Construction Agency Agreement

EXECUTION COPY


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CONSTRUCTION AGENCY AGREEMENT


dated as of February 9, 1999


between


SUMITOMO BANK LEASING AND FINANCE, INC.,
as Lessor


and


SYMANTEC CORPORATION,
as Construction Agent.


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Lease Financing of City Center II
and Construction of Certain Improvements
for Symantec Corporation


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CONSTRUCTION AGENCY AGREEMENT


THIS CONSTRUCTION AGENCY AGREEMENT, dated as of February 9, 1999 (this "Agreement"), between SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation, as Lessor (the "Lessor"), and SYMANTEC CORPORATION, a Delaware corporation, as Construction Agent (in its capacity as Construction Agent, the "Construction Agent").


W I T N E S S E T H:


WHEREAS, the Lessor and the Construction Agent are parties to that certain Master Lease and Deed of Trust dated as of October 18, 1996 (as amended by Master Amendment No. 1 and as otherwise amended, supplemented or otherwise modified from time to time, the "Master Lease"), pursuant to which the Lessee has agreed to lease from Lessor, and the Lessor has agreed to lease to Lessee, Lessor's interest in certain Properties; and


WHEREAS, pursuant to the amended and restated Operative Documents, each dated as of February 9, 1999 (the "Master Amendment"), the Lessor, Symantec Corporation (in its capacity as Lessee, Pledgor, Guarantor and Construction Agent), the Lenders and the Agent have agreed to amend certain provisions of the Operative Documents for the purpose of providing financing for the construction of certain Improvements (the "Subject Improvements") located on the Land subject to Lease Supplement No. 4 (which Land is described on Schedule 1 attached hereto);


WHEREAS, subject to the terms and conditions hereof, (i) the Lessor desires to appoint the Construction Agent as its sole and exclusive agent for the construction of the Subject Improvements in accordance with the Plans and Specifications described on Schedule 2 attached hereto (the "Plans and Specifications") and pursuant to the Master Lease and this Agreement, and (ii) the Construction Agent desires, for the benefit of the Lessor, to cause the Subject Improvements to be constructed in accordance with the Plans and Specifications and pursuant to the Master Lease and this Agreement, in each case in accordance with the terms set forth herein and in the Master Lease;


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:


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ARTICLE I


DEFINITIONS; INTERPRETATION


1.1. Definitions; Interpretation. Unless the context shall otherwise require, capitalized terms used and not defined in this Agreement (including the recitals hereto) shall have the meanings assigned thereto in Appendix A to the Participation Agreement (as amended, supplemented, amended and restated or otherwise modified from time to time, "Appendix A") for all purposes hereof (except that for the purposes hereof the term "Property" refers solely to City Center II); and the rules of interpretation set forth in Appendix A shall apply to this Agreement.


ARTICLE II


APPOINTMENT OF CONSTRUCTION AGENT; ACCEPTANCE


2.1. Appointment and Acceptance. Pursuant to and subject to the terms and conditions set forth herein and in the Lease and the other Operative Documents, the Lessor hereby irrevocably designates and appoints the Construction Agent as its exclusive agent for the construction of the Subject Improvements in accordance with the Plans and Specifications, and the Construction Agent hereby unconditionally accepts the designation and appointment as Construction Agent.


2.2. Plans and Specifications; Estimated Improvement Costs. The Construction Agent hereby represents and warrants to the Lessor with respect to the Construction for City Center II that:


(a) the Construction Agent in good faith expects that it will
expend an amount not in excess of the Construction Commitment Amount in
order for the Construction of the Subject Improvements to achieve
Substantial Completion.


2.3. Term. This Agreement shall commence on the date hereof and shall terminate upon the first to occur of:


(a) payment by the Lessee of the Lease Balance for City Center
II and termination of the Lease in accordance with the terms and
conditions of the Lease or the payment and performance of the
obligations set forth in Section 5.5 hereof;


(b) the Expiration Date or other expiration or early termination
of the Lease;


(c) termination of this Agreement pursuant to Article V hereof;
and


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(d) the completion of the Construction, including completion of
punch list items referred to in Section 2.5(e) and the full performance
of all other obligations of the Construction Agent hereunder.


2.4. Construction Documents.


(a) Subject to Section 3.1, the Construction Agent shall enter into the Prime Construction Contract and such other agreements with architects and contractors as the Construction Agent deems necessary or desirable for the completion of the Construction pursuant hereto (collectively, the "Construction Documents"); provided, however, that the Prime Construction Contract shall be substantially in the form of the Construction Contract previously used in connection with City Center V with such changes as may be approved by the Lessor and Construction Agent in their reasonable discretion; provided, further, that no such delegation shall limit or reduce in any way the Construction Agent's duties and obligations under this Agreement; provided, further, that contemporaneously with the execution and delivery of this Agreement, the Construction Agent will execute and deliver to the Lessor the Construction Documents Assignment in the form of Annex I attached hereto, pursuant to which the Construction Agent assigns to the Lessor, among other things, all of the construction Agent's rights under and interest in such Construction Documents.


2.5. Scope of Authority. (a) Subject to the terms, conditions, restrictions and limitations set forth in the Operative Documents, 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, to take all action necessary or desirable for the performance and satisfaction of all of the Construction Agent's obligations hereunder, including, without limitation:


(i) performing all design and supervisory functions and all
engineering work related to the Construction;


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


(iii) obtaining all necessary Material permits, licenses,
consents, approvals and other authorizations, including those required
under Applicable Law (including Environmental Laws), from all
Governmental Authorities in connection with the Construction and
granting on behalf of the Lessor such easements as are necessary or
appropriate to


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effect the Construction or that otherwise would not have an adverse
effect on the value of the Subject Improvements or the Land on which the
Subject Improvements are located;


(iv) maintaining all books and records with respect to the
Construction; and


(v) performing any other acts necessary in connection with the
construction and development of the Subject Improvements in accordance
with the Plans and Specifications.


(b) Subject to the terms hereof, the Construction Agent may execute any of its duties under this Agreement by or through agents, contractors, employees or attorneys-in-fact.


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


(d) Neither the Construction Agent nor any of its Affiliates or agents shall enter into any contract which would, directly or indirectly, impose any material liability or obligation on the Lessor without the express written consent of the Lessor.


2.6. Covenants of the Construction Agent. The Construction Agent hereby covenants and agrees that it will:


(a) promptly, after receiving control of the Property, commence
the Construction following the Restructuring Date and prosecute the
Construction diligently and without interruption (subject only to delays
caused by Force Majeure Events) in accordance in all Material respects
with the Plans and Specifications, all Requirements of Law and all
Insurance Requirements;


(b) promptly, upon its receipt thereof, deliver to the Lessor a
true and complete copy of the Plans and Specifications for City Center
II;


(c) notify the Lessor in writing as soon as practical after the
occurrence of each Force Majeure Event;


(d) take all reasonable and practical steps to minimize the
disruption of the construction process arising from Force Majeure
Events;


(e) cause the Substantial Completion of the Construction to
occur on or prior to the Outside Completion


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Date, and cause all Liens (including, without limitation, Liens or
claims for materials supplied or labor or services performed in
connection with the construction of the Subject Improvements), other
than Permitted Liens, to be discharged;


(f) following the Substantial Completion of the Construction,
cause all outstanding punch list items with respect to the Construction
to be promptly and expeditiously completed;


(g) cause the Subject Improvements to be constructed (x)
substantially in accordance with the applicable Plans and
Specifications, (y) in compliance in all material respects with all
Applicable Law and (z) in compliance with all Insurance Requirements;


(h) ensure that the Land subject to Lease Supplement No. 4
acquired pursuant to the Operative Documents and the Subject
Improvements shall be (x) in compliance in all material respects with
all Applicable Law (including without limitation zoning and land use
laws and Hazardous Materials Laws), and (y) fit for use as a property of
the type specified in the Appraisal of such Property delivered in
connection with the Acquisition Date thereto and other purposes
attendant thereto;


(i) as between the parties to the Operative Documents, maintain
the Land subject to Lease Supplement No. 4 in safe condition free from
injury or mishaps to third Persons;


(j) ensure that on or prior to the Outside Completion Date for
the Land and Improvements subject to Lease Supplement No. 4, 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
Hazardous Materials Laws), and all utilities serving such 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 on such Property will be provided by, either public
rights-of-way abutting such Property or appurtenant rights;


(k) ensure that all licenses, approvals, authorizations,
consents, permits (including, without limitation, building, demolition
and environmental permits, licenses, approvals, authorizations and
consents), easements and rights-of-way, including dedication, required
for (x) the use, treatment, storage, transport, disposal or disposition
of any Hazardous Materials on, at, under or from


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such Property during the construction of the Subject Improvements, and
(y) construction of the Subject Improvements on such Property in
accordance with the Plans and Specifications therefor and this Agreement
will be obtained from the appropriate Governmental Authorities having
jurisdiction or from private parties, as the case may be, prior to the
time required by such Governmental Authority or private party, except
where the failure to obtain such licenses, approvals, authorizations,
consents, permits, easements, rights-of-way or dedications could not
reasonably be expected to (x) have a Material Adverse Effect, (y) or
materially adversely affect the Construction Agent's ability to comply
with its covenants and agreements under this Agreement, including
Section 2.7(b) or (z) have a material adverse effect on the use, value
or remaining useful life of Land and Improvements subject to Lease
Supplement No. 4; and


(l) promptly notify the Lessor in writing if in the Construction
Agent's reasonable judgment the amount that needs to be expended in
order to achieve Substantial Completion of the City Center II
Improvements is in excess of the Construction Commitment Amount.


2.7. Insurance.


(a) Public Liability and Workers' Compensation Insurance. During the Interim Term with respect to the Property, the Construction Agent shall procure and carry insurance for the risks insured arising from the acts or omissions of the Construction Agent while located on, in possession of, or controlling or acting or failing to act with respect to Land and Improvements subject to Lease Supplement No. 4. In addition, during the Interim Term with respect to Land and Improvements subject to Lease Supplement No. 4, the Construction Agent shall, in the construction of Improvements on Land and Improvements subject to Lease Supplement No. 4 and the operation of Land and Improvements subject to Lease Supplement No. 4, comply with all applicable workers' compensation laws. The Construction Agent acknowledges and agrees in this connection that the Property is in its control and possession during the Interim Term therefor, it is responsible as Construction Agent for the acts and omissions of its subcontractors and agents and that it has agreed to maintain Land and Improvements subject to Lease Supplement No. 4 free from injury and mishap to third Persons.


(b) Hazard and Other Insurance. During the Interim Term with respect to the Property, the Construction Agent shall also maintain and keep in force a policy or policies of builder's "all risk" insurance with respect to such Property, insuring the Lessor's interest in Land and Improvements subject to Lease Supplement No. 4, including collapse coverage and fire insurance


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with extended coverage, written on a Standard Builder's Risk Completed Value Form (100% non-reporting), in an amount equal to 100% of the replacement cost thereof. The premium for such coverage shall be a cost paid with the proceeds of a Construction Advance. In addition, the reduction in any recovery pursuant to any deductible applicable to such policy shall be a construction cost paid with the proceeds of an Advance; provided, however, that the Construction Agent shall pay to the Lessor an amount equal to the deductible if the conditions precedent for an Advance cannot be met at the time such deductible amount shall be payable and, provided, further, that, unless each Participant otherwise agrees, each insurance policy required pursuant to this clause (b) shall have no deductible. Amounts otherwise payable by the Lessee to the Lessor with respect to the Property under the Operative Documents during the Interim Term in respect of an event covered by such policy shall be reduced by any recovery by the Lessor under such policy and for the deductible (if any) paid by the Construction Agent, in each case to the extent relating to the Land and Improvements subject to Lease Supplement No. 4.


(c) Deductibles. The insurance required to be obtained by the Construction Agent under Section 2.7(a) may be subject to deductible amounts and self-insured retentions as is consistent with the Construction Agent's or its Affiliates practice for other properties similar to the Land and Improvements subject to Lease Supplement No. 4 owned or leased by the Construction Agent or the Affiliates of the Construction Agent, and may be carried under blanket policies maintained by or on behalf of the Construction Agent so long as such policies otherwise comply with the provisions of this Section 2.7. The insurance required to be obtained by the Lessee pursuant to Section 2.7(b) may contain a deductible amount, but not in excess of $1,000.00, unless each Participant otherwise agrees and the cost of obtaining all such insurance shall be advanced to the Construction Agent and constitute part of Property Balance.


(d) Coverage. All insurance required to be carried by the Construction Agent pursuant to the requirements of Section 2.7(a) or 2.7(b) shall provide in the policy or by special endorsement that:


(i) in the case of insurance required by Section 2.7(a), the
Lessor and each Lender, are included as additional insureds;


(ii) the insurer thereunder waives all rights of subrogation
against the Lessor, and each Lender and waives any right of set-off and
counterclaim and any other right to deduction whether by attachment or
otherwise;


(iii) such insurance shall be primary without right of
contribution of any other insurance carried by or on behalf


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of the Lessor or any Lender, and shall provide that no such Perso ...