EXHIBIT 10.AAd
AMENDED AND RESTATED LEASE AGREEMENT
Dated as of May 8, 2000
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually,
but solely as Owner Trustee
under the TD 1996 Real Estate Trust,
as Lessor
and
TECH DATA CORPORATION, as Lessee
--------------------------------------------------------------------------------
This Amended and Restated Lease Agreement is subject to a security
interest in favor of Bank of America, N.A., successor in interest to
NationsBank, N.A. (South), as Administrative Agent (the "Agent") under
an Amended and Restated Security Agreement dated as of May 8, 2000,
among First Security Bank, National Association, formerly known as
First Security Bank of Utah, N.A., not individually except as expressly
stated therein, but solely as Owner Trustee under the TD 1996 Real
Estate Trust, the Lenders and the Agent, as amended, modified,
supplemented, restated or replaced from time to time. This Amended and
Restated Lease Agreement has been executed in several counterparts. To
the extent, if any, that this Amended and Restated Lease Agreement
constitutes chattel paper (as such term is defined in the Uniform
Commercial Code as in effect in any applicable jurisdiction), no
security interest in this Amended and Restated Lease Agreement may be
created through the transfer or possession of any counterpart other
than the original counterpart containing the receipt therefor executed
by the Agent on the signature page hereof.
TABLE OF CONTENTS
PAGE
----
ARTICLE I.................................................................................................1
1.1 Definitions...........................................................................1
ARTICLE II................................................................................................1
2.1 Property..............................................................................1
2.2 Lease Term............................................................................2
2.3 Title.................................................................................2
2.4 Lease Supplements.....................................................................2
2.5 Subsidiaries as Lessee................................................................2
ARTICLE III...............................................................................................3
3.1 Rent..................................................................................3
3.2 Payment of Basic Rent.................................................................3
3.3 Supplemental Rent.....................................................................3
3.4 Performance on a Non-Business Day.....................................................4
3.5 Rent Payment Provisions...............................................................4
ARTICLE IV................................................................................................4
4.1 Utility Charges; Taxes................................................................4
ARTICLE V.................................................................................................5
5.1 Quiet Enjoyment.......................................................................5
ARTICLE VI................................................................................................5
6.1 Net Lease.............................................................................5
6.2 No Termination or Abatement...........................................................6
ARTICLE VII...............................................................................................6
7.1 Ownership of the Properties...........................................................6
ARTICLE VIII..............................................................................................7
8.1 Condition of the Properties...........................................................7
8.2 Possession and Use of the Properties..................................................7
ARTICLE IX................................................................................................8
9.1 Compliance with Legal Requirements and Insurance Requirements.........................8
ARTICLE X.................................................................................................9
10.1 Maintenance and Repair; Return........................................................9
10.2 Environmental Inspection.............................................................10
ARTICLE XI...............................................................................................11
11.1 Modifications........................................................................11
i
ARTICLE XII..............................................................................................12
12.1 Warranty of Title....................................................................12
ARTICLE XIII.............................................................................................12
13.1 Permitted Contests Other Than in Respect of Indemnities..............................12
ARTICLE XIV..............................................................................................13
14.1 Public Liability and Workers' Compensation Insurance.................................13
14.2 Hazard and Other Insurance...........................................................13
14.3 Coverage.............................................................................14
14.4 Additional Insurance Requirements....................................................14
ARTICLE XV...............................................................................................15
15.1 Casualty and Condemnation............................................................15
15.2 Environmental Matters................................................................16
15.3 Notice of Environmental Matters......................................................17
ARTICLE XVI..............................................................................................17
16.1 Termination Upon Certain Events......................................................17
16.2 Procedures...........................................................................17
ARTICLE XVII.............................................................................................18
17.1 Lease Events of Default..............................................................18
17.2 Surrender of Possession..............................................................20
17.3 Reletting............................................................................20
17.4 Damages..............................................................................21
17.5 Final Liquidated Damages.............................................................21
17.6 Waiver of Certain Rights.............................................................22
17.7 Assignment of Rights Under Contracts.................................................22
17.8 Environmental Costs..................................................................22
17.9 Remedies Cumulative..................................................................23
17.10 Notice of Default or Event of Default................................................23
17.11 Lessee's Option to Cure by Purchase of All Properties................................23
ARTICLE XVIII............................................................................................23
18.1 Lessor's Right to Cure Lessee's Lease Defaults.......................................23
ARTICLE XIX..............................................................................................23
19.1 Provisions Relating to Lessee's Exercise of its Purchase Option......................23
19.2 No Termination With Respect to Less than All of a Property...........................24
ARTICLE XX...............................................................................................24
20.1 Purchase Prior to End of Term; Purchase or Sale Option at End of Term
or on Preliminary Expiration Date....................................................24
ARTICLE XXI..............................................................................................25
[INTENTIONALLY LEFT BLANK.].....................................................................25
ii
ARTICLE XXII.............................................................................................25
22.1 Sale Procedure.......................................................................25
22.2 Application of Proceeds of Sale......................................................27
22.3 Indemnity for Excessive Wear.........................................................27
22.4 Appraisal Procedure..................................................................27
22.5 Certain Obligations Continue.........................................................28
ARTICLE XXIII............................................................................................28
23.1 Holding Over.........................................................................28
ARTICLE XXIV.............................................................................................29
24.1 Risk of Loss.........................................................................29
ARTICLE XXV..............................................................................................29
25.1 Assignment...........................................................................29
25.2 Subleases............................................................................29
ARTICLE XXVI.............................................................................................30
26.1 No Waiver............................................................................30
ARTICLE XXVII............................................................................................30
27.1 Acceptance of Surrender..............................................................30
27.2 No Merger of Title...................................................................30
ARTICLE XXVIII...........................................................................................31
28.1 Incorporation of Covenants...........................................................31
28.2 Financial Information, Reports, Notices, Etc.........................................31
28.3 Other Information....................................................................32
28.4 Right of Inspection..................................................................32
28.5 Officer's Knowledge of Default.......................................................32
28.6 New Subsidiaries.....................................................................32
ARTICLE XXIX.............................................................................................33
29.1 Notices..............................................................................33
ARTICLE XXX..............................................................................................34
30.1 Miscellaneous........................................................................34
30.2 Amendments and Modifications.........................................................34
30.3 Successors and Assigns...............................................................34
30.4 Headings and Table of Contents.......................................................34
30.5 Counterparts.........................................................................34
30.6 GOVERNING LAW........................................................................34
30.7 Calculation of Rent..................................................................34
30.8 Memoranda of Lease and Lease Supplements.............................................34
30.9 Allocations between the Lenders and the Holders......................................34
30.10 Limitations on Recourse..............................................................35
30.11 WAIVERS OF JURY TRIAL................................................................35
30.12 Original Leases......................................................................35
30.13 Mortgage Grant and Remedies..........................................................35
iii
30.14 Exercise of Lessor Rights..............................................................35
EXHIBITS..................................................................................................1
EXHIBIT A [AMENDED AND RESTATED] LEASE SUPPLEMENT NO. __........................................1
EXHIBIT B FORM OF MEMORANDUM OF LEASE AND LEASE SUPPLEMENT......................................1
EXHIBIT C Form of Guaranty Agreement (Lessee and Construction Agent Obligations)................1
iv
AMENDED AND RESTATED LEASE AGREEMENT
THIS AMENDED AND RESTATED LEASE AGREEMENT (as amended, supplemented or
modified from time to time, this "Lease"), dated as of May 8, 2000, is between
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association,
formerly known as First Security Bank of Utah, N.A., having its principal office
at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, not individually, but
solely as Owner Trustee under the TD 1996 Real Estate Trust, as lessor (the
"Lessor"), and TECH DATA CORPORATION, a Florida corporation, having its
principal place of business at 0000 Xxxx Xxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx, as
lessee (the "Lessee").
W I T N E S S E T H:
A. WHEREAS, the Lessor and Lessee entered into a Lease Agreement dated
as of April 26, 1996 (as amended, the "Existing Lease"), pursuant to which
Lessor agreed to lease certain Properties to Lessee (or to certain Subsidiaries
acting as alternative lessees); and
B. WHEREAS, the Lessor desires to amend and restate the Existing Lease
on the terms and conditions set forth herein; and
C. WHEREAS, Lessor desires to lease to Lessee (or to certain
alternative Lessees permitted by SECTION 2.5), and Lessee desires to lease (or
cause such alternative Lessees to lease) from Lessor, each Property;
NOW, THEREFORE, in consideration of the foregoing, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Existing Lease Agreement is hereby amended and restated in its
entirety, and the parties hereto agree as follows:
ARTICLE I
1.1 DEFINITIONS. Capitalized terms used but not otherwise defined in
this Lease have the respective meanings specified in APPENDIX A to the Amended
and Restated Participation Agreement of even date herewith (as such may be
amended, modified, supplemented, restated and/or replaced from time to time, the
"Participation Agreement") among Tech Data Corporation, as Construction Agent,
the Lessee, First Security Bank, National Association, formerly known as First
Security Bank of Utah, N.A., not individually, except as expressly stated
therein, as Owner Trustee under the TD 1996 Real Estate Trust, the Holders party
thereto, the Lenders party thereto, and the Agent.
ARTICLE II
2.1 PROPERTY. Subject to the terms and conditions hereinafter set forth
and contained in the respective Lease Supplement relating to each Property,
Lessor hereby leases to Lessee and Lessee hereby leases from Lessor, each
Property.
2.2 LEASE TERM. The term of this Lease with respect to each New
Property (the "Basic Term" or "Term") shall begin upon the earlier to occur of
(a) the Property Closing Date for such Property or (b) the date the Lessor takes
title to such Property (such earlier date being referred to as the "Basic Term
Commencement Date" or the "Term Commencement Date" for such Property) and shall
end on May 6, 2005 (the "Basic Term Expiration Date"), unless the Term is
earlier terminated in accordance with the provisions of this Lease. The Lessor
and the Lessee acknowledge and agree that since the respective Property Closing
Date (or date of Lessor taking title) for each Existing Property has occurred
prior to the Initial Closing Date, the Term has already commenced (and is deemed
to be in effect) with respect to the Existing Properties in accordance with the
first sentence of this SECTION 2.2.
2.3 TITLE. Each Property is leased to Lessee without any representation
or warranty, express or implied, by Lessor and subject to the rights of parties
in possession (if any), the existing state of title (including, without
limitation, the Permitted Exceptions) and all applicable Legal Requirements.
Lessee shall in no event have any recourse against Lessor for any defect in
Lessor's title to any Property other than for Lessor Liens.
2.4 LEASE SUPPLEMENTS. On or prior to each Basic Term Commencement
Date, Lessee and Lessor shall each execute and deliver a Lease Supplement for
the Property to be leased effective as of such Basic Term Commencement Date in
substantially the form of EXHIBIT A hereto. Lessee hereby irrevocably appoints
Lessor as Lessee's attorney-in-fact, with power of substitution, in the name of
Lessor or the name of Lessee or otherwise, to execute any Lease Supplement which
Lessee fails or refuses to sign in accordance with the terms of this SECTION
2.4.
2.5 SUBSIDIARIES AS LESSEE. Subject to the consent of the
Administrative Agent and the delivery of such agreements and documents as the
Administrative Agent may require (including without limitation the Guaranty of
Tech Data), documents perfecting the liens of the Owner Trustee, Agent, Lenders
and Holders under the Operative Agreements and written opinions of counsel for
the Lessee and any applicable Subsidiary, a Subsidiary of Tech Data may become
party to this Lease as a Lessee (each, an "alternative Lessee") of a Property,
and shall be liable (jointly and severally with Tech Data) for all obligations
as Lessee. Without limiting the generality of the foregoing, (a) Tech Data shall
remain fully liable for all obligations as Lessee and Construction Agent with
respect to each Property, and (b) Tech Data, as and on behalf of the Lessee with
respect to each Property, shall have the right to give any notice, consent or
waiver, to exercise any option permitted under any Operative Agreement, and to
agree to any amendment or modification with respect to any Operative Agreement
or any Property (and each alternative Lessee hereby grants to Tech Data an
irrevocable power-of-attorney to take any such actions) without the necessity of
obtaining any consent of any alternative Lessee, and any other party to the
Operative Agreements shall be fully protected in relying on any such actions
taken by Tech Data or (with respect to the applicable Property) by an
alternative Lessee. Without limiting the generality of the foregoing, any
Operative Agreement may be amended or modified without obtaining the consent of
any alternative Lessee.
2
ARTICLE III
3.1 RENT.
(a) Lessee shall pay Basic Rent on each Payment Date, and on
any date on which this Lease shall terminate with respect to any or all
Properties during the Term; provided, however, with respect to each
individual Property Lessee shall have no obligation to pay Basic Rent
with respect to such Property until the earlier of (i) the Completion
Date for such Property or (ii) if such Property is a Construction
Period Property as of the date of any Agency Agreement Event of
Default, the date of such Agency Agreement Event of Default (in each
case, such earlier date being referred to as the "Basic Rent
Commencement Date"). The Lessor and the Lessee acknowledge and agree
that since the respective Closing Date for each Existing Property
(other than any Incomplete Existing Property) has occurred prior to the
Initial Closing Date, the Basic Rent Commencement Date has already
occurred for each such Property, and the Lessee must pay Basic Rent
from and after the date hereof for each such Property.
(b) Basic Rent shall be due and payable in lawful money of the
United States and shall be paid in immediately available funds on the
due date therefor (or within the applicable grace period) to such
account or accounts as Lessor shall from time to time direct.
(c) Lessee's inability or failure to take possession of all or
any portion of any Property when delivered by Lessor, whether or not
attributable to any act or omission of the Lessor, the Construction
Agent, Lessee, or any other Person, or for any other reason whatsoever,
shall not delay or otherwise affect Lessee's obligation to pay Rent for
such Property in accordance with the terms of this Lease.
3.2 PAYMENT OF BASIC RENT. Basic Rent shall be paid absolutely net to
Lessor or its designee, so that this Lease shall yield to Lessor the full amount
of Basic Rent, without setoff, deduction or reduction.
3.3 SUPPLEMENTAL RENT. Lessee shall pay to Lessor or its designee or to
the Person entitled thereto any and all Supplemental Rent promptly as the same
shall become due and payable, and if Lessee fails to pay any Supplemental Rent,
Lessor shall have all rights, powers and remedies provided for herein or by law
or equity or otherwise in the case of nonpayment of Basic Rent. Without limiting
the generality of the definition of "Supplemental Rent," Lessee shall pay to
Lessor as Supplemental Rent, among other things, on demand, to the extent
permitted by applicable Legal Requirements, (a) any and all unpaid Commitment
Fees, Holder Commitment Fees, Owner Trustee fees, other fees, charges,
prepayment penalties, Taxes, insurance costs, indemnities, expenses, payments
and other obligations (except the obligations of Lessor to pay the principal
amount of the Loans and the Holder Amount) due and owing by Lessor under the
Credit Agreement, the Trust Agreement or any other Operative Agreement
(including specifically without limitation any amounts owing to the Lenders
under SECTION 2.11 or SECTION 2.12 of the Credit Agreement and any amounts owing
to the Holders under SECTION 3.9 or SECTION 3.10 of the Trust Agreement) and (b)
interest at the applicable Overdue Rate on
3
any installment of Basic Rent not paid when due (subject to the applicable grace
period) for the period for which the same shall be overdue and on any payment of
Supplemental Rent not paid when due or demanded by the appropriate Person for
the period from the due date or the date of any such demand, as the case may be,
until the same shall be paid. The expiration or other termination of Lessee's
obligations to pay Basic Rent hereunder shall not limit or modify the
obligations of Lessee with respect to Supplemental Rent. Unless expressly
provided otherwise in this Lease, in the event of any failure on the part of
Lessee to pay and discharge any Supplemental Rent as and when due, Lessee shall
also promptly pay and discharge any fine, penalty, interest or cost which may be
assessed or added, pursuant to any Operative Agreement or otherwise, in each
case for nonpayment or late payment of such Supplemental Rent, all of which
shall also constitute Supplemental Rent.
3.4 PERFORMANCE ON A NON-BUSINESS DAY. If any Basic Rent is required
hereunder on a day that is not a Business Day, then such Basic Rent shall be due
on the corresponding Scheduled Interest Payment Date. If any Supplemental Rent
is required hereunder on a day that is not a Business Day, then such
Supplemental Rent shall be due on the next succeeding Business Day.
3.5 RENT PAYMENT PROVISIONS. Lessee shall make payment of all Basic
Rent and Supplemental Rent when due regardless of whether any of the Operative
Agreements pursuant to which same is calculated and is owing shall have been
rejected, avoided or disavowed in any bankruptcy or insolvency proceeding
involving any of the parties to any of the Operative Agreements. Such provisions
of such Operative Agreements and their related definitions are incorporated
herein by reference and shall survive any termination, amendment or rejection of
any such Operative Agreements.
ARTICLE IV
4.1 UTILITY CHARGES; TAXES. Lessee shall pay or cause to be paid all
charges for electricity, power, gas, oil, water, telephone, sanitary sewer
service and all other rents and utilities used in or on a Property and related
real property during the Term. Lessee shall be entitled to receive any credit or
refund with respect to any utility charge paid by Lessee, PROVIDED THAT Lessee
must collect any such credit or refund from Lessor or the respective utility
company (as the case may be) and shall not be entitled to offset any such amount
owed to Lessee against Rent payable by the Lessee hereunder. Unless a Lease
Default or Lease Event of Default shall have occurred and be continuing, the
amount of any credit or refund received by Lessor on account of any utility
charges paid by Lessee, net of the costs and expenses incurred by Lessor in
obtaining such credit or refund, shall be promptly paid over to Lessee. In
addition, Lessee shall pay or cause to be paid all taxes or tax assessments
against a Property. All charges for utilities and all taxes or tax assessments
imposed with respect to a Property for a billing period (or in the cases of tax
assessments, a tax period) during which this Lease expires or terminates shall
be adjusted and prorated on a daily basis between Lessor and Lessee, and each
party shall pay or reimburse the other for such party's pro rata share thereof.
4
ARTICLE V
5.1 QUIET ENJOYMENT. Subject to the rights of Lessor contained in
SECTIONS 17.2 AND 17.3 and the other terms of this Lease and the other Operative
Agreements and so long as no Lease Event of Default shall have occurred and be
continuing, Lessee shall peaceably and quietly have, hold and enjoy each
Property for the applicable Term, free of any claim or other action by Lessor or
anyone rightfully claiming by, through or under Lessor (other than Lessee) with
respect to any matters arising from and after the applicable Basic Term
Commencement Date.
ARTICLE VI
6.1 NET LEASE. This Lease shall constitute a net lease. Without
limiting the Construction Agent's rights to request Fundings with respect to
each Construction Period Property in accordance with the provisions of the
Participation Agreement prior to the respective Basic Rent Commencement Date,
Lessee shall pay all operating expenses arising out of the use, operation or
occupancy of each Property. Any present or future law to the contrary
notwithstanding, this Lease shall not terminate, nor shall Lessee be entitled to
any abatement, suspension, deferment, reduction, setoff, counterclaim, or
defense with respect to the Rent, nor shall the obligations of Lessee hereunder
be affected (except as expressly herein permitted and by performance of the
obligations in connection therewith) by reason of: (a) any damage to or
destruction of any Property or any part thereof; (b) any taking of any Property
or any part thereof or interest therein by Condemnation or otherwise; (c) any
prohibition, limitation, restriction or prevention of Lessee's use, occupancy or
enjoyment of any Property or any part thereof, or any interference with such
use, occupancy or enjoyment by any Person or for any other reason; (d) any title
defect, Lien or any matter affecting title to any Property; (e) any eviction by
paramount title or otherwise; (f) any default by Lessor hereunder; (g) any
action for bankruptcy, insolvency, reorganization, liquidation, dissolution or
other proceeding relating to or affecting the Agent, any Lender, Lessor, Lessee,
any Holder or any Governmental Authority; (h) the impossibility or illegality of
performance by Lessor, Lessee or both; (i) any action of any Governmental
Authority or any other Person; (j) Lessee's acquisition of ownership of all or
part of any Property; (k) breach of any warranty or representation with respect
to any Property or any Operative Agreement; (l) any defect in the condition,
quality or fitness for use of any Property or any part thereof; or (m) any other
cause or circumstance whether similar or dissimilar to the foregoing and whether
or not Lessee shall have notice or knowledge of any of the foregoing. The
foregoing clause (j) shall not prevent the termination of the Lease in
accordance with the terms hereof if the Lessee purchases all of the Properties
pursuant to SECTION 20.1, or the termination of the Lease with respect to an
individual Property if the Lessee purchases such Property pursuant to SECTION
20.1. The parties intend that the obligations of Lessee hereunder shall be
covenants, agreements and obligations that are separate and independent from any
obligations of Lessor hereunder and shall continue unaffected unless such
covenants, agreements and obligations shall have been modified or terminated in
accordance with an express provision of this Lease. Lessor and Lessee
acknowledge and agree that the provisions of this SECTION 6.1 have been
specifically reviewed and subject to negotiation.
5
6.2 NO TERMINATION OR ABATEMENT. Lessee shall remain obligated under
this Lease in accordance with its terms and shall not take any action to
terminate, rescind or avoid this Lease, notwithstanding any action for
bankruptcy, insolvency, reorganization, liquidation, dissolution, or other
proceeding affecting Lessor, any other Person or any Governmental Authority, or
any action with respect to this Lease or any Operative Agreement which may be
taken by any trustee, receiver or liquidator of Lessor, any other Person or any
Governmental Authority or by any court with respect to Lessor, any other Person
or any Governmental Authority. Lessee hereby waives all right (a) to terminate
or surrender this Lease (except as permitted under the terms of the Operative
Agreements) or (b) to avail itself of any abatement, suspension, deferment,
reduction, setoff, counterclaim or defense with respect to any Rent. Lessee
shall remain obligated under this Lease in accordance with its terms and Lessee
hereby waives any and all rights now or hereafter conferred by statute or
otherwise to modify or to avoid strict compliance with its obligations under
this Lease. Notwithstanding any such statute or otherwise, Lessee shall be bound
by all of the terms and conditions contained in this Lease.
ARTICLE VII
7.1 OWNERSHIP OF THE PROPERTIES.
(a) Lessor and Lessee intend that for federal and all state
and local income tax purposes and other tax purposes, for bankruptcy
purposes, creditor's rights purposes, environmental law purposes, for
purposes of exercising remedies against the Lessee, the Construction
Agent or the Properties, and for all other legal purposes (A) this
Lease will be treated as a loan and financing arrangement and not a
true lease, (B) Lessee will be treated as the owner of the Properties
and will be entitled to all tax benefits ordinarily available to owners
of property similar to the Properties for such tax purposes, and (C)
all payments of Basic Rent shall be deemed to be interest payments.
Consistent with the foregoing, Lessee intends to claim depreciation and
cost recovery deductions associated with the Property, and Lessor
agrees not to take any inconsistent position on its income tax returns.
Neither Lessor, the Agent, any Lender, any Holder nor BAS makes any
representation or warranty with respect to the foregoing matters
described in this SECTION 7.1 and will assume no liability for the
Lessee's accounting or tax treatment of this transaction.
(b) Lessor and Lessee further intend and agree that, for the
purpose of securing Lessee's obligations hereunder, (i) this Lease
shall be deemed to be a security agreement and financing statement
within the meaning of Article 9 of the Uniform Commercial Code
respecting each of the Properties to the extent such is personal
property and an irrevocable grant and conveyance of a lien and mortgage
on each of the Properties to the extent such is real property; (ii) the
acquisition of title (or to the extent applicable, a leasehold
interest) in each Property referenced in ARTICLE II shall be deemed to
be (A) a grant by Lessee to Lessor of a lien on and security interest
in all of Lessee's right, title and interest in and to each Property
and all proceeds (including without limitation insurance proceeds) of
any of the Property, whether in the form of cash, investments,
securities or other property, and (B) an assignment by Lessee to Lessor
of all rents, profits and income produced by any of the Property; and
(iii) notifications to
6
Persons holding such property, and acknowledgments, receipts or
confirmations from financial intermediaries, bankers or agents (as
applicable) of Lessee shall be deemed to have been given for the
purpose of perfecting such security interest under applicable law.
Lessor and Lessee shall promptly take such actions as may be necessary
or advisable in either party's opinion (including without limitation
the filing of Uniform Commercial Code Financing Statements or Uniform
Commercial Code Fixture Filings) to ensure that the lien and security
interest in each Property will be deemed to be a perfected lien and
security interest of first priority under applicable law and will be
maintained as such throughout the Term.
ARTICLE VIII
8.1 CONDITION OF THE PROPERTIES. LESSEE ACKNOWLEDGES AND AGREES THAT IT
IS LEASING EACH PROPERTY "AS IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT
(EXPRESS OR IMPLIED) BY LESSOR AND IN EACH CASE SUBJECT TO (A) THE EXISTING
STATE OF TITLE, (B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF ANY),
(C) ANY STATE OF FACTS WHICH AN ACCURATE SURVEY OR PHYSICAL INSPECTION MIGHT
SHOW, (D) ALL APPLICABLE LEGAL REQUIREMENTS AND (E) VIOLATIONS OF LEGAL
REQUIREMENTS WHICH MAY EXIST ON THE DATE OF THE APPLICABLE LEASE SUPPLEMENT.
NEITHER LESSOR NOR THE AGENT NOR ANY LENDER NOR ANY HOLDER HAS MADE OR SHALL BE
DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
IMPLIED) OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE,
VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR
FITNESS FOR USE OF ANY PROPERTY (OR ANY PART THEREOF), OR ANY OTHER
REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY PROPERTY (OR ANY PART THEREOF), AND NEITHER LESSOR NOR THE AGENT
NOR ANY LENDER NOR ANY HOLDER SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT
DEFECT THEREON OR THE FAILURE OF ANY PROPERTY, OR ANY PART THEREOF, TO COMPLY
WITH ANY LEGAL REQUIREMENT. THE LESSEE HAS OR WILL HAVE BEEN AFFORDED FULL
OPPORTUNITY TO INSPECT EACH PROPERTY AND THE IMPROVEMENTS THEREON (IF ANY), IS
OR WILL BE (INSOFAR AS THE LESSOR, THE AGENT, EACH LENDER AND EACH HOLDER ARE
CONCERNED) SATISFIED WITH THE RESULTS OF ITS INSPECTIONS AND IS ENTERING INTO
THIS LEASE SOLELY ON THE BASIS OF THE RESULTS OF ITS OWN INSPECTIONS, AND ALL
RISKS INCIDENT TO THE MATTERS DESCRIBED IN THE PRECEDING SENTENCE, AS BETWEEN
THE LESSOR, THE AGENT, THE LENDERS AND THE HOLDERS, ON THE ONE HAND, AND THE
LESSEE, ON THE OTHER HAND, ARE TO BE BORNE BY LESSEE.
8.2 POSSESSION AND USE OF THE PROPERTIES.
(a) At all times during the Term with respect to each
Property, such Property shall be used by Lessee in the ordinary course
of its business. Lessee shall pay, or cause to be paid, all charges and
costs required in connection with the use of the Properties as
7
contemplated by this Lease. Lessee shall not commit or permit any waste
of the Properties or any part thereof.
(b) Lessee represents and warrants that the address stated in
SECTION 29.1 of this Lease is the chief place of business and chief
executive office of Lessee (as such terms are used in Section 9-103 of
the Uniform Commercial Code of any applicable jurisdiction), and Lessee
will provide Lessor with prior written notice of any change of location
of its chief place of business or chief executive office. Regarding
each Property, Lessee represents and warrants that each Lease
Supplement correctly identifies the initial location of the related
Equipment and Improvements and contains an accurate legal description
for the related parcel of Land. Lessee has no other places of business
where the Equipment or Improvements will be located other than those
identified on the applicable Lease Supplement.
(c) Lessee will not attach or incorporate any item of
Equipment to or in any other item of equipment or personal property or
to or in any real property (except the Land identified in the Lease
Supplement in which such Equipment is also described) in a manner that
could give rise to the assertion of any Lien (other than a Permitted
Lien) on such item of Equipment by reason of such attachment or the
assertion of a claim that such item of Equipment has become a fixture
and is subject to a Lien in favor of a third party that is prior to the
Liens thereon created by the Operative Agreements.
(d) Each Lease Supplement delivered under the terms of this
Lease shall contain, in regard to the relevant Property, an Equipment
Schedule that has a complete description of each item of Equipment, an
Improvement Schedule that has a complete description of each
Improvement and a legal description of the Land, to be leased hereunder
as of such date. Simultaneously with the execution and delivery of each
Lease Supplement, such Equipment, Improvements and Land shall be deemed
to have been accepted by Lessee for all purposes of this Lease and to
be subject to this Lease.
(e) At all times during the Term with respect to each
Property, Lessee will comply with all obligations under, and (to the
extent no Event of Default has occurred and is continuing and provided
that such exercise will not impair the value of such Property) shall be
permitted to exercise all rights and remedies under, all operation and
easement agreements and related or similar agreements applicable to
such Property.
ARTICLE IX
9.1 COMPLIANCE WITH LEGAL REQUIREMENTS AND INSURANCE REQUIREMENTS.
Subject to the terms of ARTICLE XIII relating to permitted contests, Lessee, at
its sole cost and expense (without limiting the Construction Agent's rights to
request Fundings with respect to each Construction Period Property in accordance
with the provisions of the Participation Agreement prior to the respective Basic
Rent Commencement Date), shall (i) comply with all Legal Requirements (including
without limitation all Environmental Laws), and all Insurance Requirements
relating to the Properties, including the use, development, construction,
operation, maintenance, repair, refurbishment and restoration thereof, whether
or not compliance therewith
8
shall require structural or extraordinary changes in the Improvements or
interfere with the use and enjoyment of the Properties, and (ii) procure,
maintain and comply with all licenses, permits, orders, approvals, consents and
other authorizations required for the construction, use, maintenance and
operation of the Properties and for the use, development, construction,
operation, maintenance, repair and restoration of the Improvements.
ARTICLE X
10.1 MAINTENANCE AND REPAIR; RETURN.
(a) Lessee, at its sole cost and expense (without limiting the
Construction Agent's rights to request Fundings with respect to each
Construction Period Property in accordance with the provisions of the
Participation Agreement prior to the respective Basic Rent Commencement
Date), shall maintain each Property in good condition, repair and
working order (ordinary wear and tear excepted) and make all necessary
repairs thereto, of every kind and nature whatsoever, whether interior
or exterior, ordinary or extraordinary, structural or nonstructural, or
foreseen or unforeseen, in each case as required by all Legal
Requirements, Insurance Requirements, and manufacturer's specifications
and standards and on a basis consistent with the operation and
maintenance of properties or equipment comparable in type and function
to the applicable Property and in compliance with standard industry
practice, subject, however, to the provisions of ARTICLE XV with
respect to Condemnation and Casualty.
(b) Lessee shall not use or locate any component of any
Property outside of any Approved Country. Lessee shall not move or
relocate any component of any Property beyond the boundaries of the
Land described in the applicable Lease Supplement without Lessor's
prior written consent, which consent shall not be unreasonably withheld
or delayed.
(c) If any material component of any Property becomes worn
out, lost, destroyed, damaged beyond repair or otherwise permanently
rendered unfit for use, Lessee, at its own expense (without limiting
the Construction Agent's rights to request Fundings with respect to
each Construction Period Property in accordance with the provisions of
the Participation Agreement prior to the respective Basic Rent
Commencement Date), will within a reasonable time replace such
component with a replacement component which is free and clear of all
Liens (other than Permitted Liens) and has a value, utility and useful
life at least equal to the component replaced. All components which are
added to any Property shall immediately become the property of, and
title thereto shall vest in, Lessor, and shall be deemed incorporated
in such Property and subject to the terms of this Lease as if
originally leased hereunder.
(d) Upon reasonable advance notice, Lessor and its agents
shall have the right to inspect each Property and all maintenance
records with respect thereto at any reasonable time during normal
business hours but shall not materially disrupt the business of Lessee.
9
(e) Lessor or the Agent (at Lessee's sole expense) may cause
to be prepared (at Lessee's sole expense) any additional Appraisals (or
reappraisals) as Lessor or the Agent may deem appropriate (i) if an
Event of Default has occurred and is continuing, or (ii) if any one of
Lessor, the Agent, any Lender or any Holder is required pursuant to any
applicable Legal Requirement to obtain such an Appraisal (or
reappraisal).
(f) Lessor shall under no circumstances be required to build
any improvements on any Property, make any repairs, replacements,
alterations or renewals of any nature or description to any Property,
make any expenditure whatsoever in connection with this Lease or
maintain any Property in any way. Lessor shall not be required to
maintain, repair or rebuild all or any part of any Property, and Lessee
waives the right to (i) require Lessor to maintain, repair, or rebuild
all or any part of any Property (unless such repairs are needed to cure
damage to a Property caused by the gross negligence or willful
misconduct of the Lessor), or (ii) make repairs at the expense of
Lessor pursuant to any Legal Requirement, Insurance Requirement,
contract, agreement, covenants, condition or restriction at any time in
effect.
(g) Lessee shall, upon the expiration of the Term or earlier
termination of this Lease with respect to a Property, if Lessee shall
not have exercised its Purchase Option with respect to such Property,
surrender such Property to Lessor, or the third party purchaser, as the
case may be, subject to Lessee's obligations under this Lease
(including without limitation SECTIONS 9.1, 10.1(A)-(F), 10.2, 11.1,
12.1, 22.1 AND 23.1).
10.2 ENVIRONMENTAL INSPECTION. If (a) Lessee has not given notice of
the exercise of its Purchase Option on the Expiration Date or the Preliminary
Expiration Date pursuant to SECTION 20.1(B), or (b) Lessee has given notice,
pursuant to SECTION 20.1(B) of its election to remarket the Properties on the
Expiration Date or the Preliminary Expiration Date pursuant to SECTION 22.1
then, in either case, not more than one hundred twenty (120) days nor less than
sixty (60) days prior to such Applicable Expiration Date, Lessee shall, at its
sole cost and expense, provide to Lessor and the Agent a report by a reputable
environmental consultant selected by Lessee, which report shall be in form and
substance reasonably satisfactory to Lessor and the Agent and shall include
without limitation a "Phase I" environmental report (or update of a prior "Phase
I" report that was previously delivered to the Lessor and the Agent) on each of
the Properties. If the report delivered pursuant to the preceding sentence
recommends that a "Phase II" report or other supplemental report be obtained,
the Lessee shall, at its own cost and expense, not less than thirty (30) days
prior to such Applicable Expiration Date, provide to Lessor and the Agent such
"Phase II" or other report, in form and substance reasonably satisfactory to
Lessor and the Agent. If Lessee fails to provide such Phase I, Phase II or other
supplemental reports with respect to any Property within the time periods
required by this SECTION 10.2, or if such report or reports are not satisfactory
in scope or content to the Agent or the Lessor (in their sole discretion), then
notwithstanding any other provision of this Lease, Lessor may require Lessee to
purchase all of the Properties on such Applicable Expiration Date for the
Termination Value thereof, plus all Rent due and payable, and all other amounts
due and owing under any Operative Agreement.
10
ARTICLE XI
11.1 MODIFICATIONS.
(a) Lessee at its sole cost and expense (without limiting the
Construction Agent's rights to request Fundings with respect to each
Construction Period Property in accordance with the provisions of the
Participation Agreement prior to the respective Basic Rent Commencement
Date), at any time and from time to time without the consent of Lessor
may make alterations, renovations, improvements and additions to any
Property or any part thereof and substitutions and replacements
therefor (collectively, "Modifications") (and shall make any
Modification required by applicable Legal Requirements or by any
Governmental Authority); PROVIDED, that: (i) except for any
Modification required to be made pursuant to a Legal Requirement, no
Modification shall materially impair the value, utility or useful life
of any Property from that which existed immediately prior to such
Modification; (ii) the Modification shall be done expeditiously and in
a good and workmanlike manner; (iii) Lessee shall comply with all Legal
Requirements (including all Environmental Laws) and Insurance
Requirements applicable to the Modification, including without
limitation the obtaining of all permits and certificates of occupancy,
and the structural integrity of any Property shall not be adversely
affected; (iv) to the extent required by SECTION 14.2(A), Lessee shall
(without limiting the Construction Agent's rights to request Fundings
with respect to each Construction Period Property in accordance with
the provisions of the Participation Agreement prior to the respective
Basic Rent Commencement Date) maintain builders' risk insurance at all
times when a Modification is in progress; (v) subject to the terms of
ARTICLE XIII relating to permitted contests, Lessee shall (without
limiting the Construction Agent's rights to request Fundings with
respect to each Construction Period Property in accordance with the
provisions of the Participation Agreement prior to the respective Basic
Rent Commencement Date) pay all costs and expenses and discharge any
Liens (other than Permitted Liens) arising with respect to the
Modification; (vi) such Modification shall comply with the requirements
of this Lease (including without limitation SECTIONS 8.2 AND 10.1); and
(vii) no Improvements shall be demolished unless Lessee shall finance
the proposed Modification outside of this lease facility. Modifications
that (y) are not required for any Property or any part thereof pursuant
to any Legal Requirement or otherwise and (z) are severable from the
applicable Property without damage or other loss of value to such
Property shall become property of the Lessee, and title to such
Modifications shall rest with the Lessee. Except as set forth in the
immediately preceding sentence, title to each Modification shall
immediately vest in Lessor, and each such Modification shall be subject
to this Lease.
(b) The construction process provided for in the Agency
Agreement is acknowledged by Lessor and the Agent to be consistent with
and in compliance with the terms and provisions of this ARTICLE XI.
11
ARTICLE XII
12.1 WARRANTY OF TITLE.
(a) Lessee agrees that, except as otherwise provided herein
and subject to the terms of ARTICLE XIII relating to permitted
contests, Lessee shall not directly or indirectly create or allow to
remain, and shall promptly discharge at its sole cost and expense, (i)
any Lien, defect, attachment, levy, title retention agreement or claim
upon any Property or any Modifications or (ii) any Lien, attachment,
levy or claim with respect to the Rent or with respect to any amounts
held by the Agent pursuant to the Credit Agreement, in each case other
than Permitted Liens and Lessor Liens. Lessee shall promptly notify
Lessor in the event it receives actual knowledge that a Lien other than
a Permitted Lien or Lessor Lien has occurred with respect to a
Property, and Lessee represents and warrants to, and covenants with,
Lessor that the Liens in favor of the Lessor created by the Operative
Agreements are first priority perfected Liens subject only to Permitted
Liens.
(b) Nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, expressed or implied, to
or for the performance by any contractor, mechanic, laborer,
materialman, supplier or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration, addition,
repair or demolition of or to any Property or any part thereof. NOTICE
IS HEREBY GIVEN THAT LESSOR IS NOT AND SHALL NOT BE LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR
TO ANYONE HOLDING A PROPERTY OR ANY PART THEREOF THROUGH OR UNDER
LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR,
SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR
IN AND TO ANY PROPERTY.
ARTICLE XIII
13.1 PERMITTED CONTESTS OTHER THAN IN RESPECT OF INDEMNITIES. Except to
the extent otherwise provided for in SECTION 13 of the Participation Agreement,
Lessee, on its own or on Lessor's behalf but at Lessee's sole cost and expense,
may contest, by appropriate administrative or judicial proceedings conducted in
good faith and with due diligence, the amount, validity or application, in whole
or in part, of any Legal Requirement, or utility charges payable pursuant to
SECTION 4.1 or any Lien, attachment, levy, encumbrance or encroachment, and
Lessor agrees not to pay, settle or otherwise compromise any such item, provided
that (a) the commencement and continuation of such proceedings shall suspend the
collection of any such contested amount from, and suspend the enforcement
thereof against, the applicable Properties, Lessor, each Holder, the Agent and
each Lender; (b) there shall not be imposed a Lien (other than Permitted Liens)
on any Property and no part of any Property nor any Rent shall be in any danger
of being sold, forfeited, lost or deferred; (c) at no time during the permitted
contest shall there be a risk of the imposition of criminal liability or
material civil liability on Lessor, any Holder, the Agent or any Lender for
failure to comply therewith; and (d) in the event that, at any time, there shall
be a material risk of extending the application of such item beyond the end of
the Term, then Lessee shall deliver to Lessor an Officer's Certificate
certifying as to the matters set forth in clauses (a),
12
(b) and (c) of this SECTION 13.1. Lessor, at Lessee's sole cost and expense,
shall execute and deliver to Lessee such authorizations and other documents as
may reasonably be required in connection with any such contest and, if
reasonably requested by Lessee, shall join as a party therein at Lessee's sole
cost and expense.
ARTICLE XIV
14.1 PUBLIC LIABILITY AND WORKERS' COMPENSATION INSURANCE. During the
Term of each Property, Lessee shall procure and carry, at Lessee's sole cost and
expense, commercial general liability insurance for claims for injuries or death
sustained by persons or damage to property while on the Properties or the
premises where the Equipment is located and such other public liability
coverages as are then customarily carried by similarly situated companies
conducting business similar to that conducted by Lessee. Such insurance shall be
on terms and in amounts (and with deductibles and limitations on coverage) that
are (a) reasonably satisfactory to Lessor, the Agent and (b) no less favorable
than insurance maintained by Lessee with respect to similar properties and
equipment that it owns and are then carried by similarly situated companies
conducting business similar to that conducted by Lessee. The policies shall be
endorsed to name Lessor, the Agent, the Lenders and the Holders as additional
insureds. The policies shall also specifically provide that such policies shall
be considered primary insurance which shall apply to any loss or claim before
any contribution by any insurance which Lessor, any Holder, the Agent or any
Lender may have in force. Lessee shall, in the operation of the Properties,
comply with the applicable workers' compensation laws and protect Lessor, each
Holder, the Agent and each Lender against any liability under such laws.
14.2 HAZARD AND OTHER INSURANCE.
(a) During the Term for each Property, Lessee shall keep, or
cause to be kept, such Property insured against loss or damage by fire
and all other risks, and shall maintain builders' risk insurance during
construction of any Improvements or Modifications, in each case in
amounts not less than the replacement value from time to time of such
Property and on terms that (i) are no less favorable than insurance
covering other similar properties owned by Lessee and (ii) are then
carried by similarly situated companies conducting business similar to
that conducted by Lessee. The policies shall be endorsed to name Lessor
and the Agent (for itself and on behalf of the Lenders and the
Holders), to the extent of their respective interests, as additional
insureds and loss payees; PROVIDED, that so long as no Lease Event of
Default has occurred and is continuing, any loss payable under the
insurance policies required by this Section will be paid to Lessee.
(b) If, during the Term with respect to a Property the area in
which such Property is located is designated a "flood-prone" area
pursuant to the Flood Disaster Protection Act of 1973, or any
amendments or supplements thereto, then Lessee shall comply with the
National Flood Insurance Program as set forth in the Flood Disaster
Protection Act of 1973. In addition, Lessee will fully comply with the
requirements of the National Flood Insurance Act of 1968 and the Flood
Disaster Protection Act of 1973, as each may be amended from time to
time, and with any other Legal Requirement concerning flood insurance
to the extent that it may apply to any such Property.
13
14.3 COVERAGE.
(a) As of the date of this Lease and annually thereafter,
Lessee shall furnish Lessor and the Agent with certificates prepared by
the insurers or insurance broker of Lessee showing the insurance
required under SECTIONS 14.1 AND 14.2 to be in effect, naming (except
with respect to workers' compensation insurance) Lessor, the Agent,
each Lender and each Holder as an additional insured on all insurance
described in SECTION 14.1, and the Agent (for itself and on behalf of
the Lenders and the Holders) as additional insured and loss payee on
all insurance described in SECTION 14.2, and in each case evidencing
the other requirements of this ARTICLE XIV. All such insurance shall be
at the cost and expense of Lessee and provided by nationally
recognized, financially sound insurance companies with an A.M. Best
rating of not less than A- (A minus). Such certificates shall include a
provision for thirty (30) days' advance written notice by the insurer
to Lessor and the Agent in the event of cancellation or material
alteration of such insurance. If a Lease Event of Default has occurred
and is continuing and Lessor so requests, Lessee shall deliver to
Lessor copies of all insurance policies required by SECTIONS 14.1 AND
14.2.
(b) Lessee agrees that any insurance policy required by
SECTIONS 14.1, 14.2(A) AND 14.2(B) shall include an appropriate
provision that such policy will not be invalidated should Lessee waive,
at any time, any or all rights of recovery against any party for losses
covered by such policy or due to any breach of warranty, fraud, action,
inaction or misrepresentation by Lessee or any Person acting on behalf
of Lessee. Lessee hereby waives any and all such rights against the
Lessor, the Holders, the Agent and the Lenders to the extent of
payments made to any such Person under any such policy.
(c) Neither Lessor nor Lessee shall carry separate insurance
concurrent in kind or form or contributing in the event of loss with
any insurance required under this ARTICLE XIV, except that Lessor may
carry separate liability insurance at Lessor's sole cost so long as (i)
Lessee's insurance is designated as primary and in no event excess or
contributory to any insurance Lessor may have in force which would
apply to a loss covered under Lessee's policy and (ii) each such
insurance policy will not cause Lessee's insurance required under this
ARTICLE XIV to be subject to a coinsurance exception of any kind.
(d) Lessee shall pay as they become due all premiums for the
insurance required by SECTION 14.1 AND SECTION 14.2, shall renew or
replace each policy prior to the expiration date thereof, and shall
otherwise maintain the coverage required by such Sections without any
lapse in coverage.
14.4 ADDITIONAL INSURANCE REQUIREMENTS. Without limiting the generality
of SECTIONS 14.1 through 14.3 above or any other provision of any Operative
Agreement, Lessee shall obtain any and all additional insurance policies with
regard to the Properties or otherwise with respect to the transactions
contemplated by the Operative Agreements, as requested from time to time by
Lessor.
14
ARTICLE XV
15.1 CASUALTY AND CONDEMNATION.
(a) Subject to the provisions of this ARTICLE XV and ARTICLE
XVI (in the event Lessee delivers, or is obligated to deliver, a
Termination Notice), and prior to the occurrence and continuation of a
Lease Default or Lease Event of Default, Lessee shall be entitled to
receive (and Lessor hereby irrevocably assigns to Lessee all of
Lessor's right, title and interest in) any award, compensation or
insurance proceeds under SECTIONS 14.2(A) OR (B) hereof to which Lessee
or Lessor may become entitled by reason of their respective interests
in a Property (i) if all or a portion of such Property is damaged or
destroyed in whole or in part by a Casualty or (ii) if the use, access,
occupancy, easement rights or title to such Property or any part
thereof is the subject of a Condemnation; PROVIDED, HOWEVER, if a Lease
Default or Lease Event of Default shall have occurred and be continuing
such award, compensation or insurance proceeds shall be paid directly
to Lessor or, if received by Lessee, shall be held in trust for Lessor,
and shall be paid over by Lessee to Lessor and held in accordance with
the terms of this paragraph (a). All amounts held by Lessor hereunder
on account of any award, compensation or insurance proceeds either paid
directly to Lessor or turned over to Lessor shall be held as security
for the performance of Lessee's obligations hereunder.
(b) Lessee 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 such Casualty or
Condemnation and shall pay all expenses thereof. At Lessee's reasonable
request, and at Lessee's sole cost and expense, Lessor and the Agent
shall participate in any such proceeding, action, negotiation,
prosecution or adjustment. Lessor and Lessee agree that this Lease
shall control the rights of Lessor and Lessee in and to any such award,
compensation or insurance payment.
(c) If Lessee shall receive notice of a Casualty or a possible
Condemnation of a Property or any interest therein where damage to the
affected Property is estimated to equal or exceed ten percent (10%) of
the Property Cost of such Property, Lessee shall give notice thereof to
the Lessor and to the Agent promptly after the receipt of such notice.
(d) In the event of a Casualty or a Condemnation (regardless
of whether notice thereof must be given pursuant to paragraph (c)),
this Lease shall terminate with respect to the applicable Property in
accordance with SECTION 16.1 if Lessee, within thirty (30) days after
such occurrence, delivers to Lessor and the Agent a Termination Notice
to such effect.
(e) If, pursuant to this SECTION 15.1, this Lease shall
continue in full force and effect following a Casualty or Condemnation
with respect to the affected Property, Lessee shall, at its sole cost
and expense and using, if available, the proceeds of any award,
compensation or insurance with respect to such Casualty or Condemnation
15
(including, without limitation, any such award, compensation or
insurance which has been received by the Agent and which should be
turned over to Lessee pursuant to the terms of the Operative
Agreements, and if not available or sufficient, using its own funds),
promptly and diligently repair any damage to the applicable Property
caused by such Casualty or Condemnation in conformity with the
requirements of SECTIONS 10.1 AND 11.1, using the as-built plans and
specifications or manufacturer's specifications for the applicable
Improvements or Equipment (as modified to give effect to any subsequent
Modifications, any Condemnation affecting the Property and all
applicable Legal Requirements), so as to restore the applicable
Property to substantially the same condition, operation, function and
value as existed immediately prior to such Casualty or Condemnation. In
such event, title to the applicable Property shall remain with Lessor.
(f) In no event shall a Casualty or Condemnation with respect
to which this Lease remains in full force and effect under this SECTION
15.1 affect Lessee's obligations to pay Rent pursuant to SECTION 3.1.
(g) Notwithstanding anything to the contrary set forth in
SECTION 15.1(A) OR SECTION 15.1(E), if during the Term with respect to
a Property a Casualty occurs with respect to such Property or Lessee
receives notice of a Condemnation with respect to such Property, and
following such Casualty or Condemnation, (i) the applicable Property
cannot reasonably be restored, repaired or replaced on or before the
180th day prior to the Expiration Date (if such Casualty or
Condemnation occurs during the Term) to substantially the same
condition as existed immediately prior to such Casualty or
Condemnation, or (ii) on or before such day such Property is not in
fact so restored, repaired or replaced, then Lessee shall be required
to purchase such Property on the next Payment Date and pay Lessor the
Termination Value for such Property, plus any and all Rent then due and
owing, plus all other amounts then due and owing (including without
limitation amounts described in clause FIRST of SECTION 22.2).
15.2 ENVIRONMENTAL MATTERS. Promptly upon Lessee's actual knowledge of
the presence of Hazardous Substances in any portion of any Property (or in any
other property that is not subject to this Lease if Lessee has reason to believe
that such Hazardous Substances may be caused by an emission from or on, or a
condition on, any Property) in concentrations and conditions that constitute an
Environmental Violation and as to which, in the reasonable opinion of Lessee,
the cost to undertake any legally required response, clean up, remedial or other
action might result in a cost to Lessee or loss in the value of such Property of
more than $100,000, Lessee shall notify Lessor in writing of such condition. In
the event of any Environmental Violation (regardless of whether notice thereof
must be given to Lessor pursuant to the preceding sentence), Lessee shall, not
later than sixty (60) days after Lessee has actual knowledge of such
Environmental Violation, either deliver to Lessor a Termination Notice with
respect to the applicable Property or Properties pursuant to SECTION 16.1, if
applicable, or, at Lessee's sole cost and expense, promptly and diligently
undertake and complete any response, clean up, remedial or other action
necessary to remove, cleanup or remediate the Environmental Violation in
accordance with all Environmental Laws. If Lessee does not deliver a Termination
Notice with respect to such Property pursuant to SECTION 16.1, Lessee shall,
upon completion of remedial action by Lessee, cause to be prepared by a
reputable environmental consultant acceptable to
16
Lessor a report describing the Environmental Violation and the actions taken by
Lessee (or its agents) in response to such Environmental Violation, and a
statement by the consultant that the Environmental Violation has been remedied
in full compliance with applicable Environmental Law.
15.3 NOTICE OF ENVIRONMENTAL MATTERS. Promptly, but in any event within
thirty (30) days from the date Lessee has actual knowledge thereof, Lessee shall
provide to Lessor written notice of any pending or threatened Environmental
Claim involving any Environmental Law or any Release on or in connection with
any Property. All such notices shall describe in reasonable detail the nature of
the claim, action or proceeding and Lessee's proposed response thereto. In
addition, Lessee shall provide to Lessor, within five (5) Business Days of
receipt, copies of all material written communications with any Governmental
Authority relating to any Environmental Law in connection with any Property.
Lessee shall also promptly provide such detailed reports of any such material
Environmental Claims as may reasonably be requested by Lessor.
ARTICLE XVI
16.1 TERMINATION UPON CERTAIN EVENTS. If any of the following occur:
(i) if the requirements of SECTION 15.1(C) are satisfied, or (ii) if the
requirements of SECTION 15.1(D) are satisfied and Lessee has determined pursuant
to such section that following the applicable Casualty or Condemnation this
Lease shall terminate with respect to the affected Property, or (iii) Lessee has
determined pursuant to the second sentence of SECTION 15.2 that, due to the
occurrence of an Environmental Violation, this Lease shall terminate with
respect to the affected Property, then Lessee shall be obligated to deliver,
within sixty (60) days of its receipt of notice of the applicable Condemnation
or the occurrence of the applicable Casualty or Environmental Violation, a
written notice to the Lessor in the form described in SECTION 16.2(A) (a
"Termination Notice") of the termination of this Lease with respect to the
applicable Property.
16.2 PROCEDURES.
(a) A Termination Notice shall contain: (i) notice of
termination of this Lease with respect to the affected Property on a
Payment Date not more than sixty (60) days after Lessor's receipt of
such Termination Notice (the "Termination Date"); and (ii) a binding
and irrevocable agreement of Lessee to pay the Termination Value for
the applicable Property, any and all Rent then due and owing and all
other amounts then due and owing from Lessee under any of the Operative
Agreements (including without limitation amounts described in clause
FIRST of SECTION 22.2) and purchase such Property on such Termination
Date.
(b) On each Termination Date, Lessee shall pay to Lessor the
Termination Value for the applicable Property, any and all Rent then
due and owing and all other amounts then due and owing from Lessee
under any of the Operative Agreements (including without limitation
amounts described in clause FIRST of SECTION 22.2), and Lessor shall
convey such Property, or the remaining portion thereof, if any, to
Lessee (or Lessee's designee), all in accordance with SECTION 19.1.
17
ARTICLE XVII
17.1 LEASE EVENTS OF DEFAULT. If any one or more of the following
events (each a "Lease Event of Default") shall occur:
(a) Lessee or the Construction Agent shall fail to make
payment of (i) any Basic Rent on the date the same is due or (ii) any
Termination Value, Maximum Residual Guaranty Amount or Maximum Amount,
on the date any such payment is due, or any payment of Basic Rent or
Supplemental Rent due on the due date of any such payment of
Termination Value, Maximum Residual Guaranty Amount or Maximum Amount,
or any amount due on the Expiration Date or the Preliminary Expiration
Date;
(b) Lessee shall fail to make payment of any Supplemental Rent
(other than Supplemental Rent referred to in SECTION 17(A)(II)) due and
payable within three (3) days after receipt of notice that such payment
is due;
(c) Lessee shall fail to maintain insurance of the types, in
the respective amounts and coverages, with the respective loss payees,
additional insureds and insurors required by ARTICLE XIV of this Lease;
(d) Lessee, the Construction Agent or any Guarantor shall fail
to observe or perform any term, covenant or provision (including
without limitation the Incorporated Covenants) under this Lease or any
other Operative Agreement to which Lessee, the Construction Agent or
such Guarantor is a party other than those set forth in SECTIONS
17.1(A), (B) (C) OR (G) hereof, and such failure shall remain uncured
for a period of thirty (30) days after the earlier of receipt of
written notice from Lessor thereof or a Responsible Officer of Lessee
becomes aware of such failure;
(e) An Agency Agreement Event of Default shall have occurred
and be continuing;
(f) (i) Any default, which is not waived, in the payment of
any principal, interest, premium or other amount with respect to any
Indebtedness (other than obligations under the Operative Agreements) of
Tech Data or any Guarantor in an amount not less than $10,000,000 in
the aggregate outstanding, or (ii) any default, which is not waived, in
the performance, observance or fulfillment of any term or covenant
contained in any agreement or instrument under or pursuant to which any
such Indebtedness referred to in clause (i) may have been issued,
created, assumed, guaranteed or secured by Tech Data, or (iii) any
other event of default as specified in any agreement or instrument
under or pursuant to which any such Indebtedness may have been issued,
created, assumed, guaranteed or secured by Tech Data, and any such
default or event of default specified in clauses (i), (ii) or (iii)
shall continue for more than the period of grace, if any, therein
specified, or such default or event of default shall permit the holder
of any such Indebtedness (or any agent or trustee acting on behalf of
one or more holders) to accelerate the maturity thereof;
18
(g) The breach of any financial covenant or negative covenant
set forth or incorporated by reference in ARTICLE XXVIII hereof
(including without limitation any covenant set forth in SECTION 7 or
SECTION 8 of the Existing Tech Data Credit Agreement, to the extent
incorporated by reference in ARTICLE XXVIII hereof);
(h) Tech Data or any Guarantor shall be unable to pay its
debts generally as they become due; file a petition to take advantage
of any insolvency statute; make an assignment for the benefit of its
creditors; commence a proceeding for the appointment of a receiver,
trustee, liquidator or conservator of itself or of the whole or any
substantial part of its property; file a petition or answer seeking
liquidation, reorganization or arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute;
(i) A court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of Tech Data or any Guarantor or of the whole
or any substantial part of the properties of Tech Data or any
Guarantor, and such order, judgment or decree continues unstayed and in
effect for a period of sixty (60) days, or approve a petition filed
against Tech Data or any Guarantor seeking liquidation, reorganization
or arrangement or similar relief under the federal bankruptcy laws or
any other applicable law or statute of the United States of America or
any state, which petition is not dismissed within sixty (60) days; or
if, under the provisions of any other law for the relief or aid of
debtors, a court of competent jurisdiction shall assume custody or
control of Tech Data or of the whole or any substantial part of its
properties, which control is not relinquished within sixty (60) days;
or if there is commenced against Tech Data or any Guarantor any
proceeding or petition seeking liquidation, reorganization, arrangement
or similar relief under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any state
which proceeding or petition remains undismissed for a period of sixty
(60) days; or if Tech Data or any Guarantor takes any action to
indicate its consent to or approval of any such proceeding or petition;
(j) The entering of any order in any proceedings against Tech
Data or any Guarantor decreeing the dissolution, divestiture or
split-up of Tech Data or any Guarantor, and such order remains in
effect for more than sixty (60) days;
(k) Any representation, warranty or statement of fact
contained in any Operative Agreement or in any writing, report,
certificate, or statement at any time furnished to Lessor, the Agent,
any Holder or any Lender, by or on behalf of Lessee, the Construction
Agent or any Guarantor pursuant to or in connection with this Lease or
any other Operative Agreement or otherwise, shall be false or
misleading in any material respect when made;
(l) One or more judgments or orders where the amount not
covered by insurance (or the amount as to which the insurer is found
not to be liable for) is in excess of $10,000,000 is rendered against
Tech Data or any Guarantor, or (ii) there is any
19
attachment, injunction or execution against any of Tech Data's or any
Guarantor's properties for any amount in excess of $10,000,000 in the
aggregate; and such judgment, attachment, injunction or execution
remains unpaid, unstayed, undischarged, unbonded or undismissed for a
period of thirty (30) days; or
(m) Any material Environmental Violation shall have occurred
and be continuing;
(n) Any Tech Data Credit Agreement Event of Default shall have
occurred and be continuing;
(o) Any Operative Agreement shall cease to be in full force
and effect; or
(p) Any material adverse change in (i) the business, condition
(financial or otherwise) assets, liabilities or operations of Tech Data
or any of its Subsidiaries, (ii) the ability of the Lessee, the
Construction Agent or any of their Subsidiaries to perform its
respective obligations under any Operative Agreement to which it is a
party, (iii) the validity or enforceability of any Operative Agreement
or the rights and remedies of the Agent, the Lenders, the Holders, or
the Lessor thereunder, or (iv) the validity, priority or enforceability
of any Lien on any Property created by any of the Operative Agreements,
then, in any such event, Lessor may, in addition to the other rights
and remedies provided for in this ARTICLE XVII and in SECTION 18.1,
terminate this Lease by giving Lessee fifteen (15) days notice of such
termination, and this Lease shall terminate, and all rights of Lessee
under this Lease shall cease. Lessee shall, to the fullest extent
permitted by law, pay as Supplemental Rent all costs and expenses
incurred by or on behalf of Lessor, including without limitation
reasonable fees and expenses of counsel, as a result of any Lease Event
of Default hereunder.
17.2 SURRENDER OF POSSESSION. If a Lease Event of Default shall have
occurred and be continuing, and whether or not this Lease shall have been
terminated pursuant to SECTION 17.1, Lessee shall, upon thirty (30) days written
notice, surrender to Lessor possession of the Properties. Lessor may enter upon
and repossess the Properties by such means as are available at law or in equity,
and may remove Lessee and all other Persons and any and all personal property
and Lessee's equipment and personalty and severable Modifications from the
Properties. Lessor shall have no liability by reason of any such entry,
repossession or removal performed in accordance with applicable law. Upon the
written demand of Lessor, Lessee shall return the Properties promptly to Lessor,
in the manner and condition required by, and otherwise in accordance with the
provisions of, SECTION 22.1(C) hereof.
17.3 RELETTING. If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
SECTION 17.1, Lessor may, but shall be under no obligation to, relet any or all
of the Properties, for the account of Lessee or otherwise, for such term or
terms (which may be greater or less than the period which would otherwise have
constituted the balance of the Term) and on such conditions (which may include
concessions or free rent) and for such purposes as Lessor may determine, and
Lessor may
20
collect, receive and retain the rents resulting from such reletting. Lessor
shall not be liable to Lessee for any failure to relet any Property or for any
failure to collect any rent due upon such reletting.
17.4 DAMAGES. Neither (a) the termination of this Lease as to all or
any of the Properties pursuant to SECTION 17.1; (b) the repossession of all or
any of the Properties; nor (c) the failure of Lessor to relet all or any of the
Properties, the reletting of all or any portion thereof, nor the failure of
Lessor to collect or receive any rentals due upon any such reletting, shall
relieve Lessee of its liabilities and obligations hereunder, all of which shall
survive any such termination, repossession or reletting. If any Lease Event of
Default shall have occurred and be continuing and notwithstanding any
termination of this Lease pursuant to SECTION 17.1, Lessee shall forthwith pay
to Lessor all Rent and other sums due and payable hereunder to and including the
date of such termination. Thereafter, on the days on which the Basic Rent or
Supplemental Rent, as applicable, are payable under this Lease or would have
been payable under this Lease if the same had not been terminated pursuant to
SECTION 17.1 and until the end of the Term hereof or what would have been the
Term in the absence of such termination, Lessee shall pay Lessor, as current
liquidated damages (it being agreed that it would be impossible accurately to
determine actual damages) an amount equal to the Basic Rent and Supplemental
Rent that are payable under this Lease or would have been payable by Lessee
hereunder if this Lease had not been terminated pursuant to SECTION 17.1,
provided that Lessee's obligation to make payments of Basic Rent and
Supplemental Rent under this SECTION 17.4 shall continue only so long as Lessor
shall not have received the amounts specified in SECTION 17.5. The amount of
Lessee's liabilities and obligations under this Lease shall not be reduced or
offset by any proceeds Lessor may receive from any reletting of any Property,
EXCEPT THAT the net proceeds, if any, which are actually received by Lessor from
reletting of any Property shall be offset against the final liquidated damages
amount specified in SECTION 17.5. In calculating the amount of such net proceeds
from reletting, there shall be deducted all of Lessor's, any Holder's, the
Agent's and any Lender's reasonable expenses in connection therewith, including
repossession costs, brokerage or sales commissions, fees and expenses of counsel
and any necessary repair or alteration costs and expenses incurred in
preparation for such reletting. To the extent Lessor receives any damages
pursuant to this SECTION 17.4, such amounts shall be regarded as amounts paid on
account of Rent. Lessee specifically acknowledges and agrees that its
obligations under this SECTION 17.4 shall be absolute and unconditional under
any and all circumstances and shall be paid or performed, as the case may be,
without notice or demand and without any abatement, reduction, diminution,
setoff, defense, counterclaim or recoupment whatsoever.
17.5 FINAL LIQUIDATED DAMAGES. If a Lease Event of Default shall have
occurred and be continuing, whether or not this Lease shall have been terminated
pursuant to SECTION 17.1 and whether or not Lessor shall have collected any
current liquidated damages pursuant to SECTION 17.4, Lessor shall have the right
to recover, by demand to Lessee and at Lessor's election, and Lessee shall pay
to Lessor, as and for final liquidated damages, but exclusive of the indemnities
payable under SECTION 13 of the Participation Agreement, and in lieu of all
current liquidated damages beyond the date of such demand (it being agreed that
it would be impossible accurately to determine actual damages) the sum of (a)
the Termination Value for all Properties remaining under this Lease, PLUS (b)
all other amounts owing in respect of Rent, Supplemental Rent and other amounts
then due and payable by Lessee or the Construction Agent under this Lease or any
21
other Operative Agreement. It is intended and agreed that the foregoing amount
is and will be liquidated damages and not a penalty. Upon payment of the amount
specified pursuant to the first sentence of this SECTION 17.5, Lessee shall be
entitled to receive from Lessor, either at Lessee's request or upon Lessor's
election, in either case at Lessee's cost, an assignment of Lessor's entire
right, title and interest in and to the Properties, the Improvements, Fixtures,
Modifications and Equipment, in each case in recordable form and otherwise in
conformity with local custom and free and clear of the Lien of this Lease
(including the release of any memoranda of Lease or the Lease Supplement
recorded in connection therewith) and any Lessor Liens. The Properties shall be
conveyed to Lessee "AS IS" "WHERE IS" and in their then present physical
condition. If any statute or rule of law shall limit the amount of such final
liquidated damages to less than the amount agreed upon, Lessor shall be entitled
to the maximum amount allowable under such statute or rule of law; PROVIDED,
HOWEVER, Lessee shall not be entitled to receive an assignment of Lessor's
interest in the Properties, the Improvements, Fixtures, Modifications or
Equipment or documents unless Lessee shall have paid in full the Termination
Value and all other amounts due and owing by Lessee or the Construction Agent
hereunder and under the other Operative Agreements. Lessee specifically
acknowledges and agrees that its obligations under this SECTION 17.5 shall be
absolute and unconditional under any and all circumstances and shall be paid or
performed, as the case may be, without notice or demand (except as otherwise
specifically provided herein) and without any abatement, reduction, diminution,
setoff, defense, counterclaim or recoupment whatsoever.
17.6 WAIVER OF CERTAIN RIGHTS. If this Lease shall be terminated
pursuant to SECTION 17.1, Lessee waives, to the fullest extent permitted by law,
(a) any notice of re-entry or the institution of legal proceedings to obtain
re-entry or possession; (b) any right of redemption, re-entry or possession; (c)
the benefit of any laws now or hereafter in force exempting property from
liability for rent or for debt; and (d) any other rights which might otherwise
limit or modify any of Lessor's rights or remedies under this ARTICLE XVII.
17.7 ASSIGNMENT OF RIGHTS UNDER CONTRACTS. If a Lease Event of Default
shall have occurred and be continuing, and whether or not this Lease shall have
been terminated pursuant to SECTION 17.1, Lessee shall upon Lessor's demand
immediately assign, transfer and set over to Lessor all of Lessee's right, title
and interest in and to each agreement executed by Lessee in connection with the
purchase, construction, development, use or operation of the Properties
(including, without limitation, all right, title and interest of Lessee with
respect to all warranty, performance, service and indemnity provisions), as and
to the extent that the same relate to the purchase, construction, use and
operation of the Properties.
17.8 ENVIRONMENTAL COSTS. If a Lease Event of Default shall have
occurred and be continuing, and whether or not this Lease shall have been
terminated pursuant to SECTION 17.1, Lessee shall pay directly to any third
party (or at Lessor's election, reimburse Lessor) for the cost of any
environmental testing or remediation work undertaken respecting any Property as
such testing or work is deemed appropriate in the reasonable judgment of Lessor.
Lessee shall pay all amounts referenced in the immediately preceding sentence
immediately upon the request by Lessor for such payment.
22
17.9 REMEDIES CUMULATIVE. The remedies herein provided shall be
cumulative and in addition to (and not in limitation of) any other remedies
available at law, equity or otherwise, including, without limitation, any
mortgage foreclosure remedies.
17.10 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Lessee shall promptly
notify the Lessor and the Agent if any Responsible Officer of Lessee has
received notice, or has actual knowledge, of any Default or Event of Default.
17.11 LESSEE'S OPTION TO CURE BY PURCHASE OF ALL PROPERTIES.
Notwithstanding anything in this Lease or in any of the other Operative
Agreements to the contrary, the Lessee may cure a Lease Event of Default by
purchasing all (but not less than all) of the Properties, such purchase to be
consummated in accordance with SECTIONS 19.1 and 20.1, except that such purchase
must be consummated not more than 10 days after Lessee gives notice to the Agent
and the Lessor of Lessee's option to purchase the Properties The purchase price
for the Properties shall be as set forth in SECTION 20.1, and shall include
without limitation the Termination Value for all of the Properties and all Rent
then due and owing and all other amounts then due and owing by the Lessee or the
Construction Agent under this Lease or under any other Operative Agreement
(including without limitation (a) any compensation that may be required pursuant
to SECTION 13.3(B) of Participation Agreement, SECTION 3.10 of the Trust
Agreement, or SECTION 2.12 of the Credit Agreement, and (b) amounts, if any,
described in clause FIRST of SECTION 22.2).
ARTICLE XVIII
18.1 LESSOR'S RIGHT TO CURE LESSEE'S LEASE DEFAULTS. Lessor, without
waiving or releasing any obligation or Lease Event of Default, may (but shall be
under no obligation to) remedy any Lease Event of Default for the account and at
the sole cost and expense of Lessee, including the failure by Lessee to maintain
the insurance required by ARTICLE XIV, and may, to the fullest extent permitted
by law, and notwithstanding any right of quiet enjoyment in favor of Lessee,
enter upon any Property, or real property owned or leased by Lessee, take all
such action thereon as may be necessary or appropriate therefor, and inspect or
copy any records relating to any Property or the transactions contemplated
hereby (and Lessee shall make available to Lessor, for inspection thereof, any
such records). No such entry shall be deemed an eviction of any lessee. All
reasonable out-of-pocket costs and expenses so incurred (including without
limitation reasonable 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 Lessor, shall be paid by Lessee to Lessor on demand.
ARTICLE XIX
19.1 PROVISIONS RELATING TO LESSEE'S EXERCISE OF ITS PURCHASE OPTION.
Subject to SECTION 19.2, in connection with any termination of this Lease with
respect to any Property pursuant to the terms of SECTION 16.2, or in connection
with Lessee's exercise of its Purchase Option or its option to purchase any
Property pursuant to SECTION 20.1, upon the date on which this Lease is to
terminate with respect to a Property or all of the Properties, and upon tender
by Lessee of the amounts set forth in SECTIONS 16.2(B) OR 20.1, as applicable,
Lessor shall execute and deliver to Lessee (or to Lessee's designee) at Lessee's
cost and expense an assignment of
23
Lessor's entire interest in the applicable Property, in each case in recordable
form and otherwise in conformity with local custom and free and clear of the
Lien of this Lease and any Lessor Liens attributable to Lessor but without any
other warranties (of title or otherwise) from the Lessor. The Lessor's interest
in the applicable Property shall be conveyed to Lessee "AS IS" "WHERE IS" and in
then present physical condition. In addition, Lessor shall, upon Lessee's
request and at Lessee's expense, execute and deliver any documents (including
any appropriate releases of or amendments to financing statements or recorded
memoranda of this Lease) necessary to release the Lien of this Lease on the
applicable Property.
19.2 NO TERMINATION WITH RESPECT TO LESS THAN ALL OF A PROPERTY. Lessee
shall not be entitled to exercise its Purchase Option separately with respect to
Property consisting of Land, Equipment and Improvements but shall be required to
exercise its Purchase Option with respect to an entire Property.
ARTICLE XX
20.1 PURCHASE PRIOR TO END OF TERM; PURCHASE OR SALE OPTION AT END OF
TERM OR ON PRELIMINARY EXPIRATION DATE.
(a) PURCHASE OPTION PRIOR TO END OF TERM. Provided that
(subject to SECTION 17.11) no Default or Event of Default shall have
occurred and be continuing and provided that the Election Notice
referred to in SECTION 20.1(B) has not been delivered, Lessee shall
have the option, exercisable by giving the Agent and Lessor no more
than one hundred twenty (120) days and no less than thirty (30) days
written notice of Lessee's election to exercise such option, to
purchase any Property, on a Scheduled Interest Payment Date as
identified in such written notice, at a price equal to the Termination
Value for such Property and all Rent then due and owing and all other
amounts then due and owing (by the Lessee or the Construction Agent)
under this Lease or under any other Operative Agreement (including
without limitation amounts, if any, described in clause FIRST of
SECTION 22.2) (which the parties do not intend to be a "bargain"
purchase price); and, upon receipt of such amount, Lessor shall
transfer to Lessee all Lessor's right, title and interest in and to
such Property in accordance with SECTION 19.1 as of the Business Day on
which such purchase occurs.
(b) PURCHASE OR SALE OPTION AT END OF TERM OR ON PRELIMINARY
EXPIRATION DATE. Not less than 120 days and no more than 180 days prior
to the Expiration Date or the Preliminary Expiration Date, Lessee may
give Lessor and Agent irrevocable written notice (the "Election
Notice") that Lessee is electing to exercise either (a) the option to
purchase all, but not less than all, of the Properties on such
Expiration Date or such Preliminary Expiration Date (the "Purchase
Option") or (b) the option to remarket all of the Properties and cause
a sale of all of the Properties pursuant to the terms of SECTION 22.1
(the "Sale Option"), such sale to occur on such Expiration Date or such
Preliminary Expiration Date. (The Expiration Date or Preliminary
Expiration Date referred to in such Election Notice is hereinafter
referred to as the "Applicable Expiration Date.") If Lessee does not
give an Election Notice indicating the Sale Option at least 120 days
and not more than 180 days prior to the Expiration Date, then Lessee
shall be deemed to have
24
elected the Purchase Option for the Expiration Date. If Lessee does not
give an Election Notice indicating either the Purchase Option or the
Sale Option at least 120 days and not more than 180 days prior to the
Preliminary Termination Date, then Lessee shall be deemed not to have
exercised either option for the Preliminary Termination Date. Lessor
shall have no obligation to sell any Property unless all of the
Properties are sold on the Applicable Expiration Date. If Lessee shall
(i) elect (or be deemed to elect) to exercise the Purchase Option, or
(ii) elect to remarket all of the Properties pursuant to SECTION 22.1
and fail to deliver the environmental report required by SECTION 10.2
at the time specified in such Section, or (iii) elect to remarket all
of the Properties pursuant to SECTION 22.1 and fail to cause all of the
Properties to be sold in accordance with the terms of SECTION 22.1 on
the Applicable Expiration Date on which such a sale of all of the
Properties is required in connection with such election, then in each
case, Lessee shall pay to Lessor on the Applicable Expiration Date an
amount (the "Purchase Option Price") equal to the Termination Value for
all the Properties (which the parties do not intend to be a "bargain"
purchase) plus all Rent and other amounts then due and payable (by
Lessee or the Construction Agent) under this Lease or under any other
Operative Agreement (including without limitation the amounts described
in clause FIRST of SECTION 22.2), and, upon receipt of such amount,
Lessor shall transfer to Lessee all of Lessor's right, title and
interest in and to the Properties in accordance with SECTION 19.1 and
the Term of this Lease shall terminate. Lessee may not elect the Sale
Option, and Lessor shall have no obligation to sell any Property
pursuant to SECTION 22.1, if a Lease Event of Default has occurred and
is continuing on the date of the Election Notice or the Sale Date.
ARTICLE XXI
[INTENTIONALLY LEFT BLANK.]
ARTICLE XXII
22.1 SALE PROCEDURE.
(a) During the Marketing Period, Lessee, on behalf of the
Lessor, shall obtain bids for the cash purchase of all of the
Properties in connection with a sale to one or more purchasers (other
than Lessee or any Subsidiary or Affiliate of Lessee) to be consummated
on the Applicable Expiration Date for the highest price available,
shall notify Lessor promptly of the name and address of each
prospective purchaser and the cash price which each prospective
purchaser shall have offered to pay for any Property and shall provide
Lessor with such additional information about the bids and the bid
solicitation procedure as Lessor may reasonably request from time to
time. Lessor may reject any and all bids and may assume sole
responsibility for obtaining bids by giving Lessee written notice to
that effect; PROVIDED, HOWEVER, that notwithstanding the foregoing,
Lessor may not reject the highest bids for the Properties submitted by
the Lessee if (i) such bids, in the aggregate, are greater than or
equal to the sum of the Limited Recourse Amount for all of the
Properties, plus all reasonable costs and expenses referred to in
clause FIRST of SECTION 22.2, and represent bona fide offers from one
or more third party purchasers, and (ii) prior to Lessor's acceptance
of any such bid, Lessee
25
has delivered to the Agent cash collateral in an amount not less than
the anticipated Deficiency Balance (as defined in SECTION 22.1(B)
below) as determined by the Agent. If the price which a prospective
purchaser or purchasers shall have offered to pay for the Properties is
less than the sum of the Limited Recourse Amount plus all reasonable
costs and expenses referred to in clause FIRST of SECTION 22.2, Lessor
may elect to retain the Properties by giving Lessee prior written
notice of Lessor's election to retain the Properties, and upon receipt
of such notice, Lessee shall surrender the Properties to Lessor
pursuant to SECTION 10.1. Unless Lessor shall have elected to retain
the Properties pursuant to the preceding sentence, Lessee shall arrange
for Lessor to sell the Properties free and clear of the Lien of this
Lease and any Lessor Liens attributable to it, without recourse or
warranty (of title or otherwise), for cash on the last day of the
Marketing Period (such date being hereafter referred to as the "Sale
Date") to the purchaser or purchasers identified by Lessee or Lessor,
as the case may be; PROVIDED, HOWEVER, solely as to Lessor or the Trust
Company, in its individual capacity, any Lessor Lien shall not
constitute a Lessor Lien so long as Lessor or the Trust Company, in its
individual capacity, is diligently contesting such Lessor Lien by
appropriate proceedings in good faith; and PROVIDED FURTHER that Lessor
shall have no obligation to sell any Property if a Lease Event of
Default has occurred and is continuing on the Date of the Election
Notice or the Sale Date. Lessee shall surrender the Property so sold or
subject to such documents to each purchaser in the condition specified
in SECTION 10.1. Lessee shall not take or fail to take any action which
would have the effect of unreasonably discouraging bona fide third
party bids for any Property. Lessor shall have no obligation to sell
any Property on the Sale Date unless all of the Properties are sold
(and Lessor has received full payment therefor in cash in the amount
required pursuant to this SECTION 22.1) on the Sale Date. If all of the
Properties are not either (i) sold on the Sale Date in accordance with
the terms of this SECTION 22.1, or (ii) retained by the Lessor pursuant
to an affirmative election made by the Lessor pursuant to the third
sentence of this SECTION 22.1(A), then the Lessee shall be obligated to
pay the Lessor on the Sale Date an amount equal to the Termination
Value for all of the Properties (plus all Rent and other amounts then
due and payable (by the Lessee or the Construction Agent) under this
Lease and any other Operative Agreements) in accordance with the terms
of SECTION 20.1(B).
(b) If the Properties are sold on the Sale Date to one or more
third party purchasers in accordance with the terms of SECTION 22.1(A)
and the aggregate purchase price paid for the Properties minus the sum
of all costs and expenses referred to in clause FIRST of SECTION 22.2
is less than the sum of the aggregate Termination Values for all of the
Properties plus all Rent and other amounts then due and payable (by the
Lessee or the Construction Agent) under this Lease and under any other
Operative Agreements (hereinafter such difference shall be referred to
as the "Deficiency Balance"), then the Lessee hereby unconditionally
promises to pay to the Lessor on the Sale Date the lesser of (i) the
Deficiency Balance, or (ii) the Maximum Residual Guarantee Amount for
all of the Properties. If the Properties are retained by the Lessor
pursuant to an affirmative election made by the Lessor pursuant to the
third sentence of SECTION 22.1(A), then the Lessee hereby
unconditionally promises to pay to the Lessor on the Sale Date an
amount equal to the Maximum Residual Guarantee Amount for all of the
Properties.
26
(c) In the event that the Properties are either sold to one or
more third party purchasers on the Sale Date or retained by the Lessor
in connection with an affirmative election made by the Lessor pursuant
to the third sentence of SECTION 22.1(A), then in either case on the
Sale Date (i) the Lessee shall provide Lessor or such third party
purchasers with (A) all permits, certificates of occupancy,
governmental licenses and authorizations necessary to use and operate
such Property for its intended purposes, (B) such easements, licenses,
rights-of-way and other rights and privileges in the nature of an
easement as are reasonably necessary or desirable in connection with
the use, repair, access to or maintenance of such Property for its
intended purpose or otherwise as the Lessor shall reasonably request,
and (C) a services agreement covering such services as Lessor or such
third party purchaser may request in order to use and operate a
Property for its intended purposes at such rates (not in excess of
arm's-length fair market rates) as shall be acceptable to Lessee and
Lessor or such third party purchaser, and (ii) the Term of this Lease
shall terminate. All assignments, licenses, easements, agreements and
other deliveries required by clauses (i)(A) and (B) of this paragraph
(c) shall be in form reasonably satisfactory to the Lessor or such
third party purchaser, as applicable, and shall be fully assignable
(including both primary assignments and assignments given in the nature
of security) without payment of any fee, cost or other charge.
22.2 APPLICATION OF PROCEEDS OF SALE. The Lessor shall apply the
proceeds of sale of any Property n the following order of priority:
(a) FIRST, to pay or to reimburse Lessor for the payment of
all reasonable costs and expenses incurred by Lessor in connection with
the sale;
(b) SECOND, so long as the Participation Agreement, the Credit
Agreement or the Trust Agreement is in effect and any Loan, Holder
Advance or any other amount is owing to the Lenders, the Holders or any
other Person under any Operative Agreement, to the Agent to be applied
in accordance with the terms (including the inter-creditor provisions
among the Lenders and the Holders) contained in the Operative
Agreements; and
(c) THIRD, to the Lessee.
22.3 INDEMNITY FOR EXCESSIVE WEAR. If the proceeds of the sale
described in SECTION 22.1 with respect to the Properties, less all expenses
incurred by Lessor in connection with such sale, shall be less than the Limited
Recourse Amount with respect to the Properties, and at the time of such sale it
shall have been reasonably determined (pursuant to the Appraisal Procedure) that
the Fair Market Sales Value of the Properties, shall have been impaired by
greater than expected wear and tear during the term of the Lease, Lessee shall
pay to Lessor within ten (10) days after receipt of Lessor's written statement
(i) the amount of such excess wear and tear determined by the Appraisal
Procedure or (ii) the amount of the Net Sale Proceeds Shortfall, whichever
amount is less.
22.4 APPRAISAL PROCEDURE. For determining the Fair Market Sales Value
of any Property or any other amount which may, pursuant to any provision of any
Operative
27
Agreement, be determined by an appraisal procedure, Lessor and Lessee shall use
the following procedure (the "Appraisal Procedure"). Lessor and Lessee shall
endeavor to reach a mutual agreement as to such amount for a period of ten (10)
days from commencement of the Appraisal Procedure under the applicable section
of the Lease, and if they cannot agree within ten (10) days, then two qualified
appraisers, one chosen by Lessee and one chosen by Lessor, shall mutually agree
thereupon, but if either party shall fail to choose an appraiser within twenty
(20) days after notice from the other party of the selection of its appraiser,
then the appraisal by such appointed appraiser shall be binding on Lessee and
Lessor. If the two appraisers cannot agree within twenty (20) days after both
shall have been appointed, then a third appraiser shall be selected by the two
appraisers or, failing agreement as to such third appraiser within (30) days
after both shall have been appointed, by the American Arbitration Association.
The decisions of the three appraisers shall be given within twenty (20) days of
the appointment of the third appraiser and the decision of the appraiser most
different from the average of the other two shall be discarded and such average
shall be binding on Lessor and Lessee; PROVIDED that if the highest appraisal
and the lowest appraisal are equidistant from the third appraisal, the third
appraisal shall be binding on Lessor and Lessee. The fees and expenses of the
appraiser appointed by Lessee shall be paid by Lessee; the fees and expenses of
the appraiser appointed by Lessor shall be paid by Lessor (such fees and
expenses not being indemnified pursuant to SECTION 13 of the Participation
Agreement); and the fees and expenses of the third appraiser shall be divided
equally between Lessee and Lessor.
22.5 CERTAIN OBLIGATIONS CONTINUE. During the Marketing Period, the
obligation of Lessee to pay Rent with respect to the Properties (including the
installment of Basic Rent due on the Applicable Expiration Date) shall continue
undiminished until payment in full to Lessor of the sale proceeds, if any, the
Maximum Residual Guarantee Amount, the amount due under SECTION 22.3, if any,
and all other amounts due to Lessor with respect to all Properties. Lessor shall
have the right, but shall be under no duty, to solicit bids, to inquire into the
efforts of Lessee to obtain bids or otherwise to take action in connection with
any such sale, other than as expressly provided in this ARTICLE XXII.
ARTICLE XXIII
23.1 HOLDING OVER. If Lessee shall for any reason remain in possession
of a Property after the expiration or earlier termination of this Lease as to
such Property (unless such Property is conveyed to Lessee), such possession
shall be as a tenancy at sufferance during which time Lessee shall continue to
pay Supplemental Rent that would be payable by Lessee hereunder were the Lease
then in full force and effect with respect to the Property and Lessee shall
continue to pay Basic Rent at 110% of the Basic Rent that would otherwise be due
and payable at such time. Such Basic Rent shall be payable from time to time
upon demand by Lessor and such additional 10% amount shall be applied by the
Lessor to the payment of the Loans pursuant to the Credit Agreement and the
Holder Advances pursuant to the Trust Agreement pro rata between the Loans and
the Holder Advances. During any period of tenancy at sufferance, Lessee shall,
subject to the first sentence of this paragraph, be obligated to perform and
observe all of the terms, covenants and conditions of this Lease, but shall have
no rights hereunder other than the right, to the extent given by law to tenants
at sufferance, to continue their occupancy and use of such Property. Nothing
contained in this ARTICLE XXIII shall constitute the consent, express or
28
implied, of Lessor to the holding over of Lessee after the expiration or earlier
termination of this Lease as to any Property (unless such Property is conveyed
to Lessee) and nothing contained herein shall be read or construed as preventing
Lessor from maintaining a suit for possession of such Property or exercising any
other remedy available to Lessor at law or in equity.
ARTICLE XXIV
24.1 RISK OF LOSS. During the Term, unless Lessee shall not be in
actual possession of the Property in question solely by reason of Lessor's
exercise of its remedies of dispossession under ARTICLE XVII, the risk of loss
or decrease in the enjoyment and beneficial use of such Property as a result of
the damage or destruction thereof by fire, the elements, casualties, thefts,
riots, wars or otherwise is assumed by Lessee, and Lessor shall in no event be
answerable or accountable therefor.
ARTICLE XXV
25.1 ASSIGNMENT.
(a) (Other than permitting a Subsidiary of Lessee to be an
alternative Lessee pursuant to SECTION 2.5) Lessee may not assign,
mortgage, pledge or encumber this Lease or any of its rights or
obligations hereunder in whole or in part to any Person without the
prior written consent of the Agent, the Lessor, and the Majority
Financing Parties, with such consent to be given or withheld in the
sole discretion of each such party.
(b) No such assignment or other relinquishment of possession
to any Property shall in any way discharge or diminish any of the
obligations of Lessee to Lessor hereunder and Lessee shall remain
directly and primarily liable under this Lease.
25.2 SUBLEASES.
(a) Except as set forth in this Section 25.2(a), Lessee may
not sublet any Property or portion thereof without first obtaining the
prior written consent of the Lessor and the Agent, which consent may be
given or withheld in the sole discretion of each such party.
(b) Lessee may, without the consent of Lessor or the Agent,
sublet a Property only if:
(i) Lessee remains fully liable for all obligations
(including without limitation all Rent and other obligations
with respect to such subleased Properties and any other
Properties) under this Lease, each Lease Supplement and the
other Operative Agreements;
(ii) Such sublease is in writing and is expressly
subject and subordinate to the rights of the Lessor, the
Agent, the Lenders and the
29
Holders under this Lease, the Security Agreement, each
Mortgage Instrument and all other Operative Agreements; and
(iii) Such sublease is on commercially reasonable
terms and at market rates, and has a term that does not extend
past the Expiration Date, and such Property is at all times
used for the purposes set forth in this paragraph and in the
definition of "Property."
(c) No sublease or other relinquishment of possession to any
Property shall in any way discharge or diminish any of Lessee's
obligations to Lessor hereunder and Lessee shall remain directly and
primarily liable under this Lease as to the Property so sublet.
(d) Each insurance policy carried by Lessee pursuant to
ARTICLE XIV hereof shall be endorsed to name each sublessee under any
such sublease as an additional insured. Prior to the effectiveness of
any such sublease, Lessee shall deliver a copy thereof to the Lessor
and the Agent.
(e) Promptly but in any event within five (5) days following
the execution and delivery of any sublease permitted by this ARTICLE
XXV, Lessee shall notify Lessor and the Agent of the execution of such
sublease. As of the date of each Lease Supplement, Lessee shall lease
the respective Properties described in such Lease Supplement from
Lessor, and (without limiting the generality of SECTIONS 25.2(A) - (D))
any existing tenant respecting such Property shall automatically be
deemed to be a subtenant of Lessee and not a tenant of Lessor.
ARTICLE XXVI
26.1 NO WAIVER. No failure by Lessor or Lessee to insist upon the
strict performance of any term hereof or to exercise any right, power or remedy
upon a default hereunder, and no acceptance of full or partial payment of Rent
during the continuance of any such default, shall constitute a waiver of any
such default or of any such term. To the fullest extent permitted by law, no
waiver of any default shall affect or alter this Lease, and this Lease shall
continue in full force and effect with respect to any other then existing or
subsequent default.
ARTICLE XXVII
27.1 ACCEPTANCE OF SURRENDER. No surrender to Lessor of this Lease or
of all or any portion of any Property or of any part of any thereof or of any
interest therein shall be valid or effective unless agreed to and accepted in
writing by Lessor and the Agent, and no act by Lessor or the Agent or any
representative or agent of Lessor or the Agent, other than a written acceptance,
shall constitute an acceptance of any such surrender.
27.2 NO MERGER OF TITLE. There shall be no merger of this Lease or of
the leasehold estate created hereby by reason of the fact that the same Person
may acquire, own or hold, directly or indirectly, in whole or in part, (a) this
Lease or the leasehold estate created hereby or
30
any interest in this Lease or such leasehold estate, (b) any right, title or
interest in any Property, (c) any Notes, or (d) a beneficial interest in Lessor.
ARTICLE XXVIII
28.1 INCORPORATION OF COVENANTS. Reference is made to that certain
Credit Agreement dated as of May 8, 2000 (the "Existing Tech Data Credit
Agreement") among Tech Data, Bank of America as agent, swing line lender and
issuing lender, and the other lenders party thereto. Further reference is made
to the covenants contained in SECTION 7 and SECTION 8 of the Existing Tech Data
Credit Agreement (hereinafter referred to as the "Incorporated Covenants"). The
Lessee agrees with the Lessor that, effective as of the date hereof (whether or
not the Basic Term has commenced with respect to any Property), the Incorporated
Covenants (and all other relevant provisions of the Existing Tech Data Credit
Agreement related thereto) are hereby incorporated by reference into this Lease
and into the Guaranty Agreement to the same extent and with the same effect as
if set forth fully herein and therein and shall inure to the benefit of the
Lessor, without giving effect to any waiver, amendment, modification or
replacement of the Existing Tech Data Credit Agreement or any term or provision
of the Incorporated Covenants occurring subsequent to the date of this Lease,
except to the extent otherwise specifically provided in the following provisions
of this paragraph. In the event a waiver is granted under the Existing Tech Data
Credit Agreement or an amendment or modification is executed with respect to the
Existing Tech Data Credit Agreement, and such waiver, amendment or modification
affects the Incorporated Covenants, then such waiver, amendment or modification
shall be effective with respect to the Incorporated Covenants as incorporated by
reference into this Lease only if consented to in writing by the Majority
Financing Parties and the Agent. In the event of any replacement of the Existing
Tech Data Credit Agreement with a similar credit facility (the "New Facility"),
the covenants contained in the New Facility which correspond to the covenants
contained in SECTIONS 7 and 8 of the Existing Tech Data Credit Agreement shall
become the Incorporated Covenants hereunder only if consented to in writing by
the Majority Financing Parties and the Agent, and, if such consent is not
granted, then the covenants contained in SECTIONS 7 and 8 of the Existing Tech
Data Credit Agreement (together with any modifications or amendments approved in
accordance with this paragraph) shall continue to be the Incorporated Covenants
hereunder. If the Existing Tech Data Credit Agreement (or any such New Facility,
as the case may be) is terminated and not replaced, then, notwithstanding such
termination, the covenants contained in SECTIONS 7 and 8 of the Existing Tech
Data Credit Agreement (together with any modifications or amendments thereto, or
covenants of the New Facility, in each case approved in accordance with this
paragraph) shall continue to be the Incorporated Covenants hereunder.
28.2 FINANCIAL INFORMATION, REPORTS, NOTICES, ETC. Without limiting the
generality of the foregoing, from and after the date hereof (whether or not the
Basic Term has commenced with respect to any Property), to the extent that the
Incorporated Covenants require Tech Data or any of its Subsidiaries to deliver
any financial statement, certificate, notice, report, or other document or
information to the Existing Credit Agent (or any other agent or any lender under
the applicable credit facility), Tech Data shall, and shall cause any such
subsidiary to, simultaneously deliver a copy of such financial statement,
certificate, notice, report, document or information to the Agent, each Lender,
each Holder and (upon Lessor's request) the Lessor. The
31
foregoing notwithstanding, if the Agent, any Lender or any Holder (each, a
"Recipient") has received a copy of any document from Tech Data or a Subsidiary
because such Recipient is an agent or lender under the Amended Tech Data Credit
Agreement or any New Facility, then nothing contained in this SECTION 28.2 shall
require Tech Data or such Subsidiary to deliver a second copy of such document
to such Recipient solely because the Recipient is also the Agent or a Lender or
Holder under the Participation Agreement.
28.3 OTHER INFORMATION. The Lessee shall, and shall cause the
Construction Agent and each Subsidiary to, promptly deliver or cause to be
delivered to the Agent, each Lender, each Holder and the Lessor, such other
information regarding any Property or the Lessee's, the Construction Agent's or
any Subsidiary's operations, business affairs or financial condition as the
Agent, such Lender, such Holder or the Lessor may reasonable request.
28.4 RIGHT OF INSPECTION. The Lessee shall, and shall cause the
Construction Agent and each Subsidiary to, permit any Person designated by the
Agent, the Lessor, any Lender or any Holder to visit and inspect any of the
properties (including any Property), corporate books and financial reports of
the Lessee, the Construction Agent or any Subsidiary and to discuss its affairs,
finances and accounts with its principal officers and independent certified
public accountants, all (unless an Event of Default has occurred and is
continuing) at reasonable intervals and with reasonable notice.
28.5 OFFICER'S KNOWLEDGE OF DEFAULT. Upon any officer of the Lessee
obtaining knowledge of any Default or Event of Default hereunder, under the
Participation Agreement or under any other obligation of the Lessee, the
Construction Agent or any Subsidiary to the Lessor, the Agent, any Lender or any
Holder, the Lessee shall cause such officer to notify the Agent and the Lessor
promptly of the nature thereof, the period of existence thereof, and what action
the Lessee, the Construction Agent or such Subsidiary proposes to take with
respect thereto.
28.6 NEW SUBSIDIARIES.
(a) Within 30 days of the formation or Acquisition of any
Significant Subsidiary or at any time a Subsidiary becomes a
Significant Subsidiary, Tech Data shall cause to be delivered to
Administrative Agent for the benefit of the Lessor, Administrative
Agent, Lenders and Holders, as applicable:
(i) In the case of a Significant Subsidiary that is a
Domestic Subsidiary, (A) a Guaranty Agreement (Lessee and
Construction Agent Obligations) substantially in the form of
EXHIBIT C executed by such Significant Subsidiary, (B) an
opinion of counsel to the Significant Subsidiary dated as of
the date of delivery of the Guaranties provided for in this
SECTION 28.6 and addressed to Administrative Agent, the
Lessor, the Lenders and Holders, in form and substance
reasonably acceptable to Administrative Agent, and (C) the
Organization Documents of such Significant Subsidiary;
32
(ii) In the case of a Significant Subsidiary that is
a Direct Foreign Subsidiary, (A) a Pledge Agreement executed
by Tech Data or any Domestic Subsidiary (each, a "PLEDGOR")
directly owning the stock of such Significant Subsidiary which
shall pledge to Administrative Agent for the benefit of
Administrative Agent, the Lessor, the Lenders and the Holders,
65% of the voting securities or other interests having
ordinary voting power and 100% of the other securities of or
ownership interests in such Significant Subsidiary, (B)
opinions of counsel to each Pledgor and to the Significant
Subsidiary that under the laws of the applicable foreign
jurisdiction, all agreements, notices and other documents
required to be executed, delivered, filed or recorded and all
other action required to be taken, within or pursuant to the
laws of such jurisdiction to perfect the Lien conferred in
favor of Administrative Agent has been duly executed,
delivered, filed, recorded or taken, as the case may be, and
(C) take such further action and deliver or cause to be
delivered such further documents as reasonably requested by
Administrative Agent to effect the transactions contemplated
herein;
(b) If at any time the sum of the total assets or total annual
revenues of Domestic Subsidiaries that have not executed and delivered
to Administrative Agent a Guaranty Agreement (Lessee and Construction
Agent Obligations) in substantially the form of EXHIBIT C exceeds in
the aggregate $150,000,000, Tech Data shall promptly cause there to be
delivered to Administrative Agent one or more additional Guaranties of
Domestic Subsidiaries that do not constitute Significant Subsidiaries
in order that after giving effect to such additional Guaranties, the
sum of the total assets or total revenues, in either or both cases, of
Domestic Subsidiaries that have not delivered a Guaranty Agreement
(Lessee and Construction Agent Obligations) does not exceed in the
aggregate $150,000,000.
(c) The parties acknowledge and agree that so long as SECTION
7.13(B) of the Amended Tech Data Credit Agreement requires the pledge
of 65% of the Voting Securities of any Person, the actual Voting
Securities of such Person pledged to the Administrative Agent pursuant
to this SECTION 28.6 shall be the same as those pledged pursuant to
SECTION 7.13(B) of the Amended Tech Data Credit Agreement, so that
compliance with such agreement and this Lease does not result in the
pledge of more than 65% of the Voting Securities (plus 100% of the
other securities of or interests in) such Person.
ARTICLE XXIX
29.1 NOTICES. Unless otherwise expressly specified or permitted by the
terms hereof, all notices, requests, demands, directions, agreements and
documents delivered in connection with this Agreement shall be delivered as
provided in SECTION 14.3 of the Participation Agreement.
33
ARTICLE XXX
30.1 MISCELLANEOUS. Anything contained in this Lease to the contrary
notwithstanding, all claims against and liabilities of Lessee or Lessor arising
from events commencing prior to the expiration or earlier termination of this
Lease shall survive such expiration or earlier termination. If any provision of
this Lease shall be held to be unenforceable in any jurisdiction, such
unenforceability shall not affect the enforceability of any other provision of
this Lease and such jurisdiction or of such provision or of any other provision
hereof in any other jurisdiction.
30.2 AMENDMENTS AND MODIFICATIONS. None of the terms or provisions of
this Agreement may be terminated, amended, supplemented, waived or modified
except in accordance with the terms of SECTION 14.5 of the Participation
Agreement.
30.3 SUCCESSORS AND ASSIGNS. All the terms and provisions of this Lease
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
30.4 HEADINGS AND TABLE OF CONTENTS. The headings and table of contents
in this Lease are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
30.5 COUNTERPARTS. This Lease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.
30.6 GOVERNING LAW. THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO ANY OTHERWISE
APPLICABLE PRINCIPLES OF CONFLICT OF LAWS, EXCEPT TO THE EXTENT THE LAWS OF THE
STATE IN WHICH A PROPERTY IS LOCATED MAY GOVERN MATTERS RELATING TO THE
PERFECTION, FORECLOSURE AND ENFORCEMENT OF LIENS ON SUCH PROPERTY.
30.7 CALCULATION OF RENT. All calculation of Rent payable hereunder
shall be computed based on the actual number of days elapsed over a year of 360
days.
30.8 MEMORANDA OF LEASE AND LEASE SUPPLEMENTS. This Lease shall not be
recorded; provided Lessor and Lessee shall promptly record a Memorandum of this
Lease and of the applicable Lease Supplement (in substantially the form of
EXHIBIT B attached hereto) regarding each Property promptly after the
acquisition thereof in the local filing office with respect thereto in all cases
at Lessee's cost and expense, and as required under applicable law to
sufficiently evidence this Lease or any such Lease Supplement in the applicable
real estate filing records.
30.9 ALLOCATIONS BETWEEN THE LENDERS AND THE HOLDERS. Notwithstanding
any other term or provision of this Lease to the contrary, the allocations of
the proceeds of the Properties and any and all other Rent and other amounts
received hereunder shall be subject to the inter-creditor provisions between the
Lenders and the Holders contained in the Operative Agreements (or as otherwise
agreed among the Lenders and the Holders from time to time).
34
30.10 LIMITATIONS ON RECOURSE. Notwithstanding anything contained in
this Lease to the contrary, Lessee agrees to look solely to Lessor's estate and
interest in the Properties for the collection of any judgment requiring the
payment of money by Lessor in the event of liability by Lessor, and no other
property or assets of Lessor or any shareholder, owner or partner (direct or
indirect) in or of Lessor, or any director, officer, employee, beneficiary,
Affiliate of any of the foregoing shall be subject to levy, execution or other
enforcement procedure for the satisfaction of the remedies of Lessee under or
with respect to this Lease, the relationship of Lessor and Lessee hereunder or
Lessee's use of the Properties or any other liability of Lessor to Lessee,
EXCEPT to the extent expressly provided in SECTION 10.2(A) or 14.11(B) of the
Participation Agreement. Nothing in this Section shall be interpreted so as to
limit the terms of SECTIONS 6.1 OR 6.2.
30.11 WAIVERS OF JURY TRIAL. THE LESSOR AND THE LESSEE IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS LEASE OR ANY COUNTERCLAIM THEREIN.
30.12 ORIGINAL LEASES. The single executed original of this Lease
marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the signature
page thereof and containing the receipt of the Agent therefor on or following
the signature page thereof shall be the original executed counterpart of this
Lease (the "Original Executed Counterpart"). To the extent that this Lease
constitutes chattel paper, as such term is defined in the Uniform Commercial
Code as in effect in any applicable jurisdiction, no security interest in this
Lease may be created through the transfer or possession of any counterpart other
than the Original Executed Counterpart.
30.13 MORTGAGE GRANT AND REMEDIES. Without limiting any other remedies
set forth in this Lease, in the event that a court of competent jurisdiction
rules that this Lease constitutes a mortgage, deed of trust, security deed or
other secured financing, as is the intent of the parties, then the Lessor and
the Lessee agree that the Lessee hereby grants, bargains, sells, conveys,
mortgages, and grants a security interest in each Property to Lessor WITH POWER
OF SALE to secure the payment of all sums due and owing by Lessee or the
Construction Agent hereunder or under any other Operative Agreement, and that,
upon the occurrence of any Event of Default, the Lessor shall have the power and
authority, to the extent provided by law or the Operative Agreements, after
prior notice and lapse of such time as may be required by law, to foreclose its
interest (or cause such interest to be foreclosed) in all or any part of any
Property, to appoint or obtain the appointment of a receiver for all or any part
of the Property, and to exercise any other right or remedy that may be available
under applicable law to the holder of a mortgage, deed of trust, security deed
or other secured financing.
30.14 EXERCISE OF LESSOR RIGHTS. The Lessee hereby acknowledges and
agrees that the rights and powers of the Lessor under this Lease have been
collaterally assigned to the Agent pursuant to the terms of the Security
Agreement and the other Operative Agreements, and that the Lessor has encumbered
the Properties by various Mortgage Instruments made by the Lessor in favor of
the Agent, all as security for certain indebtedness and obligations described
therein of the Lessor to the Agent, the Lenders and the Holders under the
Operative Agreements. Lessee
35
hereby consents to said assignment and said Mortgage Instruments in favor of the
Agent and further acknowledges and agrees as follows:
(a) In the event that a court of competent jurisdiction rules
that this Lease constitutes a mortgage, deed of trust, security deed or
other secured financing as is the intent of the parties, then the
Lessor and the Lessee agree that the Lessor's collateral assignment of
this Lease to the Agent shall be deemed to be a collateral assignment
of such mortgage, deed of trust, security deed or other secured
financing, and the Agent as such collateral assignee shall be entitled
to exercise any and all rights and remedies of the Lessor set forth
herein during the existence of any Event of Default, including without
limitation the Lessor's rights to obtain a receiver, to obtain
possession of the Properties and the rents and revenues thereof, to
foreclose this Lease, to sell the Lessee's interest in the Properties,
and to exercise any other rights or remedies that may then be available
to the Lessor under applicable law on account of such Event of Default.
(b) Lessee's interest in the Properties is junior and
subordinate to the lien of any Mortgage Instruments made by the Lessor
in favor of the Agent against the respective Properties from time to
time in connection with the Operative Agreements; provided, however,
that for so long as no Event of Default shall have occurred and be
continuing, (i) the Agent shall not disturb Lessee's possession of the
Properties through any foreclosure or other remedial action against the
Properties under any Mortgage Instrument, and (ii) if Lessor's interest
in any Property shall be transferred to any Person other than the
Lessee as the result of the Agent's foreclosure or other remedial
action under any Mortgage Instrument, the Lessee shall (upon request of
the Agent) attorn to such transferee and recognize the transferee as
the Lessee's landlord under this Lease.
(c) During the existence of an Event of Default, the Agent as
holder of the Mortgage Instruments and as collateral assignee of this
Lease may exercise any and all rights and remedies that may then be
available under applicable law to the Agent in either or both
capacities, whether exercised singly, successively or concurrently.
Without limiting the generality of the foregoing, the Agent as
collateral assignee may enforce the Lessee's payment obligations under
this Lease (regardless of whether this Lease shall be deemed a
mortgage, deed of trust, security deed or other secured financing) even
if Lessee's interest and estate in any Property under this Lease shall
have been extinguished or forfeited under applicable law through the
foreclosure or other enforcement of any Mortgage Instrument.
[Signatures on following page.]
36
IN WITNESS WHEREOF, the parties have caused this Lease to be duly
executed and delivered as of the date first above written.
WITNESSES: TECH DATA CORPORATION, as Lessee
By: /s/
--------------------------
Name: XXXX X. XXXXXXXXX, XX. Name: Xxxxxxx X. Xxxxxxx
------------------------ Title: Executive Vice President of
Finance and Chief Financial
Officer
By: /s/
--------------------------
Name: XXXXX X. SAMPLE
----------------------
WITNESSES: FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but
solely as Owner Trustee underthe TD 1996
Real Estate Trust, as Lessor
By: /s/ By: /s/
-------------------------- --------------------------
Name: XXXX X. XXXXXXXXX, XX. Name: C. Xxxxx Xxxxxxx
------------------------ Title: Vice President
By: /s/
-------------------------
Name: XXXXX X. SAMPLE
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as of the date hereof
BANK OF AMERICA, N.A., as Agent
By: /s/
---------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: Vice President
SIGNATURE PAGE 1
ACKNOWLEDGED AND AGREED TO:
WITNESSES: TECH DATA PRODUCT MANAGEMENT, INC.,
as an Alternative Lessee
By: /s/ By: /s/
-------------------------- -------------------------
Name: XXXX X. XXXXXXXXX, XX. Name: Xxxxxxx X. Xxxxxxx
---------------------- Title: Executive Vice President of
Finance and Chief Financial
Officer
By: /s/
------------------------
Name: XXXXX X. SAMPLE
WITNESSES: TD FACILITIES, LTD., as an alternative
Lessee
By: /s/ By: /s/
------------------------- --------------------------
Name: XXXX X. XXXXXXXXX, XX. Name: Xxxxxxx X. Xxxxxxx
------------------------
Title: Executive Vice President of
Finance and Chief Financial
Officer
By: /s/
-------------------------
Name: XXXXX X. SAMPLE
SIGNATURE PAGE 2
