CONSENT AND WAIVER
This Consent and Waiver, dated as of July 14, 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 (i) a Consent, Waiver and Amendment 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) (collectively, "WCAS") as required under the
Amended and Restated Agreement and Plan of Merger between Politic Acquisition
Corp. and the Borrower and (ii) a Consent and Waiver dated as of June 20, 2000,
the Banks also consented to and waived any Default or Event of Default under
Section 2.9(c) of the Credit Agreement arising from (a) the Borrower's possible
incurrence of additional subordinated indebtedness to CSC (as defined herein) 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 is
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") and (b) 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.
The Borrower has requested that the Banks consent to (i) the incurrence by
the Borrower of additional indebtedness in an aggregate principal amount of up
to $29,000,000 ("New Subordinated
Debt") the proceeds of which will be used to pay (A) the fee to CSC (or its
designated beneficiary) in connection with the termination by the Borrower of
the merger agreement with CSC, (B) the related expenses of CSC in connection
with the termination by the Borrower of the merger agreement with CSC and (C)
the related expenses of WCAS in connection with the termination by the Borrower
of the merger agreement with WCAS (such amounts hereinafter collectively
referred to as the "Break up Fee") and (ii) the incurrence by the Borrower of
additional subordinated indebtedness in an aggregate principal amount of up to
$30,000,000 ("New Subordinated Working Capital Loan") the proceeds of which will
be used (A) to the extent outstanding, to refinance the Subordinated Working
Capital Loan in full and/or (B) for general working capital purposes.
As the use of the proceeds of the New Subordinated Debt to pay the Break-up
Fee and the New Subordinated Working Capital Loan to refinance the Subordinated
Working Capital Loan and/or for general working capital purposes 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, the Banks, effective as of the date
hereof, hereby (i) consent to the use of proceeds of the New Subordinated Debt
to pay the Break up Fee and consent to the use of proceeds of the New
Subordinated Working Capital Loan (A) to the extent outstanding, to refinance
the Subordinated Working Capital Loan and/or (B) for general working capital
purposes and (ii) 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, provided that such New
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Subordinated Debt and such New 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.
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 August 2, 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/ G. Xxxxx Xxxxxx
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Title: Chief Executive Officer
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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/ G. Xxxxx Xxxxxx
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Title: Director
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POLICY MANAGEMENT SYSTEMS
INVESTMENTS, INC.
By:Xxxxxxxxx X. Xxxxxx
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Title: President
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BANKS: BANK OF AMERICA, N.A.
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By:_/S/__John 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. Xxxxxxxxx
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Title: Senior Vice President
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