POLICY MANAGEMENT SYSTEMS CORPORATION
PROMISSORY NOTE
$19,000,000 June 20, 0000
Xx Xxxxxxx, Xxxxxxxxxx
PAYMENT WITH RESPECT TO THIS NOTE IS SUBJECT TO A SUBORDINATION AGREEMENT (THE
"SUBORDINATION AGREEMENT"), DATED AS OF THE DATE HEREOF AMONG THE MAKER, THE
LENDER, AND BANK OF AMERICA, N.A., AS AGENT, AND EACH HOLDER OF THIS NOTE, BY
ITS ACCEPTANCE HEREOF SHALL BE BOUND BY THE PROVISIONS OF THE SUBORDINATION
AGREEMENT.
FOR VALUE RECEIVED, the undersigned, POLICY MANAGEMENT SYSTEMS CORPORATION,
a South Carolina corporation ("MAKER"), hereby promises to pay to the order of
COMPUTER SCIENCES CORPORATION, a Nevada corporation ("LENDER"), at such address
as Lender may specify and in accordance with the terms of this Promissory Note
(this "NOTE"), the principal amount of NINETEEN MILLION DOLLARS
($19,000,000.00), together with all accrued and unpaid interest (the "LOAN").
1. INTEREST. Interest will accrue on the unpaid principal balance of
the Loan, from the date of issue until such date that the Loan has been entirely
repaid or converted, at a simple rate per annum equal to the lesser of (a) the
London Inter-Bank Offered Rate, adjusted for reserve requirements, for three
month U.S. Dollar deposits, as quoted by Bank of America, N.A., plus two and
three quarters percent (275 basis points) or (b) the maximum rate permitted by
applicable law. Interest shall not be due and payable until the date set forth
in Section 2 below.
2. REPAYMENT OF LOAN. The entire principal balance of the Loan,
together with all interest accrued thereon, will become immediately due and
payable upon the earlier to occur of any of the following:
(i) July 3, 2001; or
(ii) Only to the extent permitted by the terms of the
subordination agreement by and among Lender, Maker and Bank of America, N.A. as
agent for the Senior Lenders (as defined therein) (the "Subordination
Agreement"), immediately prior to the occurrence of the "Event of Default" as
described and defined in Section 6.1(k) of the Credit Agreements (as the term
"Credit Agreements" is defined in the Subordination Agreement); or
(iii) Subject to the terms of the Subordination Agreement, upon
acceleration of this Note after the occurrence of any Event of Default (as
defined below).
3. DEFAULT AND ACCELERATION.
(a) Event of Default. "EVENT OF DEFAULT" means the occurrence
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of any of the following:
(i) the failure of Maker to punctually and faithfully
observe or perform any of the other covenants, conditions or obligations imposed
upon Maker by this Note, which failure is not remedied within 10 business days
following written notice thereof from Lender;
(ii) there is an assignment by Maker for the benefit of
creditors or a composition with creditors;
(iii) Maker petitions or applies to any tribunal for, or
consents to the appointment of, or the taking of possession by, a trustee,
receiver, custodian, liquidator or similar official of any substantial amount
of its assets, or commences any proceedings under any bankruptcy,reorganization,
arrangement, insolvency, readjustment of debt, dissolution or other liquidation
law of any jurisdiction;
(iv) an order for relief is entered in an involuntary
case under the bankruptcy laws of the United States, or an order, judgment or
decree is entered appointing a trustee, receiver, custodian, liquidator or
similar official or adjudicating Maker bankrupt or insolvent, or ordering or
approving Maker's liquidation or reorganization, or any significant modification
of the rights of its creditors or approving the petition in any such
proceedings, and such order, judgment or decree remains in effect for 5 business
days; or any involuntary petition or complaint is filed against Maker under the
bankruptcy laws of the United States seeking the appointment of a trustee,
receiver, custodian, liquidator or similar official, and such petition or
complaint has not been dismissed within 10 business days of the filing thereof;
or
(v) there is levied any writ of execution or other
judicial process upon any material portion of the property of Maker not released
within 5 business days thereafter.
(b) Acceleration. Subject to the terms of the Subordination
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Agreement in the event any Event of Default has occurred and is continuing,
Lender may declare the unpaid balance of the Loan immediately due and payable,
whereupon this Note will forthwith mature and become due and payable without
presentment, demand, protest or other notice, all of which are hereby waived,
and Lender may proceed to protect and enforce its rights by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any obligation herein contained, or for an injunction against a
violation of any of the terms or provisions hereof, or in aid of the exercise of
any power granted hereby or by equity or at law; provided, however, that upon
the occurrence of any Event of Default described in Section 3(a)(ii), (iii),
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(iv) or (v), the unpaid balance of the Loan will automatically become due and
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payable without any action by Lender.
(c) Expenses. In the event any Event of Default has occurred,
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Maker shall pay to Lender such additional amount as will be sufficient to cover
the actual costs and expenses of enforcement and collection, including without
limitation, actual attorneys' fees, expenses and disbursements.
4. MISCELLANEOUS.
(a) Good Faith Best Efforts. Maker shall not take any action for
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the purpose of avoiding or seeking to avoid the observance or performance of any
of the terms to be observed or performed hereunder by Maker. Maker shall at all
times in good faith use its best efforts in carrying out all such action as may
be necessary or appropriate in order to make effective the transactions
contemplated by this Note.
(b) Amendment and Waiver. This Note may not be modified or
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amended, and the observance of any term of this Note may not be waived (either
generally or in a particular instance and either retroactively or prospectively)
, without the prior written consent of the Lender and the Senior Lenders.
(c) Rights, Powers, Privileges and Remedies. No delay or
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omission on the part of Lender in exercising any right, power or privilege
hereunder will operate as a waiver thereof, nor will any waiver or omission on
the part of Lender of any right, power or privilege hereunder operate as waiver
of any other right, power or privilege hereunder nor will any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege hereunder. All remedies, either under this Note or at law or otherwise
afforded to Lender, will be cumulative.
(d) Governing Law. This Note will be construed in accordance
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with, and the rights of the parties hereto will be governed by, the internal
laws of the State of California.
(e) Successors and Assigns. This Note will be binding upon and
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inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Neither this Note nor any of the rights, interests or
obligations hereunder may be assigned, by operation of law or otherwise, in
whole or in part by Maker to any person or entity without the prior written
consent of Lender.
(f) Replacement Notes. Upon receipt of evidence satisfactory to
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Maker of the loss, theft, destruction or mutilation of this Note, Maker shall
issue a new Note of like tenor in lieu of such lost, stolen, destroyed or
mutilated Note.
(g) Notices. All notices and other communications required or
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permitted hereunder will be in writing and will be delivered by facsimile,
courier or nationally-recognized overnight delivery service addressed as
follows:
if to Lender: With copies to:
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Computer Sciences Corporation Xxxxxx X. Xxxxx
0000 X. Xxxxx Xxxxxx Xxxxxx, Xxxx & Xxxxxxxx LLP
Xx Xxxxxxx, XX 00000 0 Xxxx Xxxxx, Xxxxx 0000
Telecopy: (000) 000-0000 Xxxxxx, XX 00000
Attention: Chief Financial Officer Telecopy: (000) 000-0000
if to Maker: with copies to:
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Policy Management Systems Xxxxx Xxxxxxxxxx LLP
Corporation 1301 Avenue of the Americas
Xxx XXXX Xxxxxx Xxx Xxxx, Xxx Xxxx 00000-0000
Xxxxxxxx, XX 00000 Telecopy: (000) 000-0000
Telecopy: (000) 000-0000 Attention: Xxxxxxx X. Xxxxx
Attention: President
IN WITNESS WHEREOF, this Note has been duly executed and delivered as
Of the date first above written.
MAKER:
POLICY MANAGEMENT SYSTEMS
CORPORATION
a South Carolina corporation
By: /S/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
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Title: Exec. Vice President and General Counsel
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