-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OxxWPrrJ+ncAYeNe+lL4i5EPbYF8NL96yncE5q8gWGnUJpHVqMoiLvtkRYvU5GD+ yOcxDiGuHb2HYVp8UAbjMQ== 0000897069-05-001507.txt : 20050621 0000897069-05-001507.hdr.sgml : 20050620 20050620173337 ACCESSION NUMBER: 0000897069-05-001507 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20050621 DATE AS OF CHANGE: 20050620 GROUP MEMBERS: RC AVIATION MANAGEMENT, LLC GROUP MEMBERS: RC AVIATION, LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HAWAIIAN HOLDINGS INC CENTRAL INDEX KEY: 0001172222 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 710879698 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-78463 FILM NUMBER: 05906659 BUSINESS ADDRESS: STREET 1: 3375 KOAPAKA STREET STREET 2: SUITE G-350 CITY: HONOLULU STATE: HI ZIP: 96819 FORMER COMPANY: FORMER CONFORMED NAME: HAWAIIAN AIR GROUP INC DATE OF NAME CHANGE: 20020429 FORMER COMPANY: FORMER CONFORMED NAME: HA HOLDINGS INC DATE OF NAME CHANGE: 20020425 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Hershfield Lawrence CENTRAL INDEX KEY: 0001294365 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: BUSINESS PHONE: 858-523-0832 MAIL ADDRESS: STREET 1: 12730 HIGH BLUFF DRIVE SUITE 180 CITY: SAN DIEGO STATE: CA ZIP: 92130 SC 13D/A 1 cmw1506.htm AMENDMENT NO. 1


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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 1)*


HAWAIIAN HOLDINGS, INC.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
419879101
(CUSIP Number)
Lawrence S. Hershfield c/o Ranch Capital LLC 12730 High Bluff Drive, Suite 180 San Diego, California 92130 (828)523-0171 with a copy to: Kenneth D. Polin, Esq. Foley & Lardner LLP 402 W. Broadway, Suite 2300 San Diego, California 92101-3542
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
June 2, 2005
(Date of Event Which Requires Filing of this Statement

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box |_|.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7(b) for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

Potential Persons who respond to the collection of information contained in this form are not
required to respond unless the form displays a currently valid OMB control number.


CUSIP No. 419879101	13D	Page 1 of 11 Pages



1	NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) RC Aviation, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP *			(a) [x] (b) [ ]
3	SEC USE ONLY
4	SOURCE OF FUNDS * 00 (Bankruptcy Claims)
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			[ ]
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware

NUMBER OF SHARES		7	SOLE VOTING POWER 13,561,524 shares of Common Stock 200 shares of Series E Preferred Stock (1)
BENEFICIALLY OWNED		8	SHARED VOTING POWER None
BY EACH REPORTING		9	SOLE DISPOSITIVE POWER 11,402,121 shares of Common Stock
PERSON WITH:		10	SHARED DISPOSITIVE POWER 2,159,403 shares of Common Stock (2)

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 13,561,524 shares of Common Stock 200 shares of Series E Preferred Stock (1)
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES *			[ ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 30.2% of Common Stock 100% of Series E Preferred Stock
14	TYPE OF REPORTING PERSON * CO (Limited Liability Company)


CUSIP No. 419879101	13D	Page 2 of 11 Pages



1	NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) RC Aviation Management, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP *			(a) [x] (b) [ ]
3	SEC USE ONLY
4	SOURCE OF FUNDS * 00 (Bankruptcy Claims of RC Aviation, LLC and RC Aviation Management, LLC)
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			[ ]
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware

NUMBER OF SHARES		7	SOLE VOTING POWER 13,664,185 shares of Common Stock 200 shares of Series E Preferred Stock (1)
BENEFICIALLY OWNED		8	SHARED VOTING POWER None
BY EACH REPORTING		9	SOLE DISPOSITIVE POWER 11,504,782 shares of Common Stock
PERSON WITH:		10	SHARED DISPOSITIVE POWER 2,159,403 shares of Common Stock (2)

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 13,664,185 shares of Common Stock 200 shares of Series E Preferred Stock (1)
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES *			[ ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 30.5% of Common Stock 100% of Series E Preferred Stock
14	TYPE OF REPORTING PERSON * CO (Limited Liability Company)


CUSIP No. 419879101	13D	Page 3 of 11 Pages



1	NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Lawrence S. Hershfield
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP *			(a) [x] (b) [ ]
3	SEC USE ONLY
4	SOURCE OF FUNDS * 00 (Bankruptcy Claims of RC Aviation, LLC and RC Aviation Management, LLC)
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			[ ]
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States of America

NUMBER OF SHARES		7	SOLE VOTING POWER 13,704,185 shares of Common Stock 200 shares of Series E Preferred Stock (1)
BENEFICIALLY OWNED		8	SHARED VOTING POWER None
BY EACH REPORTING		9	SOLE DISPOSITIVE POWER 11,442,121 shares of Common Stock
PERSON WITH:		10	SHARED DISPOSITIVE POWER 2,159,403 shares of Common Stock (2)

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 13,704,185 shares of Common Stock 200 shares of Series E Preferred Stock (1)
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES *			[ ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 30.5% of Common Stock 100% of Series E Preferred Stock
14	TYPE OF REPORTING PERSON * IN


CUSIP No. 419879101	13D	Page 4 of 11 Pages

(1) The 200 shares of Series E Preferred Stock are issuable pursuant to a warrant granted to RC Aviation, LLC on June 2, 2005 (the “Series E Warrant”). The Series E Warrant is automatically exchangeable into a separate warrant to purchase 10% of the Company’s fully diluted common stock (the “Common Stock Warrant”), which is exercisable into 6,855,685 shares of common stock as of June 2, 2005. The Series E Warrant will automatically be exchanged for the Common Stock Warrant upon the approval of the stockholders of Hawaiian Holdings, Inc. of an increase in the authorized shares of common stock of Hawaiian Holdings, Inc. (see Item 4 below).

(2) Pursuant to an agreement with AIP, LLC (see Item 5 below).


CUSIP No. 419879101	13D	Page 5 of 11 Pages

Item 1. Security and Issuer.

This statement relates to the shares of Common Stock (the “Common Stock”) of Hawaiian Holdings, Inc. (the “Company”) and warrants to purchase shares of Series E Preferred Stock (the “Series E Warrants,” and together with the Common Stock, the “Securities”) of the Company. The Company’s principal offices are located at 12730 High Bluff Drive, Suite 180, San Diego, California 92130.

Item 2. Identity and Background.

(a-c) This Amendment No. 1 to Schedule 13D is being filed by RC Aviation, LLC, a Delaware limited liability company (“RC Aviation”), RC Aviation Management, LLC, a Delaware limited liability company (“RC Management”) and the managing member of RC Aviation, and Lawrence S. Hershfield, the controlling member of RC Management (“Mr. Hershfield,” and together with RC Aviation and RC Management, the “Reporting Persons”). The principal business address of the Reporting Persons is located at 12730 High Bluff Drive, Suite 180, San Diego, California 92130. The principal business of RC Aviation is to acquire, manage, invest in, transfer, exchange and/or otherwise dispose of securities of the Company. The principal business of RC Management is to serve as the managing member of RC Aviation. The principal business of Mr. Hershfield is to manage various businesses, including, without limitation, RC Aviation and RC Management.

(d-e) None of the Reporting Persons has, during the last five years, (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), nor (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction, as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) The citizenship of RC Aviation and RC Management are as set forth above. The citizenship of Mr. Hershfield is the United States of America.

Item 3. Source and Amount of Funds or Other Consideration.

The Common Stock and Series E Warrants were obtained by the Reporting Persons in consideration for the exchange of certain bankruptcy-related claims held by the Reporting Persons against the Company’s subsidiary, Hawaiian Airlines, Inc. (“Subsidiary”). These claims consisted primarily of aircraft lease contracts under which the Company was in default. The claims were purchased by RC Aviation from its working capital.

Item 4. Purpose of Transaction.

The Company is a holding company that conducts its operations through its Subsidiary. The Subsidiary filed for bankruptcy in the United States Bankruptcy Court for the District of Hawaii (the “Bankruptcy Court”) on March 21, 2003 (the “Bankruptcy Proceeding”).

RC Aviation was formed for the purpose of acquiring a substantial equity interest in the Company in order to obtain the opportunity to profit from an investment in the Company and the Subsidiary, and to have a significant influence on the Subsidiary’s plan of reorganization in the Bankruptcy Proceeding, and on the direction and management of the Company and the Subsidiary after confirmation of the Subsidiary’s plan of reorganization in the Bankruptcy Proceeding.


CUSIP No. 419879101	13D	Page 6 of 11 Pages

The Company and RC Aviation, among others, filed an amended joint plan of reorganization (the “Joint Plan”) to govern the Subsidiary’s emergence from bankruptcy. Among other things, the Joint Plan provides for payment in full of all allowed claims and for the merger of the Subsidiary into HHIC, Inc., a wholly-owned subsidiary of the Company, with HHIC, Inc. to be the surviving entity (with HHIC, Inc. to change its name to Hawaiian Airlines, Inc.). In June, 2005, the Bankruptcy Court confirmed the Joint Plan, subject to obtaining sufficient financing to implement its provisions. The foregoing description of the Joint Plan is qualified in its entirety by reference to such document, a copy of which appears as Exhibit 6 hereto.

In accordance therewith, the Company and RC Aviation agreed to the terms of a $60 million bridge financing in the form of a newly issued series of the Company’s subordinated convertible notes (the “Notes”), which Notes were purchased by RC Aviation pursuant to that certain Note Purchase Agreement dated as of June 1, 2005 (the “Note Purchase Agreement”). RC Aviation’s purchase of the Notes arises from its earlier agreement, as set forth in that certain Restructuring Support Agreement, dated as of August 26, 2004 (the “Restructuring Support Agreement”), requiring it to raise the funds necessary to meet the distribution and payment obligations under the Joint Plan and to ensure that the Subsidiary has at least the minimum amount of cash required by the Joint Plan. The foregoing description of the Note Purchase Agreement is qualified in its entirety by reference to such document, the form of which appears as Exhibit 1 hereto.

The Note Purchase Agreement provides that the Notes be divided into two series: (a) the Series A Subordinated Convertible Note (the “Series A Note”); and (b) the Series B Subordinated Convertible Note (the “Series B Note”), both of which are due June 1, 2010, and will pay interest at 5% per year (payable at the Company’s option in cash or in kind). The Notes are convertible, beginning on June 1, 2006, into Common Stock of the Company at the conversion rate of $4.35 per share (subject to adjustment), except that the Series B Note is only convertible after the latest to occur of: (x) June 1, 2006; (y) the effective date of the Amendment (as defined below); and (z) the date that the Company’s stockholders approve the issuance of Common Stock upon conversion of the Series B Note (the “Approval”). The Company has the right to prepay the Notes at any time prior to June 1, 2006 in whole or in part at 105% of par. The Note Purchase Agreement also provides that the Notes are mandatorily redeemable in cash on June 1, 2010, subject to the obligation of the Company to mandatorily redeem the Series B Note after June 1, 2008 if: (a) the Amendment has not become effective; (b) the Approval has not occurred; and (c) the closing price of the Common Stock of the Company has exceeded $4.35 per share (subject to adjustment) for at least 20 out of 30 consecutive market trading days after June 1, 2006. The foregoing descriptions of the Series A Note and Series B Note are qualified in their entirety by reference to such documents, the forms of which appear as Exhibits 2 and 3 hereto.

Pursuant to the terms of the Note Purchase Agreement, a new class of preferred stock was designated by the Company as the Series E Preferred Stock. The Series E Preferred Stock is a nonvoting, preferred stock, providing for dividends at such time as dividends are declared or paid with respect to the Common Stock equal to the aggregate dividend amount issued with respect to each share of Common Stock multiplied by 6,855,685 divided by the number of shares of Series E Preferred Stock issuable under the Series E Warrants, payable at the Company’s option in cash or in kind. The Series E Preferred Stock has a liquidation preference equal to (a) the greater of (y) $43,193 per share of Series E Preferred Stock or (z) the amount payable with respect to each share of Common Stock upon liquidation, multiplied by 6,855,685, divided by (b) the number of shares of Series E Preferred Stock issuable under the Series E Warrants.

As part of the purchase of the Notes, the Company issued to RC Aviation Series E Warrants to purchase 200 shares of the Company’s Series E Preferred Stock. Upon the receipt of stockholder approval of an increase in the number of authorized shares of Common Stock of the Company (the “Amendment,” which the Company is soliciting pursuant to its proxy statement filed with the Securities and Exchange Commission in connection with its annual stockholder meeting to be held on July 7, 2005), the Series E Warrants shall be automatically exchanged for a separate warrant entitling the holder to purchase 10% of the Company’s fully diluted Common Stock (upon giving effect to all securities issued upon the effective date of the Joint Plan), at an exercise price of $7.20 per share, subject to adjustment for certain anti-dilutive events (the “Common Stock Warrant”). If the increase in the number of authorized shares of Common Stock as described above is not approved, the Series E Warrants will be exercisable for shares of Series E Preferred Stock at any time after the earlier of (a) December 1, 2005 or (b) the record date for a Distribution Event (as that term is defined in Section 6 of the Series E Warrant). The foregoing descriptions of the Series E Warrant and Common Stock Warrant are qualified in their entirety by reference to such documents, the forms of which appear as Exhibits 4 and 5 hereto.


CUSIP No. 419879101	13D	Page 7 of 11 Pages

In addition to the acquisition of the securities described above, RC Aviation, RC Management and Mr. Hershfield also acquired beneficial ownership of 1,402,121, 1,504,782 and 1,504,782 additional shares, respectively, of the Company’s Common Stock pursuant to the terms of the Joint Plan. Under the Joint Plan, the Reporting Persons, as holders of certain claims relating to defaulted aircraft-related leases, received distributions in exchange for their allowed claims in an amount of cash equal to 50% of the allowed claim and an amount of the Company’s Common Stock equal to 50% of the allowed claim based on a stock value of $6.16 per share of Common Stock. This resulted in the distribution of the Company’s Common stock to the Reporting Persons under the Joint Plan as set forth above.

Other than as set forth above in this Item 4, none of the Reporting Persons has any existing plan or proposal which relates to or would result in any of the matters enumerated in clauses (a) through (j), inclusive of Item 4 of Schedule 13D. However, the Reporting Persons may in the future engage in and may plan for their engagement in: (a) the acquisition by any person of additional securities of the Company or the disposition of securities of the Company; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (d) any change in the present board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the present capitalization or dividend policy of the Company; (f) any other material change in the Company’s business or corporate structure; (g) changes in the Company’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition or control of the Company by any person; (h) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or (j) any action similar to any of those enumerated above.

Any future decision of the Reporting Persons to take any such actions with respect to the Company or the Subsidiary or their respective securities will take into account various factors, including the prospects of the Company and Subsidiary, general market and economic conditions and other factors deemed relevant.

Item 5. Interest in Securities of the Issuer.

(a) As of the date hereof, RC Aviation could be deemed the beneficial owner of 13,561,524 shares of Common Stock of the Company, constituting 30.2% of the outstanding common stock of the Company based on 44,875,100 shares of Common Stock of the Company outstanding as of June 2, 2005,including the 13,561,524 shares of Common Stock to which this Amendment No. 1 to Schedule 13D relates. Of the 13,561,524 shares of Common Stock beneficially owned by RC Aviation, AIP, LLC (“AIP”) holds the dividend rights to 2,159,403 of these shares of Common Stock (see subsection (d) below for further information). In addition to the above, RC Aviation is also the beneficial owner of Series E Warrants to purchase up to 200 shares of the Company’s Series E Preferred Stock, constituting 100% of the currently outstanding Series E Preferred Stock. Upon effectiveness of the Amendment, the Series E Warrant is automatically exchangeable into the Common Stock Warrant, which, as of June 2, 2005, is exercisable into 6,855,685 shares of Common Stock.

As of the date hereof, RC Management could be deemed the beneficial owner of 13,664,185 shares of Common Stock of the Company, constituting 30.5% of the outstanding common stock of the Company based on 44,875,100 shares of Common Stock of the Company outstanding as of June 2, 2005, including the 13,664,185 shares of Common Stock to which this Amendment No. 1 to Schedule 13D relates. Of the 13,664,185 shares of Common Stock beneficially owned by RC Management, AIP holds the dividend rights to 2,159,403 of these shares of Common Stock (see subsection (d) below for further information). In addition to the above, RC Management is also the beneficial owner of Series E Warrants to purchase up to 200 shares of the Company’s Series E Preferred Stock, constituting 100% of the currently outstanding Series E Preferred Stock. Upon effectiveness of the Amendment, the Series E Warrant is automatically exchangeable into the Common Stock Warrant, which, as of June 2, 2005, is exercisable into 6,855,685 shares of Common Stock.


CUSIP No. 419879101	13D	Page 8 of 11 Pages

As of the date hereof, Mr. Hershfield could be deemed the beneficial holder of 13,704,185 shares of Common Stock of the Company, constituting 30.5% of the outstanding common stock of the Company based on 44,875,100 shares of Common Stock of the Company outstanding as of June 2, 2005, including the 13,704,185 shares of Common Stock to which this Amendment No. 1 to Schedule 13D relates. Of the 13,704,185 shares of Common Stock beneficially owned by Mr. Hershfield, AIP holds the dividend rights to 2,159,403 of these shares of Common Stock (see subsection (d) below for further information). In addition to the above, Mr. Hershfield is also the beneficial owner of Series E Warrants to purchase up to 200 shares of the Company’s Series E Preferred Stock, constituting 100% of the currently outstanding Series E Preferred Stock. Upon effectiveness of the Amendment, the Series E Warrant is automatically exchangeable into the Common Stock Warrant, which, as of June 2, 2005, is exercisable into 6,855,685 shares of Common Stock.

(b) Each of the Reporting Persons has the sole power to vote or direct the vote of 13,561,524 shares of Common Stock of the Company and 200 shares of Series E Preferred Stock issuable pursuant to the Series E Warrant, except that (i) RC Management and Mr. Hershfield have the power to vote an additional 102,661 shares of Common Stock held by RC Management and (ii) Mr. Hershfield also has the sole power to vote an additional 40,000 shares of Common Stock held directly in his capacity as an individual.

Each of the Reporting Persons has the sole power to dispose or direct the disposition of 11,402,121 shares of Common Stock of the Company and, pursuant to the agreement with AIP described below, shared power to dispose or direct the disposition of 2,159,403 shares of Common Stock of the Company, except that (i) RC Management and Mr. Hershfield have the power to dispose or direct the disposition of an additional 102,661 shares of Common Stock held by RC Management and (ii) Mr. Hershfield also has the sole power to dispose or direct the disposition of an additional 40,000 shares of Common Stock that are held directly in his capacity as an individual. Each of the Reporting Persons has the sole power to dispose or direct the disposition of 200 shares of Series E Preferred Stock issuable pursuant to the Series E Warrant.

On June 11, 2004, AIP and RC Aviation entered into a Stockholders Agreement (the “AIP Stockholders Agreement”) with respect to 2,159,403 shares of the Company’s Common Stock then held by AIP. Among other things, the AIP Stockholders Agreement provides that if AIP intends to sell or otherwise transfer any equity security of the Company then held by it, it shall give RC Aviation the right of first offer with respect to such equity securities. In addition, if AIP receives an offer from any third party to purchase any equity securities then held by AIP, the AIP Stockholders Agreement provides that RC Aviation shall have a right of first refusal with respect to such shares of equity securities. In addition, in the event RC Aviation agrees to sell all, or substantially all of the Common Stock then held by it to an unaffiliated third party, it may require AIP to sell all, but not less than all, of the common stock then held by AIP in such transaction. Further, the AIP Stockholders Agreement provides that if RC Aviation agrees to sell Common Stock then held by it to an unaffiliated third party and does not exercise its rights described in the preceding sentence, then AIP shall have the right to participate in such sale up to AIP’s pro rata portion of the Common Stock to be sold in such transaction. The foregoing description of the AIP Stockholders Agreement is qualified in its entirety by reference to such document, a copy of which was filed with the Schedule 13D filed by the Reporting Persons with the Securities and Exchange Commission on June 21, 2004.

(c) There were no transactions in the Common Stock or Series E Preferred Stock by the Reporting Persons during the prior 60 days, other than the transactions described herein.


CUSIP No. 419879101	13D	Page 9 of 11 Pages

(d) As of the date hereof, AIP retains the right to receive any dividends declared on 2,159,403 shares of Common Stock of the Company, or the proceeds from the sale of any of such shares.

(e) Not applicable.

The filing of this Amendment No. 1 to Schedule 13D shall not be construed as an admission that any of the Reporting Persons is, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, or for any other purpose, the beneficial owner of any of the Common Stock or Preferred Stock referred to herein other than shares directly held in the name of such Reporting Person. As such, RC Management and Mr. Hershfield each specifically disclaim beneficial ownership in the Common Stock and Preferred Stock reported herein, except to the extent that each may have a direct pecuniary interest in such Common Stock or Preferred Stock.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

The Limited Liability Company Operating Agreement of RC Aviation, LLC was entered into by and among the following investors (the “Investors”) in connection with RC Aviation’s purchase of the Company’s Securities: QVT Hawaiian LLC; DB Hawaiian LLC; Whitebox-RC Aviation (Convertible Arbitrage), LLC; Whitebox-RC Aviation (Hedged High Yield), LLC; Whitebox-RC Aviation (Pandora Select), LLC; Whitebox-RC Aviation (Intermarket), LLC; Guggenheim Portfolio Co. XXXI, LLC; River Run RC Aviation Holdings, LLC; Litespeed Master Fund, Ltd.; Watershed Capital Partners, L.P.; Watershed Capital Institutional Partners, LP; Watershed Capital Partners (Offshore), LLC; GPI Holdings, L.L.C.; Shadow Aviation, LLC; Triage Capital Management LP; TOF Holdings, LLC; Harbert Distressed Investment Fund, L.P.; Canyon Capital Advisors, LLC; Kermit I, LLC and Kermit II, LLC; Gryphon Hawaiian Holdings, LLC; Triage Capital Management B, L.P.; RCG Carpathia Master Fund, Ltd.; Portside Growth and Opportunity Fund; and Hotel Alpha Holding Company, LLC.

Pursuant to the Operating Agreement, RC Management is vested with the exclusive right and authority to manage and control the business of RC Aviation, subject to member approval of certain major transactions. The Operating Agreement provides that RC Management may only be removed as the managing member of RC Aviation for fraud, willful neglect, or gross or reckless misconduct which, in each case, causes material harm to RC Aviation.

The Operating Agreement obligates RC Aviation to distribute ninety percent (90%) of the Securities to certain of the Investors on a pro rata basis as soon as practicable following the date upon which the plan of reorganization of the Subsidiary shall have become effective and final (and all conditions subsequent thereto have been satisfied); provided, however, that each such Investor shall at that time execute an irrevocable proxy with respect to such Securities in favor of RC Aviation or otherwise agree to vote such Securities as directed by RC Aviation such that RC Aviation shall retain voting control over such Securities for so long as such Investor holds such Securities.

In addition to the above, RC Aviation and the Investors entered into the RC Aviation Stockholders Agreement, which provides that in the event RC Aviation agrees to sell all, but not less than all, of the Securities then held by it to an unaffiliated third party, it may require each Investor to sell all, but not less than all, of the Securities then held by such Investor in such transaction. Further, the Stockholders Agreement provides that if RC Aviation agrees to sell all, but not less than all, of the Securities then held by it to an unaffiliated third party, then each Investor who then holds Securities shall have the right to participate in such sale up to such Investor’s pro rata portion of the Securities.


CUSIP No. 419879101	13D	Page 10 of 11 Pages

Upon the sale or transfer of the Securities by RC Aviation or any Investor to any unaffiliated third party, the rights and obligations with respect to such Securities as set forth in the Operating Agreement and the RC Aviation Stockholders Agreement shall no longer have any force or effect. The foregoing descriptions of the Operating Agreement and RC Aviation Stockholders Agreement are qualified in their entirety by reference to such documents, the forms of which were filed with the Schedule 13D filed by the Reporting Persons with the Securities and Exchange Commission on June 21, 2004.

Item 7. Materials to Be Filed as Exhibits.

Exhibit 1

Note Purchase Agreement, dated as of June 1, 2005, by and between Hawaiian Holdings, Inc. and RC Aviation, LLC.

Exhibit 2

Form of Series A Subordinated Convertible Note, dated as of June 2, 2005, issued by Hawaiian Holdings, Inc. to RC Aviation, LLC.

Exhibit 3

Form of Series B Subordinated Convertible Note, dated as of June 2, 2005, issued by Hawaiian Holdings, Inc. to RC Aviation, LLC.

Exhibit 4

Warrant to Purchase Series E Preferred Stock of Hawaiian Holdings, Inc., dated as of June 2, 2005, issued to RC Aviation.

Exhibit 5

Form of Warrant to Purchase Common Stock of Hawaiian Holdings, Inc. issued to RC Aviation (included as an Exhibit to Exhibit 4 to this Schedule 13D).

Exhibit 6

Third Amended Joint Plan of Reorganization of Joshua Gotbaum for Hawaiian Airlines, Inc. confirmed on May 18, 2005.


CUSIP No. 419879101	13D	Page 11 of 11 Pages

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: June 20, 2005

RC Aviation, LLC

By:	/s/ Lawrence S. Hershfield
Name:	Lawrence S. Hershfield
Title:	Managing Member of RC Aviation, LLC

RC Aviation Management, LLC

By:	/s/ Lawrence S. Hershfield
Name:	Lawrence S. Hershfield
Title:	Managing Member

/s/ Lawrence S. Hershfield
Lawrence S. Hershfield

EXHIBIT INDEX

Exhibit 1

Note Purchase Agreement, dated as of June 1, 2005, by and between Hawaiian Holdings, Inc. and RC Aviation, LLC.

Exhibit 2

Form of Series A Subordinated Convertible Note, dated as of June 2, 2005, issued by Hawaiian Holdings, Inc. to RC Aviation, LLC.

Exhibit 3

Form of Series B Subordinated Convertible Note, dated as of June 2, 2005, issued by Hawaiian Holdings, Inc. to RC Aviation, LLC.

Exhibit 4

Warrant to Purchase Series E Preferred Stock of Hawaiian Holdings, Inc., dated as of June 2, 2005, issued to RC Aviation.

Exhibit 5

Form of Warrant to Purchase Common Stock of Hawaiian Holdings, Inc. issued to RC Aviation (included as an Exhibit to Exhibit 4 to this Schedule 13D).

Exhibit 6

Third Amended Joint Plan of Reorganization of Joshua Gotbaum for Hawaiian Airlines, Inc. confirmed on May 18, 2005.

EX-99.1 2 cmw1506a.txt NOTE PURCHASE AGREEMENT ================================================================================ NOTE PURCHASE AGREEMENT BY AND BETWEEN HAWAIIAN HOLDINGS, INC. AND RC AVIATION, LLC DATED JUNE 1, 2005 ================================================================================ TABLE OF CONTENTS PAGE ARTICLE I. DEFINITIONS.................................................................................2 Section 1.01. Definitions.......................................................................2 Section 1.02. Rules of Construction.............................................................6 ARTICLE II. ISSUANCE, SALE AND PURCHASE OF THE NOTES....................................................6 Section 2.01. Sale and Purchase of the Notes....................................................6 Section 2.02. Closing...........................................................................6 ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............................................7 Section 3.01. Organization and Good Standing....................................................7 Section 3.02. Authority; Binding Effect.........................................................7 Section 3.03. Capitalization....................................................................7 Section 3.04. No Violations; Consents...........................................................8 Section 3.05. Financial Statements..............................................................8 Section 3.06. Commission Filings................................................................9 Section 3.07. Private Placement.................................................................9 Section 3.08. Financial Advisors................................................................9 Section 3.09. No General Solicitation...........................................................9 ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.............................................10 Section 4.01. Authorization....................................................................10 Section 4.02. Investment Representations.......................................................10 Section 4.03. Investor Acknowledgments.........................................................10 Section 4.04. Financial Advisors...............................................................11 Section 4.05. Legend...........................................................................11 Section 4.06. No other Representations or Warranties...........................................11 Section 4.07. No Action Taken to Invalidate Private Placement..................................12 ARTICLE V. COVENANTS OF THE COMPANY...................................................................12 Section 5.01. Shareholder Approvals............................................................12 Section 5.02. Secure Listing...................................................................12 Section 5.03. Refinancing......................................................................13 ARTICLE VI. [RESERVED].................................................................................13 ARTICLE VII. CONDITIONS TO CLOSING......................................................................13

-i- TABLE OF CONTENTS (continued) PAGE Section 7.01. Conditions to Obligations of the Investor........................................13 Section 7.02. Conditions to Obligations of the Company.........................................14 ARTICLE VIII. CONVERSION.................................................................................16 Section 8.01. Right to Convert.................................................................16 Section 8.02. Conversion of the Notes..........................................................16 Section 8.03. Conversion Price.................................................................17 Section 8.04. Adjustment for Stock Splits and Combinations.....................................17 Section 8.05. Reorganizations, Mergers, Consolidations or Reclassifications....................18 Section 8.06. Sale of Additional Shares........................................................18 Section 8.07. Additional Shares of Common Stock................................................20 Section 8.08. Certificate of Adjustment........................................................20 Section 8.09. Reservation of Stock Issuable Upon Conversion....................................20 Section 8.10. No Impairment....................................................................21 Section 8.11. Minimum Adjustment...............................................................21 Section 8.12. Certain Adjustments..............................................................21 ARTICLE IX. REDEMPTION.................................................................................21 Section 9.01. Mandatory Redemption.............................................................21 Section 9.02. Provisional Redemption at the Option of the Company..............................21 Section 9.03. Optional Redemption..............................................................21 Section 9.04. Provisional Redemption of Series B Notes at the Option of the Holders............22 Section 9.05. Redemption at the Option of the Holders Upon a Change of Control.................22 Section 9.06. Redemption Procedure.............................................................23 ARTICLE X. EVENT OF DEFAULT...........................................................................24 Section 10.01. Event of Default.................................................................24 ARTICLE XI. FEES, Expenses and costs...................................................................24 Section 11.01. Expenses.........................................................................24 ARTICLE XII. SUBORDINATION..............................................................................25 Section 12.01. Subordination....................................................................25 ARTICLE XIII. MISCELLANEOUS..............................................................................25
-ii- TABLE OF CONTENTS (continued) PAGE Section 13.01. Note Register....................................................................25 Section 13.02. DTC; CUSIP.......................................................................26 Section 13.03. Notices and Addresses............................................................26 Section 13.04. No Survival......................................................................27 Section 13.05. Captions.........................................................................27 Section 13.06. No Waiver........................................................................27 Section 13.07. Severability.....................................................................27 Section 13.08. Exclusive Agreement..............................................................27 Section 13.09. Amendment........................................................................27 Section 13.10. Limitation on Assignment; Parties in Interest....................................28 Section 13.11. Governing Law....................................................................28 Section 13.12. Jurisdiction.....................................................................28 Section 13.13. No Third Party Beneficiary.......................................................28 Section 13.14. Injunctive Relief................................................................28 Section 13.15. Counterparts.....................................................................28 Section 13.16. Actions Simultaneous.............................................................28 Section 13.17. Acknowledgement by the Company, the Investor and HHIC............................29
-iii- NOTE PURCHASE AGREEMENT THIS NOTE PURCHASE AGREEMENT, dated June 1, 2005 (this "Agreement"), is by and between Hawaiian Holdings, Inc., a Delaware corporation (the "Company"), and RC Aviation, LLC, a Delaware limited liability company (the "Investor"). HHIC, Inc., a Delaware corporation ("HHIC"), does hereby join in this Agreement solely for the purpose described in Section 13.17. Unless otherwise provided, capitalized terms used herein are defined in Article I below. RECITALS: --------- A. The Investor, on behalf the members of the Investor set forth on Schedule A attached hereto (the "Purchasers"), desires to purchase from the Company, and the Company desires to sell to the Investor, upon the terms and subject to the conditions of this Agreement, Series A Subordinated Convertible Notes Due June 1, 2010 (the "Series A Notes") and Series B Subordinated Convertible Notes Due June 1, 2010 (the "Series B Notes" and, together with the Series A Notes, the "Notes"), each in the principal amounts set forth on Schedule A. The Series A Notes will be issued in the form attached hereto as Exhibit A, and the Series B Notes will be issued in the form attached hereto as Exhibit B. B. Subject to the terms contained herein, the Series A Notes shall be convertible into shares of Common Stock from and after the first anniversary of the Closing Date, in accordance with the terms hereof. C. Subject to the terms contained herein, the Series B Notes shall be convertible into shares of Common Stock upon the latest to occur of (i) the effectiveness of an amendment to the Company's Certificate of Incorporation to be filed with the Secretary of State of the State of Delaware to increase the aggregate number of authorized shares of Common Stock to an amount that would allow for the full conversion of the Series B Notes and the full exercise of the Common Stock Warrants (as defined herein), (ii) the receipt of shareholder approval authorizing the issuance of Common Stock upon conversion of the Series B Notes as required by Section 713 of the AMEX Company Guide, and (iii) the first anniversary of the Closing Date, each case in accordance with the terms hereof. D. The Company and the Investor, on behalf of itself and the Purchasers, desire to set forth certain agreements herein. AGREEMENT: ---------- NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and undertakings hereunder and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, intending to be legally bound, the parties hereto do hereby agree as follows: ARTICLE I Definitions Section 1.01. Definitions. As used in this Agreement, the following terms have the meanings set forth below. "Accredited Investor" shall mean any Person that is an "accredited investor" within the definition contained in Rule 501(a) under the Securities Act. "Affiliate" shall mean with respect to a Person, any Person which directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Person or entity. "Agreement" shall have the meaning set forth in the preamble. "Amendment" shall mean an amendment to the Certificate of Incorporation to be filed with the Secretary of State of the State of Delaware, subject to the receipt of the shareholder approval required by Section 5.1(i), to increase the aggregate number of authorized shares of Common Stock to an amount that would allow for the full conversion of the Series B Notes and the full exercise of the Common Stock Warrants. "AMEX Company Guide" shall mean the American Stock Exchange Company Guide. "Bankruptcy Proceeding" shall mean the case (Case No. 03-00827) filed by Hawaiian Airlines, Inc. in the United States Bankruptcy Court for the District of Hawaii under Chapter 11 of the United States Bankruptcy Code, as amended. "Board of Directors" shall mean the Board of Directors of the Company. "Business Day" shall mean any day other than (i) a Saturday, (ii) a Sunday or (iii) any other day on which banks in the City of New York are authorized or required to close. "By-Laws" shall mean, when used with respect to a specified Person, the by-laws of a Person, as the same may be amended from time to time. "Capital Stock" shall mean, with respect to any Person, any and all shares, interests, participations, rights in or other equivalents (however designated and whether voting or non-voting) of such Person's capital stock or any form of membership, ownership or participation interests, as applicable, including partnership interests, whether now outstanding or hereafter issued and any and all securities, debt instruments, rights, warrants or options exercisable or exchangeable for or convertible into such capital stock. "Certificate of Incorporation" shall mean, when used with respect to a specified Person, the Articles or Certificate of Incorporation or other applicable organizational document of such Person, as currently in effect. 2 "Closing" shall have the meaning set forth in Section 2.02(a). "Closing Date" shall have the meaning set forth in Section 2.02(a). "Commission Filings" shall have the meaning set forth in Section 3.06. "Common Stock" shall mean the common stock, $0.01 par value per share, of the Company. "Common Stock Warrants" shall mean warrants (to be issued to the Investor in exchange for the Series E Warrant upon the effectiveness of the Amendment) to purchase up to ten percent (10%) of the fully-diluted shares of Common Stock, of which warrants half had been previously earned by the Investor for its funding commitment with respect to the joint plan of reorganization proposed by the Company and the Investor in connection with the Bankruptcy Proceeding and the other half of which shall be earned by the Investor in connection with its purchase of the Notes hereunder. "Company" shall have the meaning set forth in the preamble. "Consents" shall mean all governmental and third party consents, approvals, authorizations, qualifications and waivers necessary to be received by a Person for the consummation of the transactions contemplated hereby. "Contract" shall mean any legally binding contract, agreement, mortgage, deed of trust, bond, loan, indenture, lease, license, note, option, warrant, right, instrument, commitment or other similar document, arrangement or agreement, whether written or oral. "Employee" shall mean any current, former or retired officers, directors, consultants, employees, independent contractors, agents and other Persons who render or have rendered services to the Company. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. "GAAP" shall mean generally accepted accounting principles applied on a consistent basis as used in the United States of America. "Governmental Body" shall mean any government or governmental or quasi-governmental authority including, without limitation, any federal, state, territorial, county, municipal or other governmental or quasi-governmental agency, board, branch, bureau, commission, court, arbitral body (public or private), department or other instrumentality or political unit or subdivision, whether located in the United States or abroad, the National Association of Securities Dealers, Inc., the New York Stock Exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the American Stock Exchange or the Pacific Exchange. "Hawaiian" shall mean Hawaiian Airlines, Inc. 3 "Indebtedness" means (a) all obligations for borrowed money (including all obligation owing under the Wells Fargo Credit Facility and the Second-Lien Facility), (b) all obligations evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, interest rate swaps, or other financial products, (c) all obligations as a lessee under capital leases, (d) all obligations or liabilities of others secured by a Lien on any asset of a Person or its subsidiaries, irrespective of whether such obligation or liability is assumed, (e) all obligations to pay the deferred purchase price of assets (f) trade payables incurred in the ordinary course of business and repayable in accordance with customary trade practices, (g) all obligations owing under hedge agreements, and (h) any obligation guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that constitutes Indebtedness under any of clauses (a) through (h) above. "Investor" shall have the meaning set forth in the preamble. "Law" shall mean any treaty, statute, ordinance, code, rule, regulation, Order or other legal requirement enacted, adopted, promulgated, applied or followed by any Governmental Body. "Legend" shall mean the Legend set forth in Section 4.05. "Lien" shall mean any mortgage, pledge, lien (statutory or otherwise), security interest, hypothecation, conditional sale agreement, encumbrance or similar restriction or agreement. "Market Price" shall have the meaning set forth in Section 8.02(c). "Material Adverse Effect" shall mean any event, condition or contingency that has had, or is reasonably likely to have, a material adverse effect on the business, assets, liabilities (including contingent liabilities), results of operations, financial condition or prospects of the Company, taken as a whole. For the purposes of this Agreement, a Material Adverse Effect shall not be deemed to arise by reason of (i) the transactions contemplated hereby, (ii) events of war impacting the economy in general, and (iii) changes in general economic conditions or in the airline industry, in general. "Optional Redemption Price" shall have the meaning set forth in Section 9.03. "Order" shall mean any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award. "Participant Register" shall have the meaning set forth in Section 13.01(c). "Permits" shall mean any approvals, authorizations, licenses, permits or certificates by or of any Governmental Body. 4 "Person" shall mean any individual, corporation, partnership, firm, limited liability company, joint venture, trust, association, unincorporated organization, group, joint-stock company, Governmental Body or other entity. "Purchase Price" shall mean claims in the Bankruptcy Proceeding of Hawaiian with a value equivalency in such proceeding of $60,000,000 in the aggregate, payable as set forth in Section 2.02. "Purchaser" shall have the meaning set forth in the recitals. "Put Redemption Price" shall have the meaning set forth in Section 9.04. "Register" shall have the meaning set forth in Section 13.01(b). "Registrar" shall have the meaning set forth in Section 13.01(a). "Registration Rights Agreement" shall have the meaning set forth in Section 7.01(i). "Requisite Stockholder Approval" shall mean approval of the Company's stockholders of the issuance of Common Stock upon conversion of the Series B Notes pursuant to Section 713 of the American Stock Exchange Company Guide. "SEC" shall mean the U.S. Securities and Exchange Commission. --- "Second-Lien Facility" shall mean that certain secured subordinated term loan facility available to Hawaiian, pursuant to a Credit Agreement, by and among Hawaiian, as borrower, the Company, as guarantor, the lenders named therein, and Canyon Capital Advisors, LLC, as agent for the lenders. "Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder. "Series E Certificate of Designations" shall mean the Certificate of the Designations, Powers, Preferences and Rights of Series E Preferred Stock of Hawaiian Holdings, Inc., to be filed with the Secretary of State of the State of Delaware on or prior to the Closing Date. "Series E Preferred Stock" shall mean the Company's Series E Preferred Stock, governed by the Series E Certificate of Designations. "Series E Warrants" shall mean those warrants to be granted at Closing to the Investor to purchase shares of the Series E Preferred Stock, such warrants to be automatically exchanged, upon the effectiveness of the Amendment, for the Common Stock Warrants. "Trading Day" shall mean a trading day on the American Stock Exchange. 5 "Transaction Documents" shall mean this Agreement, the schedules and exhibits hereto, the Series A Notes, the Series B Notes, the Series E Warrants, the Common Stock Warrants (from and after the issuance of such Common Stock Warrants), the Registration Rights Agreement and any certificate or other document delivered by or on behalf of the Company or the Investor pursuant to this Agreement or in connection with the transactions contemplated by this Agreement. "Wells Fargo Credit Facility" shall mean that certain credit facility available to Hawaiian, consisting of a revolving line of credit and a term loan, pursuant to a Credit Agreement (the "Wells Fargo Credit Agreement"), by and among Wells Fargo Foothill, Inc., as arranger and agent, Hawaiian, as borrower, the Company, as guarantor, and the lenders named therein. Section 1.02. Rules of Construction. Unless the context otherwise requires: (a) an accounting term defined by GAAP that is not otherwise defined herein has the meaning assigned to it in accordance with GAAP; (b) "or" is not exclusive; (c) words in the singular include the plural, and words in the plural include the singular; (d) the words "include" and "including" shall be deemed to mean "include, without limitation," and "including, without limitation"; (e) "herein," "hereof," "hereto," "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular article, section, paragraph or clause where such terms may appear; and (f) references to sections mean references to such section in this Agreement, unless stated otherwise. ARTICLE II ISSUANCE, SALE AND PURCHASE OF THE NOTES Section 2.01. Sale and Purchase of the Notes. Upon the terms and subject to the conditions of this Agreement, on the Closing Date (as defined below), the Company will sell to the Purchasers, and the Purchasers will purchase from the Company, the Series A Notes and the Series B Notes in the principal amounts set forth on Schedule A, for an aggregate purchase price of $60,000,000 (the "Purchase Price"). Section 2.02. Closing. (a) Subject to the satisfaction or waiver of the conditions set forth in this Agreement, the closing of the transactions contemplated by Section 2.01 (the "Closing") shall 6 take place on the date after the date hereof (the "Closing Date"); provided, that, if the purchase and sale of the Notes hereunder is not consummated within one week after the date hereof, this Agreement shall be terminated and of no further force or effect. The Closing shall occur at such place as is mutually agreeable by the parties hereto. (b) At the Closing: (i) the Company will deliver to the Investor (x) the Notes to be sold in accordance with the provisions of Section 2.01 payable to the Purchasers and (y) the Series E Warrants; (ii) the Investor shall satisfy payment of the Purchase Price, in full payment for the Notes, through the release and surrender to the Company by the Purchasers of an undivided interest in bankruptcy claims from the Bankruptcy Proceeding held by each of them in an aggregate amount equal to the Purchase Price; and (iii) each party shall take or cause to happen such other actions, and shall execute and deliver such other instruments or documents, as shall be required under Article VII. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to the Investor as follows: Section 3.01. Organization and Good Standing. The Company is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware, has full corporate power and authority to own, lease and operate its properties, and carry on its business as presently conducted. The Company is duly qualified, registered or licensed as a foreign corporation to do business and is in good standing in each jurisdiction in which the ownership or leasing of its properties or the character of its present operations makes such qualification, registration or licensing necessary, except where the failure to so qualify or be in good standing would not reasonably be expected to have a Material Adverse Effect. The Company has heretofore delivered or made available to the Investor complete and correct copies of the Certificate of Incorporation and By-Laws of the Company, as in effect as of the date of this Agreement. Section 3.02. Authority; Binding Effect. The Company has full corporate power and authority to execute and deliver this Agreement and the other Transaction Documents, and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and the other Transaction Documents and the consummation by the Company of the transactions contemplated hereby and thereby have been duly and validly approved by all necessary corporate action on the part of the Company. This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms. The other Transaction Documents, when executed and delivered by the Company, will be duly executed and delivered by the Company and constitute legal, valid and binding obligations of the Company, enforceable in accordance with their respective terms. Section 3.03. Capitalization. 7 (a) As of May 31, 2005, the authorized Capital Stock of the Company consisted of 60,000,000 shares of Common Stock, and 2,000,000 shares of Preferred Stock. (b) As of May 31, 2005, there were (i) 30,751,227 shares of Common Stock issued and outstanding, (ii) three (3) shares of Preferred Stock issued and outstanding, (iii) 1,514,000 shares of Common Stock reserved for issuance upon exercise of outstanding options issued by the Company to Employees, and (iv) 8,933,000 shares of Common Stock reserved for issuance upon conversion of the Series A Notes. Except as set forth in clauses (i), (ii), (iii) and (iv) above, there are no shares of Common Stock reserved for the issuance upon the exercise, conversion or exchange of any securities of the Company. All of the issued and outstanding shares of the Company's Capital Stock have been duly and validly authorized and issued and are fully paid and non-assessable and are not subject to any preemptive rights. The Company is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any of its Capital Stock. (c) The shares of Common Stock issuable to the Investor upon conversion of the Series A Notes, when issued in accordance with the terms hereof, will be duly authorized, validly issued, fully paid and non-assessable and free and clear of any Liens. The shares of Common Stock issuable to the Investor upon conversion of the Series B Notes, when issued in accordance with the terms hereof and subsequent to the effectiveness of the Amendment and the receipt of the Requisite Stockholder Approval, will be duly authorized, validly issued, fully paid and non-assessable and free and clear of any Liens. Section 3.04. No Violations; Consents. Except as set forth on Schedule 3.04, neither the execution, delivery or performance by the Company of this Agreement or the other Transaction Documents nor the consummation of the transactions contemplated hereby or thereby, will (a) conflict with, or result in the breach of, any provision of the Certificate of Incorporation or By-Laws of the Company, (b) conflict with, violate, result in the breach or termination of, or constitute a default or give rise to any right of termination or acceleration or right to increase the obligations or otherwise modify the terms thereof under any Contract, Permit or Order to which the Company is a party or by which the Company or any of the properties or assets of the Company is bound, (c) constitute a violation of any Law applicable to the Company or (d) result in the creation of any Lien upon the properties or assets of the Company, other than with respect to the foregoing clauses (b), (c) and (d), such requirements, conflicts, violations, breaches or rights which would not reasonably be expected to have a Material Adverse Effect. Except as set forth on Schedule 3.04, other than those which have been obtained or made or which would not reasonably be expected to have a Material Adverse Effect, no Consent is required on the part of the Company in connection with the execution and delivery of this Agreement or the Transaction Documents, or the compliance by the Company with any of the provisions hereof or thereof. Section 3.05. Financial Statements. The consolidated balance sheet of the Company as of December 31, 2004 and 2003 and the related consolidated income statements, changes in stockholders' equity and cash flows for the fiscal years ended December 31, 2004, 2003 and 2002, as reported in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2004, filed by the Company with the SEC under the Exchange Act, and accompanied by the 8 audit report of Ernst & Young LLP, independent public accountants, accurately reflect the books and records of the Company and present fairly, in all material respects, the consolidated financial position of the Company and the consolidated results of its operations and its cash flows for the periods and dates covered thereby, in conformity with GAAP. The unaudited consolidated balance sheet of the Company as of March 31, 2005 and 2004 and the related unaudited consolidated income statements and cash flows for the three months ended March 31, 2005 and 2004, as reported in the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2005, filed with the SEC under the Exchange Act, accurately reflect the books and records of the Company and present fairly, in all material respects, the consolidated financial position of the Company and the consolidated results of its operations and its cash flows for the periods and dates covered thereby, in conformity with GAAP, except for changes resulting from year-end adjustments (none of which will be material in amount) and the absence of footnote disclosures thereto. Section 3.06. Commission Filings. The Company has filed all reports, proxy statements and other materials, together with any amendments required to be made with respect thereto, that were required to be filed with the SEC under the Exchange Act from and after June 30, 2003 (all such reports and statements are collectively referred to herein as the "Commission Filings"). Section 3.07. Private Placement. (a) Assuming the representations and warranties of the Investor contained in Article IV are true, the offer and sale of the Notes (and the issuance of the Common Stock to the Investor upon the conversion of such Notes) are exempt from the registration requirements of the Securities Act. The Company has not taken and will not take any actions which would cause the offers and sales contemplated hereunder to become ineligible for exemption under the Securities Act. (b) Neither the Company nor any Person acting on its behalf has offered the Notes to any Person by means of general or public solicitation or general or public advertising, such as by newspaper or magazine advertisements, by broadcast media, or at any seminar or meeting whose attendees were solicited by such means. Section 3.08. Financial Advisors. Except as set forth on Schedule 3.08, no agent, broker, investment banker, finder, financial advisor or other Person is or will be entitled to any broker's or finder's fee or any other commission or similar fee from the Company, directly or indirectly, in connection with the transactions contemplated hereby. Section 3.09. No General Solicitation. None of the Company or any of its "affiliates" (as defined in Rule 501(b) of Regulation D under the Securities Act ("Regulation D")), has, directly or through an agent, engaged in any form of general solicitation or general advertising in connection with the offering of the Notes (as those terms are used in Regulation D) under the Securities Act or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act; and the Company has not entered into any contractual arrangement with 9 respect to the distribution of the Notes except for this Agreement and the Registration Rights Agreement, and the Company will not enter into any such arrangement. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE INVESTOR The Investor, on behalf of itself and the Purchasers, represents and warrants to the Company as follows: Section 4.01. Authorization. Each of the Investor and each Purchaser is duly organized and validly existing under the Laws of the state of its organization. The Investor and each Purchaser has the full power and authority to enter into this Agreement and the other Transaction Documents to which it is a party and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the other Transaction Documents and the consummation by the Investor and each Purchaser of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Investor and each Purchaser. This Agreement and the other Transaction Documents have been and will be, as the case may be, duly executed and delivered by the Investor and each Purchaser that is a party thereto and constitute legal, valid and binding obligations of the Investor and each Purchaser that is a party thereto, enforceable in accordance with their respective terms. Section 4.02. Investment Representations. Each of the Investor and each Purchaser is an Accredited Investor and is acquiring the Notes for its own account, for investment, and not with a current view to, or for sale in connection with, the distribution thereof or of any interest therein, except as such distribution may be permissible under applicable Law. Each of the Investor and each Purchaser has adequate net worth and means of providing for its current needs and contingencies and is able to sustain a complete loss of the investment in such Notes, and has no need for liquidity in such investment. Each of the Investor and each Purchaser, itself or through its officers, employees or agents, has sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of an investment such as an investment in the Notes, and each of the Investor and each Purchaser, either alone or through its officers, employees or agents, has evaluated the merits and risks of the investment in such Notes. Each of the Investor and each Purchaser understand that the Notes have not been registered under the Securities Act by reason of its issuance in a transaction exempt from the registration requirements of the Securities Act pursuant to the exemption provided in Section 4(2) thereof, and that the Notes may not be sold or otherwise disposed of unless such transaction is registered under the Securities Act or exempted from such registration. Section 4.03. Investor Acknowledgments. (a) Each of the Investor and each Purchaser has had the opportunity, directly or through its representatives, to ask questions of and receive answers from Persons acting on behalf of the Company concerning the transactions contemplated by this Agreement. 10 (b) Each of the Investor and each Purchaser acknowledges that the Series A Notes may not be converted into shares of Common Stock until the first anniversary of the Closing Date, in accordance with the terms hereof. (c) Each of the Investor and each Purchaser acknowledges that the Series B Notes may not be converted into shares of Common Stock until the latest to occur of (i) the effectiveness of the Amendment, (ii) the receipt of the Requisite Stockholder Approval, and (iii) the first anniversary of the Closing Date, each case in accordance with the terms hereof. Section 4.04. Financial Advisors. Except as set forth on Schedule 4.04, no agent, broker, investment banker, finder, financial advisor or other Person engaged by the Investor is or will be entitled to any broker's or finder's fee or any other commission or similar fee from the Company, directly or indirectly, in connection with any of the transactions contemplated by this Agreement or any of the Transaction Documents. Section 4.05. Legend. (a) The Notes and the Common Stock issuable upon conversion of the Notes will bear a legend (the "Legend") substantially similar to the following: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO INTEREST IN THESE SECURITIES MAY BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT." (b) The legend endorsed on the certificates pursuant to Section 4.05 hereof shall be removed and the Company shall issue a certificate without such legend to the holder thereof at such time as the securities evidenced thereby cease to be restricted securities upon the earliest to occur of (i) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (ii) the securities shall have been sold to the public pursuant to Rule 144 (or any successor provision) under the Securities Act, and (iii) such securities may be sold by the holder without restriction or registration under Rule 144(k) under the Securities Act (or any successor provision). Section 4.06. No other Representations or Warranties. No representations or warranties have been made to the Investor or any Purchaser by the Company or any director, officer, employee, agent or Affiliate of the Company other than the limited representations of the Company set forth herein and each of the Investor and each Purchaser understands, acknowledges and agrees that the Company makes no other representations and warranties of any kind or nature, 11 expressed or implied, all of which are specifically disclaimed by the Company. The decision of each of the Investor and each Purchaser to purchase the securities being acquired by it pursuant hereto is based on the information contained in this Agreement and its own independent investigation of the Company. Each of the Investor and each Purchaser acknowledges that it has had an opportunity to ask questions of the executive officers of the Company and has received sufficient information to evaluate its investment in the Company. Each of the Investor and each Purchaser has been, and will continue to be, solely responsible for making its own independent appraisal of an investigation into, and in connection with this Agreement and the transactions contemplated hereby it has made such an independent appraisal of an investigation into, the financial condition, creditworthiness, affairs, status and nature of the Company and it has not relied, and will not hereafter rely, on the Company or any Affiliate or representative of the Company with respect to such matters or to update the Investor with respect to such matters. Section 4.07. No Action Taken to Invalidate Private Placement. Neither the Investor nor any Purchaser has taken any action that would result in the offering of the Notes pursuant to this Agreement being treated as a public offering rather than a valid private offering under applicable securities law. ARTICLE V. COVENANTS OF THE COMPANY The Company covenants and agrees that: Section 5.01. Shareholder Approvals. The Company shall use its best efforts to, within ninety (90) days after the Closing Date, (i) obtain the stockholder approval necessary for the Amendment and to file the Amendment with the Secretary of State of the State of Delaware, and (ii) obtain the Requisite Stockholder Approval. In the event that the Amendment and the Requisite Stockholder Approval are not obtained prior to the first anniversary of the Closing Date, the Company may at its option, (x) immediately increase the interest rate set forth in the Series B Notes to ten percent (10%) per annum, such interest rate to remain in effect so long as the Series B Notes remains outstanding, or (y) pay to the holder or holders of the Series B Notes, within thirty (30) days of the first anniversary of the Closing Date, a penalty in cash in an amount equal to three percent (3%) of the aggregate outstanding principal amount of the Series B Notes. Section 5.02. Secure Listing. The Company shall use its best efforts to ensure that: (i) the shares of Common Stock issuable upon conversion of the Series A Notes shall have been duly listed, pending notice of issuance, on AMEX and PCX, and (ii) subsequent to the effectiveness of the Amendment and the receipt of the Requisite Stockholder Approval, the shares of Common Stock issuable upon conversion of the Series B Notes will be duly listed, pending notice of issuance, on AMEX and PCX, and (iii) subsequent to the effectiveness of the Amendment, the shares of Common Stock issuable upon exercise of the Common Stock Warrants shall have been duly listed, pending notice of issuance, on AMEX and PCX. 12 Section 5.03. Refinancing. The Company shall use its best efforts, prior to the first anniversary of the Closing Date, to effect a rights offering of shares of Common Stock or seek alternative financing in order to redeem in Notes in accordance with Section 9.03 hereof. ARTICLE VI [RESERVED] ARTICLE VII CONDITIONS TO CLOSING Section 7.01. Conditions to Obligations of the Investor. The obligation of the Investor to consummate the transactions contemplated hereby shall be subject to the fulfillment on or prior to the Closing Date of the following conditions, any or all of which may be waived by the Investor, in whole or in part, to the extent permitted by applicable Law: (a) Representations and Warranties. The representations and warranties of the Company contained herein shall be true in all material respects (except for representations and warranties that contain qualifications as to materiality, which shall be true and correct in all respects) at and as of the date hereof and on and as of the Closing Date with the same effect as though made on and as of the Closing Date. (b) Consents. The Company shall have obtained the consents set forth in Schedule 3.04, if any. (c) No Governmental Order or Other Proceeding or Litigation. No Order of any Governmental Body shall be in effect that restrains or prohibits the transactions contemplated hereby. (d) Wells Fargo Credit Facility. The Wells Fargo Credit Facility shall have been entered into by the parties thereto and the closing of the loan transaction contemplated therein shall occur prior to or substantially simultaneously with the Closing hereunder. (e) Second-Lien Facility. The Second-Lien Facility shall have been entered into by the parties thereto and the closing of the loan transaction contemplated therein shall occur prior to or substantially simultaneously with the Closing hereunder. (f) Series E Certificate of Designations. The Series E Certificate of Designations shall have been filed with the Secretary of State of the State of Delaware substantially simultaneously with the Closing hereunder. 13 (g) Issuance of Warrants. The Company shall have delivered to the Investor the Series E Warrants substantially simultaneously with the Closing hereunder. (h) Bankruptcy Proceeding. A confirmation order relating to Hawaiian's emergence from bankruptcy shall have been entered in the United States Bankruptcy Court for the District of Hawaii. (i) Registration Rights Agreement. The Registration Rights Agreement shall have been executed and delivered by the parties thereto and shall be in full force and effect, in substantially the form attached hereto as Exhibit C (the "Registration Rights Agreement"). (j) Notes. The Company shall have delivered to the Investor the Notes payable to the Purchasers. (k) Good Standing; Company Certificates. The Company shall have delivered to the Investor: (i) a certificate issued by the appropriate Governmental Body evidencing, as of a recent date, the good standing of the Company in its jurisdiction of incorporation; (ii) a certificate, dated the Closing Date, executed by the Secretary of the Company which certifies that (A) attached to such certificate is a complete and correct copy of the Certificate of Incorporation of the Company certified by the Secretary of State of the State of Delaware, and that there has been no amendment to the Certificate of Incorporation of the Company since that the date of such certification, (B) attached to such certificate is a complete and correct copy of the By-Laws of the Company, as in full force and effect at the Closing Date, and (C) attached to such certificate is complete and correct resolutions of the Board of Directors authorizing the execution, delivery and performance of this Agreement and each of the other Transaction Documents, including the issuance and sale of the Notes and, subject to the effectiveness of the Amendment and the receipt of the Requisite Stockholder Approval, the issuance of the shares of Common Stock issuable upon conversion of the Notes and the reservation of such shares of Common Stock. Section 7.02. Conditions to Obligations of the Company. The obligation of the Company to consummate the transactions contemplated hereby shall be subject to the fulfillment on or prior to the Closing Date of the following conditions, any or all of which may be waived by the Company: (a) Representations and Warranties. The representations and warranties of the Investor contained herein shall be true in all material respects (except for representations and warranties that contain qualifications as to materiality, which shall be true and correct in all respects) at and as of the date hereof and on and as of the Closing Date with the same effect as though made on and as of the Closing Date. 14 (b) No Governmental Order or Other Proceeding or Litigation. No Order of any Governmental Body shall be in effect that restrains or prohibits the transactions contemplated hereby. (c) Wells Fargo Credit Facility. The Wells Fargo Credit Facility shall have been entered into by the parties thereto and the closing of the loan transaction contemplated therein shall occur prior to or substantially simultaneously with the Closing hereunder. (d) Second Lien Loan. The Second-Lien Facility shall have been entered into by the parties thereto and the closing of the loan transaction contemplated therein shall occur prior to or substantially simultaneously with the Closing hereunder. (e) Bankruptcy Proceeding. A confirmation order relating to Hawaiian's emergence from bankruptcy shall have been entered in the United States Bankruptcy Court for the District of Hawaii. (f) Registration Rights Agreement. The Registration Rights Agreement shall have been executed and delivered by the parties thereto and shall be in full force and effect. (g) Purchase Price. The Purchasers, in full payment for the Notes, shall have delivered to the Company the Purchase Price as set forth in Section 2.02(b)(ii). (h) Good Standing; Investor Certificates. The Investor shall have delivered to the Company: (i) a certificate issued by the appropriate Governmental Body evidencing, as of a recent date, the good standing of the Investor in its jurisdiction of organization; (ii) a certificate, dated the Closing Date, executed by the Managing Member of the Investor which certifies that (A) attached to such certificate is a complete and correct copy of the Certificate of Formation of the Investor certified by the Secretary of State of the State of Delaware, and that there has been no amendment to the Certificate of Formation of the Investor since that the date of such certification; (B) attached to such certificate is a complete and correct copy of the limited liability company operating agreement of the Investor, as in full force and effect at the Closing Date, and any and all amendments or restatements thereof; and (C) attached to such certificate is complete and correct resolutions of the Managing Member of the Investor authorizing the execution, delivery and performance of this Agreement and each of the other Transaction Documents to which the Investor is a party. 15 ARTICLE VIII CONVERSION The rights of the holders of the Notes to convert such Notes into shares of Common Stock of the Company (the "Conversion Rights"), and the terms and conditions of such conversion, shall be as follows: Section 8.01. Right to Convert. (a) The Series A Notes shall be convertible, in whole or in part, at the option of the holder thereof, at any time after the first anniversary of the Closing Date, at the office of the Company or its transfer agent, into that number of the fully paid and nonassessable shares of Common Stock determined in accordance with the provisions of Section 8.02 below. The Series B Notes shall be convertible, in whole or in part, at the option of the holder thereof, at any time after the latest to occur of (i) the date that the Amendment becomes effective, (ii) the date that the Requisite Stockholder Approval is obtained and (iii) the first anniversary of the Closing Date, at the office of the Company or its transfer agent, into that number of the fully paid and nonassessable shares of Common Stock determined in accordance with the provisions of Section 8.02 below. In order to convert the Notes into shares of Common Stock, the holder thereof shall surrender such Notes, duly endorsed, at the office of the Company or its transfer agent, together with written notice to the Company stating that it elects to convert the same and setting forth the name or names it wishes the certificate or certificates for Common Stock to be issued. (b) The Company shall, as soon as practicable after the surrender of Notes for conversion at the office of the Company or its transfer agent, issue to each holder of such Notes, or its nominee or nominees, a certificate or certificates evidencing the number of shares of Common Stock to which it shall be entitled and, in the event that only a portion of the Notes are to be converted, a new Note in the remaining principal amount. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the Notes to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock at such date and shall, with respect to such shares, have only those rights of a holder of Common Stock of the Company. Section 8.02. Conversion of the Notes. (a) The Series A Notes shall be convertible, in whole or in part, at any time after the first anniversary of Closing Date, at the option of the holder of record thereof, into the number of fully paid and nonassessable shares of Common Stock equal to (x) the outstanding principal amount of such Series A Notes being converted divided by (y) the Conversion Price (as defined below). The Series B Notes shall be convertible, in whole or in part, at any time after the latest to occur of (i) the date that the Amendment becomes effective, (ii) the date that the Requisite Stockholder Approval is obtained and (iii) the first anniversary of the Closing Date, at the option of the holder of record thereof, into the number of fully paid and nonassessable shares 16 of Common Stock equal to (x) the outstanding principal amount of such Series B Notes being converted divided by (y) the Conversion Price (as defined below). (b) Upon conversion of a Note, or any portion thereof, the holder of such Note shall receive a payment in cash equal to the accrued and unpaid interest on the Note or the portion so converted as of the date of conversion. No fractional shares of Common Stock shall be issued upon conversion of the Notes. All shares of Common Stock (including fractions thereof) issuable upon conversion of Notes by a holder thereof shall be aggregated for purposes of determining whether the conversion would result in the issuance of any fractional share. If, after the aforementioned aggregation, the conversion would result in the issuance of any fractional share, the Company shall, in lieu of issuing any fractional share, pay cash equal to the product of such fraction multiplied by the Market Price on the date of conversion. (c) As used herein, "Market Price" for any day means, with respect to the shares of Common Stock, the volume weighted average price as reported by Bloomberg (or if such information is not available from Bloomberg, from another nationally recognized independent pricing source) over the ten (10) Trading Days immediately prior to the date of calculation; provided, that, for the purposes of Section 9.04, "Market Price" shall mean the volume weighted average price over the five (5) Trading Days prior to the date of calculation and the five (5) Trading Days from and after the date of calculation. If there is no publicly traded market for the shares of Common Stock, pricing information will be obtained directly from broker/dealers and active market makers such as banks and securities firms. In instances where there is no readily available pricing information, the Board shall determine in good faith the fair value of the Common Stock, which determination shall be set forth in a certificate by the Secretary of the Company. Section 8.03. Conversion Price. The conversion price for the Notes shall initially be $4.35 and shall be subject to adjustment from time to time as provided herein (the "Conversion Price"). Section 8.04. Adjustment for Stock Splits and Combinations. If outstanding shares of the Common Stock of the Company shall be subdivided into a greater number of shares, or a dividend in Common Stock or other securities of the Company convertible into or exchangeable for Common Stock (in which latter event the number of shares of Common Stock issuable upon the conversion or exchange of such securities shall be deemed to have been distributed) shall be paid in respect to the Common Stock of the Company, the Conversion Price in effect immediately prior to such subdivision or at the record date of such dividend shall, simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend, be proportionately reduced, and conversely, if outstanding shares of the Common Stock of the Company shall be combined into a smaller number of shares, the Conversion Price in effect immediately prior to such combination shall simultaneously with the effectiveness of such combination, be proportionately increased. Any adjustment to the Conversion Price under this Section 8.04 shall become effective at the close of business on the date the subdivision or combination referred to herein becomes effective. 17 Section 8.05. Reorganizations, Mergers, Consolidations or Reclassifications. In the event of any capital reorganization, any reclassification of the Common Stock (other than a change in par value), or the consolidation or merger of the Company with or into another Person (collectively referred to hereinafter as "Reorganizations"), the holders of the Notes shall thereafter be entitled to receive, and provision shall be made therefor in any agreement relating to a Reorganization, upon conversion of the Notes (or deemed conversion of the Notes in the event that the Reorganization is consummated at such time as the Notes are not otherwise convertible under the terms hereof), the kind and number of shares of Common Stock or other securities or property (including cash) of the Company, or other corporation resulting from such consolidation or surviving such merger, to which a holder of the number of shares of the Common Stock of the Company which the Notes entitled the holder thereof to convert to immediately prior to such Reorganization would have been entitled to receive with respect to such Reorganization; and in any such case appropriate adjustment shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the holders of the Notes, to the end that the provisions set forth herein (including the specified changes and other adjustments to the Conversion Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any shares, other securities or property thereafter receivable upon conversion of the Notes. In the event of a Reorganization for which the acquiror's shares of common stock are securities registered under Sections 12 or 15(d) of the Securities Exchange Act of 1934, as amended, any agreement relating to such Reorganization shall provide for the assumption of such Notes by the acquirer, to the extent not previously converted or redeemed, which Notes shall thereafter be convertible into the shares of common stock of the acquiror so registered on the basis set forth in this Section 8.05. The provisions of this Section 8.05 shall similarly apply to successive Reorganizations. Section 8.06. Sale of Additional Shares. (a) If at any time or from time to time the Company shall issue or sell Additional Shares of Common Stock (as hereinafter defined), or is deemed by the express provisions of this subsection to issue or sell Additional Shares of Common Stock, other than as a subdivision or combination of shares of Common Stock as provided in Section 8.04 above, for a consideration per share less than the then existing Conversion Price, then the existing Conversion Price shall be reduced, as of the opening of business on the date of such issuance or sale, to a price determined by dividing (A) an amount equal to the sum of (1) the applicable Conversion Price immediately prior to such issuance or sale multiplied by the number of shares of Common Stock deemed outstanding at the close of business on the day before the date of such issuance or sale, plus (2) the aggregate consideration, if any, received or to be received by the Company upon such issuance or sale, by (B) an amount equal to the sum of (1) the number of shares of Common Stock deemed outstanding immediately prior to such issuance or sale, plus (2) the total number of Additional Shares of Common Stock so issued. For the purposes of the preceding sentence, the number of shares of Common Stock deemed to be outstanding as of a given date shall be the sum of (i) the number of shares of Common Stock actually outstanding, and (ii) the number of shares of Common Stock into which the then outstanding Notes could be converted if fully converted on the day immediately preceding the given date. 18 (b) For the purpose of making any adjustment in the Conversion Price or number of shares of Common Stock issuable upon conversion of the Notes, as provided above, the following provisions shall be applicable: (i) In case of the issuance of Common Stock for consideration in whole or in part for cash, the consideration shall be deemed to be the amount of cash paid therefor, plus the value of any property other than cash received by the Company as determined in accordance with clause (ii) below. (ii) In case of the issuance of Common Stock for consideration in whole or in part in property or consideration other than cash, the value of such property or consideration other than cash shall be deemed to be the fair value thereof as determined in good faith by the Board. (iii) In case of the issuance of (x) options, warrants, or other rights to acquire or to purchase or to subscribe for Common Stock (whether or not at the time exercisable), (y) securities convertible into or exchangeable for Common Stock or (z) options to purchase or rights to subscribe for such convertible or exchangeable securities (whether or not at the time so convertible or exchangeable): (1) the aggregate maximum number of shares of Common Stock deliverable upon exercise of such options, warrants, or other rights to acquire or to purchase, or to subscribe for Common Stock (whether or not at the time exercisable) shall be deemed to have been issued at the time such options or rights were issued and for a consideration equal to the consideration (determined in the manner provided in clauses (i) and (ii) above), if any, received by the Company upon the issuance of such options, warrants or rights plus the purchase price provided in such options, warrants or rights for the shares of Common Stock covered thereby; (2) the aggregate maximum number of shares of Common Stock deliverable upon conversion of, or in exchange for, any such convertible or exchangeable securities or upon the exercise of options to purchase, or to subscribe for, such convertible or exchangeable securities and subsequent conversion or exchange thereof shall be deemed to have been issued at the time such securities were issued or such options, warrants or rights were issued and for a consideration equal to the consideration received by the Company for any such securities and related options or rights, plus the additional consideration, if any, to be received by the Company upon the conversion or exchange of such securities or the exercise of any related options, warrants or rights (determined in the manner provided in clauses (i) and (ii) above); and (3) on the expiration of any warrant, right or option or on the termination of any right to convert or exchange any convertible or exchangeable securities, (whether or not at the time so convertible or exchangeable): the Conversion Price then in effect shall thereupon be readjusted to the Conversion Price as would have been in effect had the adjustment made upon the granting or issuance of such warrants, rights or options or convertible or exchangeable securities (whether or not at the time so convertible or exchangeable): been made upon the basis of the issuance or sale of only the number of shares of Common Stock actually issued upon the exercise of such options, warrants or rights or upon the conversion or exchange of such convertible or exchangeable securities. No readjustment pursuant to clause (3) above shall have the effect of increasing the Conversion Price to an amount which exceeds the lower of (x) the Conversion Price on the original adjustment date or (y) the Conversion Price that would have resulted from 19 any issuance of Additional Shares of Common Stock between the original adjustment date and such readjustment date. Section 8.07. Additional Shares of Common Stock. "Additional Shares of Common Stock" shall mean all shares of Common Stock issued or deemed to be issued or issuable by the Company, whether or not subsequently reacquired or retired by the Company, other than (i) shares of Common Stock issued upon the conversion of the Notes, (ii) shares of Common Stock issued in connection with any stock split, stock dividend or recapitalization of the Company, (iii) shares of Common Stock issuable upon exercise of the Common Stock Warrants, (iv) shares of Common Stock issuable upon the exercise of stock options or other awards made or denominated in shares of Common Stock under the Company's 2005 Stock Incentive Plan or any of the Company's other stock plans including any stock option, stock purchase, restricted stock or similar plan hereafter adopted by the Board and, if required by applicable Law or stock exchange requirement, approved by the stockholders of the Company, (v) up to 1,500,000 shares of Common Stock issuable to unions and employees of Hawaiian, in transactions approved by the Board, and (vi) up to 1,514,000 shares of Common Stock issuable upon the exercise of stock options or other awards previously granted to members of management of the Company and/or Hawaiian, in transactions approved by the Board. Section 8.08. Certificate of Adjustment. In each case of an adjustment or readjustment of the Conversion Price or the number of shares of Common Stock or other securities issuable upon conversion of the Notes, the Company, at its expense, shall cause the Chief Financial Officer of the Company to compute such adjustment or readjustment in accordance with this Certificate of Incorporation and prepare a certificate showing such adjustment or readjustment, and shall mail such certificate, by first-class mail, postage prepaid, to each registered holder of the Notes at the holder's address as shown on the Company's stock transfer books. The certificate shall set forth such adjustment or readjustment, showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (i) the consideration received or to be received by the Company for any Additional Shares of Common Stock issued or sold or deemed to have been issued or sold, (ii) the Conversion Price at the time in effect for the Notes, and (iii) the number of Additional Shares of Common Stock and the type and amount, if any, of other property which at the time would be received upon conversion of the Notes. Section 8.09. Reservation of Stock Issuable Upon Conversion. The Company shall at all times (solely with respect to the Series B Notes, from and after the effectiveness of the Amendment and the receipt of the Requisite Stockholder Approval), reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the Notes, such number of its shares of Common Stock as shall from time to time be sufficient to effect a conversion of all outstanding Notes, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding Notes, the Company shall promptly seek such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose. 20 Section 8.10. No Impairment. The Company shall not participate in any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, for the purpose of avoiding or seeking to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but shall at all times in good faith use its best efforts, and assist in carrying out all such action as may be reasonably necessary or appropriate in order to protect the conversion rights of the holders of the Notes against dilution or other impairment. Section 8.11. Minimum Adjustment. No adjustment of the Conversion Price shall be made if the amount of any such adjustment would be an amount less than one percent (1%) of the Conversion Price then in effect, but any such amount shall be carried forward and an adjustment in respect thereof shall be made at the time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate an increase or decrease of one percent (1%) or more. Section 8.12. Certain Adjustments. The Conversion Price shall not be adjusted upward except in the event of a combination of the outstanding shares of Common Stock into a smaller number of shares of Common Stock or in the event of a readjustment of the Conversion Price pursuant to Section 8.06(b)(iii). ARTICLE IX REDEMPTION Section 9.01. Mandatory Redemption. On June 1, 2010 (the "Mandatory Redemption Date" and together with any date of redemption pursuant to Sections 9.02, 9.03, 9.04 and 9.05 hereof, a "Redemption Date"), the Company shall redeem, in full and in cash, all of the outstanding Notes, in accordance with the procedures set forth in Section 9.06, at an aggregate price equal to the aggregate principal amount plus an aggregate amount equal to all accrued and unpaid interest on all outstanding Notes to be so redeemed on the applicable Redemption Date (the "Redemption Price"). Section 9.02. Provisional Redemption at the Option of the Company. At any time after the first anniversary of the Closing Date (and in the case of the Series B Notes, after such time as the Series B Notes have become convertible into Common Stock under the terms hereof) and prior to the Mandatory Redemption Date, if the Market Price of the Common Stock has exceeded 150% of the Conversion Price for at least 20 out of 30 consecutive Trading Days (all of such Trading Days to have occurred after the first anniversary of the Closing Date) prior to date that the Company delivers the Redemption Notice (as defined in Section 9.06), the Company, at its option, may redeem (within sixty (60) days after such triggering event) all or any portion of the Notes at the Redemption Price, in accordance with the procedures set forth in Section 9.06. Section 9.03. Optional Redemption. At any time prior to the first anniversary of the Closing Date, the Company, at its option, may redeem all or any portion of the Notes at an aggregate price equal to, on the Redemption Date, (x) 105% of the aggregate principal amount of 21 all outstanding Notes to be so redeemed plus (y) all accrued and unpaid interest on all outstanding Notes to be so redeemed (the "Optional Redemption Price"), in accordance with the procedures set forth in Section 9.06. Section 9.04. Provisional Redemption of Series B Notes at the Option of the Holders. Solely with respect to the Series B Notes, at any time from and after the third anniversary of the Closing Date and prior to the Mandatory Redemption Date, if (1) the Amendment has not become effective, (2) the Requisite Stockholder Approval has not been obtained, and (3) the closing price of the Common Stock as reported by Bloomberg (or if such information is not available from Bloomberg, from another nationally recognized independent pricing source) (the "Closing Price") has exceeded the Conversion Price for at least 20 out of 30 consecutive Trading Days after the first anniversary of the Closing Date (subject to the circumstances described in the immediately succeeding sentence if such triggering event occurs on or after the first anniversary of the Closing Date and prior to the third anniversary of the Closing Date), then each holder of Series B Notes shall have the right, within 10 Trading Days of such price exceeding the Conversion Price on the twentieth such day, by written notice delivered to the Company (the "Holders' Provisional Redemption Demand Notice"), to require the Company to redeem, no later than ninety (90) days after the Company's receipt of the Holders' Provisional Redemption Demand Notice, all or any portion of the Series B Notes owned by such holder at a price equal to the Put Redemption Price (as defined below), in accordance with the procedures set forth in Section 9.06. If the Closing Price has exceeded the Conversion Price for at least 20 out of 30 consecutive Trading Days from and after the first anniversary of the Closing Date and prior to the third anniversary of the Closing Date, then each holder of Series B Notes, to the extent it desires to have all or any portion of the Series B Notes redeemed in accordance with this Section 9.04, must deliver the Holders' Provisional Redemption Demand Notice within 10 Trading Days after such twentieth day, and the Company shall redeem the Series B Notes, or the portion thereof specified in the Holders' Provisional Redemption Demand Notice, within thirty (30) days after the third anniversary of the Closing Date. To the extent the Holder has not given notice within such 10 Trading Day period, the right to give the Holders' Provisional Redemption Demand Notice shall terminate until such time as the price has again exceeded the Conversion Price for at least 20 out of 30 consecutive Trading Days. As used herein, "Put Redemption Price" shall mean the greater of (1) the Redemption Price and (2) an aggregate amount equal to the product of: (x) the number of shares of Common Stock into which the Series B Notes subject to redemption would have been convertible into as of the date of the Holders' Provisional Redemption Demand Notice had the Amendment become effective and the Requisite Stockholder Approval been obtained, and (y) the Market Price of the Common Stock as of the date of the Holders' Provisional Redemption Demand Notice. The provisional redemption right pursuant to this Section 9.04 shall automatically expire on the later to occur of (a) such date, if any, that the Amendment becomes effective, and (b) such date, if any, that the Requisite Stockholder Approval is obtained. Section 9.05. Redemption at the Option of the Holders Upon a Change of Control. In the event of a Change of Control (as defined below), each holder of Notes shall have the right, by written notice delivered to the Company (the "Holders' Change of Control Redemption Demand Notice"), to require the Company to redeem, no later than thirty (30) days after the Company's receipt of the Holders' Change of Control Redemption Demand Notice, all or any portion of the 22 Notes owned by such holder at a price equal to the Redemption Price, in accordance with the procedures set forth in Section 9.06. For the purposes of this Section 7, "Change of Control" means the occurrence of any of the following: (a) at any time, RC Aviation Management, LLC ceases to have appointed at least 2, or at least 15%, whichever is greater, of the individuals who compose the Board, (b) the Company fails to own and control, directly or indirectly, 100% of the capital stock of Hawaiian Airlines, or (c) any "person" or "group" (within the meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than RC Aviation Management, LLC, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 25%, or more, of the capital stock of Company having the right to vote for the election of members of the Board. Section 9.06. Redemption Procedure. (a) At least 10 days (or such shorter period as any holder of Notes may accept) and not more than 60 days prior to any intended Redemption Date, written notice (the "Redemption Notice") shall be given by facsimile or first class mail, postage prepaid, to each holder of record on the record date fixed for such redemption of Notes at such holder's facsimile number or address as it appears on the stock books of the Company; provided, that, no failure to give such notice nor any deficiency therein shall affect the validity of the procedure for the redemption of any Notes to be redeemed except as to the holder or holders to whom the Company has failed to give said notice or to whom such notice was defective. (b) From and after the Redemption Date, unless there shall have been a default in payment of the Redemption Price (which amount, for the purposes of this Section 9.06, shall refer to the Optional Redemption Price in the event of a redemption pursuant to Section 9.03 hereof or the Put Redemption Price in the event of a redemption pursuant to Section 9.04 hereof), all rights of the holders of Notes (except the right to receive the Redemption Price upon surrender of their Notes) shall cease as to those Notes redeemed, and such Notes shall not thereafter be transferred on the books of the Company or be deemed to be outstanding for any purpose whatsoever. If on the Redemption Date the funds of the Company legally available for redemption of Notes are insufficient to redeem the total number of Notes to be redeemed on such date, then the Company will use those funds which are legally available therefor to redeem the maximum possible principal amount of Notes ratably among the holders of such Notes to be redeemed based upon their holdings of Notes. Payments shall first be applied against accrued and unpaid interest and thereafter against the remainder of the Redemption Price. The Notes not redeemed shall remain outstanding and entitled to all the rights and preferences provided herein. At any time thereafter when additional funds of the Company are legally available for the redemption of Notes such funds will immediately be used to redeem the balance of the Notes to be redeemed. No dividends or other distributions shall be declared or paid on, nor shall the Company redeem, purchase or acquire any shares of, the Common Stock or any other class or series of stock of the Company unless the Redemption Price per for all Notes elected to be redeemed shall have been paid in full. Until the Redemption Price for each Note elected to be redeemed shall have been paid in full, such Note shall remain outstanding for all purposes and entitle the holder thereof to all the rights and privileges provided herein, including, without limitation, that interest thereon shall continue to accrue and, if unpaid prior to the date such 23 Notes are redeemed, shall be included as part of the Redemption Price as provided in this Section 9.06. ARTICLE X EVENT OF DEFAULT Section 10.01. Event of Default. An "Event of Default" shall exist if any of the following conditions or events shall occur and be continuing: (a) the Company fails to pay the Redemption Price on the Mandatory Redemption Date pursuant to Section 9.01; (b) the Company defaults in the payment of any interest on the Notes for more than five (5) days after the same becomes due and payable; or (c) a court or governmental authority of competent jurisdiction enters an order appointing, without consent by the Company or any of its subsidiaries, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of its subsidiaries, or any such petition shall be filed against the Company or any of its subsidiaries and such petition shall not be dismissed within 60 days. ARTICLE XI FEES, EXPENSES AND COSTS Section 11.01. Expenses. Except as otherwise expressly provided herein, the Company shall pay all expenses (including without limitation reasonable attorneys', consultants' and accountants' fees and expenses) incurred by itself and the Investor in connection with this Agreement, whether or not the transactions contemplated by this Agreement are consummated. 24 ARTICLE XII SUBORDINATION Section 12.01. Subordination. Notwithstanding anything in this Agreement or the Notes to the contrary, the Company, for itself and its successors, and the Investor, for itself and its successors and assigns, by its acceptance of the Notes, agrees that, to the extent and in the manner provided in Section 7 of the Notes, (i) the payment of the principal of, and interest on, the Notes and (ii) any payment on account of the acquisition or redemption of the Notes by the Company is subordinated, to the prior payment in full in cash of all the Indebtedness of the Company. ARTICLE XIII MISCELLANEOUS Section 13.01. Note Register. (a) The Company hereby acknowledges and makes the Notes registered obligations for United States withholding tax purposes. The Company shall be the registrar for the Notes (the "Registrar") with full power of substitution. In the event the Company becomes unable or unwilling to act as registrar under this Agreement, the Company shall reasonably designate a successor Registrar. Notwithstanding any contrary provision contained in this Agreement or any of the other Transaction Documents, neither the Notes nor any interests therein may be sold, transferred, hypothecated, participated or assigned to any Person except upon satisfaction of the conditions specified in this Section 13.01. Each holder, by its acceptance of its interest in the Notes, agrees to be bound by the provisions of this Section 13.01 . (b) The Registrar shall keep at its principal executive office (or an office or agency designated by it by notice to the last Registrar) a ledger, in which, subject to such reasonable regulations as it may prescribe, but at its expense (except as specified below), it shall provide for the registration and transfer of the Notes or interests therein (the "Register"). No sale, transfer, hypothecation, participation or assignment of any interest in the Notes shall be effective for any purpose until it shall be entered on the Register. Prior to the registration of assignment or sale of any interest in the Notes, the Registrar shall treat the Person in whose name such Note is registered as the owner thereof for the purpose of receiving all payments thereon and for all other purposes, notwithstanding notice to the contrary. In the event of a sale, transfer, hypothecation, participation or assignment of the Notes or any interest therein, the holder prior to such sale, transfer, hypothecation, participation or assignment of such interest therein shall provide the Registrar with notice of such transaction at the time of such transaction. The Registrar shall record the transfer of the Notes on the Register maintained for this purpose upon receipt by the Registrar at the office or agency designated by the Registrar of (i) a written assignment of the Notes being assigned (or the applicable interest therein), (ii) funds sufficient to pay any transfer taxes payable upon the making of such transfer as well as the cost of reviewing the documents presented to the Registrar, and (iii) such evidence of due execution as the 25 Registrar shall reasonably require. The Registrar shall record the transfer of the Notes on the books maintained for such purpose at the cost and expense of the assignee. (c) In the event that any holder sells participations in the Notes, such holder shall maintain a register on which it enters the names of all participants in the Notes held by it (the "Participant Register"). A Note may be participated in whole or in party only by registration of such participation on the Participant Register, and any participation of such Note or transfer of such participation may be effected only by the registration of such participation on the Participant Register Section 13.02. DTC; CUSIP. In the event that the Notes remain outstanding after the first anniversary of the Closing Date, the Company shall use its best efforts to (a) take all actions necessary or appropriate to cause the Notes to be eligible for deposit with The Depository Trust Company, and (b) take all actions necessary or appropriate to obtain CUSIP numbers for the Notes. Section 13.03. Notices and Addresses. Any notice, demand, request, waiver, or other communication under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service, if personally served or sent by facsimile; on the Business Day after notice is delivered to a courier or mailed by express mail, if sent by courier delivery service or express mail for next day delivery; and on the third day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered, return receipt requested, postage prepaid and addressed as follows: If to the Company: Hawaiian Holdings, Inc. 12730 High Bluff Drive, Suite 180 San Diego, CA 92130-2075 Attention: Randall L. Jenson, Chief Financial Officer Facsimile: (858) 523-1899 Telephone: (858) 523-0832 with a copy to: Dechert LLP 30 Rockefeller Plaza New York, New York 10112 Attention: Charles I. Weissman, Esq. Facsimile: (212) 698-3847 Telephone: (212) 698-3599 If to the Investor: 26 RC Aviation, LLC 12730 High Bluff Drive, Suite 180 San Diego, CA 92130 Attention: Lawrence Hershfield Facsimile: (858) 523-1899 Telephone: (858) 523-0171 With a copy to: Foley & Lardner LLP 402 West Broadway, Suite 2300 San Diego, CA 92101 Attention: Kenneth D. Polin, Esq. Facsimile: (619) 234-3510 Telephone: (619) 685-4615 Section 13.04. No Survival. The representations and warranties in this Agreement shall not survive the execution and delivery of this Agreement Section 13.05. Captions. The captions in this Agreement are for convenience of reference only and shall not be given any effect in the interpretation of this Agreement. Section 13.06. No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. Any waiver must be in writing. Any of the covenants or agreements contained in this Agreement may be waived only by the written consent of the Investor. Section 13.07. Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable Law, such provision(s) shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms so long as the economic or legal substance of the transactions contemplated by this Agreement are not affected in any manner materially adverse to any party. Section 13.08. Exclusive Agreement. This Agreement and the other Transaction Documents supersede all prior agreements among the parties with respect to its subject matter, is intended (with the documents referred to herein) as a complete and exclusive statement of the terms of the agreement among the parties with respect thereto. Section 13.09. Amendment. This Agreement cannot be amended except by a written instrument executed by the Company and the holder or holders of at least fifty (50%) of the aggregate outstanding principal amount under the Notes; provided, that the consent of each holder of Notes shall be required in connection with any amendment of the interest rate set forth in the Notes or the provisions contained in Articles VIII or IX hereof or the termination of this 27 Agreement; provided, further, that this Agreement cannot be amended without the consent of a holder of Notes to the extent such holder would be adversely affected by such amendment. Section 13.10. Limitation on Assignment; Parties in Interest. (a) This Agreement shall be binding upon, and shall inure to the benefit of, and be enforceable by, the parties and their respective successors, transferees and assigns. Section 13.11. Governing Law. This Agreement and (unless otherwise provided) all amendments hereof and waivers and consents hereunder shall be governed by the internal Laws of the State of Delaware, without regard to the conflicts of Law principles thereof which would specify the application of the Law of another jurisdiction. Section 13.12. Jurisdiction. The Investor and the Company (i) hereby irrevocably and unconditionally submits to the exclusive jurisdiction of any state or federal court sitting in the State of Delaware for the purposes of any suit, action or other proceeding arising out of this Agreement or the subject matter hereof brought by the Company, or any Investor, and (ii) hereby waives and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court. Section 13.13. No Third Party Beneficiary. The terms and provisions of this Agreement are intended solely for the benefit of each party hereto and their respective successors or permitted assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other Person. Section 13.14. Injunctive Relief. In the event that any party threatens to take any action prohibited by this Agreement, the parties agree that there may not be an adequate remedy at law. Accordingly, in such an event, a party may seek and obtain preliminary and permanent injunctive relief (without the necessity of posting any bond or undertaking). Such remedies shall, however, be cumulative and not exclusive and shall be in addition to any other remedies which any party may have under this Agreement or otherwise. Section 13.15. Counterparts. This Agreement may be executed via facsimile and in any number of counterparts, each of which shall be deemed to be an original instrument and all of which together shall constitute one and the same instrument. Section 13.16. Actions Simultaneous. All actions to be taken and all documents to be executed and delivered by all parties at the Closing shall be deemed to have been taken and executed and delivered simultaneously and no actions shall be deemed to have been taken nor shall any documents be deemed to have been executed and delivered until all actions have been taken and all documents have been executed and delivered. 28 Section 13.17. Acknowledgement by the Company, the Investor and HHIC. Each of the Company, the Investor and HHIC acknowledge that the purchase of Notes pursuant hereto in exchange for an interest in the claims in the Bankruptcy Proceeding of Hawaiian is intended to be part of the reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended, involving the merger of Hawaiian Airlines, Inc., a Hawaii corporation, with and into HHIC and to which the Company, HHIC and Hawaiian Airlines, Inc., a Hawaii corporation, are parties within the meaning of Section 368(b), and that the claims received in consideration of the issuance of the Notes will be deemed satisfied upon the exchange. [SIGNATURE PAGES FOLLOW] 29 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. HAWAIIAN HOLDINGS, INC. By: /s/ Randall L. Jenson ----------------------------------- Name: Randall L. Jenson Title: Chief Financial Officer, Treasurer & Secretary HHIC, INC. By: /s/ Randall L. Jenson ----------------------------------- Name: Randall L. Jenson Title: Vice President INVESTOR: RC AVIATION, LLC By: /s/ Randall L. Jenson ----------------------------------- Name: Randall L. Jenson Title: Manager & Vice President SCHEDULE 3.04 ------------- NO VIOLATIONS; CONSENTS ----------------------- None SCHEDULE 3.08 ------------- FINANCIAL ADVISORS ------------------ The Company has agreed to pay Imperial Capital, LLC placement fees in connection with the issuance of the Notes and as well as the placement of $75 million of senior secured debt financing, and success fees in connection with Hawaiian Airlines, Inc.'s emergence from bankruptcy. Imperial Capital will also receive a non-contingent fee in connection with rendering a fairness opinion with respect to certain of these and other related transactions. 2 SCHEDULE 4.04 ------------- FINANCIAL ADVISORS ------------------ None 3 EX-99.2 3 cmw1506b.txt FORM OF SERIES A SUBORDINATED COVERTIBLE NOTE NEITHER THIS NOTE NOR THE COMMON STOCK INTO WHICH IT MAY BE CONVERTED HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS, AND NEITHER MAY BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS SO REGISTERED OR UNLESS SOLD PURSUANT TO AN EXEMPTION THEREFROM. THIS NOTE MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THE NOTE PURCHASE AGREEMENT REFERRED TO IN THIS NOTE, A COMPLETE AND CORRECT COPY OF THE FORM OF WHICH IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF HAWAIIAN HOLDINGS, INC., 12730 HIGH BLUFF DRIVE, SUITE 180, SAN DIEGO, CA 92130. FORM OF SERIES A SUBORDINATED CONVERTIBLE NOTE $__________ June 2, 2005 FOR VALUE RECEIVED, the undersigned, Hawaiian Holdings, Inc. (herein called the "Company"), a corporation organized and existing under the laws of the State of Delaware, hereby promises to pay to ___________, or permitted, registered assigns (collectively, the "Holder"), the principal sum of ________________ ($___________) due June 1, 2010, with interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid balance thereof at the rate of 5.00% per annum. 1. Interest shall be payable semi-annually in arrears on the first day immediately following each sixth month anniversary of the issuance of this Note (each such date, an "Interest Payment Date"), or, if any such date is a Saturday, Sunday or legal holiday, then on the next day which is not a Saturday, Sunday or legal holiday. Interest with respect to any period may be paid, at the option of the Company, in either cash or additional Subordinated Convertible Notes in substantially the form of this Note valued at the principal amount thereof. 2. Payments of principal of and interest on this Note are to be made in lawful money of the United States of America by wire transfer of immediately available funds to the bank account specified by Holder or such other place Holder shall have designated by written notice. 3. This Note is subject to optional, provisional, and mandatory prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement dated June 1, 2005 between the Company and RC Aviation, LLC, as amended from time to time (the "Note Purchase Agreement"). 4. Holder may convert all or any portion of the Note into shares of Common Stock at any time following the first anniversary of the issuance of the Note. If the Note is called for redemption after the first anniversary of the issuance of this Note, Holder may convert it at any time before the close of business on the last Business Day prior to the date fixed for such redemption. The initial Conversion Price is $4.35 per share, subject to adjustment in certain events as set forth in the Note Purchase Agreement. The Note shall be convertible into the number of fully paid and nonassessable shares of Common Stock equal to the quotient of (x) the outstanding principal amount on this Note divided by (y) the Conversion Price. The Company shall deliver a check for any fractional share. 5. To convert the Note, Holder must (i) complete and sign the Conversion Notice attached to the Note, (ii) surrender the Note to the Company, (iii) furnish appropriate endorsements and transfer documents if required by the Company and (iv) pay any transfer or similar tax if required. No adjustment is to be made on conversion for interest accrued hereon or for dividends on shares of Common Stock issued on conversion; provided, however, that if the Note (other than any portion called for redemption) is surrendered for conversion after the Record Date for a payment of interest and on or before the Interest Payment Date, then, notwithstanding such conversion, the interest falling due to such Interest Payment Date plus all accrued and unpaid interest will be paid to the Person in whose name the Note is registered at the close of business on such Record Date and any Note surrendered for conversion during the period from the close of business on any Record Date to the opening of business on the corresponding Interest Payment Date must be accompanied by payment of an amount equal to the interest payable on such Interest Payment Date plus all accrued and unpaid interest. 6. (a) For purposes of this Section 6 and Section 7, the following terms have the meanings specified below: "Canyon Capital Credit Agreement" means that certain Credit Agreement, dated as of June 2, 2005, by and among the Company, Hawaiian Airlines, Inc., a Delaware corporation ("Borrower") (the Company and Borrower are collectively herein referred to as the "Obligors"), the lenders party thereto, and Canyon Capital Advisors, LLC, as agent ("Canyon"). "Canyon Capital Loan Documents" means the Canyon Capital Credit Agreement and the other Loan Documents (as defined in the Canyon Capital Credit Agreement), each as amended (including any amendment and restatement thereof), modified, renewed, refunded, replaced, or refinanced in whole or in part from time to time, including any agreement extending the maturity of, consolidating, or otherwise restructuring (including adding subsidiaries of the Company as additional obligors thereunder) all or any portion of the Canyon Capital Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender, or group and whether or not increasing the amount of Canyon Capital Indebtedness that may be incurred thereunder. "Canyon Capital Indebtedness" means "Indebtedness," as such term is defined in the Canyon Capital Credit Agreement. 2 "Indebtedness" means (a) all obligations for borrowed money (including all obligation owing under the Wells Fargo Credit Agreement and the Canyon Capital Credit Agreement), (b) all obligations evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, interest rate swaps, or other financial products, (c) all obligations as a lessee under capital leases, (d) all obligations or liabilities of others secured by a Lien on any asset of a Person or its subsidiaries, irrespective of whether such obligation or liability is assumed, (e) all obligations to pay the deferred purchase price of assets, (f) all obligations owing under hedge agreements, (g) all obligations to pay trade payables incurred in the ordinary course of business and repayable in accordance with customary trade practices, and (h) any obligation guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that constitutes Indebtedness under any of clauses (a) through (g) above. "Insolvency Proceeding" has the meaning ascribed to such term in the Wells Fargo Credit Agreement. "Lien" has the meaning ascribed to such term in the Wells Fargo Credit Agreement. "Person" has the meaning ascribed to such term in the Wells Fargo Credit Agreement. "Senior Obligations" means all obligations (whether now outstanding or hereafter incurred, contingent or non-contingent, liquidated or unliquidated, or primary or secondary) of any Obligor in respect of (a) principal under the Wells Fargo Credit Agreement or the Canyon Capital Credit Agreement or any other Wells Fargo Loan Documents or Canyon Capital Loan Documents (or any refinancing agreement entered into with respect thereto), (b) all interest and premium, if any, in respect of the Wells Fargo Indebtedness or the Canyon Capital Indebtedness referred to in clause (a) above, (c) all fees payable pursuant to any Wells Fargo Loan Documents or Canyon Capital Loan Documents (or a refinancing agreement entered into with respect thereto), (d) all other Obligations (as defined in the Wells Fargo Credit Agreement) or other payment obligations (including costs, expenses, letter of credit reimbursement obligations, or otherwise) of any Obligor to Wells Fargo, Canyon or the lenders arising under the Wells Fargo Credit Agreement or the Canyon Capital Credit Agreement (or to third persons under provisions of a refinancing agreement entered into with respect thereto), including contingent reimbursement obligations with respect to outstanding letters of credit, all costs and expenses incurred by Wells Fargo, Canyon or any lender in connection with its or their enforcement of any rights or remedies under the Wells Fargo Credit Agreement or the Canyon Capital Credit Agreement, including, by way of example, attorneys fees, court costs, appraisal and consulting fees, auctioneer fees, rent, storage, insurance premiums, and like items, and irrespective of whether allowable as a claim against any Obligor in any Insolvency Proceeding, and (e) post-petition interest on the Wells Fargo Indebtedness or 3 the Canyon Capital Indebtedness referred to in clauses (a) through (d) above, at the rate provided for in the instrument or agreements evidencing such Wells Fargo Indebtedness or Canyon Capital Indebtedness, accruing subsequent to the commencement of an Insolvency Proceeding (whether or not such interest is allowed as a claim in such Insolvency Proceeding). "Subordinated Debt" means all principal, interest, fees, costs, enforcement expenses (including attorneys fees and disbursements), and all other payment obligations (including, but not limited to, the repurchase price with respect to this Note) of any kind arising under this Note or any other Subordinated Document. "Subordinated Documents" means, collectively, this Note, the Note Purchase Agreement and any and all other documents or instruments evidencing or guarantying, directly or indirectly, any of the Subordinated Debt, whether now existing or hereafter created. "Wells Fargo Credit Agreement" means that certain Credit Agreement, dated as of June 2, 2005, by and among the Company, Borrower, the lenders party thereto, and Wells Fargo Foothill, Inc., as the arranger and administrative agent for the lenders ("Wells Fargo"). "Wells Fargo Indebtedness" means "Indebtedness," as such term is defined in the Wells Fargo Credit Agreement. "Wells Fargo Loan Documents" means the Wells Fargo Credit Agreement and the other Loan Documents (as defined in the Wells Fargo Credit Agreement), each as amended (including any amendment and restatement thereof), modified, renewed, refunded, replaced, or refinanced in whole or in part from time to time, including any agreement extending the maturity of, consolidating, or otherwise restructuring (including adding subsidiaries of the Company as additional obligors thereunder) all or any portion of the Wells Fargo Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender, or group and whether or not increasing the amount of Wells Fargo Indebtedness that may be incurred thereunder. (b) The Company covenants and agrees, and the Holder by its acceptance hereof likewise covenants and agrees, that this Note is subject to the provisions of this Section 6, and each Person holding this Note, whether upon original issue or upon transfer, assignment or exchange thereof, accepts and agrees to be bound by such provisions. The Holder by its acceptance hereof also acknowledges and agrees that the subordination provisions set forth in this Section 6 are, and are intended to be, an inducement and a consideration to each holder of the Senior Obligations to acquire and continue to hold, or to continue to hold, the Senior Obligations and such holder of the Senior Obligations shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or continuing to hold, such Senior Obligations. 4 (c) The Holder by its acceptance hereof agrees, for itself and each future holder of this Note or the Subordinated Debt, that the Subordinated Debt is expressly "subordinate" (as that term is hereinafter defined) to all Indebtedness and "junior in right of payment" (as that term is hereinafter defined) to the Senior Obligations. "Subordinate" means that no part of the Subordinated Debt shall have any claim to the assets of the Company on a parity with or prior to the claim of the Indebtedness. "Junior in right of payment" means that unless and until the Senior Obligations have been paid in full, without the express prior written consent of the holders of the Senior Obligations, the Holder will not take, demand (including by means of any legal action) or receive from the Company, and the Company will not make, give or permit, directly or indirectly, by set-off, redemption, purchase or in any other manner, any payment of the whole or any part of the Subordinated Debt; provided, that, this Note may be redeemed with the proceeds of a rights offering to the holders of Common Stock of the Company. (d) The Company may not make, and Holder may not receive any payments in cash or other property (other than Common Stock or paid-in-kind interest) of any kind or nature in respect of the Subordinated Debt; provided, however, that the Company may make (i) semi-annual interest payments, (ii) redemptions of the Note with the proceeds of a rights offering to the holders of the Common Stock of the Company or the proceeds from Permitted Parent Indebtedness (as defined in the Wells Fargo Credit Agreement), and (iii) redemptions, premiums and penalties under the Note Purchase Agreement, in the case of clauses (i), (ii) and (iii) above, so long as there is no default or event of default under the Senior Obligations and only to the extent such payments are made solely using cash held by the Company, whether on its balance sheet on the Closing Date (as defined in the Wells Fargo Credit Agreement), arising from proceeds of the rights offering to the holders of the Common Stock of the Company or permitted to be distributed to the Company by its subsidiaries under the Wells Fargo Credit Agreement. (e) Unless and until the Senior Obligations have been paid in full and irrespective of whether a default or event of default has occurred and is continuing with respect to the Senior Obligations: (A) the Holder shall not, directly or indirectly, commence, prosecute, or participate in any lawsuit, action, or proceeding, whether private, judicial, equitable, administrative, or otherwise (including, without limitation, the filing of any bankruptcy petition or case against any Obligor or any Obligor's assets) to enforce its rights or interests in respect of the Subordinated Debt, and (B) the Holder shall have no right either to (x) obtain a Lien on any assets of any Obligor, or (y) enforce any Liens in, foreclose, levy, or execute upon, or collect or attach any of any Obligor's assets, whether by judicial action or otherwise. In the event that the Holder obtains any Liens in violation of the provisions of this Note, any and all of such Liens shall in each case be subordinate to the Liens on the collateral securing the Senior Obligations. (f) The expression "payment in full" or "paid in full" or any similar term or phrase when used in this Note with respect to the Senior Obligations shall mean the payment in full of all such Senior Obligations in cash or such other form of payment as may be acceptable to the holders of Senior Obligations, or, in the case of Senior 5 Obligations consisting of contingent obligations in respect of letters of credit, or other reimbursement obligations, the setting apart of cash sufficient to discharge such portion of the Senior Obligations in an account for the exclusive benefit of the holders thereof, in which account such holders shall be granted a first priority perfected security interest in a manner reasonably acceptable to such holders. (g) Upon any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution, winding-up, liquidation or reorganization of the Company, whether voluntary or involuntary or in bankruptcy, insolvency, receivership or other proceedings, all amounts due or to become due upon the Indebtedness shall first be paid in full before any payment is made on account of the principal or premium, if any, and interest on this Note; and upon any such dissolution, winding-up, liquidation or reorganization or bankruptcy, insolvency, receivership or other such proceedings, any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which the Holder would be entitled, except for the provisions of this Section 6(g), shall be paid by the Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by the Holder if received by it, directly to the holders of the Senior Obligations (pro rata to such holders on the basis of the respective amounts of the Senior Obligations held by such holders, or as otherwise required by law or a court order) or their respective representative or representatives, to the extent necessary to pay the Senior Obligations in full in cash or in such other form of payment as may be acceptable to the holders of the Senior Obligations after giving effect to any concurrent payment or distribution to or for the holders of the Senior Obligations, and then to the holders of all other Indebtedness in full in cash or in such other form of payment as may be acceptable to the holders of such Indebtedness after giving effect to any concurrent payment or distribution to or for the holders of such Indebtedness, before any payment or distribution is made to the Holder. (h) (i) In the event that the Holder receives any payment or distribution of assets of the Company of any kind in contravention of any term of this Note, whether in cash, property or securities, including, without limitation, by way of setoff or otherwise, before the Senior Obligations are paid in full, then such payment or distribution shall be held by the recipient or recipients in trust for the benefit of, and shall immediately be paid over or delivered to, the holders of the Senior Obligations or their respective representative or representatives, for application to the payment of the Senior Obligations remaining unpaid to the extent necessary to make payment in full, in cash or such other form of payment as may be acceptable to the holders of the Senior Obligations, of the Senior Obligations remaining unpaid, after giving effect to any concurrent payment or distribution, or provision therefor, to or for the holders of the Senior Obligations. (ii) For purposes of Section 6, the words "cash, property or securities" shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other corporation provided for by a plan 6 of reorganization or readjustment, the payment of which is subordinated (at least to the extent provided in this Section 6 with respect to this Note) to the payment of the Senior Obligations which may at the time be outstanding. (i) Subject to the payment in full in cash, or in such other form of payment as may be acceptable to the holders of the Senior Obligations, of the Senior Obligations, the rights of the Holder shall be subrogated to the extent of the payments or distributions made to the holders of the Senior Obligations pursuant to the provisions of this Section 6(i) (equally and ratably with the holders of all Indebtedness of the Company which by its express terms is subordinated to other Indebtedness of the Company to substantially the same extent as this Note is subordinated and is entitled to like rights of subrogation) to the rights of the holders of the Senior Obligations to receive payments or distributions of cash, property or securities of the Company applicable to the Senior Obligations until the principal of, and premium, if any, and interest on this Note shall be paid in full; and, for the purposes of such subrogation, no payments or distributions to the holders of the Senior Obligations of any cash, property or securities to which the Holder would be entitled except for the provisions of this Section 6(i), and no payment over pursuant to the provisions of this 6(i), to or for the benefit of the holders of the Senior Obligations by the Holder, shall, as between the Company, its creditors other than holders of the Senior Obligations, and the Holder, be deemed to be a payment by the Company to or on account of the Senior Obligations; and no payments or distributions of cash, property or securities to or for the benefit of the Holder pursuant to the subrogation provisions of this Section 6(i), which would otherwise have been paid to the holders of the Senior Obligations shall be deemed to be a payment by the Company to or for the account of this Note. It is understood that the provisions of this Section 6(i) are and are intended solely for the purposes of defining the relative rights of the Holder, on the one hand, and the holders of the Senior Obligations, on the other hand. (j) (i) No right of any present or future holder of the Senior Obligations to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Note, regardless of any knowledge thereof which any such holder may have or otherwise be charged with. (ii) Without in any way limiting the generality of the foregoing paragraph, the holders of the Senior Obligations may, at any time and from time to time, without the consent of or notice to the Holder, without incurring responsibility to the Holder, and without impairing or releasing the subordination provided in this Note or the obligations of the Holder to the holders of the Senior Obligations, do any one or more of the following: (a) change the manner, place, or terms of payment (including any change in the rate of interest) or extend the time of payment of, or renew, amend, modify, alter, or grant any waiver or release with respect to, or consent to any departure from, the Senior Obligations or any instrument evidencing the same or any agreement evidencing, governing, creating, guaranteeing or securing the Senior Obligations; (b) sell, exchange, 7 release, or otherwise deal with any property pledged, mortgaged or otherwise securing the Senior Obligations; (c) release any Person liable under or in respect of the Senior Obligations; (d) fail or delay in the perfection of liens securing the Senior Obligations; (e) exercise or refrain from exercising any rights against Company and any other Person; or (f) amend, or grant any waiver or release with respect to, or consent to any departure from, any guarantee for all or any of the Senior Obligations. (k) Nothing contained in this Section 6(k) or elsewhere in this Note is intended to or shall impair, as among the Company, its creditors other than the holders of the Senior Obligations, and the Holder, the obligation of the Company, which is absolute and unconditional, to pay to the Holder the principal of, and premium, if any, and interest on the Note as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the right of the Holder and creditors of the Company other than the holders of the Senior Obligations. No provision of this Section 6(k) shall prevent the occurrence of any default or Event of Default (as defined in the Note Purchase Agreement) under this Note; provided that if payment of this Note is accelerated because of an Event of Default (as defined in the Note Purchase Agreement), the Company shall promptly notify holders of the Senior Obligations of the acceleration. 7. None of the provisions of this Note may be waived, amended, supplemented or otherwise modified without the written consent of the Company and the Holder. In addition, Section 6 hereof may not be waived, amended, supplemented or otherwise modified without the prior written consent of the holders of the Senior Obligations, which may be withheld in such holders' sole discretion. An assignment of this Note by the Holder may be effectuated only upon surrender of the original Note to the Company followed by either reissuance of the Note to the new Holder hereof or the issuance of a new instrument to such new Holder by the Company. The Company shall not be obligated to recognize any person other than the registered Holder as having an interest in the Note, despite any notice to the contrary, unless the provisions of this Section 7 have been complied with. 8. This Note is subject to the terms and conditions of the Note Purchase Agreement, and in the event of any inconsistency between this Note and the Note Purchase Agreement, the terms of the Note Purchase Agreement shall control. Terms not defined herein have the meaning set forth in the Note Purchase Agreement. 8 This Note shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the internal Laws of the State of Delaware, without regard to the conflicts of Law principles thereof which would specify the application of the Law of another jurisdiction. HAWAIIAN HOLDINGS, INC. By: ----------------------------------------- Name: Randall L. Jenson Title: Chief Financial Officer, Treasurer & Secretary FORM OF ASSIGNMENT I or we assign this Note to - ----------------------------------------------------------------------- - ----------------------------------------------------------------------- - ----------------------------------------------------------------------- (Print or type name, address and zip code of assignee) Please insert Social Security or other identifying number of assignee - ----------------------------- and irrevocably appoint ________________ agent to transfer this Note on the books of the Company. The agent may substitute another to act for him. Dated: _____________ Signed: x _________________________________ x _________________________________ x _________________________________ Signatures guaranteed: x _________________________________ THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN OR DESTROYED, THE CORPORATION MAY REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A REPLACEMENT CERTIFICATE. CONVERSION NOTICE To convert this Note into shares of common stock, par value $.01 per share, of the Company, check the box: [ ] To convert only part of this Note, state the principal amount you want to be converted (which must be a minimum of $[ ] or any multiple thereof): $_____________________ If you want the certificate made out in another person's name, fill in the form below: - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (Print or type other person's name, address and zip code) Please insert Social Security or other identifying number of other person: ________________________________ Dated: _____________ Signed: x _________________________________ x _________________________________ x _________________________________ Signatures guaranteed: x _________________________________ THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. Hawaiian Holdings, Inc. By:______________________________ [Title] OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Company pursuant to Section [__] of the Note Purchase Agreement, check the box: [ ] If you want to elect to have only part of this Note purchased by the Company pursuant to Section [__] of the Note Purchase Agreement, state the amount you want to be purchased (which must be a minimum of $1,000 or any multiple thereof): $_______________________ Dated: _____________ Signed: x _________________________________ x _________________________________ x _________________________________ Signatures guaranteed: x _________________________________ THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. EX-99.3 4 cmw1506c.txt FORM OF SERIES B SUBORDINATED CONVERTIBLE NOTE NEITHER THIS NOTE NOR THE COMMON STOCK INTO WHICH IT MAY BE CONVERTED HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS, AND NEITHER MAY BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS SO REGISTERED OR UNLESS SOLD PURSUANT TO AN EXEMPTION THEREFROM. THIS NOTE MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THE NOTE PURCHASE AGREEMENT REFERRED TO IN THIS NOTE, A COMPLETE AND CORRECT COPY OF THE FORM OF WHICH IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF HAWAIIAN HOLDINGS, INC., 12730 HIGH BLUFF DRIVE, SUITE 180, SAN DIEGO, CA 92130. FORM OF SERIES B SUBORDINATED CONVERTIBLE NOTE $____________ June 2, 2005 FOR VALUE RECEIVED, the undersigned, Hawaiian Holdings, Inc. (herein called the "Company"), a corporation organized and existing under the laws of the State of Delaware, hereby promises to pay to ___________, or permitted, registered assigns (collectively, the "Holder"), the principal sum of _________________________ ($____________) due June 1, 2010, with interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid balance thereof at the rate of 5.00% per annum. 1. Interest shall be payable semi-annually in arrears on the first day immediately following each sixth month anniversary of the issuance of this Note (each such date, an "Interest Payment Date"), or, if any such date is a Saturday, Sunday or legal holiday, then on the next day which is not a Saturday, Sunday or legal holiday. Interest with respect to any period may be paid, at the option of the Company, in either cash or additional Subordinated Convertible Notes in substantially the form of this Note valued at the principal amount thereof. 2. Payments of principal of and interest on this Note are to be made in lawful money of the United States of America by wire transfer of immediately available funds to the bank account specified by Holder or such other place Holder shall have designated by written notice. 3. This Note is subject to optional, provisional, and mandatory prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement dated June 1, 2005 between the Company and RC Aviation, LLC, as amended from time to time (the "Note Purchase Agreement"). 4. Holder may convert all or any portion of the Note into shares of Common Stock at any time following the latest to occur of (i) the date that the Amendment becomes effective, (ii) the date that the Requisite Stockholder Approval is obtained and (iii) the first anniversary of the Closing Date. If the Note is called for redemption, Holder may convert it in accordance with the preceding sentence at any time before the close of business on the last Business Day prior to the date fixed for such redemption. The initial Conversion Price is $4.35 per share, subject to adjustment in certain events as set forth in the Note Purchase Agreement. The Note shall be convertible into the number of fully paid and nonassessable shares of Common Stock equal to the quotient of (x) the outstanding principal amount on this Note divided by (y) the Conversion Price. The Company shall deliver a check for any fractional share. 5. To convert the Note, Holder must (i) complete and sign the Conversion Notice attached to the Note, (ii) surrender the Note to the Company, (iii) furnish appropriate endorsements and transfer documents if required by the Company and (iv) pay any transfer or similar tax if required. No adjustment is to be made on conversion for interest accrued hereon or for dividends on shares of Common Stock issued on conversion; provided, however, that if the Note (other than any portion called for redemption) is surrendered for conversion after the Record Date for a payment of interest and on or before the Interest Payment Date, then, notwithstanding such conversion, the interest falling due to such Interest Payment Date plus all accrued and unpaid interest will be paid to the Person in whose name the Note is registered at the close of business on such Record Date and any Note surrendered for conversion during the period from the close of business on any Record Date to the opening of business on the corresponding Interest Payment Date must be accompanied by payment of an amount equal to the interest payable on such Interest Payment Date plus all accrued and unpaid interest. 6. (a) For purposes of this Section 6 and Section 7, the following terms have the meanings specified below: "Canyon Capital Credit Agreement" means that certain Credit Agreement, dated as of June 2, 2005, by and among the Company, Hawaiian Airlines, Inc., a Delaware corporation ("Borrower") (the Company and Borrower are collectively herein referred to as the "Obligors"), the lenders party thereto, and Canyon Capital Advisors, LLC, as agent ("Canyon"). "Canyon Capital Loan Documents" means the Canyon Capital Credit Agreement and the other Loan Documents (as defined in the Canyon Capital Credit Agreement), each as amended (including any amendment and restatement thereof), modified, renewed, refunded, replaced, or refinanced in whole or in part from time to time, including any agreement extending the maturity of, consolidating, or otherwise restructuring (including 2 adding subsidiaries of the Company as additional obligors thereunder) all or any portion of the Canyon Capital Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender, or group and whether or not increasing the amount of Canyon Capital Indebtedness that may be incurred thereunder. "Canyon Capital Indebtedness" means "Indebtedness," as such term is defined in the Canyon Capital Credit Agreement. "Indebtedness" means (a) all obligations for borrowed money (including all obligation owing under the Wells Fargo Credit Agreement and the Canyon Capital Credit Agreement), (b) all obligations evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, interest rate swaps, or other financial products, (c) all obligations as a lessee under capital leases, (d) all obligations or liabilities of others secured by a Lien on any asset of a Person or its subsidiaries, irrespective of whether such obligation or liability is assumed, (e) all obligations to pay the deferred purchase price of assets, (f) all obligations owing under hedge agreements, (g) all obligations to pay trade payables incurred in the ordinary course of business and repayable in accordance with customary trade practices, and (h) any obligation guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that constitutes Indebtedness under any of clauses (a) through (g) above. "Insolvency Proceeding" has the meaning ascribed to such term in the Wells Fargo Credit Agreement. "Lien" has the meaning ascribed to such term in the Wells Fargo Credit Agreement. "Person" has the meaning ascribed to such term in the Wells Fargo Credit Agreement. "Senior Obligations" means all obligations (whether now outstanding or hereafter incurred, contingent or non-contingent, liquidated or unliquidated, or primary or secondary) of any Obligor in respect of (a) principal under the Wells Fargo Credit Agreement or the Canyon Capital Credit Agreement or any other Wells Fargo Loan Documents or Canyon Capital Loan Documents (or any refinancing agreement entered into with respect thereto), (b) all interest and premium, if any, in respect of the Wells Fargo Indebtedness or the Canyon Capital Indebtedness referred to in clause (a) above, (c) all fees payable pursuant to any Wells Fargo Loan Documents or Canyon Capital Loan Documents (or a refinancing agreement entered into with respect thereto), (d) all other Obligations (as defined in the Wells Fargo Credit Agreement) or other payment obligations (including costs, expenses, letter of credit reimbursement obligations, or otherwise) of any Obligor to Wells Fargo, Canyon or the lenders arising under the Wells 3 Fargo Credit Agreement or the Canyon Capital Credit Agreement (or to third persons under provisions of a refinancing agreement entered into with respect thereto), including contingent reimbursement obligations with respect to outstanding letters of credit, all costs and expenses incurred by Wells Fargo, Canyon or any lender in connection with its or their enforcement of any rights or remedies under the Wells Fargo Credit Agreement or the Canyon Capital Credit Agreement, including, by way of example, attorneys fees, court costs, appraisal and consulting fees, auctioneer fees, rent, storage, insurance premiums, and like items, and irrespective of whether allowable as a claim against any Obligor in any Insolvency Proceeding, and (e) post-petition interest on the Wells Fargo Indebtedness or the Canyon Capital Indebtedness referred to in clauses (a) through (d) above, at the rate provided for in the instrument or agreements evidencing such Wells Fargo Indebtedness or Canyon Capital Indebtedness, accruing subsequent to the commencement of an Insolvency Proceeding (whether or not such interest is allowed as a claim in such Insolvency Proceeding). "Subordinated Debt" means all principal, interest, fees, costs, enforcement expenses (including attorneys fees and disbursements), and all other payment obligations (including, but not limited to, the repurchase price with respect to this Note) of any kind arising under this Note or any other Subordinated Document. "Subordinated Documents" means, collectively, this Note, the Note Purchase Agreement and any and all other documents or instruments evidencing or guarantying, directly or indirectly, any of the Subordinated Debt, whether now existing or hereafter created. "Wells Fargo Credit Agreement" means that certain Credit Agreement, dated as of June 2, 2005, by and among the Company, Borrower, the lenders party thereto, and Wells Fargo Foothill, Inc., as the arranger and administrative agent for the lenders ("Wells Fargo"). "Wells Fargo Indebtedness" means "Indebtedness," as such term is defined in the Wells Fargo Credit Agreement. "Wells Fargo Loan Documents" means the Wells Fargo Credit Agreement and the other Loan Documents (as defined in the Wells Fargo Credit Agreement), each as amended (including any amendment and restatement thereof), modified, renewed, refunded, replaced, or refinanced in whole or in part from time to time, including any agreement extending the maturity of, consolidating, or otherwise restructuring (including adding subsidiaries of the Company as additional obligors thereunder) all or any portion of the Wells Fargo Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender, or group and whether or not increasing the amount of Wells Fargo Indebtedness that may be incurred thereunder. (b) The Company covenants and agrees, and the Holder by its acceptance hereof likewise covenants and agrees, that this Note is subject to the provisions of this 4 Section 6, and each Person holding this Note, whether upon original issue or upon transfer, assignment or exchange thereof, accepts and agrees to be bound by such provisions. The Holder by its acceptance hereof also acknowledges and agrees that the subordination provisions set forth in this Section 6 are, and are intended to be, an inducement and a consideration to each holder of the Senior Obligations to acquire and continue to hold, or to continue to hold, the Senior Obligations and such holder of the Senior Obligations shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or continuing to hold, such Senior Obligations. (c) The Holder by its acceptance hereof agrees, for itself and each future holder of this Note or the Subordinated Debt, that the Subordinated Debt is expressly "subordinate" (as that term is hereinafter defined) to all Indebtedness and "junior in right of payment" (as that term is hereinafter defined) to the Senior Obligations. "Subordinate" means that no part of the Subordinated Debt shall have any claim to the assets of the Company on a parity with or prior to the claim of the Indebtedness. "Junior in right of payment" means that unless and until the Senior Obligations have been paid in full, without the express prior written consent of the holders of the Senior Obligations, the Holder will not take, demand (including by means of any legal action) or receive from the Company, and the Company will not make, give or permit, directly or indirectly, by set-off, redemption, purchase or in any other manner, any payment of the whole or any part of the Subordinated Debt; provided, that, this Note may be redeemed with the proceeds of a rights offering to the holders of Common Stock of the Company. (d) The Company may not make, and Holder may not receive any payments in cash or other property (other than Common Stock or paid-in-kind interest) of any kind or nature in respect of the Subordinated Debt; provided, however, that the Company may make (i) semi-annual interest payments, (ii) redemptions of the Note with the proceeds of a rights offering to the holders of the Common Stock of the Company or the proceeds from Permitted Parent Indebtedness (as defined in the Wells Fargo Credit Agreement), and (iii) redemptions, premiums and penalties under the Note Purchase Agreement, in the case of clauses (i), (ii) and (iii) above, so long as there is no default or event of default under the Senior Obligations and only to the extent such payments are made solely using cash held by the Company, whether on its balance sheet on the Closing Date (as defined in the Wells Fargo Credit Agreement), arising from proceeds of the rights offering to the holders of the Common Stock of the Company or permitted to be distributed to the Company by its subsidiaries under the Wells Fargo Credit Agreement. (e) Unless and until the Senior Obligations have been paid in full and irrespective of whether a default or event of default has occurred and is continuing with respect to the Senior Obligations: (A) the Holder shall not, directly or indirectly, commence, prosecute, or participate in any lawsuit, action, or proceeding, whether private, judicial, equitable, administrative, or otherwise (including, without limitation, the filing of any bankruptcy petition or case against any Obligor or any Obligor's assets) to enforce its rights or interests in respect of the Subordinated Debt, and (B) the Holder shall have no 5 right either to (x) obtain a Lien on any assets of any Obligor, or (y) enforce any Liens in, foreclose, levy, or execute upon, or collect or attach any of any Obligor's assets, whether by judicial action or otherwise. In the event that the Holder obtains any Liens in violation of the provisions of this Note, any and all of such Liens shall in each case be subordinate to the Liens on the collateral securing the Senior Obligations. (f) The expression "payment in full" or "paid in full" or any similar term or phrase when used in this Note with respect to the Senior Obligations shall mean the payment in full of all such Senior Obligations in cash or such other form of payment as may be acceptable to the holders of Senior Obligations, or, in the case of Senior Obligations consisting of contingent obligations in respect of letters of credit, or other reimbursement obligations, the setting apart of cash sufficient to discharge such portion of the Senior Obligations in an account for the exclusive benefit of the holders thereof, in which account such holders shall be granted a first priority perfected security interest in a manner reasonably acceptable to such holders. (g) Upon any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution, winding-up, liquidation or reorganization of the Company, whether voluntary or involuntary or in bankruptcy, insolvency, receivership or other proceedings, all amounts due or to become due upon the Indebtedness shall first be paid in full before any payment is made on account of the principal or premium, if any, and interest on this Note; and upon any such dissolution, winding-up, liquidation or reorganization or bankruptcy, insolvency, receivership or other such proceedings, any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which the Holder would be entitled, except for the provisions of this Section 6(g), shall be paid by the Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by the Holder if received by it, directly to the holders of the Senior Obligations (pro rata to such holders on the basis of the respective amounts of the Senior Obligations held by such holders, or as otherwise required by law or a court order) or their respective representative or representatives, to the extent necessary to pay the Senior Obligations in full in cash or in such other form of payment as may be acceptable to the holders of the Senior Obligations after giving effect to any concurrent payment or distribution to or for the holders of the Senior Obligations, and then to the holders of all other Indebtedness in full in cash or in such other form of payment as may be acceptable to the holders of such Indebtedness after giving effect to any concurrent payment or distribution to or for the holders of such Indebtedness, before any payment or distribution is made to the Holder. (h) (i) In the event that the Holder receives any payment or distribution of assets of the Company of any kind in contravention of any term of this Note, whether in cash, property or securities, including, without limitation, by way of setoff or otherwise, before the Senior Obligations are paid in full, then such payment or distribution shall be held by the recipient or recipients in trust for the benefit of, and shall immediately be paid 6 over or delivered to, the holders of the Senior Obligations or their respective representative or representatives, for application to the payment of the Senior Obligations remaining unpaid to the extent necessary to make payment in full, in cash or such other form of payment as may be acceptable to the holders of the Senior Obligations, of the Senior Obligations remaining unpaid, after giving effect to any concurrent payment or distribution, or provision therefor, to or for the holders of the Senior Obligations. (ii) For purposes of Section 6, the words "cash, property or securities" shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other corporation provided for by a plan of reorganization or readjustment, the payment of which is subordinated (at least to the extent provided in this Section 6 with respect to this Note) to the payment of the Senior Obligations which may at the time be outstanding. (i) Subject to the payment in full in cash, or in such other form of payment as may be acceptable to the holders of the Senior Obligations, of the Senior Obligations, the rights of the Holder shall be subrogated to the extent of the payments or distributions made to the holders of the Senior Obligations pursuant to the provisions of this Section 6(i) (equally and ratably with the holders of all Indebtedness of the Company which by its express terms is subordinated to other Indebtedness of the Company to substantially the same extent as this Note is subordinated and is entitled to like rights of subrogation) to the rights of the holders of the Senior Obligations to receive payments or distributions of cash, property or securities of the Company applicable to the Senior Obligations until the principal of, and premium, if any, and interest on this Note shall be paid in full; and, for the purposes of such subrogation, no payments or distributions to the holders of the Senior Obligations of any cash, property or securities to which the Holder would be entitled except for the provisions of this Section 6(i), and no payment over pursuant to the provisions of this 6(i), to or for the benefit of the holders of the Senior Obligations by the Holder, shall, as between the Company, its creditors other than holders of the Senior Obligations, and the Holder, be deemed to be a payment by the Company to or on account of the Senior Obligations; and no payments or distributions of cash, property or securities to or for the benefit of the Holder pursuant to the subrogation provisions of this Section 6(i), which would otherwise have been paid to the holders of the Senior Obligations shall be deemed to be a payment by the Company to or for the account of this Note. It is understood that the provisions of this Section 6(i) are and are intended solely for the purposes of defining the relative rights of the Holder, on the one hand, and the holders of the Senior Obligations, on the other hand. (j) (i) No right of any present or future holder of the Senior Obligations to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Note, regardless of any knowledge thereof which any such holder may have or otherwise be charged with. 7 (ii) Without in any way limiting the generality of the foregoing paragraph, the holders of the Senior Obligations may, at any time and from time to time, without the consent of or notice to the Holder, without incurring responsibility to the Holder, and without impairing or releasing the subordination provided in this Note or the obligations of the Holder to the holders of the Senior Obligations, do any one or more of the following: (a) change the manner, place, or terms of payment (including any change in the rate of interest) or extend the time of payment of, or renew, amend, modify, alter, or grant any waiver or release with respect to, or consent to any departure from, the Senior Obligations or any instrument evidencing the same or any agreement evidencing, governing, creating, guaranteeing or securing the Senior Obligations; (b) sell, exchange, release, or otherwise deal with any property pledged, mortgaged or otherwise securing the Senior Obligations; (c) release any Person liable under or in respect of the Senior Obligations; (d) fail or delay in the perfection of liens securing the Senior Obligations; (e) exercise or refrain from exercising any rights against Company and any other Person; or (f) amend, or grant any waiver or release with respect to, or consent to any departure from, any guarantee for all or any of the Senior Obligations. (k) Nothing contained in this Section 6(k) or elsewhere in this Note is intended to or shall impair, as among the Company, its creditors other than the holders of the Senior Obligations, and the Holder, the obligation of the Company, which is absolute and unconditional, to pay to the Holder the principal of, and premium, if any, and interest on the Note as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the right of the Holder and creditors of the Company other than the holders of the Senior Obligations. No provision of this Section 6(k) shall prevent the occurrence of any default or Event of Default (as defined in the Note Purchase Agreement) under this Note; provided that if payment of this Note is accelerated because of an Event of Default (as defined in the Note Purchase Agreement), the Company shall promptly notify holders of the Senior Obligations of the acceleration. 7. None of the provisions of this Note may be waived, amended, supplemented or otherwise modified without the written consent of the Company and the Holder. In addition, Section 6 hereof may not be waived, amended, supplemented or otherwise modified without the prior written consent of the holders of the Senior Obligations, which may be withheld in such holders' sole discretion. An assignment of this Note by the Holder may be effectuated only upon surrender of the original Note to the Company followed by either reissuance of the Note to the new Holder hereof or the issuance of a new instrument to such new Holder by the Company. The Company shall not be obligated to recognize any person other than the registered Holder as having an interest in the Note, despite any notice to the contrary, unless the provisions of this Section 7 have been complied with. 8. This Note is subject to the terms and conditions of the Note Purchase Agreement, and in the event of any inconsistency between this Note and the Note Purchase Agreement, the terms of the Note Purchase Agreement shall control. Terms not defined herein have the meaning set forth in the Note Purchase Agreement. 8 This Note shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the internal Laws of the State of Delaware, without regard to the conflicts of Law principles thereof which would specify the application of the Law of another jurisdiction. HAWAIIAN HOLDINGS, INC. By: ------------------------------------- Name: Randall L. Jenson Title: Chief Financial Officer, Treasurer & Secretary 9 FORM OF ASSIGNMENT I or we assign this Note to - ------------------------------------------------------------------- - ------------------------------------------------------------------- - ------------------------------------------------------------------- (Print or type name, address and zip code of assignee) Please insert Social Security or other identifying number of assignee _________________________________ and irrevocably appoint ________________ agent to transfer this Note on the books of the Company. The agent may substitute another to act for him. Dated: _____________ Signed: x _________________________________ x _________________________________ x _________________________________ Signatures guaranteed: x _________________________________ THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN OR DESTROYED, THE CORPORATION MAY REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A REPLACEMENT CERTIFICATE. CONVERSION NOTICE To convert this Note into shares of common stock, par value $.01 per share, of the Company, check the box: [ ] To convert only part of this Note, state the principal amount you want to be converted (which must be a minimum of $[ ] or any multiple thereof):$_____________________ If you want the certificate made out in another person's name, fill in the form below: - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- (Print or type other person's name, address and zip code) Please insert Social Security or other identifying number of other person: ________________________ Dated: _____________ Signed: x _________________________________ x _________________________________ x _________________________________ Signatures guaranteed: x _________________________________ THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. Hawaiian Holdings, Inc. By:______________________________ [Title] OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Company pursuant to Section [__] of the Note Purchase Agreement, check the box: [ ] If you want to elect to have only part of this Note purchased by the Company pursuant to Section [__] of the Note Purchase Agreement, state the amount you want to be purchased (which must be a minimum of $1,000 or any multiple thereof): $______________________ Dated: _____________ Signed: x _________________________________ x _________________________________ x _________________________________ Signatures guaranteed: x _________________________________ THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. EX-99.4 5 cmw1506e.txt WARRANT TO PURCHASE SERIES E PREFERRED STOCK THE OFFER AND SALE OF THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE UNDERLYING SHARES OF STOCK HAVE NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW. NEITHER THIS WARRANT NOR THE UNDERLYING STOCK, NOR ANY PORTION THEREOF OR INTEREST THEREIN, MAY BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE SAME IS REGISTERED AND QUALIFIED IN ACCORDANCE WITH SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW, OR, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED. Warrant No. PW-1 June 2, 2005 WARRANT to Purchase the Series E Preferred Stock of Hawaiian Holdings, Inc. THIS CERTIFIES THAT, for value received, RC Aviation, LLC having an address at 12730 High Bluff Drive, Suite 180, San Diego, CA 92130, or registered assigns, is entitled to purchase from Hawaiian Holdings, Inc., a Delaware corporation, or any successor (the "Company"), in whole or in part, at a purchase price of $246,816 per share of Series E Preferred Stock (as herein defined), at any time, from and after the Initial Exercise Date to and including June 1, 2010, 200 shares of the fully paid and nonassessable Series E Preferred Stock (as such number may be adjusted as provided herein). This Warrant is issued in connection with the Equity Commitment Letter. This Warrant is subject to the following provisions, terms and conditions: 1. (a) Exercise of Warrant. The rights represented by this Warrant may be exercised by the Holder hereof, in whole or in part (but not as to a fractional share of Series E Preferred Stock), by (A) the delivery of this Warrant, together with a properly completed Subscription Form in the form attached hereto, to the principal office of the Company at 12730 High Bluff Drive, Suite 180, San Diego, California 92130 (or to such other address as it may designate by notice in writing to the Holder) and payment to the Company of the Warrant Purchase Price for the Warrant Shares being purchased by cash or by certified check or bank draft. The Company agrees that the shares so purchased shall be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been delivered to the Company and payment made for such shares as aforesaid. Certificates for the shares so purchased shall be delivered to the Holder within ten (10) Business Days after the rights represented by this Warrant shall have been so exercised, and, unless this Warrant has expired, a new Warrant representing the right to purchase the number of Warrant Shares, if any, with respect to which this Warrant shall not then have been exercised, in all other respects identical with this Warrant, shall also be issued and delivered to the Holder within such time, or, at the request of such Holder, appropriate notation may be made on this Warrant and signed by the Company and the same returned to such Holder. (b) Transfer Restriction Legend. Each certificate for Warrant Shares issued upon exercise of this Warrant, unless at the time of exercise the offer and sale of such Warrant Shares are registered under the Securities Act, shall bear the following legend (and any additional legend required by applicable law or rule) on the face thereof: The offer and sale of the shares of stock represented hereby have not been registered pursuant to the Securities Act of 1933, as amended, or any state securities law. Neither these shares, nor any portion thereof or interest therein, may be sold, transferred or otherwise disposed of unless the same are registered and qualified in accordance with said Act and any applicable state securities law, or, in the opinion of counsel reasonably satisfactory to the Company, such registration and qualification are not required. The provisions of Section 2 shall be binding upon all holders of certificates for Warrant Shares bearing the above legend and shall also be applicable to all holders of this Warrant. (c) Expenses and Taxes on Exercise. The Company shall pay all expenses, taxes and other charges payable in connection with the preparation, execution and delivery of any stock certificates and substitute Warrants pursuant to this Section 1, except that, in case such stock certificates or Warrants shall be registered in a name or names other than the name of the holder of this Warrant, funds sufficient to pay all stock transfer taxes which shall be payable upon the execution and delivery of such stock certificates or Warrants shall be paid by the Holder to the Company at the time the Company delivers such stock certificates or Warrants to the Company for exercise. (d) Mandatory Exchange of Warrant. Notwithstanding any other provision of this Warrant, upon (x) the approval by the stockholders of the Company, at the Company's next meeting of stockholders, of an increase in the number of authorized shares of Common Stock of the Company to at least 120 million shares (the "Stockholder Approval") and (y) the filing with the Secretary of State of the State of Delaware of an amendment to the Certificate of Incorporation of the Company as contemplated by the Stockholder Approval (the "Required Filing"), this Warrant shall be automatically exchanged for a warrant in the form attached hereto as Exhibit A (the "Common Stock Purchase Warrant") to purchase a number of shares of Common Stock equal to the Aggregate Number relating to the Warrant Shares at the time of such exchange at the Common Stock Warrant Exercise Price. Upon the Company's receipt of the Stockholder Approval and the completion of the Required Filing, the Holder shall surrender this Warrant at the Principal Office of the Company and receive in consideration therefor the Common Stock Purchase Warrant. Such surrender shall not be a condition, however, to the cancellation on the Company's books of this Warrant and the substitution on such books of the Common Stock Purchase Warrant, which shall be deemed outstanding on and after the date of the Stockholder Approval and shall be dated as of the date of such Stockholder Approval. 2. (a) Warrants and Warrant Shares Not Registered; Transferee Restrictions. Each Holder, by acceptance thereof, represents and acknowledges that the offer and sale of this Warrant and the Warrant Shares which may be purchased upon exercise of this Warrant are not being registered under the Securities Act, that the issuance of this Warrant and the offering and sale of such Warrant Shares are being made in reliance on the exemption from registration under Section 4(2) of the Securities Act as not involving any public offering and that the Company's reliance on such exemption is predicated in part on the representations made by the initial Holder of this Warrant to the Company that such Holder (i) is acquiring this Warrant for investment purposes for its own account, with no present intention of reselling or otherwise distributing the same in violation of the Securities Act, subject, nevertheless, to any requirement of law that the disposition of its property shall at all times be within its control, (ii) is an "accredited investor" as defined in Regulation D under the Securities Act and (iii) has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investments made or to be made in connection with the acquisition and exercise of this Warrant. Neither this Warrant nor the related Warrant Shares may be transferred except pursuant to an effective registration statement under the Securities Act or upon the conditions specified in Section 2(b). (b) Notice of Transfer, Opinion of Counsel. Each Holder, by acceptance hereof, agrees that prior to the disposition of this Warrant or of any Warrant Shares, other than pursuant to an effective registration under the Securities Act, such Holder will give written notice to the Company expressing such Holder's intention to effect such disposition and describing briefly such Holder's intention as to the manner in which this Warrant or the Warrant Shares theretofore issued or thereafter issuable upon exercise hereof, are to be disposed together with an opinion of counsel as may be designated by such Holder and reasonably satisfactory to the Company as to the necessity or non-necessity of registration under the Securities Act. If in the opinion of such counsel, the proposed disposition does not require registration under the Securities Act of the disposition of this Warrant and/or the Warrant Shares issuable or issued upon the exercise of this Warrant, such Holder shall be entitled to dispose of this Warrant and/or the Warrant Shares theretofore issued upon the exercise hereof, all in accordance with the terms of the notice delivered by such Holder to the Company. The Company is entitled to rely on the most recent written notice from the Holder with respect to the ownership of the Warrant. 3. Representations, Warranties and Covenants of the Company. (a) The Company hereby represents and warrants that: (A) The Company has full corporate power and authority to execute and deliver this Warrant. (B) The execution and delivery of this Warrant and the consummation by the Company of the transactions contemplated hereby have been duly and validly approved by all necessary corporate action on the part of the Company. (C) This Warrant has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms. (D) The Holder of this Warrant, when such Warrant is issued by the Company to such Holder, shall have good title thereto free from all taxes, liens and charges with respect to the issuance thereof. (b) The Company hereby covenants and agrees that: (A) Reservation of Shares. During the period within which the rights represented by this Warrant may be exercised, the Company will have at all times authorized, and reserved for the purpose of issue or transfer upon exercise of the rights evidenced by this Warrant, a sufficient number of shares of the Series E Preferred Stock to provide therefor. (B) The Warrant Shares issued pursuant to the exercise of this Warrant will, upon issuance, be duly and validly issued, fully paid and nonassessable and the holder of such Warrant Shares shall have good title to such Warrant Shares free from all taxes, liens and charges with respect to the issuance thereof. 4. Participation in Distributions; Changes;. (a) Distributions. In case at any time or from time to time the Company shall take a record of the holders of its Common Stock and its Series E Preferred Stock for the purpose of entitling them to receive any dividend or other distribution, other than a distribution of Common Stock, Convertible Securities or options, warrants or other rights to subscribe for or purchase any Convertible Securities (collectively, a "Distribution"), of: (i) Cash (other than regular quarterly dividends payable out of current consolidated earnings); (ii) any evidences of its indebtedness, any shares of its Capital Stock (other than Common Stock) or any other securities or property of any nature whatsoever (other than cash); or (iii) any options, warrants or other rights to subscribe for or purchase any of the following: any evidences of its indebtedness, any shares of its Capital Stock (other than Common Stock) or any other securities or property of any nature whatsoever (other than cash), then the Holder shall be entitled to receive such Distribution as if the Holder had fully exercised this Warrant upon the exercise of this Warrant at any time on or after the taking of such record, the number of Warrant Shares to be received upon exercise of this Warrant determined as stated herein and, in addition and without further payment, the cash, evidences of indebtedness, stock, securities, other property, options, warrants and/or other rights (or any portion thereof) to which the Holder would have been entitled by way of such Distribution and subsequent dividends and distributions through the date of exercise as if such Holder (x) had fully exercised this Warrant immediately prior to such Distribution and (y) had retained the Distribution in respect of the Series E Preferred Stock and all subsequent dividends and distributions of any nature whatsoever in respect of any stock or securities paid as dividends and distributions and originating directly or indirectly from such Series E Preferred Stock. (b) Changes in Series E Preferred Stock. In case at any time the Company shall initiate any transaction or be a party to any transaction (including, without limitation, a merger, consolidation, share exchange, sale, lease or other disposition of all or substantially all of the Company's assets, liquidation, recapitalization or reclassification of the Series E Preferred Stock) in connection with which the outstanding Series E Preferred Stock shall be changed into or exchanged for different securities of the Company or Capital Stock or other securities of another corporation or interests in a non-corporate entity or other property (including cash) or any combination of the foregoing (each such transaction being herein called a "Transaction"), then, as a condition of the consummation of the Transaction, lawful, enforceable and adequate provision shall be made so that the Holder shall be entitled to receive upon exercise of this Warrant at any time on or after the consummation of the Transaction, in lieu of the Warrant Shares issuable upon such exercise prior to such consummation, the securities or other property (including cash) to which such Holder would have been entitled upon consummation of the Transaction if such Holder had exercised this Warrant immediately prior thereto (subject to adjustments from and after the consummation date as nearly equivalent as possible to the adjustments provided for in this Section 4). The foregoing provisions of this Section 4(b) shall similarly apply to successive Transactions. (c) Notice of Proposed Actions. In case the Company shall propose (A) to pay any dividend payable in stock of any class to the holders of its Capital Stock or to make any other distribution to the holders of its Capital Stock, (B) to offer to the holders of its Capital Stock rights to subscribe for or to purchase any Convertible Securities or additional shares of Capital Stock or shares of stock of any class or any other securities, warrants, rights or options, (other than the exercise of pre-emptive rights by such a holder) (C) to effect any reclassification of its Capital Stock, (D) to effect any recapitalization, stock subdivision, stock combination or other capital reorganization, (E) to effect any consolidation or merger, share exchange, or sale, lease or other disposition of all or substantially all of its property, assets or business, or (F) to effect the liquidation, dissolution or winding up of the Company, then in each such case the Company shall give to the Holder written notice of such proposed action, which shall specify the date on which a record is to be taken for the purposes of such stock dividend, stock subdivision, stock combination, distribution or rights, or the date on which such reclassification, recapitalization, reorganization, consolidation, merger, share exchange, sale, lease, transfer, disposition, liquidation, dissolution, winding up or other transaction is to take place and the date of participation therein by the holders of Capital Stock, if any such date is to be fixed, or the date on which the transfer of Capital Stock is to occur, and shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action on the Series E Preferred Stock. Such notice shall be so given in the case of any action covered by clause (A) or (B) above at least ten (10) days prior to the record date for determining holders of the Series E Preferred Stock for purposes of such action and, in the case of any other such action, at least ten (10) days prior to the earlier of the date of the taking of such proposed action or the date of participation therein by the holders of the Series E Preferred Stock. 5. No Dilution or Impairment. The Company will not, by amendment of its Certificate of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, share exchange, dissolution or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith assist in the carrying out of all such terms and in taking of all such action as may be necessary or appropriate to protect the rights of the Holder against dilution or other impairment. Without limiting the generality of the foregoing and notwithstanding any other provision of this Warrant to the contrary (including by way of implication), the Company (a) will not increase the par value of any shares of Series E Preferred Stock receivable on the exercise of this Warrant above the amount payable therefor on such exercise or (b) will take all such action as may be necessary or appropriate so that the Company may validly and legally issue fully paid and nonassessable shares of Series E Preferred Stock on the exercise of this Warrant. 6. Definitions. The terms defined in this Section 6, whenever used in this Warrant, shall, unless the context otherwise requires, have the respective meanings hereinafter specified: (a) "Aggregate Number" shall mean 6,856,000, as adjusted as provided in the Certificate of the Designations, Preferences and Rights of Series E Preferred Stock of the Company, which adjustment shall occur whether the dilutive event occurs prior to or subsequent to the date of the exercise of this Warrant or the Common Stock Purchase Warrant. (b) "Business Day" shall mean any day other than a Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law or executive order to close. (c) "Capital Stock" shall mean (a) with respect to any Person that is a corporation, any and all shares, interests or equivalents in capital stock (whether voting or nonvoting, and whether common or preferred) of such corporation, and (b) with respect to any Person that is not a corporation, any and all partnership, membership, limited liability company or other equity interests of such Person that confer on a Person the right to receive a share of the profits and losses of, or the distribution of assets of, the issuing Person; and in each case, any and all warrants, rights or options to purchase, and all conversion or exchange rights, voting rights, calls or rights of any character with respect to, any of the foregoing, including, without limitation, any rights in respect of any change in the value of any of the foregoing, including stock appreciation rights and similar interests. (d) "Common Stock" shall mean the Common Stock, par value $.01 per share, of the Company or any other Capital Stock of the Company into which such stock is reclassified or reconstituted. (e) "Common Stock Warrant Exercise Price" shall mean $7.20 per share of Common Stock, as adjusted as provided in the Common Stock Warrant as if such Common Stock Warrant were currently outstanding. (f) "Company" shall have the meaning set forth in the introductory paragraph hereto. (g) "Convertible Securities" shall mean evidences of indebtedness, shares of stock or other securities (including, without limitation, options and warrants) which are directly or indirectly convertible, exercisable or exchangeable, with or without payment of additional consideration in cash or property, for shares of Common Stock, either immediately or upon the onset of a specified date or the happening of a specified event. (h) "Distribution" shall have the meaning set forth in Section 4(a)(i). (i) "Distribution Event" shall mean (a) a liquidation, dissolution or winding up of the Company, (b) any transaction or series of transactions which results in the disposition to a Person or group of affiliated Persons of greater than fifty percent (50%) of the voting power of the Company, (c) any merger, consolidation, share exchange or other form of corporate reorganization in which the Company is a party in which the outstanding shares of the Company are issued or exchanged for securities or other consideration issued, or caused to be issued, whereby holders of the voting stock of the Company immediately prior to such transaction hold less than fifty percent (50%) of the voting power of the Company immediately after such transaction, or (d) the sale of all or substantially all of the assets of the Company. (j) "Equity Commitment Letter" shall mean that certain agreement between RC Aviation, LLC and the Company dated August 24, 2004 for the provision of, among other things, equity financing to the Company in an amount up to $60 million. (k) "Holder" shall mean any holder of an interest in the Warrant or the outstanding Warrant Shares who becomes a holder in compliance with Section 2 hereof. (l) "Initial Exercise Date" shall mean the earlier of (x) December 1, 2005 and (y) the record date for a Distribution Event, if such Warrant is not exchangeable for the Common Stock Purchase Warrant prior to such date. (m) "Person" shall mean any individual, firm, corporation, limited liability company, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, Governmental Authority or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity. (n) "Required Holders" shall mean the holders of a majority of the Total Warrant Shares. (o) "Securities Act" shall mean the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations thereunder as the same shall be in effect at the time. (p) "Series E Preferred Stock" shall mean the Series E Preferred Stock, par value $0.01 per share, of the Company or any other Capital Stock of the Company into which such stock is reclassified or reconstituted. (q) "Total Warrants" shall mean this Warrant, together with any portions thereof assigned or transferred. (r) "Total Warrant Shares" shall mean the shares of Series E Preferred Stock issuable upon exercise of the Total Warrants and which have not been so exercised. (s) "Transaction" shall have the meaning set forth in Section 4(b). (t) "Warrant Purchase Price" shall mean the purchase price of $246,816 per share of Series E Preferred Stock. (u) "Warrants" shall mean this Warrant and all Warrants issued in exchange, transfer or replacement thereof. (v) "Warrant Shares" shall mean the 200 shares of Series E Preferred Stock issuable upon the exercise of this Warrant. (w) As used herein, any reference to a specified percentage of Warrants or Warrant Shares shall exclude any Warrants or Warrant Shares held by the Company or a subsidiary thereof. 7. Exchange, Replacement and Assignability . This Warrant is exchangeable, upon the surrender hereof by the Holder at the office or agency of the Company described in Section 1, for new Warrants of like tenor and date representing in the aggregate the right to purchase the number of shares which may be purchased hereunder, each of such new Warrants to represent the right to purchase such number of shares as shall be designated by such Holder at the time of such surrender. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of Warrants and, in the case of any such loss, theft or destruction, of an indemnity letter (reasonably satisfactory to the Company) of an institutional holder of such Warrants, or in other cases, of a bond of indemnity or other security satisfactory to the Company, or, in the case of any such mutilation, upon surrender or cancellation of Warrants, the Company will issue to the Holder a new Warrant of like tenor and date, in lieu of this Warrant or such new Warrants, representing the right to purchase the number of shares which may be purchased hereunder. Subject to compliance with Section 2, this Warrant and all rights hereunder are transferable in whole or in part upon the books of the Company by the registered holder hereof in person or by duly authorized attorney, and new Warrants shall be made and delivered by the Company, of the same tenor and date as this Warrant but registered in the name of the transferees, upon surrender of this Warrant, duly endorsed, to the appropriate office or agency of the Company. All expenses, taxes (other than stock transfer taxes) and other charges payable in connection with the preparation, execution and delivery of Warrants pursuant to this Section 7 shall be paid by the Company. 8. Transfer Books, No Rights as Stockholder, Survival of Rights. The Company will at no time close its transfer books against the transfer of this Warrant or any Warrant Shares in any manner which interferes with the timely exercise of this Warrant. This Warrant shall not entitle the Holder to any voting rights or any rights as a stockholder of the Company. The rights and obligations of the Company, of the Holder of this Warrant and of any Holder of Warrant Shares issued upon exercise of this Warrant pursuant to the terms of this Warrant shall survive the exercise of this Warrant. 9. Omissions and Indulgences; Amendment and Waiver. (a) It is agreed that any waiver, permit, consent or approval of any kind or character on the Holder's part of any breach or default under this Warrant, or any waiver on the Holder's part of any provisions or conditions of this Warrant must be in writing. (b) Any amendment, supplement or modification of or to any provision of this Warrant, any waiver of any provision of this Warrant and any consent to any departure by any party from the terms of any provision of this Warrant shall be effective only if it is made or given in writing and signed by the Company and the Required Holders; provided, however, that no such amendment, supplement or modification may be made without the written consent of the Holder if such amendment, supplement or modification changes the Warrant Purchase Price or the expiration date of this Warrant. (c) Any amendment or waiver consented to as provided in this Section 9 is binding upon each future holder of this Warrant and upon the Company without regard to whether this Warrant has been marked to indicate such amendment or waiver. 10. Rights of Transferees. Subject to compliance with Section 2, the rights granted to the Holder hereunder of this Warrant shall pass to and inure to the benefit of all subsequent transferees of all or any portion of the Warrant (provided that the Holder and any transferee shall hold such rights in proportion to their respective ownership of the Warrant and Warrant Shares) until extinguished pursuant to the terms hereof. 11. Captions. The titles and captions of the Sections and other provisions of this Warrant are for convenience of reference only and are not to be considered in construing this Warrant. 12. Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, telecopy, overnight courier service or personal delivery: (a) if to the Company: Hawaiian Holdings, Inc. 12730 High Bluff Drive Suite 180 San Diego, California 92130 Attention: Chief Executive Officer Facsimile: with copies to: Dechert LLP 30 Rockefeller Plaza New York, New York 10112 Attention: Charles I. Weissman, Esq. Facsimile: (212) 698-3599 (b) if to the Holder: Facsimile: with copies to: All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial overnight courier service; five (5) Business Days after being deposited in the mail, postage prepaid, if mailed; and when receipt is acknowledged, if telecopied. 13. Successors and Assigns. This Warrant shall be binding upon and inure to the benefit of the parties hereto and their respective successors or heirs and personal representatives and permitted assigns; provided, that the Company shall have no right to assign its rights, or to delegate its obligations, hereunder without the prior written consent of the Holder. 14. Governing Law. THIS WARRANT IS TO BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE AND WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE. 15. Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof. The parties hereto further agree to replace such invalid, illegal or unenforceable provision of this Warrant with a valid, legal and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid, illegal or unenforceable provision. 16. Entire Agreement. This Warrant contains the entire agreement among the parties with respect to the subject matter hereof and thereby supercedes all prior and contemporaneous agreements or understandings with respect thereto. 17. No Strict Construction. The Company and the Holder each acknowledge that they have been represented by counsel in connection with this Warrant. The Company and the Holder have participated jointly in the negotiation and drafting of this Warrant. In the event an ambiguity or question of intent or interpretation arises under any provision of this Warrant, this Warrant shall be construed as if drafted jointly by the parties thereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Warrant. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, Hawaiian Holdings, Inc. has caused this Warrant to be signed by its duly authorized officer effective as of June 2, 2005. HAWAIIAN HOLDINGS, INC. By:/s/ Randall L. Jenson -------------------------------------------------- Name: Randall L. Jenson Title: Chief Financial Officer, Treasurer and Secretary SUBSCRIPTION FORM To: Hawaiian Holdings, Inc. 12730 High Bluff Drive Suite 180 San Diego, California 92130 Attention: Chief Executive Officer Facsimile: 1. The undersigned, pursuant to the provisions of the attached Warrant, hereby elects to exercise this Warrant with respect to ________ shares of Series E Preferred Stock (the "Exercise Amount"). Capitalized terms used but not otherwise defined herein have the meanings ascribed thereto in the attached Warrant. 2. The undersigned herewith tenders payment for such shares in the following manner (please check type, or types, of payment and indicate the portion of the Exercise Price to be paid by each type of payment): ____ Exercise for Cash ___________________ ____ Cashless Exercise ___________________ 3. Please issue a certificate or certificates representing the shares issuable in respect hereof under the terms of the attached Warrant, as follows: ---------------------------------- (Name of Record Holder/Transferee) and deliver such certificate or certificates to the following address: ------------------------------------- (Address of Record Holder/Transferee) 4. The undersigned represents that the aforesaid shares are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. 5. If the Exercise Amount is less than all of the shares of Series E Preferred Stock purchasable hereunder, please issue a new warrant representing the remaining balance of such shares, as follows: ---------------------------------- (Name of Record Holder/Transferee) and deliver such warrant to the following address: ------------------------------------- (Address of Record Holder/Transferee) ------------------------------------- (Signature) - ------------------------------------- (Date) EX-99.5 6 cmw1506d.txt FORM OF WARRANT TO PURCHASE COMMON STOCK EXHIBIT A TO WARRANT TO PURCHASE SERIES E PREFERRED STOCK THE OFFER AND SALE OF THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE UNDERLYING SHARES OF STOCK HAVE NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW. NEITHER THIS WARRANT NOR THE UNDERLYING STOCK, NOR ANY PORTION THEREOF OR INTEREST THEREIN, MAY BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE SAME IS REGISTERED AND QUALIFIED IN ACCORDANCE WITH SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW, OR, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED. Warrant No. W-__ _________ ___, 2005 WARRANT to Purchase the Common Stock of Hawaiian Holdings, Inc. THIS CERTIFIES THAT, for value received, ___________ having an address at _____________, or registered assigns, is entitled to purchase from Hawaiian Holdings, Inc., a Delaware corporation, or any successor (the "Company"), in whole or in part, at a purchase price of $7.20 per share (subject to adjustment as provided herein), at any time, from and after the Initial Exercise Date to and including June 1, 2010, ______________ shares of the fully paid and nonassessable Common Stock (as herein defined) (as such number may be adjusted as provided herein). The shares of Common Stock which may be purchased pursuant to this Warrant are referred to herein as the "Aggregate Number". Certain terms used in this Warrant are defined in Section 6. This Warrant is issued in connection with the Equity Commitment Letter. The number of shares of Common Stock purchasable hereunder ("Warrant Shares") is subject to adjustment as hereinafter set forth. This Warrant is subject to the following provisions, terms and conditions: 1. (a) Exercise of Warrant. The rights represented by this Warrant may be exercised by the Holder hereof, in whole or in part (but not as to a fractional share of Common Stock), by (A) the delivery of this Warrant, together with a properly completed Subscription Form in the form attached hereto, to the principal office of the Company at 12730 High Bluff Drive, Suite 180, San Diego, California 92130 (or to such other address as it may designate by notice in writing to the Holder) and (B) payment to the Company of the Warrant Purchase Price for the Warrant Shares being purchased (i) by cash or by certified check or bank draft, (ii) as provided in Section 1(b) or (iii) any combination thereof. In the case of payment of all or a portion of the Warrant Purchase Price pursuant to Section 1(b), the direction of the Holder to made a "cashless exercise" shall serve as accompanying payment for that potion of the Warrant Purchase Price. The Company agrees that the shares so purchased shall be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant. shall have been delivered to the Company and payment made for such shares as aforesaid. Certificates for the shares so purchased shall be delivered to the Holder within ten (10) Business Days after the rights represented by this Warrant shall have been so exercised, and, unless this Warrant has expired, a new Warrant representing, and with an Aggregate Number equal to, the number of Warrant Shares, if any, with respect to which this Warrant shall not then have been exercised, in all other respects identical with this Warrant, shall also be issued and delivered to the Holder within such time, or, at the request of such Holder, appropriate notation may be made on this Warrant and signed by the Company and the same returned to such Holder. (b) Cashless Exercise. If the sale of the Warrant Shares is not covered by a registration statement under the Securities Act, the Holder shall have the right to pay all or a portion of the Warrant Purchase Price by making a "Cashless Exercise" pursuant to this Section 1(b), in which case (i) shares of the Company's Common Stock other than the Warrant Shares or (ii) at any time after June 1, 2006, the Warrant Shares to be acquired upon the exercise of this Warrant may be applied to pay the exercise price in connection with the exercise of this Warrant in whole or in part. Any shares of Common Stock or Warrant Shares transferred to the Company as payment of the exercise price under this Warrant shall be valued at the Fair Market Value of such shares of Common Stock or Warrant Shares. (c) Transfer Restriction Legend. Each certificate for Warrant Shares issued upon exercise of this Warrant, unless at the time of exercise the offer and sale of such Warrant Shares are registered under the Securities Act, shall bear the following legend (and any additional legend required by applicable law or rule) on the face thereof: The offer and sale of the shares of stock represented hereby have not been registered pursuant to the Securities Act of 1933, as amended, or any state securities law. Neither these shares, nor any portion thereof or interest therein, may be sold, transferred or otherwise disposed of unless the same are registered and qualified in accordance with said Act and any applicable state securities law, or, in the opinion of counsel reasonably satisfactory to the Company, such registration and qualification are not required. The provisions of Section 2 shall be binding upon all holders of certificates for Warrant Shares bearing the above legend and shall also be applicable to all holders of this Warrant. (d) Expenses and Taxes on Exercise. The Company shall pay all expenses, taxes and other charges payable in connection with the preparation, execution and delivery of any stock certificates and substitute Warrants pursuant to this Section 1, except that, in case such stock certificates or Warrants shall be registered in a name or names other than the name of the holder of this Warrant, funds sufficient to pay all stock transfer taxes which shall be payable upon the execution and delivery of such stock certificates or Warrants shall be paid by the Holder to the Company at the time the Company delivers such stock certificates or Warrants to the Company for exercise. 2 2. (a) Warrants and Warrant Shares Not Registered; Transferee Restrictions. Each Holder, by acceptance thereof, represents and acknowledges that the offer and sale of this Warrant and the Warrant Shares which may be purchased upon exercise of this Warrant are not being registered under the Securities Act, that the issuance of this Warrant and the offering and sale of such Warrant Shares are being made in reliance on the exemption from registration under Section 4(2) of the Securities Act as not involving any public offering and that the Company's reliance on such exemption is predicated in part on the representations made by the initial Holder of this Warrant to the Company that such Holder (i) is acquiring this Warrant for investment purposes for its own account, with no present intention of reselling or otherwise distributing the same in violation of the Securities Act, subject, nevertheless, to any requirement of law that the disposition of its property shall at all times be within its control, (ii) is an "accredited investor" as defined in Regulation D under the Securities Act and (iii) has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investments made or to be made in connection with the acquisition and exercise of this Warrant. Neither this Warrant nor the related Warrant Shares may be transferred except pursuant to an effective registration statement under the Securities Act or upon the conditions specified in Section 2(b). (b) Notice of Transfer, Opinion of Counsel. Each Holder, by acceptance hereof, agrees that prior to the disposition of this Warrant or of any Warrant Shares, other than pursuant to an effective registration under the Securities Act, such Holder will give written notice to the Company expressing such Holder's intention to effect such disposition and describing briefly such Holder's intention as to the manner in which this Warrant or the Warrant Shares theretofore issued or thereafter issuable upon exercise hereof, are to be disposed together with an opinion of counsel as may be designated by such Holder and reasonably satisfactory to the Company as to the necessity or non-necessity of registration under the Securities Act. If in the opinion of such counsel, the proposed disposition does not require registration under the Securities Act of the disposition of this Warrant and/or the Warrant Shares issuable or issued upon the exercise of this Warrant, such Holder shall be entitled to dispose of this Warrant and/or the Warrant Shares theretofore issued upon the exercise hereof, all in accordance with the terms of the notice delivered by such Holder to the Company. The Company is entitled to rely on the most recent written notice from the Holder with respect to the ownership of the Warrant. 3. Representations, Warranties and Covenants of the Company. (a) The Company hereby represents and warrants that: (A) The Company has full corporate power and authority to execute and deliver this Warrant. (B) The execution and delivery of this Warrant and the consummation by the Company of the transactions contemplated hereby have been duly and validly approved by all necessary corporate action on the part of the Company. 3 (C) This Warrant has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms. (D) The Holder of this Warrant, when such Warrant is issued by the Company to such Holder, shall have good title thereto free from all taxes, liens and charges with respect to the issuance thereof. (b) The Company covenants and agrees that: (A) Reservation of Shares. During the period within which the rights represented by this Warrant may be exercised, the Company will have at all times authorized, and reserved for the purpose of issue or transfer upon exercise of the rights evidenced by this Warrant, a sufficient number of shares of the Common Stock to provide therefore (B) Issuance of Shares. The Warrant Shares issued pursuant to the exercise of this Warrant will, upon issuance, be duly and validly issued, fully paid and nonassessable and the holder of such Warrant Shares shall have good title to such Warrant Shares free from all taxes, liens and charges with respect to the issuance thereof. (C) Listing on Securities Exchanges. The Company promptly will procure at its sole expense the listing of all Warrant Shares then registered for public sale (subject to issuance or notice of issuance) on all stock exchanges on which the shares of Common Stock are then listed. 4. Participation in Distributions of Common Stock and Certain Adjustments. Under certain conditions, the Aggregate Number is subject to adjustment as set forth in this Section 4. No adjustments shall be made under this Section 4 as a result of the issuance by the Company of the Warrant Shares upon exercise of this Warrant. (a) Adjustments. The Aggregate Number, after taking into consideration any prior adjustments pursuant to this Section 4, shall be subject to adjustment from time to time as follows and, thereafter, as adjusted, shall be deemed to be the Aggregate Number hereunder. No adjustment shall be made under this Section 4(a) upon the issuance of Convertible Securities or Common Stock issuable upon exercise or conversion of such Convertible Securities if an adjustment shall previously have been made upon the issuance of such Convertible Securities pursuant to Section 4(c). (i) Stock Dividends; Subdivisions and Combinations. In case at any time or from time to time the Company shall: (A) issue to the holders of the Common Stock a dividend payable in, or other distribution of, Common Stock (a "Stock Dividend"), 4 (B) subdivide its outstanding shares of Common Stock into a larger number of shares of Common Stock, including without limitation by means of a stock split (a "Stock Subdivision"), or (C) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock (a "Stock Combination"), then the Aggregate Number in effect immediately prior thereto shall be (1) proportionately increased in the case of a Stock Dividend or a Stock Subdivision and (2) proportionately decreased in the case of a Stock Combination. In the event the Company shall declare or pay, without consideration, any dividend on the Common Stock payable in any right to acquire Common Stock for no consideration, then the Company shall be deemed to have made a Stock Dividend in an amount of shares equal to the maximum number of shares issuable upon exercise of such rights to acquire Common Stock. (ii) Other Distributions. In case at any time or from time to time the Company shall take a record of the holders of the Common Stock for the purpose of entitling them to receive any dividend or other distribution, other than a distribution of Common Stock, Convertible Securities or options, warrants or other rights to subscribe for or purchase any Convertible Securities (collectively, a "Distribution"), of: (A) Cash (other than regular quarterly dividends payable out of current consolidated earnings); (B) any evidences of its indebtedness, any shares of its Capital Stock (other than Common Stock) or any other securities or property of any nature whatsoever (other than cash); or (C) any options, warrants or other rights to subscribe for or purchase any of the following: any evidences of its indebtedness, any shares of its Capital Stock (other than Common Stock) or any other securities or property of any nature whatsoever (other than cash), then the Holder shall be entitled to receive such Distribution as if the Holder had fully exercised this Warrant upon the exercise of this Warrant at any time on or after the taking of such record, the number of Warrant Shares to be received upon exercise of this Warrant determined as stated herein and, in addition and without further payment, the cash, evidences of indebtedness, stock, securities, other property, options, warrants and/or other rights (or any portion thereof) to which the Holder would have been entitled by way of such Distribution and subsequent dividends and distributions through the date of exercise as if such Holder (x) had fully exercised this Warrant immediately prior to such Distribution and (y) had retained the Distribution in respect of the Common Stock and all subsequent dividends and distributions of any nature whatsoever in respect of any stock or 5 securities paid as dividends and distributions and originating directly or indirectly from such Common Stock. A reclassification of the Common Stock into shares of Common Stock and shares of any other class of stock shall be deemed a Distribution by the Company to the holders of the Common Stock of such shares of such other class of stock and, if the outstanding shares of Common Stock shall be changed into a larger or smaller number of shares of Common Stock as a part of such reclassification, such event shall be deemed a Stock Subdivision or Stock Combination, as the case may be, of the outstanding shares of Common Stock within the meaning of Section 4(a)(i) hereof. (iii) Issuance of Common Stock. If at any time or from time to time the Company shall (except as hereinafter provided in this Section 4(a)(iii)) issue or sell any additional shares of Common Stock for a consideration per share less than the Fair Market Value, then, effective on the date specified below, the Aggregate Number shall be adjusted by multiplying (A) the Aggregate Number immediately prior thereto by (B) a fraction, the numerator of which shall be the sum of the number of shares of Common Stock outstanding immediately prior to the issuance of such additional shares of Common Stock (calculated on a Fully Diluted basis) and the number of such additional shares of Common Stock so issued and the denominator of which shall be the sum of the number of shares of Common Stock outstanding immediately prior to the issuance of such additional shares of Common Stock (calculated on a Fully Diluted basis) and the number of shares of Common Stock which the aggregate consideration for the total number of such additional shares of Common Stock so issued would purchase at the Fair Market Value. The date as of which the Fair Market Value shall be computed shall be the earlier of the date on which the Company shall enter into a firm contract or commitment for the issuance of such additional shares of Common Stock or the date of actual issuance of such additional shares of Common Stock. The provisions of this Section 4(a)(iii) shall not apply to any issuance of additional shares of Common Stock for which an adjustment is otherwise provided under Section 4(a)(i) hereof. No adjustment of the Aggregate Number shall be made under this Section 4(a)(iii) upon: (A) the issuance of any additional shares of Common Stock which are issued pursuant to (x) the exercise of other subscription or purchase rights or (y) the exercise of any conversion or exchange rights in any Convertible Securities, provided that for purposes of clauses (x) or (y) an adjustment shall previously have been made upon the issuance of such other rights or upon the issuance of such Convertible Securities pursuant to Section 4(a)(iv) or (v) hereof or no such adjustment shall have been required upon the issuance of such other rights or Convertible Securities; 6 (B) the issuance of Common Stock in any merger or other acquisition of a business or Person approved by the Board of Directors of the Company; (C) the issuance of Common Stock in a Qualified Public Offering; (D) the issuance of Common Stock upon the exercise of rights issued in connection with the contemplated rights offering by the Company for the purpose of the redemption of the Series A Subordinated Convertible Notes and Series B Subordinated Convertible Notes issued by the Corporation (collectively, the "Subordinated Convertible Notes"), prior to the first anniversary of the issuance of the Subordinated Convertible Notes; (E) the issuance of up to 1,500,000 shares of Common Stock issuable to unions of Hawaiian Airlines, Inc., in transactions approved by the Board of Directors of the Company; (F) the issuance of shares of Common Stock upon the exercise of stock options or other awards made or denominated in shares of Common Stock under the Company's 2005 Stock Incentive Plan or any of the Company's other stock plans including any stock option, stock purchase, restricted stock or similar plan hereafter adopted by the Board of Directors of the Company and, if required by applicable law or stock exchange requirement, approved by the stockholders of the Company; (G) the issuance of Common Stock on exercise or conversion of Convertible Securities outstanding on the Closing Date; or (H) the issuance of Common Stock pursuant to Convertible Securities to financial institutions or similar entities in transactions approved by the Board of Directors of the Company, the principal purpose of which is not raising capital through the sale of equity securities. (iv) Warrants and Options. If at any time or from time to time the Company shall take a record of the holders of the Common Stock for the purpose of entitling them to receive a distribution of, or shall in any manner (whether directly, by assumption in a merger in which the Company is the surviving corporation and in which the shareholders of the Company immediately prior to the merger continue to own more than fifty percent (50%) of the outstanding Common Stock immediately after the merger and for a period of one hundred eighty (180) days thereafter, or otherwise) issue or sell any warrants, options or other rights to subscribe for or purchase, directly or indirectly, any Convertible Securities, whether or not the rights to subscribe, purchase, exchange or convert thereunder are immediately exercisable, and the consideration per share for which additional shares of Common Stock may at any time thereafter be issuable pursuant to 7 such warrants, options or other rights or pursuant to the terms of such Convertible Securities shall be less than the Fair Market Value, then the Aggregate Number shall be adjusted as provided in Section 4(a)(iii) hereof on the basis that (A) the maximum number of additional shares of Common Stock issuable pursuant to all such warrants, options or other rights or necessary to effect the conversion or exchange of all such Convertible Securities shall be deemed to have been issued as of the date of the determination of the Fair Market Value as hereinafter provided and (B) the aggregate consideration for such maximum number of additional shares of Common Stock shall be deemed to be the minimum consideration received and receivable by the Company for the issuance of such additional shares of Common Stock pursuant to the terms of such warrants, options or other rights or such Convertible Securities. For purposes of this Section 4(a)(iv), the effective date of such adjustment and the date as of which the Fair Market Value shall be computed shall be the earliest of (x) the date on which the Company shall take a record of the holders of the Common Stock for the purpose of entitling them to receive any such warrants, options or other rights, (y) the date on which the Company shall enter into a firm contract or commitment for the issuance of such warrants, options or other rights and (z) the date of actual issuance of such warrants, options or other rights. No adjustment of the Aggregate Number shall be made under this Section 4(a)(iv) upon: (A) the issuance of any warrants, options or other rights which are issued pursuant to the exercise of any warrants, options or other rights if an adjustment shall have been made or is contemporaneously made or if no such adjustment shall have been required upon the issuance of such warrants, options or other rights, pursuant to this Section 4(a)(iv); (B) the issuance of warrants, options or other rights to subscribe for or purchase Convertible Securities in any merger or other acquisition of a business or Person approved by the Board of Directors of the Company; (C) the issuance of warrants, options or other rights to subscribe for or purchase shares of Common Stock or other awards made or denominated in shares of Common Stock under the Company's 2005 Stock Incentive Plan or any of the Company's other stock plans including any stock option, stock purchase, restricted stock or similar plan hereafter adopted by the Board of Directors of the Company and, if required by applicable law or stock exchange requirement, approved by the stockholders of the Company; (D) the issuance of rights to purchase Common Stock issued in connection with the contemplated rights offering by the Company for the purpose of the redemption of the Subordinated Convertible Notes, prior to the first anniversary of the issuance of the Subordinated Convertible Notes; or 8 (E) the issuance of options, warrants or other rights to subscribe for or purchase Convertible Securities to financial institutions or similar entities in transactions approved by the Board of Directors of the Company, the principal purpose of which is not raising capital through the sale of equity securities. (v) Convertible Securities. If at any time or from time to time the Company shall take a record of the holders of the Common Stock for the purpose of entitling them to receive a distribution of or shall in any manner (whether directly, by assumption in a merger in which the Company is the surviving corporation and in which the shareholders of the Company immediately prior to the merger continue to own more than fifty percent (50%) of the outstanding Common Stock immediately after the merger and for a period of one hundred eighty (180) days thereafter, or otherwise) issue or sell Convertible Securities, whether or not the rights to exchange or convert thereunder are immediately exercisable, and the consideration per share for the additional shares of Common Stock which may at any time thereafter be issuable pursuant to the terms of such Convertible Securities shall be less than the Fair Market Value, then the Aggregate Number shall be adjusted as provided in Section 4(a)(iii) hereof on the basis that (A) the maximum number of additional shares of Common Stock necessary to effect the conversion or exchange of all such Convertible Securities shall be deemed to have been issued as of the date of the determination of the Fair Market Value as herein provided and (B) the aggregate consideration for such maximum number of additional shares of Common Stock shall be deemed to be the minimum consideration received and receivable by the Company for the issuance of such additional shares of Common Stock pursuant to the terms of such Convertible Securities. For purposes of this Section 4(a)(v), the effective date of such adjustment and the date as of which the Fair Market Value shall be computed shall be the earliest of (x) the date on which the Company shall take a record of the holders of the Common Stock for the purpose of entitling them to receive any such Convertible Securities, (y) the date on which the Company shall enter into a firm contract or commitment for the issuance of such Convertible Securities and (z) the date of actual issuance of such Convertible Securities. No adjustment of the Aggregate Number shall be made under this Section 4(a)(v) upon: (A) the issuance of any Convertible Securities which are issued pursuant to the exercise of any warrants, options or other subscription or purchase rights if an adjustment shall previously have been made or is contemporaneously made or if no such adjustment shall have been required upon the issuance of such warrants, options or other rights pursuant to Section 4(a)(iv) hereof; 9 (B) the issuance of Convertible Securities in any merger or other acquisition of a business or Person approved by the Board of Directors of the Company; (C) the issuance of Convertible Securities upon the exercise, conversion or the extension of the term of Convertible Securities outstanding on the Closing Date or the cancellation and reissuance with identical terms and conditions except for a longer term of any such Convertible Securities outstanding on the Closing Date; or (D) the issuance of Convertible Securities to financial institutions or similar entities in transactions approved by the Board of Directors of the Company, the principal purpose of which is not raising capital through the sale of equity securities. (vi) Subsequent Adjustments. If at any time after any adjustment of the Aggregate Number shall have been made pursuant to Section 4(a) (iv) or (v) hereof on the basis of the issuance of warrants, options or other rights or the issuance of Convertible Securities, or after any new adjustments of the Aggregate Number shall have been made pursuant to this Section 4(a)(vi), then: (A) such warrants, options or rights or the right of conversion or exchange in such Convertible Securities shall expire, and all or a portion of such warrants, options or rights, or the right of conversion or exchange in respect of all or a portion of such Convertible Securities, as the case may be, shall not have been exercised prior to such expiration, then (B) such previous adjustment shall be rescinded and annulled and the additional shares of Common Stock which were deemed to have been issued by virtue of the computation made in connection with such adjustment shall no longer be deemed to have been issued by virtue of such computation; (C) simultaneously therewith, a recomputation shall be made of the effect of such warrants, options or rights or Convertible Securities on the determination of the Aggregate Number, which shall be made on the basis of treating the number of additional shares of Common Stock, if any, theretofore actually issued pursuant to any previous exercise of such warrants, options or rights or such right of conversion or exchange as having been issued on the date or dates of such exercise and, in the case of a recomputation of a calculation originally made pursuant to Section 4(a)(iv) or (v), for the consideration actually received and receivable therefor; and, if and to the extent called for by the foregoing provisions of Section 4(a)(vi) on the basis aforesaid, a new adjustment of the Aggregate Number shall be made, such new adjustment shall supersede the previous adjustment so rescinded and annulled. 10 (vii) Miscellaneous. The following provisions shall be applicable to the making of adjustments of the Aggregate Number provided above in this Section 4(a): (A) Whenever the Aggregate Number is adjusted pursuant to this Section 4(a), the Warrant Purchase Price per Warrant Share payable upon exercise of this Warrant shall be adjusted by multiplying the Warrant Purchase Price immediately prior to such adjustment by a fraction, the numerator of which shall be the Aggregate Number prior to such adjustment, and the denominator of which shall be the Aggregate Number following such adjustment. (B) The sale or other disposition of any issued shares of Common Stock owned or held by or for the account of the Company or any of its Subsidiaries shall be deemed an issuance thereof for the purposes of this Section 4(a). (C) To the extent that any additional shares of Common Stock or any Convertible Securities or any warrants, options or other rights to subscribe for or purchase any Convertible Securities (1) are issued solely for cash consideration, the consideration received by the Company therefor shall be deemed to be the amount of the cash received by the Company therefor or (2) are offered by the Company for subscription, the consideration received by the Company shall be deemed to be the subscription price, in any such case excluding any amounts paid or receivable for accrued interest or accrued or accumulated dividends. To the extent that such issuance shall be for a consideration other than cash, or partially for cash and partially for other consideration, then the amount of such consideration shall be deemed to be the fair market value of such other consideration plus, if applicable, the amount of such cash at the time of such issuance, determined in the manner set forth in Section 4(d)(ii). In case any additional shares of Common Stock or any Convertible Securities or any warrants, options or other rights to subscribe for or purchase any Convertible Securities shall be issued in connection with any merger in which the Company is the survivor and issues any securities, the amount of consideration therefor shall be deemed to be the fair market value of such additional shares of Common Stock, Convertible Securities, warrants, options or other rights, as the case may be, determined in the manner set forth in Section 4(d)(ii). The consideration for any shares of Common Stock issuable pursuant to the terms of any Convertible Securities shall be equal to (x) the consideration received by the Company for issuing any warrants, options or other rights to subscribe for or purchase such Convertible Securities, plus (y) the consideration paid or payable to the Company in respect of the subscription for or purchase of such Convertible Securities, plus (z) the consideration, if any, payable to the Company upon the exercise of the right of conversion or exchange of such Convertible Securities. 11 In case of the issuance at any time of any additional shares of Common Stock or Convertible Securities in payment or satisfaction of any dividends upon any class of stock other than Common Stock, the Company shall be deemed to have received for such additional shares of Common Stock or Convertible Securities a consideration equal to the amount of such dividend so paid or satisfied. (D) The adjustments required by the preceding paragraphs of this Section 4(a) shall be made whenever and as often as any specified event requiring an adjustment shall occur, except that no adjustment of the Aggregate Number that would otherwise be required shall be made if the amount of such adjustment shall be less than one percent (1%) of the number of Warrant Shares issuable upon exercise of the Warrants immediately prior to such adjustment. Any adjustment representing a change of less than such minimum amount (except as aforesaid) shall be carried forward and made as soon as such adjustment, together with other adjustments required by this Section 4(a) and not previously made, would result in a minimum adjustment. For the purpose of any adjustment, any specified event shall be deemed to have occurred at the close of business on the date of its occurrence. (E) In computing adjustments under this Section 4(a), fractional interests in Common Stock shall be taken into account to the nearest one-thousandth of a share. (F) If the Company shall take a record of the holders of the Common Stock for the purpose of entitling them to receive a dividend or distribution or subscription or purchase rights and shall, thereafter and before the distribution to shareholders thereof, legally abandon its plan to pay or deliver such dividend, distribution, subscription or purchase rights, then no adjustment shall be required by reason of the taking of such record and any such adjustment previously made in respect thereof shall be rescinded and annulled. (b) Changes in Common Stock. In case at any time the Company shall initiate any transaction or be a party to any transaction (including, without limitation, a merger, consolidation, share exchange, sale, lease or other disposition of all or substantially all of the Company's assets, liquidation, recapitalization or reclassification of the Common Stock) in connection with which the previous outstanding Common Stock shall be changed into or exchanged for different securities of the Company or Capital Stock or other securities of another corporation or interests in a non-corporate entity or other property (including cash) or any combination of the foregoing (each such transaction being herein called a "Transaction"), then, as a condition of the consummation of the Transaction and without duplication of any adjustment made pursuant to Section 4(a)(i), lawful, enforceable and adequate provision shall be made so that the Holder shall be entitled to receive upon exercise of this Warrant at any time on or after the consummation of the Transaction, in lieu of the Warrant Shares issuable upon such exercise prior to such consummation, the securities or other property (including cash) to which such Holder would have been entitled upon consummation of the Transaction if such Holder had exercised this Warrant immediately prior thereto (subject to adjustments from and after the consummation date as nearly 12 equivalent as possible to the adjustments provided for in this Section 4). The foregoing provisions of this Section 4(b) shall similarly apply to successive Transactions. (c) Other Action Affecting Capital Stock. In case at any time or from time to time the Company shall take any action of the type contemplated in Section 4(a) or (b) hereof but not expressly provided for by such provisions (other than the granting of stock appreciation rights, phantom stock rights or other rights with equity features) other than cash bonuses, then, unless in the opinion of the Company's Board of Directors such action will not have a material adverse effect upon the rights of the Holder (taking into consideration, if necessary, any prior actions which the Company's Board of Directors deemed not to materially adversely affect the rights of the Holder), the Aggregate Number shall be adjusted in such manner and at such time as the Company's Board of Directors may in good faith determine to be equitable in the circumstances. (d) Notices. (i) Notice of Proposed Actions. In case the Company shall propose (A) to pay any dividend payable in stock of any class to the holders of the Common Stock or to make any other distribution to the holders of the Common Stock, (B) to offer to the holders of the Common Stock rights to subscribe for or to purchase any Convertible Securities or additional shares of Common Stock or shares of stock of any class or any other securities, warrants, rights or options, (other than the exercise of pre-emptive rights by such a holder) (C) to effect any reclassification of the Common Stock, (D) to effect any recapitalization, stock subdivision, stock combination or other capital reorganization, (E) to effect any consolidation or merger, share exchange, or sale, lease or other disposition of all or substantially all of its property, assets or business, (F) to effect the liquidation, dissolution or winding up of the Company, or (G) to effect any other action which would require an adjustment under this Section 4, then in each such case the Company shall give to the Holder written notice of such proposed action, which shall specify the date on which a record is to be taken for the purposes of such stock dividend, stock subdivision, stock combination, distribution or rights, or the date on which such reclassification, recapitalization, reorganization, consolidation, merger, share exchange, sale, lease, transfer, disposition, liquidation, dissolution, winding up or other transaction is to take place and the date of participation therein by the holders of Common Stock, if any such date is to be fixed, or the date on which the transfer of Common Stock is to occur, and shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action on the Common Stock and on the Aggregate Number after giving effect to any adjustment which will be required as a result of such action. Such notice shall be so given in the case of any action covered by clause (A) or (B) above at least ten (10) days prior to the record date for determining holders of the Common Stock for purposes of such action and, in the case of any other such action, at least ten (10) days prior to the earlier of the date of the taking of such proposed action or the date of participation therein by the holders of Common Stock. 13 (ii) Adjustment Notice. Whenever the Aggregate Number is to be adjusted pursuant to this Section 4, unless otherwise agreed by the Holder, the Company shall promptly (and in any event within twenty (20) Business Days after the event requiring the adjustment) prepare a certificate signed by the Chief Financial Officer of the Company, setting forth, in reasonable detail, the event requiring the adjustment and the method by which such adjustment is to be calculated. The Company shall keep at its principal office copies of all such certificates and cause the same to be available for inspection at said office during normal business hours by the Holder or any prospective purchaser of the Warrant (in whole or in part) if so designated by the Holder. 5. No Dilution or Impairment. The Company will not, by amendment of its Certificate of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, share exchange, dissolution or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, including, without limitation, the adjustments required under Section 4 hereof, and will at all times in good faith assist in the carrying out of all such terms and in taking of all such action as may be necessary or appropriate to protect the rights of the Holder against dilution or other impairment. Without limiting the generality of the foregoing and notwithstanding any other provision of this Warrant to the contrary (including by way of implication), the Company (a) will not increase the par value of any shares of Common Stock receivable on the exercise of this Warrant above the amount payable therefor on such exercise or (b) will take all such action as may be necessary or appropriate so that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on the exercise of this Warrant. 6. Definitions. The terms defined in this Section 6, whenever used in this Warrant, shall, unless the context otherwise requires, have the respective meanings hereinafter specified: (a) "Aggregate Number" shall have the meaning set forth in the recitals hereto. (b) "Business Day" shall mean any day other than a Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law or executive order to close. (c) "Capital Stock" shall mean (a) with respect to any Person that is a corporation, any and all shares, interests or equivalents in capital stock (whether voting or nonvoting, and whether common or preferred) of such corporation, and (b) with respect to any Person that is not a corporation, any and all partnership, membership, limited liability company or other equity interests of such Person that confer on a Person the right to receive a share of the profits and losses of, or the distribution of assets of, the issuing Person; and in each case, any and all warrants, rights or options to purchase, and all conversion or exchange rights, voting rights, calls or rights of any character with respect to, any of the foregoing, including, without limitation, any rights in respect of any change in the value of any of the foregoing, including stock appreciation rights and similar interests. (d) "Cashless Exercise" shall have the meaning set forth in Section 1(b). 14 (e) "Closing Date" shall mean June 1, 2005. (f) "Common Stock" shall mean the Common Stock, par value $.01 per share, of the Company or any other Capital Stock of the Company into which such stock is reclassified or reconstituted. (g) "Company" shall have the meaning set forth in the introductory paragraph hereto. (h) "Convertible Securities" shall mean evidences of indebtedness, shares of stock or other securities (including, without limitation, options and warrants) which are directly or indirectly convertible, exercisable or exchangeable, with or without payment of additional consideration in cash or property, for shares of Common Stock, either immediately or upon the onset of a specified date or the happening of a specified event. (i) "Distribution" shall have the meaning set forth in Section 4(a)(ii). (j) "Equity Commitment Letter" shall mean that certain agreement between RC Aviation, LLC and the Company dated August 24, 2004 for the provision of, among other things, equity financing to the Company in an amount up to $60 million. (k) "Fair Market Value" shall mean, with respect to a share of Common Stock on any date: (i) the fair market value of the outstanding Common Stock over then ten (10) trading days prior to the date of calculation based upon (a) if the Common Stock is listed on a national securities exchange, the closing price per share of Common Stock on each such day published in The Wall Street Journal (National Edition) or, if no such closing price on each such day is published in The Wall Street Journal (National Edition), the average of the closing bid and asked prices on each such day, as officially reported on the principal national securities exchange on which the Common Stock is then listed or admitted to trading; (b) if the Common Stock is not then listed or admitted to trading on any national securities exchange, but is designated as a national market system security, the last trading price of the Common Stock on each such day; and (c) if there shall have been no trading on any such day or if the Common Stock is not so designated, the average of the reported closing bid and asked price of the Common Stock, on each such day as shown by NASDAQ and reported by any member firm of the NYSE selected by the Company; or (ii) if none of (i)(a), (b) or (c) is applicable, a market price per share determined in good faith by the Board of Directors of the Company, which shall be deemed to be "Fair Market Value". (l) "Fully Diluted" shall mean, with respect to the Common Stock as of a particular time, the total number of outstanding shares of Common Stock as of such time as determined by treating (i) the shares issuable under the Warrants as having been issued and (ii) all outstanding and "in-the-money" and then exercisable Convertible Securities, as having been converted, exercised or exchanged and the shares issuable thereunder as having been issued. (m) "Holder" shall mean any holder of an interest in the Warrant or the outstanding Warrant Shares who becomes a holder in compliance with Section 2 hereof. (n) "Person" shall mean any individual, firm, corporation, limited liability 15 company, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, Governmental Authority or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity. (o) "Qualified Public Offering" shall mean the consummation of a firm commitment public offering of the Common Stock of the Company by a nationally recognized investment banking firm pursuant to an effective registration statement under the Securities Act covering the offer and sale of such securities for cash for the account of the Company. (p) "Required Holders" shall mean the holders of a majority of the Total Warrant Shares. (q) Securities Act" shall mean the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations thereunder as the same shall be in effect at the time. (r) "Stock Combination" shall have the meaning set forth in Section 4(a)(i). (s) "Stock Dividend" shall have the meaning set forth in Section 4(a)(i). (t) "Stock Subdivision" shall have the meaning set forth in Section 4(a)(i). (u) "Total Warrants" shall mean this Warrant, together with any portions thereof assigned or transferred. (v) "Total Warrant Shares" shall mean the shares of Common Stock issuable upon exercise of the Total Warrants and which have not been so exercised. (w) "Transaction" shall have the meaning set forth in Section 4(b). (x) "Warrant Purchase Price" shall mean the purchase price of $7.20 per share of Common Stock payable upon exercise of this Warrant, as adjusted as provided herein. (y) "Warrants" shall mean this Warrant and all Warrants issued in exchange, transfer or replacement thereof. (z) "Warrant Shares" shall have the meaning set forth in the fourth paragraph hereto. (aa) As used herein, any reference to a specified percentage of Warrants or Warrant Shares shall exclude any Warrants or Warrant Shares held by the Company or a subsidiary thereof. 7. Exchange, Replacement and Assignability . This Warrant is exchangeable, upon the surrender hereof by the Holder at the office or agency of the Company described in Section 1, for new Warrants of like tenor and date representing in the aggregate the right to purchase the number of shares which may be purchased hereunder, each of such new Warrants to represent the right to purchase such number of shares as shall be designated by such Holder at the time of 16 such surrender. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of Warrants and, in the case of any such loss, theft or destruction, of an indemnity letter (reasonably satisfactory to the Company) of an institutional holder of such Warrants, or in other cases, of a bond of indemnity or other security satisfactory to the Company, or, in the case of any such mutilation, upon surrender or cancellation of Warrants, the Company will issue to the Holder a new Warrant of like tenor and date, in lieu of this Warrant or such new Warrants, representing the right to purchase the number of shares which may be purchased hereunder. Subject to compliance with Section 2, this Warrant and all rights hereunder are transferable in whole or in part upon the books of the Company by the registered holder hereof in person or by duly authorized attorney, and new Warrants shall be made and delivered by the Company, of the same tenor and date as this Warrant but registered in the name of the transferees, upon surrender of this Warrant, duly endorsed, to the appropriate office or agency of the Company. All expenses, taxes (other than stock transfer taxes) and other charges payable in connection with the preparation, execution and delivery of Warrants pursuant to this Section 7 shall be paid by the Company. 8. Transfer Books, No Rights as Stockholder, Survival of Rights. The Company will at no time close its transfer books against the transfer of this Warrant or any Warrant Shares in any manner which interferes with the timely exercise of this Warrant. This Warrant shall not entitle the Holder to any voting rights or any rights as a stockholder of the Company. The rights and obligations of the Company, of the Holder of this Warrant and of any Holder of Warrant Shares issued upon exercise of this Warrant pursuant to the terms of this Warrant shall survive the exercise of this Warrant. 9. Omissions and Indulgences; Amendment and Waiver. (a) It is agreed that any waiver, permit, consent or approval of any kind or character on the Holder's part of any breach or default under this Warrant, or any waiver on the Holder's part of any provisions or conditions of this Warrant must be in writing. (b) Any amendment, supplement or modification of or to any provision of this Warrant, any waiver of any provision of this Warrant and any consent to any departure by any party from the terms of any provision of this Warrant shall be effective only if it is made or given in writing and signed by the Company and the Required Holders; provided, however, that no such amendment, supplement or modification may be made without the written consent of the Holder if such amendment, supplement or modification changes the Aggregate Number, the Warrant Purchase Price or the expiration date of this Warrant. (c) Any amendment or waiver consented to as provided in this Section 9 is binding upon each future holder of this Warrant and upon the Company without regard to whether this Warrant has been marked to indicate such amendment or waiver. 10. Rights of Transferees. Subject to compliance with Section 2, the rights granted to the Holder hereunder of this Warrant shall pass to and inure to the benefit of all subsequent transferees of all or any portion of the Warrant (provided that the Holder and any transferee shall hold such rights in proportion to their respective ownership of the Warrant and Warrant Shares) until extinguished pursuant to the terms hereof. 17 11. Captions. The titles and captions of the Sections and other provisions of this Warrant are for convenience of reference only and are not to be considered in construing this Warrant. 12. Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, telecopy, overnight courier service or personal delivery: (a) if to the Company: Hawaiian Holdings, Inc. 12730 High Bluff Drive Suite 180 San Diego, California 92130 Attention: Chief Executive Officer Facsimile: with copies to: Dechert LLP 30 Rockefeller Plaza New York, New York 10112 Attention: Charles I. Weissman, Esq. Facsimile: (212) 698-3599 (b) if to the Holder: Facsimile: with copies to: All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial overnight courier service; five (5) Business Days after being deposited in the mail, postage prepaid, if mailed; and when receipt is acknowledged, if telecopied. 13. Successors and Assigns. This Warrant shall be binding upon and inure to the benefit of the parties hereto and their respective successors or heirs and personal representatives and permitted assigns; provided, that the Company shall have no right to assign its rights, or to delegate its obligations, hereunder without the prior written consent of the Holder. 14. Governing Law. THIS WARRANT IS TO BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE AND WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE. 18 15. Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof. The parties hereto further agree to replace such invalid, illegal or unenforceable provision of this Warrant with a valid, legal and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid, illegal or unenforceable provision. 16. Entire Agreement. This Warrant contains the entire agreement among the parties with respect to the subject matter hereof and thereby supercedes all prior and contemporaneous agreements or understandings with respect thereto. 17. No Strict Construction. The Company and the Holder each acknowledge that they have been represented by counsel in connection with this Warrant. The Company and the Holder have participated jointly in the negotiation and drafting of this Warrant. In the event an ambiguity or question of intent or interpretation arises under any provision of this Warrant, this Warrant shall be construed as if drafted jointly by the parties thereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Warrant. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 19 IN WITNESS WHEREOF, Hawaiian Holdings, Inc. has caused this Warrant to be signed by its duly authorized officer under its corporate seal, duly attested by its authorized officer, and dated as of __________ __, 2005. HAWAIIAN HOLDINGS, INC. By:_______________________________ Name: Title: ATTEST: - ---------------------------- 20 SUBSCRIPTION FORM To: Hawaiian Holdings, Inc. 12730 High Bluff Drive Suite 180 San Diego, California 92130 Attention: Chief Executive Officer Facsimile: 1. The undersigned, pursuant to the provisions of the attached Warrant, hereby elects to exercise this Warrant with respect to ________ shares of Common Stock (the "Exercise Amount"). Capitalized terms used but not otherwise defined herein have the meanings ascribed thereto in the attached Warrant. 2. The undersigned herewith tenders payment for such shares in the following manner (please check type, or types, of payment and indicate the portion of the Exercise Price to be paid by each type of payment): ____ Exercise for Cash ___________________ ____ Cashless Exercise ___________________ 3. Please issue a certificate or certificates representing the shares issuable in respect hereof under the terms of the attached Warrant, as follows: ---------------------------------- (Name of Record Holder/Transferee) and deliver such certificate or certificates to the following address: ---------------------------------- (Address of Record Holder/Transferee) 4. The undersigned represents that the aforesaid shares are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. 5. If the Exercise Amount is less than all of the shares of Common Stock purchasable hereunder, please issue a new warrant representing the remaining balance of such shares, as follows: ---------------------------------- (Name of Record Holder/Transferee) and deliver such warrant to the following address: ------------------------------------- (Address of Record Holder/Transferee) ------------------------------------- (Signature) - ------------------------------------- (Date) 2 EX-99.6 7 cmw1506f.txt THIRD AMENDED JOINT PLAN OF REORGANIZATION UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF HAWAII In re ) Case No. 03-00817 ) ) ) HAWAIIAN AIRLINES, INC., a Hawaii corporation,) Chapter 11 ) ) ) Debtor. ) - ---------------------------------------------- THIRD AMENDED JOINT PLAN OF REORGANIZATION OF JOSHUA GOTBAUM, AS CHAPTER 11 TRUSTEE FOR HAWAIIAN AIRLINES, INC., THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS, HHIC, INC., HAWAIIAN HOLDINGS, INC., AND RC AVIATION LLC, DATED AS OF MARCH 11, 2005
ATTORNEYS FOR AS CHAPTER 11 TRUSTEE ATTORNEYS FOR HAWAIIAN HOLDINGS, ATTORNEYS FOR THE OFFICIAL COMMITTEE OF INC., HHIC, INC., AND RC AVIATION UNSECURED CREDITORS LLC Bruce Bennett, Esq. Jeffery C. Krause, Esq. Brett H. Miller, Esq. Sidney P. Levinson, Esq. Michael H. Goldstein, Esq. Lorenzo Marinuzzi, Esq. Joshua M. Mester, Esq. Eric D. Winston, Esq. OTTERBOURG, STEINDLER, HOUSTON & ROSEN John L. Jones II, Esq. STUTMAN, TREISTER & GLATT P.C. 230 Park Avenue HENNIGAN, BENNETT & DORMAN LLP 1901 Avenue of the Stars, New York, NY 10169 601 South Figueroa St., Suite 3300 Suite 1200 Los Angeles, California 90017 Los Angeles, CA 90067 And And And Tom E. Roesser, Esq. Simon Klevansky, Esq James A. Wagner, Esq. Katherine G. Leonard, Esq. GELBER, GELBER, INGERSOLL & Chuck C. Choi, Esq. CARLSMITH BALL LLP KLEVANSKY WAGNER, CHOI & EVERS ASB Tower, Suite 2200 Topa Financial Center, Suite 1400 745 Fort Street 1001 Bishop Street 745 Fort Street Honolulu, Hawaii 96813 Honolulu, Hawaii 96809 Honolulu, HI 96813-3823
Joshua Gotbaum (the "TRUSTEE"), the duly appointed chapter 11 trustee for Hawaiian Airlines, Inc. (the "DEBTOR"), the Official Committee of Unsecured Creditors (the "COMMITTEE"), Hawaiian Holdings, Inc. ("HHI"), HHIC, Inc. ("HHIC"), and RC Aviation, LLC ("RC AVIATION"), hereby propose the following Joint Plan of Reorganization (the "JOINT PLAN") pursuant to chapter 11 of the Bankruptcy Code: INTRODUCTION The Joint Plan defines the Debtor's financial structure from and after the Effective Date, including the ownership interests in the Reorganized Debtor. Among other things, the Joint Plan designates classes of Claims and classes of Interests, identifies each Class of Claims or Interests as unimpaired or impaired, provides for the satisfaction of all Claims against and Interests in the Debtor, and provides adequate means for the implementation of the Joint Plan. A separate document, entitled the "Disclosure Statement in Support of Joint Plan of Reorganization" (the "DISCLOSURE STATEMENT"), accompanies the Joint Plan. The Disclosure Statement is intended to provide information sufficient to enable you to determine whether to vote for or against the Joint Plan. Along with the Joint Plan and the Disclosure Statement, Holders of Claims and Interests entitled to vote on the Joint Plan will receive a Ballot for voting on the Joint Plan. The Joint Plan Proponents strongly recommend that you review thoroughly both the Joint Plan and Disclosure Statement before deciding to accept or reject the Joint Plan. ARTICLE I DEFINITIONS AND CONSTRUCTION OF TERMS 1. Definitions. As used herein, the following terms have the respective meanings specified below, unless the context otherwise requires: 1.1 "AA" means American Airlines, Inc. 1.2 "ADMINISTRATIVE EXPENSE CLAIM" means any claim alleged to have priority under sections 503(b) and 507(a)(1) of the Bankruptcy Code, including, without limitation, any actual and necessary expenses of preserving the estate of the Debtor, any actual and necessary expenses of operating the business of the Debtor during the Reorganization Case, all compensation and reimbursement of expenses allowed by the Bankruptcy Court under sections 330 or 503 of the Bankruptcy Code, and any fees or charges assessed against the estate of the Debtor under section 1930 of chapter 123 of title 28 of the United States Code. 1.3 "ALLOWED CLAIM" means a Claim to the extent that: (a) Such Claim is an Administrative Expense Claim and: (i) a request for payment or Final Fee Application for such Claim is timely Filed under Section 2.3.1 or Section 2.3.2, whichever is applicable, or is deemed timely filed by Final Order; and (ii) the Claim is Allowed as set forth in Article IV or Article V; or (b) Such Claim is a Priority Tax Claim, or a Claim that if Allowed would be a Class 1 through 6 Claim, and a proof of such Claim is timely Filed or is deemed timely Filed by Final Order, or under Bankruptcy Code Section 1111(a); and (i) no party in interest with standing Files and serves on the holder of such Claim an objection to the Claim by the applicable Objection Deadline set forth in Section 1.28 and the Claim is not otherwise a Disputed Claim; (ii) such Claim is Allowed (and only to the extent Allowed) by Final Order or agreement between the holder of the Claim and (A) the Debtor, if such agreement is entered into before the Effective Date and is approved by Final Order; or (B) the Reorganized Debtor, if such agreement is 1 entered into after the Effective Date and is authorized by Final Order or as set forth in Section 8.2; or (iii) such Claim is deemed to be Allowed in accordance with the Joint Plan. 1.4 "ALLOWED ADMINISTRATIVE EXPENSE CLAIM" means an Administrative Expense Claim, to the extent it is or has become an Allowed Claim. 1.5 "ALLOWED OTHER PRIORITY CLAIM" means an Other Priority Claim, to the extent it is or has become an Allowed Claim. 1.6 "ALLOWED OTHER SECURED CLAIM" means an Other Secured Claim, to the extent it is or has become an Allowed Claim. 1.7 "ALLOWED PRIORITY TAX CLAIM" means a Priority Tax Claim, to the extent it is or has become an Allowed Claim. 1.8 "ALLOWED SECURED CLAIM" means a Secured Claim, to the extent it is or has become an Allowed Claim. 1.9 "ALLOWED UNSECURED CLAIM" means an Unsecured Claim, to the extent it is or has become an Allowed Claim. 1.10 "ALLOWED INTEREST" means any Interest in the Debtor that is registered in the stock register maintained by or on behalf of the Debtor as of the Petition Date and to which no objection to the allowance thereof has interposed within the applicable period of time fixed by the Joint Plan, the Bankruptcy Code, the Bankruptcy Rules or the Confirmation Order, or as to which an objection has been interposed and such Interest has been allowed in whole or in part by a Final Order. HHI and HHIC are the only holders of Allowed Interests. 1.11 "ALPA COLLECTIVE BARGAINING AGREEMENT" means that certain collective bargaining agreement between the Debtor and the Air Line Pilots Association, International. 1.12 "AMENDED AND RESTATED ARTICLES OF INCORPORATION" means the amended and restated Articles of Incorporation of Reorganized Debtor in substantially the form included in the Joint Plan Appendix. 1.13 "AMENDED AND RESTATED BYLAWS" means the amended and restated Bylaws of Reorganized Debtor in substantially the form included in the Joint Plan Appendix. 1.14 "ANSETT" means AWMS I, a Delaware statutory trust. 1.15 "ANSETT CLAIM" means the Claim asserted by Ansett in the amount of $107,506,114, and which is Allowed in an amount no less than $106,320,000. 1.16 "ARTICLES OF INCORPORATION" means the Amended and Restated Articles of Incorporation of Hawaiian Airlines, Inc., as amended and in effect as of the date hereof. 1.17 "BALLOT" means the form or forms distributed to each holder of an impaired Claim or Interest entitled to vote on the Joint Plan on which the holder indicates acceptance or rejection of the Joint Plan or any election for treatment of such Claim under the Joint Plan. 1.18 "BANKRUPTCY CODE" means title 11 of the United States Code, 11 U.S.C. ss.ss. 101-1330, as now in effect or hereafter amended. 1.19 "BANKRUPTCY COURT" means the United States Bankruptcy Court for the District of Hawaii. 2 1.20 "BANKRUPTCY RULES" means, collectively, the Federal Rules of Bankruptcy Procedure and the local rules of the Bankruptcy Court, as now in effect or hereafter amended. 1.21 "BAR DATE" means the applicable bar date by which a proof of Claim must be or must have been Filed. 1.22 "BAR DATE ORDER" means the order of the Bankruptcy Court entered on November 7, 2003, establishing January 26, 2004 as the Bar Date for Filing proofs of Claims and proofs of Interest in the Reorganization Case, as the same may be amended, modified or supplemented. 1.23 "BOEING" means Boeing Capital Corporation, BCC Equipment Leasing Corporation and Wells Fargo Bank Northwest, N.A. solely in its capacity as Owner Trustee acting on behalf of BCC Equipment Leasing Corporation (formerly known as MDFC Equipment Leasing Corporation). 1.24 "BOEING CLAIM" means the Claims allowed by the Bankruptcy Court, by order dated September 27, 2004, as unsecured Class 5 Claims in the amount of $66,500,000. 1.25 "BOEING MOU" means that Memorandum of Understanding between Boeing and the Trustee dated September 15, 2004. 1.26 "BUSINESS DAY" means any day, other than a Saturday, Sunday or "legal holiday" (as defined in Bankruptcy Rule 9006(a)). 1.27 "CASH" means legal tender of the United States of America and equivalents thereof. 1.28 "CLAIM" means a "claim," as defined in section 101(5) of the Bankruptcy Code, against the Debtor. 1.29 "CLAIMS OBJECTION BAR DATE" means, for all Claims and all Interests, other than those Claims and Interests expressly not specifically allowed in the Joint Plan, the later of: (a) 90 days after the Effective Date; (b) 60 days after the Filing of a proof of Claim for such Claim; and (c) such other period of limitation as may be specifically fixed by the Joint Plan, the Confirmation Order, the Bankruptcy Rules or a Final Order for objecting to such Claim. 1.30 "CLAIMS RESERVES" means, collectively the Unsecured Claims Reserve and any other claims reserves that may be established pursuant to the Joint Plan. 1.31 "CLASS" means a class of Claims or Interests, as described in Article II. 1.32 "CLASS 5 NOTES" means notes issued to those Holders of Lease Related Claims that have elected the Class 5 Note Consideration under Section 4.5.1.2, and with terms set forth in Section 4.5.1.3 herein. 1.33 "COMMITTEE" means the Official Committee of Unsecured Creditors of Hawaiian Airlines, Inc. appointed by the United States Trustee in the Reorganization Case. 1.34 "CONFIRMATION" means the entry of the Confirmation Order on the docket of the Bankruptcy Court. 1.35 "CONFIRMATION DATE" means the date on which the Bankruptcy Court enters the Confirmation Order on its docket within the meaning of Bankruptcy Rules 5003 and 9021. 3 1.36 "CONFIRMATION HEARING" means the hearing held by the Bankruptcy Court on Confirmation of the Joint Plan, as such hearing may be continued from time to time. 1.37 "CONFIRMATION ORDER" means the order of the Bankruptcy Court confirming the Joint Plan pursuant to section 1129 of the Bankruptcy Code. 1.38 "CONVENIENCE CLAIM" means any Claim against the Debtor that meets the following conditions: (a) the Claim is not (i) an Administrative Expense Claim, (ii) a Tax Claim, (iii) an Other Priority Claim, or (iv) a Secured Claim; and (b) such Claim, when aggregated with all similar Claims of such Holder, are Allowed in the amount of $5,000 or less. 1.39 "CURE AMOUNT CLAIM" means a Claim based upon the Debtor's defaults under an Executory Contract and Unexpired Lease at the time such contract or lease is assumed by the Trustee under section 365 of the Bankruptcy Code, including any actual pecuniary loss resulting from such default, but shall not include defaults arising from a provision relating to (i) the insolvency or financial condition of the Debtor at any time before the closing of the Reorganization Case, (ii) the commencement of the Reorganization Case, (iii) the appointment of or taking possession by the Trustee, or (iv) the satisfaction of any penalty rate or provision relating to a default arising from any failure by the Debtor to perform nonmonetary obligations under the Executory Contract or Unexpired Lease. 1.40 "DATE OF ASSESSMENT" means in the case of a Priority Tax Claim the later of (a) first Business Day following the ninetieth day after a notice of deficiency in respect of such Allowed Priority Tax Claim is issued and (b) if a case is commenced in the United States Tax Court, the date any judgment of the United States Tax Court determining the amount of any Claim for taxes against the Debtor becomes final and, in the case of any other Priority Tax Claim, sixty days after the date any such Claim becomes an Allowed Claim. 1.41 "DEBTOR" means Hawaiian Airlines, Inc., as the chapter 11 debtor in the Reorganization Case. 1.42 "DEFICIENCY AMOUNT" means the amount, if any, by which the Allowed amount of a Secured Claim exceeds the value of the collateral securing such Claim or the amount by which a Claim subject to setoff exceeds the Allowed amount of any setoff. 1.43 "DEFICIENCY CLAIM" means any Claim against the Debtor representing a Deficiency Amount. 1.44 "DERIVATIVE CAUSE OF ACTION" means a claim that is property of the Debtor's Estate pursuant to Section 541 of the Bankruptcy Code. 1.45 "DEUTSCHE BANK" means Deutsche Bank Securities, Inc. 1.46 "DISBURSING AGENT" means (a) an Entity designated by the Reorganized Debtor to act as a Disbursing Agent and/or (b) the Reorganized Debtor, as applicable, pursuant to section 8.1 of this Joint Plan. 1.47 "DISCLOSURE STATEMENT" means the disclosure statement (including all exhibits and schedules thereto or referenced therein) that relates to the Joint Plan, as approved by the Bankruptcy Court pursuant to section 1125 of the Bankruptcy Code, as the same may be amended, modified or supplemented. 1.48 "DISCLOSURE STATEMENT ORDER" means the order entered by the Bankruptcy Court approving the Joint Disclosure Statement as containing adequate information in accordance with section 1125 of the Bankruptcy Code. 4 1.49 "DISPUTED CLAIM" means (a) a Claim that is listed on the Debtor's Schedules as other than disputed, contingent or unliquidated, but as to which the Reorganized Debtor or, prior to the Confirmation Date, any other party in interest, has Filed an objection on or before the Claims Objection Bar Date, and such objection has not been withdrawn or denied by a Final Order; (b) a Claim that is listed on the Debtor's Schedules as disputed, contingent or unliquidated; or (c) if a proof of Claim or request for payment of an Administrative Expense Claim has been Filed by the Bar Date or has otherwise been deemed timely Filed under applicable law: (i) a Claim for which no corresponding Claim is listed on the Debtor's Schedules; (ii) a Claim for which a corresponding Claim is listed on the Debtor's Schedules as other than disputed, contingent or unliquidated, but the nature or amount of the Claim as asserted in the proof of Claim varies from the nature and amount of such Claim as it is listed on the Schedules; (iii) a Claim for which a corresponding Claim is listed on the Debtor's Schedules as disputed, contingent or unliquidated; (iv) a Claim for which an objection has been Filed by the Reorganized Debtor or, prior to the Confirmation Date, any other party in interest, by the Claims Objection Bar Date, and such objection has not been withdrawn or denied by a Final Order; or (v) a Tort Claim. 1.50 "DISTRIBUTION RECORD DATE" means the close of business on the Confirmation Date. 1.51 "EFFECTIVE DATE" means a day, as determined by the Trustee and the HHI Parties, after consultation with the Committee, that is the Business Day as soon as reasonably practicable after all conditions to the Effective Date in Section 10.2 have been met or waived pursuant to Section 10.3. 1.52 "ENTITY" means a person (as defined in section 101(15) of the Bankruptcy Code), an estate, a trust, a governmental unit and the United States Trustee. 1.53 "ESTATE" means the estate created for Hawaiian Airlines, Inc. in its Reorganization Case pursuant to section 541 of the Bankruptcy Code. 1.54 "EXECUTORY CONTRACT AND UNEXPIRED LEASE" means a contract or lease to which the Debtor is a party that is subject to assumption or rejection under section 365 of the Bankruptcy Code. 1.55 "FILE," "FILED" or "FILING" means file, filed or filing with the Bankruptcy Court or its authorized designee in the Reorganization Case. 1.56 "FINAL ORDER" means an order or judgment of the Bankruptcy Court, or other court, as entered on the docket in any Reorganization Case or the docket of such other court, that has not been reversed, stayed, modified or amended, and as to which the time to appeal or seek certiorari or move for a new trial, reargument or rehearing has expired, and no appeal or petition for certiorari or other proceedings for a new trial, reargument or rehearing has been timely taken, or as to which any appeal that has been taken or any petition for certiorari that has been timely filed has been withdrawn or resolved by the highest court to which the order or judgment was appealed or from which certiorari was sought or the new trial, reargument or rehearing shall have been denied or resulted in no modification of such order. 1.57 "HHI" means Hawaiian Holdings, Inc. 1.58 "HHI COMMON STOCK" means the common stock of HHI. 1.59 "HHI COMMON STOCK DISTRIBUTION PRICE" means the price of a share of HHI Common Stock equal to the average closing price of HHI Common Stock on the American 5 Stock Exchange for the twenty (20) Trading Days following the date of the entry of the Disclosure Statement Order, provided however, that in no event such value of a share of HHI Common Stock shall be less than $5 per share or more than $8 per share, which amounts shall be subject to adjustment for stock splits, stock dividends, or rights offering. 1.60 "HHI PARTIES" means HHI, HHIC, and RC Aviation. 1.61 "HHIC" means HHIC, Inc. 1.62 "HOLDER" means the beneficial owners of any Claim, Interest or Administrative Expense, which, in the case of an investment company, shall be the investment company and not their shareholders, and which in the case of an insurance company, shall be the insurance company and not their insured. 1.63 "ILFC" means International Lease Finance Corporation. 1.64 "INTEREST" means the interest of any holder of an equity security of the Debtor represented by any issued and outstanding shares of common or preferred stock or other instrument evidencing a present ownership interest in the Debtor, whether or not transferable, or any option, warrant or right, contractual or otherwise, to purchase, sell, or subscribe to such interest in the Debtor. 1.65 "JOINT PLAN" means this joint plan of reorganization for Hawaiian Airlines, Inc. proposed by the Joint Plan Proponents, and all Exhibits attached hereto or referenced herein, as the same may be amended, modified or supplemented. 1.66 "JOINT PLAN APPENDIX" means a supplemental appendix to the Joint Plan that will contain the draft form of the Joint Plan Documents to be entered into as of the Effective Date, to be filed no later than 10 days before the date of the Confirmation Hearing, and in any event no later than 5 days prior to the Voting Deadline. Documents to be included in the Joint Plan Appendix will be posted at [website] as they become available, but no later than 5 days prior to the Voting Deadline. 1.67 "JOINT PLAN DOCUMENTS" means the documents to be executed, delivered, assumed, and/or performed in conjunction with the consummation of the Joint Plan on the Effective Date, including, but not limited to (i) Amended and Restated Articles of Incorporation; (ii) Amended and Restated Bylaws; (iii) Class 5 Notes; and (iv) the litigation trust agreement referenced in Section 8.6. 1.68 "JOINT PLAN PROPONENTS" means the Trustee, the Committee, HHIC, HHI, and RC Aviation. 1.69 "LEASE RELATED CLAIMS" means any Allowed Claim arising from the rejection or modification of leases or rental agreements related to aircraft and related aircraft parts with the Debtor, including without limitation the Ansett Claim, and those Claims held by Boeing, ILFC, Deutsche Bank, and AA. 1.70 "LIENS" means any mortgage, pledge, deed of trust, assessment, security interest, lease, lien, adverse claim, levy, charge, constructive trust claim, equitable lien or other encumbrance of any kind, or any conditional sale contract, title retention contract or other contract to give any of the foregoing. 1.71 "MANAGEMENT COMPENSATION PLAN" means that certain Management Incentive Plan approved by the Bankruptcy Court on July 16, 2004. 6 1.72 "MINIMUM CASH BALANCE" means $70 million in unrestricted Cash on January 31, 2005, with such amount adjusted for other monthly ends based on seasonality. 1.73 "NOTICE OF EFFECTIVE DATE" means the notice to be mailed by the Reorganized Debtor (or its agent) to all known holders of Claims and Interests notifying them of: (a) the entry of the Confirmation Order; (b) the occurrence of the Effective Date; (c) the treatment of executory contracts and unexpired leases as provided under the Joint Plan, and the bar dates for Claims relating to executory contracts and unexpired leases; (d) the bar date for Administrative Claims through the Effective Date under Section 2.3.1; and (e) the name and address of the Reorganization Debtor. 1.74 "ORDINARY COURSE PROFESSIONALS ORDER" means the Order Pursuant to sections 105(a), 327, 328 and 330 of the Bankruptcy Code Authorizing Debtor to Employ Professionals Utilized in the Ordinary Course of Business (D.I. 73), on March 31, 2003. 1.75 "ORDINARY COURSE ADMINISTRATIVE EXPENSES" means Allowed Administrative Expenses that represent obligations incurred for goods and services provided to the Debtor in the ordinary course of its business during the Reorganization Case, but shall not include federal Tax Claims other than federal Tax Claims for income tax liability for calendar years 2004 and 2005. 1.76 "OTHER PRIORITY CLAIM" means a Claim that is entitled to priority in payment pursuant to section 507(a) of the Bankruptcy Code that is not an Administrative Expense Claim or a Priority Tax Claim. 1.77 "PETITION DATE" means March 21, 2003. 1.78 "PILOTS' PENSION PLAN" means the retirement plan for the Debtor's pilots provided in the Hawaiian Airlines 2000 Pilots Agreement, as amended. 1.79 "PRIORITY TAX CLAIM" means a Claim that is entitled to priority in payment pursuant to section 507(a)(8) of the Bankruptcy Code. 1.80 "PROFESSIONAL" means any professional employed in the Reorganization Cases pursuant to sections 327 or 1103 of the Bankruptcy Code or any professional or other Entity seeking compensation or reimbursement of expenses in connection with the Reorganization Cases under or pursuant to section 503(b)(4) of the Bankruptcy Code. 1.81 "PROFESSIONAL FEE CLAIM" means a Claim under sections 330(a), 331, 503 or 1103 of the Bankruptcy Code for compensation of a Professional or other Entity for services rendered or expenses incurred in the Reorganization Cases. 1.82 "PROFESSIONAL FEE ORDER" means the "Order Establishing Procedures For Interim Compensation Of Chapter 11 Professionals and Committee Members" on or about March 24, 2003 (D.I. 86). 1.83 "RC AVIATION" means RC Aviation LLC. 1.84 "RC AVIATION CONTROLLED CLAIMS" means any Claim, including without limitation the Ansett Claim and the Boeing Claim, owned or controlled by HHI, HHIC, RC Aviation, or any of their respective affiliates. 1.85 "RECOVERY ACTION(S)" means, collectively and individually: (a) preference actions, fraudulent conveyance actions, rights of setoff and other claims or causes of action under sections 510, 541, 542, 544, 545, 547, 548, 549, 550, 551, and 553 of the 7 Bankruptcy Code and other applicable bankruptcy or nonbankruptcy law; (b) claims or causes of action to recover illegal dividends or stock redemptions and similar claims; (c) claims or causes of action based on piercing the corporate veil, alter ego liability or similar legal or equitable theories of recovery arising out of the ownership or operation of the Debtor; and (d) claims or causes of action of the Debtor based on unjust enrichment against an officer or director, for fraud, breach of fiduciary duty, mismanagement, malfeasance or relating to the provision of retiree medical benefits or director and officer liability insurance or indemnification. 1.86 "REINSTATED" or "REINSTATEMENT" means rendering a Claim or Interest unimpaired within the meaning of section 1124 of the Bankruptcy Code. Unless the Joint Plan specifies a particular method of Reinstatement, when the Joint Plan provides that an Allowed Claim will be Reinstated, such Claim will be Reinstated, at the Trustee's and the HHI Parties' discretion, after consultation with the Committee, in accordance with one of the following: (a) the legal, equitable and contractual rights to which such Claim entitles the holder will be unaltered; or (b) notwithstanding any contractual provision or applicable law that entitles the holder of such Claim to demand or receive accelerated payment of such Claim after the occurrence of a default: (i) any such default that occurred before or after the commencement of the applicable Reorganization Case, other than a default of a kind specified in section 365(b)(2) of the Bankruptcy Code, will be cured; (ii) the maturity of such Claim as such maturity existed before such default will be reinstated; and (iii) the holder of such Claim will be compensated for any damages incurred as a result of any reasonable reliance by such holder on such contractual provision or such applicable law; and the legal, equitable or contractual rights to which such Claim entitles the holder of such Claim will not otherwise be altered. 1.87 "REORGANIZATION CASE" means the bankruptcy case pending for the Debtor in the Bankruptcy Court, captioned In re Hawaiian Airlines, Inc., Case No. 03-00817. 1.88 "REORGANIZED DEBTOR" means Hawaiian Airlines, Inc. a Delaware Corporation, immediately upon the Debtor's merger into HHIC upon the Effective Date. 1.89 "RESTRUCTURING SUPPORT AGREEMENT" means that certain Restructuring Support Agreement between the Trustee, HHI and RC Aviation dated August 26, 2004. 1.90 "RESTRUCTURING TRANSACTIONS" means the transactions described in Section 5.2, which are also described in the Restructuring Support Agreement. 1.91 "RIGHTS OF ACTION" means any and all actions, causes of action, suits, accounts, controversies, agreements, promises, rights to legal remedies, rights to equitable remedies, rights to payment and claims, whether known, unknown, reduced to judgment, not reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured and whether asserted or assertable directly or derivatively, in law, equity or otherwise and whether commenced before or after the Effective Date, including Derivative Causes of Action and Recovery Actions. 1.92 "SCHEDULES" means the schedules of assets and liabilities and the statements of financial affairs Filed by the Debtor, as the same may have been or may be amended, modified or supplemented. 1.93 "SECURED CLAIM" means a Claim that is secured by a Lien on property in which an Estate has an interest or that is subject to setoff under section 553 of the Bankruptcy Code, to the extent of the value of the Claim holder's interest in the Estate's interest in such property or to the extent of the amount subject to setoff, as applicable, as determined pursuant to sections 506(a) and, if applicable, 1129(b) of the Bankruptcy Code. 8 1.94 "SECURED TAX CLAIM" means a Priority Tax Claim that is also a Secured Claim. 1.95 "STIPULATION OF AMOUNT AND NATURE OF CLAIM" means a stipulation or other agreement between, on the one hand, the Debtor or the Reorganized Debtor and, on the other hand, a holder of a Claim or Interest, or an agreed order of the Bankruptcy Court, establishing the Allowed amount, priority, and/or secured status of a Claim or Interest. 1.96 "TAX" means (a) any net income, alternative or add-on minimum, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, license, property, environmental or other tax, assessment or charge of any kind whatsoever (together in each instance with any interest, penalty, addition to tax or additional amount) imposed by any federal, state, local or foreign taxing authority; or (b) any liability for payment of any amounts of the foregoing types as a result of being a member of an affiliated, consolidated, combined or unitary group, or being a party to any agreement or arrangement whereby liability for payment of any such amounts is determined by reference to the liability of any other Entity. 1.97 "TORT CLAIM" means any Claim that has not been settled, compromised or otherwise resolved that (a) arises out of allegations of personal injury, wrongful death, property damage, products liability or similar legal theories of recovery; or (b) arises under any federal, state or local statute, rule, regulation or ordinance governing, regulating or relating to health, safety, hazardous substances or the environment. 1.98 "TRADING DAY" means any day in which trading may take place of HHI Common Stock on the American Stock Exchange. 1.99 "TRUSTEE" means Joshua Gotbaum as the duly appointed chapter 11 trustee in the Reorganization Case. 1.100 "UNCLAIMED PROPERTY" shall have the meaning ascribed to such term in Section 7.6 herein. 1.101 "UNINSURED CLAIM" means any Claim that is not an Insured Claim. 1.102 "UNSECURED CLAIM" means any Claim that is not an Administrative Expense Claim, Cure Amount Claim, Other Priority Claim, Priority Tax Claim, Secured Claim, Convenience Claim, and Lease Related Claim. 1.103 "VOTING DEADLINE" means the date and time set by the Bankruptcy Court as the deadline for submitting Ballots to accept or reject the Joint Plan in accordance with section 1126 of the Bankruptcy Code. Interpretation; Application of Definitions and Rules of Construction. - -------------------------------------------------------------------- Unless otherwise specified, all section, schedule or exhibit references in this Joint Plan are to the respective section in, article of, or schedule or exhibit to, this Joint Plan, as the same may be amended, waived or modified from time to time. The words "herein," "hereof," "hereto," "hereunder," and others of similar import refer to the Joint Plan as a whole and not to any particular section, subsection, or clause contained in the Joint Plan. The rules of construction contained in section 102 of the Bankruptcy Code shall apply to the construction of this Joint Plan. 9 Any capitalized term used herein and not defined herein but defined in the Bankruptcy Code shall have the meaning assigned to such term in the Bankruptcy Code. ARTICLE II TREATMENT OF ADMINISTRATIVE EXPENSE CLAIMS AND PRIORITY TAX CLAIMS 2.1 Administrative Expense Claims. Except as provided in Section 2.2 below or to the extent that the holder of an Allowed Administrative Expense Claim agrees to a different treatment, the Reorganized Debtor shall pay to each holder of an Allowed Administrative Expense Claim Cash in an amount equal to such Allowed Administrative Expense Claim on the later of the Effective Date and the date such Administrative Expense Claim becomes an Allowed Administrative Expense Claim, or as soon thereafter as is practicable; provided, however, that all Ordinary Course Administrative Expenses may be paid by the Reorganized Debtor in the ordinary course of business in accordance with the terms and conditions of agreements relating thereto. The Confirmation Order shall contain a bar date for purposes of assertion and allowance of Administrative Expense Claims, other than Ordinary Course Administrative Expenses. 2.2 Compensation and Reimbursement Claims. Except as provided in Section 2.3, all Entities that are awarded compensation or reimbursement of expenses by the Bankruptcy Court in accordance with section 330 or 331 of the Bankruptcy Code or entitled to the priority pursuant to section 503(b)(2), 503(b)(3), 503(b)(4) or 503(b)(5) of the Bankruptcy Code, shall be paid in full, in Cash, the amounts allowed by the Bankruptcy Court (a) on or as soon as reasonably practicable following the later to occur of (i) the Effective Date and (ii) the date on which the Bankruptcy Court order allowing such Claim becomes a Final Order, or (b) upon such other terms as may be mutually agreed upon between such holder of an Allowed Administrative Expense Claim and Reorganized Debtor. 2.3 Bar Dates for Administrative Expense Claims. 2.3.1 General Bar Date Provisions. Except as otherwise provided herein and except for Ordinary Course Administrative Expenses, unless previously Filed, requests for payment of Administrative Expense Claims must be Filed and served on the Reorganized Debtor, pursuant to the procedures specified in the Confirmation Order and the notice of entry of the Confirmation Order, no later than 30 days after the Effective Date (the "ADMINISTRATIVE CLAIMS BAR DATE"). Holders of Administrative Expense Claims that are required to File and serve a request for payment of such Administrative Expense Claims and that do not File and serve such a request by the applicable Bar Date will be forever barred from asserting such Administrative Expense Claims against the Debtor or Reorganized Debtor or their respective property, and such Administrative Expense Claims will be deemed discharged as of the Effective Date. Objections to such requests must be Filed and served on the Reorganized Debtor and the requesting party by the later of (A) 120 days after the Effective Date or (B) 60 days after the Filing of the applicable request for payment of Administrative Expense Claims. 2.3.2 Bar Dates for Certain Administrative Expense Claims. Professionals or other Entities asserting a Professional Fee Claim for services rendered to the Estate before the Effective Date must File and serve on Reorganized Debtor and such other Entities who are designated by the Bankruptcy Rules, the Confirmation Order, the Professional Fee Order or other order of the Bankruptcy Court an application for final allowance of such Professional Fee Claim, as it relates to services provided to the Estate, no later than 60 days after the Effective Date; provided, however, that any professional who may receive compensation or reimbursement of expenses pursuant to the Ordinary Course Professionals 10 Order may continue to receive such compensation and reimbursement of expenses for services rendered before the Effective Date from Reorganized Debtor, without further Bankruptcy Court review or approval, in accordance with the terms and conditions of the Ordinary Course Professionals Order. Objections to any Professional Fee Claim must be Filed and served on Reorganized Debtor and the requesting party by the later of (1) 90 days after the Effective Date or (2) 30 days after the Filing of the applicable request for payment of the Professional Fee Claim. To the extent necessary, the Confirmation Order will amend and supersede any previously entered order of the Bankruptcy Court, including the Professional Fee Order, regarding the payment of Professional Fee Claims. 2.3.3 Bar Date for Certain Administrative Tax Claim of the United States. Any request for payment of an Administrative Expense Claim asserted by the United States for federal income taxes for calendar year 2003 (the "IRS ADMINISTRATIVE TAX CLAIM") must be Filed and served on the Reorganized Debtor, pursuant to the procedures specified in the Confirmation Order and the notice of entry of the Confirmation Order, no later than 90 days after the Effective Date (the "ADMINISTRATIVE TAX CLAIM BAR DATE"), provided, however, the Administrative Tax Claim Bar Date may be extended from time to time upon the mutual agreement of the Reorganized Debtor and the United States or pursuant to an order of the Court. If the United States does not File and serve a request for payment of the IRS Administrative Tax Claim by the applicable Administrative Tax Claim Bar Date, the United States will be forever barred from asserting such IRS Administrative Tax Claims against the Debtor or Reorganized Debtor or their respective property, and such IRS Administrative Tax Claims will be deemed discharged as of the Effective Date. Objections to such IRS Administrative Tax Claims must be Filed and served on the Reorganized Debtor and the requesting party by the later of (A) 120 days after the Effective Date or (B) 60 days after the Filing of the applicable request for payment of Administrative Expense Claims. 2.4 Payment of Priority Tax Claims. The Allowed Priority Tax Claim held by any taxing authority relating to any taxable year shall be the lesser of: (a) the Allowed Claim held by such Entity; (b) the estimated claim amount held by such Entity, if estimated by the Bankruptcy Court for purposes of allowance; or (c) the amount of such claim as determined by any administrative or judicial tribunal of competent jurisdiction before which such issue is brought by final order or as compromised and settled by the Reorganized Debtor and such taxing authority. Notwithstanding any other provision of this Joint Plan to the contrary, payments in respect of Allowed Priority Tax Claims shall not be made on the Effective Date, but rather shall, at the sole option and discretion of Reorganized Debtor be made (a) in full, in Cash, on the later of the Effective Date or the Date of Assessment, (b) in accordance with section 1129(a)(9)(C) of the Bankruptcy Code, in full, in Cash, in up to twenty-four (24) equal quarterly installments, commencing on the first Business Day following the Date of Assessment of such Allowed Priority Tax Claim, together with interest from the Date of Assessment at a rate of five percent (5%), or (c) by mutual agreement of the holder of such Allowed Priority Tax Claim and Reorganized Debtor. 2.5 Other Provisions Concerning Treatment of Priority Tax Claims. Notwithstanding the provisions of Section 2.4, the holder of an Allowed Priority Tax Claim shall not be entitled to receive any payment on account of any penalty arising with respect to or in connection with the Allowed Priority Tax Claim. Any such Claim or demand for any such penalty shall be subject to treatment in Class 4 if not subordinated to Class 4 Claims pursuant to an order of the Bankruptcy Court. The holder of an Allowed Priority Tax Claim shall not assess or attempt to collect any penalty arising with respect to or in consideration with 11 such Allowed Priority Tax Claim from the Debtor, Reorganized Debtor or their respective property, but such holder may timely file a Claim for such penalty with respect to a Tax Claim that arises prior to the Effective Date. ARTICLE III CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS 3.1 Claims, other than Administrative Expense Claims and Priority Tax Claims, and Equity Interests are classified for all purposes, including, where applicable, voting, confirmation, and distribution pursuant to the Joint Plan, as follows: Class 1 - Secured Tax Claims Class 2 - Other Secured Claims Class 3 - Other Priority Claims Class 4 - Unsecured Claims Class 5 - Lease Related Claims Class 6 - Convenience Claims Class 7 - Interests ARTICLE IV TREATMENT OF CLAIMS AND EQUITY INTERESTS 4.1 CLASS 1 - SECURED TAX CLAIMS. Class 1 consists of Secured Tax Claims. 4.1.1 Treatment. Class 1 is unimpaired under the Joint Plan, and the legal, equitable, and contractual rights of the Holders of Allowed Class 1 Claims are unaltered by the Joint Plan. Unless the Holder of such Claim and the Debtor agree to a different treatment, each holder of an Allowed Class 1 Claim shall receive the legal, equitable, and contractual rights to which such Claim entitles the holder thereof. Any default with respect to any Allowed Class 1 Claim that existed immediately prior to the filing of the Case shall be cured upon the Effective Date. 4.1.2 Voting. Class 1 is unimpaired. The Holders of Claims in Class 1 will not vote to accept or reject the Joint Plan. 4.2 CLASS 2 - OTHER SECURED CLAIMS. Class 2 consists of all Other Secured Claims. Each Allowed Class 2 Claim shall be deemed to separately classified from all other Allowed Claims. 4.2.1 Treatment. On the Effective Date, at the election of the Reorganized Debtor, the Holder of each Allowed Other Secured Claim shall, on account of such Claim, either: (i) be paid in Cash in full, (ii) have surrendered to it, without representation or warranty, the collateral securing its Claim, (iii) notwithstanding any contractual provision or applicable law that entitles the Holder of such Claim to demand or receive accelerated payment of such Claim after the occurrence of a default (A) be paid a cure of any such default that occurred prior to the Effective Date, other than a default of a kind specified in section 365(b)(2) of this title, (B) have Reinstated the maturity of such Claim as such maturity existed before such default, (C) be compensated for any damages incurred as a result of any reasonable reliance by 12 such Holder on such contractual provision or such applicable law, and (D) otherwise not have altered the legal, equitable, or contractual rights to which such Claim entitles the Holder of such Claim, or (iv) have left unaltered the legal, equitable, and contractual rights to which such Claim entitles the Holder of such Claim. In the case of option (ii) or (iii), in the event that any such Claim is not completely satisfied by such distribution, the Deficiency Amount will constitute a Deficiency Claim against the Debtor and will be classified in the appropriate other Class and will receive the same treatment as other Claims in such Class. Any Holder of an Other Secured Claim may agree to accept less favorable treatment. 4.2.2 Voting. Class 2 is unimpaired. The Holders of Claims in Class 2 will not vote to accept or reject the Joint Plan. 4.3 CLASS 3 - OTHER PRIORITY CLAIMS. Class 3 consists of all Other Priority Claims. 4.3.1 Treatment. On the Effective Date, each holder of an Allowed Other Priority Claim shall receive Cash equal to the amount of such Allowed Other Priority Claim. 4.3.2 Voting. Class 3 is unimpaired. The Holders of Claims in Class 3 will not vote to accept or reject the Joint Plan. 4.4 CLASS 4 - UNSECURED CLAIMS. Class 4 consists of all Unsecured Claims. 4.4.1 Treatment of Class 4 Unsecured Claims. By checking the appropriate box on a timely cast Ballot, the Holder of a Class 4 Unsecured Claim may elect to receive one of the following treatments for its claim: 4.4.1.1 Class 4 Cash and Stock Consideration. On the Effective Date, each holder of an Allowed Unsecured Claim electing to receive the Class 4 Cash and Stock Consideration shall receive Cash in an amount equal to fifty percent (50%) of the amount of such Allowed Unsecured Claim and a number of shares of HHI Common Stock equal to the quotient of fifty percent (50%) of the amount of such Allowed Unsecured Claim divided by the HHI Common Stock Distribution Price. 4.4.1.2 100% Cash Consideration. On the Effective Date, each holder of an Allowed Unsecured Claim electing to receive the 100% Cash Consideration shall receive Cash equal to the amount of such Allowed Unsecured Claim, without payment of post-petition interest. 4.4.1.3 Default Treatment. Any Holder of an Unsecured Claim that (a) fails to return a Ballot, (b) returns a defective or untimely Ballot, or (c) returns a timely Ballot that fails to elect a treatment of its Unsecured Claim shall be deemed to have elected to receive the 100% Cash Consideration under section 4.4.1.2 above. There will be no payment of post-petition interest to any Holder of an Allowed Class 4 Unsecured Claim. 4.4.2 Voting. Class 4 is impaired. Because Class 4 is impaired and Holders of Class 4 Claims receive consideration under the Joint Plan, the Holders of Claims in Class 4 are permitted to vote to accept or reject the Joint Plan. 4.5 CLASS 5 - LEASE RELATED CLAIMS. Class 5 consists of all Lease Related Claims. 13 4.5.1 Treatment of Class 5 Claims Voting to Accept the Joint Plan. By checking the appropriate box on a timely cast Ballot, the Holder of a Lease Related Claim may elect to receive one of the following treatments for its Claim: 4.5.1.1 Class 5 Cash and Stock Consideration. On the Effective Date, each holder of an Allowed Unsecured Claim (excluding postpetition interest) electing to receive the Class 5 Cash and Stock Consideration shall receive Cash equal to fifty percent (50%) of the amount of such Allowed Lease Related Claim (excluding postpetition interest) and a number of shares of HHI Common Stock equal to the quotient of fifty percent (50%) of the amount of such Allowed Lease Related Claim (excluding postpetition interest) divided by the HHI Common Stock Distribution Price. 4.5.1.2 Class 5 Note Consideration. On the Effective Date, each holder of an Allowed Lease Related Claim electing to receive the Class 5 Note Consideration shall receive a Class 5 Note in a principal amount equal to the amount of such Allowed Lease Related Claim. 4.5.1.3 Terms of Class 5 Notes. The Class 5 Notes shall be unsecured obligations of the Reorganized Debtor, having the following terms: (i) a principal amount equal to 100% of the Allowed Class 5 Lease Related Claim (excluding postpetition interest); (ii) a maturity date of 15 years following the first business day of the second month after the Effective Date; (iii) simple interest accruing as of the Effective Date and continuing thereafter until the full payment of the principal amount, at a rate of 6.5% per annum; (iv) amortization payments made on the first Business Day of the first month after the Effective Date, and commencing on the first Business Day of the second month after the Effective Date and continuing until the maturity date of the Class 5 Notes, equal monthly payments of principal and interest; and (v) without any covenants, guarantees, or cross-defaults. The Class 5 Notes may be prepaid at any time without limitation, penalty or premium. 4.5.2 Treatment of Class 5 Claims. In the event that Class 5 votes to reject the Joint Plan, holders of Allowed Lease Related Claims shall receive such treatment as the Bankruptcy Court determines will satisfy the requirements of section 1129(b) of the Bankruptcy Code. 4.5.3 Default Treatment. In the event that a Holder of a Lease Related Claim: (a) fails to return a Ballot, (b) returns a defective or untimely Ballot, or (c) returns a timely Ballot that fails to elect a treatment of its Unsecured Claim), such Lease Related Claims shall be deemed to have elected to receive the Class 5 Note Consideration. There will be no payment of post-petition interest to any Holder of an Allowed Class 5 Lease Related Claim. 4.5.4 Voting. Class 5 is impaired. Because Class 5 is impaired and Holders of Class 5 Claims receive consideration under the Joint Plan, the Holders of Claims in Class 5 are permitted to vote to accept or reject the Joint Plan. 4.6 CLASS 6 - CONVENIENCE CLAIMS. Class 6 consists of all Convenience Claims. 4.6.1 Treatment. Each holder of a Convenience Claim in Class 6 shall receive Cash in an amount equal to 100% of the Allowed amount of such Convenience Claim on the Effective Date or as soon thereafter as is practicable. There will be no payment of post-petition interest to any Holder of an Allowed Class 6 Convenience Claim. 14 4.6.2 Voting. Class 6 is impaired. Because Class 6 is impaired and Holders of Class 6 Claims receive consideration under the Joint Plan, the Holders of Claims in Class 6 are permitted to vote to accept or reject the Joint Plan. 4.7 CLASS 7 - INTERESTS. Class 7 consists of all Interests in the Debtor. 4.7.1 Treatment. Holders of Class 7 Interests shall retain their Interests in the Reorganized Debtor without modification or alteration by the Joint Plan. All Interests held by HHI and HHIC shall be deemed Allowed Interests. 4.7.2 Voting. Class 7 may or may not be impaired. The Holders of Interests in Class 7 are permitted to vote to accept or reject the Joint Plan. ARTICLE V MEANS FOR IMPLEMENTATION OF THE JOINT PLAN 5.1 Revesting of Assets. On the Effective Date, without any further action or authorization on behalf of the Debtor, the Debtor shall be deemed, as a matter of law, merged into HHIC with HHIC as the surviving corporate entity and to be immediately thereafter renamed Hawaiian Airlines, Inc., a Delaware corporation, hereafter the Reorganized Debtor. Except as otherwise provided in the Joint Plan, on and after the Effective Date, all property of the Estate of the Debtor, including all Rights of Action and Recovery Actions, and any property acquired by the Debtor under or in connection with the Joint Plan will vest in the Reorganized Debtor free and clear of all Claims, Liens, charges, other encumbrances and Interests. On the Effective Date, and as a result of the merger of the Debtor and HHIC, each issued and outstanding share of an equity interest in HHIC shall be exchange for one share of common stock of the Reorganized Debtor. On and after the Effective Date, the Reorganized Debtor may operate its business and may use, acquire and dispose of property and compromise or settle any Claims or Interests without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than restrictions expressly imposed by the Joint Plan or the Confirmation Order. 5.2 Restructuring Support Agreement. Prior to the commencement of a hearing to consider the adequacy of the Joint Disclosure Statement, the Trustee and the HHI Parties entered into a Restructuring Support Agreement. Under the Restructuring Support Agreement, HHI and RC Aviation made certain funding commitments that will provide all financing necessary to make all distributions required under the Joint Plan and to assure that the Reorganized Debtor will have the Minimum Cash Balance on the Effective Date of the Joint Plan. The actions to effect the transactions contemplated in the Restructuring Support Agreement may include: (a) the execution and delivery of appropriate agreements or other documents of transfer, merger, consolidation, restructuring, disposition, liquidation or dissolution containing terms that are consistent with the terms of the Joint Plan and that satisfy the requirements of applicable law and such other terms to which the applicable Entities may agree; (b) the execution and delivery of appropriate instruments of transfer, assignment, assumption or delegation of any asset, property, right, liability, duty or obligation on terms consistent with the terms of the Joint Plan and having such other terms as the applicable Entities may agree; (c) the filing of appropriate certificates or articles of merger, consolidation, continuance or dissolution or similar instruments with the applicable governmental authorities; and (d) the taking of all other actions that the applicable Entities determine to be necessary or appropriate, including making other filings or recordings that may be required by applicable law in connection with such transactions. 15 5.3 Amended and Restated Articles of Incorporation & Amended and Restated By-Laws. On the Effective Date, the Amended and Restated Articles of Incorporation and Amended and Restated By-Laws shall be deemed adopted without further action of the shareholders or directors of the Reorganized Debtor and the Amended and Restated Articles of Incorporation shall be filed with the appropriate Secretary of State. The Amended and Restated Articles of Incorporation and the Amended and Restated Bylaws as filed as part of the Joint Plan Appendix shall be the Amended and Restated Articles of Incorporation and the Amended and Restated Bylaws for Hawaiian Airlines, Inc., a Delaware corporation, modified, as required, as the Reorganized Debtor will be a Delaware corporation and not a Hawaii corporation, and as otherwise required to conform to the provisions of the Joint Plan. The Amended and Restated Articles of Incorporation will, among other things, prohibit the issuance of nonvoting equity securities to the extent required by section 1123(a) of the Bankruptcy Code. The Amended and Restated Articles of Incorporation shall also prohibit the Reorganized Debtor for a period of two years from the Effective Date from paying any dividends or making any stock redemptions, or other payments to HHI, HHIC, or RC Aviation unless after giving effect to any such payment or other distribution, the Reorganized Debtor's unrestricted cash exceeds the Minimum Cash Balance on January 31, 2005, provided however, that if the Effective Date occurs on any later date, that the Minimum Cash Balance shall be adjusted to account for seasonal variations in the Reorganized Debtor's cash balances. Notwithstanding the foregoing, the Reorganized Debtor shall be permitted to make payments to (a) RC Aviation or its members to the extent that it or they hold the note described in section 5.7.3 of the Joint Plan; and (b) HHI for (i) the payment of interest on, or principal of, New Debt issued by HHI, whether or not held by an affiliate of RC Aviation; (ii) the payment of preferred dividends on any Series E Preferred Stock of HHI, whether or not held by an affiliate of RC Aviation; (iii) customary costs and expenses of operating a publicly-traded entity not to exceed $2,000,000 annually, including, without limitation, filing fees and taxes, director fees and legal fees associated with the foregoing; (iv) insurance; (v) legal fees associated with litigation or with a transaction involving the Reorganized Debtor, HHI or both, outside the ordinary course; and (vi) accounting fees. After the Effective Date, the Reorganized Debtor may amend and restate its Amended and Restated Charters, Amended and Restated By-Laws and other constituent documents as permitted by applicable non-bankruptcy law, except as provided herein. 5.4 Management/Board of Directors. From and after the Effective Date, the current members of the board of directors of HHI shall serve as the Reorganized Debtor's Board of Directors subject to the terms and conditions of the Amended and Restated Articles of Incorporation, the Amended and Restated By-Laws and applicable law. Mark Dunkerley, the President and Chief Operating Office of the Debtor, shall be the Chief Executive Office of the Reorganized Debtor. The remaining Officers of the Reorganized Debtor shall be the same as those Officers who are currently Officers of the Debtor (other than the Trustee whose appointment as representative of the Debtor and the Estate, and whose office and power as trustee for the Debtor and the Estate under the Bankruptcy Code, shall terminate on the Effective Date). Those Officers will continue to be employed, in accordance with the terms and conditions of their respective employment agreements and other terms previously approved by the Bankruptcy Court, subject to amendment or modification by agreement between the Reorganized Debtor and the respective executives. 5.5 Management Compensation Plan. The Management Compensation Plan shall remain in full force and effect after the Effective Date for work performed prior to the Effective Date. After the Effective Date, the Board of Directors of the Reorganized Debtor shall 16 have the right to modify the Management Compensation Plan, or adopt alternative management incentive programs, in its sole and absolute discretion with respect to work performed after the Effective Date. 5.6 Corporate Actions. On the Effective Date, all actions contemplated by the Joint Plan shall be deemed authorized and approved in all respects (subject to the provisions of the Joint Plan), including, without limitation, the following: (a) the adoption and the filing with the appropriate Secretary of State of the Amended and Restated Articles of Incorporation; (b) the adoption of the Amended and Restated By-Laws; and (c) the execution and the delivery of, and the performance under, each of the Joint Plan Documents and all documents and agreements contemplated by or relating to any of the foregoing. The Reorganized Debtor shall be authorized to take all corporate actions, and make all filings, as necessary and appropriate to effect the merger. All matters provided for under the Joint Plan involving the corporate structure of the Reorganized Debtor and any corporate action required by the Reorganized Debtor in connection with the Joint Plan shall be deemed to have occurred and shall be in effect pursuant to the Bankruptcy Code, without any requirement of further action by the shareholders or the directors of the Reorganized Debtor. On the Effective Date, the appropriate officers of the Reorganized Debtor are authorized and directed to execute and to deliver the Joint Plan Documents and any other agreements, documents and instruments contemplated by the Joint Plan or the Joint Plan Documents in the name and on behalf of the Reorganized Debtor. 5.7 Sources of Cash for Plan Distributions. The sources of Cash for distribution under the Joint Plan shall be the Debtor's Cash and Cash from HHI and RC Aviation. Financing sources utilized by HHI and RC Aviation may include any of the following or any other manner of financing agreed to in writing by the Trustee: 5.7.1 New Debt. HHI and RC Aviation shall, to the extent necessary to meet their financing obligations under the Joint Plan, obtain a commitment of one or more financial institutions or accredited investors to purchase new debt to be issued by Reorganized Debtor that generates net proceeds to the Reorganized Debtor of up to $150,000,000 (the "NEW DEBT"), provided, however, that HHI and RC Aviation shall not be required (but shall be authorized) to obtain a commitment for New Debt if HHI and RC Aviation receive commitments for the New Contribution, in a form reasonably satisfactory to the Trustee, after consultation with the Committee, that are sufficient to fund all payments required under the Joint Plan and maintain the Minimum Cash Balance. Up to $100,000,000 of net proceeds of New Debt may be raised by the sale of notes issued by the Reorganized Debtor or HHI (the "NEW NOTES"), which New Notes may have a maximum aggregate principal amount of $150,000,000, on terms reasonably acceptable to the Trustee and the HHI Parties, after consultation with the Committee. Up to $50,000,000 of New Debt may be secured debt of the Reorganized Debtor pursuant to a new Senior Secured Loan Facility with an independent third-party lender providing $50,000,000 of financing to the Reorganized Debtor on terms to be negotiated, at market rates (the "SENIOR SECURED LOAN FACILITY"). If the Senior Secured Loan Facility is finalized, the amount raised through the New Notes will be reduced by an amount equal to the Senior Secured Loan Facility and the maximum aggregate principal amount of the New Notes shall also be proportionately reduced. 5.7.2 New Contribution. Whether or any or all of the New Debt permitted above is actually issued, on the Effective Date of the Joint Plan, the HHI Parties will contribute to Debtor (the "NEW CONTRIBUTION") that amount required, after taking into account (i) the proceeds of the New Notes (if any) and the funds available under the Senior Secured Loan 17 Facility (if any), to fund the payments required to be paid on the Effective Date under the Joint Plan, (ii) all payments required to be made on the Effective Date under the Joint Plan to Holders of Allowed Claims (excluding Holders of Allowed Ordinary Course Administrative Expense Claims) (it being understood that the amount of these payments will vary depending upon the elections made by Holders of Allowed Claims), and (iii) the Debtor's unrestricted cash balances on the Effective Date, to assure the Reorganized Debtor will have the Minimum Cash Balance. The Trustee and HHI, after consultation with the Committee, will agree on the minimum amount of the New Contribution prior to the Confirmation Hearing based on information then available regarding the Cash likely to be on hand on the Effective Date. The New Contribution may be raised through a rights offering of HHI Common Stock to HHI's shareholders (the "RIGHTS OFFERING"). If the Trustee, after consultation with the Committee, determines in his reasonable opinion that the Rights Offering cannot be completed without unduly delaying the Effective Date, RC Aviation will, within five Business Days of receiving written notice of such determination by the Trustee, fund the New Contribution on an interim basis through the purchase of Series E Preferred Stock of HHI, on the terms described on PLAN EXHIBIT C, which shall be redeemed under certain circumstances when the Rights Offering is completed. 5.7.3 RC Aviation Controlled Claims. The Holders of the RC Aviation Controlled Claims shall be deemed to have elected to receive the treatment specified in Section 4.5.1.1 of the Joint Plan. To the extent necessary to make all other Cash distributions under the Joint Plan on account of Allowed Claims and to fund the Disputed Claims Reserve on account of Disputed Claims as provided for, and in accordance with the procedure and limitations on the determination of the dollar amounts thereof as provided for in, Section 7.7 of the Joint Plan, and have the Minimum Cash Balance, notwithstanding any alternative treatment specified herein, in lieu of all or part of the distribution of Cash equal to 50% of the RC Aviation Controlled Claims (the "50% CASH DISTRIBUTION") as provided for in Section 4.5.1.1, Holders of RC Aviation Controlled Claims shall receive on the Effective Date (1) such Cash as is available after making all other Cash distributions required by the Plan and reserving the Minimum Cash Balance (the "AVAILABLE CASH"); and (2) a promissory note of the Reorganized Debtor in the principal amount equal to the 50% Cash Distribution, minus the Available Cash (the "RC NOTE"), that is all due and payable, with accrued interest on the first Business Day that is six months after the Effective Date (the "MATURITY DATE"). The RC Note shall bear interest from the Effective Date to the date of payment at rate of interest equal to LIBOR plus five percent (5%), calculated daily based upon the number of days elapsed and assuming a 360 day year. The principal and accrued and unpaid interest on the RC Note may be paid, without premium or penalty, at or before the Maturity Date. The payment can be made in Cash only if (x) the Reorganized Debtor's unrestricted cash balance exceeds the Minimum Cash Balance; or (y) the Reorganized Debtor receives an additional cash equity contribution from HHI in an amount not less than the Cash to be paid on the RC Note. If the RC Note is not paid in Cash at or before the Maturity Date it shall be satisfied by the issuance of shares of HHI Common Stock (based upon the HHI Common Stock Distribution Price). Notwithstanding anything to the contrary herein, if the Available Cash equals at least the 50% Cash Distribution, the Holders of the RC Aviation Controlled Claims shall be entitled to receive on the Effective Date the treatment specified in Section 4.5.1.1 of the Plan (i.e. the 50% Cash Distribution and 50% of the RC Aviation Controlled Claims in Common Stock, based upon the HHI Common Stock Distribution Price). 5.7.4 Contribution of HHI Common Stock. On or prior to the Effective Date, HHI shall contribute to the Debtor such shares of HHI Common Stock as are necessary to make distributions under the Joint Plan. 18 5.8 Allowance of Ansett Claim. The Ansett Claim shall be Allowed in the amount no less than $106,320,000; provided, however, that the holder of the Ansett Claim shall reserve any and all rights to assert that the Allowed amount of the Ansett Claim is equal to its face amount of $107,506,114. 5.9 Affirmation of Certain Tax Indemnity Obligations to Boeing. This Joint Plan shall be deemed to affirm the obligations set forth in Section 2(f) of the Boeing MOU. ARTICLE VI TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES 6.1 Assumption Generally. Except as otherwise provided in the Joint Plan, or in any Final Order, on the Effective Date, pursuant to Bankruptcy Code Section 365, each of the executory contracts and unexpired leases designated for assumption and listed on PLAN EXHIBIT A, which will be Filed with the Bankruptcy Court 5 days prior to the hearing on the Disclosure Statement and may be amended through the date that is 10 Days prior to the Confirmation Hearing, by notice Filed by the Trustee and served on the parties affected by such amendment, shall be assumed by the Debtor. 6.1.1 Each executory contract and unexpired lease identified for assumption or not rejected under Section 6.13 shall be assumed only to the extent, if any, that it constitutes an executory contract or unexpired lease on the Effective Date, and the listing of such contract or lease on PLAN EXHIBIT A shall not constitute an admission by the Debtor, the Estate, or the Reorganized Debtor that such contract or lease is an executory contract or unexpired lease or that the Debtor or the Estate have any liability thereunder. 6.1.2 Any executory contract or unexpired lease that the Debtor assumes shall be deemed to be a permitted assignment notwithstanding a provision in such contract or lease requiring consent of the nondebtor party to such contract or lease. 6.1.3 The execution and recording of any memorandum of lease relating to any unexpired lease listed on PLAN EXHIBIT A is hereby exempt from any law or requirement requiring lessor consent or joinder, whether express or otherwise, to such execution or recordation. The Reorganized Debtor or any agent or representative thereof, is hereby authorized to serve upon all filing and recording officers a notice, substantially in the form attached hereto as PLAN EXHIBIT A, in connection with the execution, filing and recording of any memoranda of lease (whether recorded or unrecorded) in accordance with the Joint Plan, to evidence and implement this paragraph. The appropriate state or local government filing and recording officers are hereby directed to accept for filing or recording any and all memoranda of lease to be executed, filed and recorded in accordance with the Joint Plan and the exhibits thereto, without need for lessor consent or joinder to such execution or recordation, and without the presentation of any affidavits, instruments, or returns otherwise required for recording, other than the Confirmation Order. The Bankruptcy Court retains jurisdiction to enforce the foregoing direction, by contempt proceedings or otherwise. 6.2 Approval Of Assumption. The Confirmation Order shall constitute an order of the Bankruptcy Court approving assumption of the Executory Contracts and Unexpired Leases, as provided for under the Joint Plan, pursuant to Bankruptcy Code Section 365, as of the Effective Date, to the extent such contracts or leases are executory contracts or unexpired leases. 19 6.3 Objections To Assumption. Any party in interest wishing to object to the assumption of an executory contract or unexpired lease, shall file and serve on counsel for the Trustee, counsel for the Committee, counsel for the HHI Parties, and the U.S. Trustee any objection to such assumption by the same deadline and in the same manner established for filing objections to Confirmation, unless the assumption of such executory contract or unexpired lease is the subject of an amendment to PLAN EXHIBIT A, in which case the deadline is the date that is the earlier of: (a) 20 days after the date of such amendment; or (b) March 21, 2005. Failure to file and serve any such objection by the applicable deadline shall constitute consent to the assumption, an acknowledgment that there are no defaults or Cure Amount Claims due under the executory contract or unexpired lease identified for assumption, except as set forth in PLAN EXHIBIT A, and that adequate assurance of future performance in connection with the proposed assumption has been provided. 6.3.1 If an objection to assumption of an executory contract or unexpired lease is timely filed and: (a) a Final Order is entered determining that the executory contract or unexpired lease cannot be assumed; or (b) if the Debtor (before the Effective Date) or the Reorganized Debtor (after the Effective Date) give notice to the other party to such executory contract or unexpired lease stating that assumption of such contract or lease is not in the best interests of the Estate in light of the objection, then the contract or lease shall automatically thereupon be deemed to have been included on PLAN EXHIBIT B, and rejected pursuant to Article VI. 6.3.2 If the rejection of an executory contract or unexpired lease pursuant to Article VI gives rise to an Allowed Claim, such Claim shall be classified in Class 4 (other than a Lease Related Claim, which shall be classified in Class 5); provided, however, that any Claim arising from such rejection which has not been barred by a prior order of the Bankruptcy Court shall be forever barred and shall not be enforceable unless a proof of Claim is Filed within 30 days after the mailing of notice referred to in Article VI. 6.3.3 Nothing in Article VI shall constitute a waiver of any other applicable bar date. 6.4 Payments Related To Assumption. Any monetary defaults, including Cure Amount Claims, under each executory contract and unexpired lease to be assumed under the Joint Plan, shall be satisfied, pursuant to Bankruptcy Code Section 365(b)(1) , by payment of the Cure Amount Claim, if any as set forth in PLAN EXHIBIT A (or as otherwise agreed by the Reorganized Debtor and the parties to such executory contract or unexpired lease or as provided in a Final Order, if a timely objection is filed to the assumption), and shall be paid on or as soon as practicable after the Effective Date by the Reorganized Debtor. In the case of a dispute with respect to such cure amount set forth in a timely filed objection to the assumption, the Reorganized Debtor shall pay such Cure Amount Claim in Cash on or as soon as practicable after entry of a Final Order resolving the dispute, and approving the assumption. 6.5 Collective Bargaining Agreements. Subject to Section 10.1.3, the Trustee and the HHI Parties shall jointly seek to negotiate new or revised collective bargaining agreements with the Debtor's unions. 6.6 Rejection Generally. As of the Effective Date, the following executory contracts and unexpired leases shall be rejected to the extent, if any, that they constitute executory contracts or unexpired leases of the Debtor, including any remaining obligations of the Debtor under any executory contract or unexpired lease assigned by the Debtor prior to the Petition Date: (a) each executory contract or unexpired lease of the Debtor that has not been 20 previously assumed, assumed and assigned, or rejected by Final Order and whose term has not expired as of the Effective Date, and is not the subject of a motion pending on the Effective Date to assume or to assume and assign; (b) the executory contracts and unexpired leases listed on PLAN EXHIBIT B, which PLAN EXHIBIT B will be filed 5 days prior to the hearing on the Disclosure Statement and may be amended through the date that is 10 days prior to the Confirmation Hearing, on notice filed by the Debtor and served on the parties affected by such amendments. The listing of a contract or lease by category above, or on PLAN EXHIBIT B, shall not constitute an admission by any party that such contract or lease is an executory contract or unexpired lease, or that the Debtor or the Estate have any liability thereunder, nor shall such listing, the absence of an objection thereto, or Confirmation constitute a finding or determination that any such contract or lease is an executory contract or unexpired lease. 6.7 Approval Of Rejection. The Confirmation Order shall constitute an order of the Bankruptcy Court approving the rejection of the executory contracts and unexpired leases as provided for under the Joint Plan pursuant to Bankruptcy Code Sections 365 and 1123(b)(2). If an executory contract previously has been rejected, or is hereby rejected, under which the Debtor are a licensor of intellectual property (as defined in Bankruptcy Code Section 101(35A)), the licensee under such contract shall retain and may exercise its rights and remedies under Bankruptcy Code Section 365(n); provided, however, that nothing in the Joint Plan, or any Exhibits to the Joint Plan, shall constitute an admission by the Debtor, the Estate or the Reorganized Debtor that the Debtor is a licensor of intellectual property, or that Bankruptcy Code Sections 101(35A) or 365(n) apply to any such contract. 6.8 Objections To Rejection. Any party in interest wishing to object to the rejection of an executory contract or unexpired lease identified for rejection, as provided under the Joint Plan, shall file and serve on counsel for the Trustee, counsel for the Committee, counsel for the HHI Parties, and the U.S. Trustee any objection by the same deadline and in the same manner established for filing objections to Confirmation, unless the rejection is the subject of an amendment to PLAN EXHIBIT B, in which case the deadline is the date that is the earlier of: (a) 20 days after the date of such amendment; or (b) the day that is 5 days before the Confirmation Hearing. Failure to file and serve any such objection by the applicable deadline shall constitute consent to the rejection. 6.9 Bar Date For Rejection Claims. Any Claim by any party to an executory contract or unexpired lease rejected hereunder shall be classified in Class 4 (other than a Lease Related Claim, which shall be classified in Class 5); provided, however, that: (a) any Claim arising from rejection of an executory contract or unexpired lease which has not been barred by a prior order of the Bankruptcy Court, shall be forever barred and shall not be enforceable unless a proof of Claim is Filed within 30 days after the mailing of the Notice of Effective Date; and (b) nothing in Article VI shall constitute a waiver of the Claims Bar Date, if applicable. 6.10 Bar Date for Bankruptcy Code ss. 365(n) Election. If the rejection of an executory contract pursuant to the Joint Plan gives rise to the right by the other party or parties to such contract to make an election under ss. 365(n) of the Bankruptcy Code to either treat such contract as terminated or to retain its rights under such contract, such other party to such contract will be deemed to elect to treat such contract as terminated unless such other party files and serves a notice of its alternative election on the Reorganized Debtor and its counsel within 30 days after the Effective Date. 21 ARTICLE VII DISTRIBUTIONS AND RELATED MATTERS 7.1 Reorganized Debtor to Serve As Disbursing Agent. The Reorganized Debtor shall serve as the Disbursing Agent to hold and distribute Cash and such other property as may be distributed pursuant to the Joint Plan, provided however, that the Reorganized Debtor, in its sole and absolute discretion, may employ another Person, on such terms as may be determined by the Reorganized Debtor, to hold and distribute Cash and such other property as may be distributed pursuant to the Joint Plan. Even if the Disbursing Agent is a Person other than the Reorganized Debtor, nonetheless the Disbursing Agent shall be an agent of the Reorganized Debtor and not a separate taxable entity with respect to, for example, the assets held, income received or disbursements or distributions made for the Reorganized Debtor. The Debtor or the Reorganized Debtor will pay Ordinary Course Administrative Expenses. The Reorganized Debtor, in its discretion, may delegate the making of all other distributions of Cash or HHI Common Stock under the Joint Plan to a third party Disbursing Agent. On the Effective Date, the Reorganized Debtor may transfer to the Disbursing Agent sufficient Cash to enable payments under the Joint Plan. The Cash received by the Disbursing Agent from the Reorganized Debtor shall be maintained in a segregated, interest bearing or similar investment account. The Disbursing Agent shall account for all distributions made from such Cash and shall file any reports or tax returns to the extent required under applicable law. Further, on the Effective Date, all of the HHI Common Stock to be distributed under the Joint Plan may be delivered to a third party Disbursing Agent, for distribution in accordance with the terms and conditions of the Joint Plan. The Reorganized Debtor shall not be required to provide a bond in connection with the making of any distributions pursuant to the Joint Plan. 7.2 Dates of Distributions. The provisions of the Joint Plan for treatment of Administrative Expense Claims, Claims, and Interests specify the times for distributions. Whenever any payment or distribution to be made under the Joint Plan shall be due on a day other than a Business Day, such payment or distribution shall instead be made, without interest, on the immediately following Business Day. Distributions due on the Effective Date will be paid on such date or as soon as practicable thereafter, provided that if other provisions of the Joint Plan require the surrender of securities or establish other conditions precedent to receiving a distribution, the distribution may be delayed until such surrender occurs or conditions are satisfied. If, under the terms of the Joint Plan, the resolution of a particular Disputed Claim, (e.g., it is not Allowed), entitles other Holders of Claims or Interests to a further distribution, either (a) the Reorganized Debtor or the Disbursing Agent may make such further distribution as soon as practicable after the resolution of the Disputed Claim or (b) if the further distribution is determined in good faith, by the Reorganized Debtor or the Disbursing Agent who is to make such distribution, to be less than $500 for any Creditor, then, in order to afford the Reorganized Debtor an opportunity to minimize costs and aggregate such distributions, the Reorganized Debtor or the Disbursing Agent may make such further distribution any time prior to sixty (60) days after the Final Resolution Date. 7.3 Cash Distributions. Distributions of Cash may be made either by check drawn on a domestic bank or wire transfer from a domestic bank, at the option of the Reorganized Debtor, as applicable, except that Cash payments made to foreign Creditors may be made in such funds and by such means as are necessary or customary in a particular foreign jurisdiction. 22 7.4 De Minimis Distributions. The Reorganized Debtor or Disbursing Agent shall not distribute Cash to the holder of an Allowed Claim in an impaired Class if the total aggregate amount of Cash to be distributed on account of such Claim is less than $25, unless the Reorganized Debtor or the Disbursing Agent determines within its sole discretion to make such distribution. Any holder of an Allowed Claim on account of which the total aggregate amount of Cash to be distributed is less than $25 will have its claim for such distribution discharged and will be forever barred from asserting any such claim against the Debtor, the Reorganized Debtor or Disbursing Agent, or their respective property. 7.5 Distribution of HHI Common Stock. The Reorganized Debtor or Disbursing Agent will distribute or cause to be distributed all HHI Common Stock to be distributed under the Joint Plan. Pending the distribution of HHI Common Stock as provided by the Joint Plan, the Reorganized Debtor or Disbursing Agent will cause the HHI Common Stock held by it for such distribution to be: (i) represented in person or by proxy at each meeting of the stockholders of HHI; (ii) voted in any election of directors of HHI, at the option of HHI, either (a) proportionally with the votes cast by other stockholders of the HHI, or (b) for the nominees recommended by the Board of Directors of the HHI; and (iii) voted with respect to any other matter in the same manner as prescribed in (ii)(a) above. 7.6 Fractional Securities and Rounding of Payments. No fractional securities will be issued. If a distribution to a Holder of an Allowed Claim or Allowed Interest would otherwise result in the issuance of a number of shares of HHI Common Stock that is not a whole number, the actual distribution of shares of HHI Common Stock will be rounded down to the next whole number. No consideration will be provided to Holders of Claims or Interests in lieu of fractional shares of HHI Common Stock. 7.7 Disputed Claims. Notwithstanding all references in the Joint Plan to Claims that are Allowed, in undertaking the calculations prior to the Effective Date concerning Allowed Claims or Allowed Administrative Expense Claims under the Joint Plan, including the determination of the amount or number of distributions due to the Holders of Allowed Claims, Allowed Interests and Allowed Administrative Expense Claims, and the amount of financing to be provided by HHI and RC Aviation with respect to payment of Cash distributions on the Effective Date and to meet the Minimum Cash Balance, each Disputed Claim shall be treated as if it were an Allowed Claim, Allowed Interest or Allowed Administrative Expense Claim, in the amount that the Trustee and the HHI Parties, after consultation with the Committee, determines is the amount that the Disputed Claim will become an Allowed Claim, except that if the Bankruptcy Court estimates the likely portion of a Disputed Claim to be Allowed or authorized or otherwise determines the amount or number which would constitute a sufficient reserve for a Disputed Claim (which estimates and determinations may be requested by the Reorganized Debtor, but are not required), such amount or number as determined by the Bankruptcy Court shall be used as to such Claim; provided however, such amount for Disputed Claims in Class 4 and Class 5 shall not exceed in $22 million in the aggregate. 7.7.1 Distributions of non-Cash consideration due in respect of a Disputed Claim shall be held and not made pending resolution of the Disputed Claim. The Cash distributions due in respect of Disputed Claims in Class 4 or Class 5 based on the calculations required by the Joint Plan shall be reserved (the "Disputed Claims Reserve") for the Holders of such Disputed Claims, but such amount shall not exceed $22 million in the aggregate. 7.7.2 After an objection to a Disputed Claim is withdrawn, resolved by agreement, or determined by Final Order, the distributions due on account of any resulting 23 Allowed Claim, Allowed Interest or Allowed Administrative Expense Claim shall be made by the Disbursing Agent, provided that any distribution of Cash shall be made from the Reorganized Debtor's Cash or the Disputed Claims Reserves, as applicable. Such distribution shall be made at the time provided in the Joint Plan for the next scheduled distribution to the class or type of Claim, Interest or Administrative Expense of such Holder and, if there is no such further scheduled time, within forty-five (45) days of the date that the Disputed Claim becomes an Allowed Claim, Allowed Interest or Allowed Administrative Expense. No interest shall be due to a Holder of a Disputed Claim based on the delay attendant to determining the allowance of such Claim, Interest or Administrative Expense. 7.7.3 Should a finally Allowed Claim or Allowed Interest of a Holder otherwise entitle the Holder to a Cash distribution in an amount in excess of the undistributed assets in the Disputed Claims Reserve, unless the Debtor elects to pay such Holder sooner or the Court or terms of the Joint Plan have limited the Holder's recourse to the amount held in the Disputed Claims Reserve for its Disputed Claim, the Holder shall receive, for the shortfall in the reserve, amounts already due and in no event shall such Holder have recourse to any payments or distributions theretofore made to or for the benefit of any Holder of a Claim, Interest or Administrative Expense Claim hereunder. 7.7.4 After an objection to such a Disputed Claim is sustained in whole or in part by a Final Order or by agreement such that the Disputed Claim is not Allowed in whole or in part, (1) if the Disputed Claim was treated as a potential Claim or Interest in a Class which, under the Joint Plan, shares among its members the consideration available for such Class, then the Cash held in the Disputed Claims Reserve and any other consideration held in respect of the particular Disputed Claim (in excess of the distributions due on account of any resulting Allowed Claim or Allowed Interest) shall no longer be held in the Disputed Claim Reserve and such Cash shall become the property of the Reorganized Debtor and may be used by the Reorganized Debtor in any manner not inconsistent with this Joint Plan, and such HHI Common Stock (or Class 5 Note) shall be cancelled. If the Claim is not Allowed (by example only, under 11 U.S.C. ss. 502(d)), the Claim of such Holder shall be cancelled, retired and of no further force and effect and such Holder shall be obligated to surrender any document, certificate or other matter evidencing such Claim. The Holders of any such cancelled instruments, securities and other documentation will have no rights arising from or relating to such instruments, securities or other documentation, or the cancellation thereof, except the rights provided pursuant to the Joint Plan. 7.8 Undeliverable and Unclaimed Distributions. If any distribution under the Joint Plan is returned to the Reorganized Debtor or its agents as undeliverable or the check or other similar instrument or distribution by the Reorganized Debtor remains uncashed or unclaimed for one hundred eighty (180) days, such Cash or HHI Common Stock shall be deemed to be "Unclaimed Property." Upon Cash becoming Unclaimed Property, it immediately shall be revested in the Reorganized Debtor. Upon shares of HHI Common Stock or Class 5 Notes becoming Unclaimed Property, such shares or notes shall be cancelled. Pending becoming Unclaimed Property, such Cash, Class 5 Notes, or HHI Common Stock will remain in the possession of the Disbursing Agent and, if the Disbursing Agent is notified in writing of a new address for the Holder, it shall cause distribution of the Cash or HHI Common Stock, as appropriate, within 45 days thereafter. Once there becomes Unclaimed Property for a Holder, no subsequent distributions for such Holder which may otherwise be due under the Joint Plan will accrue or be held for such Holder, provided that, if the Reorganized Debtor is notified in writing of such Holder's then-current address and status as a Holder under the Joint Plan, thereafter, the 24 Holder will become entitled to its share of distributions, if any, which first become due after such notification. 7.9 Compliance with Tax Requirements. The Reorganized Debtor and the Disbursing Agent shall comply with all withholding and reporting requirements imposed by federal, state or local taxing authorities in connection with making distributions pursuant to the Joint Plan. In connection with each distribution with respect to which the filing of an information return (such as an Internal Revenue Service Form 1099 or 1042) or withholding is required, the Reorganized Debtor and the Disbursing Agent shall file such information return with the Internal Revenue Service and provide any required statements in connection therewith to the recipients of such distribution, or effect any such withholding and deposit all moneys so withheld to the extent required by law. With respect to any Person from whom a tax identification number, certified tax identification number or other tax information required by law to avoid withholding has not been received by the Reorganized Debtor or the Disbursing Agent, the Reorganized Debtor or the Disbursing Agent may, at their sole option, withhold the amount required and distribute the balance to such Person or decline to make such distribution until the information is received; provided, however, that the Reorganized Debtor or the Disbursing Agent shall not be obligated to liquidate any securities to perform such withholding. ARTICLE VIII PROCEDURES FOR RESOLVING DISPUTED CLAIMS; AND LITIGATION 8.1 Objections to Claims. All objections to Claims must be Filed and served on the holders of such Claims by the Claims Objection Bar Date, and, if Filed prior to the Effective Date, such objections will be served on the parties on the then-applicable service list in the Reorganization Case. If an objection is required to be Filed and has not been Filed to a proof of Claim or a scheduled Claim by the Claims Objection Bar Date, the Claim to which the proof of Claim or scheduled Claim relates will be treated as an Allowed Claim if such Claim has not been allowed earlier. An objection is deemed to have been timely Filed as to all Tort Claims, thus making each such Claim a Disputed Claim as of the Claims Objection Bar Date. Each such Tort Claim will remain a Disputed Claim until it becomes an Allowed Claim. 8.2 Authority to Prosecute Objections. After the Effective Date, only the Reorganized Debtor will have the authority to File, settle, compromise, withdraw or litigate to judgment objections to Claims, including pursuant to any alternative dispute resolution or similar procedures approved by the Bankruptcy Court. 8.3 Estimation of Tax Claims. In addition to any other available remedies or procedures with respect to Tax Claims or Tax issues or liabilities, the Reorganized Debtor, at any time, may utilize (and receive the benefits of) section 505 of the Bankruptcy Code with respect to: any Tax issue or liability relating to an act or event occurring prior to the Effective Date; or any Tax liability arising prior to the Effective Date. If the Reorganized Debtor utilizes section 505(b) of the Bankruptcy Code: (1) the Court shall determine the amount of the subject Tax liability or Claim in the event that the appropriate governmental entity timely determines a Tax to be due in excess of the amount indicated on the subject return; and (2) if the prerequisites are met for obtaining a discharge of Tax liability or Claim in accordance with section 505(b) of the Bankruptcy Code, the Reorganized Debtor and any successors to the Debtor shall be entitled to such discharge which shall apply to any and all Taxes relating to the period covered by such return. 25 8.4 Temporary or Permanent Resolution of Disputed Claims. The Reorganized Debtor may, at any time, request that the Bankruptcy Court estimate any Disputed Claim, including without limitation any Tax Claim, pursuant to section 502(c) of the Bankruptcy Code, irrespective of whether the Reorganized Debtor has previously objected to such Disputed Claim or whether the Bankruptcy Court has ruled on any such objection. The Bankruptcy Court will retain jurisdiction to estimate any contingent or unliquidated Disputed Claim at any time during litigation concerning any objection to the Disputed Claim, including during the pendency of any appeal relating to any such objection. If the Bankruptcy Court estimates any Disputed Claim, that estimated amount would constitute either the Allowed amount of such Disputed Claim or a maximum limitation on such Disputed Claim, as determined by the Bankruptcy Court. If the estimated amount constitutes a maximum limitation on such Disputed Claim, the Reorganized Debtor may elect to pursue any supplemental proceedings to object to any ultimate payment on account of such Disputed Claim. In addition, the Reorganized Debtor may resolve or adjudicate any Disputed Claim in the manner in which the amount of such Claim, Interest or Administrative Expense Claim and the rights of the Holder of such Claim, Interest or Administrative Expense Claim would have been resolved or adjudicated if the Chapter 11 Cases had not been commenced. All of the aforementioned objection, estimation and resolution procedures are cumulative and not necessarily exclusive of one another. 8.5 Setoff. The Reorganized Debtor may, pursuant to section 553 of the Bankruptcy Code or applicable nonbankruptcy law, set off against any Allowed Claim, Interest or Administrative Expense Claim and the distributions to be made pursuant to the Joint Plan on account of such Claim, Interest or Administrative Expense Claim (before any distribution is made on account of such Claim, Interest or Administrative Expense Claim), the Rights of Action of any nature that the Debtor may hold against the Holder of such Allowed Claim, Interest or Administrative Expense Claim. Neither the failure to set off nor the allowance of any Claim, Interest or Administrative Expense Claim hereunder will constitute a waiver or release by the Reorganized Debtor of any such Rights of Action that it may have against such Holder. 8.6 Rights of Action. Except as set forth in this Section 8.6, in accordance with section 1123(b) of the Bankruptcy Code, the Reorganized Debtor, to the extent set forth below, and its successors, any assigns hereunder and future assigns will retain and may exclusively enforce any Rights of Action subject only to any express waiver or release thereof by the Trustee in the Joint Plan or in any other contract, instrument, release, indenture or other agreement entered into in connection with the Joint Plan or entered into otherwise by the Trustee, and the Confirmation Order's approval of the Joint Plan shall be deemed a res judicata determination of such rights to retain and exclusively enforce such Rights of Action. Absent such express waiver or release by the Trustee, the Reorganized Debtor, or its successors or assigns may pursue Rights of Action, as appropriate, in accordance with the best interests of the Reorganized Debtor (or its successors or future assigns). The Trustee may designate certain Rights of Action for transfer, on the Effective Date, to a litigation trust having terms that shall be governed by a litigation trust agreement. The Rights of Actions may be asserted or prosecuted before or after solicitation of votes on the Joint Plan or before or after the Effective Date. 8.6.1 Absent an express waiver or release as referenced above, nothing in the Joint Plan shall (or is intended to) prevent, estop or be deemed to preclude the Reorganized Debtor from utilizing, pursuing, prosecuting or otherwise acting upon all or any of their Rights of Action and, therefore, no preclusion doctrine, including, without limitation, the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable or otherwise) or laches shall apply to such Rights of Action upon or after 26 Confirmation or Consummation. By example only and without limiting the foregoing, the utilization or assertion of a Right of Action or the initiation of any proceeding with respect thereto against a Person, by the Reorganized Debtor or any successor to or assign of it, shall not be barred (whether by estoppel, collateral estoppel, res judicata or otherwise) as a result of: (a) the solicitation of a vote on the Joint Plan from such Person or such Person's predecessor in interest; (b) the Claim, Interest or Administrative Expense Claim of such Person or such Person's predecessor in interest having been listed in the Debtor's Schedules, List of Holders of Interests, or in the Joint Plan, Disclosure Statement or any exhibit thereto; (c) prior objection to or allowance of a Claim, Interest or Administrative Expense Claim of the Person or such Person's predecessor in interest; or (d) Confirmation of the Joint Plan. 8.6.2 Notwithstanding any allowance of a Claim or Administrative Expense Claim, the Reorganized Debtor reserves the right to seek, among other things, to have such Claim or Administrative Expense Claim disallowed if the Reorganized Debtor, at the appropriate time, determines that it has a defense under 11 U.S.C. ss. 502(d), e.g., the Reorganized Debtor holds a Right of Action for an Avoidance claim against the Holder of such Claim or Administrative Expense Claim and such Holder after demand refuses to pay the amount due in respect thereto. ARTICLE IX EXEMPTION FROM CERTAIN TRANSFER TAXES 9.1 Pursuant to section 1146(c) of the Bankruptcy Code, any transfers from the Debtor to the Reorganized Debtor or any other Person pursuant to the Joint Plan including (a) the issuance, transfer, or exchange of HHI Common Stock, (b) the creation of any mortgage deed or trust, or other security interest, and (c) the making of any agreement or instrument in furtherance of, or in connection with, this Joint Plan, shall not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, stamp act, real estate transfer tax, mortgage recording tax or other similar Tax or governmental assessment. ARTICLE X CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE JOINT PLAN 10.1 Conditions to Confirmation. The Bankruptcy Court will not enter the Confirmation Order unless and until the following conditions have been satisfied or duly waived pursuant to Section 10.3: 10.1.1 The Confirmation Order will be reasonably acceptable in form and substance to the Trustee and the HHI Parties and will expressly approve the Restructuring Support Agreement and authorize the transactions contemplated thereby. 10.1.2 All Exhibits to the Joint Plan will be in a form and substance reasonably satisfactory to the Trustee and the HHI Parties. 10.1.3 Collective bargaining agreements satisfactory to the Trustee and HHI shall be agreed upon, or if no such agreement has been reached, the Bankruptcy Court shall have entered an order pursuant to Section 1113 of the Bankruptcy Code authorizing the following modifications: existing collective bargaining agreements shall be extended in their current form and at their current wage and benefit levels for three (3) years beyond their amendable dates, provided however, that benefits under the Pilots' Pension Plan shall be frozen and replaced with defined contribution and disability plans having a cost no greater than the 27 normal cost under the current Pilots' Pension Plan; provided, however, that this condition may be jointly waived by the Trustee and HHI exercising his or its own sole and absolute discretion. 10.1.4 The Confirmation Order is entered no later than August 26, 2005. 10.2 Conditions to the Effective Date. The Effective Date will not occur, and the Joint Plan will not be consummated, unless and until each of the following conditions have been satisfied or duly waived pursuant to Section 10.3: 10.2.1 The Confirmation Order has been entered, has not been reversed, stayed, modified or amended and has become a Final Order. 10.2.2 The Confirmation Order shall authorize the Trustee and the HHI Parties to take all actions necessary or appropriate to implement the Joint Plan, including consummation of the Restructuring Support Agreement and transactions contemplated by the Joint Plan, as well as the implementation and consummation of all contracts, instruments, releases and other agreements or documents contemplated by the Joint Plan, the Restructuring Support Agreement, or the Restructuring Transactions. 10.2.3 The Restructuring Transactions have been consummated, either prior to or simultaneous with substantial consummation of the Joint Plan. 10.2.4 The Unsecured, non-Priority Claim held by the Internal Revenue Service against the Debtor for Tax related penalties shall be not Allowed by the Bankruptcy Court. 10.2.5 The Joint Plan shall not have been amended, altered or modified from the Joint Plan as confirmed, in any material respect, unless such amendment, alteration or modification has been consented to in accordance with Section 14.1, and all Exhibits to the Joint Plan remain in form and substance reasonably satisfactory to the Trustee and the HHI Parties. 10.2.6 The Effective Date has occurred by February 26, 2006. 10.3 Waiver of Conditions to the Confirmation or Effective Date. Subject to Section 10.1.3, the conditions to Confirmation set forth in Section 10.1 and the conditions to the Effective Date set forth in Section 10.2 may be waived, in writing, in whole or in part by the Trustee and all of the HHI Parties, after consultation with the Committee, at any time without an order of the Bankruptcy Court. 10.4 Effect of Nonoccurrence of Conditions to the Effective Date. If each of the conditions to the Effective Date is not satisfied or duly waived in accordance with Section 10.3, then upon motion by the Trustee and the HHI Parties, after consultation with the Committee, made before the time that each of such conditions has been satisfied or duly waived and upon notice to such parties in interest as the Bankruptcy Court may direct, the Confirmation Order will be vacated by the Bankruptcy Court; provided, however, that, notwithstanding the Filing of such motion, the Confirmation Order may not be vacated if each of the conditions to the Effective Date is either satisfied or duly waived before the Bankruptcy Court enters an order granting such motion. If the Confirmation Order is vacated pursuant to this Section 10.4, (1) the Joint Plan will be null and void in all respects, including with respect to: (a) the discharge of Claims and termination of Interests pursuant to section 1141 of the Bankruptcy Code; (b) the assumptions, assignments or rejections of Executory Contracts and Unexpired Leases pursuant to Article VI; and (c) the releases described in Section 13.6; and (2) nothing contained in the Joint 28 Plan will: (a) constitute a waiver or release of any claims by or against, or any Interest in, the Debtor; or (b) prejudice in any manner the rights of the Debtor, the Trustee, the HHI Parties, or any other party in interest. ARTICLE XI CRAMDOWN 11.1 The Joint Plan Proponents request Confirmation under section 1129(b) of the Bankruptcy Code with respect to any impaired Class that does not accept the Joint Plan pursuant to section 1126 of the Bankruptcy Code. The Trustee and the HHI Parties, after consultation with the Committee, reserve the right to modify the Joint Plan to the extent, if any, that Confirmation pursuant to section 1129(b) of the Bankruptcy Code requires modification. ARTICLE XII RETENTION OF JURISDICTION AND MISCELLANEOUS MATTERS 12.1 Retention of Jurisdiction. Notwithstanding the entry of the Confirmation Order or the occurrence of the Effective Date, the Bankruptcy Court shall retain jurisdiction over the Reorganization Case and any of the proceedings related to the Reorganization Case pursuant to section 1142 of the Bankruptcy Code and 28 U.S.C. ss. 1334 to the fullest extent permitted by the Bankruptcy Code and other applicable law, including, without limitation, such jurisdiction as is necessary to ensure that the purpose and intent of the Joint Plan are carried out, provided, however, that the Bankruptcy Court shall not have jurisdiction with respect to Tax Claims that arise solely after the Effective Date. Without limiting the generality of the foregoing, the Bankruptcy Court shall retain jurisdiction for the following purposes: 12.1.1 establish the priority or secured or unsecured status of, allow, disallow, determine, liquidate, classify, or estimate any Claim, Administrative Expense Claim or Interest (including, without limitation and by example only, determination of Tax issues or liabilities in accordance with Bankruptcy Code ss.505), resolve any objections to the allowance or priority of Claims or Administrative Expense Claim, or resolve any dispute as to the treatment necessary to reinstate a Claim or Administrative Expense Claim pursuant to the Joint Plan; 12.1.2 grant or deny any applications for allowance of compensation or reimbursement of expenses authorized pursuant to the Bankruptcy Code or the Joint Plan, for periods ending on or before the Effective Date; 12.1.3 resolve any matters related to the assumption, assumption and assignment or rejection of any executory contract or unexpired lease to which the Debtor is a party or with respect to which the Debtor may be liable, and to hear, determine and, if necessary, liquidate any Claims or Administrative Expenses arising therefrom; 12.1.4 ensure that distributions to Holders of Allowed Claims, Administrative Expense Claims or Interests are made pursuant to the provisions of the Joint Plan, and to effectuate performance of the provisions of the Joint Plan; 12.1.5 decide or resolve any motions, adversary proceedings, contested or litigated matters and any other matters and grant or deny any applications involving the Debtor that may be pending before the Effective Date or that may be commenced thereafter as provided in the Joint Plan; 29 12.1.6 except as otherwise provided in the Confirmation Order or in the Joint Plan, enter such orders as may be necessary or appropriate to implement or consummate the provisions of the Joint Plan and all contracts, instruments, releases, indentures and other agreements or documents created in connection with the Joint Plan, the Disclosure Statement or the Confirmation Order, including, without limitation, any stay orders as may be appropriate in the event that the Confirmation Order is for any reason stayed, revoked, modified or vacated; 12.1.7 resolve any cases, controversies, suits or disputes that may arise in connection with the consummation, interpretation or enforcement of the Joint Plan or the Confirmation Order, including the release and injunction provisions set forth in and contemplated by the Joint Plan and the Confirmation Order or any Person's rights arising under or obligations incurred in connection with the Joint Plan or the Confirmation Order; provided, however, that, absent a Reorganized Debtor's request or consent, such retention of jurisdiction shall not apply to any cases, controversies, suits or disputes that may arise in connection with a Reorganized Debtor's or any other entity's rights or obligations as: (a) the issuer or Holder, respectively, of any securities issued or delivered pursuant to the Joint Plan; or (b) a party to any agreements governing, instruments evidencing or documents relating to the securities issued or delivered pursuant to the Joint Plan; 12.1.8 subject to the restrictions on modifications provided in any contract, instrument, release, indenture or other agreement or document created in connection with the Joint Plan, modify the Joint Plan before or after the Effective Date pursuant to section 1127 of the Bankruptcy Code or modify the Disclosure Statement, the Confirmation Order or any contract, instrument, release, indenture or other agreement or document created in connection with the Joint Plan, the Disclosure Statement or the Confirmation Order; or remedy any defect or omission or reconcile any inconsistency in any Bankruptcy Court order, the Joint Plan, the Disclosure Statement, the Confirmation Order or any contract, instrument, release, indenture or other agreement or document created in connection with the Joint Plan, the Disclosure Statement or the Confirmation Order, in such manner as may be necessary or appropriate to consummate the Joint Plan, to the extent authorized by the Bankruptcy Code; 12.1.9 issue injunctions, enter and implement other orders or take such other actions as may be necessary or appropriate to restrain interference by any Person with the consummation, implementation or enforcement of the Joint Plan or the Confirmation Order, 12.1.10 consider and act on the compromise and settlement of any Claim against, or Right of Action of the Debtor or Trustee or any of their successors or representatives; 12.1.11 decide or resolve any Rights of Action under the Bankruptcy Code, including without limitation, Avoidance Actions and claims under sections 362, 510, 542 and 543 of the Bankruptcy Code,; 12.1.12 enter such orders as may be necessary or appropriate in connection with the recovery of the assets of the Debtor or the Reorganized Debtor wherever located; 12.1.13 hear and determine any motions or contested matters involving Tax Claims or Taxes either arising prior (or for periods including times prior) to the Effective Date or relating to the administration of the Reorganization Case, including, without limitation (i) matters involving federal, state and local Taxes in accordance with sections 346, 30 505 and 1146 of the Bankruptcy Code, (ii) matters concerning Tax refunds due for any period including times prior to the Effective Date, (iii) any matters arising prior to the Effective Date affecting Tax attributes of the Reorganized Debtor, and (iv) estimate or allow any Tax Claims asserted against the Debtor or Reorganized Debtor; 12.1.14 determine such other matters as may be provided for in the Confirmation Order or as may from time to time be authorized under the provisions of the Bankruptcy Code or any other applicable law; 12.1.15 enforce all orders, judgments, injunctions, releases, exculpations, indemnifications and rulings issued or entered in connection with the Reorganization Case or the Joint Plan; 12.1.16 remand to state court any claim, cause of action, or proceeding involving the Debtor that was removed to federal court in whole or in part in reliance upon 28 U.S.C. ss. 1334; 12.1.17 determine any other matters that may arise in connection with or relate to the Joint Plan, the Disclosure Statement, the Confirmation Order or any contract, instrument, release, indenture or other agreement or document created in connection with the Joint Plan, the Disclosure Statement or the Confirmation Order, except as otherwise provided in the Joint Plan; 12.1.18 determine any other matter not inconsistent with the Bankruptcy Code; and 12.1.19 enter an order concluding the Reorganization Case. 12.2 Headings. The headings used in the Joint Plan are inserted for convenience only and neither constitute a portion of the Joint Plan nor in any manner affect the construction of the provisions of the Joint Plan. 12.3 Notices. All notices and requests in connection with the Joint Plan shall be in writing and shall be hand delivered or sent by mail addressed to: Debtor and Reorganized Debtor: Mark Dunkerley Chief Executive Officer Hawaiian Airlines, Inc. 3375 Koapaka Street, Suite G-350 Honolulu, HI 96819 Facsimile: (808) 835-3690 with a copy to: Bruce Bennett, Esq. Hennigan, Bennett & Dorman LLP 601 S. Figueroa Avenue, Suite 3300 Los Angeles, CA 90017 Facsimile: (213) 694-1234 31 Tom E. Roesser, Esq. Carlsmith Ball LLP Pacific Tower, Suite 2200 1001 Bishop Street Honolulu, HI 96813 Facsimile: (808) 523-0842 HHI and RC Aviation: Lawrence Hershfield Chief Executive Officer Hawaiian Holdings, Inc. c/o RC Aviation, LLC 12730 High Bluff Drive, Suite 180 San Diego, CA 92130 Facsimile: (858) 523-1899 with a copy to: Jeffrey C. Krause, Esq. Stutman, Treister & Glatt P.C. 1901 Avenue of the Stars, Suite 1200 Los Angeles, CA 90067 Facsimile: (310) 228-5788 Committee: Brett H. Miller, Esq. Otterbourg, Steindler, Houston & Rosen 230 Park Avenue New York, NY 10169 Facsimile: (212) 682-6104 with a copy to: James A. Wagner, Esq. Wagner, Choi & Evers P.C. 745 Fort Street, Suite 1900 Honolulu, HI 96813 Facsimile: (808) 566-6900 12.4 Other Notices. All notices and requests to any Person holding of record any Claim, Administrative Expense or Interest shall be sent to such Person at the Person's last known address, or if known by the Debtor, to the last known address of the Person's attorney of record. Any such Person may designate in writing any other address for purposes of this Section of the Joint Plan, which designation will be effective on receipt. 12.5 Mutual Cooperation. The Joint Plan Proponents shall (i) use commercially reasonable efforts to seek approval of a Disclosure Statement relating to the Joint 32 Plan by the Bankruptcy Court, (ii) upon Bankruptcy Court approval of the Disclosure Statement, use commercially reasonable efforts to solicit acceptances of the Joint Plan and (iii) take all other commercially reasonably necessary actions to support and obtain confirmation of and implement the Joint Plan. 12.6 Successors and Assigns. The rights, duties and obligations of any Person named or referred to in the Joint Plan shall be binding upon, and shall inure to the benefit of, the successors and assigns of such Person. 12.7 Committee. The Committee shall be terminated on the Effective Date; provided, however, that following the termination of the Committee, the professionals employed by the Committee may prepare and File their respective Fee Applications, review Fee Applications Filed by Professionals, and prosecute any objections to Fee Applications. Except as otherwise provided herein and notwithstanding anything provided in the Bankruptcy Code, the Committee shall not have any rights under the Bankruptcy Code as a Joint Plan Proponent, including without limitation rights under Section 1127 of the Bankruptcy Code. 12.8 Trustee's Professionals. Following the termination of the Trustee's appointment on the Effective Date, the professionals employed by the Trustee may prepare and File their respective Fee Applications and the Trustee's Fee Applications. 12.9 Severability of Plan Provisions. If, prior to Confirmation, any term or provision of the Joint Plan is held by the Bankruptcy Court to be invalid, void or unenforceable, the Bankruptcy Court will have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void or unenforceable, and such term or provision will then be applicable as altered or interpreted. Notwithstanding any such holding, alteration or interpretation, the remainder of the terms and provisions of the Joint Plan will remain in full force and effect and will in no way be affected, impaired or invalidated by such holding, alteration or interpretation. The Confirmation Order will constitute a judicial determination that each term and provision of the Joint Plan, as it may have been altered or interpreted in accordance with the foregoing, is valid and enforceable pursuant to their terms. 12.10 No Waiver. Neither the failure of the Debtor to list a Claim in the Debtor's Schedules, the failure of the Debtor to object to any Claim or Interest for purposes of voting, the failure of the Reorganized Debtor to object to a Claim, Administrative Expense Claim or Interest prior to Confirmation or the Effective Date, the failure of the Debtor to assert a Right of Action prior to Confirmation or the Effective Date, the absence of a proof of Claim having been filed with respect to a Claim, nor any action or inaction of the Reorganized Debtor or any other party with respect to a Claim, Administrative Expense Claim, Interest or Right of Action other than a legally effective express waiver or release shall be deemed a waiver or release of the right of the Debtor or its successors, before or after solicitation of votes on the Joint Plan or before or after Confirmation or the Effective Date to (a) object to or examine such Claim, Administrative Expense Claim or Interest, in whole or in part or (b) retain and either assign or exclusively assert, pursue, prosecute, utilize, otherwise act or otherwise enforce any Rights of Action. 12.11 Inconsistencies. In the event the terms or provisions of the Joint Plan are inconsistent with the terms and provisions of the exhibits to the Joint Plan or documents executed in connection with the Joint Plan, the terms of the Joint Plan shall control. 33 ARTICLE XIII EFFECT OF CONFIRMATION 13.1 Binding Effect of Confirmation. Confirmation will bind the Debtor, all Holders of Claims, Administrative Expense Claims or Interests and other parties in interest to the provisions of the Joint Plan whether or not the Claim, Administrative Expense Claim or Interest of such Holder is impaired under the Joint Plan and whether or not the Holder of such Claim, Administrative Expense Claim or Interest has accepted the Joint Plan. 13.2 Good Faith. Confirmation of the Joint Plan shall constitute a finding that: (i) this Joint Plan has been proposed by the Joint Plan Proponents in good faith and in compliance with applicable provisions of the Bankruptcy Code; and (ii) all Persons' solicitations of acceptances or rejections of this Joint Plan and the offer, issuance, sale, or purchase of a security offered or sold under the Joint Plan have been in good faith and in compliance with applicable provisions of the Bankruptcy Code. 13.3 No Limitations on Effect of Confirmation. Nothing contained in the Joint Plan will limit the effect of Confirmation as described in section 1141 of the Bankruptcy Code. 13.4 Discharge of Claims, Administrative Expenses and Interests. Except as provided in the Joint Plan or Confirmation Order, the rights afforded hereunder and the treatment of Claims, Administrative Expense Claims and Interests thereunder will be in exchange for and in complete satisfaction, discharge and release of all Claims and Administrative Expense Claims, including any interest accrued on Claims from the Petition Date. Except as provided in the Joint Plan or the Confirmation Order, Confirmation will discharge the Debtor and Reorganized Debtor from all Claims, Administrative Expense Claims or other debts that arose before the Confirmation Date and all debts of the kind specified in sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, whether or not (a) a proof of Claim based on such debt is filed or deemed filed pursuant to section 501 of the Bankruptcy Code, (b) a Claim based on such debt is allowed pursuant to section 502 of the Bankruptcy Code or (c) the Holder of a Claim or Administrative Expense Claim based on such debt has accepted the Joint Plan. As of the Confirmation Date, except as provided in the Joint Plan or the Confirmation Order, all Entities shall be precluded from asserting against the Debtor, the Reorganized Debtor, their successors or their property, any other or further claims, debts, rights, causes of action, liabilities or equity interests based upon any act, omission, transaction or other activity of any nature that occurred prior to the Confirmation Date. 13.5 Judicial Determination of Discharge. As of the Confirmation Date, except as provided in the Joint Plan, all Persons shall be precluded from asserting against the Debtor any other or further Claims, Administrative Expense Claims, Interests, debts, rights, causes of action, liabilities, or equity interests based on any act, omission, transaction or other activity of any kind or nature that occurred before the Confirmation Date. In accordance with the foregoing, except as provided in the Joint Plan or in the Confirmation Order, the Confirmation Order will be a judicial determination of discharge of all such Claims, Administrative Expense Claims and other debts and liabilities against the Debtor, pursuant to sections 524 and 1141 of the Bankruptcy Code, and such discharges shall void any judgment obtained against the Debtor at any time, to the extent that such judgment relates to a discharged liability, Claim, or Administrative Expense Claim. Notwithstanding the foregoing, the Department of Transportation, Federal Aviation Authority, the United States Securities and Exchange Commission, and other governmental agencies shall not be subject to the foregoing injunction 34 with respect to the exercise and enforcement of any of their respective regulatory or police rights and powers. 13.6 Injunctions. Except as provided in the Joint Plan or the Confirmation Order, as of the Effective Date, all Entities that have held, currently hold or may hold a Claim or other debt or liability that is satisfied or released, as applicable, or any holder of an Interest will be permanently enjoined from taking any of the following actions on account of any such discharged or satisfied Claims, debts or liabilities: (a) commencing or continuing in any manner any action or other proceeding against the Debtor, Estate, Trustee, the Reorganized Debtor or their respective property, other than to enforce any right pursuant to the Joint Plan to a distribution; (b) enforcing, attaching, collecting or recovering in any manner any judgment, award, decree or order against the Debtor, Estate, Trustee, the Reorganized Debtor or their respective property, other than as permitted pursuant to (a) above; (c) creating, perfecting or enforcing any lien or encumbrance against the Debtor, Estate, Trustee, the Reorganized Debtor or their respective property; (d) asserting a setoff, right of subrogation or recoupment of any kind against any debt, liability or obligation due to the Debtor, Estate, Trustee, or the Reorganized Debtor; and (e) commencing or continuing any action, in any manner, in any place that does not comply with or is inconsistent with the provisions of the Joint Plan, provided however, that nothing herein shall affect or otherwise impair the existing right of setoff by the United States of mutual prepetition obligations. Notwithstanding the foregoing, the Department of Transportation, Federal Aviation Authority, the United States Securities and Exchange Commission, and other governmental agencies shall not be subject to the foregoing injunction with respect to the exercise and enforcement of any of their respective regulatory or police rights and powers. 13.6.1 As of the Effective Date, all Entities that have held, currently hold or may hold any claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action or liabilities that are released pursuant to the Joint Plan will be permanently enjoined from taking any of the following actions against any released Entity or its property on account of such released claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action or liabilities: (a) commencing or continuing in any manner any action or other proceeding; (b) enforcing, attaching, collecting or recovering in any manner any judgment, award, decree or order; (c) creating, perfecting or enforcing any Lien; (d) asserting a setoff, right of subrogation or recoupment of any kind against any debt, liability or obligation due to any released Entity; and (e) commencing or continuing any action, in any manner, in any place that does not comply with or is inconsistent with the provisions of the Joint Plan, provided however, that nothing herein shall affect or otherwise impair the existing right of setoff by the United States of mutual prepetition obligations. Notwithstanding the foregoing, the Department of Transportation, Federal Aviation Authority, the United States Securities and Exchange Commission, and other governmental agencies shall not be subject to the foregoing injunction with respect to the exercise and enforcement of any of their respective regulatory or police rights and powers. 13.6.2 By accepting any distributions pursuant to the Joint Plan, each Holder of an Allowed Claim or Interest receiving distributions pursuant to the Joint Plan will be deemed to have specifically consented to the injunctions set forth in this Section 13.6. 13.7 Exemption from Securities Laws. The entry of the Confirmation Order shall be (1) a final determination of the Bankruptcy Court that the HHI Common Stock authorized, issued or distributed pursuant to this Joint Plan, are entitled to all of the benefits and 35 exemptions provided by section 1145 of the Bankruptcy Code, (2) a final determination of the Bankruptcy Court that the HHI Common Stock is entitled to the exemptions from federal and state securities registration available under Section 4(2) of the Securities Act of 1933, as amended, Rule 701 and/or Regulation D of the Securities and Exchange Commission, and similar provisions of state securities law, and (3) deemed to incorporate the following provisions of this Article XIII as mixed findings of fact and conclusions of law. 13.8 Initial Offer and Sale Exempt from Registration. Section 5 of the Securities Act and any State or local law requiring registration for the offer or sale of a security or registration or licensing of an issuer of, underwriter of, or broker or dealer in, a security, do not apply to the offer or sale of any HHI Common Stock in accordance with the Joint Plan. 13.9 Exculpation and Limitation of Liabilities. To the maximum extent permitted by law, none of the Debtor, the Trustee, the Reorganized Debtor, the Estate, the Committee, HHI, HHIC, RC Aviation, nor any of their employees, officers, directors, agents, members, representatives, or the professionals employed or retained by any of them, whether or not by Bankruptcy Court order (each, an "EXCULPATED PERSON"), shall have or incur liability to any Person for an act taken or omission made in good faith in connection with or related to the formulation of the Joint Plan, the Joint Disclosure Statement, the Restructuring Support Agreement or a contract, instrument, release, or other agreement or document created in connection therewith, the solicitation of acceptances for or confirmation of the Joint Plan, or the consummation and implementation of the Joint Plan and the transactions contemplated therein. Each Exculpated Person shall in all respects be entitled to reasonably rely on the advice of counsel with respect to its duties and responsibilities under the Joint Plan. Entry of the Confirmation Order constitutes a judicial determination that the exculpation provision contained in this Section is necessary to, inter alia, facilitate Confirmation and feasibility and to minimize potential claims arising after the Effective Date for indemnity, reimbursement or contribution from the Reorganized Debtor. The Confirmation Order's approval of the Joint Plan also constitutes a res judicata determination of the matters included in the exculpation provisions of the Joint Plan. 13.10 Plan Distributions and Transfers Deemed Not To Be Fraudulent Transfers. The Confirmation Order is to be a judicial determination that no distribution or transfer of Cash, securities or other property under the Joint Plan by the Debtor or Reorganized Debtor is to be deemed to have been made with the actual intent to hinder, delay, or defraud any creditor. Moreover, the Confirmation Order shall also be a judicial determination that, with respect to a timely distribution or transfer by the Debtor or Reorganized Debtor of Cash, securities or other property which was required under the Joint Plan to be made on, or as soon as practicable after, the Effective Date, the Debtor or Reorganized Debtor (1) was solvent at the time of such distribution or transfer and immediately thereafter, (2) was not left thereby with an unreasonably small amount of assets with respect to its intended business or transactions, and (3) did not intend to incur, did not believe it would incur, and reasonably should have believed it would not incur, debts beyond its ability to pay as they became due. ARTICLE XIV MODIFICATION OR WITHDRAWAL OF PLAN 14.1 The Trustee and the HHI Parties, after consultation with the Committee, may seek to amend or modify the Joint Plan at any time prior to its Confirmation in the manner provided by section 1127 of the Bankruptcy Code or as otherwise permitted by law without additional disclosure pursuant to section 1125 of the Bankruptcy Code, except as the Bankruptcy 36 Court may otherwise order, and the Trustee and the HHI Parties reserve the right to amend the terms of the Joint Plan or waive any conditions to its Confirmation, effectiveness or consummation if the Trustee and the HHI Parties, after consultation with the Committee, determine that such amendments or waivers are necessary or desirable to confirm, effectuate or consummate the Joint Plan. To the extent that the Trustee and the HHI Parties agree to a modification of the Joint Plan that is material, the Committee shall have the right to withdraw as a Joint Plan Proponent and shall, notwithstanding Section 12.5 of the Joint Plan, be entitled to object to Confirmation of the Joint Plan. 14.2 After confirmation of the Joint Plan, the Trustee and the HHI Parties may apply to the Bankruptcy Court, pursuant to section 1127 of the Bankruptcy Code, to modify the Joint Plan. After confirmation of the Joint Plan, the Trustee and the HHI Parties may apply to remedy defects or omissions in the Joint Plan or to reconcile inconsistencies in the Joint Plan. The Joint Plan may not be altered, amended or modified without the written consent of the Trustee and the HHI Parties, after consultation with the Committee, or their successors. 14.3 The Trustee and the HHI Parties reserve the right, to be exercised jointly, each in their sole and unfettered discretion, after consultation with the Committee, to revoke and withdraw the Joint Plan at any time prior to the Effective Date, in which case the Joint Plan will be deemed to be null and void (including, without limitation, (1) any discharge of Claims and Administrative Expenses and termination of Interests pursuant to section 1141 of the Bankruptcy Code will be deemed null and void, (2) the assumptions, assumptions and assignments or rejections of executory contracts and unexpired leases pursuant to the Joint Plan will be deemed null and void, and (3) nothing contained in the Joint Plan will (a) constitute a waiver or release of any Right of Action, Claim, Administrative Expense or Interest or (b) prejudice in any manner the rights of the Reorganized Debtor). ARTICLE XV CONFIRMATION REQUEST 15.1 The Joint Plan Proponents request that the Court confirm the Joint Plan and that it do so, if applicable, pursuant to section 1129(b) of the Bankruptcy Code notwithstanding the rejection of the Joint Plan by any impaired Class. 37
DATED: Honolulu, Hawaii March 11, 2005 /s/ Joshua Gotbaum --------------------------------------------------------------- Joshua Gotbaum, Chapter 11 Trustee for Hawaiian Airlines, Inc. /s/ Randall Jenson --------------------------------------------------------------- Randall Jenson For Hawaiian Holdings, Inc. /s/ Randall Jenson --------------------------------------------------------------- Randall Jenson For RC Aviation LLC /s/ Randall Jenson --------------------------------------------------------------- Randall Jenson For HHIC, Inc. /s/ Brett H. Miller --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Hawaiian Airlines, Inc.
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