Construction Agency Agreement Dated March 3, 1997

EXHIBIT 10.22


EXHIBIT A


- --------------------------------------------------------------------------------


CONSTRUCTION AGENCY AGREEMENT


dated as of March 3, 1997


between


SUMITOMO BANK LEASING AND FINANCE, INC.,
as Lessor


and


SYMANTEC CORPORATION,
as Construction Agent.


--------------------------


Lease Financing of Three Properties
Located in Cupertino, California
and Construction of Certain Improvements
for Symantec Corporation


- --------------------------------------------------------------------------------


2


CONSTRUCTION AGENCY AGREEMENT


THIS CONSTRUCTION AGENCY AGREEMENT, dated as of March 3, 1997 (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 (as defined below) and as 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 Master Amendment No. 1 dated as of the date hereof (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. 3 (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:


3


ARTICLE I


DEFINITIONS; INTERPRETATION


I.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 by Master Amendment No. 1 and as amended, supplemented, amended and restated or otherwise modified from time to time, "Appendix A") for all purposes hereof; and the rules of interpretation set forth in Appendix A shall apply to this Agreement.


ARTICLE II


APPOINTMENT OF CONSTRUCTION AGENT


II.1. Appointment. 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.


II.2. 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 and termination
of the Lease in accordance with the terms and conditions of the Lease;


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


(c) 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.


II.3. 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


-2- 4


Contract shall include a retainage provision in an amount equal to at least ten percent (10%) of the construction costs payable pursuant thereto (or, after payment to the Prime Contractor of more than fifty percent (50%) of the construction costs payable to the Prime Contractor thereunder (assuming for purposes hereof that no retainage had been withheld), an amount equal to at least five percent (5%) of the construction costs payable pursuant thereto); 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.


II.4. 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 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


-3- 5


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 for which the Lessor is not indemnified by the Construction Agent or the Lessee under this Agreement or any of the other Operative Documents.


II.5. Covenants of the Construction Agent. The Construction Agent hereby covenants and agrees that it will:


(a) promptly commence the Construction following the Improvements
Closing 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) notify the Lessor in writing as soon as practical after the
occurrence of each Force Majeure Event;


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


(d) cause the Substantial Completion of the Construction to occur on
or prior to the Outside Completion 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; and


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


-4- 6


ARTICLE III


THE SUBJECT IMPROVEMENTS


III.1. Construction of the Subject Improvements. The Construction Agent shall (a) cause the Subject Improvements to be constructed in accordance with the Plans and Specifications (as such Plans and Specifications may be modified from time to time in accordance with Section 3.3) and (b) cause the Subject Improvements to be constructed, equipped, maintained and used in compliance in all Material respects with all Requirements of Law and Insurance Requirements, and otherwise in compliance with the requirements of this Agreement, the Lease and the other Operative Documents.


III.2. Estimated Improvement Costs. The Construction Agent hereby certifies that the aggregate amount which the Construction Agent in good faith expects to be expended in order to achieve Substantial Completion of the Subject Improvements, including all costs of Construction and all Transaction Expenses related thereto, does not exceed the Construction Commitment Amount.


III.3. Amendments and Modifications to Plans and Specifications and Construction Documents. The Construction Agent may, subject to the conditions, restrictions and limitations set forth herein and in the other Operative Documents, at any time during the term hereof revise, amend or modify the Plans and Specifications and/or the Construction Documents without the consent of the Lessor; provided, however, that: (a) the Lessor's prior written consent will be required (except to the extent that such revision, amendment or modification constitutes a Required Modification) if (i) such revision, amendment or modification would result in the Substantial Completion of the Construction occurring after the Outside Completion Date, or (ii) the aggregate effect of such revision, amendment or modification, when taken together with any previous or contemporaneous revisions, amendments or modifications to the Plans and Specifications and Construction Documents, would be to reduce the Fair Market Sales Value of the Subject Improvements upon completion of the Construction, or (iii) such revision, amendment or modification would materially change the nature of the contemplated Subject Improvements or the utility of such Subject Improvements for the purposes contemplated by the parties hereto as of the date hereof; (b) the Construction Agent shall not terminate any Construction Document or modify any provision of any Construction Document relating to requiring retainage without the prior written consent of the Lessor; and (c) the Construction Agent shall regularly furnish copies of all such revisions, amendments and modifications to the Lessor.


-5- 7


ARTICLE IV


PAYMENT OF FUNDS


IV.1. Funding of Property Improvements Costs. (a) In connection with and during the course of the ...