Participation Agreement [Amendment No. 2] - PeopleSoft Inc., Lease Plan North America Inc., ABN AMRO Bank NV, Credit Lyonnais, The Industrial Bank of Japan Ltd., KeyBank NA, Mellon Bank NA and The Dai-Ichi Kangyo Bank Ltd.
SECOND AMENDMENT TO PARTICIPATION AGREEMENT,
MASTER LEASE, GUARANTEE, CONSTRUCTION DEED OF TRUST, CASH
COLLATERAL AGREEMENT, ASSIGNMENT OF LEASE AND APPENDIX 1
This SECOND AMENDMENT TO PARTICIPATION AGREEMENT, MASTER LEASE,
GUARANTEE, CONSTRUCTION DEED OF TRUST, CASH COLLATERAL AGREEMENT, ASSIGNMENT OF
LEASE and APPENDIX 1 TO PARTICIPATION AGREEMENT, MASTER LEASE AND CONSTRUCTION
DEED OF TRUST (this "Amendment"), dated as of September 28, 1998, is by and
among PEOPLESOFT, INC., a Delaware corporation, as Lessee (together with its
permitted successors and assigns, the "Lessee"); LEASE PLAN NORTH AMERICA, INC.,
an Illinois corporation, as Lessor (together with its permitted successors and
assigns, the "Lessor"); ABN AMRO BANK N.V., SAN FRANCISCO INTERNATIONAL BRANCH,
as a Participant, CREDIT LYONNAIS LOS ANGELES BRANCH, as a Participant, THE
INDUSTRIAL BANK OF JAPAN, LIMITED SAN FRANCISCO AGENCY, as a Participant,
KEYBANK NATIONAL ASSOCIATION, as a Participant, MELLON BANK, N.A., as a
Participant, THE DAI-ICHI KANGYO BANK, LIMITED SAN FRANCISCO AGENCY, as a
Participant (together with their permitted successors and assigns, each a
"Participant" and collectively the "Participants"); and ABN AMRO BANK N.V., SAN
FRANCISCO INTERNATIONAL BRANCH, as Agent (in such capacity, together with its
successors in such capacity, the "Agent") for the Participants.
RECITALS:
A. The Lessee, the Lessor, the Participants and the Agent are parties to
that certain Participation Agreement dated as of December 4, 1996, as amended on
February 20, 1998 (as amended, restated, supplemented or otherwise modified from
time to time, the "Participation Agreement");
B. Appendix 1 to Participation Agreement, Master Lease and Construction
Deed of Trust (as amended, restated, supplemented or otherwise modified from
time to time,"Appendix 1") is part of the Participation Agreement, the Lease and
the Mortgage and contains defined terms and rules of construction applicable to
the Operative Documents;
C. The parties desire to amend certain provisions of the Participation
Agreement, Master Lease, Guarantee, Construction Deed of Trust, Cash Collateral
Agreement, Assignment of Lease and Appendix 1, all on the terms and conditions
set forth in this Amendment; and
D. Each capitalized term used in this Amendment and not otherwise
defined in this Amendment shall have the meaning ascribed thereto in Appendix 1;
this Amendment shall constitute an Operative Document; and these Recitals shall
be construed as part of this Amendment.
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NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto agree as follows:
1. Amendments to the Participation Agreement. The Participation
Agreement is hereby amended as follows:
(a) Section 3.4(b)(i) of the Participation Agreement is hereby
amended by adding the following at the end of said section:
"The Lessee shall pay to the Agent a fee of $1,000 for
each Fixed Rate Request."
(b) Section 3.4(b)(v) of the Participation Agreement is hereby
amended by deleting the words "Not later than 11:30 a.m. (New York time)
on" and substituting therefor the following: "Promptly upon receipt of
the Agent's notice referred to in Section 3.5(b)(iv) above, on the third
Business Day prior to".
(c) Section 3.8(e) of the Participation Agreement is hereby
amended by deleting the word "Schedule" in the third line thereof and
substituting therefor the word "Scheduled".
(d) Section 10.1(f) of the Participation Agreement is hereby
amended by adding the following at the end of said section:
", provided that the Consolidated Quick Ratio shall be
reduced to .95 to 1.0 solely for the fiscal quarter in
which the Momentum Distribution is made."
(e) Section 10.1(g) of the Participation Agreement is hereby
amended by deleting the words "at September 30, 1996" in the third line
thereof and substituting in their place the following "at the end of the
fiscal quarter ending June 30, 1998 (as adjusted for the fiscal quarter
in which the Momentum Transaction is consummated)".
(f) Section 10.1(j) of the Participation Agreement is hereby
amended by deleting "or" in the second line thereof and substituting in
its place the word "and".
(g) Section 10.1(l) of the Participation Agreement is hereby
amended by deleting the figure "$20,000,000" in the second line of
clause (v) thereof and substituting in its place the figure
"$50,000,000".
(h) Section 10.1(m) of the Participation Agreement is hereby
amended (i) by adding the following after the word "California" in the
second line of clause (iv): ", Lot 56 and the Dublin Parcel", (ii) by
deleting the word "and" at the end of
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clause (v) and (iii) by adding the following at the end of clause (vi):
"and (vii) the Lessee may make the Momentum Distribution."
(i) Section 10.1(o) of the Participation Agreement is hereby
amended (i) by deleting the second "and" in the third line thereof and
substituting a comma therefor and (ii) by adding the following at the
end of said section: "and (iii) the Lessee may make the Restricted
Payments contemplated by the Momentum Transaction."
(j) Section 10.1(p) of the Participation Agreement is hereby
amended by adding at the end of said section the following: "and the
investment contemplated by the Momentum Transaction."
(k) Exhibit R (Form of Compliance Certificate) is hereby amended
(i) by adding the following at the end of Section 1(f): "(or .95 solely
for the fiscal quarter in which the Momentum Distribution is made)",
(ii) by deleting the words "at September 30, 1996" in Section 2(b)(i)
and substituting therefor the following "at the end of the fiscal
quarter ending June 30, 1998 (as adjusted for the fiscal quarter in
which the Momentum Transaction is consummated)" and (iii) by deleting
the word "or" in Section 5(f) and substituting therefor the word "and".
2. Amendments to Master Lease. The Master Lease is hereby amended as
follows:
(a) Section 12.4 of the Master Lease is hereby amended by
deleting the words "and the Ground Lease" in the second line thereof.
(b) Section 14.2 of the Master Lease is hereby amended by
deleting clauses (i) and (ii) in their entirety and substituting in
their place the following:
"(i) first, to the exclusion of other facilities covered by
such policy other than the New Property, to the repair,
rebuilding and restoration of any damage to the Property and
the New Property covered by such policy on a pro rata basis,
if so required in order to complete such repair, rebuilding
or restoration, up to the lesser of (A) the extent of the
loss suffered and (B) $23,000,000 per occurrence, and (ii)
second, if the loss suffered is in excess of $23,000,000 per
occurrence, any such proceeds in excess of $23,000,000 per
occurrence shall be shared between the loss payees under this
Lease and the lease referred to in the New Participation
Agreement, on the one hand, and other parties having an
insured interest with respect to such event covered by such
policy, on the other hand, based on the proportion that the
loss suffered with respect to the Property and the New
Property, on the one hand, bears to the aggregate loss
suffered by the Property, the New Property and all other
properties insured by such policy, on the other hand."
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(c) Section 17.1(h) of the Master Lease is hereby amended by
deleting the reference to "$2,500,000" in line one thereof and
substituting therefor "$10,000,000".
(d) Section 17.1(k) of the Master Lease is hereby deleted in its
entirety and replaced with the following:
"(k) Intentionally Omitted;"
(e) Section 17.2(j) of the Master Lease is hereby deleted in its
entirety.
(f) Section 20.3 of the Master Lease is hereby amended by
deleting the following at the end of said section:
"other than a Financial Covenant Event of Default (except as
provided in Section 17.2(j))."
3. Amendments to Guarantee. The Guarantee is hereby amended as follows:
(a) The definition of the term "Obligations" is hereby amended by
deleting the following proviso from clause (i):
"provided, however, the term "Obligations" shall not
include the Lessor's obligation under the Participation
Agreement to pay the Tranche B Participation Interest
Balances following the occurrence of a Lease Event of
Default constituting a Financial Covenant Event of Default
(unless the Lessee would be required to pay Asset
Termination Value under the circumstances contemplated in
Section 17.2(j) of the Lease, in which event the term
"Obligations" shall include the obligation of the Lessor
to pay the Tranche B Participation Interest Balances of
all Tranche B Participants)".
(b) Section 11.1(e) of the Guarantee is hereby amended by
deleting the reference to "$2,500,000" in line one thereof and
substituting therefor $10,000,000".
4. Amendments to Construction Deed of Trust, Security Agreement, Fixture
Filing and Financing Statement. The Construction Deed of Trust, Security
Agreement, Fixture Filing and Financing Statement is hereby amended as follows:
(a) Section B1 of the Construction Deed of Trust is hereby
amended by deleting the words "(other than a Financial Covenant Event of
Default)" in the second line thereof.
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(b) Section C11 of the Construction Deed of Trust is hereby
amended by deleting the words "and the Ground Lease" in the fourth line
thereof.
5. Amendment to Cash Collateral Agreement. The Cash Collateral Agreement
is hereby amended by deleting the following proviso from Section 8 thereof:
"provided, however, that (i) if the only Event of Default
which has occurred is a Financial Covenant Event of Default,
neither Agent nor Depositary Bank may exercise the foregoing
rights and remedies against that portion of the Collateral
representing the Tranche B Participation Interests in the
Advances while Lessee is properly exercising its right to
remarket the Property pursuant to Section 17.2(j) of the
Lease; and (ii) if, following the occurrence of such a
Financial Covenant Event of Default, the Lessor thereafter
becomes entitled under such Section 17.2(j) to recover the
entire Asset Termination Value remaining unpaid due to the
occurrence of an Event of Default that is not a Financial
Covenant Event of Default, Agent or Depositary Bank may
collect, proceed against or realize upon any or all of the
Collateral without the limitation contained in clause (i) of
this proviso."
6. Amendment to Assignment to Lease. The Assignment of Lease is hereby
amended by deleting the words "or the Ground Lessor" in the third line of
Section 10(b) thereof.
7. Amendments to Appendix 1. Appendix 1 is hereby amended as follows
(and each of the Lease, the Mortgage and each other Operative Document
incorporating Appendix 1 shall be deemed to be so amended):
(a) The definition of the term "Event of Default" is deleted in
its entirety and replaced with the following:
" 'Event of Default' means a Lease Event of Default, a
Construction Agency Agreement Event of Default or a Guarantee
Event of Default."
(b) The definition of the term "Financial Covenant Event of
Default" is deleted in its entirety.
(c) Appendix 1 is further amended by adding the following defined
terms in alphabetical order:
" 'Dublin Parcel' means an approximately 49.0744 acre parcel
forming a portion of that certain real property located in the
City of Dublin,
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California, south of Dublin Boulevard, west of Hacienda
Drive, north of I-580 and east of Arnold Road."
" 'Lot 56' means an approximately 20.538 acre parcel commonly
known as Lot 56C in the Hacienda Business Park, Pleasanton,
California."
" 'Momentum Distribution' is defined in the definition of the
term 'Momentum Transaction.'"
" 'Momentum Transaction' means a transaction to be
consummated by the Lessee consisting of (i) the establishment
of a new entity ("Momentum") for the purpose of developing
enterprise application software for selected industry
markets, (ii) distribution by the Lessee to Momentum of an
amount not to exceed $300,000,000 (the "Momentum
Distribution") and (iii) the distribution of the shares of
callable common stock of Momentum to the stockholders of the
Lessee."
" 'New Participation Agreement' means the Participation
Agreement dated as of September 28, 1998, as amended among
the Lessee, Wilmington Trust Company, as Owner Trustee, as
Lessor, ABN AMRO Bank N.V., as Indenture Trustee, ABN AMRO
Leasing, Inc., as Certificate Purchaser, and the Note
Purchasers identified on Schedule I thereto."
" 'New Property' means the property subject to the New
Participation Agreement."
8. Reference to and Effect on the Participation Agreement, Master Lease,
Guarantee, Construction Deed of Trust, Cash Collateral Agreement, Assignment of
Lease, Appendix 1 and Other Operative Documents.
8.1 Except as specifically amended above, the Participation Agreement,
Master Lease, Guarantee, Construction Deed of Trust, Cash Collateral Agreement,
Assignment of Lease, Appendix 1 and the other Operative Documents, and each of
the Schedules, Exhibits and Appendices thereto, shall remain in full force and
effect and the Participation Agreement, Master Lease, Guarantee, Construction
Deed of Trust, Cash Collateral Agreement, Assignment of Lease, Appendix 1 and
the other Operative Documents, each as amended by this Amendment, are hereby
ratified and confirmed in all respects.
8.2 Upon the effectiveness of this Amendment each reference in the
Participation Agreement, Master Lease, Guarantee, Construction Deed of Trust,
Cash Collateral Agreement, Assignment of Lease, Appendix 1 and the other
Operative Documents to "this Agreement," "hereunder," "hereof," or words of
similar import, shall, in each case, mean and be a reference to the
Participation Agreement, Master Lease, Guarantee, Construction Deed of Trust,
Cash Collateral Agreement, Assignment of
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Lease, Appendix 1 and the other Operative Documents, as applicable, as amended
hereby.
9. Miscellaneous.
9.1 Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
9.2 Counterparts. This Amendment may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
9.3 Effective Date. This Amendment shall be effective as of the date
first above written when executed by all of the parties hereto.
9.4 GOVERNING LAW. THIS AMENDMENT SHALL IN ALL RESPECTS BE GOVERNED BY
THE LAW OF THE STATE OF CALIFORNIA (EXCLUDING ANY CONFLICT-OF-LAW OR
CHOICE-OF-LAW RULES WHICH MIGHT LEAD TO THE APPLICATION OF THE INTERNAL LAWS OF
ANY OTHER JURISDICTION) AS TO ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
* * * *
[SIGNATURE PAGE FOLLOWS]
DOCUMENT NUMBER: 357594.7
DECEMBER 9, 1998
IN WITNESS WHEREOF, each party hereto has caused this Second
Amendment to be duly executed and delivered as of the date first written above.
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PEOPLESOFT, INC.
as Lessee
By: ________________________________
Title: _____________________________
LEASE PLAN NORTH AMERICA, INC.,
as Lessor
By: ________________________________
Title: _____________________________
ABN AMRO BANK N.V., SAN FRANCISCO
INTERNATIONAL BRANCH, as a Participant
By: ________________________________
Title: _____________________________
By: ________________________________
Title: _____________________________
ABN AMRO BANK N.V., SAN FRANCISCO
INTERNATIONAL BRANCH, as Agent
By: ________________________________
Title: _____________________________
By: ________________________________
Title: _____________________________
CREDIT LYONNAIS LOS ANGELES
BRANCH, as a Participant
By: ________________________________
Title: _____________________________
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THE INDUSTRIAL BANK OF JAPAN,
LIMITED SAN FRANCISCO AGENCY,
as a Participant
By: ________________________________
Title: _____________________________
KEYBANK NATIONAL ASSOCIATION,
as a Participant
By: ________________________________
Title: _____________________________
MELLON BANK, N.A.,
as a Participant
By: ________________________________
Title: _____________________________
THE DAI-ICHI KANGYO BANK,
LIMITED SAN FRANCISCO AGENCY,
as a Participant
By: ________________________________
Title: _____________________________