-----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, DP8eTpDeJFDElmECMw+ad+MvX4C9YHzO4gpSn0m0yZhcG37EwrfwKfm9I3jS65+0 i9wTRLLPDR2TU1IORIbK0Q== 0000950142-96-000025.txt : 19960206 0000950142-96-000025.hdr.sgml : 19960206 ACCESSION NUMBER: 0000950142-96-000025 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19960205 SROS: AMEX SROS: PSE GROUP MEMBERS: AIP GENERAL PARTNER, INC. GROUP MEMBERS: AIRLINE INVESTORS PARTNERSHIP LP GROUP MEMBERS: AIRLINE INVESTORS PARTNERSHIP, L.P. GROUP MEMBERS: JOHN W. ADAMS SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HAWAIIAN AIRLINES INC/HI CENTRAL INDEX KEY: 0000046205 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 990212598 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-13378 FILM NUMBER: 96511229 BUSINESS ADDRESS: STREET 1: 3375 KOAPAKA ST STREET 2: STE G350 CITY: HONOLULU STATE: HI ZIP: 96819 BUSINESS PHONE: 8088353700 FORMER COMPANY: FORMER CONFORMED NAME: HAL INC /HI/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: HAWAIIAN AIRLINES INC DATE OF NAME CHANGE: 19850314 FORMER COMPANY: FORMER CONFORMED NAME: INTER ISLAND AIRWAYS LTD DATE OF NAME CHANGE: 19670920 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: AIRLINE INVESTORS PARTNERSHIP LP CENTRAL INDEX KEY: 0001006659 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O SMITH MANAGEMENT CO STREET 2: 885 THIRD AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2128885500 MAIL ADDRESS: STREET 1: C/O SMITH MANAGEMENT CO STREET 2: 885 THIRD AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 SC 13D/A 1 SCHEDULE 13D AMENDMENT NO. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________ SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 1) HAWAIIAN AIRLINES, INC. (Name of Issuer) CLASS A COMMON STOCK, PAR VALUE $.01 PER SHARE (Title of Class of Securities) 419849-104 (CUSIP Number) _______________________ DAVID A. PERSING, ESQ. 885 THIRD AVENUE 34TH FLOOR NEW YORK, NEW YORK 10022 TEL. NO.: (212) 888-5500 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) _______________________ JANUARY 31, 1996 (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 which is the subject of this Schedule 13D, and is filing this statement because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [ ]. Page 1 of 56 Pages SCHEDULE 13D CUSIP NO. 419849-104 Page 2 of 56 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Airline Investors Partnership, L.P. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ] (B) [X] 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 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 7 SOLE VOTING POWER NUMBER OF SHARES 18,181,818 BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 8 SHARED VOTING POWER -- 9 SOLE DISPOSITIVE POWER 18,181,818 10 SHARED DISPOSITIVE POWER -- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 18,181,818 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 72.64% 14 TYPE OF REPORTING PERSON PN SCHEDULE 13D CUSIP NO. 419849-104 Page 3 of 56 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON AIP General Partner, Inc. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ] (B) [X] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 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 7 SOLE VOTING POWER NUMBER OF SHARES 18,181,818 BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 8 SHARED VOTING POWER -- 9 SOLE DISPOSITIVE POWER 18,181,818 10 SHARED DISPOSITIVE POWER -- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 18,181,818 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 72.64% 14 TYPE OF REPORTING PERSON CO SCHEDULE 13D CUSIP NO. 419849-104 Page 4 of 56 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON John W. Adams 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(A) [ ] (B) [X] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 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 7 SOLE VOTING POWER NUMBER OF SHARES 18,181,818 BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 8 SHARED VOTING POWER -- 9 SOLE DISPOSITIVE POWER 18,181,818 10 SHARED DISPOSITIVE POWER -- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 18,181,818 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 72.64% 14 TYPE OF REPORTING PERSON IN SCHEDULE 13D CUSIP NO. 419849-104 Page 5 of 56 Pages AMENDMENT NO. 1 TO SCHEDULE 13D This is Amendment No. 1 to the Schedule 13D filed by the Reporting Parties with respect to the Class A Common Stock of Hawaiian Airlines, Inc. (the "Company"), dated as of January 18, 1996 (the "Original Schedule 13D"). ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Item 3 is amended as follows: Pursuant to the Stock Purchase Agreement, dated as of December 8, 1995 (the "Stock Purchase Agreement"), between Hawaiian Airlines, Inc. (the "Company") and Airline Investors Partnership, L.P. ("AIP"), the Company issued, and AIP purchased from the Company, an aggregate of 18,181,818 shares of Class A Common Stock (the "Class A Common Stock") and 4 shares of Series B Special Preferred Stock (together with the Class A Common Stock, the "Shares"), for an aggregate purchase price (the "Purchase Price") of $20,000,004.40 paid in cash by AIP, upon the terms and conditions set forth in the Stock Purchase Agreement (a copy of the Stock Purchase Agreement is filed as an Exhibit to the Proxy Statement of the Company, dated as of January 13, 1996, filed with the Securities and Exchange Commission (the "Proxy Statement") and herein incorporated by reference). The Purchase Price was paid by AIP in the following manner: (i) $3,000,000 of the Purchase Price was paid by the conversion of the Secured Convertible Promissory Note, dated as of January 18, 1996 (the "Note" a copy of which was filed as an Exhibit to the Original Schedule 13D), of the Company issued in favor of AIP into 2,727,272 shares of Class A Common Stock in accordance with the Note and the Loan Agreement, dated as of January 15, 1996 (the "Loan Agreement" a copy of which was filed as an Exhibit to the Original Schedule 13D), between the Company and AIP, (ii) an offset of the Purchase Price in the amount of $10,685.00, representing all accrued but unpaid interest on the outstanding principal amount under the Note, and (iii) a cash payment in the amount of $16,989,319.40. The funds used by AIP to pay the Purchase Price were obtained from capital contributions to AIP made by its partners pursuant to their capital commitments. SCHEDULE 13D CUSIP NO. 419849-104 Page 6 of 56 Pages ITEM 4. PURPOSE OF THE TRANSACTION. Item 4 is amended as follows: AIP has acquired the Shares for the purpose of making a significant investment in the Company, obtaining the right to nominate a simple majority of the Company's Board of Directors and exercising the rights contained in the Stock Purchase Agreement, the Registration Rights Agreement, dated as of January 31, 1996, between the Company and AIP, the Rightsholders Agreement, dated as of January 31, 1996, between AMR Corporation, Martin Anderson, Robert Midkiff, AIP and the Company, the Stockholders Agreement, dated as of January 31, 1996, between the Air Line Pilots Association, Hawaiian Master Executive Council, the Association of Flight Attendants, the International Association of Machinists, AIP and the Company (collectively, the "Agreements"), which are attached as Exhibits hereto and herein incorporated by reference. These Agreements contain, among other things, certain provisions which relate to the acquisition and disposition of securities of the Company, a change in the present Board of Directors and in the directors nomination procedures, and a change in the Company's capitalization and are described more fully in Item 6. Except as set forth in the Proxy Statement and in Item 6, the Reporting Parties have no intention, plan or proposal with respect to: 1. The acquisition by any person of additional securities of the issuer or the disposition of securities of the issuer; 2. An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the issuer or any of its subsidiaries; 3. A sale or transfer of a material amount of assets of the issuer or any of its subsidiaries; 4. Any change in the present Board of Directors or management of the issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the Board; 5. Any material change in the present capitalization or dividend policy of the issuer; SCHEDULE 13D CUSIP NO. 419849-104 Page 7 of 56 Pages 6. Any other material change in the issuer's business or corporate structure; 7. Changes in the issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the issuer by any person; 8. Causing a class of securities of the issuer 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; 9. A class of equity securities of the issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or 10. Any action similar to any of those enumerated above. Each of the Reporting Parties, however, may, at any time and from time to time, and reserves the right to, acquire additional securities of the Company, dispose of any such securities of the Company or formulate other plans or proposals regarding the Company or its securities, to the extent deemed advisable by such Reporting Party in light of its general investment policies, market conditions or other factors. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. Item 5 is amended as follows: To the best of the Reporting Parties' knowledge based on the Company's Proxy Statement and on the consummation of the transactions contemplated by the Stock Purchase Agreement, the aggregate number of shares of Class A Common Stock of the Company outstanding as of January 31, 1996 is 25,026,923 shares. As of the close of business on January 31, 1996: NAME OF REPORTING PARTY: AIP (a) Aggregate Number of Securities Owned 18,181,818 ---------- SCHEDULE 13D CUSIP NO. 419849-104 Page 8 of 56 Pages Percentage 72.64% ----------- (b) 1. Sole power to vote or to direct the vote 18,181,818 ----------- 2. Shared power to vote or to direct the vote -- ----------- 3. Sole power to dispose or to direct the disposition 18,181,818 ----------- 4. Shared power to dispose of or to direct the disposition -- ----------- (c) On January 31, 1996, AIP acquired 18,181,818 shares of Class A Common Stock and 4 shares of Series B Special Preferred Stock of the Company for a purchase price of $20,000,004.40 ($1.10 per share). AIP GENERAL PARTNER (a) Aggregate Number of Securities Owned 18,181,818 ----------- Percentage 72.64% ----------- (b) 1. Sole power to vote or to direct the vote 18,181,818 ----------- 2. Shared power to vote or to direct the vote -- ----------- 3. Sole power to dispose or to direct the disposition 18,181,818 ----------- 4. Shared power to dispose of or to direct the disposition -- ----------- JOHN W. ADAMS (a) Aggregate Number of Securities Owned 18,181,818 ----------- Percentage 72.64% ----------- (b) 1. Sole power to vote or to direct the vote 18,181,818 ----------- 2. Shared power to vote or to direct the vote -- ----------- SCHEDULE 13D CUSIP NO. 419849-104 Page 9 of 56 Pages 3. Sole power to dispose or to direct the disposition 18,181,818 ----------- 4. Shared power to dispose of or to direct the disposition -- ----------- ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Item 6 is amended as follows: There are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 and between such persons and any person with respect to any security of the Company, except the following: 1. AIP and the Company entered into a Stock Purchase Agreement, dated as of December 8, 1995, and effective January 31, 1996, under which AIP purchased 18,181,818 shares of Class A Common Stock and 4 shares of Series B Special Preferred Stock of the Company for a Purchase Price of $20,000,004.40 in cash ($1.10 per share). The 18,181,818 shares issued to AIP under this agreement include 2,727,272 shares issued upon conversion of the Note as provided in the Loan Agreement and the Note. Under the Stock Purchase Agreement, AIP has agreed to use its best efforts to cause the Company to make a Rights Offering of rights to acquire Class A Common Stock as soon as practicable following the closing of the Stock Purchase Agreement, on such terms and conditions, and to such persons as the Board of Directors shall determine at the time of the Rights Offering (which would not include AIP (except possibly with respect to the rights not exercised during the allotted time) but would include among others, shareholders as of the Record Date who continue to hold shares until the Rights Offering and holders of options granted under the Company's 1994 Stock Option Plan). Each right will entitle its holder to subscribe for one share of Class A Common Stock at a purchase price representing a 30% discount from the Market Price (as such term is defined by the Board of Directors of the Company at the time) of the Class A Common Stock, subject to a minimum of $1.10 per share. Under the Stockholders Agreement (as defined in SCHEDULE 13D CUSIP NO. 419849-104 Page 10 of 56 Pages paragraph 4 below), AIP has agreed to cause the Company to permit certain employees of the Company to subscribe for one half of the Class A Common Stock, up to 2,000,000 shares, that were not issued upon the exercise of Rights granted in the Rights Offering during the allotted time. Under the Stock Purchase Agreement, AIP has agreed that it will not transfer the Common Stock except pursuant to an effective registration statement or an applicable exemption from registration under the Securities Act of 1933, as amended (the "Securities Act"). 2. AIP and the Company entered into a Registration Rights Agreement, dated as of January 31, 1996 (the "Registration Rights Agreement") (a copy of which is attached as Exhibit 1 hereto and which is incorporated herein by reference) under which AIP and certain of its transferees will be entitled to request the Company to use its best efforts to register, at the earliest possible date, their shares of Class A Common Stock (the "Shares") and certain shares issued with respect to their Shares (such shares, "Registrable Securities") by way of a dividend, stock split, recapitalization, merger, consolidation or similar event, under the Securities Act. Under the Registration Rights Agreement, the Company may not be requested to (i) effect more than two registrations or (ii) effect a registration within 6 months following the effectiveness of a registration statement filed pursuant to the Registration Rights Agreement, except when a majority of disinterested Directors determines that such registration shall not have a material effect on the market price of the Class A Common Stock. If the Company proposes at any time to register any of its common stock on any Form other than Forms S-4 or S-8, AIP and certain of its transferees will have the opportunity to request the inclusion of their Registrable Securities in the Company's registration, on a pro rata basis with holders who have existing registration rights. The Company will pay all expenses in connection with the registration. The Company has generally agreed to use its best efforts to effect such registration within 90 days after the end of the period within which requests for registration may be given to the Company and to SCHEDULE 13D CUSIP NO. 419849-104 Page 11 of 56 Pages list all Registrable Securities covered by such registration statement on any national securities exchange on which the Class A Common Stock is then listed. The Company has also agreed to enter into an underwriting agreement on customary terms and to use its best efforts to arrange for the underwriters to include requesting holders of Registrable Securities in an underwritten offering. The underwriters in any such offering will be selected by the holders of more than 50% of each class of shares to be registered and shall be reasonably acceptable to the Company. The Company has the right to postpone for a reasonable period of time (but not exceeding 90 days) the filing of any registration statement otherwise required to be prepared and filed by it if it determines in its reasonable judgment that such registration would interfere with any financing, acquisition, corporate reorganization or other material transaction involving the Company. The Company has agreed to indemnify each seller of Registrable Securities covered by a registration statement and each underwriter in the offering or sale of such securities and their respective directors, officers, partners, agents and affiliates against certain liabilities under the Securities Act. (All capitalized terms used in this paragraph 2 have the meaning set forth in the Registration Rights Agreement). 3. AMR Corporation ("American"), Martin Anderson ("Anderson"), Robert Midkiff ("Midkiff"), AIP (collectively the "Rightsholders") and the Company entered into a Rightsholders Agreement, dated as of January 31, 1996 (the "Rightsholders Agreement") (a copy of which is attached as Exhibit 2 hereto and which is herein incorporated by reference), which, among other things, provides that notwithstanding anything to the contrary in any registration rights agreement of any Rightsholder with the Company, if such Rightsholder has incidental registration rights pursuant to such Rightsholders' registration rights agreement with the Company, such Rightsholder shall have the right to request the Company to register its securities if the Company proposes to register any of its Class A Common Stock under the Securities Act upon certain terms and conditions set forth in the Rightsholders Agreement. SCHEDULE 13D CUSIP NO. 419849-104 Page 12 of 56 Pages In addition, pursuant to the Rightsholders Agreement, Anderson and Midkiff have agreed to waive certain anti-dilution protection provided in their warrants to acquire Class A Common Stock that would otherwise be triggered upon (i) the issuance of warrants to American, (ii) the issuance of Class A Common Stock under the American warrants, or (iii) the issuance of Class A Common Stock pursuant to the Rights Offering. The Rightsholders Agreement restricts the ability of Anderson, Midkiff and American to transfer their respective warrants unless the transferee thereof agrees to be bound by the terms of the Rightsholders Agreement. (All capitalized terms in this paragraph have the meaning set forth in the Rightsholders Agreement). 4. AIP, the Company, the Air Line Pilots Association ("ALPA"), Hawaiian Master Executive Council ("Hawaiian MEC"), the Association of Flight Attendants ("AFA"), the International Association of Machinists ("IAM" and, together with ALPA, Hawaiian MEC and AFA, the "Unions") entered into a Stockholders Agreement, dated as of January 31, 1996 (the "Stockholders Agreement") (a copy of which is attached as Exhibit 3 hereto and incorporated herein by reference). Pursuant to the Stockholders Agreement, AIP agreed to vote its shares in favor of the Directors nominated by the Unions standing for election on the Board of Directors. AIP agreed to vote its shares or to take other action at the shareholders' meeting against any proposal to revise certain provisions of the Company's Amended Articles and Amended Bylaws (the "Charter Documents") in a manner which would be inconsistent with, or which would alter, the rights of the Unions or the obligations of the Board of Directors under the governance provisions of the Charter Documents (the "Governance Provisions"). AIP further agreed not to take any action inconsistent with the Governance Provisions and, in the event of a change in the rights or powers of AIP as a stockholder, to take, at the Unions' request, any action necessary to implement comparable changes to the rights or powers of the Unions. Pursuant to the Stockholders Agreement, AIP will make reasonable efforts to ensure that at least one Employee Director serves on each significant committee SCHEDULE 13D CUSIP NO. 419849-104 Page 13 of 56 Pages of the Board other than the Audit Committee, including, if any, the Executive Committee, the Strategic Planning Committee, and the Board Nominating Committee. (All capitalized terms in this paragraph not otherwise herein defined have the meaning set forth in the Stockholders Agreement). 5. As contemplated by, in the case of the amendment to the Company's Amended Articles, and as required by, in the case of the amendment of the Company's Bylaws, the Stock Purchase Agreement, at a Special Meeting of the shareholders of the Company held on January 30, 1996, the Company's stockholders approved amendments to the Amended Articles of Incorporation ("Articles") and the Bylaws of the Company. The amendments to the Articles (i) increased the authorized number of shares of Class A Common Stock from 40,000,000 to 60,000,000 shares, and (ii) deleted the restrictions to transfers of Class A Common Stock contained in the Articles. The Bylaws were amended to provide that: (i) of the 11 members of the Board of Directors, one shall be nominated by each of the Association of Flight Attendants, the Air Line Pilots Association and the International Association of Machinists, six shall be nominated by AIP, one shall be an outside Director who is not employed by the Company, and is not affiliated with the Company's labor unions and one shall be a senior management official of the Company; (ii) AIP's right to nominate six directors will continue so long as it owns 35% of the outstanding Common Stock on a fully diluted basis and will be reduced to five so long as it retains 25% of such Common Stock, reduced to four so long as it retains 10% of such Common Stock, and reduced to three so long as it retains 5% of such Common Stock. Thereafter AIP will not have the right to nominate any individuals to the Board unless it holds at least 5% of such Common Stock within 365 days of the date on which its ownership dropped below 5%. To the extent that Board members are not required to be nominated by AIP because of the reduction in its stock holdings, such Board members are to be outside directors. 6. John W. Adams was granted an irrevocable proxy pursuant to an agreement, dated as of January 31, 1996 (the "Irrevocable Proxy Agreement") (a copy of which is attached as Exhibit 4 hereto and which is herein incorporated by reference), by a non-United States entity that is a minority shareholder (the "Shareholder") of a Texas corporation (the "Subject SCHEDULE 13D CUSIP NO. 419849-104 Page 14 of 56 Pages Company") that holds a 25% voting interest in the limited partner of AIP. The Irrevocable Proxy Agreement provides that John W. Adams has absolute authority and discretion to vote the shares of the subject company with respect to all matters related to the activities of the Company. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. The Stock Purchase Agreement is contained in the Proxy Statement and is herein incorporated by reference. The Loan Agreement is filed as an Exhibit to the Original Schedule 13D and is herein incorporated by reference. Exhibit 1: Registration Rights Agreement Exhibit 2: Rightsholders Agreement Exhibit 3: Stockholders Agreement Exhibit 4: Irrevocable Proxy Agreement SCHEDULE 13D CUSIP NO. 419849-104 Page 15 of 56 Pages SIGNATURES 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. February 5, 1996 AIRLINE INVESTORS PARTNERSHIP,L.P. By AIP General Partner, Inc., its general partner By: /S/ John W. Adams ----------------------- John W. Adams President AIP GENERAL PARTNER, INC. By: /S/ John W. Adams ----------------------- John W. Adams President /S/ John W. Adams ------------------------ John W. Adams EX-99 2 EXHIBIT 1 REGISTRATION RIGHTS AGREEMENT between HAWAIIAN AIRLINES, INC. and AIRLINE INVESTORS PARTNERSHIP, L.P. _______________________________________ Dated as of January 31, 1996 _______________________________________ TABLE OF CONTENTS PAGE 1. Background............................................1 2. Registration Under Securities Act, etc................1 2.1 Registration on Request..........................1 2.2 Incidental Registration..........................4 2.3 Registration Procedures..........................5 2.4 Underwritten Offerings...........................9 2.5 Preparation; Reasonable Investigation...........10 2.6 Limitations, Conditions and Qualifications to Obligations under Registration Covenants........10 2.7 Indemnification.................................11 3. Definitions..........................................15 4. Rule 144 and Rule 144A...............................17 5. Amendments and Waivers...............................17 6. Nominees for Beneficial Owners.......................17 7. Notices..............................................18 8. Assignment...........................................18 9. Calculation of Percentage Interests in Registrable Securities...........................................19 10. No Inconsistent Agreements...........................19 11. Remedies.............................................19 12. Severability.........................................19 13. Entire Agreement.....................................19 14. Headings.............................................20 15. Governing Law........................................20 16. Counterparts.........................................20 17. Termination..........................................20 Page 1 REGISTRATION RIGHTS AGREEMENT, dated as of January 31, 1996, between HAWAIIAN AIRLINES, INC., a Hawaii corporation (the "Company") and AIRLINE INVESTORS PARTNERSHIP, L.P., a Delaware limited partnership (the "Purchaser"). The parties hereby agree as follows: 1. BACKGROUND. Pursuant to a Stock Purchase Agreement, dated as of December 8, 1995, between the Company and the Purchaser (the "Purchase Agreement"), the Purchaser has agreed to purchase from the Company, and the Company has agreed to issue and sell to the Purchaser at the Closing (as defined in the Purchase Agreement), 4 shares of Series B Special Preferred Stock, par value $0.01 per share of the Company and an aggregate of 18,181,818 shares (the "Shares") of the Company's Class A Common Stock, par value $.01 per share. The Purchaser would not enter into the Purchase Agreement unless this Registration Rights Agreement were being simultaneously entered into by the Company. Capitalized terms used herein but not otherwise defined shall have the meanings given them in Section 3. 2. REGISTRATION UNDER SECURITIES ACT, ETC. 2.1 REGISTRATION ON REQUEST. (a) REQUEST. At any time, or from time to time, upon the written request of one or more holders (the "Initiating Holders") of Registrable Securities that the Company effect the registration under the Securities Act of all or part of such Initiating Holders' Registrable Securities, the Company promptly will give written notice of such requested registration to all registered holders of Registrable Securities, and thereupon the Company will use its best efforts to effect, at the earliest possible date, the registration under the Securities Act, including by means of a shelf registration on Form S-3 (or any successor form) pursuant to Rule 415 under the Securities Act if so requested in such request (but only if the Company is then eligible to use such a shelf registration and if Form S-3 (or such successor form) is then available to the Company), of (i) the Registrable Securities which the Company has been so requested to register by such Initiating Holders, and (ii) all other Registrable Securities which the Company has been requested to register by the holders thereof (such holders together with the Page 2 Initiating Holders hereinafter are referred to as the "Selling Holders") by written request given to the Company within 30 days after the giving of such written notice by the Company, all to the extent necessary to permit the disposition of the Registrable Securities and such shares of Common Stock so to be registered. (b) REGISTRATION OF OTHER SECURITIES. Whenever the Company shall effect a registration pursuant to this Section 2.1, no securities other than Registrable Securities shall be included among the securities covered by such registration unless the Selling Holders of not less than 66-2/3% of all Registrable Securities to be covered by such registration shall have consented in writing to the inclusion of such other securities. (c) REGISTRATION STATEMENT FORM. Registrations under this Section 2.1 shall be on such appropriate registration form of the Commission as shall be reasonably selected by the Company. (d) EFFECTIVE REGISTRATION STATEMENT. A registration requested pursuant to this Section 2.1 shall not be deemed to have been effected (i) unless a registration statement with respect thereto has become effective and remained effective in compliance with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such registration statement until such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement (unless the failure to so dispose of such Registrable Securities shall be caused solely by reason of a failure on the part of the Selling Holders), PROVIDED, that except with respect to any registration statement filed pursuant to Rule 415 under the Securities Act, such period need not exceed 135 days; (ii) if after it has become effective, such registration is interfered with by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason not attributable solely to the Selling Holders and has not thereafter become effective; or (iii) if the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied or waived, other than solely by reason of a failure on the part of the Selling Holders. (e) SELECTION OF UNDERWRITERS. The underwriter or underwriters of each underwritten offering of the Registrable Securities so to be registered shall be Page 3 selected by the Selling Holders of more than 50% of each class of Registrable Securities to be included in such registration and shall be reasonably acceptable to the Company. (f) PRIORITY IN REQUESTED REGISTRATION. If the managing underwriter of any underwritten offering shall advise the Company in writing (and the Company shall so advise each Selling Holder of Registrable Securities requesting registration of such advice) that, in its opinion, the number of securities requested to be included in such registration exceeds the number which can be sold in such offering within a price range acceptable to the Selling Holders of 66-2/3% of the Registrable Securities requested to be included in such registration, the Company, except as provided in the following sentence, will include in such registration, to the extent of the number and type which the Company is so advised can be sold in such offering, Registrable Securities requested to be included in such registration, PRO RATA (based on the number of Registrable Securities held by each of the Selling Holders) among the Selling Holders requesting such registration. Notwithstanding the foregoing, if the total number of Registrable Securities requested to be included in any registration cannot be included, holders of Registrable Securities requesting registration thereof pursuant to Section 2.1, representing not less than 50% of the Registrable Securities with respect to which registration has been requested, shall have the right to withdraw the request for registration by giving written notice to the Company within 20 days after receipt of the notice from the managing underwriter described above by the Company and, in the event of such withdrawal, such request shall not be counted for purposes of the requests for registration to which holders of Registrable Securities are entitled pursuant to Section 2.1 hereof. In connection with any such registration to which this Section 2.1(f) is applicable, no securities other than Registrable Securities shall be covered by such registration. (g) LIMITATIONS ON REGISTRATION REQUESTS. Notwithstanding anything in this Section 2.1 to the contrary, in no event will the Company be required to (i) effect, in the aggregate, more than two registrations pursuant to this Section 2.1; or (ii) effect a registration pursuant to this Section 2.1 within the six-month period occurring immediately subsequent to the effectiveness (within the meaning of Section 2.1(d)) of a registration statement filed pursuant to this Section 2.1, unless a majority of the Disinterested Directors determines that effecting a second registration within the six-month period would not have a material adverse effect on the market price of the Common Stock. Page 4 (h) EXPENSES. The Company will pay all Registration Expenses in connection with any registrations requested pursuant to this Section 2.1. 2.2 INCIDENTAL REGISTRATION. (a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. If the Company at any time prior to February 1, 2006, proposes to register any of its Common Stock under the Securities Act by registration on any form other than Forms S-4 or S-8 (or successor forms), whether or not for sale for its own account, it will each such time give prompt written notice to all registered holders of Registrable Securities of its intention to do so and of such holders' rights under this Section 2.2. Upon the written request of any such holder (a "Requesting Holder") made as promptly as practicable and in any event within 30 days after the receipt of any such notice from the Company (15 days if the Company states in such written notice or gives telephonic or telecopied notice to all registered holders of Registrable Securities, with written confirmation to follow promptly thereafter, that (i) such registration will be on Form S-3 and (ii) such shorter period of time is required because of a planned filing date) (which request shall specify the Registrable Securities intended to be disposed of by such Requesting Holder), the Company will use its best efforts to effect the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the Requesting Holders thereof; PROVIDED, that prior to the effective date of the registration statement filed in connection with such registration, immediately upon notification to the Company from the managing underwriter of the price at which such securities are to be sold, if such price is below the price which any Requesting Holder shall have indicated to be acceptable to such Requesting Holder, the Company shall so advise such Requesting Holder of such price, and such Requesting Holder shall then have the right to withdraw its request to have its Registrable Securities included in such registration statement; PROVIDED, FURTHER, HOWEVER, that if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to each Requesting Holder of Registrable Securities and (x) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from any obligation of the Company to pay the Registration Expenses in connection therewith), without prejudice, how- Page 5 ever, to the rights of any holder or holders of Registrable Securities entitled to do so to cause such registration to be effected as a registration under Section 2.1, and (y) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities, for the same period as the delay in registering such other securities. No registration effected under this Section 2.2 shall relieve the Company of its obligation to effect any registration upon request under Section 2.1. (b) PRIORITY IN INCIDENTAL REGISTRATIONS. If the managing underwriter of any underwritten offering shall inform the Company by letter of its opinion that the number or type of Registrable Securities requested to be included in such registration would materially adversely affect such offering, and the Company has so advised the Requesting Holders in writing, then the Company will include in such registration, to the extent of the number and type which the Company is so advised can be sold in (or during the time of) such offering, FIRST, all securities proposed by the Company to be sold for its own account, and SECOND, such Registrable Securities requested to be included in such registration pursuant to this Agreement, PRO RATA (based on the number of Registrable Securities requested to be included therein by each Requesting Holder) among such Requesting Holders. (c) EXPENSES. The Company will pay all Registration Expenses in connection with any registration contemplated pursuant to this Section 2.2. 2.3 REGISTRATION PROCEDURES. If and when-ever the Company is required to use its best efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Sections 2.1 and 2.2, the Company will, as expeditiously as possible: (i) prepare and (within 90 days after the end of the period within which requests for registra- Page 6 tion may be given to the Company) file with the Commission the requisite registration statement to effect such registration and thereafter use its best efforts to cause such registration statement to become effective; PROVIDED, HOWEVER, that the Company may discontinue any registration of its securities which are not Registrable Securities (and, under the circumstances specified in Section 2.2(a), Registrable Securities) at any time prior to the effective date of the registration statement relating thereto; (ii) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective in accordance with Section 2.1(d)(i) hereof and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such registration statement until such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement; PROVIDED, that except with respect to any such registration statement filed pursuant to Rule 415 under the Securities Act, such period need not exceed 135 days; (iii) furnish to each seller of Registrable Securities covered by such registration statement, such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and such other documents, as such seller may reasonably request; (iv) use its reasonable best efforts (x) to register or qualify all Registrable Securities and other securities covered by such registration statement under such other securities or blue sky laws of such States of the United States of America where an exemption is not available and as the sellers of Registrable Securities covered by such registration statement shall reasonably request, (y) to keep such registration or qualification in effect for so long as such registration statement remains in effect and (z) to take any other action which may be reasonably necessary or advisable to enable such sellers to consummate the disposition in such jurisdictions of the securities to be sold by such sellers, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this subdivision (iv) be obligated to be so qualified or to consent to general service of process in any such jurisdiction; (v) use its best efforts to cause all Registrable Securities covered by such registration statement to be registered with or approved by such Page 7 other federal or state governmental agencies or authorities as may be necessary in the reasonable opinion of counsel to the Company and counsel to the seller or sellers of Registrable Securities to enable the seller or sellers thereof to consummate the disposition of such Registrable Securities; (vi) furnish at the effective date of such registration statement to each seller of Registrable Securities, and each such seller's underwriters, if any, a signed counterpart of: (x) an opinion of counsel for the Company, dated the effective date of such registration statement and, if applicable, the date of the closing under the underwriting agreement, and (y) a "comfort" letter signed by the independent public accountants who have certified the Company's financial statements included or incorporated by reference in such registration statement, covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of the accountants' comfort letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer's counsel and in accountants' comfort letters delivered to the underwriters in underwritten public offerings of securities and, in the case of the accountants' comfort letter, such other financial matters, and, in the case of the legal opinion, such other legal matters, as the underwriters may reasonably request; (vii) notify each seller of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, in the light of the circumstances under which they were made, and at the request of any such seller promptly prepare and furnish to it a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such Page 8 prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made; (viii) otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable (but not more than eighteen months after the effective date of such registration statement), an earnings statement covering the period of at least twelve months beginning with the first full calendar month after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder; (ix) provide and cause to be maintained a transfer agent and registrar (which, in each case, may be the Company) for all Registrable Securities covered by such registration statement from and after a date not later than the effective date of such registration; and (x) use its best efforts to list all Registrable Securities covered by such registration statement on any national securities exchange on which Registrable Securities of the same class covered by such registration statement are then listed and, if no such Registrable Securities are so listed, on any national securities exchange on which the Common Stock is then listed. The Company may require each seller of Registrable Securities as to which any registration is being effected to furnish the Company such information regarding such seller and the distribution of such securities as the Company may from time to time reasonably request in writing. Each holder of Registrable Securities agrees by acquisition of such Registrable Securities that, upon receipt of any notice from the Company of the happening of any event of the kind described in subdivision (vii) of this Section 2.3, such holder will forthwith discontinue such holder's disposition of Registrable Securities pursuant to the registration statement relating to such Registrable Securities until such holder's receipt of the copies of the supplemented or amended prospectus contemplated by subdivision (vii) of this Section 2.3 and, if so directed by the Company, will deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then Page 9 in such holder's possession of the prospectus relating to such Registrable Securities current at the time of receipt of such notice. 2.4 UNDERWRITTEN OFFERINGS. (a) REQUESTED UNDERWRITTEN OFFERINGS. If requested by the underwriters for any underwritten offering by holders of Registrable Securities pursuant to a registration requested under Section 2.1, the Company will enter into an underwriting agreement with such underwriters for such offering, such agreement to be reasonably satisfactory in substance and form to each such holder and the underwriters and to contain such representations and warranties by the Company and such other terms as are generally prevailing in agreements of that type, including, without limitation, indemnities to the effect and to the extent provided in Section 2.7 or such other indemnities as are customarily received by underwriters in public offerings of similar securities. The holders of the Registrable Securities proposed to be sold by such underwriters will reasonably cooperate with the Company in the negotiation of the underwriting agreement. Such holders of Registrable Securities to be sold by such underwriters shall be parties to such underwriting agreement and may, at their option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of such holders of Registrable Securities and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of such holders of Registrable Securities. No holder of Registrable Securities shall be required to make any representations or warranties to or agreements with the Company other than representations, warranties or agreements regarding such holder, such holder's Registrable Securities and such holder's intended method of distribution or any other representations required by applicable law. (b) INCIDENTAL UNDERWRITTEN OFFERINGS. If the Company proposes to register any of its securities under the Securities Act as contemplated by Section 2.2 and such securities are to be distributed by or through one or more underwriters, the Company will, if requested by any Requesting Holder of Registrable Securities, use its reasonable best efforts to arrange for such underwriters to include all the Registrable Securities to be offered and sold by such Requesting Holder among the securities of the Company to be distributed by such underwriters, subject to the provisions of Section 2.2(b). The holders of Registrable Securities to be distributed by such underwriters Page 10 shall be parties to the underwriting agreement between the Company and such underwriters and may, at their option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of such holders of Registrable Securities and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of such holders of Registrable Securities. Any such Requesting Holder of Registrable Securities shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such Requesting Holder, such Requesting Holder's Registrable Securities and such Requesting Holder's intended method of distribution or any other representations required by applicable law. 2.5 PREPARATION; REASONABLE INVESTIGATION. In connection with the preparation and filing of each registration statement under the Securities Act pursuant to this Agreement, the Company will give the holders of Registrable Securities to be registered under such registration statement, their underwriters, if any, and their respective counsel the opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the Commission, and each amendment thereof or supplement thereto, and will give each of them such reasonable access to its books and records and such opportunities to discuss the business of the Company with its officers and the independent public accountants who have certified its financial statements as shall be necessary, in the opinion of such holders' and such underwriters' respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act. 2.6 LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS UNDER REGISTRATION COVENANTS. The Company shall be entitled to postpone for a reasonable period of time (but not exceeding 90 days) the filing of any registration statement otherwise required to be prepared and filed by it pursuant to Section 2.1 if the Company determines, in its reasonable judgment, that such registration and offering would interfere with any financing, acquisition, corporate reorganization or other material transaction involving the Company and promptly gives the holders of Registrable Securities requesting registration thereof pursuant to Section 2.1 written notice of such determination, containing a general statement of the reasons for such postponement and an approximation of the anticipated delay. If the Company shall so postpone the filing of a registra- Page 11 tion statement, holders of Registrable Securities requesting registration thereof pursuant to Section 2.1, representing not less than 50% of the Registrable Securities with respect to which registration has been requested, shall have the right to withdraw the request for registration by giving written notice to the Company within 30 days after receipt of the notice of postponement and, in the event of such withdrawal, such request shall not be counted for purposes of the requests for registration to which holders of Registrable Securities are entitled pursuant to Section 2.1 hereof. 2.7 INDEMNIFICATION. (a) INDEMNIFICATION BY THE COMPANY. The Company will, and hereby does, indemnify and hold harmless, in the case of any registration statement filed pursuant to Section 2.1 or 2.2, each seller of any Registrable Securities covered by such registration statement and each other Person who participates as an underwriter in the offering or sale of such securities and each other Person, if any, who controls such seller or any such underwriter within the meaning of the Securities Act or the Exchange Act, and their respective directors, officers, partners, agents and affiliates, against any losses, claims, damages or liabilities, joint or several, to which such seller or underwriter or any such director, officer, partner, agent, affiliate or controlling person may become subject under the Securities Act or otherwise, including, without limitation, the reasonable fees and expenses of legal counsel, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company will reimburse such seller or underwriter and each such director, officer, partner, agent, affiliate and controlling Person for any reasonable legal or any other expenses incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding; PROVIDED, HOWEVER, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, any such preliminary Page 12 prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Company by or on behalf of such seller or underwriter, as the case may be, specifically stating that it is for use in the preparation thereof; PROVIDED, FURTHER, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or expense arises out of or is based upon an untrue statement or alleged untrue statement of any material fact contained in any such registration statement, preliminary prospectus, final prospectus or summary prospectus contained therein or any omission to state therein a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances in which they were made not misleading in a prospectus or prospectus supplement, if such untrue statement or omission is completely corrected in an amendment or supplement to such prospectus or prospectus supplement, the seller of the Registrable Securities has an obligation under the Securities Act to deliver a prospectus or prospectus supplement in connection with such sale of Registrable Securities and the seller of Registrable Securities thereafter fails to deliver such prospectus or prospectus supplement as so amended or supplemented prior to or concurrently with the sale of Registrable Securities to the person asserting such loss, claim, damage or liability after the Company has furnished such seller with a sufficient number of copies of the same. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such seller or underwriter or any such director, officer, partner, agent, affiliate or controlling person and shall survive the transfer of such securities by such seller or underwriter. (b) INDEMNIFICATION BY THE SELLERS. As a condition to including any Registrable Securities in any registration statement, the Company shall have received an undertaking reasonably satisfactory to it from the prospective seller of such Registrable Securities, to indemnify and hold harmless (in the same manner and to the same extent as set forth in Section 2.7(a)) the Company, and each director of the Company, each officer of the Company and each other Person, if any, who participates as an underwriter in the offering or sale of such securities and each other Person who controls the Company or any such underwriter within the meaning of the Securities Act or the Exchange Act, with respect to any statement or alleged statement in or omission or alleged omission from such registration statement, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, if such statement or alleged statement or omission or alleged omission was made Page 13 in reliance upon and in conformity with written information furnished to the Company by such seller specifically stating that it is for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement; PROVIDED, HOWEVER, that the liability of such indemnifying party under this Section 2.7(b) shall be limited to the amount of proceeds received by such indemnifying party in the offering giving rise to such liability. Such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling person and shall survive the transfer of such securities by such seller. (c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in Section 2.7(a) or (b), such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the latter of the commencement of such action; PROVIDED, HOWEVER, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under the preceding subdivisions of this Section 2.7, except to the extent that the indemnifying party is actually and materially prejudiced by such failure to give notice. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it may wish, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party; PROVIDED, HOWEVER, that any indemnified party may, at its own expense, retain separate counsel to participate in, but not control, such defense. Notwithstanding the foregoing, in any action or proceeding in which both the Company and an indemnified party is, or is reasonably likely to become, a party, such indemnified party shall have the right to employ separate counsel at the Company's expense and to control its own defense of such action or proceeding if, in the reasonable opinion of counsel to such indemnified party, (a) there are or may be legal defenses available to such indemnified party or to other indemnified parties that are different from or additional to those available to the Company or (b) any conflict or potential conflict exists between the Company and such indemnified party that would make such separate representation advisable; PROVIDED, HOWEVER, that in no event shall the Company be required to pay fees and expenses under this Section 2.7 for more than one firm of attorneys representing the indemnified parties (together, if appropriate, with one firm of local counsel per jurisdiction) in any one legal action or group of Page 14 related legal actions. No indemnifying party shall be liable for any settlement of any action or proceeding effected without its written consent, which consent shall not be unreasonably withheld. No indemnifying party shall, without the consent of the indemnified party, which consent shall not be unreasonably withheld, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability with respect to such claim or litigation or which requires action other than the payment of money by the indemnifying party. (d) CONTRIBUTION. If the indemnification provided for in this Section 2.7 shall for any reason be held by a court to be unavailable to an indemnified party under Section 2.7(a) or (b) hereof in respect of any loss, claim, damage or liability, or any action in respect thereof, then, in lieu of the amount paid or payable under Section 2.7(a) or (b), the indemnified party and the indemnifying party under Section 2.7(a) or (b) shall contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating the same), (i) in such proportion as is appropriate to reflect the relative fault of the Company and the prospective sellers of Registrable Securities covered by the registration statement which resulted in such loss, claim, damage or liability, or action or proceeding in respect thereof, with respect to the statements or omissions which resulted in such loss, claim, damage or liability, or action or proceeding in respect thereof, as well as any other relevant equitable considerations or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as shall be appropriate to reflect the relative benefits received by the Company and such prospective sellers from the offering of the securities covered by such registration statement, PROVIDED, that for purposes of this clause (ii), the relative benefits received by the prospective sellers shall be deemed not to exceed the amount of proceeds received by such prospective sellers. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Such prospective sellers' obligations to contribute as provided in this Section 2.7(d) are several in proportion to the relative value of their respective Registrable Securities covered by such registration statement and not joint. In addition, no Person shall be obligated to contribute hereunder any amounts in payment for any settlement of any action or claim effected without such Person's consent, which consent shall not be unreasonably withheld. Page 15 (e) OTHER INDEMNIFICATION. Indemnification and contribution similar to that specified in the preceding subdivisions of this Section 2.7 (with appropriate modifications) shall be given by the Company and each seller of Registrable Securities with respect to any required registration or other qualification of securities under any federal or state law or regulation of any governmental authority other than the Securities Act. (f) INDEMNIFICATION PAYMENTS. The indemnification and contribution required by this Section 2.7 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred. 3. DEFINITIONS. As used herein, unless the context otherwise requires, the following terms have the following respective meanings: "COMMISSION" means the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. "COMMON STOCK" shall mean and include the Class A Common Stock, par value $.01 per share, of the Company and each other class of capital stock of the Company that does not have a preference over any other class of capital stock of the Company as to dividends or upon liquidation, dissolution or winding up of the Company and, in each case, shall include any other class of capital stock of the Company into which such stock is reclassified or reconstituted. "DISINTERESTED DIRECTOR" means, with respect to any transaction or series of related transactions, a member of the board of directors of the Company who does not have any material direct or indirect financial interest in or with respect to such transaction or series of related transactions. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or any superseding Federal statute, and the rules and regulations promulgated thereunder, all as the same shall be in effect at the time. Reference to a particular section of the Securities Exchange Act of 1934, as amended, shall include a reference to the comparable section, if any, of any such superseding Federal statute. "INITIATING HOLDER" is defined in Section 2.1. Page 16 "PERSON" means any individual, firm, corporation, partnership, limited liability company or partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind and shall include any successor (by merger or otherwise) of such entity. "REGISTRABLE SECURITIES" means any Shares and any Related Registrable Securities. As to any particular Registrable Securities, once issued, such securities shall cease to be Registrable Securities when (a) 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, (b) they shall have been sold as permitted by Rule 144 (or any successor provision) under the Securities Act, (c) they shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of them shall not require registration of such distribution under the Securities Act or (d) they shall have ceased to be outstanding. All references to percentages of Registrable Securities shall be calculated pursuant to Section 9. "REGISTRATION EXPENSES" means all expenses incident to the Company's performance of or compliance with Section 2, including, without limitation, all registration and filing fees, all fees of the American Stock Exchange, other national securities exchanges or the National Association of Securities Dealers, Inc., all fees and expenses of complying with securities or blue sky laws, all word processing, duplicating and printing expenses, messenger and delivery expenses, the fees and disbursements of counsel for the Company and of its independent public accountants, including the expenses of "comfort" letters required by or incident to such performance and compliance, any fees and disbursements of underwriters customarily paid by issuers or sellers of securities (excluding any underwriting discounts or commissions with respect to the Registrable Securities) and the reasonable fees and expenses of one counsel to the Selling Holders (selected by Selling Holders representing at least 50% of the Registrable Securities covered by such registration); PROVIDED, HOWEVER, that in the event the Company shall determine, in accordance with Section 2.2(a) or Section 2.6, not to register any securities with respect to which it had given written notice of its intention to so register to holders of Registrable Securities, all of the costs of the type (and subject to any limitation to the extent) set forth in this definition and incurred by Requesting Holders in connection with such Page 17 registration on or prior to the date the Company notifies the Requesting Holders of such determination shall be deemed Registration Expenses. "RELATED REGISTRABLE SECURITIES" means with respect to the Shares any securities of the Company issued or issuable with respect to any of the Shares by way of a dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise. "REQUESTING HOLDER" is defined in Section 2.2. "SECURITIES ACT" means the Securities Act of 1933, as amended, or any superseding Federal statute, and the rules and regulations promulgated thereunder, all as the same shall be in effect at the time. References to a particular section of the Securities Act of 1933, as amended, shall include a reference to the comparable section, if any, of any such superseding Federal statute. "SELLING HOLDER" is defined in Section 2.1. 4. RULE 144 AND RULE 144A. The Company shall take all actions reasonably necessary to enable holders of Registrable Securities to sell such securities without registration under the Securities Act within the limitation of the provisions of (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, (b) Rule 144A under the Securities Act, as such Rule may be amended from time to time, or (c) any similar rules or regulations hereafter adopted by the Commission. Upon the request of any holder of Registrable Securities, the Company will deliver to such holder a written statement as to whether it has complied with such requirements. 5. AMENDMENTS AND WAIVERS. This Agreement may be amended with the consent of the Company and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written consent to such amendment, action or omission to act, of the holder or holders of at least 66-2/3% of the Registrable Securities affected by such amendment, action or omission to act. Each holder of any Registrable Securities at the time or thereafter outstanding shall be bound by any consent authorized by this Section 5, whether or not such Registrable Securities shall have been marked to indicate such consent. 6. NOMINEES FOR BENEFICIAL OWNERS. In the event that any Registrable Securities are held by a nominee for the beneficial owner thereof, the beneficial owner thereof Page 18 may, at its election in writing delivered to the Company, be treated as the holder of such Registrable Securities for purposes of any request or other action by any holder or holders of Registrable Securities pursuant to this Agreement or any determination of any number or percentage of shares of Registrable Securities held by any holder or holders of Registrable Securities contemplated by this Agreement. If the beneficial owner of any Registrable Securities so elects, the Company may require assurances reasonably satisfactory to it of such owner's beneficial ownership of such Registrable Securities. 7. 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, telecopier, courier service or personal delivery: (a) if to the Purchaser, addressed to it in the manner set forth in the Purchase Agreement, or at such other address as it shall have furnished to the Company in writing in the manner set forth herein; (b) if to any other holder of Registrable Securities, at the address that such holder shall have furnished to the Company in writing in the manner set forth herein, or, until any such other holder so furnishes to the Company an address, then to and at the address of the last holder of such Registrable Securities who has furnished an address to the Company; or (c) if to the Company, addressed to it in the manner set forth in the Purchase Agreement, or at such other address as the Company shall have furnished to each holder of Registrable Securities at the time outstanding in the manner set forth herein. All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; when delivered by a courier, if delivered by overnight courier service; three business days after being deposited in the mail, postage prepaid, if mailed; and when receipt is acknowledged, if telecopied. 8. ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and, with respect to the Company, its respective successors and permitted assigns and, with respect to the Purchaser, any holder of any Registrable Securities, subject to the provisions respecting the minimum amount of Registrable Securities required in order to be entitled to certain rights, or take certain actions, contained herein. Page 19 Except by operation of law, this Agreement may not be assigned by the Company without the prior written consent of the holders of 66-2/3% of the Registrable Securities outstanding at the time such consent is requested. 9. CALCULATION OF PERCENTAGE INTERESTS IN REGISTRABLE SECURITIES. For purposes of this Agreement, all references to a percentage of the Registrable Securities shall be calculated based upon the number of Registrable Securities outstanding at the time such calculation is made. 10. NO INCONSISTENT AGREEMENTS. The Company will not hereafter enter into any agreement with respect to its securities which is inconsistent with the rights granted to the holders of Registrable Securities in this Agreement. Without limiting the generality of the foregoing, the Company will not hereafter enter into any agreement with respect to its securities which grants, or modify any existing agreement with respect to its securities to grant, to the holder of its securities in connection with an incidental registration of such securities equal or higher priority to the rights granted to the Purchaser under Section 2 of this Agreement. 11. REMEDIES. Each holder of Registrable Securities, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 12. SEVERABILITY. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, 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 contained herein shall not be in any way impaired thereby, it being intended that all of the rights and privileges of the Purchaser shall be enforceable to the fullest extent permitted by law. 13. ENTIRE AGREEMENT. This Agreement, together with the Purchase Agreement (including the exhibits and schedules thereto), is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, Page 20 promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement and the Purchase Agreement (including the exhibits and schedules thereto) supersede all prior agreements and understandings between the parties with respect to such subject matter. 14. HEADINGS. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 15. GOVERNING LAW. This Agreement has been negotiated, executed and delivered in the State of New York and shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law. 16. COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed an original and all of which taken together shall constitute one and the same instrument. 17. TERMINATION. Upon termination of the Purchase Agreement in accordance with Section 9.1 thereof, this Agreement shall terminate automatically. [The remaineder of this page intentionally left blank.] Page 21 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their respective representatives hereunto duly authorized as of the date first above written. HAWAIIAN AIRLINES, INC. By: /S/ Bruce R. Nobles ------------------------------- Name: Bruce R. Nobles Title: President By: /S/ Rae A. Capps ------------------------------- Name: Rae A. Capps Title: Vice President AIRLINE INVESTORS PARTNERSHIP, L.P. By: AIP GENERAL PARTNER, INC., its general partner By: /S/ John W. Adams ------------------------------- Name: John W. Adams Title: President EX-99 3 EXHIBIT 2 RIGHTSHOLDERS AGREEMENT RIGHTSHOLDERS AGREEMENT, dated as of January 31, 1996 (this "AGREEMENT"), by and among HAWAIIAN AIRLINES, INC., a Hawaii corporation (the "COMPANY"), AIRLINE INVESTORS PARTNERSHIP, L.P., a Delaware limited partnership ("AIP"), AMR Corporation, a Delaware Corporation ("AMR"), MARTIN ANDERSON ("ANDERSON") and ROBERT MIDKIFF ("MIDKIFF" and, together with AIP, AMR and Anderson, the "RIGHTSHOLDERS"). WHEREAS, the Company issued to Anderson Warrant Nos. 01 through 05, each dated as of September 12, 1994 (the "ANDERSON WARRANTS"), pursuant to which Anderson is entitled to acquire, on the terms and subject to the conditions set forth therein, an aggregate of 494,505 shares (subject to adjustment as set forth therein) of the Company's Class A Common Stock, par value $0.01 per share (the "COMMON STOCK"); WHEREAS, the Company issued to Midkiff Warrant Nos. 06 through 10, each dated as of September 12, 1994 (the "MIDKIFF WARRANTS"), pursuant to which Midkiff is entitled to acquire, on the terms and subject to the conditions set forth therein, an aggregate of 494,505 shares (subject to adjustment as set forth therein) of Common Stock; WHEREAS, the Company issued to AMR Warrant Nos. 11 and 12, each dated as of January 31, 1996 (the "AMR WARRANTS" and, together with the Anderson Warrants and the Midkiff Warrants, the "Warrants"), pursuant to which AMR is entitled to acquire, on the terms and subject to the conditions set forth therein, an aggregate of 1,897,946 shares (subject to adjustment as set forth therein) of Common Stock; WHEREAS, each of the Anderson Warrants, the Midkiff Warrants and the AMR Warrants contains provisions pursuant to which the holder thereof has the right (such rights, "REGISTRATION RIGHTS"), subject to the terms and conditions set forth in the Warrants, to cause the Company to use its best efforts to cause the shares of Common Stock issuable upon the exercise of such Warrants to be registered under the Securities Act of 1933, as amended (the "SECURITIES ACT"); WHEREAS, the Company and AIP are parties to that certain Registration Rights Agreement, dated as of January 31, 1996 (the "REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company has granted to AIP Registration Rights, subject to the terms and conditions set forth in the Registration Rights Agreement, with respect to certain shares of Common Stock owned by AIP; Page 2 WHEREAS, the Registration Rights of the holders of the Anderson Warrants, the Midkiff Warrants and the AMR Warrants as set forth in such Warrants, and the Registration Rights of AIP as set forth in the Registration Rights Agreement are inconsistent; WHEREAS, the parties hereto desire to correct the inconsistencies in the several agreements, the Company desires to extend the time in which Anderson and Midkiff may request a registration of the shares of Common Stock issuable under the Anderson Warrants and the Midkiff Warrants; WHEREAS, AIP and the Company entered into the Stock Purchase Agreement, dated as of December 8, 1995 (the "STOCK PURCHASE AGREEMENT"), pursuant to which AIP has agreed to purchase from the Company, and the Company has agreed to issue and sell to AIP at the Closing (as defined in the Stock Purchase Agreement), an aggregate of 18,181,818 shares of Common Stock; WHEREAS, it is a condition to AIP's purchase of the Common Stock that Anderson and Midkiff agree to waive the application of the antidilution provisions of the Anderson Warrants and the Midkiff Warrants, respectively, with respect to certain specified transactions; and WHEREAS, Anderson and Midkiff are willing to waive such provisions as herein provided. NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. REGISTRATION RIGHTS. Notwithstanding anything to the contrary in the Warrants or the Registration Rights Agreement: 1.1 INCIDENTAL REGISTRATION RIGHTS. (a) If the Company at any time proposes to register any of its Common Stock under the Securities Act by registration on any form other than Forms S-4 or S- 8 (or successor forms) and other than in connection with an exchange offer or an offering of securities to the Company's existing security holders, whether or not for sale for its own account, it will each such time give prompt written notice to all Rightsholders of its intention to do so and of such holders' rights, if any, under the Warrants or the Registration Rights Agreement, as applicable. (b) In the event that pursuant to the Warrants or the Registration Rights Agreement, as the case Page 3 may be, a Rightsholder has incidental registration rights at the time the notice referred to in clause (a) above is delivered, then such Rightsholder shall have the right, in accordance with the terms and conditions and subject to the procedures of the Warrant or the Registration Rights Agreement, as the case may be, to cause the Company to use its best efforts to effect the registration under the Securities Act of all securities which the Company has been so requested to register by such Rightsholder. 1.2 PRIORITY IN INCIDENTAL AND DEMAND REGISTRATIONS. If the managing underwriter of any underwritten offering shall inform the Company by letter of its opinion that the number or type of securities requested to be included in such registration would materially adversely affect such offering, and the Company has so advised the Rightsholders that have requested pursuant to rights granted in such Rightsholder's Warrant or the Registration Rights Agreement, as the case may be, to have securities registered in such offering, in writing, then the Company will include in such registration, to the extent of the number and type which the Company is so advised can be sold in (or during the time of) such offering, FIRST, all securities proposed by the Company to be sold for its own account, SECOND, all securities proposed to be sold for the account of the Rightsholder (the "INITIATING RIGHTSHOLDER"), if any, that, pursuant to rights granted in the Warrants or the Registration Rights Agreement, as the case may be, initially requested the Company to register such securities, and THIRD, such securities requested by Rightsholders (other than the Initiating Rightsholder, if any) to be included in such registration pursuant to rights granted in the Warrants and/or the Registration Rights Agreement, as the case may be, PRO RATA (based on the number of securities requested to be included therein by each Rightsholder (other than the Initiating Rightsholder)) among such Rightsholders. 2. WAIVER OF ANTI-DILUTION PROVISIONS. Each of Anderson and Midkiff hereby agrees that notwihtstanding Sections 3 and 4 of the Anderson Warrants and the Midkiff Warrants, supplementing Section 4(b) of such Warrants, neither the Current Warrant Price (as defined in such Warrants) nor the number of shares of Common Stock issuable upon exercise of such Warrants shall be adjusted as a result of (i) the issuance of the AMR Warrants, (ii) the issuance and sale of shares of Common Stock from time to time upon the exercise, in whole or in part, of the AMR Warrants, or (iii) the issuance and sale of shares of Common Equity (as defined in such Warrants) in connection with an offering of rights to purchase Common Stock in 1996. Page 4 3. EXTENSION OF DEMAND REGISTRATION. The Company hereby agrees that Section 8 of each of the Anderson Warrants and the Midkiff Warrants shall be amended to delete the date "December 31, 1997" in the fifth line thereof and substitute in lieu thereof the date "December 31, 1998." 4. NO INCONSISTENT AGREEMENTS. The Company hereby agrees that it will not hereafter enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Rightsholders hereunder, under the Warrants or under the Registration Rights Agreement. Without limiting the generality of the foregoing, the Company will not hereafter enter into any agreement with respect to its securities which grants, or modify any existing agreement with respect to its securities to grant, to the holder of its securities in connection with a registration of such securities equal or higher priority to the rights granted to the Rightsholders under this Agreement. 5. RESTRICTION ON TRANSFER OF WARRANTS. (a) Anderson, Midkiff and AMR hereby agree that they shall not sell, give, assign or otherwise dispose of (whether by operation of law or otherwise) (each a "TRANSFER") any Warrants or any right, title or interest therein or thereto to any Person unless such Person agrees in writing to be bound by this Agreement. Any attempt to transfer any Warrants or any such rights in violation of the preceding sentence shall be null and void AB INITIO. 6. WARRANT CERTIFICATE LEGEND. A copy of this Agreement shall be filed with the Corporate Secretary of the Company and kept with the records of the Company. Each Warrant now held or hereafter acquired by Anderson, Midkiff and AMR shall for as long as this Agreement is effective bear a legend substantially in the following form: THE SALE, ASSIGNMENT OR OTHER DISPOSITION (EACH A "TRANSFER") OF THIS WARRANT IS RESTRICTED BY THE TERMS OF THE RIGHTSHOLDERS AGREEMENT, DATED AS OF JANUARY 31, 1996, BY AND AMONG THE COMPANY, AIRLINE INVESTORS PARTNERSHIP, L.P. AND THE HOLDERS OF WARRANTS OF THE COMPANY, A COPY OF WHICH MAY BE INSPECTED AT THE COMPANY'S PRINCIPAL OFFICE. THE COMPANY WILL NOT REGISTER ON THE BOOKS OF THE COMPANY OR OTHERWISE EFFECT THE TRANSFER OF THIS WARRANT IF THE TRANSFER HAS NOT BEEN MADE IN COMPLIANCE WITH THE RIGHTSHOLDERS AGREEMENT. Anderson and Midkiff hereby agree that as soon as practicable after the date hereof they shall present each Page 5 existing Warrant to the Corporate Secretary of the Company at the Company's principal office for the purpose of having the legend set forth in this Section 6 affixed thereto. 7. REPRESENTATIONS OF ANDERSON AND MIDKIFF. 7.1 Anderson hereby represents and warrants to the other Rightsholders and the Company that he has neither Transferred nor agreed to Transfer the Anderson Warrants or any of them, in whole or in part, to any other person. 7.2 Midkiff hereby represents and warrants to the other Rightsholders and the Company that he has neither Transferred nor agreed to Transfer the Midkiff Warrants or any of them, in whole or in part, to any other person. 8. MISCELLANEOUS. 8.1 NOTICES. All notices or other communications given or made hereunder shall be validly given or made if made in accordance with the notice provisions of the relevant Warrant or the Registration Rights Agreement, as the case may be. 8.2 AMENDMENT AND WAIVER. (a) No failure or delay on the part of any party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to the parties hereto at law, in equity or otherwise. (b) This Agreement may be amended, supplemented or modified only with the written consent of all parties hereto. 8.3 ENTIRE AGREEMENT; NO EXPANSION OF RIGHTS. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. Section 1 of this Agreement is not intended to, and shall not, confer upon any Rightsholder any Registration Rights that are not expressly contained in such Rightsholder's Warrants or in the Registration Rights Agreement, as the case may be. Page 6 8.4 CONTINUING EFFECT OF AGREEMENTS. This Agreement shall not constitute a waiver, amendment or modification of any other provisions of the Warrants or the Registration Rights Agreement not expressly referred to herein and shall not be construed as a waiver or consent to any further or future action on the part of the Company or the Rightsholders that would require a waiver or consent. Except as expressly amended or modified herein, the provisions of the Warrants and the provisions of the Registration Rights Agreement are and shall remain in full force and effect. 8.5 TERM OF AGREEMENT. Section 1 of this Agreement shall terminate and be of no further force or effect with respect to each Rightsholder at the first date on which such Rightsholder shall no longer have any Registration Rights. The remainder of this Agreement shall terminate and be of no further force and effect at such time as no Rightsholder owns any Warrants or shares of Common Stock. 8.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. 8.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and with respect to the Company, its successors and permitted assigns and, with respect to the Rightsholders, any transferee of the Warrants as permitted hereunder and the holder of any securities registrable pursuant to the AMR Warrants or the Registration Rights Agreement. This Agreement may not be assigned by the Company without the prior written consent of the other parties hereto. 8.8 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument. [The remainder of this page intentionally left blank.] Page 7 IN WITNESS WHEREOF, the undersigned have executed, or have cause to be executed, this Agreement on the date first written above. /S/ Martin Anderson -------------------------- Martin Anderson /S/ Robert Midkiff -------------------------- Robert Midkiff AMR CORPORATION By: /S/ Gerard G. Arpey ------------------------- Name: Gerard G. Arpey Title: Senior Vice President Finance and Planning, CFO AIRLINE INVESTORS PARTNERSHIP, L.P. By: AIP GENERAL PARTNER, INC., Its General Partner By: /S/ John W. Adams --------------------------- Name: John W. Adams Title: President HAWAIIAN AIRLINES, INC. By: /S/ Bruce R. Nobles --------------------------- Name: Bruce R. Nobles Title: President By: /S/ Rae A. Capps ---------------------------- Name: Rae A. Capps Title: Vice President EX-99 4 EXHIBIT 3 STOCKHOLDERS AGREEMENT STOCKHOLDERS AGREEMENT, dated January 31, 1996 (this "AGREEMENT"), by and among HAWAIIAN AIRLINES, INC., a Hawaii corporation (the "COMPANY"), AIRLINE INVESTORS PARTNERSHIP, L.P., a Delaware limited partnership ("AIP"), the AIR LINE PILOTS ASSOCIATION, HAWAIIAN MASTER EXECUTIVE COUNCIL ("HAWAIIAN MEC"), the ASSOCIATION OF FLIGHT ATTENDANTS ("AFA") and the INTERNATIONAL ASSOCIATION OF MACHINISTS ("IAM" and, together with the Hawaiian MEC and AFA, the "UNIONS"). WHEREAS, AIP and the Company entered into the Stock Purchase Agreement, dated December 8, 1995 (the "STOCK PURCHASE AGREEMENT"), pursuant to which AIP has agreed to purchase from the Company, and the Company has agreed to issue and sell to AIP at the Closing (as defined in the Stock Purchase Agreement), an aggregate of 18,181,818 shares, par value $.01 per share, of Class A Common Stock of the Company (the "CLASS A COMMON STOCK"), for an aggregate price of $20,000,000. WHEREAS, as set forth in the Stock Purchase Agreement, it is a condition to AIP's purchase of the Class A Common Stock that the Unions enter into amended collective bargaining agreements (the "AMENDED COLLECTIVE BARGAINING AGREEMENTS") carrying out the term sheets set forth as Exhibit F to the Stock Purchase Agreement (the "TERM SHEETS"). NOW, THEREFORE, to induce the Unions to enter into the Amended Collective Bargaining Agreements, and as required by the Term Sheets set forth as Exhibit F to the Stock Purchase Agreement, and in consideration of the same, the parties hereto agree as follows: 1. DEFINITIONS. As used in this Agreement, the following terms shall have the meanings set forth below: An "AFFILIATE" of, or a person "affiliated" with, a specified Person, means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified. The term "control" (including the terms "controlling," "controlled by" and "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise. "AIP STOCKHOLDER" shall mean AIP or any "affiliate" of AIP as defined in the Charter Documents. Page 2 "BOARD OF DIRECTORS" means the Board of Directors of the Company. "CHARTER DOCUMENTS" means the Amended Articles of Incorporation and the Amended Bylaws of the Company as in effect on the date hereof, copies of which are attached hereto as EXHIBITS A AND B, respectively. "COMMON STOCK" means the Class A Common Stock or any other capital stock of the Company into which such stock is reclassified or reconstituted. "COMMON STOCK EQUIVALENTS" means any security or obligation which is by its terms convertible into shares of Common Stock and any option, warrant or other subscrip-tion or purchase right with respect to Common Stock. "PERSON" means any individual, corporation, partnership, limited liability company, firm, joint venture, association, joint stock company, trust, unincorporated organization, governmental body or other entity. "SERIES B SPECIAL PREFERRED STOCK," "SERIES C SPECIAL PREFERRED STOCK," "SERIES D SPECIAL PREFERRED STOCK" and "SERIES E SPECIAL PREFERRED STOCK" shall have the meanings assigned to such terms in the Charter Documents. "SHARES" means, with respect to the AIP Stockholder, all shares, whether now owned or hereafter acquired, of Common Stock; PROVIDED, for purposes of Section 2, Shares shall be deemed to include Common Stock Equivalents. "STOCKHOLDERS MEETING" shall mean any regular or special meeting of the stockholders of the Company. "WRITTEN CONSENT" shall mean any written consent executed in lieu of a Stockholders Meeting. 2. RESTRICTION ON TRANSFER OF SHARES. The AIP Stockholder agrees that it shall not sell, give, assign or otherwise dispose of (whether by operation of law or otherwise) (each a "TRANSFER") any Shares or any right, title or interest therein or thereto to any Person that is, or is an Affiliate of, any Person that has been denied a Part 121 certificate by the Department of Transportation. Any attempt to transfer any Shares or any such rights in violation of the preceding sentence shall be null and void AB INITIO, and the Company agrees not to register any such transfer. Page 3 3. CORPORATE GOVERNANCE. 3.1 ELECTION OF DIRECTORS. The AIP Stockholder shall vote its Shares at any Stockholders Meeting called for the purpose of filling positions on the Board of Directors, or in any Written Consent executed for such purpose, in favor of the directors standing for election and nominated by the holders of Series B Special Preferred Stock, Series C Special Preferred Stock, Series D Special Preferred Stock, and Series E Special Preferred Stock, respectively. 3.2 AMENDMENT OF CHARTER DOCUMENTS. The AIP Stockholder shall vote its Shares at any Stockholders Meeting called for the purpose of revising the Charter Documents, or in any Written Consent executed for such purposes, against any proposed amendment to any Charter Document that would be inconsistent with, or alter the rights of the Unions or the obligations of the Board of Directors under, the Designation of Special Preferred Stock included in Exhibit A hereto or any of Sections 3.02, 3.09, 3.12 or 7.04 of the By-Laws included in Exhibit B hereto (collectively referred to as the "Governance Provisions"). In the event the Board of Directors purports to amend or revise the Charter Documents in any respect that would be inconsistent with, or alter the rights of the Unions or the obligations of the Board of Directors under, the Governance Provisions, then the AIP Stockholder shall, at the request of any Union and to the extent permitted by law, (i) seek a Stockholders Meeting or stockholder action by Written Consent, as soon as practicable, for the purpose of restoring the Governance Provisions, (2) propose a stockholder resolution at such Stockholders Meeting or action by Written consent to restore the Governance Provisions, and (3) vote its shares at any Stockholders Meeting, or in any Written Consent, in favor of such resolution to restore the Governance Provisions. 3.3 BOARD COMMITTEE REPRESENTATION. The AIP Stockholder shall make reasonable efforts to ensure that at least one Employee Director serves on each significant committee of the Board other than the Audit Committee (including, if any, the Executive Committee, the Strategic Planning Committee, the Board Nominating Committee and other committees of comparable significance). 3.4 GENERAL OBLIGATIONS. The AIP Stockholder shall not take any action inconsistent with the Governance Provisions. In the event of any material change to the terms or structure of the rights or powers of the AIP Stockholder, as a stockholder or as a holder of the Series B Special Preferred Stock, under the Charter Documents or comparable corporate documentation (including, without Page 4 limitation, changes in the AIP Stockholder's right to nominate, designate, remove or replace directors on the Board of Directors), the AIP Stockholder shall, at the request of any Union and to the extent permitted by law, take all action necessary to implement comparable changes to the terms or structure of the rights or powers of such Union under the Charter Documents or comparable corporate documentation. 3.5 STOCKHOLDER ACTIONS. In order to effectuate the provisions of this Section 3, the AIP Stockholder hereby agrees that when any action or vote is required to be taken pursuant to this Agreement, such Stockholder shall attend the Stockholders Meeting, in person or by proxy, or execute or cause to be executed a Written Consent to effectuate such stockholder action, as appropriate. 4. STOCK CERTIFICATE LEGEND. A copy of this Agreement shall be filed with the Secretary of the Company and kept with the records of the Company. Each certificate representing Shares now held or hereafter acquired by the AIP Stockholder shall for as long as this Agreement is effective bear a legend substantially in the following form: THE SALE, ASSIGNMENT OR OTHER DISPOSITION (EACH A "TRANSFER") AND VOTING OF ANY OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF THE STOCKHOLDERS AGREEMENT, DATED JANUARY 31, 1996, BY AND AMONG THE COMPANY, AIRLINE INVESTORS PARTNERSHIP, L.P. AND CERTAIN UNIONS, A COPY OF WHICH MAY BE INSPECTED AT THE COMPANY'S PRINCIPAL OFFICE. THE COMPANY WILL NOT REGISTER THE TRANSFER OF SUCH SECURITIES ON THE BOOKS OF THE COMPANY IF THE TRANSFER HAS NOT BEEN MADE IN COMPLIANCE WITH THE STOCKHOLDERS AGREEMENT. 5. MISCELLANEOUS. 5.1 NOTICES. All notices or other communications given or made hereunder shall be validly given or made if in writing and delivered by facsimile transmission or in Person at, mailed by registered or certified mail, return receipt requested, postage prepaid, or sent by a reputable overnight courier to, the following addresses (and shall be deemed effective at the time of receipt thereof). Page 5 (a) if to the Hawaiian MEC: Air Line Pilots Association, Hawaiian Master Executive Council 535 Herndon Parkway Herndon, Virginia 22070-1169 Attention: Master Chairman, Hawaiian MEC Telecopy: (703) 689-4290 with a copy to: Cohen, Weiss and Simon 330 West 42nd Street New York, New York 10036 Attention: Stephen Presser Telecopy: (212) 239-9012 (b) if to the AFA: Association of Flight Attendants 1625 Massachusetts Avenue, N.W. Washington, D.C. 20036 Attention: President, Hawaiian MEC and David Borer Telecopy: (202) 939-5385 (c) if to the IAM: International Association of Machinists, District 141 1449 South Beretania Street Honolulu, HI 96814 Attention: Sam Poomaihealani and Floyd Baptiste Telecopy: (808) 836-0144 (d) if to the AIP Stockholder: Airline Investors Partnership, L.P. 885 Third Avenue 34th Floor New York, New York 10022 Attention: John Adams and Richard Conway Telecopy: (212) 751-9501 with a copy to: Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the Americas New York, New York 10019-6064 Attention: Judith R. Thoyer, Esq. Telecopy: (212) 757-3990 Page 6 (e) if to the Company: Hawaiian Airlines, Inc. 3376 Koapaka Street Honolulu, Hawaii 96819 Attention: General Counsel Telecopy: (808) 835-3690 with a copy to: Gibson, Dunn & Crutcher 333 South Grand Avenue Los Angeles, CA 90071-3197 Attention: Ronald S. Beard, Esq. Telecopy: (213) 229-7520 or to such other address as the party to whom notice is to be given may have previously furnished notice in writing to the other in the manner set forth above. 5.2 AMENDMENT AND WAIVER. (a) No failure or delay on the part of any party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to the parties hereto at law, in equity or otherwise. (b) This Agreement may be amended, supplemented or modified only with the written consent of the AIP Stockholder and the Unions. 5.3 NO INCONSISTENT AGREEMENT. The AIP Stockholder shall not enter into any stockholder agreement, voting agreement or other agreement that is inconsistent with the terms of this Agreement. 5.4 ENFORCEMENT. The parties to this Agreement agree that the irreparable damage will occur in the event that any of the provisions of this Agreement is not performed in accordance with its specific terms or is otherwise breached and that monetary damages will not constitute adequate compensation for any breach of this Agreement. Accordingly, in addition to any other remedy available to any party at law or equity, the parties shall be entitled to an injunction or injunctions in any court of competent jurisdiction to prevent breaches of this Agreement Page 7 to specifically enforce the terms and provisions of this Agreement. 5.5 SEVERABILITY. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the validity, legality or enforceability of such provision in every other respect and of each remaining provision of the Agreement shall not be impaired thereby in any respect. The parties specifically intend that all of the rights of the Unions under this Agreement shall be enforceable to the fullest extent permitted by law. 5.6 ENTIRE AGREEMENT. This Agreement, together with the exhibits hereto, is intended by the AIP Stockholder and the Unions as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of such parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein. This Agreement, together with the exhibits hereto, supersede all prior agreements and understandings between the AIP Stockholder and the Unions with respect to such subject matter. 5.7 TERM OF AGREEMENT. This Agreement shall terminate at such time as the AIP Stockholder shall no longer have any right to designate directors pursuant to the Charter Documents. 5.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF EXCEPT TO THE EXTENT INTERNAL CORPORATE LAWS OF THE COMPANY'S STATE OF INCORPORATION SHALL APPLY. 5.9 TRANSFER TO AFFILIATES. An AIP Stockholder shall not transfer any Shares to any Affiliate of AIP or an AIP Stockholder (an "AIP AFFILIATE") unless the AIP Affiliate agrees in writing to be bound by the terms and conditions of this Agreement in the same manner as AIP. 5.10 SUCCESSORS AND ASSIGNS. This agreement shall be binding on any successor that acquires all or substantially all of AIP or any AIP Affiliate that maintains beneficial or record ownership of any Shares (an "AIP Successor"), and the AIP Stockholder shall not adopt or permit any agreement or arrangement that results in an AIP Successor unless the AIP Successor agrees in writing to be bound by the terms and conditions of this Agreement in the Page 8 same manner as AIP. This Agreement is not assignable except in connection with a transfer of Shares by AIP to an "affiliate," as defined in the Charter Documents. 5.11 NOTICE OF TRANSFER. The AIP Stockholder shall provide the Company and the Unions with reasonable notice prior to transferring record or beneficial ownership of Shares to any Affiliate, Substantial Purchaser or AIP Successor. For this purpose, a "Substantial Purchaser" shall mean a transferee (or group of transferees acting in concert) which acquires 10% or more of the Shares. 5.12 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned have executed, or have cause to be executed, this Agreement on the date first written above. AIR LINE PILOTS ASSOCIATION, HAWAIIAN MASTER EXECUTIVE COUNCIL By: /S/ Reno F. Morella ---------------------------- Reno F. Morella Chairman, Hawaiian MEC ASSOCIATION OF FLIGHT ATTENDANTS By: /S/ Patricia Friend ----------------------------- Name: Patricia Friend Title: International President Page 9 INTERNATIONAL ASSOCIATION OF MACHINISTS By: /S/ Ken Thiede ----------------------------- Name: Ken Thiede Title: President AIRLINE INVESTORS PARTNERSHIP, L.P. By: AIP GENERAL PARTNER, INC., Its General Partner By: /S/ John W. Adams ------------------------------ Name: John W. Adams Title: President HAWAIIAN AIRLINES, INC. By: /S/ Bruce R. Nobles ------------------------------- Name: Bruce R. Nobles Title: Chairman of the Board, President and CEO (Solely with respect to Sections 2 and 4 hereof) EX-99 5 EXHIBIT 4 IRREVOCABLE PROXY Airline Investors Partnership, L.P. ("AIP") and Hawaiian Airlines, Inc. (the "COMPANY") have entered into a Stock Purchase Agreement, dated as of December 8, 1995 (the "STOCK PURCHASE AGREEMENT"), pursuant to which, among other things, AIP has agreed to purchase from the Company, subject to the terms and conditions set forth therein, (i) 18,181,818 shares of the Company's Class A Common Stock, par value $.01 per share (the "COMMON STOCK") and (ii) four shares of the Company's Series B Special Preferred Stock (the "PREFERRED STOCK"). The Common Stock will represent in excess of 25% of the capital stock of the Company entitled to vote. Capitalized terms used herein and not otherwise defined herein shall have the meanings given them in the Stock Purchase Agreement. The Company is subject to the foreign ownership restrictions of the Transportation Act and the rules and regulations of the Department of Transportation and the Federal Aviation Administration promulgated thereunder (the "FOREIGN OWNERSHIP REGULATIONS"). Durham Investments Limited, an Isle of Jersey company ("DURHAM"), owns approximately 49.5% of the common equity (the "COMMON EQUITY") of Pengo Industries, Inc., a Texas corporation ("PENGO"), which, in turn, owns 25% of the Class A Common Stock of AIP, Inc., the sole limited partner of AIP. In order to ensure that, in conformity with the Foreign Ownership Regulations, under all circumstances a United States citizen will ultimately direct the voting of the shares of the Company held by AIP in connection with actions of the Company, AIP is requiring Durham, and Durham will agree as provided herein, to grant an irrevocable proxy to John W. Adams ("ADAMS") to vote the Common Equity under the circumstances described herein. NOW, THEREFORE, in consideration of the premises, Durham hereby agrees as follows: 1. Durham hereby appoints Adams its proxy to represent and vote the Common Equity held of record by Durham on the record date for determining the stockholders of Pengo eligible to vote on the matter at issue (the "RECORD DATE"), for and in the name, place and stead of Durham, at all regular, special or other meetings of the holders of Pengo's Common Equity, and at any adjournment of such meetings, and to act by consent in lieu of a meeting, Page 2 or otherwise, solely with respect to the activities of the Company at all times this Proxy is in effect. 2. Durham acknowledges and agrees that this Proxy is irrevocable and is coupled with an interest. This Proxy shall be effective as of the date that AIP acquires any shares of Common Stock and shall remain in effect until the earliest to occur of (i) AIP no longer owning any shares of common stock of the Company entitled to vote, and (ii) the date on which neither Pengo nor Durham owns an interest, directly or indirectly, in the Company. 3. This Proxy may not be sold, assigned or otherwise transferred by Adams. If any portion of the Common Equity held by Durham is sold, assigned or otherwise transferred to any person that is a United States citizen, (i) the transferee of such Common Equity shall not be bound by this Proxy, and (ii) Adams shall have no voting rights whatsoever with respect to any shares so sold, assigned or transferred. 4. THIS PROXY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. IN WITNESS WHEREOF, the undersigned has executed this Proxy as of this ____ day of January, 1996. DURHAM INVESTMENTS LIMITED By: /S/ M.L. Sinel ------------------------------ Name: M.L. Sinel Title: Director -----END PRIVACY-ENHANCED MESSAGE-----