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Exhibit 3.5
1. PROPOSED AMENDMENT TO MAKE CERTAIN CHANCES IN THE
MANNER IN WHICH PARTNERSHIP INVESTMENTS ARE MADE.
Section 3.5(A)-(C) of the Partnership Agreement is amended and restated in
full as follows and a new Section (D) is added to Section 3-5 to read as
follows:
3.5 Participation in Aircraft Investment with Affiliates.
(A) So long as Airlease Management Services, Inc. or another Related
Entity is the General, Partner, the Partnership may only make Aircraft leasing
investments offered to it in accordance with this Section.
(B) Until September 30, 1991, the General Partner and Airlease hereby
agree to offer the Partnership the right to acquire a 50% participation interest
in all Aircraft leasing investments to be made by any Related Entity where the
aggregate Aircraft Cost in such investment is greater than $10 million. The
Partnership shall acquire such interest subject to the determination by the
General Partner that the investment is suitable for the Partnership. If, after
allocating an investment in accordance with the first two sentences above, the
total investment made by Related Entities (including through their interest in
the Partnership either as a General Partner or a Limited Partner) would exceed
U.S. Leasing's then existing credit policy regarding maximum permissible
investment for a single lessee, the General Partner and Airlease shall offer
and, subject to a determination of suitability, the Partnership shall accept an
additional participation interest in an amount necessary to reduce the total
investment by Related Entities to an amount in compliance with U.S. Leasing's
credit policy. Any offer required to be made by this subsection (i) is only
required to be made at the time of the commitment (but may be made at a later
time in the sole discretion of the General Partner or Airlease) to enter into
the transaction and (ii) must be accepted by the Partnership at the time that
the offer is made. Notwithstanding anything in this paragraph (B) to the
contrary, if the Aircraft leasing investment to be made by Airlease or any
Related Entity is a leveraged lease, as defined in Statement of Financial
Accounting Standards No. 13, then Airlease may, in its discretion, decline to
offer the Partnership a participation interest in such investment.
(C) After September 30, 1991, neither the General Partner nor Airlease
shall be under any obligation to offer the Partnership any investment
opportunities. However, the General Partner and Airlease may continue to offer
investment opportunities to the Partnership, and the Partnership shall accept
opportunities deemed suitable by the General Partner, provided one or more
Related Entities makes at least 20% (including the interest in the Partnership
then owned by the General Partner and all Related Entities) of the total
investment made by Related Entities and the Partnership in such transactions.
(D) Notwithstanding anything in paragraphs (A), (B) or (C) of this
Section 3.5 to the contrary, the Partnership may make Aircraft leasing
investments in which Related Entities do not participate (i) where the
investment committee of the board of directors of U.S. Leasing determines that
such investment would cause U.S. Leasing or the affiliated group with which it
files consolidated federal income tax returns to forego current utilization of
foreign tax credits or would increase their foreign assets, or (ii) where the
investment is in an Aircraft which is subject to a tax benefit transfer lease
under the safe harbor lease rules enacted under the Economic Recovery Tax Act of
1981, or (iii) where the Aircraft investment is made by the Partnership after or
in anticipation of the disposition of the Partnership's interest in another
Aircraft in which a Related Entity does not or did not have an interest, and the
board of directors of the General Partner determines that such new Aircraft
investment is for the purpose of replacing the Partnership's interest in such
other Aircraft.
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2. PROPOSED AMENDMENT GIVING THE GENERAL PARTNER DISCRETION
REGARDING DISTRIBUTION OF CERTAIN SALES PROCEEDS.
Section 10.3 of the Partnership Agreement is amended and restated in
full as follows:
10.3 Distributions of Cash Available From Sale or Refinancing.
(A) Deleted.
(B) Through December 31, 2004, any Cash Available From Sale or
Refinancing may, at the discretion of the General Partner, be retained for use
in the Partnership's business.
(C) After December 31, 2004, subject to Section 3.3(B)(2), any Cash
Available From Sale or Refinancing shall be distributed 99% of the Unitholders
and 1 % to the General Partner.
(D) Cash Available From Sale or Refinancing shall be distributed at
such time as the General Partner in its discretion may determine to the holders
of record on the first business day in the month during which such sale or
refinancing occurs, unless a different Record Date is determined by the General
Partner.
3. PROPOSED AMENDMENT TO CLARIFY THE MANNER IN WHICH THE
PARTICIPATION IN AN INVESTMENT BY THE PARTNERSHIP
AND A RELATED ENTITY IS DETERMINED.
Section 3.5 is amended by adding a new Section (E) thereto to read in
full as follows:
(E) For purposes of this Section 3.5, a 50% participation interest in
an Aircraft leasing investment by the Partnership and a Related Entity shall
include, in the case of two Similar Aircraft, the acquisition of one Similar
Aircraft by the Partnership and one Similar Aircraft by a Related Entity. As
used herein, a Similar Aircraft shall mean substantially similar aircraft leased
to the same lessee pursuant to substantially similar leases and acquired by the
Partnership or a Related Entity at a substantially Similar Aircraft Cost (the
difference not to exceed 5% of the lesser Aircraft Cost), all as determined by
the General Partner at the time of acquisition.
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AMENDMENT TO THE AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP OF AIRLEASE LTD.,
A CALIFORNIA LIMITED PARTNERSHIP
Section 9.4(A) of the Partnership Agreement is hereby amended to read in full as
follows:
(A) Except as otherwise provided herein, the General Partner shall, in
its sole discretion, determine whether to make any available election
under the Code. The General Partner shall, in the Partnership's 1988
tax year, make the election under Section 754 of the Code in accordance
with applicable regulations thereunder to cause the basis of
Partnership Assets to be adjusted for Federal income tax purposes as
provided by Sections 734 and 743 of the Code. In making Section 754
elections, the General Partner is authorized to make simplifying
assumptions for computational purposes, in its sole discretion. Such
election may also be made, in the General Partner's discretion, for the
reconstituted Partnership upon any termination of the Partnership
pursuant to Section 708 of the Code. The General Partner shall elect to
deduct expenses incurred in organizing the Partnership ratably over a
60-month period as provided in Section 709 of the Code.
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