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10697v7
10697v7
FIRST AMENDMENT TO CREDIT AGREEMENT
This Amendment, dated as of November 5, 1999 (this "Amendment") is entered
into by and among Policy Management Systems Corporation, a South Carolina
corporation (the "Company"), the financial institutions parties to this
Agreement (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 Company, the Agent and the Banks are parties to a Credit Agreement
dated as of August 8, 1997 (the "Credit Agreement") pursuant to which the Banks
extended a revolving facility. Capitalized terms used and not otherwise defined
or amended in this Amendment shall have the meanings respectively assigned to
them in the Credit Agreement.
The Company has requested that the Banks modify the Credit Agreement to
take into account certain restriction changes along with certain other
modifications. In order to induce the Banks to agree to the foregoing, the Banks
have requested, and the Company has agreed, that the Company will provide
certain information, pay an amendment fee and modify certain other covenants.
The Company has requested that the Banks enter into this Amendment in order to
approve and reflect the foregoing, 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:
A. AMENDMENTS
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1. Amendment of Section 1.1.
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(a) A new definition of "Term Loan" is hereby added as follows:
"Term Loan" means that certain term loan in the amount of $70,000,000 made
to the Borrower by the Banks
party to the Term Loan Agreement dated November 5, 1999."
(b) The definition of "Consolidated Tangible Net Worth" is hereby
amended by deleting the text in subclause "(i)" before the word "less" and
substituting the words "Total Shareholders' Equity" therefore.
2. Amendment to Section 2.1. Section 2.1 is hereby amended by deleting the
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amount "$15,000,000" and replacing it with the amount "$5,000,000".
3. Amendment to Section 2.4(a). Section 2.4(a) is hereby amended by
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deleting the amount "$15,000,000" and replacing it with the amount "$5,000,000"
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throughout Section 2.4(a).
4. Amendment to Section 2.11. Section 2.11 is hereby amended and restated
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as follows:
(a) The Commitments shall terminate on the Termination Date and any
Loans then due and outstanding (together with accrued interest thereon) shall be
due and payable on such date.
(b) If the Borrower shall issue for cash any additional equity (other
than in connection with the exercise of options, the issuance of equity in
connection with employee benefit plans, or a contribution to the Borrower in
connection with a vendor agreement to fund a specific development and marketing
effort or to fund one or more specific acquisitions set forth in the vendor
agreement or a technology transfer agreement) or incur Debt for cash, the
Borrower shall promptly notify the Agent of the estimated net proceeds of such
issuance to be received by the Borrower. Promptly upon, and in no event later
than three Business Days after receipt by the Borrower of the net cash proceeds
of such issuance, the Borrower shall prepay the Term Loan in an aggregate amount
equal to the amount of net proceeds until the Term Loan shall be repaid in full.
5. Amendment of Section 5.12. Section 5.12 of the Credit Agreement is
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hereby amended by replacing the amount "$80,000,000" with the amount
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"$126,718,000" and replacing the date "January 1, 1997" with the date "January
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1, 1999".
6.
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Amendment to Section 5.10(g). Section 5.10(g) of the Credit Agreement is hereby
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amended by deleting the percentage "10%" and substituting "35%" therefor.
7. Amendment to Section 5.13. Section 5.13 of the Credit Agreement is
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hereby amended by adding "or the Term Loan" after the words "the Loans" in
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subsection "(x)" of Section 5.13 and by adding a new "(w)" as follows:
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"(w) Outstandings in the amount of $30,000,000 under a promissory note
in favor of First Union National Bank payable on November 5, 1999."
8. Addition of New Section 5.17. A new Section 5.17 is hereby added as
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follows:
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"5.17 Limitation on Non-Cash Charges. The Borrower will not incur
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non-cash charges that would exceed $50,000,000 in the aggregate with respect to
the Borrower and its Consolidated Subsidiaries from and after November 1, 1999
other than (i) depreciation and amortization expensed in the ordinary course of
business determined in accordance with generally accepted accounting principles
excluding a one-time acceleration of amortization and depreciation expense; and
(ii) any acquisition related charges of intangibles within one year of the end
of the fiscal quarter in which the acquisition occurred determined in accordance
with generally accepted accounting principles."
B. REPRESENTATIONS AND WARRANTIES
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The Company hereby represents and warrants to the Agent and Banks that:
1. After giving effect to this Amendment, no Event of Default specified
in the Credit Agreement and no event which with notice or lapse of time or both
would become such an Event of Default has occurred and is continuing;
2. The representations and warranties of the Company pursuant to the
Credit Agreement are true on and as of the date hereof as if made on and as of
said date; and
3. The making and performance by the Company of this Amendment have
been duly authorized by all corporate action.
C. CONDITIONS PRECEDENT
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This Amendment will become effective as of October 29, 1999 upon execution
by the Required Banks provided that the Agent shall have received in form and
substance satisfactory to the Agent all of the following:
1. A copy of a resolution passed by the Board of Directors of the
Company, certified by the Secretary or an Assistant Secretary of the Company as
being in full force and effect on the date hereof, authorizing the execution,
delivery and performance of the Credit Agreement as hereby amended.
2. A certificate of incumbency certifying the names of the officers of
the Company authorized to sign this Amendment, together with the true signatures
of such officers.
3. Executed counterparts of this Amendment.
4. Borrower shall have paid the Agent for the account of the consenting
Banks an amendment fee equal to 15 basis points payable to the Banks on November
5, 1999 in accordance with their Pro Rata Share.
D. MISCELLANEOUS
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1. This Amendment 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.
2. 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 amended by this Amendment.
3. This Amendment shall be governed by and construed in accordance with
the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first written.
POLICY MANAGEMENT SYSTEMS
CORPORATION
By:_/S/ Stephen G. Morrison
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Title: Executive Vice President
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And General Counsel
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BANK OF AMERICA, N.A.
By:/S/ Michael J. McKenney
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Title: Managing Director
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WACHOVIA BANK, N.A.
By:/S/Donald E. Sellers, Jr.
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Title: Vice President
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FIRST UNION NATIONAL BANK
By: /S/Daniel Amaker
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Title: Vice President
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DEUTSCHE BANK AG, NEW YORK
BRANCH AND/OR CAYMAN ISLANDS
BRANCH
By: /S/ Susan M. O'Connor
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Title: Director
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By: /S/ Susan L. Pearson
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Title: Director
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DAI-ICHI KANGYO BANK, LTD.
By: /S/ Nelson Chang
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Title: Assistant Vice President
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THE FUJI BANK, LIMITED
By: /S/ Raymond Ventura
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Title:Vice President & Manager
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ACKNOWLEDGED AND AGREED:
POLICY MANAGEMENT SYSTEMS
CORPORATION
CYBERTEK CORPORATION
PMSC LIMITED
CYBERTEK SOLUTIONS, L.P.
By: POLICY MANAGEMENT
SYSTEMS CORPORATION;
Its General Partner
THE LEVERAGE GROUP
By: /S/ Stephen G. Morrison
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Title: Secretary
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ACKNOWLEDGED AND AGREED:
POLICY MANAGEMENT SYSTEMS
INVESTMENTS, INC.
By: /S/ Elizabeth Powers
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Title: President
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