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Exhibit 10.12
Amendment dated February 12, 2002 (the "Amendment") among REPUBLIC AIRWAYS
HOLDINGS INC., a Delaware Corporation ("Republic"); CHAUTAUQUA AIRLINES, INC. a
New York corporation (collectively with any assignee or designee, "CAI"); and
SOLITAIR CORP., a Delaware corporation ("Solitair") to Agreement dated as of
March 13, 2001 (the "Agreement") between CAI and Solitair.
W I T N E S S E T H
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WHEREAS, Solitair and Embraer - Empresa Brasileira de Aeronautica S.A.
("Embraer") have entered into an amendment (the "Embraer Amendment") to the
purchase agreement dated June 17, 1998, and associated letter agreement (the
"1998 Embraer Agreement"), as previously amended, relating to the modification
of the terms of the purchase by Solitair of EMB-145LR aircraft, comprised of the
firm Aircraft Nos. 40-45 together with the exercise of eight (8) option Aircraft
(Aircraft Nos. 46-53) (collectively, "Aircraft 40 through 53") and the remaining
twenty (20) Option Aircraft (the "Remaining Option Aircraft");
WHEREAS, the Embraer Amendment, with respect to each of Aircraft Nos.
40-53, and the Remaining Option Aircraft will provide Solitair the right to
elect to purchase EMB-140LR Aircraft in lieu of purchasing EMB-145LR Aircraft
(the "EMB-140LR Election");
WHEREAS, the Agreement provides for the sale or lease of Aircraft Nos.
6-45;
WHEREAS, Republic is negotiating an agreement (the "Assignment Agreement")
with Embraer and Solitair and has reached agreement in principal, subject to
definitive documentation, for (a) the assignment to Republic of Solitair's
rights with respect to the Remaining Option Aircraft, and (b) the grant by
Embraer to Republic of options to purchase an additional 17 Aircraft;
WHEREAS, Solitair, CAI and Republic wish to amend the Agreement to provide
for (a) the purchase by CAI from Solitair and the sale by Solitair to CAI of
Aircraft Nos. 46 through 53, and (b) pending finalization of the Assignment
Agreement, CAI's right to purchase from Solitair the Remaining Option Aircraft;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound, the parties agree as follows (subject to the execution and
effectiveness of the Embraer Amendment):
1) PURCHASE OF AIRCRAFT. CAI shall purchase from Solitair and Solitair shall
sell to CAI each of Aircraft Nos. 46 through 53. CAI shall have the right to
purchase from Solitair each of the Remaining Option Aircraft, by providing
written notice to Solitair of its election to purchase such Aircraft no later
that 1 business day prior to the date that Solitair is required to provide
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notice to Embraer of its exercise of its option to purchase each such
Remaining Option Aircraft.
The purchase of each of Aircraft Nos. 46 through 53 and each of the Remaining
Option Aircraft as to which CAI elects to exercise its right to purchase
(collectively, the "Sold Aircraft") shall occur on the date designated by
CAI, but not earlier than the actual delivery date of the respective Aircraft
from Embraer (the "Delivery Date") and not later than thirty (30) days after
the Delivery Date. The purchase price for each Sold Aircraft shall be the sum
of (a) $440,000 for each Sold Aircraft that is an ERJ140 or $500,000 for each
Sold Aircraft that is an ERJ 145 (the "Solitair Fee"), and (b) Solitair's
cost of acquisition, including, without limitation, all direct and indirect
costs and expenses relating thereto. In connection with the Solitair Fee for
each of the Sold Aircraft, CAI shall, at its discretion, issue Solitair a
subordinated promissory note in the amount of $440,000 or $500,000 as the
case may be (the "Subordinated Promissory Note"), in the form and pursuant to
the terms of the Promissory Note attached hereto as Annex A.
CAI will have the option to enter into a short term lease (the "Short Term
Lease") with respect to each of the Sold Aircraft from Solitair for the
period, not to exceed thirty days, commencing on the Delivery Date and ending
on the date CAI purchases the Aircraft, at a monthly lease rate of (a)
$119,680 for each of Aircraft Nos. 46 through 53 and each Remaining Option
Aircraft that is an ERJ 140, and (b) $136,000 for each Remaining Option
Aircraft that is an ERJ 145, in each case on terms and conditions otherwise
in accordance with previous Short Term Leases under the Agreement.
In connection with the Remaining Option Aircraft, CAI's rights shall at all
times be subject to Solitair's rights under the Embraer Agreement and the
Embraer Amendment, and in the event that Solitair's rights with respect to
any of such Aircraft lapse or terminate for any reason, CAI shall have no
further rights with respect to such Aircraft.
2) ASSIGNMENT OF BENEFITS AND WARRANTIES. With respect to each of the Sold
Aircraft, Solitair agrees to assign to CAI all assignable warranties and
benefits under the Embraer Agreement and the Embraer Amendment, subject to
any applicable terms, conditions and limitations with respect to the
assignment and/or transfer of such warranties and benefits.
3) ASSIGNMENT AGREEMENT. Upon the effective date of the Assignment Agreement,
Republic shall pay to Solitair the amount of $253,645.83 plus $104.17 for
each day from March 31, 2002 until such effective date.
4) PRIOR AGREEMENT. This Amendment supercedes the Agreement, with respect to the
Aircraft subject to this amendment. The Agreement shall be of no further
force and effect, except with respect to Aircraft prior to Aircraft No. 46,
as to which the Agreement shall remain in full force and effect.
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5. OTHER PROVISIONS.
(a) NOTICES. All notices required to be delivered under this
Agreement shall be in writing and shall be given by certified or
registered mail, postage prepaid, return receipt requested, or by
recognized overnight courier, such as Federal Express or Airborne Express,
or by facsimile, and shall be deemed to be given on the third business day
following the date of posting in a United States Post Office or one day
after delivery to the overnight courier or, in the case of facsimiles,
upon actual receipt, and shall be addressed to the parties as follows
(provided that either party may, by notice, designate a different address
or addresses for communications intended for it):
To CAI: Chautauqua Airlines Inc.
2500 South High School Road
Indianapolis, Indiana 46241
Attention: Bryan Bedford (fax 317-484-6060)
To Republic: Republic Airways Holdings Inc.
2500 South High School Road
Indianapolis, Indiana 46241
Attention: Bryan Bedford (fax 317-484-6060)
To Solitair: Solitair Corp.
C/o Wexford Capital LLC
411 West Putnam Avenue
Greenwich Connecticut 06830
Attention: Fred Simon, President (fax 203-862-7311)
with a copy to: Solitair Kapital AB
P.O. Box 5671, SE-114 86
Stockholm, Sweden
Attention: Managing Director (fax 011-46-8-611-2010)
(b) SUCCESSORS. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
and permitted assigns and except as otherwise expressly provided herein,
no other person shall have any right or obligation under this Agreement
except as specifically set forth herein.
(c) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York (without giving
effect to the principles of conflicts of law thereof) applicable to
contracts made and to be entirely performed therein.
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(d) JURISDICTION AND ARBITRATION. The parties agree that any dispute
relating to this Agreement shall be subject to mandatory binding
arbitration under the rules of the American Arbitration Association with
such arbitration to be conducted in New York City, New York.
(e) WAIVER AND AMENDMENT. Except as otherwise expressly provided
herein, no provision hereof may be waived, amended or otherwise modified
except by a written agreement signed by each of the parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed to
constitute a waiver of any other provision whether or not similar nor
shall any waiver constitute a continuing waiver.
(f) ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding between the parties hereto with respect to the subject
matter hereof and superseded all prior agreements and understandings
relating thereto other than this Agreement.
(g) HEADINGS. The headings of this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
CHAUTAUQUA AIRLINES INC. REPUBLIC AIRWAYS HOLDINGS INC.
By: /s/ Arthur Amron By: /s/ Arthur Amron
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Name: Arthur Amron Name: Arthur Amron
Title: Vice President and Title: Vice President and
Assistant Secretary Assistant Secretary
SOLITAIR CORP.
By: /s/ Douglas Lambert
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Name: Douglas Lambert
Title: Vice President
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ANNEX A
THIS SUBORDINATED PROMISSORY NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE
SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO THE SECURITIES LAWS OF ANY
STATE. ACCORDINGLY, THIS PROMISSORY NOTE MAY NOT BE SOLD, UNLESS EITHER
REGISTERED UNDER SUCH ACT AND SUCH APPLICABLE STATE LAWS OR UNLESS AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
SUBORDINATED PROMISSORY NOTE
Aircraft ______
$[440,000][$500,000] __________, 2002
FOR VALUE RECEIVED, Chautauqua Airlines, Inc., a New York corporation
(the "Company and "Borrower"), hereby jointly and severally unconditionally
promises to pay on demand to the order of Solitair Corp., a Delaware
corporation ("Lender"), at c/o Wexford Capital LLC, 411 West Putnam Avenue,
Greenwich, Connecticut 06830 or at such other place as the holder of this
Note may designate from time to time in writing, in lawful money of the
United States of America and in immediately available funds, the principal
amount of [four]hundred and forty thousand dollars ($440,000.00)]
[five hundred thousand dollars]($500,000)] or such lesser amount as may be
outstanding hereunder on the earlier of: (i) the date of Borrower's or
Borrower's parent company Initial Public Offering; or (ii) March 31, 2003
(the "Maturity Date"), together with interest (computed on the basis of a
360-day year of twelve 30-day months and compounded semiannually) (a) on the
unpaid balance thereof at the rate of 9% per annum from the date hereof, (b)
to the extent permitted by law, on any overdue payment (including any overdue
prepayment) of principal and any overdue payment of interest, payable as
aforesaid (or, at the option of the holder hereof, on demand), at a rate per
annum equal to 12%.
Payments of principal of and interest on this Note are to be made in
lawful money of the United States of America at the office of the Company or at
such other place as the Company shall have designated by written notice to the
holder of this Note.
The Company agrees, and the holder agrees, that the indebtedness evidenced
by this Note is subordinate in right of payment, to the extent and in the manner
provided in this paragraph, to the prior payment in full of all Senior Debt, and
that the subordination is for the benefit of the holders of Senior Debt. "Senior
Debt" means any indebtedness to Fleet Capital Corporation under the terms of the
Loan and Security Agreement dated December 9, 1998 as amended by Amendment No. 1
to Loan and Security Agreement dated July 27, 1999, Amendment No. 2 to Loan and
Security Agreement dated August 28, 1999, and Amendment No. 3 to Loan and
Security Agreement dated October 29, 2001 or as further amended pursuant to any
subsequent amendment. Upon any distribution to creditors of the Company in a
liquidation or dissolution of
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the Company or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or its property, (1) holders of
Senior Debt shall be entitled to receive payment in full in cash of the
principal of and interest (including interest accruing after the commencement of
any such proceeding) to the date of payment on the Senior Debt before the holder
shall be entitled to receive any payment of principal of or interest on this
Note; and (2) until the Senior Debt is paid in full in cash, any distribution to
which the holder would be entitled but for this paragraph shall be made to
holders of Senior Debt as their interests may appear. The Company may not pay
principal of or interest on this Note and may not acquire this Note for cash or
property other than capital stock of the Company if a default on Senior Debt
occurs and is continuing that permits holders of such Senior Debt to accelerate
its maturity, and if a distribution is made to the holder that because of this
paragraph should not have been made to it, the holder who receives the
distribution shall hold it in trust for holders of Senior Debt and pay it over
to them as their interests may appear. After all Senior Debt is paid in full and
until this Note is paid in full, the holder shall be subrogated to the rights of
holders of Senior Debt to receive distributions applicable to Senior Debt to the
extent that distributions otherwise payable to the holders have been applied to
the payment of Senior Debt. Nothing in this paragraph shall impair, as between
the Company and the holder, the obligation of the Company, which is absolute and
unconditional, to pay principal of and interest on this Note in accordance with
its terms.
The Company may prepay this Note, in whole or in part, at any time
together with interest accrued to the date of such prepayment. Upon any sale,
assignment, transfer or other disposition of any stock of Chautauqua Airlines,
Inc., or upon any issuance or sale by the Company or the Company's parent
company of any capital stock, the Company shall prepay principal and interest on
this Note in an amount equal to the cash proceeds of any such disposition,
issuance or sale, net of reasonable costs and expenses and net of any repayments
of indebtedness secured by a lien on any such stock of Chautauqua Airlines, Inc.
Demand, presentment, protest and notice of nonpayment and protest are
hereby waived by Borrowers.
This Note shall be interpreted, governed by, and construed in accordance
with, the laws of the State of New York.
In Witness Whereof, Borrower has caused this Note to be duly executed and
delivered on the date first above written.
CHAUTAUQUA AIRLINES, INC.
By:
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Name:
Title: