- 4 -
experience in the leasing and financing of fleets of aircraft.
CATCO and American Airlines (American) agreed that CATCO would
purchase from American 36 Boeing Model 727-023 aircraft, each
with 3 Pratt & Whitney JT8D-7B turbofan engines (36 aircraft),
and executed a letter of intent, dated April 6, 1990, and an
aircraft purchase agreement, dated June 8, 1990. The purchase
price per aircraft was $733,333.33, and the aggregate purchase
price was $26,400,000. At the time of the agreement, the fair
market value of an average Boeing 727-023 was $2 million, and the
cost of a "D" check, a very extensive routine maintenance check,
was $1.2 million.
CATCO executed a secured promissory note, dated June 27,
1990, with SPELI for the entire purchase price. The promissory
note provided for repayment of the loan, with interest at a rate
of 12 percent per annum, in 16 installments due on the following
dates:
Due Dates Principal Payment
9/1/92 $733,333.33
10/1/92 733,333.33
1/1/93 1,466,666.67
2/1/93 1,466,666.67
3/1/93 1,466,666.67
8/1/93 1,466,666.67
9/1/93 2,933,333.32
10/1/93 1,466,666.67
11/1/93 1,466,666.67
1/1/94 1,466,666.67
2/1/94 733,333.33
3/1/94 1,466,666.67
9/1/94 2,199,999.99
10/1/94 2,933,333.34
11/1/94 2,933,333.32
1/1/95 1,466,666.68
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