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BMC > SEC Filings for BMC > Form 8-K on 11-Sep-2013All Recent SEC Filings

Show all filings for BMC SOFTWARE INC

Form 8-K for BMC SOFTWARE INC


11-Sep-2013

Entry into a Material Definitive Agreement, Termination of a Material Definitive


Item 1.01. Entry into a Material Definitive Agreement.

New Credit Facilities

Overview

On September 10, 2013, BMC Software Finance, Inc., a newly formed Delaware subsidiary of Parent and the parent of the Company, as the US Borrower ("US Borrower"), BMC Foreign Holding Company, a newly formed unlimited company incorporated in Ireland and an indirect subsidiary of US Borrower, as the Foreign Borrower ("Foreign Borrower", and together with the US Borrower, the "Borrowers" and each individually a "Borrower") and Parent entered into the Credit Agreement, dated as of September 10, 2013 (the "Credit Agreement"), with the Lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as Administrative Agent and Collateral Agent ("Agent").

The Credit Agreement provides for (i)(a) US term loans denominated in US Dollars to US Borrower in an aggregate original principal amount of $2,880,000,000 (the "US Term Loans"), and (b) foreign term loans (the "Foreign Term Loans" and, collectively with the US Term Loans, the "Term Loans") comprised of (x) foreign term loans denominated in US Dollars to Foreign Borrower in an aggregate original principal amount of $335,000,000 (the "Foreign USD Term Loans") and
(y) foreign term loans denominated in Euros to Foreign Borrower in an aggregate original principal amount of 500,000,000 (the "Foreign Euro Term Loans"), in the case of each of the foregoing clauses (a) and (b), under the new senior secured term loan facilities (the "Term Loan Facilities") and (ii)(a) US revolving loans to US Borrowers of up to $170,000,000 (including letters of credit) (the "US Revolving Loans") and (b) multicurrency revolving loans to the Borrowers of up to $180,000,000 (including letters of credit), a portion of which may be denominated in US Dollars, Euro, Sterling, Yen, Australian Dollars, Canadian Dollars, New Zealand Dollars, Brazilian Reais, Mexican Pesos, Argentine Pesos, Swiss Francs or other currency that may be agreed (the "Multicurrency Revolving Loans"), under the new senior secured revolving loan facilities (the "Revolving Credit Facilities" and, together with the Term Loan Facilities, the "Credit Facilities"). Concurrently with the consummation of the Merger, the full amount of the Term Loan Facilities was drawn, and no amount under the Revolving Credit Facilities was drawn. The Credit Agreement also permits the Borrowers to establish incremental revolving credit commitments or incur secured or unsecured incremental term loans or notes at any time, from time to time, after the closing subject to the terms and conditions set forth therein.

Interest Rate and Fees

At the Company's election, the interest rate per annum applicable to the loans under the Credit Facilities will be based on a fluctuating rate of interest determined by reference to either (i) a base rate determined by reference to the higher of (a) the "prime rate" of Credit Suisse AG, Cayman Islands Branch,
(b) the federal funds effective rate plus 0.50% and (c) the Eurocurrency rate applicable for an interest period of one month plus 1.00%, plus an applicable margin equal to (x) 3.00%, in the case of the US Term Loans and the Foreign USD Term Loans, (y) 3.00% in the case of the US Revolving Loans or (z) 2.50% in the case of the Multicurrency Revolving Loans or (ii) a Eurocurrency rate determined by reference to LIBOR, adjusted for statutory reserve requirements, plus an applicable margin equal to (w) 4.00%, in the case of the US Term Loans and the Foreign USD Term Loans, (x) 4.50% in the case of the Foreign Euro Term Loans,
(y) 4.00% in the case of the US Revolving Loans or (z) 3.5% in the case of the Multicurrency Revolving Loans. The Term Loan Facilities will be subject to a Eurocurrency rate floor of 1.00%. Under the Revolving Credit Facilities, (i) a commitment fee of .50% will accrue on the undrawn amount of the US Revolving Facility and (ii) a facility fee of .50% will accrue on all drawn or undrawn amounts under the Multicurrency Revolving Facility. The applicable margin, commitment fees and facility fees for loans under the Revolving Credit Facilities will be adjusted after each fiscal quarter of the Company commencing with the Company's first full fiscal quarter after the closing based upon the Company's first lien net leverage ratio.

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Prepayments

Subject to certain exceptions, the Term Loans are subject to mandatory prepayments in amounts equal to: (1) 100% of the net proceeds (determined by taking into account any indebtedness secured pari passu with the Term Loan Facilities that is prepaid with such net cash proceeds) from certain non-ordinary course sales or other dispositions of assets including sale-leasebacks and casualty or condemnation by the US Borrower or any Restricted Subsidiaries (as defined in the Credit Agreement) in excess of a certain amount and subject to customary reinvestment provisions and certain other exceptions; (2) 100% of the net cash proceeds from the issuance or incurrence of debt by the US Borrower or any Restricted Subsidiaries (other than indebtedness permitted by the Credit Facilities); and (3) beginning with the first full fiscal year after the closing, 50% (with step-downs to 25% and 0% based upon achievement of specified first lien net leverage ratios) of annual excess cash flow of the US Borrower and the Restricted Subsidiaries. Subject to certain prepayment premiums and penalties and the payment of customary "breakage" costs, the Company may voluntarily prepay outstanding loans at any time.

Amortization

The Term Loan Facilities initially have a seven-year maturity and the Revolving Credit Facilities initially have a five-year maturity, each of which may be extended in accordance with the terms therein. The principal amount of the Term Loan Facilities amortizes in quarterly installments equal to 0.25% of the original principal amount of the Term Loan Facilities beginning at the end of the second full fiscal quarter after the closing, with the balance payable at maturity.

Guaranty and Security

In connection with the Credit Facilities, (i) Parent entered into a Holdco Guaranty, dated as of September 10, 2013, in favor of the Agent and (ii) certain US Subsidiary Loan Parties (as defined in the Credit Agreement) entered into a US Subsidiary Guaranty, dated as of September 10, 2013, in favor of the Agent, in each case pursuant to which Parent and such US Subsidiary Loan Parties, respectively, guaranteed the obligations of each of the Borrowers under the Credit Facilities and certain swap agreements and cash management arrangements provided to the Borrowers and their subsidiaries by any lender party to the Credit Facilities or any of its affiliates. In connection with the Credit Facilities, (i) the direct parent companies of the Foreign Borrower entered into a Foreign Parent Guaranty, dated as of September 10, 2013, in favor of the Agent and (ii) certain Foreign Subsidiary Loan Parties (as defined in the Credit Agreement) entered into a Foreign Subsidiary Guaranty, dated as of September 10, 2013, in favor of the Agent, in each case pursuant to which such parent entities and such Foreign Subsidiary Loan Parties guaranteed obligations of the Foreign Borrower under such Credit Facilities and certain swap agreements and cash management arrangements provided to Foreign Borrower and its subsidiaries by any lender party to the Credit Facilities or any of its affiliates.

In connection with the Credit Facilities, the US Borrower, Parent, and certain US Subsidiary Loan Parties entered into a Security Agreement (the "US Security Agreement"), dated as of September 10, 2013, in favor of the Agent and the Foreign Borrower and certain other Foreign Loan Parties (as defined in the Credit Agreement) entered into foreign security documents, each dated as of September 10, 2013, in favor of the Agent, governed by the laws of such Foreign Loan Parties' jurisdiction or incorporation and organization (the "Foreign Security Agreements"). Pursuant to the US Security Agreement, amounts borrowed by the Borrowers under the Credit Facilities and any swap agreements and cash management arrangements provided by any lender party to the Credit Facilities or any of its affiliates are secured on a first priority basis by a perfected security interest in substantially all of the tangible and intangible assets (subject to certain exceptions) of the US Borrower, Parent and each US Subsidiary Loan Party party thereto, including U.S. registered intellectual property and all of the capital stock of each of the US Borrower's direct and indirect wholly-owned material Restricted Subsidiaries, including the US Borrower (limited (other than in respect of the pledge of the capital stock of the Foreign Parent Loan Parties (as defined in the Credit Agreement) in support of the foreign obligations, to 65% of the capital stock of first tier foreign subsidiaries and domestic foreign holding companies). Pursuant to the Foreign Security Agreements, amounts borrowed by Foreign Borrower under the Credit Facilities and any swap agreements and cash management arrangements provided to Foreign Borrower

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. . .



Item 1.02. Termination of a Material Definitive Agreement

On September 10, 2013, in connection with the consummation of the Merger, the Company terminated (i) that certain Credit Agreement, dated as of November 30, 2010, by and among the Company, as the Borrower, the lender parties thereto, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, JPMorgan Chase Bank N.A., as Syndication Agent, and Barclays Bank plc, Deutsche Bank AG New York Branch and The Royal Bank of Scotland plc, as Co-Documentation Agents, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Sole Lead Arranger and Sole Book Manager, and (ii) that certain Credit Agreement, dated as of

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November 21, 2012, by and among the Company, as the Borrower, Bank of America, N.A., as Administrative Agent and Lender, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Sole Lead Arranger and Sole Book Manager, in each case including any amendments thereto.



Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 is incorporated by reference herein.

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