DELTA AIR LINES, INC. LETTER AGREEMENT March 12, 2007
Exhibit
10.2
CONFIDENTIAL
TREATMENT
REQUESTED
PURSUANT TO RULE 24b-2
Certain
portions of this exhibit have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934.
The omitted materials have been filed separately with the Securities and
Exchange Commission.
DELTA
AIR
LINES, INC.
LETTER
AGREEMENT
Xxxxx
00,
0000
Xxxxxxxx
Airways Holdings, Inc.
0000
Xxxxxx Xxxx
Xxxxxxxxxxxx,
Xxxxxxx 00000
Chautauqua
Airlines, Inc.
0000
Xxxxxx Xxxx
Xxxxxxxxxxxx,
Xxxxxxx 00000
Shuttle
America Corp.
0000
Xxxxxx Xxxx
Xxxxxxxxxxxx,
Xxxxxxx 00000
Ladies
and Gentlemen:
Reference
is made to (i) that certain Delta Connection Agreement, dated as of June 7,
2002
(as amended from time to time, the “Chautauqua
Delta Connection Agreement”)
by and
among Delta Air Lines, Inc. (“Delta”),
Chautauqua Airlines, Inc. (“Chautauqua”)
and
Republic Airways Holdings, Inc. (“Republic”)
and
(ii) that certain Delta Connection Agreement, dated as of January 13, 2005
(the
“Shuttle
America Delta Connection Agreement”)
by and
among Delta, Shuttle America Corp. (as assignee of Republic Airline, Inc.)
(“Shuttle
America”)
and
Republic. Capitalized terms used and not otherwise defined herein shall have
the
meanings given thereto in the Chautauqua Delta Connection Agreement and the
Shuttle America Delta Connection Agreement, as applicable.
Reference
is also made to (x) the certain agreement dated as of June 7, 2002 between
Republic and Delta relating to the issuance of certain warrants (the
“Warrant
Master Agreement”)
and
(y) that certain Amended and Restated Registration Rights Agreement (the
“Registration
Rights Agreement”),
dated
as of June 7, 2002, by and among Republic, Delta and the “Wexford Investors” (as
defined therein).
In
connection with the execution and delivery of the Amendment Number Six dated
of
even date herewith to the Chautauqua Delta Connection Agreement (the
“Chautauqua Agreement”)
and
Amendment Number One dated of even date herewith to the Shuttle America Delta
Connection Agreement (the “Shuttle
America Amendment;”
together with the Chautauqua Amendment, the “Amendments”),
and
for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Delta, Republic, Chautauqua and Shuttle America agree
as
follows:
1. Warrant
Surrender; Termination of Related Agreements
Upon (a)
Republic and Chautauqua executing and entering into the Chautauqua Amendment
and
(b) Republic and Shuttle America executing and entering into the Shuttle America
Amendment, contemporaneously therewith, Delta shall surrender and forfeit to
Republic each of the IPO Warrant, the Private Placement Warrant, the Additional
Warrant, the Second Additional Warrant, the Third Additional Warrant and the
Fourth Additional Warrant, and upon such surrender (the “Warrant
Surrender”),
each
such warrant shall be null and void and of no further force and effect. The
warrants included in the Warrant Surrender constitute all warrants issued by
Republic to Delta as of the date hereof and Delta confirms that no such warrants
have heretofore been exercised in whole or in part. For the avoidance of doubt,
the number of warrants to be surrendered is 3,435,000. Simultaneously with
the
Warrant Surrender, (x) the Warrant Master Agreement shall be terminated, with
no
rights or liabilities assigned to either party, and of no further force and
effect and (y) Delta shall no longer be deemed a party to the Registration
Rights Agreement, and Delta shall have no rights or liabilities
thereunder.
2. Bankruptcy
Proceedings.
Delta
is a debtor and debtor-in-possession in a case filed pursuant to Chapter 11
of
the United States Bankruptcy Code (the “Bankruptcy
Code”)
in the
Bankruptcy Court (the “Delta
Case”),
which
is jointly administered by the Bankruptcy Court along with the Chapter 11 cases
of certain of Delta’s subsidiaries (together with Delta, the “Debtors”).
Delta, Republic, Chautauqua and Shuttle America (Republic, Chautauqua and
Shuttle America are collectively referred to herein as the “Companies”)
have
agreed that in connection with the execution of the Amendments, Delta will
grant
the Companies an agreed aggregate claim amount [*],
and the
parties agree that the value of such claim is Ninety-One Million and 00/100
Dollars ($91,000,000.00) (the “Claim”).
In
connection therewith, Delta and the Companies further agree as
follows:
| (a) |
The
Claim will be treated as an allowed general unsecured pre-petition
claim
in the Delta Case, and shall be deemed to satisfy in full all rights,
claims and causes of action under the Chautauqua Connection Agreement
or
the Shuttle America Connection Agreement. Neither the Debtors nor
any
other party in interest may contest the Claim, which shall not be
subject
to disallowance, reduction, offset or subordination. If a proof of
claim
has been filed or is subsequently filed by any of the Companies,
the
Companies agrees that Delta may object to any amount claimed in excess
of
the claim amount set forth above. Companies shall not contest any
such
objection or the Bankruptcy Court’s disallowance of the excess claim
amount. It is expressly understood and agreed by Companies that Companies
may seek satisfaction of the Claim only as set forth in this paragraph,
and that in no event will any persons who are employed or otherwise
associated with the Debtors be liable to any of the Companies in
any other
way whatsoever with respect to the Claim. Each other proof of claim
filed
by any of the Companies against any of the Debtors is hereby deemed
withdrawn, disallowed and expunged, including proof of claim numbers
5466
and 5467.
|
| (b) |
Upon
Delta’s assumption of the Chautauqua Delta Connection Agreement, Delta’s
obligation to (i) cure any existing pre-petition default or loss
to any of
the Companies under the Chautauqua Delta Connection Agreement, or
(ii)
take any other action required under the Bankruptcy Code as a condition
precedent to the assumption of contracts, shall each be deemed to
have
been satisfied in full.
|
| (c) | Upon Delta’s assumption of the Shuttle America Delta Connection Agreement, Delta’s obligation to (i) cure any existing pre-petition default or loss to any of the Companies under the Shuttle America Delta Connection Agreement, or (ii) take any other action required under the Bankruptcy Code as a condition precedent to the assumption of contracts, shall each be deemed to have been satisfied in full. |
|
*Confidential
|
| (d) |
Each
of the Companies shall affirmatively support, in a manner not inconsistent
with the Bankruptcy Code, including, without limitation, section
1125 of
the Bankruptcy Code, Delta’s restructuring activities and its chapter 11
plan of reorganization in connection with the implementation of the
Amendments. In addition, each of the Companies shall not, unless
otherwise
agreed to by Delta, assign, offer, sell, contract to sell, sell any
option
or contract to purchase, grant any option, right or warrant to purchase,
lend, pledge or hypothecate or otherwise transfer or dispose of,
directly
or indirectly, the Claim or any portion thereof (unless the applicable
Company retains in full the voting rights with respect to such claim)
prior to the earlier of (a) entry of an order confirming a plan in
the Delta Case, (b) dismissal of the Delta Case or
(c) conversion of the Delta Case to a case under Chapter
7.
|
|
(e) |
Each
of the Companies consents to Delta’s assignment of each of the Chautauqua
Delta Connection Agreement and the Shuttle America Delta Connection
Agreement (including any applicable licenses therein) to the reorganized
entity upon Delta’s assumption of the Chautauqua Delta Connection
Agreement and the Shuttle America Delta Connection, respectively.
|
| (f) |
The
Companies hereby represent and warrant that, as of the date hereof,
(i)
there are no unsatisfied post-petition defaults that would have to
be
cured under Section 365(b)(1)(A) and (B) of the Bankruptcy Code or
otherwise paid by any of the Debtors to any of the Companies and
(ii) the
Companies do not have any unsatisfied claims for post-petition
administrative expenses against any of the Debtors with respect to
the
Chautauqua Delta Connection Agreement or the Shuttle America Delta
Connection Agreement.
|
3. Conditions
to Effectiveness.
The
effectiveness of this Letter Agreement shall be subject to and conditioned
upon
the United States Bankruptcy Court for the Southern District of New York, which
is administering Delta’s case under Chapter 11 Case No. 05-17923 (ASH), (the
“Bankruptcy
Court”)
having
entered an order (collectively, the “Approval
Order”)
(A)
approving this Letter Agreement, the Chautauqua Amendment and the Shuttle
America Amendment, (B) providing for Delta’s assumption of the Shuttle America
Delta Connection Agreement (as amended by the Shuttle America Amendment) and
the
Chautauqua Delta Connection Agreement (as amended by the Chautauqua Amendment)
pursuant to Section 365 of the Bankruptcy Code, and (C) authorizing Delta to
perform its obligations and exercise its rights under the Chautauqua Amendment
and the Shuttle America Amendment and to execute and deliver the other
instruments and documents contemplated thereby and to consummate the
transactions contemplated thereby. Any motion for rehearing or reconsideration
of the Approval Order shall have been denied. If the Approval Order shall have
been appealed, either (i) no stay of the Approval Order shall be in effect
or
(ii) if such a stay has been granted by a court of competent jurisdiction,
then
(x) the stay shall have been dissolved or (y) a final order of a court having
jurisdiction to hear such appeal shall have affirmed the Approval Order and
the
time allowed to appeal from such affirmance or to seek review or rehearing
thereof shall have expired and no further hearing, appeal or petition for
certiorari can be taken or granted. Delta shall use its commercially reasonable
efforts to obtain an Approval Order on a prompt basis after the parties have
executed each of the Amendments and this Letter Agreement, an in connection
therewith will file an appropriate motion with the Bankruptcy Court by no later
than March 15, 2007.
4. Counterparts;
Assignment.
This
Letter Agreement may be executed in counterparts, and all such counterparts
taken together shall constitute one and the same agreement and shall bind and
inure to the benefit of Delta, Republic, Chautauqua and Shuttle America and
their respective successors and assigns
5. Governing
Law.
This
Letter Agreement shall be governed by the laws of the State of New York without
regard to conflict of laws principles.
[Remainder
of page intentionally left blank]
|
|
Please
acknowledge your agreement with the foregoing provisions of this Letter
Agreement by signing in the space provided below.
| Very truly yours, | ||
| DELTA AIR LINES, INC. | ||
| |
|
|
| By: /s/ Xxxxxx Xxxxxxx | ||
|
Name: Xxxxxx Xxxxxxx |
||
| Title: Executive VP & CFO | ||
this
12th
day of
March, 2007:
| Republic Airways Holdings, Inc. | |||
| /s/ Xxxxx Xxxxxxx | |||
|
|
|||
| Name:
Xxxxx
Xxxxxxx Title: Chairman and CEO |
| Chautauqua Airlines, Inc. | |||
| /s/ Xxxxx Xxxxxxx | |||
|
|
|||
|
Name:
Xxxxx Xxxxxxx
Title:
Chairman and CEO
|
| Shuttle America Corp. | |||
| /s/ Xxxxx Xxxxxxx | |||
|
|
|||
| Name:
Xxxxx Xxxxxxx Title: Chairman and CEO |
