MODIFICATION AGREEMENT
MODIFICATION AGREEMENT, dated as of _____________, 1997, among
Triton Aviation Services V LLC, a California limited liability company ("TAS V")
and Polaris Aircraft Income Fund V, a California limited partnership ("PAIF V")
("Agreement").
R E C I T A L S:
WHEREAS, PAIF V and TAS V have entered into that certain
Purchase, Assignment and Assumption Agreement, dated as of April 1, 1997 (the
"Purchase Agreement"); and
WHEREAS, pursuant to the Purchase Agreement, PAIF V agreed to
sell the Receivables to TAS V; and
WHEREAS, between the date of the Purchase Agreement and May
28, 1997 (the date of the Effective Time for the Receivable), the obligor under
the only Receivable failed to make a scheduled principal payment and requested a
restructuring of and modification to the terms of the Receivable;
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained the receipt and sufficiency of which are hereby
agreed and acknowledged, it is agreed as follows:
1. Definitions. The capitalized terms used herein and not
otherwise defined herein shall have the meaning assigned to such terms in the
Purchase Agreement.
2. Rescission of Sale of Receivable. The parties hereto
acknowledge and agree that the agreement to convey the Receivable to TAS V
pursuant to the Purchase Agreement is hereby rescinded and rendered null and
void ab initio and that the Receivable is no longer a subject of the Purchase
Agreement, that the Purchase Agreement and each of the Ancillary Agreements are
hereby deemed to be reformed to delete all references to the Receivables, the
Receivable Agreements, the Receivable Effective Date and the Receivable
Transferred Interests and Schedule 8 to the Purchase Agreement is hereby deleted
in its entirety.
3. Reduction of Purchase Price. The Purchase Price is hereby
reduced to $34,750,259.34, of which $3,914,964.14 is the Cash Amount and
$30,835,295.20 is the Note Amount. Schedule 4(a) to the Purchase Agreement is
hereby deleted in its entirety and replaced by the Schedule 4(a) attached hereto
as Exhibit A.
4. Delivery of Replacement Promissory Note. Contemporaneously
with the execution and delivery of this Agreement, TAS V will execute and
deliver a Promissory Note to PAIF V in the form attached hereto as Exhibit B
(the "Replacement Note") in substitution for and replacement of the Promissory
Note delivered to PAIF V in connection with the first Effective Time to occur
under the Purchase Agreement. The parties further acknowledge and agree that all
references to the Promissory Note in the Purchase Agreement or any of the other
Ancillary Agreements to which they are a party shall be deemed to be references
to the Replacement Note, the Replacement Note shall be deemed to be an Ancillary
Agreement and the Promissory Note shall be deemed null and void ab initio upon
delivery of the Replacement Note.
5. Return of Pro Rata Cash Amount and Note Income;
Distribution of Excess Cash. Pursuant to Section 4(a) of the Purchase Agreement,
TAS V has caused $5,203,540 to be deposited into the Cash Account, $1,288,575.86
of which is attributable to the Receivable. Pursuant to Section 4(b) of the
Purchase Agreement, PAIF V has caused $95,314.51 to be transferred to TAS V in
respect of Income on the Receivable since April 1, 1997. Upon the later to occur
of (i) the withdrawal of the Cash Amount from the Cash Account in accordance
with Section 4(c) of the Purchase Agreement or (ii) the execution and delivery
of this Agreement, PAIF V will cause $1,288,575.86 to be returned to TAS V and
TAS V will cause $95,314.51 to be returned to PAIF V. Notwithstanding anything
to the contrary in the Replacement Note or any other Ancillary Agreement, TAS V
shall have the right to distribute to its members, and such members shall have
the right to retain free of any security interest of PAIF V, an amount equal to
$1,288,575.86 in excess of all other amounts TAS V is otherwise entitled to
distribute to its members under the Replacement Note.
6. Reference to and Effect on the Purchase Agreement and the
Ancillary Agreements
(a) Upon the effectiveness of this Agreement, from and after
the date hereof, each reference in the Purchase Agreement to "this Agreement",
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"hereunder", "hereof" or words of like import referring to the Purchase
Agreement and each reference in any of the Ancillary Agreements to "the Purchase
Agreement", "thereunder", "thereof" or words of like import referring to the
Purchase Agreement, shall mean and be a reference to the Purchase Agreement as
modified hereby and each reference in any of the Ancillary Agreements to "the
Promissory Note", "the Note", "thereunder", "thereof" or words of like import
referring to the Promissory Note, shall mean and be a reference to the
Replacement Note.
(b) Except as specifically modified by this Agreement, the
Purchase Agreement, and all of the Ancillary Agreements (including, without
limitation, the Replacement Note) are and shall continue to be in full force and
effect, are hereby ratified and confirmed in all respects and are enforceable in
accordance with their respective 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 any such agreement, 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). Without limiting the generality of the foregoing, to the extent
provided therein, the Security Agreement and all of the Pledged Collateral
described therein do and shall continue to secure the payment of all Secured
Obligations under the Security Agreement.
7. Reduction of Keep Well Amount. Section 1(b) of the Keep Well
Agreement, dated April 1, 1997, among Triton Aviation Services Limited, a
Bermuda corporation, TAS V and PAIF V is hereby amended to delete the amount of
$4,034,060 and insert in its place the amount of $3,035,088. In connection
therewith, PAIF V and TAS V hereby authorize and instruct Weil Gotshal & Manges
LLP to substitute the page of the Keep Well Agreement delivered on May 28, 1997
with a new page reflecting such amendment.
8. Consent of Additional Parties. By their execution and delivery of
this Agreement, each of Triton Aviation Services Limited (in its individual
capacity) and Triton Investments Limited hereby consents to all of the terms and
provisions of this Agreement and ratifies and confirms that the Keepwell, the
Keepwell Guaranty, the Loan Guaranty and each of the other Ancillary Agreement
to which they are a party all remain in full and effect and enforceable in
accordance with their respective 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 any such agreement, 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).
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9. Notices. All notices, demands, declarations and other communications
required by this Agreement 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:
If to PAIF V, to:
c/o Polaris Investment Management Corporation
201 Mission Street, 27th Floor
San Francisco, CA 94105
Attention: President
Facsimile Number: (415) 284-7460
With a copy to:
c/o Polaris Investment Management Corporation
201 High Ridge Road, 1st Floor
Stamford, CT 06927-4900
Attention: Portfolio Management
Facsimile Number: (203) 357-4585
or to such other address as PAIF V shall from time to time designate in writing
to TAS V; and
If to TAS V, to:
Triton Aviation Services V LLC
55 Green Street, Suite 500
San Francisco, CA 94111
Attn: President
Facsimile Number: (415) 398-9184
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or to such other address as TAS V may from time to time designate in writing to
PAIF V.
10. GOVERNING LAW. THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION,
THE INTERPRETATION, CONSTRUCTION, VALIDITY AND ENFORCEABILITY THEREOF, SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA,
EXCLUDING ANY CONFLICT OF LAWS RULES THEREOF.
11. Miscellaneous.
(a) If any provision hereof should be held invalid,
illegal or unenforceable in any respect in any jurisdiction, then, to the
fullest extent permitted by law, (i) all other provisions hereof shall remain in
full force and effect in such jurisdiction and shall be construed in order to
carry out the intentions of the parties hereto as nearly as may be possible and
(ii) such invalidity, illegality or unenforceability shall not affect the
validity, legality or enforceability of such provision in any other
jurisdiction.
(b) No amendment, modification, waiver, termination
or discharge of any provision of this Agreement, nor any consent to any
departure by PAIF V or TAS V from any provision hereof, shall in any event be
effective unless the same shall be in writing and signed by PAIF V and TAS V,
and each such amendment, modification, waiver, termination or discharge shall be
effective only in the specific instance and for the specific purpose for which
given. No provision of this Agreement shall be varied, contradicted or explained
by any oral agreement, course of dealing or performance or any other matter not
set forth in an agreement in writing and signed by PAIF V and TAS V.
(c) This Agreement and any amendments, waivers or
consents hereto may be executed by PAIF V and TAS V in separate counterparts (or
upon separate signature pages bound together into one or more counterparts),
each of which, when so executed and delivered, shall be an original, but all
such counterparts shall together constitute one and the same instrument.
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(d) This Agreement, the Purchase Agreement and the
Ancillary Agreements constitute the entire agreement of PAIF V and TAS V with
respect to the subject matter hereof or thereof, and all prior understandings or
agreements, whether written or oral, between PAIF V and TAS V with respect to
such subject matter are hereby superseded in their entirety.
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IN WITNESS WHEREOF, the undersigned have caused this AGREEMENT to be
duly executed as of the day and year first written above.
POLARIS AIRCRAFT INCOME FUND V
By: Polaris Investment Management Corporation,
General Partner
By: /s/ Eric M. Dull
--------------------------------------------
Name: Eric M. Dull
------------------------------------------
Title: Executive Vice President
-----------------------------------------
TRITON AVIATION SERVICES V LLC
By: Triton Aviation Services Limited,
Manager
By: /s/ John E. Flynn
----------------------------------------
Name: John E. Flynn
--------------------------------------
Title: President
-------------------------------------
Consented and Agreed to
this ___ day of June, 1997
TRITON AVIATION SERVICES LIMITED
By: /s/ John E. Flynn
-----------------------------
Title: President
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TRITON INVESTMENTS LIMITED
By:/s/ Steven C. Wight
---------------------------
Title:
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EXHIBIT A
SCHEDULE 4(a)
PURCHASE PRICE
Purchase Note Cash
Transferred Interests Price Amount Amount
---
Transferred Interest 21345 |
Transferred Interest 21601 |
Transferred Interest 19733 |
Transferred Interest 20925 |
Transferred Interest 21117 |
Transferred Interest 21447 |
Transferred Interest 21448 |--- $34,750,259.34 $30,835,295.20 $3,914,964.14
Transferred Interest 21533 | -------------- -------------- -------------
Transferred Interest 21534 |
Transferred Interest 21999 |
Transferred Interest 23014 |
Transferred Interest 22162 |
---
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EXHIBIT B
REPLACEMENT PROMISSORY NOTE
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