MODIFICATION OF CONFIDENTIAL SETTLEMENT AGREEMENT
MODIFICATION
OF
This
Modification of Confidential Settlement Agreement (this “Modification”) is dated
as of the ____ day of September, 2004, by and between PLM WORLDWIDE LEASING
CORP. (“PLM”), a California corporation, and VARIG S.A. (VIACAO AEREA
RIO-GRANDENSE) also known as Varig Brazilian Airlines (“Varig”), a Brazilian
corporation. PLM and Varig are collectively referred to herein as the
“Parties.”
W
I T N E S S E T H
WHEREAS,
PLM as
owner and lessor, and Varig, as lessee, entered into an aircraft lease agreement
(GF-VII) dated September 10, 1996 covering one Boeing Model 737-200 Aircraft
21007/PP-VML equipped with two ▇▇▇▇▇ and ▇▇▇▇▇▇▇ Model JT8D-17A Engines. PLM and
Varig subsequently entered into a written Amendment of this Lease on or about
September 30, 1999; and
WHEREAS,
PLM as
owner and lessor, and Varig, as lessee, entered into an aircraft lease agreement
(IF-I) dated September 10, 1996 covering four Boeing Model 737-200 Aircraft
21005/PP-VMJ, 21000/PP-VME, 21017/PP-CJT, 21012/PP-CJN, each equipped with two
▇▇▇▇▇ and Whitney Model JT8D-17A Engines. PLM and Varig subsequently entered
into a written Amendment of this Lease on or about September 30, 1999;
and
WHEREAS,
PLM as
owner and lessor, and Varig, as lessee, entered into an aircraft lease agreement
(GF-V) dated September 10, 1996 covering three Boeing Model 737-200 Aircraft
21003/PP-VMH, 21008/PP-VMM, 21009/PP-VMN, each equipped with two ▇▇▇▇▇ and
▇▇▇▇▇▇▇ Model JT8D-17A Engines. PLM and Varig subsequently entered into a
written Amendment of this Lease on or about September 30, 1999. (The three
Aircraft Leases and the Amendments thereto are referred to collectively herein
as the “Leases” or the “Aircraft Leases);” and
WHEREAS,
PLM sued
Varig to recover sums owed under the above-described Leases, Case No. 02-06116
CA 21 in the Circuit Court of the 11th Judicial
Circuit, in and for Miami-Dade County, Florida (the “Lawsuit”); and
WHEREAS, PLM and
Varig entered into that certain Confidential Settlement Agreement dated as of
October 11, 2002 (the “Settlement Agreement”); and
WHEREAS,
Varig has
paid $8,859,103.53 to PLM under the Settlement Agreement, and still owes PLM
$403,396.47 plus interest under the Settlement Agreement; and
WHEREAS,
PLM is
currently holding Lease Security Deposits in the amount of $521,993.28 and there
is approximately $472,203.79 (including interest accrued through September 1,
2004) in Escrowed Funds as of this date (collectively referred to herein as the
“Varig Deposits”); and
WHEREAS, Varig
missed the March, 2003 payment in the amount of $406,358.75 due under the
Settlement Agreement (the “Missed Payment”); and
WHEREAS, Varig
has now returned to PLM six of the seven aircraft that were in its possession as
of the date of execution of the Settlement Agreement, to wit: 21000/PP-VME;
21009/PP-VMN; 21017/PP-CJT; 21007/PP-VML; 21008/PP-VMM; and 21005/PP-VMJ
(collectively, the “Returned Aircraft”); and
WHEREAS, PLM
wishes to sell to Varig, and Varig wishes to buy, Boeing Model 737-200 Aircraft
21003/PP-VMH (“VMH”); and
WHEREAS,
PLM and
Varig wish to modify the Settlement Agreement to reflect the above changes in
situation, and to memorialize certain new undertakings of the
Parties.
NOW,
THEREFORE, in
consideration of the foregoing, the mutual covenants and considerations set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as
follows:
1. Recitals. The
above Recitals are true and correct and are incorporated herein.
2. Defined
Terms. The
defined terms and abbreviations used in the Leases and the Settlement Agreement
shall apply in this Modification as well.
3. Amounts
due by VARIG to PLM.
A. The
parties hereby agree that as of the date of this Modification, Varig owes PLM
additional monies for aircraft rentals, return adjustments on the Returned
Aircraft, the Missed Payment, and the purchase of Aircraft 21003/PP-VMH. The
total amount due by Varig to PLM for these items is $3,918,159.90, plus 5%
interest (the “Modification Balance”). In addition to any discounts provided for
under the Settlement Agreement, Varig shall receive a $300,000.00 discount for
timely payment of all amounts due under this Modification and the Settlement
Agreement. Varig shall pay the Modification Balance as set forth in paragraph 4
below.
4. Varig’s
Payment of the Modification Balance. Varig
shall pay the Modification Balance in equal, consecutive, monthly installments
of $406,358.75, due on the 10th day of each month, commencing on October 10,
2004. The last installment of $406,358.75 shall be due on April 10, 2005. On May
10, 2005 PLM shall apply any Varig Deposits then held and return any excess
funds to Varig on the same date. PLM shall apply all payments first to past due
rentals under the Leases, then to any other rentals, and then to any other
payment obligation under this Modification, the Settlement Agreement or the
Leases.
5. Purchase
and Sale of Boeing Model 737-200 Aircraft 21003/PP-VMH. PLM
agrees to sell to Varig, and Varig agrees to buy, VMH. VMH is being sold
“AS
IS, WHERE IS”, free
and clear of all liens and encumbrances of any kind created by or through PLM.
Varig has had opportunity to inspect VMH and has satisfied itself as to every
aspect of the condition of VMH. Varig acknowledges that since delivery of VMH by
PLM to Varig under the applicable Lease in 1996, Varig has been the sole person
in possession of VMH, and has maintained operational and maintenance control
over VMH. Closing shall take place within 90 days of the date of this
Modification, and the parties shall execute a separate Purchase and Sale
Agreement and closing documents.
6. Escrowed
Funds. The
last sentence of paragraph 5C of the Settlement Agreement is hereby amended to
read as follows:
“The
Escrowed Monies shall be applied toward payment of the last payments due on the
Modification Balance, and may be released from escrow as soon as the due date
for these payments arrives. The Parties hereby direct the Escrow Agent to
release said funds upon request from PLM, without further notice to the
Parties.”
7. Default. In the
event that Varig defaults on any of its obligations hereunder, or on those
obligations set forth in the Settlement Agreement or in the Leases, PLM shall
have the following remedies, which may be pursued either individually or
cumulatively in any combination thereof:
A. In the
event that Varig defaults on any of its payment obligations to PLM on the
Modification Balance, or on its obligation to timely purchase VMH, PLM shall be
entitled to obtain a Final Judgment in the Lawsuit in the amount of
$3,918,159.90, less any payments made on the Modification Balance. The parties
agree that PLM may obtain this Final Judgment by following the procedures, and
pursuant to the provisions, set forth in paragraph 7A of the Settlement
Agreement;
B. In the
event that Varig fails to timely close on the VMH sale, such failure shall
constitute a default under this Modification, the Settlement Agreement and the
Leases, and PLM shall be entitled to all default remedies thereunder;
C. Any other
remedies available under the Settlement Agreement ;
D. Any other
remedies available under the Leases; and/or
E. Any other
remedies available under either Florida or Brazilian law.
In the
event of a default, Varig shall not be entitled to the $300,000.00 discount for
timely payment, and shall also lose the discount provided in the Settlement
Agreement. Any default under this Modification shall also constitute a default
under the Settlement Agreement and the Leases. Any
default under the Leases or the Settlement Agreement, except those defaults
waived by PLM accordance with the Settlement Agreement or this Modification,
shall constitute a default under this Modification as well.
8. Counterparts. This
Modification may be executed in several counterparts, each of which shall be
deemed an original, and the counterparts shall together constitute one and the
same agreement, notwithstanding that all parties are not signatory to the
original or the same counterpart.
9. Florida
Law.
Notwithstanding any contrary provisions contained within the Leases or the
Settlement Agreement, this Modification shall be governed by and construed in
accordance with laws of the State of Florida and may be enforced in any court in
Miami-Dade County, Florida or in any court in Brazil.
10. Effectiveness
Of The Leases and the Settlement Agreement. Except
as specifically modified in this Modification, the Leases and the Settlement
Agreement shall remain in full force and effect. In the event of a conflict
between any term of the Leases, the Settlement Agreement, or this Modification,
the Modification terms shall be controlling.
11. Integration. As of
the date hereof, the Leases as amended by the Settlement Agreement, and as
further amended by this Modification and any attachments to it, contain the
entire agreement between the parties, and the terms of the Leases, as amended by
the Settlement Agreement and as further amended by this Modification, are
contractual and not a mere recital. The Parties agree that all prior
negotiations and understandings between the parties have been merged into the
Leases, as amended by the Settlement Agreement and as further amended by this
Modification, and may not be modified or changed, except by a further writing
signed by a duly authorized representative of each party.
12. Alterations
to Modification. The
Parties mutually represent and warrant each unto the other that this
Modification may not be modified or amended in any respect whatsoever, except by
a writing signed by the party against whom enforcement is sought.
13. Binding
Effect. This
Modification shall be binding upon the Parties, and their heirs, successors and
assigns.
14. Waiver. No
waiver of any provisions of this Modification shall be valid unless in writing
and signed by the party against whom charged.
WE
HEREBY AGREE to each
of the foregoing terms.
PLM
WORLDWIDE LEASING CORP. Witnesses
By:___________________________ ________________________________
Title__________________________ ________________________________
VARIG,
S.A. Witnesses
By:___________________________ ________________________________
Title__________________________ ________________________________