1
EXHIBIT 99.2
[CHASE LOGO]
BMC Software, Inc.
Senior Credit Facility
Commitment Letter
March 8, 1999
BMC Software, Inc.
2101 CityWest Blvd.
Houston, Texas 77042
Attention: Michael Shryock
You (the "Borrower") have requested that Chase Securities Inc. ("CSI")
agree to structure, arrange and syndicate a senior revolving credit facility in
an aggregate amount of up to $500,000,000 (the "Facility"), and that Chase Bank
of Texas, National Association ("Chase"), commit to provide the entire
principal amount of the Facility and to serve as administrative agent for the
Facility.
CSI is pleased to advise you that it is willing to act as exclusive
advisor, lead arranger, and book manager for the Facility.
Furthermore, Chase is pleased to advise you of (a) its commitment to
provide the entire amount of the Facility upon the terms and subject to the
conditions set forth or referred to in this commitment letter (the "Commitment
Letter") and in the Summary of Terms and Conditions attached hereto as Exhibit
A (the "Term Sheet").
It is agreed that Chase will act as the sole and exclusive Administrative
Agent, and that CSI will act as the sole and exclusive advisor, lead arranger,
and book manager (in such capacity, the "Arranger"), for the Facility, and each
will, in such capacities, perform the duties and exercise the authority
customarily performed and exercised by it in such roles. You agree that no
other agents, co-agents or arrangers will be appointed, no other titles will be
awarded and no compensation (other than that expressly contemplated by the Term
Sheet and the Fee Letter referred to below) will be paid in connection with the
Facility unless you and we shall so agree.
We intend to syndicate the Facility to a group of financial institutions
(together with Chase, the "Lenders") identified by us in consultation with you.
CSI intends to commence syndication efforts promptly upon the execution of this
Commitment Letter, and you agree actively to assist CSI in completing a
syndication satisfactory to it. Such assistance shall include (a) your using
commercially reasonable efforts to ensure that the syndication efforts benefit
materially from your existing lending relationships, (b) direct contact between
senior management and advisors of the Borrower and the proposed Lenders, (c)
assistance in the preparation of a Confidential Information Memorandum and
other marketing materials to be used in connection with the syndication and (d)
the hosting, with CSI, of one or more meetings of prospective Lenders.
As the Arranger, CSI will manage all aspects of the syndication, including
decisions as to the selection of institutions to be approached and when they
will be approached, when their commitments will be accepted, which institutions
will participate, the allocations of the commitments among the Lenders and the
amount and distribution of fees among the Lenders. In acting as the Arranger,
CSI will have no responsibility other than to arrange the syndication. To
assist CSI in its syndication efforts, you agree
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BMC Software, Inc.
March 5, 1999
Page 2
promptly to prepare and provide to CSI and Chase all information with respect
to the Borrower and the transactions contemplated hereby, including all
financial information and projections (the "Projections"), as we may reasonably
request in connection with the arrangement and syndication of the Facility. You
hereby represent and covenant that (a) all information other than the
Projections (the "Information") that has been or will be made available to
Chase or CSI by you or any of your representatives is or will be, when
furnished, complete and correct in all material respects and does not or will
not, when furnished, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under which
such statements are made and (b) the Projections that have been or will be made
available to Chase or CSI by you or any of your representatives have been or
will be prepared in good faith based upon reasonable assumptions. You
understand that in arranging and syndicating the Facility we may use and rely
on the Information and Projections without independent verification thereof.
As consideration for Chase's commitment hereunder and CSI's agreement to
perform the services described herein, you agree to pay to Chase the
nonrefundable fees in the Fee Letter dated the date hereof and delivered
herewith (the "Fee Letter").
Chase and CSI shall be entitled, after consultation with you and with your
consent, such consent not to be unreasonably withheld, to change the structure,
terms, amount or pricing of the Facility if the syndication has not been
completed and if Chase and CSI determine that such changes are advisable in
order to ensure a successful syndication of the Facility. Chase's commitment
hereunder is subject to the agreements in this paragraph.
Chase's commitment hereunder and CSI's agreement to perform the services
described herein are subject to (a) there not occurring or becoming known to us
any material adverse condition or material adverse change in or affecting the
business, operations, property, condition (financial or otherwise) or prospects
of the Borrower and its subsidiaries, taken as a whole, (b) our completion of
and satisfaction in all respects with a due diligence investigation of the
Borrower and the acquisition candidate contemplated with this Facility, (c) our
not becoming aware after the date hereof of any information or other matter
affecting the Borrower or the transactions contemplated hereby which is
inconsistent in a material and adverse manner with any such information or other
matter disclosed to us prior to the date hereof, (d) there not having occurred a
material disruption of or material adverse change in financial, banking or
capital market conditions that, in our judgment, could materially impair the
syndication of the Facility, (e) our satisfaction that prior to and during the
syndication of the Facility there shall be no competing offering, placement or
arrangement of any debt securities or bank financing by or on behalf of the
Borrower or any affiliate thereof, (f) the negotiation, execution and delivery
on or before May 7, 1999 of definitive documentation with respect to the
Facility satisfactory to Chase and its counsel and (h) the other conditions set
forth or referred to in the Term Sheet. The terms and conditions of Chase's
commitment hereunder and of the Facility are not limited to those set forth
herein and in the Term Sheet. Those matters that are not covered by the
provisions hereof and of the Term Sheet are subject to the approval and
agreement of Chase, CSI and the Borrower.
You agree to indemnify and hold harmless Chase, CSI, the other Lenders,
their respective affiliates and their respective officers, directors, employees,
advisors, and agents (each, an "indemnified person") from and against any and
all losses, claims, damages and liabilities to which any such indemnified person
may become subject arising out of or in connection with this Commitment Letter,
the Facility, the use of the proceeds thereof or any related transaction or any
claim, litigation, investigation or proceeding relating to any of the foregoing,
regardless of whether any indemnified person is a party thereto, and to
reimburse each indemnified person upon demand for any legal or other expenses
incurred in connection with investigating or defending any of the foregoing,
provided that the foregoing indemnity will not, as to any indemnified person,
apply to losses, claims, damages, liabilities or related expenses to the extent
they arise from the willful misconduct, unlawful conduct or gross negligence of
such indemnified person. YOU AGREE THAT THE INDEMNITY CONTAINED IN THE PRECEDING
SENTENCE
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BMC Software, Inc.
March 5, 1999
Page 3
EXTENDS TO AND IS INTENDED TO COVER LOSSES AND RELATED EXPENSES ARISING OUT OF
THE ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE OF ANY INDEMNIFIED PERSON. You
also agree to reimburse Chase, CSI and their affiliates on demand for all
out-of-pocket expenses (including syndication expenses, travel expenses, and
reasonable fees, charges and disbursements of counsel) incurred in connection
with the Facility and any related documentation (including this Commitment
Letter, the Term Sheet, the Fee Letter and the definitive financing
documentation) or the administration, amendment, modification or waiver
thereof. No indemnified person shall be liable for any damages arising from the
use by others of Information or other materials obtained through electronic,
telecommunications or other information transmission systems or for any
special, indirect, consequential or punitive damages in connection with the
Facilities.
This Commitment Letter shall not be assignable by you without the prior
written consent of Chase and CSI (and any purported assignment without such
consent shall be null and void), is intended to be solely for the benefit of the
parties hereto and is not intended to confer any benefits upon, or create any
rights in favor of, any person other than the parties hereto. This Commitment
Letter may not be amended or waived except by an instrument in writing signed by
you, Chase and CSI. This Commitment Letter may be executed in any number of
counterparts, each of which shall be an original, and all of which, when taken
together, shall constitute one agreement. Delivery of an executed signature page
of this Commitment Letter by facsimile transmission shall be effective as
delivery of manually executed counterpart hereof. This Commitment Letter and the
Fee Letter are the only agreements that have been entered into among us with
respect to the Facility and set forth the entire understanding of the parties
with respect thereto. This Commitment Letter shall be governed by, and construed
in accordance with, the laws of the State of Texas.
This Commitment Letter is delivered to you on the understanding that
neither this Commitment Letter, the Term Sheet or the Fee Letter nor any of
their terms or substance shall be disclosed, directly or indirectly, to any
other person except (a) to your officers, agents and advisors who are directly
involved in the consideration of this matter or (b) as may be compelled in a
judicial or administrative proceeding or as otherwise required by law (in which
case you agree to inform us promptly thereof), provided, that the foregoing
restrictions shall cease to apply (except in respect of the Fee Letter and its
terms and substance) after this Commitment Letter has been accepted by you.
You acknowledge that CSI and Chase may be providing debt financing,
equity capital or other services (including financial advisory services) to
other companies in respect of which you may have conflicting interests regarding
the transactions described herein and otherwise. Neither CSI nor Chase will use
confidential information obtained from you by virtue of the transactions
contemplated by this letter or their other relationships with you in connection
with the performance by CSI or Chase of services for other companies, and
neither CSI nor Chase will furnish any such information to other companies. You
also acknowledge that CSI and Chase have no obligation to use in connection with
the transactions contemplated by this letter, or to furnish to you, confidential
information obtained from other companies.
The reimbursement, indemnification and confidentiality provisions
contained herein and in the Fee Letter shall remain in full force and effect
regardless of whether definitive financing documentation shall be executed and
delivered and notwithstanding the termination of this Commitment Letter or
Chase's commitment hereunder.
THIS COMMITMENT LETTER, THE ATTACHED TERM SHEET, THE FEE LETTER AND ALL
EXHIBITS, SCHEDULES AND OTHER ATTACHMENTS HERETO AND THERETO CONSTITUTE A "LOAN
AGREEMENT" FOR PURPOSES OF SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE
AND REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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BMC Software, Inc.
March 5, 1999
Page 4
If the foregoing correctly sets forth our agreement, please indicate your
acceptance of the terms hereof and of the Term Sheet and the Fee Letter by
returning to us executed counterparts hereof and of the Fee Letter not later
than 5:00 p.m., Central Standard Time, on March 10, 1999. Chase's commitment and
CSI's agreements herein will expire at such time in the event Chase has not
received such executed counterparts in accordance with the immediately preceding
sentence.
Chase and CSI are pleased to have been given the opportunity to assist you
in connection with this important financing.
Very truly yours,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
By: /s/ MICHAEL A. CERDA
------------------------
Name: Michael A. Cerda
Title: Vice President
CHASE SECURITIES INC.
By: /s/ GREGORY M. SPIER
------------------------
Name: Gregory M. Spier
Title: Managing Director
Accepted and agreed to as of
the date first written above by:
BMC SOFTWARE, INC.
By: /s/ STEPHEN SOLCHER
---------------------
Name: Stephen Solcher
Title: Treasurer
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EXHIBIT A
MARCH 8, 1999
SUMMARY OF TERMS AND CONDITIONS
Borrower: BMC Software, Inc.
Facilities: Up to $500,000,000; 364-Day Revolving Credit Facility,
with one year term out option. Facility to include a
Competitive Bid Option for the Borrower to request
Competitive Bids. Four (4) days advance notice to
Agent required via telephone with written
confirmation. Typical Competitive Bid procedures shall
apply.
Maturity: 364 days from Closing. Additionally, at the option of
the Borrower, the ability to term out the outstandings
under the revolver at maturity, payable within one
year from the date of the term out request.
Minimum Initial
Commitment Per
Institution: $200,000,000 for each Primary Institution
Required Lenders: 51% of Commitments
Commitment Date: March 9, 1999
Closing Date: Closing and Funding to occur on or before April 7,
1999.
Purpose: For general corporate purposes including working
capital, capital expenditures and acquisitions.
Interest Rate: Performance Pricing tied to a Funded Debt to EBITDA
ratio.
- -----------------------------------------------------------
Funded Debt/EBITDA LIBOR Margin* Facility Fee**
- -----------------------------------------------------------
>2.25X 92.5 b.p.s. 20.0 b.p.s.
- -----------------------------------------------------------
>1.50X 72.5 b.p.s. 15.0 b.p.s.
- -----------------------------------------------------------
>0.75X 62.5 b.p.s. 12.5 b.p.s.
- -----------------------------------------------------------
<0.75X 52.5 b.p.s. 10.0 b.p.s.
-
- -----------------------------------------------------------
* If the Borrower elects the one year term option, the LIBOR Margin will
Increase by 12.5 bps across all grid points. Additionally, in anticipation of
receiving a rating from both S&P and Moody's, a ratings grid will be
incorporated into the documentation reflecting drawn pricing of 50 bps for a
BBB+/Baa1 senior, unsecured debt rating. The other grid points to be determined.
** The Facility Fee will be paid on the commitment amount regardless of usage.
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Underwriting Fee: An underwriting fee as set forth in the fee letter
on allocated underwritten commitment. Payable
on the funding date of the facility, to be reduced by
amount of fees necessary for secondary syndication.
Facility Fee: A facility fee shall be paid to each Lender on the
basis of such Lenders allocated share of the
Commitments (both drawn and undrawn portion) in the
amount of applicable Facility Fee (as shown on the
table for same).
Agent Titles: To be determined on 3/10/99.
Financial Covenants: o The Total funded Debt to EBITDA shall not exceed 2.5X
EBITDA based upon a rolling four quarter basis and
including historical EBITDA of the acquired companies.
o Borrower and its Subsidiaries shall at all times
maintain ownership (free and clear of all encumbrances)
of at least $300,000,000 in cash and/or marketable
securities.
Documentation: The Credit Documentation shall contain representations,
warranties, covenants and events of default customary
for financings of this type and other terms deemed
appropriate by the Lenders, including, without
limitation:
Representations and Warranties: Financial statements;
no material adverse change; corporate existence;
compliance with law; corporate power and authority;
enforceability of Credit Documentation; no conflict
with law or contractual obligations; no material
litigation; no default; ownership of property;
intellectual property; taxes; Federal Reserve
regulations: ERISA; Investment Company Act; Year 2000
matters; accuracy of disclosure.
Affirmative Covenants: Delivery of financial
statements, reports accountants' letters, projections,
officers' certificates and other information reasonably
requested by the Lenders; continuation of business and
maintenance of existence and material rights and
privileges; compliance with laws and material
contractual obligations; maintenance of property and
insurance; maintenance of books and records; right of
the Lenders to inspect property and books and records;
and notices of defaults, litigation and other material
events.
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7
Negative Covenants: Limitations on: liens; mergers,
consolidations, sales of assets; transactions with
affiliates; sale and leasebacks; and changes in lines of
business.
Events of Default: Nonpayment of principal when due;
nonpayment of interest, fees or other; material
inaccuracy of representations and warranties; violation
of covenants (subject, in the case of certain
affirmative covenants, to a grace period to be agreed
upon); cross-default; bankruptcy events; certain ERISA
events; material judgments; and a change of control (the
definition of which is to be agreed).
Conditions: to be mutually agreed upon between
Administrative Agent and Borrower.
Syndication Sell-Down
Strategy: Every dollar raised during the syndication process will
reduce the Primary Lender's positions until each Primary
Lender's position reaches $50,000,000. No Primary
Lender's position will be reduced below $50,000,000
until every Primary Lender's position is reduced to
$50,000,000.
Indemnification: The Administrative Agent, the Arranger, the Agents and
the Lenders (and their affiliates and their respective
officers, directors, employees, advisors and agents)
will have no liability for, and will be indemnified and
held harmless against, any loss, liability, cost or
expense incurred in respect of the financing
contemplated hereby or the use or the proposed use of
proceeds thereof (except to the extent resulting from
the gross negligence or willful misconduct of the
indemnified party).
Governing Law
and Forum: State of Texas.
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March 9, 1999
BMC Software, Inc.
2101 Citywest Blvd.
Houston, TX 77042
Attention: Mike Shryock
Re: $500,000,000 Facility
Ladies and Gentlemen:
NationsBank, N.A. ("NationsBank") is pleased to offer its commitment to lend up
to $500,000,000 of the Facility, upon and subject to the terms and conditions of
this letter and the Summary of Terms and Conditions attached hereto (the
"Summary of Terms"). NationsBanc Montgomery Securities LLC ("NMS") is pleased to
advise you of its willingness, as Lead Arranger and Book Manager for the
Facility, to use its best efforts to form a syndicate of financial institutions
(the "Lenders") reasonably acceptable to you for the Facility.
The commitment of NationsBank hereunder and the agreement of NMS to provide the
services described herein are subject to the satisfaction of each of the
following conditions precedent in a manner acceptable to us in our sole
discretion: (a) each of the terms and conditions set forth herein and in the
Summary of Terms; (b) the completion of all due diligence with respect to the
Borrower and its subsidiaries in scope and determination satisfactory to us in
our sole discretion; (c) the negotiation, execution and delivery of definitive
documentation for the Facility consistent with the Summary of Terms and
otherwise satisfactory to us; (d) since the date hereof, no material adverse
change in or material disruption of conditions in the financial, banking or
capital markets which we, in our sole discretion, deem material in connection
with the syndication of the Facility shall have occurred and be continuing; (e)
no change, occurrence or development that could, in our opinion, have a material
adverse effect on the business, assets, liabilities (actual or contingent),
operations, condition (financial or otherwise) or prospects of the Borrower and
its subsidiaries taken as a whole shall have occurred or become known to us; and
(f) our not becoming aware after the date hereof of any information or other
matter which in our judgment is inconsistent in a material and adverse manner
with any information or other matter disclosed to us prior to the date hereof.
The terms of this letter, the Summary of Terms and the fee letter among you and
us (the "Fee Letter") are confidential and, except for disclosure on a
confidential basis to your accountants, attorneys and other professional
advisors retained by you in connection with the Facility or as may be
required by law, may not be disclosed in whole or in part to any other person
or entity without our prior written consent. We hereby consent to your
disclosure of a copy of this letter and the Summary of Terms (but not the Fee
Letter), provided that any information relating to pricing, fees and expenses
is omitted.
This letter and the Fee Letter shall be governed by laws of the State of Texas.
This offer will expire at 5:00 p.m. central time on March 12, 1999.
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BMC Software, Inc.
March 9, 1999
Page 2
We are pleased to have the opportunity to work with you in connection with this
important financing.
Very truly yours,
NATIONSBANK, N.A.
By: /s/ DAN KILLIAN
----------------------------------
Title: Vice President
NATIONSBANC MONTGOMERY SECURITIES LLC
By: /s/ JOSEPH SIEGEL
----------------------------------
Title: Managing Director
Accepted and Agreed to
as of March 10, 1999:
BMC SOFTWARE, INC.
By: /s/ STEPHEN SOLCHER
----------------------------------
Title: Treasurer
10
Confidential BMC Software, Inc.
- --------------------------------------------------------------------------------
SUMMARY OF TERMS AND CONDITIONS
BMC SOFTWARE, INC.
$500,000,000 FACILITY
BORROWER: BMC Software, Inc., (the "Borrower").
AGENTS, LEAD ARRANGERS
AND BOOK MANAGERS: Financial institutions reasonably acceptable to the
Borrower, NationsBank and NMS, to be determined on March
10, 1999.
FACILITY: An aggregate principal amount of up to $500,000,000 will
be available upon the terms and conditions hereinafter
set forth:
Revolving Credit Facility: $500 million 364 day
revolving credit facility (the "Facility"). Facility to
include a Competitive Bid Option for the Borrower to
request Competitive Bids. Four (4) days advance notice
to Agent required via telephone with written
confirmation. Typical competitive Bid procedures shall
apply.
PURPOSE: The proceeds of the Facility shall be used for general
corporate purposes including for working capital,
capital expenditures, and other lawful corporate
purposes and acquisitions.
CLOSING: The execution of definitive loan documentation and
funding by NationsBank, to occur on or before April 7,
1999 ("Closing").
INTEREST RATES: As set forth in Addendum I.
MATURITY: The Revolving Facility shall terminate and all amounts
outstanding thereunder shall be due and payable 364 days
from Closing. Provided that no event of default under
the Facility or incipient default has occurred and is
then continuing, the outstanding principal amount of
loans under the Revolving Facility on such maturity date
may, at the Borrower's election, be converted to a term
loan which will be repayable in a single payment one (1)
year from such maturity date.
CONDITIONS PRE-
CEDENT TO CLOSING: The Closing (and the initial funding) of the Facility
will be subject to satisfaction of the conditions
precedent to be mutually agreed upon by the Borrower,
Agents and the Lenders.
DOCUMENTATION: The Credit Documentation shall contain representations
warranties, covenants and events of default customary
for financings of this type and other terms deemed
appropriate by the Lenders, to be mutually agreed upon
by the Borrower, Agents and the Lenders.
REPRESENTATIONS
AND WARRANTIES: Usual and customary for transactions of this type, to
include without limitation: correctness of financial
statements; no material adverse change; corporate
existence and status; corporate power and authority;
enforceability of Credit Documentation; compliance with
law or contractual obligations; no material litigation;
no default; ownership of property; intellectual
property; no required governmental or third party
approvals; use of proceeds/compliance with margin
regulations; status under Investment Company Act; ERISA
matters; environmental
- --------------------------------------------------------------------------------
[BANK OF AMERICA LOGO] Page 1 March 9, 1999
11
Confidential BMC Software, Inc.
- --------------------------------------------------------------------------------
matters; payment of taxes; accuracy of disclosure; and
Year 2000 preparedness.
COVENANTS: Affirmative Covenants: Delivery of financial
statements, reports accountants' letters, projections,
officers' certificates and other information reasonable
requested by the Lenders; continuation of business and
maintenance of existence and material rights and
privileges; compliance with laws and material
contractual obligations; maintenance of property and
insurance; maintenance of books and records; right of
the Lenders to inspect property and books and records,
and; notices of defaults, litigation and other material
events.
Negative Covenants: Limitations on liens; mergers,
consolidations, sales of assets; transactions with
affiliates; sale and leasebacks; and changes in lines
of business.
Financial covenants:
o The Total Funded Debt to EBITDA shall not exceed
2.5 to 1.0.
o Borrower and its Subsidiaries shall at all times
maintain ownership (free and clear of all
encumbrances) of at least $300,000,000 in cash
and/or marketable securities.
EVENTS OF DEFAULT: Nonpayment of principal when due; nonpayment of
interest, fees or other; material inaccuracy of
representations and warranties; violation of covenants
(subject, in the case of certain affirmative covenants,
to a grace period to be agreed upon); cross-default;
bankruptcy events; certain ERISA events; material
judgements; and a change of control (the definition of
which is to be agreed).
REQUIRED LENDERS: Amendments and waivers of the provisions of the loan
agreement and other definitive credit documentation
will require the approval of Lenders holding loans and
commitments representing more than 50% of the aggregate
amount of loans (excluding Competitive Bid Loans) and
commitments under the Facility, except that the consent
of all the Lenders affected thereby shall be required
with respect to (i) increases in the commitment of such
Lenders, (ii) reductions of principal, interest or
fees, and (iii) extensions of scheduled maturities or
times for payment.
GOVERNING LAW AND FORUM: State of Texas.
FEES/EXPENSES: As set forth in Addendum 1.
OTHER: This Summary of Terms is intended as an outline of
certain of the material terms of the Facility and does
not purport to summarize all of the conditions,
covenants, representations, warranties and other
provisions which would be contained in definitive
documentation for the Facility contemplated hereby. The
Borrower and the Guarantors shall each waive its right
to a trial by jury.
SYNDICATION SELL-DOWN Every dollar raised during the Syndication process will
STRATEGY reduce the primary Lender's positions until each
Primary Lender's position will be reduced below
$50,000,000. No Primary Lender's position will be
reduced below $50,000,000 until every Primary Lender's
position is reduced to $50,000,000.
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[BANK OF AMERICA LOGO] Page 2 March 9, 1999
12
CONFIDENTIAL
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ADDENDUM 1
FEES AND EXPENSES
FACILITY FEE: The Borrower will pay a fee (the "Facility Fee"),
on each Lender's allocated share of the Commitments
(both drawn and undrawn portion), in the amount of
applicable Facility Fee determined in accordance
with the attached Pricing Grid. The Facility Fee is
payable quarterly in arrears.
INTEREST RATES: At the Borrower's option, any loan under the
Facility that is made to it will bear interest at a
rate equal to the Applicable Margin, as determined
in accordance with the attached Pricing Grid, plus
one of the following indexes: (i) LIBOR, or (ii) the
Alternate Base Rate (to be defined as the higher of
(a) the Administrative Agent's prime rate and (b)
the Federal Funds rate plus .50%). If the Borrower
shall elect the conversion of any loan under the
Facility to a one year Term Loan the Applicable
Margin will be equal to the sum of the Applicable
Margin for LIBOR Loans, the Facility Fee plus 12.5
basis points.
COST AND YIELD
PROTECTION: Customary for transactions and facilities of this
type, including, without limitation, in respect of
breakage or redeployment costs incurred in
connection with prepayments, changes in capital
adequacy and capital requirements or their
interpretation, illegality, unavailability, reserves
without proration or offset and payments free and
clear of withholding or other taxes.
The Facility Fee, the Applicable Margin for any fiscal quarter, shall be the
applicable rate per annum set forth in the table below opposite the ratio of
Funded Debt to EBITDA determined as of the last day of the immediately
preceding fiscal quarter.
FACILITY PRICING GRID
================================================================================
APPLICABLE APPLICABLE
MARGIN FOR MARGIN FOR ABR FACILITY
LEVEL TOTAL DEBT/EBITDA LIBOR LOANS LOANS FEE
- --------------------------------------------------------------------------------
I >2.25x 92.5bps 0.0bps 20.0bps
- --------------------------------------------------------------------------------
II > = 1.50x but <2.25x 72.5bps 0.0bps 15.0bps
- --------------------------------------------------------------------------------
III* > = 0.75x but <1.50x 82.5bps 0.0bps 12.5bps
- --------------------------------------------------------------------------------
IV <0.75x 52.5bps 0.0bps 10.0bps
- --------------------------------------------------------------------------------
V BBB+/Baa1 40.0bps 0.0bps 10.0bps
================================================================================
* Anticipated Initial LIBOR margin and Facility Fee.
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[BANK OF AMERICA LOGO] Page 3 MARCH 9, 1998
13
[ABN-AMRO BANK LETTERHEAD]
March 9, 1999
BMC Software, Inc.
2101 City West Blvd.
Houston, Texas 77042
Attn: Stephen Solcher, Vice President and Treasurer
Mike Shryock, Finance Manager
Re: Proposed $500,000,000 Revolving Credit Facility (the "Facility")
Dear Stephen and Mike:
We, ABN AMRO Bank N.V. ("ABN AMRO"), hereby issue our commitment to the
Facility in a principal amount of $125,000,000 based on the terms and
conditions outlined in the revised Summary of Terms and Conditions dated March
8, 1999 (the "Term Sheet") sent to us by BMC Software, Inc. as amended by Mike
Shryock's letter to ABN AMRO dated March 9, 1999. Our commitment to this
financing is subject to the negotiation and execution of documentation
satisfactory to ABN AMRO.
The commitment offered by ABN AMRO herein is to underwrite the aggregate amount
of $125,000,000. If BMC accepts this commitment offer, ABN AMRO undertakes to
syndicate the Facility; provided, however, that the inability of ABN AMRO to
complete such syndication shall not affect the commitment of ABN AMRO or the
obligations of BMC hereunder.
BMC agrees to provide ABN AMRO with all information and take such other actions
as ABN AMRO may reasonably request to facilitate the syndication of the
Facility by ABN AMRO. ABN AMRO agrees to treat all confidential information
provided to it by BMC on a confidential basis in accordance with customary
banking practices subject to customary exceptions. ABN AMRO may provide such
information to potential syndicate banks and financial institutions provided
such banks and financial institutions similarly agree to maintain such
confidentiality.
This letter is not meant to encompass, nor shall it be construed as
encompassing, all of the terms and conditions of the Facility. It is intended
to outline the principal points of business understandings concerning the
Facility. The commitment of ABN AMRO hereunder is subject to completion by ABN
AMRO of satisfactory due diligence and the execution of a definitive lease
agreement and other lease documentation in form and substance satisfactory to
ABN AMRO. If ABN AMRO and BMC are unable to agree upon such documentation, they
shall have no further obligations to each other hereunder
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except that BMC shall be obligated to reimburse ABN AMRO for its out-of-pocket
fees, costs and expenses as provided herein.
In consideration of the commitments provided by ABN AMRO hereunder, BMC agrees
to indemnify and hold harmless each of ABN AMRO and its officers, directors,
employees, agents, advisors and affiliates for all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
disbursements of counsel) incurred by any of them in connection with this
commitment letter, the Facility, the use by BMC of the Facility or the proceeds
thereof, the collateral for the Facility, the lease documents, any related
document, instrument or agreement or any transaction contemplated hereby or
thereby whether or not such transactions are consummated, except for the portion
of such claims, damages, losses, liabilities and expenses caused by such party's
gross negligence or willful misconduct.
The commitment set forth in this letter is personal to BMC and may not be
transferred or assigned to any other party without the prior written consent of
ABN AMRO. Except as otherwise required by law, neither this letter nor any part
hereof may, without the prior written consent of ABN AMRO, be disclosed or
exhibited to any other party except BMC's accountants, attorneys and other
advisors, and then, in each case, only in connection with the transactions
contemplated hereby and on a confidential basis.
If the commitment offered herein is satisfactory, please indicate BMC's
acceptance by having an authorized officer of BMC sign and date each of the
enclosed copies of this letter and the attached fee agreement letter and
delivering the executed copies of each, to ABN AMRO. ABN AMRO reserves the
right to terminate the commitment offer set forth herein at any time prior to
receipt by ABN AMRO of such executed copies. Unless so accepted or otherwise
terminated by ABN AMRO on or prior to March 15, 1999, the offer set forth
herein will expire on that date.
Upon the acceptance by BMC of the commitment offer set forth in this letter, ABN
AMRO will commence its due diligence and instruct its counsel to commence
documentation. By accepting this offer, BMC agrees to reimburse ABN AMRO for all
reasonable fees, costs and expenses (whether incurred before or after the date
hereof), including, without limitation, audit fees, out-of-pocket syndication
expenses, and fees and disbursements of counsel for ABN AMRO, incurred by ABN
AMRO in connection with its due diligence, the syndication of the Facility and
the negotiation, preparation, execution, delivery and enforcement of the lease
documents, whether or not any money is advanced by ABN AMRO under the Facility,
any of the transactions contemplated hereby are consummated or any documents are
agreed to and executed. If BMC accepts this offer, ABN AMRO's commitment
hereunder shall continue until September 30, 1999, on which date such commitment
shall expire unless final documents have been executed by ABN AMRO, BMC and the
other parties thereto on or prior to such date.
This letter shall be governed by and construed in accordance with the laws of
the State of California without regard to conflicts of law principles.
Closing and funding by ABN-AMRO to occur on or before April 7th, 1999.
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We look forward to working with you on this transaction. Please let us know if
you have any questions.
Very truly yours,
ABN AMRO BANK N.V.
By: /s/ JAMIE DILLON By: /s/ MATHEW HARVEY
-------------------------------- ---------------------------------
Name: Jamie Dillon Name: Mathew Harvey
Title: Vice President and Director Title: Vice President
ACCEPTED AND AGREED
BMC SOFTWARE, INC.
By: /s/ STEPHEN SOLCHER
--------------------------------
Name: STEPHEN SOLCHER
Title: TREASURER
Date: 3/10/99