Exhibit 10.14(a)
CONFIDENTIAL
AMENDMENT NUMBER 1 TO AMENDED
AND RESTATED LETTER AGREEMENT GCT-026/98
----------------------------------------
This Amendment Number 1 to Amended and Restated Letter Agreement GCT-026/98,
dated as of June 7, 2002 ("Amendment No. 1") relates to the Amended and Restated
Letter Agreement GCT-026/98 (the "Letter Agreement") between Embraer - Empresa
Brasileira de Aeronautica S.A. ("Embraer") and Republic Airways Holdings, Inc.
("Buyer") dated April 19, 2002, which concerns the Amended and Restated Purchase
Agreement GCT-025/98 (the "Purchase Agreement"), as amended from time to time
(collectively referred to herein as the "Agreement"). This Amendment No. 1 is
between Embraer and Buyer, collectively referred to herein as the "Parties".
This Amendment No. 1 sets forth further agreements between Embraer and Buyer
relative to the incorporation of 22 firm aircraft and 30 option aircraft to the
Purchase Agreement with certain specifics and exclusives conditions, as provided
in Amendment No. 1 to the Purchase Agreement, dated as of the date hereof.
This Amendment No. 1 constitutes an amendment and modification of the Letter
Agreement. All terms defined in the Agreement and not defined herein shall have
the meaning given in the Agreement when used herein, and in case of any conflict
between this Amendment No. 1 and the Agreement, the terms of this Amendment No.
1 shall control.
WHEREAS, in connection with the Parties' agreements as described above, the
Parties have agreed to modify the Letter Agreement as provided below;
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, Embraer and Buyer do hereby agree as follows:
1. LETTER AGREEMENT APPLIES TO DELTA AIRCRAFT: The terms of the Letter Agreement
shall apply to the Delta Aircraft except as otherwise provided in this Amendment
No. 1 to the Letter Agreement.
2. [*]
3. SPARE PARTS CREDIT: Article 2 of the Letter Agreement is hereby deleted and
replaced with the following:
"Embraer will provide Buyer a spare parts (except engines, engine related
parts and APU) and ground support equipment credit of [*] This spare parts
credit shall be made available to Buyer upon [*] If for any reason the
Purchase Agreement is partially terminated in relation to any Aircraft,
then Buyer shall pay [*] per each applicable terminated EMB-145 Aircraft
and/or [*] per each EMB-140 Aircraft and/or [*] per each EMB-135 Aircraft
for which such Spare Parts Credit for any reason has already been provided
to Buyer. Each Spare Part Credit shall only be made available to Buyer in
the event there is [*] If any such credit is not so made available to
Buyer because [*] , such credit shall be made
Page 1 of 4
------------
Certain portions of this exhibit have been omitted pursuant to a request for
confidential treatment under Rule 406 of the Securities Act of 1933. The
omitted materials have been filed separately with the Securities and Exchange
Commission.
*Confidential
CONFIDENTIAL
available [*]. Any portion of such credit which remains unused [*] shall
be deemed to have been waived by Buyer, and no further compensation shall
be due [*] for such Spare Parts Credit. Such Spare Parts Credit shall be
applied against [*]
4. FINANCING: Article 4 of the Letter Agreement shall not apply to the Delta
Aircraft. Embraer shall provide financing assistance for the Delta Aircraft
pursuant to the Finance Term Sheet attached hereto as Schedule "7" to the Letter
Agreement.
5. AIRCRAFT ESCALATION PRICE: Article 5 of the Letter Agreement shall not apply
to the Delta Aircraft. The following escalation limits shall apply to the Delta
Aircraft:
A. The Delta Aircraft Basic Prices are subject to Embraer's standard
escalation formula [*] .
B. The result of the Escalation Formula application to each Delta
Aircraft delivery is [*] The Delta Aircraft Purchase Price shall be
the result of the [*] times [*] of the Escalation Factor [*] .
However, in the event that [*] shall be fully [*] .
C. The conditions described in this Article 10 shall only be applicable
in the event the [*] In the event the [*] the Delta Aircraft
Purchase Price will be equal to the Delta Aircraft Basic Price [*]
In the event any Delta Aircraft shall be delivered after December 2007, the
Parties agree to, in addition to the Escalation Formula, enter into good faith
negotiations for the revision of the Aircraft Basic Prices for the Delta
Aircraft not yet delivered. Should the Parties not succeed in the negotiation
for revision of the relevant Basic Prices, then Embraer may terminate the
Purchase Agreement in regard to the Delta Aircraft not yet delivered. [*]
6. ADDITIONAL AIRCRAFT [*] : Article 7 of the Letter Agreement shall be deleted
and replaced with the following text:
"Embraer shall provide a [*] in accordance with the terms and conditions
specified in Schedules "4" and "5", respectively. These [*] shall apply to
[*]."
7. [*] : Article 8 of the Letter Agreement shall not apply to the Delta
Aircraft. However, Buyer may, at Buyer's option, [*] , provided that Buyer
informs Embraer by means of a written notice no later than the date which Buyer
confirms the exercise of its option to purchase [*] , according to Article 24 of
the Purchase Agreement, of its intention to exercise [*] . Upon [*] all relevant
provisions of the Purchase Agreement and Letter Agreement shall apply MUTATIS
MUTANDI.
8. [*] PAYMENTS: Article 9 of the Letter Agreement shall apply for all Aircraft,
except that Buyers obligations thereunder shall be limited as follows:
Page 2 of 4
-------------
*Confidential
CONFIDENTIAL
Notwithstanding anything to the contrary in the Purchase Agreement, Buyers
obligations to make [*] payment and deposits shall be [*] as provided in
this Section 8.
[*] Buyer shall make (by wire transfer) [*] payments in an amount of [*]
for each Aircraft with a Contractual Delivery Date on or before [*] , and
[*] for each Aircraft with a Contractual Delivery Date between [*] After
making such payments, Buyer shall not be obligated to make [*] until [*]
[*] Buyer shall make all additional [*] payments and all [*] and the
provisions of the Purchase Agreement. In order to compensate Embraer for
the [*] on the amount of each [*] payment and deposit that has been [*]
shall be made in accordance with the provisions of Article 9.3 of the
Letter Agreement, except that they shall be paid [*] .
9. OTHER AGREEMENTS: Article 10 of the Letter Agreement is hereby deleted and
replaced with the following:
"Any breach, default or failure to perform by Chautauqua or Buyer under
any other agreement between one or both of them and Embraer shall be a
breach of the Purchase Agreement. Any breach, default or failure to
perform by Buyer under the Purchase Agreement shall be a breach and event
of default by Buyer and Chautauqua under all other agreements between one
or both of them and Embraer.
10. [*].
11. MISCELLANEOUS: All other provisions of the Agreement which have not been
specifically amended or modified by this Amendment No. 1 shall remain valid in
full force and effect without any change.
Page 3 of 4
-------------
*Confidential
CONFIDENTIAL
IN WITNESS WHEREOF, Embraer and Buyer, by their duly authorized officers, have
entered into and executed this Amendment No. 1 to be effective as of the date
first written above.
EMBRAER - Empresa Brasileira de Republic Airways Holdings, Inc.
Aeronautica S.A.
By: By:
--------------------------- ------------------------------
Name: Name:
Title: Title:
By Date:
---------------------------
Name: Place:
Title:
Date:
Place:
Witness: Witness:
---------------------- -------------------------
Name: Name:
------------------------- ----------------------------
Page 4 of 4
CONFIDENTIAL
SCHEDULE "7"
FINANCING TERM SHEET
Pursuant to negotiations between Embraer - Empresa Brasileira de Aeronautica
S.A. ("Embraer"), Republic Airways Holdings, Inc. ("Buyer") and Delta Air Lines,
Inc. ("Delta"), Embraer is pleased to present this Financing Term Sheet which
describes the general terms and conditions of the financing assistance to be
offered [*] . (References to Buyer in this Financing Term Sheet shall be deemed
to include Chautauqua).
Embraer will use commercially reasonable efforts to obtain [*] financing for the
Delta Aircraft based on the following basic terms and conditions:
AIRCRAFT: The Delta Aircraft (i.e. 22 Firm Aircraft and 30 Option
Aircraft).
AIRCRAFT PRICE: The Purchase Prices for the Delta Aircraft.
[*]
FINANCING TRANSACTION: The Delta Aircraft Interim or permanent financing
assistance will be provided in the form of [*]
financing (the "[*] Financing") and will be provided by
Embraer [*] to the benefit of Buyer, which may require
the utilization of special purpose corporation(s) and/or
trust arrangements, and shall consist of following
financial main terms and conditions:
DEBT PROVIDER: [*] ;
FINANCED AMOUNT: Up to [*] of the Delta Aircraft Purchase Price, with
Buyer to pay no less than [*] itself;
DEBT TENOR: [*] years, payable in [*] and a maximum average [*]
DEBT RATE: [*] as such rate is adjusted on the [*] For reference
purposes only, [*] rate as at June 5, 2002 [*]
In the event that [*] obtain financing from [*] but in
an amount less than [*] of the aircraft purchase price,
Embraer agrees that it will provide or cause to be
provided from a third party [*] The interest rate for
such [*] shall be [*]
In the event that Embraer cannot obtain [*] Embraer
agrees to [*] Further, such [*] is expressly conditioned
upon Buyer's [*] provided that Buyer shall not be [*]
[*] are generally offering in the US market for similar
regional airlines at the time.
Embraer and Buyer agree to jointly work together [*]
Page 1 of 3
-------------
*Confidential
CONFIDENTIAL
Additionally, in the event Buyer arranges sub-debt or
market equity (including without limitation a single
investor lease) [*] Embraer may provide, [*] on terms
and conditions to be further discussed and agreed
between Buyer and Embraer. [*]
CONDITIONS PRECEDENT: (1) Absence of any material adverse change in the
business, operations or financial condition of Buyer as
proposed by the Buyer business plan as reflected in its
S1 filing. The parties specifically agree that the
following events in and of themselves shall not
constitute material adverse changes in the business,
operations or financial condition of Buyer (provided
that, for the avoidance of doubt, such events may
contribute to a material adverse change) : [*].
(2) Absence of litigation by or against Buyer, Delta or
any Buyer affiliate, which could be reasonably be
expected to have a material adverse effect upon the
operations of Buyer; provided that if Buyer continues to
make reasonable efforts to resolve the litigation
without a material adverse effect and such litigation is
resolved within ninety days (in any case, no later than
thirty days before the relevant closing), this condition
shall only [*].
(3) For the Option Aircraft, absence of any material
adverse change in the financial/lease markets negatively
impacting availability of, access to, or costs of
aircraft financing; and for all Aircraft, absence of a
disruption in the finance markets that results In banks
being permitted or required to close (provided that such
condition shall only [*] ).
(4) Buyer entering into a code-share agreement with
Delta for 22 firm Aircraft and such agreement remaining
in full force and effect. With respect to the financing
of any Option Aircraft, Buyer shall have entered into an
agreement with Delta pursuant to which such Option
Aircraft will be operated under such code share
agreement or an amendment or modification thereof.
(5) No changes or amendments to Section 1110 of the
United States Bankruptcy Code as currently legislated
and interpreted in a manner that would materially
adversely affect the financing parties in a United
States aircraft financing, and that has had a materially
adverse effect on the aircraft financing market;
provided that if such effect [*], this condition shall
[*] ends.
(6) Buyer shall cooperate with any financing party, or
any other participant in the financing structure, and
shall provide financial and other information reasonably
requested by such participants.
Page 2 of 3
-------------
*Confidential
CONFIDENTIAL
(7) There shall not be a monetary default by Buyer with
respect to the pertinent financing parties at the time
of financing.
(8) Buyer shall waive trial by jury in respect of any
claim based upon or arising out of financings and
resulting transactions.
(9) All payments to be made by the Buyer in favor of the
financing parties shall be free and clear of any taxes,
levies, duties or other deductions of whatever nature
including standard gross up provisions.
(10) All legal fees and disbursements, and out-of-pocket
expenses of Embraer, the financing parties, or any other
financing party associated with this transaction,
including but not limited to registration fees/expenses
that are customary in aircraft transactions, shall be
for the account of Buyer and shall be paid by it on
closing, provided that with respect to any Aircraft for
which Embraer arranges or provides Interim Financing and
permanent financing is subsequently arranged, in the
event the total amount of such fees, disbursements and
expenses incurred in connection with such Interim
Financing and such permanent financing [*] , Embraer
shall [*] .
Page 3 of 3
-------------
*Confidential
