WELSH, CARSON, XXXXXXXX & XXXXX VII, L.P.
WCAS CAPITAL PARTNERS III, L.P.
July 8, 1997
CDSI Holding Corporation
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, X.X. 00000
Control Data Systems, Inc.
--------------------------
Dear Sirs:
We refer to the Agreement and Plan of Merger dated as of the
date hereof (the "Merger Agreement") among CDSI Holding Corporation, a Delaware
corporation ("Holding"), CDSI Acquisition Corp., a Delaware corporation
("Acquisition"), and Control Data Systems, Inc., a Delaware corporation (the
"Company"), providing for a tender offer by Acquisition for all the issued and
outstanding capital stock of the Company and the subsequent merger of
Acquisition with and into the Company. Terms used herein which are defined in
the Merger Agreement and not otherwise defined herein shall have the respective
meanings assigned to them therein. The undersigned, Welsh, Carson, Xxxxxxxx &
Xxxxx VII, L.P., a Delaware limited partnership ("WCAS VII"), is the sole
stockholder of Holding, and Acquisition is a wholly-owned subsidiary of Holding.
The undersigned WCAS Capital Partners III, L.P., a Delaware corporation ("WCAS
CP III" and, collectively with WCAS VII, the Partnerships) is under common
control with WCAS VII.
This will confirm our agreement that, (i) subject to
satisfaction of the Minimum Condition and the other conditions set forth in
Annex I to the Merger Agreement, the Partnerships will provide (or cause to be
provided) cash financing to Holding, for transfer to Acquisition, in an amount
sufficient to permit Acquisition to purchase and pay for all Shares tendered in
the Offer, and (ii) subject to satisfaction of the conditions to the obligations
of Holding and Acquisition contained in Section 7.01 of the Merger Agreement,
the Partnerships will provide (or cause to be provided) cash financing to
Holding in an amount sufficient to permit it to convert the Shares (other than
Shares then held by Acquisition) to cash in the Merger, in each case up to the
maximum amount of financing for each Partnership hereinbelow provided.
The form of the securities to be acquired by the Partnerships
in connection with such financing shall be determined by the Partnerships and
CDSI in their discretion, subject to compliance with applicable laws, but the
amount of financing so provided (or caused to be provided) by WCAS VII shall not
exceed $200 million, and the amount so provided (or caused to be provided) by
WCAS CP III shall not exceed $100 million. The obligation of the Partnerships to
provide (or cause to be provided) such financing shall be several and not joint,
but no failure by one Partnership shall relieve the other of its obligations
hereunder. In the event that WCAS VII or WCAS CP III shall arrange for other
parties to provide a portion of the financing committed for by it hereunder, any
such arrangement shall not relieve such Partnership from its obligations
hereunder, subject only to the conditions hereinbefore stated, to provide (or
cause to be provided) such financing.
This letter is intended to be for the benefit of the Company,
and may be enforced by the Company as a third-party beneficiary. This letter
shall be governed by and construed in accordance with the laws of the State of
New York.
Very truly yours,
WELSH, CARSON, XXXXXXXX & XXXXX
VII, L.P.
By WCAS VII PARTNERS, L.P., General
Partner
By /s/ Xxxxxx X. XxXxxxxxx
------------------------------------------
General Partner
WCAS CAPITAL PARTNERS III, L.P.
By WCAS CP III ASSOCIATES L.L.C.,
General Partner
By /s/ Xxxxxx X. XxXxxxxxx
------------------------------------------
Managing Member
