GUARANTY (KEEP WELL)
GUARANTY, dated as of April 1, 1997, of TRITON INVESTMENTS
LIMITED, a Bermuda corporation ("Guarantor"), in favor of TRITON AVIATION
SERVICES V LLC, a California limited liability company ("Borrower") and POLARIS
AIRCRAFT INCOME FUND V, a California limited partnership ("Lender") (Borrower
and Lender each sometimes referred to herein as a "Beneficiary" and, together,
as the "Beneficiaries").
W I T N E S S E T H:
WHEREAS, Borrower and Lender have entered into a Purchase,
Assignment and Assumption Agreement dated as of April 1, 1997 (as at any time
amended, modified or supplemented, the "Purchase Agreement") and, in connection
therewith, Borrower has delivered to Lender a promissory note effective as of
April 1, 1997 (the "Note"); and
WHEREAS, Triton Aviation Services Limited, a Bermuda
corporation and a majority-owned and controlled subsidiary of Guarantor ("TASL")
is the record and beneficial owner of 99% of the member interests in Borrower;
and
WHEREAS, TASL, Borrower and Lender have entered into a Keep
Well Agreement of even date herewith (the "Keep Well"), pursuant to which TASL
has agreed to pay certain amounts to Borrower as a contribution to Borrower's
equity in order to permit Borrower promptly to perform all of its obligations
under the Note and the Purchase Agreement; and
WHEREAS, Guarantor, as the majority owner of TASL, will derive
substantial direct and indirect economic benefit from the transactions
contemplated by the Purchase Agreement, the Keep Well and the delivery of the
Note to Lender; and
WHEREAS, in connection with the execution and delivery of the
Purchase Agreement, the Keep Well and the Note and as security for the
Obligations (as defined below), each of the Beneficiaries is requiring that
Guarantor shall have executed and delivered this Guaranty;
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, and to induce Lender to enter into the Purchase
Agreement, it is agreed as follows:
1. DEFINITIONS. Unless otherwise defined herein, terms defined
in the Note are used herein as therein defined, and the following shall have
(unless otherwise provided elsewhere in this Guaranty) the following respective
meanings (such meanings being equally applicable to both the singular and plural
form of the terms defined):
"Obligations" means all obligations of any kind or nature,
present or future, of TASL under the Keep Well.
References to this "Guaranty" shall mean this Guaranty,
including all amendments, modifications and supplements and any exhibits or
schedules to any of the foregoing, and shall refer to this Guaranty as the same
may be in effect at the time such reference becomes operative.
2. THE GUARANTY. The guaranty of Guarantor hereunder is as
follows:
2.1. Guaranty of Obligations of TASL. Guarantor hereby
unconditionally guarantees to each of the Beneficiaries and their respective
successors, endorsees, transferees and assigns, the prompt payment (whether at
stated maturity, by acceleration or otherwise) and performance of the
Obligations. Guarantor agrees that this Guaranty is a guaranty of payment and
performance and not of collection, and that its obligations under this Guaranty
shall be primary, absolute and unconditional, irrespective of, and unaffected
by:
(a) the genuineness, validity, regularity,
enforceability or any future amendment of, or change in this Guaranty,
the Keep Well, the Note or any other agreement, document or instrument
to which Borrower, TASL, Lender and/or Guarantor is or are or may
become a party;
(b) the absence of any action to enforce this
Guaranty, the Keep Well, the Note or any other agreement, document or
instrument to which Borrower, TASL, Lender and/or Guarantor is or are
or may become a party, or the waiver or consent by Lender with respect
to any of the provisions thereof;
2
(c) the existence, value or condition of, or failure
to perfect its lien against, any security for the Obligations or any
action, or the absence of any action, by any Beneficiary in respect
thereof (including, without limitation, the release of any such
security); or
(d) any other action or circumstances which might
otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor,
it being agreed by Guarantor that its obligations under this Guaranty shall not
be discharged until the payment and performance, in full, of the Obligations.
Guarantor shall be regarded, and shall be in the same position, as principal
debtor with respect to the Obligations. Guarantor expressly waives all rights it
may have now or in the future under any statute, or at common law, or at law or
in equity, or otherwise, to compel (i) Borrower to proceed in respect of the
Obligations against TASL or any other party or (ii) Lender to proceed in respect
of the Obligations against Borrower or TASL or any other party, or against any
security for the payment and performance of the Obligations before proceeding
against, or as a condition to proceeding against, Guarantor. Guarantor agrees
that any notice or directive given at any time to a Beneficiary which is
inconsistent with the waiver in the immediately preceding sentence shall be null
and void and may be ignored by such Beneficiary, and, in addition, may not be
pleaded or introduced as evidence in any litigation relating to this Guaranty
for the reason that such pleading or introduction would be at variance with the
written terms of this Guaranty, unless such Beneficiary has specifically agreed
otherwise in writing. It is agreed among Guarantor and each of the Beneficiaries
that the foregoing waivers are of the essence of the transaction contemplated by
the Purchase Agreement and the Note and that, but for this Guaranty and such
waivers, the Beneficiaries would decline to enter into the Purchase Agreement
and to deliver the Note.
2.2. Demand by Beneficiary. In addition to the terms of the
Guaranty set forth in Section 2.1 hereof, and in no manner imposing any
limitation on such terms, it is expressly understood and agreed that, if TASL
has failed to make any payments required to be made under the Keep Well, then
Guarantor shall, upon demand in writing therefor by a Beneficiary to Guarantor,
pay to such Beneficiary the entire outstanding Obligations due and owing to such
Beneficiary; provided, however, if both Beneficiaries shall make demand,
Guarantor shall make the payment to Lender and Borrower shall give Lender 10
days prior written notice of the failure of TASL to make any payments due under
the Keep Well prior to demand by Borrower upon Guarantor; provided, further,
that if at any time Lender shall notify Guarantor that any amounts are due and
owing to it by Borrower, then until such notice has been revoked by Lender, any
payments to be made by Guarantor hereunder shall be made by Guarantor directly
3
to Lender and Lender shall apply all payments received from Guarantor in the
same manner as though paid directly by Borrower.
2.3. Enforcement of Guaranty. In no event shall (i) Borrower
have any obligation (although it is entitled at its option) to proceed against
TASL or any other Person or any real or personal property pledged to secure the
Obligations, or (ii) Lender have any obligation (although it is entitled, at its
option) to proceed against Borrower or TASL or any other Person or any real or
personal property pledged to secure the Obligations, before seeking satisfaction
from Guarantor. A Beneficiary may proceed, prior or subsequent to, or
simultaneously with, the enforcement of such Beneficiary's rights hereunder, to
exercise any right or remedy which it may have against any property, real or
personal, as a result of any lien it may have as security for all or any portion
of the Obligations.
2.4. Waiver. In addition to the waivers contained in Section
2.1 hereof, Guarantor waives, and agrees that it shall not at any time insist
upon, plead or in any manner whatever claim or take the benefit or advantage of,
any appraisal, valuation, stay, extension, marshalling of assets or redemption
laws, or exemption, whether now or at any time hereafter in force, which may
delay, prevent or otherwise affect the performance by Guarantor of its
obligations under, or the enforcement by the Beneficiaries of, this Guaranty.
Guarantor hereby waives diligence, presentment and demand (whether for
non-payment or protest or of acceptance, maturity, extension of time, change in
nature or form of the Obligations, acceptance of further security, release of
further security, composition or agreement arrived at as to the amount of, or
the terms of, the Obligations, notice of adverse change in Borrower's or TASL's
financial condition or any other fact which might materially increase the risk
to Guarantor) with respect to any of the Obligations or all other demands
whatsoever and waives the benefit of all provisions of law which are or might be
in conflict with the terms of this Guaranty. Guarantor repre sents, warrants and
agrees that, as of the date of this Guaranty, its obligations under this
Guaranty are not subject to any offsets or defenses against Lender, TASL or
Borrower of any kind. Guarantor further agrees that its obligations under this
Guaranty shall not be subject to any counterclaims, offsets or defenses against
Lender or against Borrower or TASL of any kind which may arise in the future.
2.5. Benefit of Guaranty. The provisions of this Guaranty are
for the benefit of the Beneficiaries and their respective successors,
transferees, endorsees and assigns, and nothing herein contained shall impair,
as between TASL and Lender or TASL and Borrower, as the case may be, the
obligations of TASL under the Keep Well. In the event all or any part of the
4
Obligations are transferred, indorsed or assigned by Lender to any Person or
Persons, any reference to "Lender" herein shall be deemed to refer equally to
such Person or Persons.
2.6. Modification of Obligations, Etc. If Lender and/or
Borrower shall at any time or from time to time, with or without the consent of,
or notice to, Guarantor:
(a) change or extend the manner, place or terms of
payment of, or renew or alter all or any portion of, the Obligations;
(b) take any action under or in respect of the Keep
Well in the exercise of any remedy, power or privilege contained
therein or available to it at law, equity or otherwise, or waive or
refrain from exercising any such remedies, powers or privileges;
(c) amend or modify, in any manner whatsoever, the
Keep Well;
(d) extend or waive the time for any of Guarantor's,
Borrower's, TASL's or any other Person's performance of, or compliance
with, any term, covenant or agreement on its part to be performed or
observed under the Keep Well, or waive such performance or compliance
or consent to a failure of, or departure from, such performance or
compliance;
(e) take and hold security or collateral for the
payment of the Obligations guaranteed hereby or sell, exchange,
release, dispose of, or otherwise deal with, any property pledged,
mortgaged or conveyed, or in which Lender has been granted a lien, to
secure any indebtedness of Guarantor, Borrower or TASL to Lender or of
Guarantor or TASL to Borrower, as the case may be;
(f) release anyone who may be liable in any manner
for the payment of any amounts owed by Guarantor, Borrower or TASL to
Lender or by Guarantor or TASL to Borrower, as the case may be;
(g) modify or terminate the terms of any
intercreditor or subordination agreement pursuant to which claims of
other creditors of Guarantor, Borrower or TASL are subordinated to the
claims of Lender and/or
(h) apply any sums by whomever paid or however
realized to any amounts owing by Guarantor, Borrower or TASL to Lender
or by Guarantor, or TASL to Borrower, in such manner as Lender or
5
Borrower, as the case may be, shall determine in its discretion;
then Lender and/or Borrower shall not incur any liability to Guarantor pursuant
hereto as a result thereof, and no such action shall impair or release the
obligations of Guarantor under this Guaranty.
2.7. Reinstatement. This Guaranty shall remain in full force
and effect and continue to be effective should any petition be filed by or
against Borrower, TASL or Guarantor for liquidation or reorganization, should
Borrower, TASL or Guarantor become insolvent or make an assignment for the
benefit of creditors or should a receiver or trustee be appointed for all or any
significant part of Borrower's, TASL's or Guarantor's assets, and shall continue
to be effective or be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by a Beneficiary, whether as a "voidable preference", "fraudulent conveyance",
or otherwise, all as though such payment or performance had not been made. In
the event that any pay ment, or any part thereof, is rescinded, reduced,
restored or returned, the Obligations shall be reinstated and deemed reduced
only by such amount paid and not so rescinded, reduced, restored or returned.
2.8. Waiver of Subrogation Etc. (a) If, pursuant to applicable
law, Guarantor, by payment or otherwise, becomes subrogated to all or any of the
rights of the Beneficiaries or either of them under the Keep Well, the rights of
such Beneficiary to which Guarantor shall be subrogated shall be accepted by
Guarantor "as is" and without any representation or warranty of any kind by such
Beneficiary, express or implied, with respect to the legality, value, validity
or enforceability of any of such rights, or the existence, availability, value,
merchantability or fitness for any particular purpose of any collateral and
shall be without recourse to such Beneficiary.
(b) If a Beneficiary may, under applicable law, proceed to
realize its benefits under the Keep Well, giving such Beneficiary a lien upon
any collateral, whether owned by TASL or by any other Person, either by judicial
foreclosure or by non-judicial sale or enforcement, such Beneficiary may, at its
sole option, determine which of its remedies or rights it may pursue without
affecting any of its rights and remedies under this Guaranty. If, in the
exercise of any of its rights and remedies, such Beneficiary shall forfeit any
of its rights or remedies, including its right to enter a deficiency judgment
against TASL or any other Person, whether because of any applicable laws
pertaining to "election of remedies" or the like, Guarantor hereby consents to
6
such action by such Beneficiary and waives any claim based upon such action,
even if such action by such Beneficiary shall result in a full or partial loss
of any rights of subrogation which Guarantor might otherwise have had but for
such action by such Beneficiary. Any election of remedies which results in the
denial or impairment of the right of a Beneficiary to seek a deficiency judgment
against TASL or any other Person shall not impair Guarantor's obligation to pay
the full amount of the Obligations. In the event a Beneficiary shall bid at any
foreclosure or trustee's sale or at any private sale permitted by law or the
Keep Well, such Beneficiary may bid all or less than the amount of the
Obligations and the amount of such bid need not be paid by such Beneficiary but
shall be credited against the Obligations. The amount of the successful bid at
any such sale, whether a Beneficiary or any other party is the successful
bidder, shall be conclusively deemed to be the fair market value of the
collateral and the difference between such bid amount and the remaining balance
of the Obligations shall be conclusively deemed to be the amount of the
Obligations guaranteed under this Guaranty, notwithstanding that any present or
future law or court decision or ruling may have the effect of reducing the
amount of any deficiency claim to which such Beneficiary might otherwise be
entitled but for such bidding at any such sale.
2.9. Continuing Guaranty. Guarantor agrees that this Guaranty
is a continuing guaranty and shall remain in full force and effect until the
payment and performance in full of the Obligations.
2.10. Limitation on Guaranty. Notwithstanding anything to the
contrary contained herein, in no event shall Guarantor's obligation under this
Guaranty with respect to the Obligations exceed an amount equal to the
outstanding Maximum Obligation (as defined in the Keep Well) of TASL under the
Keep Well; provided, however, that nothing in this Section 2.10 shall limit
Guarantor's obligations or liabilities in respect of the representations,
warranties and covenants of Guarantor set forth in this Guaranty. Except as
expressly set forth in this Guaranty, Guarantor shall have no obligation with
respect to the Note.
3. REPRESENTATIONS AND WARRANTIES. To induce the Beneficiaries
to enter into the Purchase Agreement and accept the Note, Guarantor makes the
following representations and warranties to the Beneficiaries, each and all of
which shall survive the execution and delivery of this Guaranty:
3.1. Corporate Existence; Compliance with Law. Guarantor (i)
is a corporation duly organized, validly existing and in good standing under the
laws of Bermuda; (ii) is duly qualified to do business and is in good standing
under the laws of each jurisdiction where its ownership or lease of property or
7
the conduct of its business requires such qualification (except for
jurisdictions in which such failure so to qualify or to be in good standing
would not have a materially adverse effect on (A) the business, operations,
prospects or financial condition of Guarantor, or (B) Guarantor's ability to pay
or perform the Obligations in accordance with the terms hereof); (iii) has the
requisite corporate power and authority and the legal right to own, pledge,
mortgage and operate its properties, to lease the property it operates under
lease, and to conduct its business as now, heretofore and proposed to be
conducted; (iv) has all material licenses, permits, consents or approvals from
or by, and has made all material filings with, and has given all material
notices to, all governmental authorities having jurisdiction, to the extent
required for such ownership, operation and conduct; (v) is in compliance with
its articles of incorporation and by-laws or other organizational documents; and
(vi) is in compliance with all applicable provisions of law where the failure to
so comply would have a materially adverse effect on (A) the business,
operations, prospects, assets or financial or other condition of Guarantor or
(B) the Guarantor's ability to pay or perform the Obligations in accordance with
the terms hereof.
3.2. Corporate Power; Authorization; Enforceable Obligations.
The execution, delivery and performance of this Guaranty and all other
instruments and documents to be delivered by Guarantor hereunder and under the
Purchase Agreement are within Guarantor's corporate powers, have been duly
authorized by all necessary or proper corporate action, including the consent of
stockholders where required, are not in contravention of any provision of
Guarantor's articles of incorporation or by-laws (or other organizational
documents), will not violate any law or regulation, or any order or decree of
any court or governmental instrumentality, will not conflict with or result in
the breach of, or constitute a default under, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which Guarantor is a party or by
which Guarantor or any of its property is bound, will not result in the creation
or imposition of any lien upon any of the property of Guarantor, and the same do
not require the consent or approval of any governmental body, agency, authority
or any other Person except those already obtained. At or prior to the Closing
Date, this Guaranty and each of the Ancillary Agreements to which Guarantor is a
party shall have been duly executed and delivered for the benefit of or on
behalf of Guarantor, and each shall then constitute a legal, valid and binding
obligation of Guarantor, enforceable against Guarantor in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other similar laws affecting the rights and
remedies of creditors generally and, with respect to the enforceability of this
Guaranty, by general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement
is sought in a proceeding at law or in equity).
8
3.3. No Material Adverse Change. Since December 31, 1996,
there has been no material adverse change in the business, financial condition,
results of operations or liabilities of Guarantor.
4. Covenants. Guarantor hereby covenants and agrees that:
4.1. Guarantor will not take any action, directly or
indirectly, to authorize or permit any amendment, alteration or change to
Borrower's articles of organization or operating agreement (other than
amendments permitted under the Note), the Keep Well, the Keep Well Guaranty or
the Loan Guaranty or permit Borrower to repeal its articles of organization.
4.2. Guarantor covenants and agrees that it will not take any
action, directly or indirectly, to authorize or permit Borrower to take any of
the actions set forth on Annex A attached hereto; provided, however, that with
respect to all prohibited actions included on Annex A attached hereto, Guarantor
shall have no obligation under this Section 4.2 to provide any funds to Borrower
which Borrower may require in order to avoid or cure any violation or breach
thereof; provided, further that the failure of Guarantor to change or replace
the management, directors or Persons holding similar offices of TASL or Borrower
will not be deemed, in and of itself, to constitute Guarantor's authorization or
permission of actions taken by such management, directors or Persons which cause
or result in Borrower taking any of the prohibited actions set forth on Annex A.
4.3. Guarantor shall deliver to Lender (i) within 60 days
after the end of each of the first three fiscal quarters of Guarantor, a copy of
the unaudited balance sheet of Guarantor as of the end of such fiscal quarter
and an unaudited statement of income and cash flow of Guarantor for such fiscal
quarter, all prepared in accordance with GAAP (subject to normal year end
adjustment), accompanied by a certification of the chief executive officer or
chief financial officer of Guarantor that all such financial statements are
complete and correct and present fairly, all in accordance with GAAP, the
financial position, the results of operations and the changes in financial
position of Guarantor as at the end of such quarter and for the period then
ended and (ii) within 120 days after the end of each fiscal year of Guarantor, a
copy of the audited balance sheet of Guarantor as of the end of such fiscal year
and an audited statement of income and cash flow of Guarantor for such fiscal
year, all prepared in accordance with GAAP, accompanied by (x) a certification
of the chief executive officer or chief financial officer of Guarantor that (1)
all such financial statements are complete and correct and present fairly in
accordance with GAAP the financial position, the results of operations and the
9
changes in financial position of Guarantor as at the end of such year and for
the period then ended and (2) there have been no amendments, modifications or
changes to Borrower's articles of organization or operating agreement other than
those which are permitted pursuant the Note hereof and (y) an auditor's report
unqualified as to the scope of the audit and as to Guarantor being a going
concern, from KPMG Peat Marwick LLP, or any other firm of independent certified
public accountants of recognized national standing selected by Guarantor and
acceptable to Lender together with a certification from such firm that the
Economic Interests held by all Triton Members in Borrower as of the end of such
fiscal year are, in the aggregate, at least fifty percent (50%) of the Economic
Interests of Borrower.
4.4. At all times, Triton Members shall hold, in the
aggregate, at least fifty percent (50%) of the Economic Interests of Borrower.
5. PERMITTED ASSIGNMENT BY LENDER. Lender may freely assign
its rights and delegate its duties under this Guaranty, but no such assignment
or delegation shall increase or diminish Guarantor's obligations hereunder.
Lender shall give Guarantor prompt notice of such assignment or delegation and
agrees to use its best efforts to give such notice at least three (3) Business
Days prior to such assignment or delegation, but the consent of Guarantor shall
not be required for any such assignment or delegation and failure to give such
notice shall not affect the validity or enforceability of any such assignment or
delegation or this Guaranty or subject Lender to any liability.
6. FURTHER ASSURANCES. Guarantor agrees, upon the written
request of the Beneficiaries or either of them, to execute and deliver to such
Beneficiary, from time to time, any additional instruments or documents
reasonably considered necessary by such Beneficiary to cause this Guaranty to
be, become or remain valid and effective in accordance with its terms.
7. PAYMENTS FREE AND CLEAR OF TAXES. All payments required to
be made by Guarantor hereunder shall be made to the Beneficiaries free and clear
of, and without deduction for, any and all present and future taxes,
withholdings, levies, duties, and other governmental charges ("Taxes"),
excluding such income and franchise taxes thereof which would otherwise have
been payable (i) by Borrower if TASL had paid the Obligations to Borrower, or
(ii) by Lender if Borrower or TASL, as the case may be, had paid the Obligations
to Lender, in accordance with the terms of the Keep Well. Upon request by the
Beneficiaries or either of them, Guarantor shall furnish to such Beneficiary a
receipt for any Taxes paid by Guarantor pursuant to this Section 6 or, if no
Taxes are payable with respect to any payments required to be made by Guarantor
hereunder, either a certificate from each appropriate taxing authority or an
10
opinion of counsel acceptable to such Beneficiary, in either case stating that
such payment is exempt from or not subject to Taxes. If Taxes are paid by a
Beneficiary in the good faith belief that such taxes are owing, Guarantor will,
upon demand of such Beneficiary, and whether or not such Taxes shall be
correctly or legally asserted, indemnify such Beneficiary for such payments,
together with any interest, penalties and expenses in connection therewith plus
interest thereon at the lesser of 10% or the maximum lawful rate under
applicable law. Such Beneficiary shall thereafter cooperate in a commercially
reasonable manner with Guarantor in seeking any refunds of such Taxes, interest,
penalties and expenses, which refunds and any interest thereon shall be paid by
such Beneficiary to Guarantor within five (5) business days of receipt by such
Beneficiary; provided, that in no event shall any Beneficiary be required to
expend its own funds in seeking any such refund and provided, further, that any
expenses incurred in connection therewith shall be paid by Guarantor.
8. MISCELLANEOUS.
8.1. Entire Agreement; Amendments. This Guaranty, together
with the Purchase Agreement, the Note, the Keep Well and the other Ancillary
Documents, constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements relating to a
guaranty of payment and performance of the Obligations and may not be amended or
supplemented except by a writing signed by Guarantor and each of the
Beneficiaries.
8.2. Headings. The headings in this Guaranty are for
convenience of reference only and are not part of the substance of this
Guaranty.
8.3. Severability. In the event that any one or more of the
provisions contained in this Guaranty shall be determined to be invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision or provisions in every other respect and
the remaining provisions of this Guaranty shall not be in any way impaired.
8.4. Notices. All notices, demands, declarations and other
communications required by this Guaranty shall be in writing and shall be
effective (i) if given by facsimile, when transmitted, (ii) if given by
registered or certified mail, three (3) Business Days after being deposited with
the U.S. Postal Service, (iii) if given by courier, when received, or (iv) if
personally delivered, when so delivered, addressed:
(a) If to Lender at:
11
c/o Polaris Investment Management Corporation
201 Mission Street, 27th Floor
San Francisco, CA 94105
Attention: President
Telecopy Number: (415) 284-7460
With a copy to:
c/o Polaris Investment Management Corporation
201 High Ridge Road
Stamford, Connecticut 06927-4900
Attention: Portfolio Management
Telecopy Number: (203) 357-4585
or to such other address as Lender may from time to time designate in writing to
Borrower and Guarantor.
(b) If to Borrower, at:
Triton Aviation Services V LLC
55 Green Street, Suite 500
San Francisco, CA 94111
Attention: President
Telecopy Number: (415) 398-9184
or to such other address as Borrower may from time to time designate in writing
to Lender and Guarantor.
(c) If to Guarantor, at:
Triton Investments Limited
c/o Triton Container International Inc.
55 Green Street, Suite 500
San Francisco, CA 94111
Attention: President
Telecopy Number: (415) 398-9184
12
or to such other address as Guarantor may from time to time designate in writing
to Lender and Borrower. The giving of any notice required hereunder may be
waived in writing by the party entitled to receive such notice.
8.5. Binding Effect. This Guaranty shall bind Guarantor and
shall inure to the benefit of each of the Beneficiaries and its respective
successors and assigns. Guarantor may not assign this Guaranty.
8.6. Non-Waiver. The failure of the Beneficiaries or either of
them to enforce any right or remedy hereunder, or promptly to enforce any such
right or remedy, shall not constitute a waiver thereof, nor give rise to any
estoppel against such Beneficiary, nor excuse Guarantor from its Obligations
hereunder. Any waiver of any such right or remedy by a Beneficiary must be in
writing and signed by such Beneficiary.
8.7. Termination. This Guaranty shall terminate and be of no
further force or effect at such time as the Obligations shall be paid and
performed in full. Upon payment and performance in full of the Obligations, the
Beneficiaries shall deliver to Guarantor such documents as Guarantor may
reasonably request to evidence such termination.
8.8. Governing Law. The terms of this Guaranty shall be
governed by, and shall be construed and enforced in accordance with, the laws of
the State of California (exclusive of any rules as to conflict of laws) and the
laws of the United States applicable therein. Guarantor hereby submits to
personal jurisdiction and waives any objection as to venue in the County of San
Francisco, State of California. Service of process on Guarantor in any action
arising out of or relating to this Guaranty shall be effective if mailed to
Guarantor in accordance with Section 7.4 hereof. Nothing herein shall preclude
the Beneficiaries from bringing suit or taking other legal action in any other
jurisdiction.
8.9. Counterparts. This Guaranty may be executed in any number
of counterparts which shall individually and collectively constitute one
agreement.
13
IN WITNESS WHEREOF, Guarantor has executed and delivered this
Guaranty as of the date first above written.
TRITON INVESTMENTS LIMITED
By:/S/ STEVEN C. WIGHT
----------------------------------
Name: STEVEN C. WIGHT
Title: EXECUTIVE VICE PRESIDENT
Accepted and acknowledged by:
POLARIS AIRCRAFT INVESTMENT FUND V
By: Polaris Investment Management
Corporation, General Partner
By:/S/ MARC A. MEICHES
----------------------------------
Name: MARC A. MEICHES
Title: VICE PRESIDENT
TRITON AVIATION SERVICES V LLC
By: Triton Aviation Services Limited,
its Manager
By:/S/ JOHN E. FLYNN
----------------------------------
Name: JOHN E. FLYNN
Title: PRESIDENT
14
Annex A
Borrower will not:
(a) engage in any business or activity other than (i)
acquiring, holding, maintaining, improving, refurbishing, modifying,
selling, leasing, transferring and disposing of all right, title and
interest in those certain trust estates, subject of the Trust
Agreements, and the related Aircraft and (ii) any activity or exercise
of any powers permitted to limited liability companies under the laws
of the State of California that are incident, necessary and appropriate
to accomplish the activities specified in clause (i) of this subsection
(a);
(b) liquidate or take any affirmative action to
dissolve, in whole or in part;
(c) acquire any interest in any aircraft other than
the Aircraft;
(d) consolidate or merge with or into any other
entity or convey or transfer its properties and assets substantially as
an entirety to any entity, except as permitted under the Note;
(e) engage in transactions with Affiliates other than
any agreement or transaction entered into pursuant to the reasonable
requirements of Borrower's ordinary course of business and upon terms
that are no less favorable to Borrower than Borrower could obtain in a
comparable arm's-length transaction with any person or entity not an
Affiliate of Borrower;
(f) declare any dividend or other distribution or
incur any liability in respect thereof, with respect to the membership
interests (or any other equity interest) of Borrower, other than as
permitted by the Note;
(g) employ any employees;
(h) institute proceedings to be adjudicated bankrupt
or insolvent;
(i) consent to the institution of bankruptcy or
insolvency proceedings against it;
15
(j) file a petition seeking, or consent to,
reorganization or relief under any applicable federal or state law
relating to bankruptcy;
(k) seek or consent to the appointment of a receiver,
liquidator, conservator, assignee, trustee, sequestrator, custodian or
any other similar official of Borrower or a substantial part of its
properties;
(l) make any assignment for the benefit of creditors;
(m) admit in writing its inability to pay its debts
generally as they become due;
(n) otherwise seek relief under any laws relating to
the relief from debts or the protection of debtors generally;
(o) guarantee or become obligated for the debts of
any other entity or person;
(p) hold out its credit as being available to satisfy
the obligations of any other person or entity;
(q) acquire the obligations or securities of its
affiliates or owners other than Permitted SPV Investments;
(r) make loans to any other person or entity or buy
or hold evidence of indebtedness issued by any other person or entity
(except for Permitted Investments);
(s) create, incur, assume or permit to exist any
Indebtedness except Indebtedness permitted to be incurred by Borrower
pursuant to Section 4.2 of the Note;
(t) except for Permitted Encumbrances, pledge its
assets for the benefit of any other person or entity or create any Lien
on any of its properties or assets;
(u) permit any Lien to exist on any of its properties
or assets except for (i) involuntary or inchoate Liens that are
incurred by Borrower in the ordinary course of Borrower's business
16
conducted in compliance with the provisions of subsection (a) hereof
or (ii) Permitted Encumbrances;
(v) take any action in furtherance of any of the
preceding actions.
17