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Exhibit 10.39
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 Person shall
have any obligation or liability for payment of premiums;
(iv) the respective interests of the Lessor or any Lender, under
all insurance policies required hereunder shall not be invalidated by
any action or inaction of the Lessee or the Construction Agent or any
other Person (other than, with respect to any such insured, such
insured) and such insurance shall insure the Lessor or any Lender as
their interests may appear, regardless of any breach or violation of any
warranty, declaration or condition contained in such policies by the
Lessee, the Construction Agent or any other Person (other than, with
respect to any such insured, such insured);
(v) if the insurers cancel such insurance for any reason
whatsoever or any materially adverse change is made in policy terms or
conditions, or if such insurance is allowed to lapse for nonpayment of
premium, such cancellation, change or lapse shall not be effective as to
the Lessor and the Lenders for thirty (30) days after receipt by the
Lessor and the Lenders, respectively, of written notice from such
insurers of such cancellation, change or lapse; and
(vi) with respect to all liability insurance, in as much as the
policies are written to cover more than one insured, all terms,
conditions, insuring agreements and endorsements, with the exception of
the limits of liability, shall operate in the same manner as if there
were a separate policy covering each insured.
(e) Adjustment of Losses. Losses, if any, with respect to the Property
under any property damage policies required to be carried under Section 2.7(b)
shall be adjusted with the insurance companies, including the filing of
appropriate proceedings, as follows: (x) so long as no Lease Event of Default or
Construction Agency Agreement Event of Default shall have occurred and be
continuing, and provided that the Lessee is required by the Operative Documents,
or has agreed, to repair the damage to the Property, such losses shall be
adjusted by the Lessee, and (y) if any Lease Event of Default or Construction
Agency Agreement Event of Default shall have occurred and be continuing, or if
the Lessee is not required to, and has not agreed, to repair the damage to the
Property, such losses shall be adjusted by the Lessor. The party which shall be
entitled to adjust losses may appear in any proceeding or action to negotiate,
prosecute, adjust or appeal any claim for any award, compensation or insurance
payment on account of any Casualty and shall pay all expenses thereof. At such
party's reasonable request, and at the Construction Agent's sole cost and
expense, the Lessee, the
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Lessor and each Lender, as the case may be, shall participate in any such
proceeding, action, negotiation, prosecution or adjustment. The parties hereto
agree that this Construction Agency Agreement shall control the rights of the
parties hereto in and to any such award, compensation or insurance payment
relating to any Casualty affecting the Property during the Interim Term.
(f) Application of Insurance Proceeds. All proceeds of insurance
maintained pursuant to Section 2.7(b) on account of any damage to or destruction
of any Property or any part thereof shall be paid over to the Lessor or as it
may direct; provided that if no Lease Event of Default or Construction Agency
Event of Default shall have occurred such funds shall be held by the Lessor in a
segregated account and, so long as the Construction Agent is diligently
repairing the damage to the applicable Property caused by the applicable
Casualty, disbursed to the Construction Agent to effect the repair of the
applicable Property.
(g) Additional Insurance. Any additional insurance obtained by the
Construction Agent, the Lessor or any Lender shall provide that it shall not
interfere with or in any way limit insurance required to be maintained under
Sections 2.7(a) and 2.7(b) or increase the amount of any premium payable with
respect to any such required insurance. The proceeds of any such additional
insurance will be for the account of the party maintaining such additional
insurance.
(h) Annual Insurance Report. Prior to the commencement of Construction
and each January 1 thereafter, the Construction Agent shall provide the Lessor
and the Lender an insurance certificate certifying compliance with the insurance
then required to be maintained by the Construction Agent pursuant to this
Section 2.7.
ARTICLE III
THE IMPROVEMENTS; CASUALTY AND CONDEMNATION
3.1. Construction. The Construction Agent shall cause the Subject
Improvements to be constructed, equipped, maintained and used in compliance with
all Insurance Requirements and in compliance in all material respects with all
Applicable Law (including all Hazardous Materials Laws).
3.2. Modifications to Plans and Specifications. 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 Interim Term for
the Property, amend or modify the Plans and Specifications for such Property
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without the consent of the Lessor; provided, however, that the prior written
consent of the Lessor will be required if such revision, amendment or
modification, when taken together with any previous or contemporaneous revision,
amendment or modification to such Plans and Specifications, could reasonably be
expected to: (w) cause the Completion Date for such Property to occur after the
Outside Completion Date for such Property, (x) result in the Improvement Costs
for such Property exceeding the estimated improvement costs, (y) reduce the Fair
Market Sales Value of such Property when completed from the Fair Market Sales
Value of such Property as set forth in the Appraisal of such Property delivered
in connection with the Acquisition Date therefor or (z) cause the Improvements
to vary in any material respect from the assumptions with respect to use,
operation and construction set forth in the Appraisal of such Property delivered
in connection with the Acquisition Date therefor.
3.3. Casualty, Condemnation and Force Majeure Events. If at any time
prior to the Completion Date for the Property there occurs a Casualty,
Condemnation or a Force Majeure Event with respect to the Property, then, except
as otherwise provided in Article XIV or XVI of the Lease, in each case the
Construction Agent shall use commercially reasonable efforts to complete the
Construction of the Improvements on such Property in accordance with the Plans
and Specifications therefor and in compliance with the terms hereof, and cause
the Completion Date for such Property to occur on or prior to the Outside
Completion Date for such Property. If the Outside Completion Date is extended by
six or more months as a result of the occurrence of a Force Majeure Event, the
Lessor may terminate the Construction Agent hereunder and engage one or more new
construction agents to complete the Property.
3.4. Condemnation Proceedings. The Construction Agent hereby agrees that
it shall, within five (5) Business Days after the date on which the Construction
Agent shall have notice thereof, give notice to the Lessor and the Lenders of
each action or proceeding by any Governmental Authority with respect to any
actual, pending or threatened Condemnation affecting the Property during the
Interim Term. During the Interim Term, the Lessor and the Lenders shall be
entitled, to the exclusion of the Construction Agent, to negotiate, prosecute,
adjust or appeal any claim for any award, compensation or insurance payment on
account of any Condemnation affecting such Property. The Participants shall
consult with the Lessee in connection with the foregoing, but the Construction
Agent shall have no right to participate in any such negotiation, prosecution,
adjustment or appeal unless the Lessor and the Lenders consent thereto in their
sole discretion.
3.5. Condemnation Awards. During the Interim Term with respect to the
Property, all awards, compensation and insurance
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payments on account of any Condemnation affecting such Property shall be paid
directly to the Lessor or, if received by the Construction Agent, shall be held
in trust for the Participants and shall promptly be paid over by the Lessee to
Lessor. All amounts held by the Lessor on account of any award, compensation or
insurance payment described in this Section 3.5 shall be distributed by the
Lessor as follows: (i) if the Property can be restored to its pre-Condemnation
or pre-Casualty condition prior to the Expiration Date by application of such
proceeds to the restoration of the Property, such proceeds will be released to
the Construction Agent so long as it offers its obligation to complete
Construction otherwise such proceeds shall be distributed to the Participants as
provided in Section 7.9(b) of the Participation Agreement.
ARTICLE IV
PAYMENT OF FUNDS
4.1. Funding of Property Improvements Costs. (a) In connection with and
during the course of the construction of the Subject Improvements, the
Construction Agent may request that the Lessor advance funds for the payment of
Property Improvements Costs, and the Lessor will comply with such request to the
extent provided for under, and subject to the conditions, restrictions and
limitations contained in, the Lease. The Construction Agent and the Lessor
acknowledge and agree that the Lessee's right to request funds and the Lessor's
obligation to advance funds for the payment of Property Improvements Costs is
subject in all respects to the terms and conditions of the Lease and each of the
other Operative Documents.
(b) The proceeds of any funds made available to the Lessor to pay
Property Improvements Costs shall be made available to the Construction Agent or
its designee(s) in accordance with the Funding Request relating thereto and the
terms of the Lease. The Construction Agent will use such proceeds only to pay
the Property Improvements Costs set forth in the Funding Request relating to
such funds.
(c) In no event shall the Lessor be required to advance funds for the
payment of Property Improvement Costs in excess of the Construction Commitment
Amount.
(d) The Construction Agent shall, upon the passing of possession and
control to the Construction Agent, at all times cause to be and remain vested in
the Lessor's ownership of any and all construction materials and equipment not
yet incorporated into the Property for which funds shall have been requested
pursuant to this Article IV, and cause such title to be and remain free of all
Liens other than Permitted Liens.
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ARTICLE V
CONSTRUCTION AGENCY AGREEMENT EVENTS OF DEFAULT
5.1. Construction Agency Agreement Events of Default. If any one or more
of the following events (each a "Construction Agency Agreement Event of
Default") shall occur:
(a) the Construction Agent fails to apply any funds paid by the
Lessor to the Construction Agent or its designee(s) to the payment of
the appropriate Property Improvements Costs; or
(b)(i) the Construction Agent shall cause or permit any
Improvements to be constructed and equipped in a manner which (x)
violates in any material respect any Applicable Law or Insurance
Requirements or (y) deviates in any material respect from the Plans and
Specifications; or (ii) the Construction Agent shall fail to maintain
the insurance required under Section 2.7; or
(c)(i) the Construction Agent shall (A) admit in writing its
inability to pay its debts generally as they become due, (B) file a
petition under the United States bankruptcy laws or any other applicable
insolvency law or statute of the United States of America or any State
or Commonwealth thereof, (C) make a general assignment for the benefit
of its creditors, (D) consent to the appointment of a receiver of itself
or the whole or any substantial part of its property, (E) fail to cause
the discharge of any custodian, trustee or receiver appointed for the
Construction Agent or the whole or a substantial part of its property
within sixty (60) days after such appointment, or (F) file a petition or
answer seeking or consenting to reorganization under the United States
bankruptcy laws or any other applicable insolvency law or statute of the
United States of America or any State or Commonwealth thereof; or (ii)
insolvency proceedings or a petition under the United States bankruptcy
laws or any other applicable insolvency law or statute of the United
States of America or any State or Commonwealth thereof shall be filed
against the Construction Agent and not dismissed within ninety (90) days
from the date of its filing (provided, that the Construction Agent
hereby expressly authorizes the Lessor to appear in any court conducting
any such proceeding during such ninety (90) day period to preserve,
protect and defend the respective rights of the Participants under the
Operative Documents), or a court of competent jurisdiction shall enter
an order or decree appointing, without the consent of the Construction
Agent, a receiver of the Construction Agent or
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the whole or a substantial part of its property, and such order or
decree shall not be vacated or set aside within ninety (90) days from
the date of the entry thereof;
(d) the Construction Agent shall fail to perform or observe any
covenant or agreement (other than any covenant or agreement described in
clause (a) or (b) above) to be performed or observed by it under this
Agreement and such failure shall continue for a period of thirty (30)
days after the earlier of (i) the date on which the Construction Agent
shall have knowledge of such failure and (ii) receipt by the
Construction Agent of a written notice from the Lessor with respect
thereto; or
(e) any representation or warranty made by the Construction
Agent shall prove to have been Materially inaccurate at the time made,
and if such inaccuracy can be cured, it shall not have been cured within
thirty (30) days after written notice thereof from the Lessor or any
Lender.
5.2. Survival. The termination of this Agreement pursuant to Section 5.1
shall in no event relieve the Construction Agent of its liability and
obligations hereunder which accrued prior to such termination, all of which
shall survive any such termination.
5.3. Remedies.
(a) Termination of Commitments; Acceleration of Lease Balance,
etc. Upon the occurrence and continuance of any Construction Agency
Agreement Event of Default of the type described in Section 5.1(c), all
Commitments shall automatically terminate and the Construction Agent
shall, subject to Section 5.4, immediately become obligated to pay the
then outstanding amount of the Lease Balance together with all accrued
and unpaid Basic Rent and Supplemental Rent, without presentment,
demand, protest, notice of acceleration or other notice of any kind, all
of which are hereby expressly waived, anything in this Agreement or any
other Operative Document to the contrary notwithstanding. After the
occurrence and continuance of any other Construction Agency Agreement
Event of Default, the Lessor may by written notice to the Lessee or the
Construction Agent, immediately (x) terminate all Commitments, (y)
terminate this Agreement (and upon the giving of such notice, this
Agreement shall terminate and all rights of the Construction Agent and
all obligations of the Lessor under this Agreement (as the case may be)
shall cease) and/or (z) subject to the limitations imposed under Section
5.4, accelerate the Lease Balance and all other amounts due and owing by
the Lessee under the Operative Documents and, upon any such notice of
acceleration, the Lessee shall
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immediately become obligated to pay the then outstanding amount of the
Lease Balance together with all accrued and unpaid Basic Rent and
Supplemental Rent.
(b) Remedies.
(i) If (x) a Construction Agency Agreement Event of Default
shall have occurred and be continuing under Section 5.1(a) or 5.1(c),
(y) as a result of the Construction Agent's fraudulent or illegal acts
or omissions or willful misconduct, any other Construction Agency
Agreement Event of Default shall have occurred and be continuing, or (z)
any Construction Agency Agreement Event of Default not described in
clause (x) or (y) shall have occurred and be continuing and the
Construction Agent shall have failed to relinquish all of its interest
the Property and convey possession thereof to the Lessor or its designee
in then, in each case, the Lessor shall have all rights and remedies
available under the Operative Documents (including under Article XVI of
the Lease) or available at law, equity or otherwise.
(ii) If a Construction Agency Agreement Event of Default shall
have occurred and be continuing under Section 5.1(b), (d) or (e), other
than as a result of Construction Agent's fraudulent or illegal acts or
omissions or willful misconduct, the Lessor shall have the right to
require the Construction Agent to relinquish all of its right, title and
interest in, to and under the applicable Property to the Lessor and to
pay to the Lessor the Construction Period Guarantee Amount for the
Property. Under such circumstances, the Lessee shall, in accordance with
the procedures set forth in Section 21.1 of the Lease, convey to the
Lessor all of the Lessee's right, title and interest in, to and under
the Property free and clear of all Liens (other than Lessor Liens and
Permitted Liens of the type described in clause (a) of the definition
thereof) and in compliance with all Hazardous Materials Laws, and
deliver to the Lessor an affidavit of the Lessee to such effect and
appropriate statements of termination.
(c) Remedies Cumulative. No failure to exercise and no delay in
exercising, on the part of the Lessor, any right, remedy, power or
privilege under this Agreement or under the other Operative Documents
shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers
and privileges provided in this Agreement and in the other Operative
Documents are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.
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(d) Payment of Costs and Expenses. The Construction Agent shall
pay upon demand all reasonable costs, expenses, losses, expenditures and
damages (including, without limitation, attorneys' fees) incurred by or
on behalf of any Participant or the Collateral Agent in connection with
any Construction Agency Agreement Event of Default.
5.4. Limitation on Construction Agent's Recourse Liability.
Notwithstanding anything contained herein or in any other Operative Document to
the contrary, upon the occurrence and during the continuance of a Construction
Agency Agreement Event of Default with respect to the Property described in
clause (b), clause (d) or clause (e) of Section 5.1 (other than as a result of
the Construction Agent's fraudulent or illegal acts or omissions or willful
misconduct), so long as the Construction Agent and Lessee relinquishes all of
its interest in the applicable Property and conveys possession thereof to the
Lessor or its designee free and clear of all Liens (other than Lessor Liens and
Permitted Liens of the type described in clause (a) of the definition thereof in
Appendix A) and in compliance with all Hazardous Materials Laws, accompanied by
an affidavit to each Participant to such effect and appropriate statements of
termination, the aggregate maximum recourse liability of the Construction Agent
with respect to such Property to the Lessor or any Person claiming by, through
or under the Lessor under the Operative Documents, including specifically, the
Lenders, shall be limited to the Construction Period Guarantee Amount. The
Construction Agent nonetheless acknowledges that the Lessor (and Persons
claiming by, through or under the Lessor) shall be entitled to recover from the
Property (including through any reletting and/or sale of such Property or any
portion thereof) the entire outstanding Property Cost of such Property, all
accrued and unpaid interest, Yield and other amounts then due and owing to the
Lessor or any other Person under the Operative Documents and all other costs and
expenses of the Lessor and the Collateral Agent incurred in connection with such
Property (including without limitation, any costs incurred in connection with
the construction of the Improvements and/or any reletting or sale of such
Property or any portion thereof) from and after the date of such return.
5.5. Construction Agent's Right to Purchase. In the event that a
Construction Agency Agreement Event of Default (other than a Construction Agency
Agreement Event of Default under Section 5.1(c)) or a delay in the construction
of the Property (which delay is in excess of 60 days) with respect to the
Property shall have occurred and be continuing, the Construction Agent may
purchase the applicable Property for a price equal to the Property Balance of
such Property, then outstanding on the date of such purchase plus all accrued
and unpaid Basic Rent plus any Supplemental Rent due and owing by exercising its
Purchase Option
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in accordance with Section 18.1 of the Lease; provided that the Construction
Agent shall have given written notice of its intention to do so within five (5)
days after the occurrence of such Construction Agency Agreement Event of Default
and provided, further, that the Construction Agent shall purchase the applicable
Property and pay all amounts due in connection therewith within fifteen (15)
days after the occurrence of such Construction Agency Agreement Event of
Default. If the Construction Agent elects to halt Construction for more than
sixty (60) days and the Construction Agent does not elect to purchase such
Property the Lessor may: (i) offer to extend the Construction Period, (ii)
terminate the Construction Agency Agreement and complete such Property (upon
completion of such Property the Basic Term shall commence), (iii) require the
Construction Agent to pay to the Lessor the Construction Period Guarantee
Amount, and (iv) sell such Property. With regard to the Lessor's right to sell
an applicable Property hereunder, the Lessor and the Construction Agent
acknowledge and agree that the Lessor shall be entitled to recover up to 100% of
any outstanding Lease Balance with respect to such Property plus all expenses
and cost incurred by the Lessor with regard to such sale, all amounts recovered
in excess of such amount shall be for the account of the Lessee. The Lessee's
purchase of any Property in accordance with this Section 5.5 and in accordance
with Section 18.1 of the Lease shall be deemed to cure the applicable
Construction Agency Agreement Event of Default to the extent relating to such
Property.
ARTICLE VI
NO CONSTRUCTION AGENCY FEE
6.1. Lease as Fulfillment of Lessor's Obligations. All obligations,
duties and requirements imposed upon or allocated to the Construction Agent
shall be performed by the Construction Agent at the Construction's Agent's sole
cost and expense, and the Construction Agent will not be entitled to, and the
Lessor shall have no obligation to pay, any agency fee or other fee or
compensation, and the Construction Agent shall not be entitled to, and the
Lessor shall have no obligation to make or pay, any reimbursement therefor, it
being understood that this Agreement is being entered into as consideration for
and as an inducement to the Lessor and the Construction Agent entering into the
Lease and the other Operative Documents.
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ARTICLE VII
MISCELLANEOUS
7.1. Notices. All notices, consents, directions, approvals,
instructions, requests, demands and other communications required or permitted
by the terms hereof to be given to any Person shall be given in writing in the
manner provided in, shall be sent to the respective addresses set forth in, and
the effectiveness thereof shall be governed by the provisions of, Section 14.3
of the Participation Agreement.
7.2. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Lessor, the Construction Agent and their respective
successors and assigns.
7.3. GOVERNING LAW. THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY
THE LAW OF THE STATE OF CALIFORNIA (EXCLUDING ANY CONFLICT-OF-LAW OR
CHOICE-OF-LAW RULES WHICH MIGHT LEAD TO THE APPLICATION OF THE INTERNAL LAWS OF
ANY OTHER JURISDICTION) AS TO ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
7.4. Amendments, etc. The Lessor and the Construction Agent may from
time to time, enter into written amendments, supplements or modifications
hereto.
7.5. Counterparts. This Agreement may be executed in any number of
separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
7.6. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
7.7. Headings and Table of Contents. The headings and table of contents
contained in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
SYMANTEC CORPORATION
as Construction Agent
By /s/ XXXX XXXXX
-------------------------------------
Name: Xxxx Xxxxx
Title: Vice President Finance
CONSTRUCTION AGENCY AGREEMENT
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SUMITOMO BANK LEASING AND FINANCE, INC.,
as Lessor
By /s/ XXXXXXX X. XXXX
---------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
CONSTRUCTION AGENCY AGREEMENT
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Schedule 2
Plans and Specifications
21
ANNEX I
TO CONSTRUCTION AGENCY AGREEMENT
CONSTRUCTION DOCUMENTS ASSIGNMENT
FOR VALUE RECEIVED, and to secure the performance by SYMANTEC
CORPORATION, a Delaware corporation (hereinafter referred to as either the
"Lessee" or "Assignor"), of all of its obligations under that certain
Construction Agency Agreement dated as of __________, 199_ (as the same may be
amended, modified or restated from time to time, and together with all
supplements thereto, the "Construction Agency Agreement"), between the Lessee
and Sumitomo Bank Leasing and Finance, Inc. (the "Lessor" or "Secured Party"),
the Lessee does hereby quitclaim, sell, assign, transfer and set over unto the
Secured Party and its successors and assigns, all of the Lessee's right, title
and interest in and to the following (referred to collectively herein as the
"Collateral"):
(i) all construction contracts relating to the Construction of
the Subject Improvements (including, without limitation, the Prime
Construction Contract), as each such agreement may hereafter be
supplemented, modified or amended from time to time (collectively, the
"Construction Contracts");
(ii) all architectural services agreements pertaining to the
Construction, as each such agreement may hereafter be supplemented,
modified or amended from time to time (collectively, the "Architect's
Agreements");
(iii) all plans, specifications and drawings of any and every
kind heretofore or hereafter prepared for use in connection with the
Construction of the Property (including, without limitation, the Plans
and Specifications), and any supplements, amendments or modifications
thereto (collectively, the "Plans"); and
(iv) all building and other permits, licenses and governmental
approvals which are necessary or useful to the commencement and
completion of the Construction, or otherwise relate to the Construction,
heretofore or hereafter obtained or applied for by or on behalf of the
Assignor or any architects, engineers or contractors working on any
aspect of the Construction, and any deposits made in connection
therewith (collectively, the "Permits");
provided, however, that the Secured Party shall have no obligation or liability
of any kind under or with respect to the
22
Construction Contracts, the Architect's Agreements, the Permits or the Plans,
either before or after the Secured Party's exercise of any rights hereby granted
to it, and the Assignor agrees to save and hold the Secured Party harmless of
and from, and to indemnify the Secured Party against, any and all such
obligations and liabilities, contingent or otherwise, including without
limitation attorneys' fees and expenses incurred in connection therewith.
This Construction Documents Assignment shall inure to the benefit of the
Secured Party and its successors and assigns, and shall be binding upon the
Assignor and its successors and assigns, and shall continue in full force and
effect until all obligations, liabilities and indebtedness of any kind now or
hereafter due the Secured Party from the Assignor under or with respect to the
Lease or any of the other Operative Documents, or which are otherwise secured
hereby, whether now existing or hereafter arising or incurred (collectively, the
"Liabilities"), have been fully paid, performed and satisfied, and all
Commitments have terminated, at which time this Construction Documents
Assignment will terminate. The Secured Party will not exercise any of its rights
hereunder until there shall have occurred and be continuing a Lease Event of
Default.
For purposes of completing the Construction after any Lease Event of
Default shall have occurred and be continuing, the Secured Party may, at its
option, further assign its right, title and interest in the Collateral without
the consent of the Assignor, or any contractor or architect.
This Construction Documents Assignment is a present, perfected and
absolute assignment; provided, however, that the Secured Party shall not have
the right to undertake completion of the Construction or directly to enforce the
provisions of any Construction Contract or any Architect's Agreement until a
Lease Event of Default shall have occurred and be continuing. During the
continuance of any such Event of Default, the Secured Party may, without
affecting any other right or remedy available to it, exercise its rights under
this Construction Documents Assignment as provided herein in any manner
permitted by law. If any notice to the Assignor is required by law, such notice
shall be deemed commercially reasonable if given at least ten (10) days prior to
the date of intended action.
This Construction Documents Assignment may be effectively waived,
modified, amended or terminated only by a written instrument executed by the
Secured Party and the Lessee. Any waiver by the Secured Party shall be effective
only with respect to the specific instance described therein. Delay or course of
conduct shall not constitute a waiver of any right or remedy of the Secured
Party.
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Unless the context shall otherwise require, capitalized terms used and
not defined in this Construction Documents Assignment shall have the meanings
assigned thereto in Appendix A (as defined in the Construction Agency Agreement)
for all purposes hereof; and the rules of interpretation set forth in Appendix A
shall apply to this Construction Documents Assignment.
THIS CONSTRUCTION DOCUMENTS ASSIGNMENT SHALL IN ALL RESPECTS BE GOVERNED
BY THE LAW OF THE STATE OF CALIFORNIA (EXCLUDING ANY CONFLICT-OF-LAW OR
CHOICE-OF-LAW RULES WHICH MIGHT LEAD TO THE APPLICATION OF THE INTERNAL LAWS OF
ANY OTHER JURISDICTION) AS TO ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
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IN WITNESS WHEREOF, the undersigned has executed and delivered this
Construction Documents Assignment as of this ______ day of ________ pursuant to
proper authority duly granted.
SYMANTEC CORPORATION,
as Construction Agent
By____________________________________
Name:
Title:
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TABLE OF CONTENTS
SECTION Page
------- ----
ARTICLE I
DEFINITIONS; INTERPRETATION
1.1. Definitions; Interpretation....................................................2
ARTICLE II
APPOINTMENT OF CONSTRUCTION AGENT; ACCEPTANCE
2.1. Appointment and Acceptance.....................................................2
2.2. Plans and Specifications; Estimated
Improvement Costs..........................................................2
2.3. Term...........................................................................2
2.4. Construction Documents.........................................................3
2.5. Scope of Authority.............................................................3
2.6. Covenants of the Construction Agent............................................4
2.7. Insurance......................................................................6
ARTICLE III
THE IMPROVEMENTS; CASUALTY AND CONDEMNATION
3.1. Construction...................................................................9
3.2. Modifications to Plans and Specifications......................................9
3.3. Casualty, Condemnation and Force Majeure Events...............................10
3.4. Condemnation Proceedings......................................................10
3.5. Condemnation Awards...........................................................10
ARTICLE IV
PAYMENT OF FUNDS
4.1. Funding of Property Improvements Costs........................................11
ARTICLE V
CONSTRUCTION AGENCY AGREEMENT EVENTS OF DEFAULT
5.1. Construction Agency Agreement Events of Default...............................12
5.2. Survival......................................................................13
5.3. Remedies......................................................................13
5.4. Limitation on Construction Agent's
Recourse Liability........................................................15
5.5. Construction Agent's Right to Purchase........................................15
ARTICLE VI
NO CONSTRUCTION AGENCY FEE
6.1. Lease as Fulfillment of Lessor's Obligations..................................16
ARTICLE VII
MISCELLANEOUS
7.1. Notices.......................................................................17
7.2. Successors and Assigns........................................................17
7.3. GOVERNING LAW.................................................................17
7.4. Amendments, etc...............................................................17
7.5. Counterparts..................................................................17
7.6. Severability..................................................................17
7.7. Headings and Table of Contents................................................17
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Schedules and Annex
Schedule 1 Description of Land
Schedule 2 Plans and Specifications for Subject Improvements
Annex I Form of Construction Documents Assignment
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