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Title: Secretary
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POLICY MANAGEMENT SYSTEMS
INVESTMENTS, INC.
By: /S/ Xxxxxxxxx Xxxxxx
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Title: President
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BANKS: BANK OF AMERICA, N.A.
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By:/S/ Xxxxxxx X. XxXxxxxx
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Title: Managing Director
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WACHOVIA BANK, N.A.
By: /S/ Xxxx X. Xxxxxx
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Title: Assistant Vice President
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FIRST UNION NATIONAL BANK
By:/S/ Xxxxxxxx X. Wesssinger
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Title: Senior Vice President
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