Exhibit 10.7

 

CSC TRANSPORT IV, INC.

8000 Republic Airport, Hangar 5

Farmingdale, New York 11797

 

 

March 15, 2005

 

Sterling Aviation LLC

340 Crossways Drive

Woodbury, New York 11797

 

Re:  Interchange Agreement

 

Gentlemen:

 

This letter sets forth our mutual understandings regarding the Interchange
Agreement (as amended, the “Agreement”) dated as of March 1, 2002 between CSC
Transport IV, Inc. (“CSC”) and Sterling Aviation LLC (“Counterparty”).
Capitalized terms used but not defined in this letter agreement have the same
meanings as in the Agreement.

 

WHEREAS, as provided herein, the parties have agreed to extend the Term of the
Agreement beyond its scheduled expiration date on December 14, 2004;

 

WHEREAS, through December 14, 2004, CSC has used substantially more hours
(“Excess Hours”) on the Counterparty Aircraft than Counterparty has used on the
CSC Aircraft;

 

WHEREAS, CSC has previously paid Counterparty for the Excess Hours incurred
prior to calendar year 2004 and would now be required to pay Counterparty for
the Excess Hours incurred in 2004, in each case at rates calculated in
accordance with the Agreement and applicable Federal Aviation Regulations;

 

WHEREAS, in order to induce CSC to extend the Term of the Agreement on the terms
hereof, Counterparty has agreed to (i) refund to CSC the $375,173 net amount
paid by CSC as the Reconciliation Amount for Excess Hours incurred prior to
2004, (ii) waive CSC’s obligation to pay Counterparty the $370,025 that is
currently due to Counterparty as the Reconciliation Amount for 2004, and
(iii) significantly reduce the number of Excess Hours that CSC would owe to
Counterparty under the Agreement after such refund by 40.1 hours;

 

WHEREAS, the terms hereof are consistent with the intent of the Agreement to
allow the parties to make their respective aircraft available to one another on
an hour-for-hour basis and to pay for such hours in kind (rather than in cash);
and

 

WHEREAS, it is in the best interests of CSC to extend the Agreement on the terms
hereof;

 

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NOW, THEREFORE, CSC and Counterparty hereby agree as follows:

 

1.                                       Counterparty shall promptly refund to
CSC $375,173, which is the net Reconciliation Amount paid by CSC to Counterparty
for 2002 and 2003. CSC shall have no obligation to pay Counterparty the $370,025
Reconciliation Amount that would, but for this letter agreement, have been
payable by CSC as the Reconciliation Amount for 2004.

 

2.                                       As of the effective date of this letter
agreement, Counterparty no longer operates the Counterparty Aircraft. As a
result, and in view of the significant number of Excess Hours owing by CSC to
Counterparty, Counterparty shall no longer have any obligation to CSC to lease
the Counterparty Aircraft to CSC pursuant to the Agreement.

 

3.                                       CSC shall continue to make the CSC
Aircraft available to Counterparty in accordance with the Agreement until the
expiration of the Term (as extended pursuant to Section 4 below). Counterparty
acknowledges and agrees that CSC may also make available, in lieu of the CSC
Aircraft, the Gulfstream GIV-SP aircraft, s/n 1230, previously operated by
Counterparty as the Counterparty Aircraft under the Agreement. The parties
hereby agree that the number of Excess Hours available as of the effective date
of this letter agreement shall be reduced to 273.1 hours.

 

4.                                       Unless sooner terminated in accordance
with its terms, the parties hereby agree that the Term of the Agreement shall
continue in full force and effect until the date earliest to occur on which
(i) CSC has provided all of the remaining Excess Hours to Counterparty in
accordance with the Agreement, (ii) either party, in its respective sole
discretion, terminates the Agreement on not less than five business days written
notice to the other, or (iii) CSC no longer owns or operates a Gulfstream GV or
Gulfstream GIV-SP aircraft.

 

5.                                       As required by Section 14 of the
Agreement (as modified by this letter agreement), upon any termination of the
Agreement, CSC shall pay to Counterparty the Reconciliation Amount for any then
remaining Excess Hours at $2,729 per hour. CSC shall have no obligation to make
any payments to Counterparty in respect of Excess Hours except as provided
herein.

 

6.                                       As required by Section 2(c) of the
Agreement, the aggregate Expense Differential due from Counterparty to CSC for
2004 is $15,518.90 ($311/hour Expense Differential x 49.9 exchanged hours).
Counterparty agrees to pay such amount to CSC promptly after execution of this
letter agreement. Counterparty also agrees, to the extent CSC continues to
satisfy the Excess Hours through use by Counterparty of the CSC Aircraft (as
opposed to the Gulfstream GIV-SP), to reimburse CSC annually for the additional
incurred Expense Differential at $311 per such hour.

 

7                                          This letter agreement shall become
effective as of December 14, 2004, subject to the prior approval of the
independent directors of Cablevision Systems Corporation.

 

(signature page follows)

 

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If the foregoing terms accurately reflect your understanding, please so indicate
by signing in the space provided below.

 

 

 

Sincerely yours,

 

 

 

 

 

CSC TRANSPORT IV, INC.

 

 

 

 

 

By:

/s/ Thomas M. Rutledge

 

 

 

Name:

Thomas M. Rutledge

 

 

 

Title:

Chief Operating Officer

 

 

 

Date:

May 2, 2005

 

 

 

 

 

 

 

Agreed to and accepted effective
as of the date set forth above:

 

 

 

STERLING AVIATION, LLC

 

 

 

 

 

By:

/s/ William Frewin, Jr

 

 

 

Name:

William Frewin, Jr.

 

 

 

Title:

Manager

 

 

 

Date:

March 15, 2005

 

 

 

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