Construction Agency Agreement

EXECUTION COPY


CONSTRUCTION AGENCY AGREEMENT


between


THE SYMANTEC 2001 TRUST,
as Lessor,


and


SYMANTEC CORPORATION,
as Construction Agent and Lessee


Dated as of March 30, 2001


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TABLE OF CONTENTS


PAGE ARTICLE 1 DEFINITIONS................................................................1


1.1 Defined Terms.................................................................1


ARTICLE 2 APPOINTMENT OF CONSTRUCTION AGENT..........................................1


2.1 Appointment...................................................................1


2.2 Acceptance....................................................................2


2.3 Plans and Specifications; Estimated Improvement Costs; Insurance..............2


2.4 Term..........................................................................2


2.5 Scope of Authority............................................................3


2.6 Delegation of Duties..........................................................4


2.7 Covenants of the Construction Agent...........................................4


2.8 Supplements to this Agreement.................................................5


ARTICLE 3 THE IMPROVEMENTS...........................................................6


3.1 Construction..................................................................6


3.2 Amendments; Modifications.....................................................6


3.3 Casualty, Condemnation and Force Majeure Events...............................6


ARTICLE 4 PAYMENT OF FUNDS...........................................................6


4.1 Right to Receive Project Costs................................................6


4.2 Cost Overruns.................................................................7


ARTICLE 5 EVENTS OF DEFAULT..........................................................8


5.1 Events of Default.............................................................8


5.2 Survival......................................................................9


5.3 Remedies.....................................................................10


5.4 Limitation on Construction Agent's Recourse Liability........................10


5.5 Certain Ongoing Obligations..................................................10


ARTICLE 6 INSURANCE.................................................................11


6.1 Public Liability Insurance...................................................11


(a) Construction Agent Responsible........................................11


(b) Hazard and Other Insurance............................................11


(c) Coverage..............................................................11


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TABLE OF CONTENTS
(CONTINUED)


PAGE
(d) Adjustment of Losses..................................................12


(e) Application of Insurance Proceeds.....................................13


ARTICLE 7 LESSOR'S RIGHTS...........................................................13


7.1 Assignment of the Lessor's Rights............................................13


7.2 Lessor's Right to Cure Construction Agent's Defaults.........................13


ARTICLE 8 MISCELLANEOUS.............................................................13


8.1 Notices......................................................................13


8.2 Successors and Assigns.......................................................15


8.3 GOVERNING LAW................................................................15


8.4 Amendments and Waivers.......................................................15


8.5 Counterparts.................................................................15


8.6 Severability.................................................................15


8.7 Headings and Table of Contents...............................................15


8.8 Limitation of Liability of Trustee...........................................15


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CONSTRUCTION AGENCY AGREEMENT


THIS CONSTRUCTION AGENCY AGREEMENT, dated as of March 30, 2001 (this "Agreement"), is entered into by and between THE SYMANTEC 2001 TRUST, a Delaware business trust (the "Lessor"), and SYMANTEC CORPORATION, a Delaware corporation (in its capacity as construction agent hereunder, the "Construction Agent," and in its capacity as lessee under the Lease (as defined below), the "Lessee").


PRELIMINARY STATEMENT


The Lessor, the Construction Agent, the Lessee, the Holders, the Lenders, the Trust Companies, Fuji Bank, Limited, as documentation agent, KeyBank National Association, as syndication agent and the Agent are parties to a Participation Agreement, dated as of the date hereof (as amended, supplemented or otherwise modified from time to time, the "Participation Agreement"), pursuant to which the Participants have agreed, subject to the terms and conditions thereof, to finance (i) the acquisition of each of the properties described in one or more Construction Agency Agreement Supplements attached hereto (individually, the "Property," and collectively, the "Properties") and (ii) the construction of the Improvements in accordance with the Plans and Specifications.


The Lessor and the Lessee are also parties to a Master Lease, dated as of the date hereof (as amended, supplemented or otherwise modified from time to time, the "Lease"), pursuant to which the Lessee shall lease the Properties from the Lessor.


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 acquisition and development of each of the Properties and the construction of the Improvements thereon in accordance with the Plans and Specifications and (ii) the Construction Agent desires, for the benefit of the Lessor and the Holders, to cause the construction of the Improvements on the Properties in accordance with the Plans and Specifications and to assume such other liabilities and obligations as are set forth herein.


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 1


DEFINITIONS


1.1 DEFINED TERMS. Capitalized terms used herein but not otherwise defined shall have the meanings set forth in Annex A to the Participation Agreement.


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ARTICLE 2


APPOINTMENT OF CONSTRUCTION AGENT


2.1 APPOINTMENT. Subject to the terms and conditions hereof, the Lessor hereby irrevocably designates and appoints the Construction Agent as its exclusive agent in connection with the acquisition of each Property and construction of the Improvements thereon in accordance with the Plans and Specifications for each Property, and pursuant to the terms of the Participation Agreement and the other Operative Agreements.


2.2 ACCEPTANCE. The Construction Agent hereby unconditionally accepts the appointment set forth in SECTION 2.1 and agrees to perform its duties hereunder.


2.3 PLANS AND SPECIFICATIONS; ESTIMATED IMPROVEMENT COSTS; INSURANCE. The Construction Agent hereby represents and warrants to the Lessor and the Agent, with respect to each Property, that attached to each Construction Agency Agreement Supplement is or shall be a true, correct and complete copy of:


(a) the Plans and Specifications for the Property to be purchased on the effective date of such Construction Agency Agreement Supplement, as such Plans and Specifications are in effect on the date thereof;


(b) the Estimated Project Costs for the Property to be purchased on the effective date of such Construction Agency Agreement Supplement; and


(c) the deductibles for the insurance policies described in SECTION 6.1(a) and the premium and the deductibles for the insurance policies described in SECTION 6.1(b).


2.4 TERM. This Agreement shall commence on the date hereof and shall terminate


(a) with respect to any single Property, upon the earliest to occur of:


(i) the payment by the Lessee or the Construction Agent of (x) the Lease Balance attributable to such Property and (y) all accrued and unpaid Rent with respect to such Property;


(ii) the termination of this Agreement pursuant to ARTICLE V; and


(iii) the occurrence of the Completion Date with respect to such Property and full performance of all other obligations of the Construction Agent hereunder with respect to such Property; and


(b) with respect to all Properties (and therefore, this Agreement shall terminate in full), upon the earliest to occur of:


(i) the payment by the Lessee (in accordance with the terms of the Lease) or the Construction Agent (in accordance with SECTIONS 4.2 or 5.3) of (x) the Lease


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Balance attributable to all Properties and (y) all accrued and unpaid Rent with respect to all Properties;


(ii) the termination of this Agreement pursuant to ARTICLE V; and


(iii) the occurrence of (x) the final Completion Date and (y) full performance of all other obligations of the Construction Agent hereunder with respect to all Properties;


provided, however, that any termination of this Agreement shall not relieve the Construction Agent of its liability for any breach of any of the terms hereof.


2.5 SCOPE OF AUTHORITY. (a) The Lessor hereby expressly authorizes the Construction Agent to, and the Construction Agent shall, take all action necessary or desirable for the performance and satisfaction of all of the Construction Agent's obligations under this Agreement, including:


(i) assistance with the acquisition and development of each Property in accordance with the terms and conditions of the Participation Agreement;


(ii) all design and supervisory functions relating to the construction of the Improvements and the performance of all engineering work related to the construction of the Improvements;


(iii) negotiating and entering into all contracts or arrangements to procure the equipment necessary to construct the Improvements on such terms and conditions as are customary and reasonable in light of local standards and practices;


(iv) obtaining all necessary permits, licenses, consents, approvals and other authorizations, including those required under applicable Environmental Laws, from all Governmental Authorities in connection with the development and construction of the Improvements in accordance with the Plans and Specifications;


(v) maintaining all books and records with respect to the construction, operation and management of the Properties including maintaining an accurate record of Project Costs; and


(vi) performing any other acts necessary in connection with the acquisition and development of each Property and construction and development of the Improvements thereon in accordance with the Plans and Specifications.


(b) Neither the Construction Agent nor any of its Affiliates or agents shall enter into any contract relating to the construction of the Improvements which would, directly or indirectly, impose any liability or obligation on the Lessor and for which liability or obligation the Lessor is not indemnified. AS BETWEEN THE LESSOR AND THE CONSTRUCTION AGENT, THE CONSTRUCTION AGENT SHALL BE RESPONSIBLE FOR THE ACTS AND OMISSIONS OF ITS CONTRACTORS, SUBCONTRACTORS AND OTHER AGENTS.


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(c) Subject to the terms and conditions of this Agreement, the Construction Agent shall have sole management and control over the construction means, methods, sequences and procedures with respect to the construction of the Improvements on each Property.


2.6 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, that no such delegation shall limit or reduce in any way the Construction Agent's duties and obligations under this Agreement.


2.7 COVENANTS OF THE CONSTRUCTION AGENT. The Construction Agent hereby covenants and agrees that it will:


(a) cause construction of the Improvements to be prosecuted diligently and continuously in accordance with the Plans and Specifications and all Legal Requirements and Insurance Requirements;


(b) enter into Construction Contracts with reputable contractors on terms and conditions reasonably satisfactory to the Lessor and the Agent, which Construction Contracts shall provide for the completion of the Improvements on each Property on a date certain and for a guaranteed maximum price;


(c) within three (3) days after entering into a Construction Contract deliver copies of such Construction Contract to the Lessor and the Agent;


(d) cause the Completion Date to occur on or prior to the Commitment Termination Date, free and clear (by removal or bonding) of Liens (other than Lessor Liens and Permitted Exceptions) or claims for materials supplied or labor or services performed in connection with the construction of the Improvements;


(e) following the Completion Date of each Property, use reasonable good faith efforts to cause all outstanding punch list items with respect to the Improvements on such Property to be completed;


(f) cause the Improvements on each Property to be constructed for an amount equal to or less than 110% of each Property's respective Projected Completion Value;


(g) notify the Lessor in writing not less than three (3) Business Days after the occurrence of each Force Majeure Event;


(h) promptly, but in any case within sixty (60) days of actual knowledge by the Construction Agent thereof and subject to Article XIII of the Lease, cause all Liens (other than Lessor Liens and Permitted Exceptions) on any Property (including Liens or claims for materials supplied or labor or services performed in connection with the construction of the Improvements), to be discharged or bonded off if disputed in good faith by the Construction Agent;


(i) maintain each Property in a safe condition;


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(j) ensure that on or prior to the Commitment Termination Date all water, sewer, electric, gas, telephone and drainage facilities, all other utilities required to adequately service the Improvements for the intended use and means of access between such Improvements and public highways for pedestrians and motor vehicles will be available pursuant to adequate permits (including any that may be required under applicable Environmental Laws), and all utilities serving each Property, or proposed to serve such Property in accordance with the Plans and Specifications, are or will be located in, and vehicular access to the Improvements will be provided by, either public rights-of-way abutting such Property or Appurtenant Rights;


(k) pay when due (subject to reimbursement as provided for under this Agreement) pursuant to and subject to the Budget, or cause to be paid when due in accordance with the Participation Agreement, all applicable Project Costs;


(l) enforce or cause to be enforced performance by each party to each Construction Contract of their respective obligations, warranties and other design, construction or other obligations with respect to the design, construction and completion of the Improvements or pursue remedies with respect to the breach of those obligations;


(m) subject to ARTICLE VI and Articles XV and XVI of the Lease, use the proceeds of any property insurance maintained with respect to any Property to complete construction of, or rebuild or replace, any portion of such Property with respect to a Casualty or Condemnation occurring with respect to that portion of such Property; and


(n) provide to the Lessor: (A) monthly, if requested by the Lessor, copies of all change orders, notices, requests for any increase of any contract sum payable, or other communication received under or in connection with any Construction Contract which seek to increase the total consideration payable under any Construction Contract; (B) promptly upon request, information regarding the status of the construction, compliance of the parties to the Construction Contracts with the terms thereof, and amounts due and payable under the Construction Contracts, including such information as the Lessor shall reasonably require to determine that the Budget is In Balance (for purposes of this Agreement and the other Operative Agreements, the determination, at any time, including at the time of each request for an Advance, as to whether or not the Budget is In Balance will be made in the reasonable judgment of the Lessor); and (C) monthly, its certification: (1) that the Budget is In Balance, (2) that the remaining Contingency Reserves are sufficient for any reasonably foreseeable contingency which might occur during the remaining period through Completion, (3) of the anticipated date on which Completion will be achieved, and (4) of the number of days the construction is, without overtime or premium pay (other than such overtime or premium pay as is budgeted or reserved for in the Budget) and given the prevailing weather and other conditions of construction that are a ...