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EXHIBIT 10.48
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.
▇.▇▇ 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 ▇▇▇▇ 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 Commitments to fund such fees
and expenses) or (iii) the Construction Agent; provided, if the Construction
Agent funds such fees and expenses (as referenced in subsection (iii)) then the
Maximum Amount in respect of the applicable portion of the Property will be
reduced accordingly, as more specifically described in the definition of
"Maximum Amount". Amounts funded by the Lenders and the Holders with respect to
the foregoing for any portion of the Property shall be added to the Property
Cost of such portion. All of the foregoing documentation must be in form and
substance reasonably satisfactory to the Lessor. Subject to the foregoing, the
Property or applicable portions thereof shall be conveyed to the Construction
Agent "AS-IS", "WHERE-IS" and in then present physical condition.
In the event the costs in excess of any original Construction Budget
previously delivered to the Agent for any portion of the Property are not funded
by the Lenders and the Holders because (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
not satisfied, then if, but only if, all the Holders and all the Lenders agree
at such time, (a) such excess costs shall be funded and (b) the Holder
Commitments and the Lender Commitments shall be increased accordingly.
SECTION 2.2 [INTENTIONALLY OMITTED].
SECTION 2.3 TERM. This Agreement shall commence on the date hereof and,
unless the Lessor (in its sole discretion) elects otherwise, this Agreement
shall terminate with respect to any portion of the Property on the applicable
Construction Period Termination Date. If this Agreement expires prior to the
Completion of any portion of the Property, then the Lessor may either (i) hire a
new construction agent (at the direction of the Agent) to finalize the
Completion of the Property or such portion or (ii) require the Construction
Agent to continue to perform hereunder and to achieve Completion of the Property
or such portion. The cost and expense incurred to finalize the Completion of the
Property or any portion thereof as referenced in the
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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 with
respect to any portion of the Property exceed the Maximum Amount in respect of
such portion; provided, further, amounts expended by the Lessor to finalize the
Completion of any portion of the Property as referenced in the preceding
sentence shall be added to the Property Cost therefor.
SECTION 2.4 SCOPE OF AUTHORITY.
(a) 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, subject to Section 2.4(b),
to take all action necessary or desirable for the performance and satisfaction
of any and all of the Lessor's obligations under any construction agreement and
to fulfill all of the obligations of the Construction Agent including without
limitation:
(i) the identification and assistance with the acquisition of the
Land and all other portions of the Property in accordance with the
terms and conditions of the Participation Agreement;
(ii) all design and supervisory functions relating to the
development, acquisition, installation, construction and testing of
all Improvements, Equipment and other components of the Property and
performing all engineering work related thereto;
(iii) (A) negotiating, entering into, performing and enforcing
all contracts and arrangements to acquire the Land and all other
Property and to procure the equipment necessary to construct the
Improvements and all related Property on the Land and (B) negotiating,
executing, performing and enforcing all contracts and arrangements to
develop, acquire, install, construct and test the Improvements, the
Equipment and the other components of the Property on such terms and
conditions as are customary and reasonable in light of local and
national standards and practices and the businesses in which the
Lessee is engaged;
(iv) obtaining all necessary permits, licenses, consents,
approvals, entitlements and other authorizations, including without
limitation all of the foregoing required for the Property and the use
and occupancy thereof and those required under applicable Law
(including without limitation Environmental Laws), from all
Governmental Authorities in connection with the development,
acquisition, installation, construction and testing of any
Improvements, the Equipment and the other components of the Property
substantially in accordance with the applicable Plans and
Specifications;
(v) maintaining all books and records with respect to the
Property and the construction, operation and management thereof;
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(vi) performing any other acts necessary in connection with the
identification and acquisition of the Land and all other portions of
the Property and the development, acquisition, installation,
construction and testing of any Improvements, Equipment and all other
additional components of the Property in accordance with the
applicable Plans and Specifications;
(vii) the right to submit notices pursuant to Section 2.3 of the
Credit Agreement and to receive the proceeds of Advances directly from
the Agent;
(viii) the right to contest all mechanics' and materialmens'
liens in accordance with the requirements for Permitted Liens; and
(ix) the right to bring or defend any claims or seek resolution
of disputes arising from Construction Agent's performance of any of
the foregoing actions.
(b) Neither the Construction Agent nor any of its Affiliates or agents
shall enter into any contract or consent to any contract in the name of the
Lessor without the Lessor's prior written consent, such consent to be given or
withheld in the exercise of the Lessor's reasonable discretion; provided,
however, that (i) no such contract will increase the obligations of the Lessor
beyond the obligations of the Lessor as are expressly set forth in the Operative
Agreements and (ii) each such contract shall expressly limit recourse against
the Lessor to the assets of the VS Trust 2000-2 and shall otherwise be
non-recourse to the Lessor on terms and conditions that are reasonably
acceptable to the Lessor.
(c) Subject to the terms and conditions of this Agreement and the other
Operative Agreements, the Construction Agent shall have sole management and
control over the installation, construction and testing means, methods,
sequences and procedures with respect to the Property.
SECTION 2.5 DELEGATION OF DUTIES. The Construction Agent may execute any of
its duties under this Agreement by or through agents, contractors, employees or
attorneys-in-fact; provided, however, that no such delegation shall limit or
reduce in any way the Construction Agent's duties and obligations under this
Agreement.
SECTION 2.6 COVENANTS OF THE CONSTRUCTION AGENT. The Construction Agent
hereby covenants and agrees that it will:
(a) following the Construction Commencement Date for each portion of
the Property, cause the development, acquisition, installation, construction and
testing of such portion of the Property to be prosecuted in a good and
workmanlike manner, and respecting each portion of the Property in accordance
with the applicable Plans and Specifications therefor, the Construction Budget
therefor, the applicable contracts relating to the applicable Improvements, the
applicable Equipment, other components of such portion of the Property and
procurement of construction materials, the applicable construction contracts,
the applicable construction schedule, prevalent industry practices and otherwise
in accordance with Section 3.1 hereof;
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(b) [Intentionally Omitted];
(c) cause the Completion Date for any Improvements to occur on or
before the earlier of (i) the date that is twenty-four (24) months after the
Closing Date, in the case of the Initial Improvements and related Property, or
such date following the Construction Commencement Date therefor as shall have
been agreed to by Construction Agent and the Financing Parties prior to such
Construction Commencement Date, in the case of any Subsequent Improvements, or
(ii) the applicable Construction Period Termination Date, in each case free and
clear (by removal or bonding) of Liens or claims for materials supplied or labor
or services performed in connection with the development, acquisition,
installation, construction or testing thereof, except for Permitted Liens;
provided, that the failure to cause the Completion of any such portion of the
Property by such date shall not be deemed a breach hereunder if such delay is
caused by a Force Majeure Event and Completion in respect of such portion of the
Property is accomplished within three (3) months of the date otherwise
applicable but for this proviso; provided, further, to the extent such failure
to complete is caused by a Force Majeure Event extending beyond such three (3)
month period, the Construction Agent shall elect one of the Construction Agent
Options set forth in Section 2.1 and, if such election is not made within ten
(10) Business Days of the end of such three (3) month period, the Construction
Agent shall be deemed to have elected to purchase the applicable Improvements
and related portions of the Property for the Termination Value therefor in
accordance with the provisions of Section 2.1;
(d) use its good faith efforts to cause all outstanding punch list
items with respect to any Improvements and related Property to be completed
promptly following the Completion Date therefor;
(e) at all times subsequent to the initial Advance respecting any
portion of the Property (i) cause good and marketable title to such portion of
the Property to vest in the Owner Trustee (ii) cause a valid, perfected, first
priority Lien on such portion of the Property to be in place in favor of the
Agent (for the benefit of the Lenders and the Holders), (iii) file all necessary
documents under the applicable real property law and Article 9 of the Uniform
Commercial Code to perfect such title and Liens and (iv) subject to the terms of
Article XIII of the Lease relating to Permitted Contests, not permit Liens
(other than Permitted Liens and Lessor Liens) to be filed or maintained
respecting the Property;
(f) on or prior to the date required pursuant to Section 5.4(g) of the
Participation Agreement with respect to the Initial Improvements or any
Subsequent Improvements, the Construction Agent shall deliver to the Agent (for
the benefit of the Lessor) true, complete and correct copies of the Construction
Budget therefor. Thereafter, the Construction Agent, on a monthly basis, shall
deliver to the Lessor true, correct and complete copies of any material
modifications of any such Construction Budget and progress reports regarding the
development, acquisition, installation, construction and testing of the
applicable portion of the Property;
(g) procure insurance for the Property during any Construction Period
in accordance with the provisions of Article XIV of the Lease; and
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(h) on or before the Construction Period Termination Date in respect of
any portion of the Property (which date shall be subject to extension pursuant
to the provisions of Section 2.1 in the sole and absolute discretion of the
Lenders and the Holders), cause the Rent Commencement Date to occur with respect
to such portion of the Property or purchase any such portion of the Property for
an amount equal to the sum referenced in Section 5.3(b) hereof applicable
thereto and otherwise in compliance with the other terms and provisions of the
Operative Agreements.
ARTICLE III
THE PROPERTIES
SECTION 3.1 CONSTRUCTION. The Construction Agent shall cause the
Improvements, the Equipment and all other components of the Property to be
developed, acquired, installed, constructed and tested in compliance with all
Legal Requirements, all Insurance Requirements, all manufacturer's
specifications and standards and the standards maintained by the Construction
Agent for similar properties owned or operated by the Construction Agent, unless
non-compliance, individually or in the aggregate, shall not have and could not
be reasonably expected to have a Material Adverse Effect.
SECTION 3.2 AMENDMENTS; MODIFICATIONS.
(a) The Construction Agent may at any time revise, amend or modify (i)
the Plans and Specifications in respect of the Initial Improvements or any
Subsequent Improvements and any related Property without the consent of the
Lessor; provided, that any such amendment to any such Plans and Specifications
does not (x) result in the Completion Date of the applicable Improvements and
related portions of the Property occurring on or after the Construction Period
Termination Date therefor or (y) result in the cost of the applicable
Improvements and related portions of the Property exceeding the amount specified
in the Construction Budget therefor, as amended from time to time, or an amount
equal to the sum of the then Available Commitments plus the then Available
Holder Commitments (reduced by the amount, if any, necessary to pay for the cost
as determined based on the applicable Construction Budget of construction and
development of other Improvements on the Property which are currently under
construction but have not yet achieved Completion (such amount the "Unfunded
Amount")), and (ii) the Construction Budget in respect of any portion of the
Property and enter into any related amendments, modifications or supplements
thereto without the consent of the Lessor; provided, that such revisions,
amendments or modifications to any such Plans and Specifications or related
amendments, modifications or supplements to any such Construction Budget do not
result in any increase in total Property Costs in respect of (x) the Initial
Improvements and related Property, or (y) any Subsequent Improvements and
related Property, as the case may be, greater than the amount specified in the
applicable Construction Budget for the Initial Improvements or such Subsequent
Improvements, as the case may be, as amended from time to time, or the then
Available Commitments and Available Holder Commitment (reduced by the Unfunded
Amount).
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(b) The Construction Agent agrees that it will not implement any
revision, amendment or modification to the Plans and Specifications for (x) the
Initial Improvements and related Property, or (y) any Subsequent Improvements
and related Property, as the case may be, if the aggregate effect of such
revision, amendment or modification, when taken together with any previous or
contemporaneous revision, amendment or modification to such Plans and
Specifications for the Initial Improvements or such Subsequent Improvements, as
the case may be, would cause a reduction in the Fair Market Sales Value of the
Initial Improvements (and related Property) or such Subsequent Improvements (and
related Property) below the Termination Value therefor when completed, unless
such revision, amendment or modification is required by Legal Requirements or
Section 9.1 of the Lease.
SECTION 3.3 FAILURE TO COMPLETE CONSTRUCTION PERIOD PROPERTIES. Until
termination of the Lease Agreement and the Construction Agency Agreement, the
Construction Agent shall promptly and diligently complete the development,
acquisition, refinancing, installation, construction and testing of all
Construction Period Property substantially in accordance with the applicable
Plans and Specifications and with the terms hereof and cause the Completion Date
with respect to all Construction Period Property to occur on or prior to the
Construction Period Termination Date therefor.
If, prior to the Completion Date with respect to any portion of the
Property, the Construction Agent shall abandon or permanently discontinue the
construction and development of such portion of the Property (which abandonment
or permanent discontinuance shall be deemed to have occurred if no work at or on
such portion of the Property is undertaken or completed during a period of
thirty (30) days or more after construction has commenced for reasons other than
a Force Majeure Event), then the Construction Agent shall pay to the Lessor, on
a date designated by the Lessor, an aggregate amount equal to the Termination
Value of such portion of the Property, and on such date Lessor shall transfer
and convey to the Construction Agent all right, title and interest of Lessor in
and to such portion of the Property, at the cost and expense of the Construction
Agent. The Lessor shall convey such property "AS IS," "WHERE-IS" and in its then
present physical condition to the Construction Agent or its designee free and
clear of Lessor Liens. If Lessor does not require the Construction Agent to pay
such amount, the Construction Agent shall promptly and diligently complete the
development, acquisition, refinancing, installation, construction and testing of
such portion of the Property in substantial accordance with the Plans and
Specifications therefor and with the terms hereof and cause the Completion Date
with respect thereto to occur on or before the Construction Period Termination
Date therefor.
ARTICLE IV
PAYMENT OF FUNDS
SECTION 4.1 RIGHT TO RECEIVE CONSTRUCTION COST.
(a) In connection with the development, acquisition, installation,
construction and testing of the Property and during the course of the
construction of the Improvements on the Property, the Construction Agent may
request that the Lessor advance funds for the payment of
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Property Acquisition Costs or other Property Costs, and the Lessor will comply
with such request to the extent provided for under the Participation Agreement.
The Construction Agent and the Lessor acknowledge and agree that the
Construction Agent's right to request such funds and the Lessor's obligation to
advance such funds for the payment of Property Acquisition Costs or other
Property Costs is subject in all respects to the terms and conditions of the
Participation Agreement and each of the other Operative Agreements. Without
limiting the generality of the foregoing it is specifically understood and
agreed that in no event shall the aggregate amounts advanced by the Lenders and
the Holders for Property Acquisition Costs or other Property Costs and any other
amounts due and owing hereunder or under any of the other Operative Agreements
exceed the sum of the aggregate Commitment of the Lenders plus the aggregate
amount of the Holder Commitments, including without limitation such amounts
owing for (i) development, acquisition, installation, construction and testing
of the Property or any portion thereof or (ii) additional amounts which accrue
or become due and owing under the Credit Agreement or Trust Agreement as
obligations of the Lessor prior to any Completion Date.
(b) The proceeds of any funds made available to the Lessor to pay
Property Acquisition Costs or other Property Costs shall be made available to
the Construction Agent in accordance with the Requisition relating thereto and
the terms of the Participation Agreement. The Construction Agent will use such
proceeds only to pay the Property Acquisition Costs or other Property Costs set
forth in the Requisition relating to such funds.
ARTICLE V
EVENTS OF DEFAULT
SECTION 5.1 EVENTS OF DEFAULT. If any one (1) or more of the following
events (each an "Event of Default") shall occur:
(a) the Construction Agent fails to apply any funds paid by the Lessor
to the Construction Agent in a manner consistent with the requirements of the
Operative Agreements and as specified in the applicable Requisition for the
development, acquisition, installation, construction and testing of the Property
and related Improvements and Equipment or otherwise respecting the Property to
the payment of Property Acquisition Costs or other Property Costs;
(b) the Construction Agent shall fail to make any payment required
pursuant to the terms of this Agreement (including without limitation pursuant
to Sections 2.1 and 3.3) within three (3) Business Days after the same has
become due and payable;
(c) any Event of Default (as such term is defined in Appendix A to the
Participation Agreement) shall have occurred and not be cured within any cure
period expressly permitted under the terms of the applicable Operative
Agreement; and
(d) the Construction Agent shall fail to observe or perform any term,
covenant or condition of any Operative Agreement other than as set forth in
paragraphs (a), (b) or (c) of this Section 5.1 and such failure to observe or
perform any such term, covenant or condition shall continue for more than thirty
(30) days after the earlier of an officer of the Construction Agent
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becoming aware of such default or notice thereof by the Lessor; provided,
however, that if such failure is of a nature that is not capable of being cured
within such thirty (30) day period, and the Construction Agent promptly
commences appropriate steps to cure such failure within such thirty (30) day
period and continues to pursue such cure with diligence and good faith
thereafter, unless Lessor shall determine that such delay could reasonably be
expected to have a Material Adverse Effect, such thirty (30) day period shall be
extended for an additional sixty (60) days;
then, in any such event, the Lessor may, in addition to the other rights and
remedies provided for in this Agreement, terminate this Agreement by giving the
Construction Agent three (3) days written notice of such termination and upon
the expiration of the time fixed in such notice and the payment of all amounts
owing by the Construction Agent hereunder (including without limitation any
amounts specified under Section 5.3 hereof), this Agreement shall terminate. The
Construction Agent shall pay all costs and expenses incurred by or on behalf of
the Lessor, including without limitation fees and expenses of counsel, as a
result of any Event of Default hereunder.
SECTION 5.2 DAMAGES. The termination of this Agreement pursuant to Section
5.1 shall in no event relieve the Construction Agent of its liability and
obligations hereunder, all of which shall survive any such termination.
SECTION 5.3 REMEDIES; REMEDIES CUMULATIVE.If an Event of Default hereunder
shall have occurred and be continuing, the Lessor shall have all rights
available to the Lessor under the Lease and the other Operative Agreements and
all other rights otherwise available at law, equity or otherwise.
(b) Upon the occurrence of an Event of Default, the Lessor shall have
(in addition to its rights otherwise described in this Agreement or existing at
law, equity or otherwise) the option (and shall be deemed automatically, and
without any further action, to have exercised such option upon the occurrence of
any Lease Event of Default arising under Sections 17.1(g), (h) (i) or (j) of the
Lease) to transfer and convey to the Construction Agent upon a date designated
by the Lessor all right, title and interest of the Lessor in and to the Property
or any portion thereof (including without limitation the Land and/or any
Improvements, any interest in any Improvements, any Equipment and any Property
then under construction) which is a Construction Period Property. On any
transfer and conveyance date specified by the Lessor pursuant to this Section
5.3(b), (i) the Lessor shall transfer and convey (at the cost of the
Construction Agent) all right, title and interest of the Lessor in and to any or
all such Construction Period Property free and clear of the Lien of the Lease
and all Lessor Liens, (ii) the Construction Agent hereby covenants and agrees
that it will accept such transfer and conveyance of right, title and interest in
and to such Construction Period Property and (iii) the Construction Agent hereby
promises to pay to the Lessor, as liquidated damages (it being agreed that it
would be impossible accurately to determine actual damages), an aggregate amount
equal to the Termination Value of such Construction Period Property plus other
costs and expenses described in Section 2.1 hereof. The Construction Agent
specifically acknowledges and agrees that its obligations under this Section
5.3(b), including without limitation its obligations to accept the transfer and
conveyance of Construction Period Property and its payment obligations described
in subparagraph (iii) of this Section 5.3(b), shall be absolute and
unconditional under any and all circumstances and shall be performed and/or
paid, as the case may be, without notice or demand
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and without any abatement, reduction, diminution, setoff, defense, counterclaim
or recoupment whatsoever. Notwithstanding the foregoing provisions of this
Section 5.3(b), the Lessor shall have the right in its sole discretion to
rescind any exercise of its option under this Section 5.3(b) upon the giving of
its written confirmation of such rescission to the Construction Agent on or
prior to the earlier to occur of (a) the actual date of transfer and (b) the
date one hundred and twenty (120) days after the date the Lessor has given
notice of its intent to transfer and convey any Property to the Construction
Agent as referenced above in this Section 5.3(b).
(c) The Construction Agent shall have the right to cure an Event of
Default hereunder with respect to the Property or any portion thereof by
purchasing the Property or such portion from the Lessor (to the extent such
Event of Default is no longer continuing with respect to any other portion of
the Property remaining subject to this Agreement after such purchase) for an
amount equal to the liquidated damages amount set forth in Section 5.3(b) of
this Agreement.
(d) 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 Agreements 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 are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
ARTICLE VI
THE LESSOR'S RIGHTS
SECTION 6.1 EXERCISE OF THE LESSOR'S RIGHTS. Subject to the Excepted
Payments, the Construction Agent and the Lessor hereby acknowledge and agree
that, subject to and in accordance with the terms of the Security Agreement made
by the Lessor in favor of the Agent, the rights and powers of the Lessor under
this Agreement have been assigned to the Agent.
SECTION 6.2 THE LESSOR'S RIGHT TO CURE THE CONSTRUCTION AGENT'S DEFAULTS.
The Lessor, without waiving or releasing any obligation or Event of Default, may
(but shall be under no obligation to) remedy any Event of Default for the
account of and at the sole cost and expense of the Construction Agent. All
out-of-pocket costs and expenses so incurred (including without limitation fees
and expenses of counsel), together with interest thereon at the Overdue Rate
from the date on which such sums or expenses are paid by the Lessor, shall be
paid by the Construction Agent to the Lessor on demand.
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ARTICLE VII
MISCELLANEOUS
SECTION 7.1 NOTICES. All notices required or permitted to be given under
this Agreement shall be in writing and delivered as provided in Section 12.2 of
the Participation Agreement.
SECTION 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 the assigns of the Lessor. The Construction Agent may
not assign this Agreement or any of its rights or obligations hereunder or with
respect to the Property or any portion thereof in whole or in part to any Person
without the prior written consent of the Agent, the Lenders, the Holders and the
Lessor.
SECTION 7.3 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED,
INTERPRETED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
SECTION 7.4 SUBMISSION TO JURISDICTION; VENUE; WAIVERS. THE PROVISIONS OF
THE PARTICIPATION AGREEMENT RELATING TO SUBMISSION TO JURISDICTION AND VENUE ARE
HEREBY INCORPORATED BY REFERENCE HEREIN, MUTATIS MUTANDIS.
SECTION 7.5 AMENDMENTS AND WAIVERS. This Agreement may not be terminated,
amended, supplemented, waived or modified except in accordance with the
provisions of Section 12.4 of the Participation Agreement.
SECTION 7.6 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 (1) and the same instrument.
SECTION 7.7 SEVERABILITY. Any provision of this Agreement which 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.
SECTION 7.8 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.
SECTION 7.9 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT ALLOWED BY
APPLICABLE LAW, THE LESSOR AND THE CONSTRUCTION AGENT IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
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ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND ANY COUNTERCLAIM THEREUNDER.
[signature page follows]
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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.
VERITAS SOFTWARE GLOBAL
CORPORATION, as the Construction Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
FIRST SECURITY
BANK, NATIONAL
ASSOCIATION, not
individually, but
solely as Owner
Trustee under the
VS Trust 2000-2,
as the Lessor
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
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