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 ...