Exhibit 10.5(b)
EXECUTION VERSION
February 20, 2002
Xx. Xxxxx X. Xxxxxxx
President and CEO
Chautauqua Airlines, Inc.
Indianapolis Int'l Airport
Suite #160
0000 Xxxxx Xxxx Xxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Sent via Fax to (000) 000-0000
AIR SERVICES AGREEMENT, DATED AS OF JUNE 11, 2001
BY AND BETWEEN CHAUTAUQUA AIRLINES, INC.
("CHAUTAUQUA") AND AMR CORPORATION ("AMR")
Dear Xx. Xxxxxxx:
We refer to the agreement described above (the "Air Services Agreement").
(Unless otherwise defined in this letter, capitalized terms that we use below
have the meaning set forth in the Air Services Agreement.)
Chautauqua has informed AMR that Chautauqua wishes to take delivery on or
about February 20, 2002 of [a] Firm Approved Aircraft under a financing
arrangement, [*] The Firm Approved Aircraft referred to above (the "Specified
Aircraft") has serial number 145569. AMR consents, on the following terms, to
such delivery under such Alternative Financing arrangement.
1) Until such time as Chautauqua is able to close an Alternative Financing
arrangement with Banco Nacional de Desenvolvimento Economico e Social or
its affiliate Agencia Especial de Financimento Industrial - FINAME (either
being referred to hereafter as "BNDES"), Chautauqua will only enter into
an [*], and thereafter, Chautauqua will only enter into an [*] (including,
without limitation, a refinancing of [*] other than pursuant to a Lease
meeting the requirements of Section 7.03(c) of the Air Services Agreement)
with BNDES.
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* Confidential
2) Chautauqua acknowledges that AMR and AA intend to negotiate with BNDES
forms of leveraged lease documentation (the "AA/BNDES Form Lease") based
on existing aircraft loans by BNDES to AMR affiliates and acceptable to
AMR for submission to lessors (which may include Solitair Corp., an
affiliate of Chautauqua; Chautauqua or a subsidiary of Chautauqua (each a
"CAI Affiliate") as the equity participant) with respect to any Firm
Approved Aircraft financed by BNDES that are subsequently leased to AA or
an AMR affiliate (a "Permitted Assignee") pursuant to either the "put" or
"call" provisions of the Air Services Agreement. Any AA/BNDES Form Lease
shall be subject to the approval of the lessor under such leveraged lease.
Chautauqua and AMR intend to negotiate leveraged lease documentation based
on the AA/BNDES Form Lease and acceptable to AMR for lease to an AMR
affiliate with a CAI Affiliate as equity participant acting through a
trust or similar entity (such lease, a "Chautauqua Leasing Arrangement").
AMR and Chautauqua and their respective affiliates shall not have any
liability under this letter for any failure to reach agreement as to an
AA/BNDES Form Lease, as to a Chautauqua Leasing Arrangement, or as to any
Alternative Financing or other arrangement.
3) Until the date that (i) AMR and BNDES agree to the terms of an AA/BNDES
Form Lease, (ii) AMR and Chautauqua agree on the terms of a Chautauqua
Leasing Arrangement and, (iii) financing for a Specified Aircraft has been
put in place with BNDES that permits such Specified Aircraft to be leased
to a Permitted Assignee pursuant to an AA/BNDES Form Lease (and, if
applicable, under a Chautauqua Leasing Arrangement) upon exercise of any
put or call option referred to below, Chautauqua will not enter into any
[*]. If the conditions of the preceding sentence are satisfied, Chautauqua
may enter into an Alternative Financing of a Specified Aircraft on such
agreed terms without further approval by AMR of such financing (a
"Definitive Alternative Arrangement") for purposes of the Air Services
Agreement.
4) At the time of (a) a transfer to AMR or an affiliate of a leasehold
interest in a Specified Aircraft or (b) a lease to an AMR affiliate under
a Chautauqua Leasing Arrangement, in either case pursuant to [*]
(but otherwise free and clear of all liens, including liens permitted by
the Alternative Financing).
5) (a) At such time as Chautauqua enters into an [*]
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* Confidential
(b) Notwithstanding the provisions of Section 5(a) hereof, until such time
as Chautauqua enters into an Alternative Financing arrangement with
respect to the Aircraft, the provisions of Schedule E-3, Section J(2) of
the Air Services Agreement shall not apply to the Specified Aircraft, and
the limit on the [*].
6) AMR agrees that it may not [*] of the Air Services Agreement and
Chautauqua agrees that it may not [*] of the Air Services Agreement with
respect to the Specified Aircraft that is subject to an Alternative
Financing until such time, if any, that a Definitive Alternative
Financing or a Lease is entered into with respect to such aircraft.
7) Except as otherwise expressly provided herein, this letter does not limit
(a) any of AMR's [*] of the Air Services Agreement, which options will
remain in effect with respect to the Specified Aircraft, or (b) any of the
other rights or obligations of Chautauqua or AMR under the Air Services
Agreement.
8) This letter agreement does not apply to any Firm Approved Aircraft other
than the Specified Aircraft.
9) AMR agrees that the Specified Aircraft shall be placed into service under
the Air Services Agreement. AMR further acknowledges and agrees that
Chautauqua has the right under certain circumstances to return the
Specified Aircraft to Embraer. In the event Chautauqua exercises such
right, AMR agrees that Chautauqua shall have the further right to elect on
written notice to AMR that: (a) such Aircraft shall be [*], (b) such
Aircraft shall [*], (c) the Air Services Agreement [*], and (d) [*].
Except as modified hereby and by the letter of December 31, 2001, the Air
Services Agreement remains in effect. This letter agreement shall be governed by
the internal laws of Texas without reference to conflict of laws rules.
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This letter agreement may be executed in separate counterparts, each of which
when so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument. Execution may be
effected by delivery of facsimiles of signature pages (and the parties shall
follow such delivery by prompt delivery of originals of such pages). This letter
agreement may be executed in any number of counterparts (and each of the parties
hereto shall not be required to execute the same counterpart). Any counterpart
may be executed by facsimile signature and such facsimile signature shall be
deemed an original. Each counterpart of this letter agreement including a
signature page executed by each of the parties hereto shall be an original
counterpart of this letter agreement, but all of such counterparts together
shall constitute one instrument.
[Intentionally Blank. Continued on next page.]
If you are in agreement with the foregoing, please countersign a copy of
this letter agreement and return a copy to the parties set forth in the notice
provisions of the Air Services Agreement.
Very Truly Yours,
AMR CORPORATION
By: /s/ Xxxxxxx X. XxxXxxx
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Its: Corporate Secretary
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AGREED AND ACCEPTED:
CHAUTAUQUA AIRLINES, INC.
By: /s/ Xxxxx Xxxxxxx
---------------------------
Its: President and CEO
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cc: Wexford Capital, LLC, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000;
Attention: Xxxxxx Xxxxxx, President; Attention: Xxxxxx Xxxxx, General
Counsel; Fax # 000-000-0000
Xxx Xxxxx - American Eagle
Xxxx Xxxx - American Eagle
Xxxxx Xxxxxx - American Airlines
Xxxx Xxx - Xxxxxx & Xxxxx, Fax # 000-000-0000
Xxxx Xxxxx - Xxxxxx Xxxxxxx & Xxxx, Fax # 000-000-0000
Debevoise & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000;
Attn: Xxxxxx Xxxxxxx; Fax # 000-000-0000
ATTACHMENT TEXT OF EXHIBIT P
Note: input items marked with an asterisk (*) will be adjusted in the manner
specified. The figures included below are based on GECC indicative financing as
of November 7, 2001.
Purchase Price*: [*]
Closing Date*: November 23, 2001 (to be adjusted to reflect the actual
delivery date of the respective Firm Approved Aircraft).
5-yr Generic
US Swap Rate*: [*] (determined using Bloomberg page "IRSB18." To be
adjusted to reflect the rate in effect on the Closing
Date).
Equity After-Tax
Yield*: [*]
Composite
Tax Rate: 35%
Lender's
Debt Rate*: CIRR Rate (as adjusted for the rate in effect on date of
closing, which is [*] as of November __, 2001).
CIRR Rate: For any day, the Commercial Interest Reference Rate for
the U.S. dollar with respect to loans with a tenor
exceeding 17 semi-annual repayment periods applicable
for such day, as published for monthly periods by the
United States Export-Import Bank, at its official
website address under the heading "Commercial Interest
Reference Rate (CIRRS)."
Rent Structure: [*]
Average Monthly
Accounting Rent: [*] (to be determined using the Xxxxxx & Xxxxxxx
ABC Program using the input items set forth herein;
provided, however, that in no event shall the rent be
less than the Lender's debt service).
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* Confidential
Residual: [*] of Purchase Price
Early Buyout Date: [*] Anniversary of the Closing Date.
Early Buyout Price: [*]
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* Confidential
