Lease Agreement

Exhibit 10AAr


SECOND AMENDED AND RESTATED LEASE AGREEMENT


Dated as of July 31, 2003

between


SUNTRUST EQUITY FUNDING, LLC

as Lessor

and


TECH DATA CORPORATION, as Lessee


This Second Amended and Restated Lease Agreement is subject to a security interest in favor of SunTrust Bank, as Agent (the "Agent") under a Second Amended and Restated Security Agreement dated as of July 31, 2003, among SunTrust Equity Funding, LLC and the Agent, as amended, modified, supplemented, restated or replaced from time to time. This Second Amended and Restated Lease Agreement has been executed in several counterparts. To the extent, if any, that this Second 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 Second 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


ARTICLE I

1.1

Definitions 1

ARTICLE II

2.1

Property 1

2.2

Lease Term 1

2.3

Title 2

2.4

Lease Supplements 2

2.5

Subsidiaries as Lessee 2

ARTICLE III

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

4.1

Utility Charges; Taxes 4

ARTICLE V

5.1

Quiet Enjoyment 4

ARTICLE VI

6.1

Net Lease 5

6.2

No Termination or Abatement 5

ARTICLE VII

7.1

Ownership of the Properties 6

ARTICLE VIII

8.1

Condition of the Properties 6

8.2

Possession and Use of the Properties 7


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TABLE OF CONTENTS


ARTICLE IX

9.1

Compliance with Legal Requirements and Insurance Requirements 8

ARTICLE X

10.1

Maintenance and Repair; Return 8

10.2

Environmental Inspection 10

ARTICLE XI

11.1

Modifications 10

ARTICLE XII

12.1

Warranty of Title 11

ARTICLE XIII

13.1

Permitted Contests Other Than in Respect of Indemnities 11

ARTICLE XIV

14.1

Public Liability and Workers' Compensation Insurance 12

14.2

Hazard and Other Insurance 12

14.3

Coverage 13

14.4

Additional Insurance Requirements 13

ARTICLE XV

15.1

Casualty and Condemnation 14

15.2

Environmental Matters 15

15.3

Notice of Environmental Matters 16

ARTICLE XVI

16.1

Termination Upon Certain Events 16

16.2

Procedures 16

ARTICLE XVII

17.1

Lease Events of Default 16

17.2

Surrender of Possession 20


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17.3

Reletting 20

17.4

Damages 20

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 22

17.10

Notice of Default or Event of Default 22

17.11

Lessee's Option to Cure by Purchase of All Properties 22

17.12

Liability Limited 23

ARTICLE XVIII

18.1

Lessor's Right to Cure Lessee's Lease Defaults 23

ARTICLE XIX

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 23

ARTICLE XX

20.1

Purchase Prior to End of Term; Purchase, Renewal or Sale Option; Purchase of Excess Land 24

ARTICLE XXI

21.1

Renewal 25

ARTICLE XXII

22.1

Sale Procedure 25

22.2

Application of Proceeds of Sale 27

22.3

Indemnity for Excessive Wear 27

22.4

Appraisal Procedure 28

22.5

Certain Obligations Continue 28

ARTICLE XXIII

23.1

[RESERVED.] 28


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TABLE OF CONTENTS


ARTICLE XXIV

24.1

Risk of Loss 28

ARTICLE XXV

25.1

Assignment 28

25.2

Subleases 29

ARTICLE XXVI

26.1

No Waiver 30

ARTICLE XXVII

27.1

Acceptance of Surrender 30

27.2

No Merger of Title 30

ARTICLE XXVIII

28.1

Notices 30

ARTICLE XXIX

29.1

Miscellaneous 30

29.2

Amendments and Modifications 30

29.3

Successors and Assigns 30

29.4

Headings and Table of Contents 31

29.5

Counterparts 31

29.6

GOVERNING LAW 31

29.7

Calculation of Rent 31

29.8

Memoranda of Lease and Lease Supplements 31

29.9

Allocations between the Financing Parties 31

29.10

Limitations on Recourse 31

29.11

WAIVERS OF JURY TRIAL 31

29.12

Original Leases 31

29.13

Mortgage Grant and Remedies 32

29.14

Exercise of Lessor Rights 32


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TABLE OF CONTENTS


EXHIBITS

EXHIBIT A

[Amended and Restated] Lease Supplement No.

A-3

EXHIBIT B

Form of Memorandum of Lease and Lease Supplement

B-1

EXHIBIT C

Form of Guaranty Agreement (Lessee Obligations)

C-1


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SECOND AMENDED AND RESTATED LEASE AGREEMENT

THIS SECOND AMENDED AND RESTATED LEASE AGREEMENT (as amended, supplemented or modified from time to time, this "Lease"), dated as of July 31, 2003, is between SUNTRUST EQUITY FUNDING, LLC, having its principal office c/o Atlantic Financial Group, Ltd., 2808 Fairmont, Suite 250 LB9, Dallas, Texas 75201, as lessor (the "Lessor"), and TECH DATA CORPORATION, a Florida corporation, having its principal place of business at 5350 Tech Data Drive, Clearwater, Florida, as lessee (the "Lessee").

W I T N E S S E T H :


A. WHEREAS, the Wells Fargo Bank Northwest, National Association (as successor to First Security Bank, National Association), as Owner Trustee, and Lessee entered into an Amended and Restated Lease Agreement dated as of May 8, 2000 (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, contemporaneously herewith, shall acquire the Properties by acquiring the Existing Holders' Certificates and dissolving the TD 1996 Real Estate Trust; and


C. WHEREAS, the Lessor desires to amend and restate the Existing Lease on the terms and conditions set forth herein; and

D. 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 Second 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 the Lessee, the Lessor, 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 Property (the "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 hereof (such date being referred to as the "Basic Term Commencement Date" for such Property) and shall end on July 30, 2008 (the "Basic Term Expiration Date"), unless the Term is earlier terminated in accordance with the provisions of this Lease or unless this Lease shall be renewed in accordance with Section 21.1 hereof. The Lessor and the Lessee acknowledge and agree that since the respective Property Closing Date (or date of Lessor taking title) for each Property has occurred prior to the Restatement Effective Date, the Term has already commenced (and is deemed to be in effect) with respect to the 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 the Basic Term Commencement Date, Lessee and Lessor shall have each executed and delivered a Lease Supplement for the Property 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 has failed or refused 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 and Financing Parties 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 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.

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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. The Lessor and the Lessee acknowledge and agree that since the respective Closing Date for each Property has occurred prior to the Restatement Effective Date, the Basic Rent Commencement Date has already occurred for each Property, and the Lessee must pay Basic Rent from and after the date hereof for each 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 it was delivered by Lessor, whether or not attributable to any act or omission of the Lessor, 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 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 of the Lessee to pay the Lessor Amount) due and owing by Lessor or the Lessee under the Credit Agreement or any other Operative Agreement and (b) interest and Yield at the applicable Overdue Rate on 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


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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.

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.


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ARTICLE VI


6.1 Net Lease . This Lease shall constitute a net lease. 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 Financing Party, Lessor, Lessee 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.


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.


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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 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 nor any Financing Party 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 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


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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 FINANCING PARTY 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 FINANCING PARTY 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 FINANCING PARTY 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 FINANCING PARTIES, 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 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 its location (as defined in Section 9-307 of the Uniform Commercial Code of any applicable jurisdiction) is Florida, and Lessee will provide Lessor with prior written notice of any change of such location. 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 busines ...