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Veritas Software / First Security Bank, National Assocation - Construction Agency Agreement
CONSTRUCTION AGENCY AGREEMENT
Dated as of July 28, 2000
between
VERITAS SOFTWARE GLOBAL CORPORATION
as the Construction Agent
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, but solely as the
Owner Trustee under the VS Trust 2000-2
as the Lessor
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS; RULES OF USAGE ................................................. 1
Section 1.1 Definitions ................................................... 1
Section 1.2 Interpretation ................................................ 2
ARTICLE II APPOINTMENT OF THE CONSTRUCTION AGENT ...................................... 2
Section 2.1 Appointment and Acceptance .................................... 2
Section 2.2 [Intentionally Omitted] ....................................... 4
Section 2.3 Term .......................................................... 4
Section 2.4 Scope of Authority ............................................ 5
Section 2.5 Delegation of Duties .......................................... 6
Section 2.6 Covenants of the Construction Agent ........................... 6
ARTICLE III THE PROPERTIES ............................................................ 8
Section 3.1 Construction .................................................. 8
Section 3.2 Amendments; Modifications ..................................... 8
Section 3.3 Failure to Complete Construction Period Properties ............ 9
ARTICLE IV PAYMENT OF FUNDS ........................................................... 9
Section 4.1 Right to Receive Construction Cost ............................ 9
ARTICLE V EVENTS OF DEFAULT ........................................................... 10
Section 5.1 Events of Default ............................................. 10
Section 5.2 Damages ....................................................... 11
Section 5.3 Remedies; Remedies Cumulative ................................. 11
ARTICLE VI THE LESSOR'S RIGHTS ........................................................ 12
Section 6.1 Exercise of the Lessor's Rights ............................... 12
Section 6.2 The Lessor's Right to Cure the Construction Agent's Defaults .. 12
ARTICLE VII MISCELLANEOUS ............................................................. 13
Section 7.1 Notices ....................................................... 13
Section 7.2 Successors and Assigns ........................................ 13
Section 7.3 GOVERNING LAW ................................................. 13
Section 7.4 SUBMISSION TO JURISDICTION; VENUE; WAIVERS .................... 13
Section 7.5 Amendments and Waivers ........................................ 13
Section 7.6 Counterparts .................................................. 13
Section 7.7 Severability .................................................. 13
Section 7.8 Headings and Table of Contents ................................ 13
Section 7.9 WAIVER OF JURY TRIAL .......................................... 13
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CONSTRUCTION AGENCY AGREEMENT
THIS CONSTRUCTION AGENCY AGREEMENT, dated as of July 28, 2000 (as amended, modified, extended, supplemented, restated and/or replaced from time to time, the "Agreement"), between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association ("FSB"), not individually, but solely as Owner Trustee under the VS Trust 2000-2 (the "Lessor"), and VERITAS SOFTWARE GLOBAL CORPORATION, a Delaware corporation (the "Construction Agent").
PRELIMINARY STATEMENT
A.The Lessor and the Construction Agent are parties to that certain Master Lease Agreement dated as of even date herewith (as amended, modified, extended, supplemented, restated and/or replaced from time to time, the "Lease"), pursuant to which the Construction Agent, as lessee (in such capacity, the "Lessee") has agreed to lease certain Land, Improvements and Equipment from the Lessor.
B.In connection with the execution and delivery of the Participation Agreement, the Lease and the other Operative Agreements, and subject to the terms and conditions hereof, (i) the Lessor desires to appoint the Construction Agent as its sole and exclusive agent in connection with the identification and acquisition of the Land and other components of the Property (provided, title to the Land and all other Property shall be held in the name of the Lessor) and the development, acquisition, installation, construction and testing of the Improvements and the Equipment in accordance with the applicable Plans and Specifications therefor and pursuant to the applicable Construction Contract and (ii) the Construction Agent desires, for the benefit of the Lessor, to identify and acquire the Land and other components of the Property and to cause the development, acquisition, installation, construction and testing of the Improvements, the Equipment and the other components of the Property in accordance with the applicable Plans and Specifications and to undertake such other liabilities and obligations as are herein set forth.
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS; RULES OF USAGE
SECTION 1.1 DEFINITIONS. For purposes of this Agreement, capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to them in Appendix A to that certain Participation Agreement dated as of July 28, 2000 (as amended, modified, extended, supplemented, restated and/or replaced from time to time in accordance with the applicable provisions thereof, the "Participation Agreement") among the Construction Agent, the various parties thereto from time to time, as Guarantors, the Lessor, the various banks and
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lending institutions parties thereto from time to time, as Holders, the various banks and lending institutions parties thereto from time to time, as Lenders, ABN AMRO Bank N.V., as the agent for the Lenders and respecting the Security Documents, as the agent for the Lenders and the Holders, to the extent of their interests, Credit Suisse First Boston, as Documentation Agent, and Credit Lyonnais Los Angeles Branch, as Syndication Branch. Unless otherwise indicated, references in this Agreement to articles, sections, paragraphs, clauses, appendices, schedules and exhibits are to the same contained in this Agreement.
SECTION 1.2 INTERPRETATION. The rules of usage set forth in Appendix A to the Participation Agreement shall apply to this Agreement.
ARTICLE II
APPOINTMENT OF THE CONSTRUCTION AGENT
SECTION 2.1 APPOINTMENT AND ACCEPTANCE. Subject to the terms and conditions hereof, the Lessor hereby irrevocably designates and appoints the Construction Agent as its exclusive agent and as general contractor, and the Construction Agent accepts such appointment, in connection with the identification and acquisition from time to time of the Land and other components of the Property (provided, title to the Land and other Property shall be held in the name of the Lessor) and the development, acquisition, installation, construction and testing of the Initial Improvements and any Subsequent Improvements on the Land, the Equipment and the other components of the Property in accordance with the applicable Plans and Specifications, and pursuant to the terms of the Operative Agreements. Notwithstanding any provisions hereof or in any other Operative Agreement to the contrary, the Construction Agent acknowledges and agrees that the Lessor shall advance no more than (a) with respect to (i) the Initial Improvements and related Property, or (ii) any Subsequent Improvements and related Property, the aggregate amount required to achieve Completion with respect thereto as set forth in the Construction Budget therefor for the Initial Improvements or such Subsequent Improvements, as the case may be, (as the same may have been modified in accordance with the Operative Agreements), and (b) with respect to all of the Property, the sum of the aggregate Commitment of the Lenders plus the aggregate amount of the Holder Commitments of the Holders in regard to the Property (including without limitation for any and all Advances in the aggregate from the Lenders under the Credit Agreement and from the Holders under the Trust Agreement). After the Construction Agent gains knowledge or a reasonable expectation that the costs for the Initial Improvements or any Subsequent Improvements and related Property shall exceed the original Construction Budget therefor (or exceed any such Construction Budget as modified in accordance with the Operative Agreements) or that Completion for the Initial Improvements or any Subsequent Improvements and related Property shall not occur on or prior to the Construction Period Termination Date therefor, the Construction Agent shall promptly (and in any event within five (5) Business Days of gaining such knowledge or expectation) notify the Agent in writing of the same. If at any time prior to the Construction Period Termination Date in respect of Initial Improvements or any Subsequent Improvements and related Property, the Lessor or the Agent shall have (x) determined in its respective reasonable good faith judgment that (i) the sum of the Available Commitments and the Available Holder Commitments (less the Unfunded Amount) shall be less than the amounts necessary for Completion of such portion of the Property or (ii) Completion in
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respect of any portion of the Property shall not occur on or prior to the Construction Period Termination Date therefor (y) received any notice from the Construction Agent as referenced in the preceding provisions of this paragraph, then in any such case Lessor shall have the option (at the direction of the Agent) to replace the Construction Agent with a new construction agent selected by the Lessor (at the direction of the Agent) to finalize the Completion of such portion of the Property. The cost and expense incurred to finalize the Completion of all or any portion of the Property as referenced in the preceding sentence shall be the responsibility of the Construction Agent and shall be payable by the Construction Agent on demand; provided, in no event shall the obligations of the Construction Agent for such costs and expenses in respect of any portion of the Property exceed the Maximum Amount therefor; provided, further, amounts expended by the Lessor to finalize the Completion of all or any portion of the Property as referenced in the preceding sentence shall be added to the Property Cost therefor.
Costs in excess of each original Construction Budget (or any such Construction Budget as modified in accordance with the Operative Agreements) in each case as previously delivered to the Agent in respect of the Initial Improvements or any Subsequent Improvements and related portions of the Property shall not be the responsibility of the Construction Agent but instead shall be paid by the Lenders and the Holders to the extent, but only to the extent, that (after taking into account such excess costs and any other items of excess cost which are then known to the Construction Agent or are reasonable for the Construction Agent to expect) the conditions precedent set forth in Section 5.4 of the Participation Agreement are satisfied.
Subject to the Lenders and the Holders not agreeing to continue making Advances in accordance with the provisions of the next paragraph and in the event from time to time (a) the Construction Agent gains knowledge or a reasonable expectation that the costs for the Initial Improvements, or any Subsequent Improvements and related Property shall exceed the original Construction Budget therefor (or exceed such Construction Budget as modified in accordance with the Operative Agreements) or that Completion for any such portion of the Property shall not occur on or prior to the Construction Period Termination Date therefor or (b) the Lessor or the Agent shall have determined in its respective reasonable good faith judgment with respect to any portion of the Property that the sum of the Available Commitments and the Available Holder Commitments (less the Unfunded Amount) shall be less than the amounts necessary for Completion of such portion of the Property or that Completion of any such portion of the Property shall not occur on prior to the applicable Construction Period Termination Date, the Construction Agent shall elect and comply (within ten (10) days of the Construction Agent gaining such knowledge or expectation or within ten (10) days of the Lessor or the Agent making such determination and giving written notice of the same to the Construction Agent, as referenced in subsections (a) and (b) above of this paragraph) with one of the options set forth in the following subsections (i) or (ii) (collectively, the "Construction Agent Options"): (i) the Construction Agent shall pay to the Lessor, on a date designated by the Lessor, an aggregate amount equal to (A) the Termination Value for such portion of the Property plus (B) any and all fees and expenses incurred by or on behalf of the Lessor or the Agent in connection with the such portion of the Property (including without limitation the transfer thereof) and on such date the Lessor shall transfer and convey to the Construction Agent all right, title and interest of the Lessor in and to such portion of the Property or (ii) the Construction Agent shall pay to the Lessor, on a date designated by the Lessor, an aggregate amount equal to the Maximum Amount in respect of such portion of the Property and on and after such date, the Construction Agent
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shall be irrevocably deemed, without any further action, to have relinquished all right, title and interest in and to such portion of the Property and to have transferred and conveyed all such right, title and interest to the Lessor. In connection with any transfer of any portion of the Property as referenced above in this Section 2.1 by the Lessor to the Construction Agent, the Lessor shall execute and deliver to the Construction Agent, at the cost and expense of the Construction Agent (subject to the limitations described in the next sentence), each of the following: (w) special or limited warranty deeds conveying each applicable portion of the Property to the Construction Agent free and clear of the Lien of the Lease, the Lien of the Credit Documents and any Lessor Liens; (x) a Bill of Sale conveying each applicable portion of the Property (to the extent it is personal property) to the Construction Agent free and clear of the Lien of the Lease, the Lien of the Credit Documents and any Lessor Liens; (y) any real estate tax affidavit or other document required by law to be executed and filed in order to record the applicable Deed; and (z) FIRPTA affidavits. The Lessor (at the discretion of the Agent) shall elect whether the out-of-pocket fees and expenses associated with the transfer of the Property or any such portion thereof shall be paid by either (i) sales proceeds from the Property or such portion, (ii) the Lessor (but only to the extent amounts are available therefor with respect to the Available Commitments and the Available Holder Commitments or each Lender and each Holder approves the necessary increases in the Available Commitments and the Available Holder Commitments to fund such fees and expenses) or (iii) the Construction Agent; provided, if the Construction Agent funds such fees and expenses (as referenced in subsection (iii)) then the Maximum Amount in respect of the applicable portion of the Property will be reduced accordingly, as more specifically described in the definition of "Maximum Amount". Amounts funded by the Lenders and the Holders with respect to the foregoing for any portion of the Property shall be added to the Property Cost of such portion. All of the foregoing documentation must be in form and substance reasonably satisfactory to the Lessor. Subject to the foregoing, the Property or applicable portions thereof shall be conveyed to the Construction Agent "AS-IS", "WHERE-IS" and in then present physical condition.
In the event the costs in excess of any original Construction Budget previously delivered to the Agent for any portion of the Property are not funded by the Lenders and the Holders because (after taking into account such excess costs and any other items of excess cost which are then known to the Construction Agent or are reasonable for the Construction Agent to expect) the conditions precedent set forth in Section 5.4 of the Participation Agreement are not satisfied, then if, but only if, all the Holders and all the Lenders agree at such time, (a) such excess costs shall be funded and (b) the Holder Commitments and the Lender Commitments shall be increased accordingly.
SECTION 2.2 [INTENTIONALLY OMITTED].
SECTION 2.3 TERM. This Agreement shall commence on the date hereof and, unless the Lessor (in its sole discretion) elects otherwise, this Agreement shall terminate with respect to any portion of the Property on the applicable Construction Period Termination Date. If this Agreement expires prior to the Completion of any portion of the Property, then the Lessor may either (i) hire a new construction agent (at the direction of the Agent) to finalize the Completion of the Property or such portion or (ii) require the Construction Agent to continue to perform hereunder and to achieve Completion of the Property or such portion. The cost and expense incurred to finalize the Completion of the Property or any portion thereof as referenced in the
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preceding sentence shall be the responsibility of the Construction Agent and shall be payable by the Construction Agent on demand; provided, in no event shall the obligations of the Construction Agent for such costs and expenses with respect to any portion of the Property exceed the Maximum Amount in respect of such portion; provided, further, amounts expended by the Lessor to finalize the Completion of any portion of the Property as referenced in the preceding sentence shall be added to the Property Cost therefor.
SECTION 2.4 SCOPE OF AUTHORITY.
(a) The Lessor hereby expressly authorizes the Construction Agent, or any agent or contractor of the Construction Agent, and the Construction Agent unconditionally agrees for the benefit of the Lessor, subject to Section 2.4(b), to take all action necessary or desirable for the performance and satisfaction of any and all of the Lessor's obligations under any construction agreement and to fulfill all of the obligations of the Construction Agent including without limitation:
(i) the identification and assistance with the acquisition of the
Land and all other portions of the Property in accordance with the
terms and conditions of the Participation Agreement;
(ii) all design and supervisory functions relating to the
development, acquisition, installation, construction and testing of
all Improvements, Equipment and other components of the Property and
performing all engineering work related thereto;
(iii) (A) negotiating, entering into, performing and enforcing
all contracts and arrangements to acquire the Land and all other
Property and to procure the equipment necessary to construct the
Improvements and all related Property on the Land and (B) negotiating,
executing, performing and enforcing all contracts and arrangements to
develop, acquire, install, construct and test the Improvements, the
Equipment and the other components of the Property on such terms and
conditions as are customary and reasonable in light of local and
national standards and practices and the businesses in which the
Lessee is engaged;
(iv) obtaining all necessary permits, licenses, consents,
approvals, entitlements and other authorizations, including without
limitation all of the foregoing required for the Property and the use
and occupancy thereof and those required under applicable Law
(including without limitation Environmental Laws), from all
Governmental Authorities in connection with the development,
acquisition, installation, construction and testing of any
Improvements, the Equipment and the other components of the Property
substantially in accordance with the applicable Plans and
Specifications;
(v) maintaining all books and records with respect to the
Property and the construction, operation and management thereof;
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(vi) performing any other acts necessary in connection with the
identification and acquisition of the Land and all other portions of
the Property and the development, acquisition, installation,
construction and testing of any Improvements, Equipment and all other
additional components of the Property in accordance with the
applicable Plans and Specifications;
(vii) the right to submit notices pursuant to Section 2.3 of the
Credit Agreement and to receive the proceeds of Advances directly from
the Agent;
(viii) the right to contest all mechanics' and materialmens'
liens in accordance with the requirements for Permitted Liens; and
(ix) the right to bring or defend any claims or seek resolution
of disputes arising from Construction Agent's performance of any of
the foregoing actions.
(b) Neither the Construction Agent nor any of its Affiliates or agents shall enter into any contract or consent to any contract in the name of the Lessor without the Lessor's prior written consent, such consent to be given or withheld in the exercise of the Lessor's reasonable discretion; provided, however, that (i) no such contract will increase the obligations of the Lessor beyond the obligations of the Lessor as are expressly set forth in the Operative Agreements and (ii) each such contract shall expressly limit recourse against the Lessor to the assets of the VS Trust 2000-2 and shall otherwise be non-recourse to the Lessor on terms and conditions that are reasonably acceptable to the Lessor.
(c) Subject to the terms and conditions of this Agreement and the other Operative Agreements, the Construction Agent shall have sole management and control over the installation, construction and testing means, methods, sequences and procedures with respect to the Property.
SECTION 2.5 DELEGATION OF DUTIES. The Construction Agent may execute any of its duties under this Agreement by or through agents, contractors, employees or attorneys-in-fact; provided, however, that no such delegation shall limit or reduce in any way the Construction Agent's duties and obligations under this Agreement.
SECTION 2.6 COVENANTS OF THE CONSTRUCTION AGENT. The Construction Agent hereby covenants and agrees that it will:
(a) following the Construction Commencement Date for each portion of the Property, cause the development, acquisition, installation, construction and testing of such portion of the Propert...
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