WELSH, CARSON, XXXXXXXX & XXXXX VIII, L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
As of March 30, 2000
Politic Acquisition Corp.
c/o Welsh, Carson, Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Reference is made to the Agreement and Plan of Merger, dated as of the
date hereof (the "Merger Agreement"), between Policy Management Systems
Corporation, a South Carolina corporation (the "Company"), and Politic
Acquisition Corp., a South Carolina corporation ("Acquisition"). Capitalized
terms used and not otherwise defined herein have the meanings ascribed to them
in the Merger Agreement.
We agree that, at the Effective Time, subject to the satisfaction or
waiver (with our consent) of each of the conditions precedent set forth in
Sections 6.01 and 6.02 of the Merger Agreement, Acquisition will be capitalized
with common equity in an aggregate amount of between $339.7 million and $429.4
million or between 24,261,429 shares and 30,671,429 shares from Welsh, Carson,
Xxxxxxxx & Xxxxx VIII, L.P. ("WCAS VIII") and certain affiliated investors
(together with WCAS VIII, the "Investors"). The equity commitment of the
Investors will increase proportionately above $339.7 million to the extent the
Company's shareholders elect to retain more than the minimum number of retained
shares specified by the Merger Agreement. The proceeds of such investment will
be used by Acquisition to consummate the Merger and related transactions as set
forth in the Merger Agree-ment and to provide additional equity capital for the
future working capital needs and general corporate purposes of the Surviving
Corporation and the Subsidiaries. The Investors will be under no obligation
under any circumstances to capitalize Acquisition with aggregate equity of
more than $429.4 million. At the time of, and subject to, the consummation of
the Merger, WCA Management Corporation or another designee of WCAS VIII shall be
entitled to receive from the Surviving Corporation a financing fee equal to
1.25% of the total equity and debt financing provided by WCAS VIII and its
affiliated entities and persons.
Notwithstanding anything that may be expressed or implied in this
letter agreement, the Company, by its acceptance of the benefits hereof,
covenants, agrees and acknowledges that, no person other than WCAS VIII shall
have any obligation hereunder and that, notwithstanding that WCAS VIII and
certain of the other Investors are partnerships, no recourse hereunder or under
any documents or instruments delivered in connection herewith shall be had
against any current or future officer, agent or employee of WCAS VIII or of any
other Investor, against any current or future general or limited partner of WCAS
VIII or of any other Investor or against any current or future director,
officer, employee, general or limited partner, member, affiliate or assignee of
any of the foregoing, whether by the enforcement of any assessment or by any
legal or equitable proceeding, or by virtue of any statute, regulation or other
applicable law, it being expressly agreed and acknowledged that no personal
liability whatsoever shall attach to, be imposed on or otherwise be incurred by
any current or future officer, agent or employee of WCAS VIII or of any other
Investor or any current or future general or limited partner of WCAS VIII or of
any Investor or any current or future director, officer, employee, general or
limited partner, member, affiliate or assignee of any of the foregoing, as such
for any obligations of WCAS VIII or of any Investor under this letter agreement
or any documents or instruments delivered in connection herewith or for any
claim based on, in respect of or by reason of such obligations or their
creation.
Very truly yours,
WELSH, CARSON, XXXXXXXX &
XXXXX VIII, L.P.
By WCAS VIII Associates LLC,
General Partner
By /s/ Xxxxxx X. XxXxxxxxx
-----------------------------
Managing Member
