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
March 12, 2007
Republic Airways Holdings, Inc.
8909 Purdue Road
Indianapolis, Indiana 46468
 
Chautauqua Airlines, Inc.
8909 Purdue Road
Indianapolis, Indiana 46468
 
Shuttle America Corp.
8909 Purdue Road
Indianapolis, Indiana 46468
 
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
 

 

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(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.
 
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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/ Edward Bastian  

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Name: Edward Bastian   Title: Executive VP & CFO 

Accepted and Agreed to as of
this 12th day of March, 2007:
 
 

Republic Airways Holdings, Inc.               /s/ Bryan Bedford      

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    Name: Bryan Bedford
Title: Chairman and CEO
     

 
 

Chautauqua Airlines, Inc.               /s/ Bryan Bedford      

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Name: Bryan Bedford
Title: Chairman and CEO

     

 
 

Shuttle America Corp.               /s/ Bryan Bedford      

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    Name: Bryan Bedford
Title: Chairman and CEO
     

 

 
 

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