EXHIBIT 10.31(a)
CONFIDENTIAL TREATMENT
REQUESTED PURSUANT TO RULE 406
CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT OF 1933. THE OMITTED
MATERIALS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
Amendment Number One
to
Delta Connection
Agreement
This Amendment Number One (this "Amendment"), dated and effective the 7th
day of February, 2003, to the Delta Connection Agreement dated and effective
June 7, 2002 (the "Agreement"), is among Delta Air Lines, Inc., 0000 Xxxxx
Xxxxxxxxx, Xxxxxxx, Xxxxxxx 00000 ("Delta"), Chautauqua Airlines, Inc.
("Chautauqua" or "Operator"), 0000 X. Xxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxxx,
Xxxxxxx 00000 and Republic Airways Holdings, Inc. ("Republic"), 0000 X. Xxxx
Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000.
WHEREAS, Delta, Chautauqua and Republic are parties to the Agreement; and
WHEREAS, the parties desire to amend the Agreement to add an additional
twelve (12) Embraer ERJ 145 aircraft to the Aircraft to be operated by
Chautauqua pursuant to the terms of the Agreement; and
NOW, THEREFORE, for and in consideration of the mutual undertakings set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Delta, Operator and Republic,
intending to be legally bound, hereby agree as follows:
1. DEFINED TERMS. All terms capitalized used, but not defined, herein shall
have the meaning ascribed to such terms in the Agreement.
2. ADDITION OF AIRCRAFT.
A. Pursuant to Article 1(A) of the Agreement, the twelve (12) Embraer
ERJ 145 aircraft set forth on APPENDIX 1 attached hereto (the "First
Additional Aircraft") shall be included as "Aircraft" under the
terms of the Agreement. EXHIBIT A of the Agreement is hereby deleted
in its entirety and replaced with the new EXHIBIT A attached hereto
as APPENDIX 2.
B. For purposes of the Agreement, the First Additional Aircraft shall
no longer be deemed Committed Aircraft, Option Aircraft,
Repositioned Aircraft or Excluded Aircraft.
C. The First Additional Aircraft shall be delivered to Delta no later
than the respective dates set forth on the new EXHIBIT A. Chautauqua
and Republic, jointly and
severally, represent and warrant to Delta that the First Additional
Aircraft have been maintained in accordance with Operator's FAA
approved maintenance program, and with the exception of the need to
repaint and redecorate such aircraft in Delta Connection livery,
scheduled C-checks and customary maintenance requirements, the First
Additional Aircraft are fully operable, are able to begin operating
under the terms of the Agreement as amended, and are not subject to
any unusual or extraordinary repair or maintenance requirements.
D. Each of the First Additional Aircraft shall be appointed in the
Delta Connection Livery upon delivery, and Chautauqua shall be
responsible for all costs and expenses associated with modifying the
First Additional Aircraft to such Livery.
E. Delta has reviewed and approved the terms of the respective leases
for the First Additional Aircraft and acknowledges the prepaid rent
balance as of December 31, 2002 in the amount set forth for each
First Additional Aircraft on APPENDIX 1.
3. COMPENSATION. Delta shall compensate Chautauqua for operating the First
Additional Aircraft pursuant to the terms and conditions of the Agreement,
with the following exceptions:
(i) The parties acknowledge and agree that the Base Rate costs
shall be based upon the model attached hereto as EXHIBIT B.
EXHIBIT B of the Agreement is hereby deleted in its entirety
and replaced with the new EXHIBIT B attached hereto as
APPENDIX 3.
(ii) the parties acknowledge and agree that the aircraft rent
expense for each of the First Additional Aircraft shall be
deemed to be an average of $ [ * ] per month. Xxxx-Up of the
aircraft rent expense shall be capped at a monthly rate of $
[ * ]. The parties further acknowledge and agree that Delta
shall not be responsible for reimbursing Operator for any
such aircraft rent expense until the actual in service date
for each First Additional Aircraft.
(iii) the parties acknowledge and agree that some or all of the
First Additional Aircraft will require "C-checks" on their
respective airframe. In such event, it is understood and
agreed that Delta shall only be responsible for reimbursing
Chautauqua a pro-rata portion of the total cost of such
C-checks based on the number of flight hours such First
Additional Aircraft are operated by Chautauqua for Delta as
compared to the total flight hours of operation since the
last C-check of the respective aircraft. The parties
estimate that for 2003, Delta's pro-rata portion of the
total C-check expense will be approximately $ [* ].
(iv) the parties acknowledge and agree that engine maintenance
costs for each of the First Additional Aircraft shall be
incurred pursuant to that certain engine maintenance
agreement by and between Chautauqua and Rolls Royce attached
hereto as APPENDIX 4. The parties estimate that the
estimated engine
---------
* Confidential
2
maintenance rates will be as follows: Base engine rate -
approximately $ [ * ] per engine flight hour; LRP rate-
approximately $ [ * ] per engine flight hour; minor FOD
coverage - approximately $ [ * ] per EFH; LLP rate -
approximately $ [ * ] per EFH. The maintenance rates are at
2002 economics and are subject to reasonable escalation and
retroactive adjustment for the actual rates based on the
actual operations of the aircraft.
4. WARRANT. Pursuant to Article 19(D) of the Agreement, simultaneously with the
execution of this Amendment, Republic shall issue to Delta a warrant to
purchase 720,000 shares of Republic Common Stock in the form attached hereto
as APPENDIX 5 (the "Additional Warrant").
5. MISCELLANEOUS.
A. This Amendment, together with the Appendices attached hereto, and the
Additional Warrant, constitute the entire understanding of the parties
with respect to the subject matter hereof, and any other prior or
contemporaneous agreements, whether written or oral, are expressly
superseded hereby.
B. The Amendment may be executed in any number of counterparts, each of
which shall be deemed an original and all of which, taken together,
shall constitute one and the same instrument.
C. Except as specifically stated herein, all other terms and conditions of
the Agreement shall remain in full force and effect.
---------
* Confidential
3
IN WITNESS WHEREOF, the parties have executed this Amendment by their
undersigned duly authorized representatives:
Republic Airways Holdings, Inc. Delta Air Lines, Inc.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxx Xxxxxxxx
------------------------------- -----------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxx Xxxxxxxx
----------------------------- ---------------------------
Title: President and CEO Title: President and CEO, Delta
---------------------------- Connection, Inc.
----------------------------
Chautauqua Airlines, Inc.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxx
-----------------------------
Title: President and CEO
----------------------------
4
APPENDIX 1
FIRST ADDITIONAL AIRCRAFT
PRE-PAID
SERIAL RENT AS OF DATE OF
AIRCRAFT NUMBER 12-31-02 MANUFACTURE
--------------------------------------------
N269SK 145293 [ * ] 07/12/00
N270SK 145304 [ * ] 08/16/00
N271SK 145305 [ * ] 08/28/00
N272SK 145306 [ * ] 09/04/00
N273SK 145331 [ * ] 10/17/00
N274SK 145344 [ * ] 11/16/00
N276SK 145348 [ * ] 11/28/00
N278SK 145370 [ * ] 01/09/00
N290SK 145474 [ * ] 07/20/01
N292SK 145488 [ * ] 08/16/01
N294SK 145497 [ * ] 08/28/01
N296SK 145514 [ * ] 10/25/01
----------
* Confidential
5
APPENDIX 2
NEW EXHIBIT A
EXHIBIT A
DELTA AIR LINES, INC.
FIRM AIRCRAFT DELIVERY SCHEDULE
Aircraft Delivery Date of:
Number Model Delivery In-Service
-------- -------- --------- ----------
DL-1 145 Oct-02 1-Nov-02
DL-2 145 Oct-02 1-Nov-02
DL-3 135 Xxx-00 0-Xxx-00
XX-0 000 Xxx-00 1-Dec-02
DL-5 145 Dec-02 1-Jan-03
DL-6 135 Dec-02 1-Jan-03
DL-7 145 Jan-03 1-Feb-03
DL-8 135 Jan-03 1-Feb-03
DL-9 135 Feb-03 1-Mar-03
DL-10 145 Feb-03 1-Mar-03
DL-11 135 Xxx-00 0-Xxx-00
XX-00 000 Xxx-00 1-Apr-03
DL-13 135 Apr-03 1-May-03
DL-14 135 Apr-03 1-may-03
DL-15 135 May-03 1-Jun-03
DL-16 135 May-03 1-Jun-03
DL-17 135 Jun-03 1-Jul-03
DL-18 135 Jun-03 1-Jul-03
DL-19 135 Jul-03 1-Aug-03
DL-20 135 Jul-03 1-Aug-03
DL-21 135 Aug-03 1-Sep-03
DL-22 135 Sep-03 1-Oct-03
DL-23 145 1-Apr-03 9-Apr-03
DL-24 145 6-Apr-03 22-Apr-03
DL-25 145 6-Apr-03 23-Apr-03
DL-26 145 6-Apr-03 4-May-03
DL-27 145 1-May-03 22-May-03
DL-28 145 1-May-03 22-May-03
DL-29 145 15-May-03 9-Jun-03
DL-30 145 15-May-03 9-Jun-03
6
DL-31 145 1-Jun-03 14-Jun-03
DL-32 145 1-Jun-03 23-Jun-03
DL-33 145 15-Jun-03 23-Jun-03
DL-34 145 15-Jun-03 26-Jun-03
7
APPENDIX 3
[ * ]
---------
* Confidential
8
APPENDIX 4
[ * ]
----------
* Confidential
9
APPENDIX 5
ADDITIONAL WARRANT
[See Exhibit 10.28(a)]
10
