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NOTE PURCHASE AGREEMENT
BY AND BETWEEN
HAWAIIAN HOLDINGS, INC.
AND
RC AVIATION, LLC
DATED JUNE 1, 2005
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TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS.................................................................................2
Section 1.01. Definitions.......................................................................2
Section 1.02. Rules of Construction.............................................................6
ARTICLE II. ISSUANCE, SALE AND PURCHASE OF THE NOTES....................................................6
Section 2.01. Sale and Purchase of the Notes....................................................6
Section 2.02. Closing...........................................................................6
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............................................7
Section 3.01. Organization and Good Standing....................................................7
Section 3.02. Authority; Binding Effect.........................................................7
Section 3.03. Capitalization....................................................................7
Section 3.04. No Violations; Consents...........................................................8
Section 3.05. Financial Statements..............................................................8
Section 3.06. Commission Filings................................................................9
Section 3.07. Private Placement.................................................................9
Section 3.08. Financial Advisors................................................................9
Section 3.09. No General Solicitation...........................................................9
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.............................................10
Section 4.01. Authorization....................................................................10
Section 4.02. Investment Representations.......................................................10
Section 4.03. Investor Acknowledgments.........................................................10
Section 4.04. Financial Advisors...............................................................11
Section 4.05. Legend...........................................................................11
Section 4.06. No other Representations or Warranties...........................................11
Section 4.07. No Action Taken to Invalidate Private Placement..................................12
ARTICLE V. COVENANTS OF THE COMPANY...................................................................12
Section 5.01. Shareholder Approvals............................................................12
Section 5.02. Secure Listing...................................................................12
Section 5.03. Refinancing......................................................................13
ARTICLE VI. [RESERVED].................................................................................13
ARTICLE VII. CONDITIONS TO CLOSING......................................................................13
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TABLE OF CONTENTS
(continued)
PAGE
Section 7.01. Conditions to Obligations of the Investor........................................13
Section 7.02. Conditions to Obligations of the Company.........................................14
ARTICLE VIII. CONVERSION.................................................................................16
Section 8.01. Right to Convert.................................................................16
Section 8.02. Conversion of the Notes..........................................................16
Section 8.03. Conversion Price.................................................................17
Section 8.04. Adjustment for Stock Splits and Combinations.....................................17
Section 8.05. Reorganizations, Mergers, Consolidations or Reclassifications....................18
Section 8.06. Sale of Additional Shares........................................................18
Section 8.07. Additional Shares of Common Stock................................................20
Section 8.08. Certificate of Adjustment........................................................20
Section 8.09. Reservation of Stock Issuable Upon Conversion....................................20
Section 8.10. No Impairment....................................................................21
Section 8.11. Minimum Adjustment...............................................................21
Section 8.12. Certain Adjustments..............................................................21
ARTICLE IX. REDEMPTION.................................................................................21
Section 9.01. Mandatory Redemption.............................................................21
Section 9.02. Provisional Redemption at the Option of the Company..............................21
Section 9.03. Optional Redemption..............................................................21
Section 9.04. Provisional Redemption of Series B Notes at the Option of the Holders............22
Section 9.05. Redemption at the Option of the Holders Upon a Change of Control.................22
Section 9.06. Redemption Procedure.............................................................23
ARTICLE X. EVENT OF DEFAULT...........................................................................24
Section 10.01. Event of Default.................................................................24
ARTICLE XI. FEES, Expenses and costs...................................................................24
Section 11.01. Expenses.........................................................................24
ARTICLE XII. SUBORDINATION..............................................................................25
Section 12.01. Subordination....................................................................25
ARTICLE XIII. MISCELLANEOUS..............................................................................25
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TABLE OF CONTENTS
(continued)
PAGE
Section 13.01. Note Register....................................................................25
Section 13.02. DTC; CUSIP.......................................................................26
Section 13.03. Notices and Addresses............................................................26
Section 13.04. No Survival......................................................................27
Section 13.05. Captions.........................................................................27
Section 13.06. No Waiver........................................................................27
Section 13.07. Severability.....................................................................27
Section 13.08. Exclusive Agreement..............................................................27
Section 13.09. Amendment........................................................................27
Section 13.10. Limitation on Assignment; Parties in Interest....................................28
Section 13.11. Governing Law....................................................................28
Section 13.12. Jurisdiction.....................................................................28
Section 13.13. No Third Party Beneficiary.......................................................28
Section 13.14. Injunctive Relief................................................................28
Section 13.15. Counterparts.....................................................................28
Section 13.16. Actions Simultaneous.............................................................28
Section 13.17. Acknowledgement by the Company, the Investor and HHIC............................29
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NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT, dated June 1, 2005 (this "Agreement"), is by
and between Hawaiian Holdings, Inc., a Delaware corporation (the "Company"), and
RC Aviation, LLC, a Delaware limited liability company (the "Investor"). HHIC,
Inc., a Delaware corporation ("HHIC"), does hereby join in this Agreement solely
for the purpose described in Section 13.17. Unless otherwise provided,
capitalized terms used herein are defined in Article I below.
RECITALS:
---------
A. The Investor, on behalf the members of the Investor set forth on
Schedule A attached hereto (the "Purchasers"), desires to purchase from the
Company, and the Company desires to sell to the Investor, upon the terms and
subject to the conditions of this Agreement, Series A Subordinated Convertible
Notes Due June 1, 2010 (the "Series A Notes") and Series B Subordinated
Convertible Notes Due June 1, 2010 (the "Series B Notes" and, together with the
Series A Notes, the "Notes"), each in the principal amounts set forth on
Schedule A. The Series A Notes will be issued in the form attached hereto as
Exhibit A, and the Series B Notes will be issued in the form attached hereto as
Exhibit B.
B. Subject to the terms contained herein, the Series A Notes shall be
convertible into shares of Common Stock from and after the first anniversary of
the Closing Date, in accordance with the terms hereof.
C. Subject to the terms contained herein, the Series B Notes shall be
convertible into shares of Common Stock upon the latest to occur of (i) the
effectiveness of an amendment to the Company's Certificate of Incorporation to
be filed with the Secretary of State of the State of Delaware to increase the
aggregate number of authorized shares of Common Stock to an amount that would
allow for the full conversion of the Series B Notes and the full exercise of the
Common Stock Warrants (as defined herein), (ii) the receipt of shareholder
approval authorizing the issuance of Common Stock upon conversion of the Series
B Notes as required by Section 713 of the AMEX Company Guide, and (iii) the
first anniversary of the Closing Date, each case in accordance with the terms
hereof.
D. The Company and the Investor, on behalf of itself and the Purchasers,
desire to set forth certain agreements herein.
AGREEMENT:
----------
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and undertakings hereunder and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
intending to be legally bound, the parties hereto do hereby agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. As used in this Agreement, the following terms
have the meanings set forth below.
"Accredited Investor" shall mean any Person that is an "accredited
investor" within the definition contained in Rule 501(a) under the Securities
Act.
"Affiliate" shall mean with respect to a Person, any Person which directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with such Person or entity.
"Agreement" shall have the meaning set forth in the preamble.
"Amendment" shall mean an amendment to the Certificate of Incorporation to
be filed with the Secretary of State of the State of Delaware, subject to the
receipt of the shareholder approval required by Section 5.1(i), to increase the
aggregate number of authorized shares of Common Stock to an amount that would
allow for the full conversion of the Series B Notes and the full exercise of the
Common Stock Warrants.
"AMEX Company Guide" shall mean the American Stock Exchange Company Guide.
"Bankruptcy Proceeding" shall mean the case (Case No. 03-00827) filed by
Hawaiian Airlines, Inc. in the United States Bankruptcy Court for the District
of Hawaii under Chapter 11 of the United States Bankruptcy Code, as amended.
"Board of Directors" shall mean the Board of Directors of the Company.
"Business Day" shall mean any day other than (i) a Saturday, (ii) a Sunday
or (iii) any other day on which banks in the City of New York are authorized or
required to close.
"By-Laws" shall mean, when used with respect to a specified Person, the
by-laws of a Person, as the same may be amended from time to time.
"Capital Stock" shall mean, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents (however designated
and whether voting or non-voting) of such Person's capital stock or any form of
membership, ownership or participation interests, as applicable, including
partnership interests, whether now outstanding or hereafter issued and any and
all securities, debt instruments, rights, warrants or options exercisable or
exchangeable for or convertible into such capital stock.
"Certificate of Incorporation" shall mean, when used with respect to a
specified Person, the Articles or Certificate of Incorporation or other
applicable organizational document of such Person, as currently in effect.
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"Closing" shall have the meaning set forth in Section 2.02(a).
"Closing Date" shall have the meaning set forth in Section 2.02(a).
"Commission Filings" shall have the meaning set forth in Section 3.06.
"Common Stock" shall mean the common stock, $0.01 par value per share, of
the Company.
"Common Stock Warrants" shall mean warrants (to be issued to the Investor
in exchange for the Series E Warrant upon the effectiveness of the Amendment) to
purchase up to ten percent (10%) of the fully-diluted shares of Common Stock, of
which warrants half had been previously earned by the Investor for its funding
commitment with respect to the joint plan of reorganization proposed by the
Company and the Investor in connection with the Bankruptcy Proceeding and the
other half of which shall be earned by the Investor in connection with its
purchase of the Notes hereunder.
"Company" shall have the meaning set forth in the preamble.
"Consents" shall mean all governmental and third party consents, approvals,
authorizations, qualifications and waivers necessary to be received by a Person
for the consummation of the transactions contemplated hereby.
"Contract" shall mean any legally binding contract, agreement, mortgage,
deed of trust, bond, loan, indenture, lease, license, note, option, warrant,
right, instrument, commitment or other similar document, arrangement or
agreement, whether written or oral.
"Employee" shall mean any current, former or retired officers, directors,
consultants, employees, independent contractors, agents and other Persons who
render or have rendered services to the Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"GAAP" shall mean generally accepted accounting principles applied on a
consistent basis as used in the United States of America.
"Governmental Body" shall mean any government or governmental or
quasi-governmental authority including, without limitation, any federal, state,
territorial, county, municipal or other governmental or quasi-governmental
agency, board, branch, bureau, commission, court, arbitral body (public or
private), department or other instrumentality or political unit or subdivision,
whether located in the United States or abroad, the National Association of
Securities Dealers, Inc., the New York Stock Exchange, the Nasdaq National
Market, the Nasdaq SmallCap Market, the American Stock Exchange or the Pacific
Exchange.
"Hawaiian" shall mean Hawaiian Airlines, Inc.
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"Indebtedness" means (a) all obligations for borrowed money (including all
obligation owing under the Xxxxx Fargo Credit Facility and the Second-Lien
Facility), (b) all obligations evidenced by bonds, debentures, notes, or other
similar instruments and all reimbursement or other obligations in respect of
letters of credit, bankers acceptances, interest rate swaps, or other financial
products, (c) all obligations as a lessee under capital leases, (d) all
obligations or liabilities of others secured by a Lien on any asset of a Person
or its subsidiaries, irrespective of whether such obligation or liability is
assumed, (e) all obligations to pay the deferred purchase price of assets (f)
trade payables incurred in the ordinary course of business and repayable in
accordance with customary trade practices, (g) all obligations owing under hedge
agreements, and (h) any obligation guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any obligation of any other Person that constitutes
Indebtedness under any of clauses (a) through (h) above.
"Investor" shall have the meaning set forth in the preamble.
"Law" shall mean any treaty, statute, ordinance, code, rule, regulation,
Order or other legal requirement enacted, adopted, promulgated, applied or
followed by any Governmental Body.
"Legend" shall mean the Legend set forth in Section 4.05.
"Lien" shall mean any mortgage, pledge, lien (statutory or otherwise),
security interest, hypothecation, conditional sale agreement, encumbrance or
similar restriction or agreement.
"Market Price" shall have the meaning set forth in Section 8.02(c).
"Material Adverse Effect" shall mean any event, condition or contingency
that has had, or is reasonably likely to have, a material adverse effect on the
business, assets, liabilities (including contingent liabilities), results of
operations, financial condition or prospects of the Company, taken as a whole.
For the purposes of this Agreement, a Material Adverse Effect shall not be
deemed to arise by reason of (i) the transactions contemplated hereby, (ii)
events of war impacting the economy in general, and (iii) changes in general
economic conditions or in the airline industry, in general.
"Optional Redemption Price" shall have the meaning set forth in Section
9.03.
"Order" shall mean any order, injunction, judgment, decree, ruling, writ,
assessment or arbitration award.
"Participant Register" shall have the meaning set forth in Section
13.01(c).
"Permits" shall mean any approvals, authorizations, licenses, permits or
certificates by or of any Governmental Body.
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"Person" shall mean any individual, corporation, partnership, firm, limited
liability company, joint venture, trust, association, unincorporated
organization, group, joint-stock company, Governmental Body or other entity.
"Purchase Price" shall mean claims in the Bankruptcy Proceeding of Hawaiian
with a value equivalency in such proceeding of $60,000,000 in the aggregate,
payable as set forth in Section 2.02.
"Purchaser" shall have the meaning set forth in the recitals.
"Put Redemption Price" shall have the meaning set forth in Section 9.04.
"Register" shall have the meaning set forth in Section 13.01(b).
"Registrar" shall have the meaning set forth in Section 13.01(a).
"Registration Rights Agreement" shall have the meaning set forth in Section
7.01(i).
"Requisite Stockholder Approval" shall mean approval of the Company's
stockholders of the issuance of Common Stock upon conversion of the Series B
Notes pursuant to Section 713 of the American Stock Exchange Company Guide.
"SEC" shall mean the U.S. Securities and Exchange Commission. ---
"Second-Lien Facility" shall mean that certain secured subordinated term
loan facility available to Hawaiian, pursuant to a Credit Agreement, by and
among Hawaiian, as borrower, the Company, as guarantor, the lenders named
therein, and Canyon Capital Advisors, LLC, as agent for the lenders.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Series E Certificate of Designations" shall mean the Certificate of the
Designations, Powers, Preferences and Rights of Series E Preferred Stock of
Hawaiian Holdings, Inc., to be filed with the Secretary of State of the State of
Delaware on or prior to the Closing Date.
"Series E Preferred Stock" shall mean the Company's Series E Preferred
Stock, governed by the Series E Certificate of Designations.
"Series E Warrants" shall mean those warrants to be granted at Closing to
the Investor to purchase shares of the Series E Preferred Stock, such warrants
to be automatically exchanged, upon the effectiveness of the Amendment, for the
Common Stock Warrants.
"Trading Day" shall mean a trading day on the American Stock Exchange.
5
"Transaction Documents" shall mean this Agreement, the schedules and
exhibits hereto, the Series A Notes, the Series B Notes, the Series E Warrants,
the Common Stock Warrants (from and after the issuance of such Common Stock
Warrants), the Registration Rights Agreement and any certificate or other
document delivered by or on behalf of the Company or the Investor pursuant to
this Agreement or in connection with the transactions contemplated by this
Agreement.
"Xxxxx Fargo Credit Facility" shall mean that certain credit facility
available to Hawaiian, consisting of a revolving line of credit and a term loan,
pursuant to a Credit Agreement (the "Xxxxx Fargo Credit Agreement"), by and
among Xxxxx Fargo Foothill, Inc., as arranger and agent, Hawaiian, as borrower,
the Company, as guarantor, and the lenders named therein.
Section 1.02. Rules of Construction. Unless the context otherwise requires:
(a) an accounting term defined by GAAP that is not otherwise defined
herein has the meaning assigned to it in accordance with GAAP;
(b) "or" is not exclusive;
(c) words in the singular include the plural, and words in the plural
include the singular;
(d) the words "include" and "including" shall be deemed to mean
"include, without limitation," and "including, without limitation";
(e) "herein," "hereof," "hereto," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
article, section, paragraph or clause where such terms may appear; and
(f) references to sections mean references to such section in this
Agreement, unless stated otherwise.
ARTICLE II
ISSUANCE, SALE AND PURCHASE OF THE NOTES
Section 2.01. Sale and Purchase of the Notes. Upon the terms and subject to
the conditions of this Agreement, on the Closing Date (as defined below), the
Company will sell to the Purchasers, and the Purchasers will purchase from the
Company, the Series A Notes and the Series B Notes in the principal amounts set
forth on Schedule A, for an aggregate purchase price of $60,000,000 (the
"Purchase Price").
Section 2.02. Closing.
(a) Subject to the satisfaction or waiver of the conditions set forth
in this Agreement, the closing of the transactions contemplated by Section 2.01
(the "Closing") shall
6
take place on the date after the date hereof (the "Closing Date"); provided,
that, if the purchase and sale of the Notes hereunder is not consummated within
one week after the date hereof, this Agreement shall be terminated and of no
further force or effect. The Closing shall occur at such place as is mutually
agreeable by the parties hereto.
(b) At the Closing: (i) the Company will deliver to the Investor (x)
the Notes to be sold in accordance with the provisions of Section 2.01 payable
to the Purchasers and (y) the Series E Warrants; (ii) the Investor shall satisfy
payment of the Purchase Price, in full payment for the Notes, through the
release and surrender to the Company by the Purchasers of an undivided interest
in bankruptcy claims from the Bankruptcy Proceeding held by each of them in an
aggregate amount equal to the Purchase Price; and (iii) each party shall take or
cause to happen such other actions, and shall execute and deliver such other
instruments or documents, as shall be required under Article VII.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor as follows:
Section 3.01. Organization and Good Standing. The Company is a corporation
duly incorporated, validly existing and in good standing under the Laws of the
State of Delaware, has full corporate power and authority to own, lease and
operate its properties, and carry on its business as presently conducted. The
Company is duly qualified, registered or licensed as a foreign corporation to do
business and is in good standing in each jurisdiction in which the ownership or
leasing of its properties or the character of its present operations makes such
qualification, registration or licensing necessary, except where the failure to
so qualify or be in good standing would not reasonably be expected to have a
Material Adverse Effect. The Company has heretofore delivered or made available
to the Investor complete and correct copies of the Certificate of Incorporation
and By-Laws of the Company, as in effect as of the date of this Agreement.
Section 3.02. Authority; Binding Effect. The Company has full corporate
power and authority to execute and deliver this Agreement and the other
Transaction Documents, and to perform its obligations hereunder and thereunder.
The execution and delivery of this Agreement and the other Transaction Documents
and the consummation by the Company of the transactions contemplated hereby and
thereby have been duly and validly approved by all necessary corporate action on
the part of the Company. This Agreement has been duly executed and delivered by
the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms. The other Transaction
Documents, when executed and delivered by the Company, will be duly executed and
delivered by the Company and constitute legal, valid and binding obligations of
the Company, enforceable in accordance with their respective terms.
Section 3.03. Capitalization.
7
(a) As of May 31, 2005, the authorized Capital Stock of the Company
consisted of 60,000,000 shares of Common Stock, and 2,000,000 shares of
Preferred Stock.
(b) As of May 31, 2005, there were (i) 30,751,227 shares of Common
Stock issued and outstanding, (ii) three (3) shares of Preferred Stock issued
and outstanding, (iii) 1,514,000 shares of Common Stock reserved for issuance
upon exercise of outstanding options issued by the Company to Employees, and
(iv) 8,933,000 shares of Common Stock reserved for issuance upon conversion of
the Series A Notes. Except as set forth in clauses (i), (ii), (iii) and (iv)
above, there are no shares of Common Stock reserved for the issuance upon the
exercise, conversion or exchange of any securities of the Company. All of the
issued and outstanding shares of the Company's Capital Stock have been duly and
validly authorized and issued and are fully paid and non-assessable and are not
subject to any preemptive rights. The Company is not subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any of
its Capital Stock.
(c) The shares of Common Stock issuable to the Investor upon conversion
of the Series A Notes, when issued in accordance with the terms hereof, will be
duly authorized, validly issued, fully paid and non-assessable and free and
clear of any Liens. The shares of Common Stock issuable to the Investor upon
conversion of the Series B Notes, when issued in accordance with the terms
hereof and subsequent to the effectiveness of the Amendment and the receipt of
the Requisite Stockholder Approval, will be duly authorized, validly issued,
fully paid and non-assessable and free and clear of any Liens.
Section 3.04. No Violations; Consents. Except as set forth on Schedule
3.04, neither the execution, delivery or performance by the Company of this
Agreement or the other Transaction Documents nor the consummation of the
transactions contemplated hereby or thereby, will (a) conflict with, or result
in the breach of, any provision of the Certificate of Incorporation or By-Laws
of the Company, (b) conflict with, violate, result in the breach or termination
of, or constitute a default or give rise to any right of termination or
acceleration or right to increase the obligations or otherwise modify the terms
thereof under any Contract, Permit or Order to which the Company is a party or
by which the Company or any of the properties or assets of the Company is bound,
(c) constitute a violation of any Law applicable to the Company or (d) result in
the creation of any Lien upon the properties or assets of the Company, other
than with respect to the foregoing clauses (b), (c) and (d), such requirements,
conflicts, violations, breaches or rights which would not reasonably be expected
to have a Material Adverse Effect. Except as set forth on Schedule 3.04, other
than those which have been obtained or made or which would not reasonably be
expected to have a Material Adverse Effect, no Consent is required on the part
of the Company in connection with the execution and delivery of this Agreement
or the Transaction Documents, or the compliance by the Company with any of the
provisions hereof or thereof.
Section 3.05. Financial Statements. The consolidated balance sheet of the
Company as of December 31, 2004 and 2003 and the related consolidated income
statements, changes in stockholders' equity and cash flows for the fiscal years
ended December 31, 2004, 2003 and 2002, as reported in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2004, filed by the
Company with the SEC under the Exchange Act, and accompanied by the
8
audit report of Ernst & Young LLP, independent public accountants, accurately
reflect the books and records of the Company and present fairly, in all material
respects, the consolidated financial position of the Company and the
consolidated results of its operations and its cash flows for the periods and
dates covered thereby, in conformity with GAAP. The unaudited consolidated
balance sheet of the Company as of March 31, 2005 and 2004 and the related
unaudited consolidated income statements and cash flows for the three months
ended March 31, 2005 and 2004, as reported in the Company's Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 2005, filed with the SEC
under the Exchange Act, accurately reflect the books and records of the Company
and present fairly, in all material respects, the consolidated financial
position of the Company and the consolidated results of its operations and its
cash flows for the periods and dates covered thereby, in conformity with GAAP,
except for changes resulting from year-end adjustments (none of which will be
material in amount) and the absence of footnote disclosures thereto.
Section 3.06. Commission Filings. The Company has filed all reports, proxy
statements and other materials, together with any amendments required to be made
with respect thereto, that were required to be filed with the SEC under the
Exchange Act from and after June 30, 2003 (all such reports and statements are
collectively referred to herein as the "Commission Filings").
Section 3.07. Private Placement.
(a) Assuming the representations and warranties of the Investor
contained in Article IV are true, the offer and sale of the Notes (and the
issuance of the Common Stock to the Investor upon the conversion of such Notes)
are exempt from the registration requirements of the Securities Act. The Company
has not taken and will not take any actions which would cause the offers and
sales contemplated hereunder to become ineligible for exemption under the
Securities Act.
(b) Neither the Company nor any Person acting on its behalf has offered
the Notes to any Person by means of general or public solicitation or general or
public advertising, such as by newspaper or magazine advertisements, by
broadcast media, or at any seminar or meeting whose attendees were solicited by
such means.
Section 3.08. Financial Advisors. Except as set forth on Schedule 3.08, no
agent, broker, investment banker, finder, financial advisor or other Person is
or will be entitled to any broker's or finder's fee or any other commission or
similar fee from the Company, directly or indirectly, in connection with the
transactions contemplated hereby.
Section 3.09. No General Solicitation. None of the Company or any of its
"affiliates" (as defined in Rule 501(b) of Regulation D under the Securities Act
("Regulation D")), has, directly or through an agent, engaged in any form of
general solicitation or general advertising in connection with the offering of
the Notes (as those terms are used in Regulation D) under the Securities Act or
in any manner involving a public offering within the meaning of Section 4(2) of
the Securities Act; and the Company has not entered into any contractual
arrangement with
9
respect to the distribution of the Notes except for this Agreement and the
Registration Rights Agreement, and the Company will not enter into any such
arrangement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE INVESTOR
The Investor, on behalf of itself and the Purchasers, represents and
warrants to the Company as follows:
Section 4.01. Authorization. Each of the Investor and each Purchaser is
duly organized and validly existing under the Laws of the state of its
organization. The Investor and each Purchaser has the full power and authority
to enter into this Agreement and the other Transaction Documents to which it is
a party and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the other Transaction Documents and
the consummation by the Investor and each Purchaser of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
action on the part of the Investor and each Purchaser. This Agreement and the
other Transaction Documents have been and will be, as the case may be, duly
executed and delivered by the Investor and each Purchaser that is a party
thereto and constitute legal, valid and binding obligations of the Investor and
each Purchaser that is a party thereto, enforceable in accordance with their
respective terms.
Section 4.02. Investment Representations. Each of the Investor and each
Purchaser is an Accredited Investor and is acquiring the Notes for its own
account, for investment, and not with a current view to, or for sale in
connection with, the distribution thereof or of any interest therein, except as
such distribution may be permissible under applicable Law. Each of the Investor
and each Purchaser has adequate net worth and means of providing for its current
needs and contingencies and is able to sustain a complete loss of the investment
in such Notes, and has no need for liquidity in such investment. Each of the
Investor and each Purchaser, itself or through its officers, employees or
agents, has sufficient knowledge and experience in financial and business
matters to be capable of evaluating the merits and risks of an investment such
as an investment in the Notes, and each of the Investor and each Purchaser,
either alone or through its officers, employees or agents, has evaluated the
merits and risks of the investment in such Notes. Each of the Investor and each
Purchaser understand that the Notes have not been registered under the
Securities Act by reason of its issuance in a transaction exempt from the
registration requirements of the Securities Act pursuant to the exemption
provided in Section 4(2) thereof, and that the Notes may not be sold or
otherwise disposed of unless such transaction is registered under the Securities
Act or exempted from such registration.
Section 4.03. Investor Acknowledgments.
(a) Each of the Investor and each Purchaser has had the opportunity,
directly or through its representatives, to ask questions of and receive answers
from Persons acting on behalf of the Company concerning the transactions
contemplated by this Agreement.
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(b) Each of the Investor and each Purchaser acknowledges that the
Series A Notes may not be converted into shares of Common Stock until the first
anniversary of the Closing Date, in accordance with the terms hereof.
(c) Each of the Investor and each Purchaser acknowledges that the
Series B Notes may not be converted into shares of Common Stock until the latest
to occur of (i) the effectiveness of the Amendment, (ii) the receipt of the
Requisite Stockholder Approval, and (iii) the first anniversary of the Closing
Date, each case in accordance with the terms hereof.
Section 4.04. Financial Advisors. Except as set forth on Schedule 4.04, no
agent, broker, investment banker, finder, financial advisor or other Person
engaged by the Investor is or will be entitled to any broker's or finder's fee
or any other commission or similar fee from the Company, directly or indirectly,
in connection with any of the transactions contemplated by this Agreement or any
of the Transaction Documents.
Section 4.05. Legend.
(a) The Notes and the Common Stock issuable upon conversion of the
Notes will bear a legend (the "Legend") substantially similar to the following:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. NO INTEREST IN THESE
SECURITIES MAY BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER SAID ACT."
(b) The legend endorsed on the certificates pursuant to Section 4.05
hereof shall be removed and the Company shall issue a certificate without such
legend to the holder thereof at such time as the securities evidenced thereby
cease to be restricted securities upon the earliest to occur of (i) a
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of in accordance with such registration statement, (ii) the securities
shall have been sold to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, and (iii) such securities may be sold by
the holder without restriction or registration under Rule 144(k) under the
Securities Act (or any successor provision).
Section 4.06. No other Representations or Warranties. No representations or
warranties have been made to the Investor or any Purchaser by the Company or any
director, officer, employee, agent or Affiliate of the Company other than the
limited representations of the Company set forth herein and each of the Investor
and each Purchaser understands, acknowledges and agrees that the Company makes
no other representations and warranties of any kind or nature,
11
expressed or implied, all of which are specifically disclaimed by the Company.
The decision of each of the Investor and each Purchaser to purchase the
securities being acquired by it pursuant hereto is based on the information
contained in this Agreement and its own independent investigation of the
Company. Each of the Investor and each Purchaser acknowledges that it has had an
opportunity to ask questions of the executive officers of the Company and has
received sufficient information to evaluate its investment in the Company. Each
of the Investor and each Purchaser has been, and will continue to be, solely
responsible for making its own independent appraisal of an investigation into,
and in connection with this Agreement and the transactions contemplated hereby
it has made such an independent appraisal of an investigation into, the
financial condition, creditworthiness, affairs, status and nature of the Company
and it has not relied, and will not hereafter rely, on the Company or any
Affiliate or representative of the Company with respect to such matters or to
update the Investor with respect to such matters.
Section 4.07. No Action Taken to Invalidate Private Placement. Neither the
Investor nor any Purchaser has taken any action that would result in the
offering of the Notes pursuant to this Agreement being treated as a public
offering rather than a valid private offering under applicable securities law.
ARTICLE V.
COVENANTS OF THE COMPANY
The Company covenants and agrees that:
Section 5.01. Shareholder Approvals. The Company shall use its best efforts
to, within ninety (90) days after the Closing Date, (i) obtain the stockholder
approval necessary for the Amendment and to file the Amendment with the
Secretary of State of the State of Delaware, and (ii) obtain the Requisite
Stockholder Approval. In the event that the Amendment and the Requisite
Stockholder Approval are not obtained prior to the first anniversary of the
Closing Date, the Company may at its option, (x) immediately increase the
interest rate set forth in the Series B Notes to ten percent (10%) per annum,
such interest rate to remain in effect so long as the Series B Notes remains
outstanding, or (y) pay to the holder or holders of the Series B Notes, within
thirty (30) days of the first anniversary of the Closing Date, a penalty in cash
in an amount equal to three percent (3%) of the aggregate outstanding principal
amount of the Series B Notes.
Section 5.02. Secure Listing. The Company shall use its best efforts to
ensure that: (i) the shares of Common Stock issuable upon conversion of the
Series A Notes shall have been duly listed, pending notice of issuance, on AMEX
and PCX, and (ii) subsequent to the effectiveness of the Amendment and the
receipt of the Requisite Stockholder Approval, the shares of Common Stock
issuable upon conversion of the Series B Notes will be duly listed, pending
notice of issuance, on AMEX and PCX, and (iii) subsequent to the effectiveness
of the Amendment, the shares of Common Stock issuable upon exercise of the
Common Stock Warrants shall have been duly listed, pending notice of issuance,
on AMEX and PCX.
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Section 5.03. Refinancing. The Company shall use its best efforts, prior to
the first anniversary of the Closing Date, to effect a rights offering of shares
of Common Stock or seek alternative financing in order to redeem in Notes in
accordance with Section 9.03 hereof.
ARTICLE VI
[RESERVED]
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.01. Conditions to Obligations of the Investor. The obligation of
the Investor to consummate the transactions contemplated hereby shall be subject
to the fulfillment on or prior to the Closing Date of the following conditions,
any or all of which may be waived by the Investor, in whole or in part, to the
extent permitted by applicable Law:
(a) Representations and Warranties. The representations and warranties
of the Company contained herein shall be true in all material respects (except
for representations and warranties that contain qualifications as to
materiality, which shall be true and correct in all respects) at and as of the
date hereof and on and as of the Closing Date with the same effect as though
made on and as of the Closing Date.
(b) Consents. The Company shall have obtained the consents set forth in
Schedule 3.04, if any.
(c) No Governmental Order or Other Proceeding or Litigation. No Order
of any Governmental Body shall be in effect that restrains or prohibits the
transactions contemplated hereby.
(d) Xxxxx Fargo Credit Facility. The Xxxxx Fargo Credit Facility shall
have been entered into by the parties thereto and the closing of the loan
transaction contemplated therein shall occur prior to or substantially
simultaneously with the Closing hereunder.
(e) Second-Lien Facility. The Second-Lien Facility shall have been
entered into by the parties thereto and the closing of the loan transaction
contemplated therein shall occur prior to or substantially simultaneously with
the Closing hereunder.
(f) Series E Certificate of Designations. The Series E Certificate of
Designations shall have been filed with the Secretary of State of the State of
Delaware substantially simultaneously with the Closing hereunder.
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(g) Issuance of Warrants. The Company shall have delivered to the
Investor the Series E Warrants substantially simultaneously with the Closing
hereunder.
(h) Bankruptcy Proceeding. A confirmation order relating to Hawaiian's
emergence from bankruptcy shall have been entered in the United States
Bankruptcy Court for the District of Hawaii.
(i) Registration Rights Agreement. The Registration Rights Agreement
shall have been executed and delivered by the parties thereto and shall be in
full force and effect, in substantially the form attached hereto as Exhibit C
(the "Registration Rights Agreement").
(j) Notes. The Company shall have delivered to the Investor the Notes
payable to the Purchasers.
(k) Good Standing; Company Certificates. The Company shall have
delivered to the Investor:
(i) a certificate issued by the appropriate Governmental Body
evidencing, as of a recent date, the good standing of the Company in its
jurisdiction of incorporation;
(ii) a certificate, dated the Closing Date, executed by the
Secretary of the Company which certifies that (A) attached to such certificate
is a complete and correct copy of the Certificate of Incorporation of the
Company certified by the Secretary of State of the State of Delaware, and that
there has been no amendment to the Certificate of Incorporation of the Company
since that the date of such certification, (B) attached to such certificate is a
complete and correct copy of the By-Laws of the Company, as in full force and
effect at the Closing Date, and (C) attached to such certificate is complete and
correct resolutions of the Board of Directors authorizing the execution,
delivery and performance of this Agreement and each of the other Transaction
Documents, including the issuance and sale of the Notes and, subject to the
effectiveness of the Amendment and the receipt of the Requisite Stockholder
Approval, the issuance of the shares of Common Stock issuable upon conversion of
the Notes and the reservation of such shares of Common Stock.
Section 7.02. Conditions to Obligations of the Company. The obligation of
the Company to consummate the transactions contemplated hereby shall be subject
to the fulfillment on or prior to the Closing Date of the following conditions,
any or all of which may be waived by the Company:
(a) Representations and Warranties. The representations and warranties
of the Investor contained herein shall be true in all material respects (except
for representations and warranties that contain qualifications as to
materiality, which shall be true and correct in all respects) at and as of the
date hereof and on and as of the Closing Date with the same effect as though
made on and as of the Closing Date.
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(b) No Governmental Order or Other Proceeding or Litigation. No Order
of any Governmental Body shall be in effect that restrains or prohibits the
transactions contemplated hereby.
(c) Xxxxx Fargo Credit Facility. The Xxxxx Fargo Credit Facility shall
have been entered into by the parties thereto and the closing of the loan
transaction contemplated therein shall occur prior to or substantially
simultaneously with the Closing hereunder.
(d) Second Lien Loan. The Second-Lien Facility shall have been entered
into by the parties thereto and the closing of the loan transaction contemplated
therein shall occur prior to or substantially simultaneously with the Closing
hereunder.
(e) Bankruptcy Proceeding. A confirmation order relating to Hawaiian's
emergence from bankruptcy shall have been entered in the United States
Bankruptcy Court for the District of Hawaii.
(f) Registration Rights Agreement. The Registration Rights Agreement
shall have been executed and delivered by the parties thereto and shall be in
full force and effect.
(g) Purchase Price. The Purchasers, in full payment for the Notes,
shall have delivered to the Company the Purchase Price as set forth in Section
2.02(b)(ii).
(h) Good Standing; Investor Certificates. The Investor shall have
delivered to the Company:
(i) a certificate issued by the appropriate Governmental Body
evidencing, as of a recent date, the good standing of the Investor in its
jurisdiction of organization;
(ii) a certificate, dated the Closing Date, executed by the
Managing Member of the Investor which certifies that (A) attached to such
certificate is a complete and correct copy of the Certificate of Formation of
the Investor certified by the Secretary of State of the State of Delaware, and
that there has been no amendment to the Certificate of Formation of the Investor
since that the date of such certification; (B) attached to such certificate is a
complete and correct copy of the limited liability company operating agreement
of the Investor, as in full force and effect at the Closing Date, and any and
all amendments or restatements thereof; and (C) attached to such certificate is
complete and correct resolutions of the Managing Member of the Investor
authorizing the execution, delivery and performance of this Agreement and each
of the other Transaction Documents to which the Investor is a party.
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ARTICLE VIII
CONVERSION
The rights of the holders of the Notes to convert such Notes into shares of
Common Stock of the Company (the "Conversion Rights"), and the terms and
conditions of such conversion, shall be as follows:
Section 8.01. Right to Convert.
(a) The Series A Notes shall be convertible, in whole or in part, at
the option of the holder thereof, at any time after the first anniversary of the
Closing Date, at the office of the Company or its transfer agent, into that
number of the fully paid and nonassessable shares of Common Stock determined in
accordance with the provisions of Section 8.02 below. The Series B Notes shall
be convertible, in whole or in part, at the option of the holder thereof, at any
time after the latest to occur of (i) the date that the Amendment becomes
effective, (ii) the date that the Requisite Stockholder Approval is obtained and
(iii) the first anniversary of the Closing Date, at the office of the Company or
its transfer agent, into that number of the fully paid and nonassessable shares
of Common Stock determined in accordance with the provisions of Section 8.02
below. In order to convert the Notes into shares of Common Stock, the holder
thereof shall surrender such Notes, duly endorsed, at the office of the Company
or its transfer agent, together with written notice to the Company stating that
it elects to convert the same and setting forth the name or names it wishes the
certificate or certificates for Common Stock to be issued.
(b) The Company shall, as soon as practicable after the surrender of
Notes for conversion at the office of the Company or its transfer agent, issue
to each holder of such Notes, or its nominee or nominees, a certificate or
certificates evidencing the number of shares of Common Stock to which it shall
be entitled and, in the event that only a portion of the Notes are to be
converted, a new Note in the remaining principal amount. Such conversion shall
be deemed to have been made immediately prior to the close of business on the
date of such surrender of the Notes to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock at such date and shall, with respect to such shares, have only
those rights of a holder of Common Stock of the Company.
Section 8.02. Conversion of the Notes.
(a) The Series A Notes shall be convertible, in whole or in part, at
any time after the first anniversary of Closing Date, at the option of the
holder of record thereof, into the number of fully paid and nonassessable shares
of Common Stock equal to (x) the outstanding principal amount of such Series A
Notes being converted divided by (y) the Conversion Price (as defined below).
The Series B Notes shall be convertible, in whole or in part, at any time after
the latest to occur of (i) the date that the Amendment becomes effective, (ii)
the date that the Requisite Stockholder Approval is obtained and (iii) the first
anniversary of the Closing Date, at the option of the holder of record thereof,
into the number of fully paid and nonassessable shares
16
of Common Stock equal to (x) the outstanding principal amount of such Series B
Notes being converted divided by (y) the Conversion Price (as defined below).
(b) Upon conversion of a Note, or any portion thereof, the holder of
such Note shall receive a payment in cash equal to the accrued and unpaid
interest on the Note or the portion so converted as of the date of conversion.
No fractional shares of Common Stock shall be issued upon conversion of the
Notes. All shares of Common Stock (including fractions thereof) issuable upon
conversion of Notes by a holder thereof shall be aggregated for purposes of
determining whether the conversion would result in the issuance of any
fractional share. If, after the aforementioned aggregation, the conversion would
result in the issuance of any fractional share, the Company shall, in lieu of
issuing any fractional share, pay cash equal to the product of such fraction
multiplied by the Market Price on the date of conversion.
(c) As used herein, "Market Price" for any day means, with respect to
the shares of Common Stock, the volume weighted average price as reported by
Bloomberg (or if such information is not available from Bloomberg, from another
nationally recognized independent pricing source) over the ten (10) Trading Days
immediately prior to the date of calculation; provided, that, for the purposes
of Section 9.04, "Market Price" shall mean the volume weighted average price
over the five (5) Trading Days prior to the date of calculation and the five (5)
Trading Days from and after the date of calculation. If there is no publicly
traded market for the shares of Common Stock, pricing information will be
obtained directly from broker/dealers and active market makers such as banks and
securities firms. In instances where there is no readily available pricing
information, the Board shall determine in good faith the fair value of the
Common Stock, which determination shall be set forth in a certificate by the
Secretary of the Company.
Section 8.03. Conversion Price. The conversion price for the Notes shall
initially be $4.35 and shall be subject to adjustment from time to time as
provided herein (the "Conversion Price").
Section 8.04. Adjustment for Stock Splits and Combinations. If outstanding
shares of the Common Stock of the Company shall be subdivided into a greater
number of shares, or a dividend in Common Stock or other securities of the
Company convertible into or exchangeable for Common Stock (in which latter event
the number of shares of Common Stock issuable upon the conversion or exchange of
such securities shall be deemed to have been distributed) shall be paid in
respect to the Common Stock of the Company, the Conversion Price in effect
immediately prior to such subdivision or at the record date of such dividend
shall, simultaneously with the effectiveness of such subdivision or immediately
after the record date of such dividend, be proportionately reduced, and
conversely, if outstanding shares of the Common Stock of the Company shall be
combined into a smaller number of shares, the Conversion Price in effect
immediately prior to such combination shall simultaneously with the
effectiveness of such combination, be proportionately increased. Any adjustment
to the Conversion Price under this Section 8.04 shall become effective at the
close of business on the date the subdivision or combination referred to herein
becomes effective.
17
Section 8.05. Reorganizations, Mergers, Consolidations or
Reclassifications. In the event of any capital reorganization, any
reclassification of the Common Stock (other than a change in par value), or the
consolidation or merger of the Company with or into another Person (collectively
referred to hereinafter as "Reorganizations"), the holders of the Notes shall
thereafter be entitled to receive, and provision shall be made therefor in any
agreement relating to a Reorganization, upon conversion of the Notes (or deemed
conversion of the Notes in the event that the Reorganization is consummated at
such time as the Notes are not otherwise convertible under the terms hereof),
the kind and number of shares of Common Stock or other securities or property
(including cash) of the Company, or other corporation resulting from such
consolidation or surviving such merger, to which a holder of the number of
shares of the Common Stock of the Company which the Notes entitled the holder
thereof to convert to immediately prior to such Reorganization would have been
entitled to receive with respect to such Reorganization; and in any such case
appropriate adjustment shall be made in the application of the provisions herein
set forth with respect to the rights and interests thereafter of the holders of
the Notes, to the end that the provisions set forth herein (including the
specified changes and other adjustments to the Conversion Price) shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares, other securities or property thereafter receivable upon conversion of
the Notes. In the event of a Reorganization for which the acquiror's shares of
common stock are securities registered under Sections 12 or 15(d) of the
Securities Exchange Act of 1934, as amended, any agreement relating to such
Reorganization shall provide for the assumption of such Notes by the acquirer,
to the extent not previously converted or redeemed, which Notes shall thereafter
be convertible into the shares of common stock of the acquiror so registered on
the basis set forth in this Section 8.05. The provisions of this Section 8.05
shall similarly apply to successive Reorganizations.
Section 8.06. Sale of Additional Shares.
(a) If at any time or from time to time the Company shall issue or sell
Additional Shares of Common Stock (as hereinafter defined), or is deemed by the
express provisions of this subsection to issue or sell Additional Shares of
Common Stock, other than as a subdivision or combination of shares of Common
Stock as provided in Section 8.04 above, for a consideration per share less than
the then existing Conversion Price, then the existing Conversion Price shall be
reduced, as of the opening of business on the date of such issuance or sale, to
a price determined by dividing (A) an amount equal to the sum of (1) the
applicable Conversion Price immediately prior to such issuance or sale
multiplied by the number of shares of Common Stock deemed outstanding at the
close of business on the day before the date of such issuance or sale, plus (2)
the aggregate consideration, if any, received or to be received by the Company
upon such issuance or sale, by (B) an amount equal to the sum of (1) the number
of shares of Common Stock deemed outstanding immediately prior to such issuance
or sale, plus (2) the total number of Additional Shares of Common Stock so
issued. For the purposes of the preceding sentence, the number of shares of
Common Stock deemed to be outstanding as of a given date shall be the sum of (i)
the number of shares of Common Stock actually outstanding, and (ii) the number
of shares of Common Stock into which the then outstanding Notes could be
converted if fully converted on the day immediately preceding the given date.
18
(b) For the purpose of making any adjustment in the Conversion Price or
number of shares of Common Stock issuable upon conversion of the Notes, as
provided above, the following provisions shall be applicable:
(i) In case of the issuance of Common Stock for consideration in
whole or in part for cash, the consideration shall be deemed to be the amount of
cash paid therefor, plus the value of any property other than cash received by
the Company as determined in accordance with clause (ii) below.
(ii) In case of the issuance of Common Stock for consideration in
whole or in part in property or consideration other than cash, the value of such
property or consideration other than cash shall be deemed to be the fair value
thereof as determined in good faith by the Board.
(iii) In case of the issuance of (x) options, warrants, or other
rights to acquire or to purchase or to subscribe for Common Stock (whether or
not at the time exercisable), (y) securities convertible into or exchangeable
for Common Stock or (z) options to purchase or rights to subscribe for such
convertible or exchangeable securities (whether or not at the time so
convertible or exchangeable): (1) the aggregate maximum number of shares of
Common Stock deliverable upon exercise of such options, warrants, or other
rights to acquire or to purchase, or to subscribe for Common Stock (whether or
not at the time exercisable) shall be deemed to have been issued at the time
such options or rights were issued and for a consideration equal to the
consideration (determined in the manner provided in clauses (i) and (ii) above),
if any, received by the Company upon the issuance of such options, warrants or
rights plus the purchase price provided in such options, warrants or rights for
the shares of Common Stock covered thereby; (2) the aggregate maximum number of
shares of Common Stock deliverable upon conversion of, or in exchange for, any
such convertible or exchangeable securities or upon the exercise of options to
purchase, or to subscribe for, such convertible or exchangeable securities and
subsequent conversion or exchange thereof shall be deemed to have been issued at
the time such securities were issued or such options, warrants or rights were
issued and for a consideration equal to the consideration received by the
Company for any such securities and related options or rights, plus the
additional consideration, if any, to be received by the Company upon the
conversion or exchange of such securities or the exercise of any related
options, warrants or rights (determined in the manner provided in clauses (i)
and (ii) above); and (3) on the expiration of any warrant, right or option or on
the termination of any right to convert or exchange any convertible or
exchangeable securities, (whether or not at the time so convertible or
exchangeable): the Conversion Price then in effect shall thereupon be readjusted
to the Conversion Price as would have been in effect had the adjustment made
upon the granting or issuance of such warrants, rights or options or convertible
or exchangeable securities (whether or not at the time so convertible or
exchangeable): been made upon the basis of the issuance or sale of only the
number of shares of Common Stock actually issued upon the exercise of such
options, warrants or rights or upon the conversion or exchange of such
convertible or exchangeable securities. No readjustment pursuant to clause (3)
above shall have the effect of increasing the Conversion Price to an amount
which exceeds the lower of (x) the Conversion Price on the original adjustment
date or (y) the Conversion Price that would have resulted from
19
any issuance of Additional Shares of Common Stock between the original
adjustment date and such readjustment date.
Section 8.07. Additional Shares of Common Stock. "Additional Shares of
Common Stock" shall mean all shares of Common Stock issued or deemed to be
issued or issuable by the Company, whether or not subsequently reacquired or
retired by the Company, other than (i) shares of Common Stock issued upon the
conversion of the Notes, (ii) shares of Common Stock issued in connection with
any stock split, stock dividend or recapitalization of the Company, (iii) shares
of Common Stock issuable upon exercise of the Common Stock Warrants, (iv) shares
of Common Stock issuable upon the exercise of stock options or other awards made
or denominated in shares of Common Stock under the Company's 2005 Stock
Incentive Plan or any of the Company's other stock plans including any stock
option, stock purchase, restricted stock or similar plan hereafter adopted by
the Board and, if required by applicable Law or stock exchange requirement,
approved by the stockholders of the Company, (v) up to 1,500,000 shares of
Common Stock issuable to unions and employees of Hawaiian, in transactions
approved by the Board, and (vi) up to 1,514,000 shares of Common Stock issuable
upon the exercise of stock options or other awards previously granted to members
of management of the Company and/or Hawaiian, in transactions approved by the
Board.
Section 8.08. Certificate of Adjustment. In each case of an adjustment or
readjustment of the Conversion Price or the number of shares of Common Stock or
other securities issuable upon conversion of the Notes, the Company, at its
expense, shall cause the Chief Financial Officer of the Company to compute such
adjustment or readjustment in accordance with this Certificate of Incorporation
and prepare a certificate showing such adjustment or readjustment, and shall
mail such certificate, by first-class mail, postage prepaid, to each registered
holder of the Notes at the holder's address as shown on the Company's stock
transfer books. The certificate shall set forth such adjustment or readjustment,
showing in detail the facts upon which such adjustment or readjustment is based,
including a statement of (i) the consideration received or to be received by the
Company for any Additional Shares of Common Stock issued or sold or deemed to
have been issued or sold, (ii) the Conversion Price at the time in effect for
the Notes, and (iii) the number of Additional Shares of Common Stock and the
type and amount, if any, of other property which at the time would be received
upon conversion of the Notes.
Section 8.09. Reservation of Stock Issuable Upon Conversion. The Company
shall at all times (solely with respect to the Series B Notes, from and after
the effectiveness of the Amendment and the receipt of the Requisite Stockholder
Approval), reserve and keep available out of its authorized but unissued shares
of Common Stock, solely for the purpose of effecting the conversion of the
Notes, such number of its shares of Common Stock as shall from time to time be
sufficient to effect a conversion of all outstanding Notes, and if at any time
the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding Notes, the Company
shall promptly seek such corporate action as may, in the opinion of its counsel,
be necessary to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purpose.
20
Section 8.10. No Impairment. The Company shall not participate in any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, for the purpose of avoiding or
seeking to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but shall at all times in good
faith use its best efforts, and assist in carrying out all such action as may be
reasonably necessary or appropriate in order to protect the conversion rights of
the holders of the Notes against dilution or other impairment.
Section 8.11. Minimum Adjustment. No adjustment of the Conversion Price
shall be made if the amount of any such adjustment would be an amount less than
one percent (1%) of the Conversion Price then in effect, but any such amount
shall be carried forward and an adjustment in respect thereof shall be made at
the time of and together with any subsequent adjustment which, together with
such amount and any other amount or amounts so carried forward, shall aggregate
an increase or decrease of one percent (1%) or more.
Section 8.12. Certain Adjustments. The Conversion Price shall not be
adjusted upward except in the event of a combination of the outstanding shares
of Common Stock into a smaller number of shares of Common Stock or in the event
of a readjustment of the Conversion Price pursuant to Section 8.06(b)(iii).
ARTICLE IX
REDEMPTION
Section 9.01. Mandatory Redemption. On June 1, 2010 (the "Mandatory
Redemption Date" and together with any date of redemption pursuant to Sections
9.02, 9.03, 9.04 and 9.05 hereof, a "Redemption Date"), the Company shall
redeem, in full and in cash, all of the outstanding Notes, in accordance with
the procedures set forth in Section 9.06, at an aggregate price equal to the
aggregate principal amount plus an aggregate amount equal to all accrued and
unpaid interest on all outstanding Notes to be so redeemed on the applicable
Redemption Date (the "Redemption Price").
Section 9.02. Provisional Redemption at the Option of the Company. At any
time after the first anniversary of the Closing Date (and in the case of the
Series B Notes, after such time as the Series B Notes have become convertible
into Common Stock under the terms hereof) and prior to the Mandatory Redemption
Date, if the Market Price of the Common Stock has exceeded 150% of the
Conversion Price for at least 20 out of 30 consecutive Trading Days (all of such
Trading Days to have occurred after the first anniversary of the Closing Date)
prior to date that the Company delivers the Redemption Notice (as defined in
Section 9.06), the Company, at its option, may redeem (within sixty (60) days
after such triggering event) all or any portion of the Notes at the Redemption
Price, in accordance with the procedures set forth in Section 9.06.
Section 9.03. Optional Redemption. At any time prior to the first
anniversary of the Closing Date, the Company, at its option, may redeem all or
any portion of the Notes at an aggregate price equal to, on the Redemption Date,
(x) 105% of the aggregate principal amount of
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all outstanding Notes to be so redeemed plus (y) all accrued and unpaid interest
on all outstanding Notes to be so redeemed (the "Optional Redemption Price"), in
accordance with the procedures set forth in Section 9.06.
Section 9.04. Provisional Redemption of Series B Notes at the Option of the
Holders. Solely with respect to the Series B Notes, at any time from and after
the third anniversary of the Closing Date and prior to the Mandatory Redemption
Date, if (1) the Amendment has not become effective, (2) the Requisite
Stockholder Approval has not been obtained, and (3) the closing price of the
Common Stock as reported by Bloomberg (or if such information is not available
from Bloomberg, from another nationally recognized independent pricing source)
(the "Closing Price") has exceeded the Conversion Price for at least 20 out of
30 consecutive Trading Days after the first anniversary of the Closing Date
(subject to the circumstances described in the immediately succeeding sentence
if such triggering event occurs on or after the first anniversary of the Closing
Date and prior to the third anniversary of the Closing Date), then each holder
of Series B Notes shall have the right, within 10 Trading Days of such price
exceeding the Conversion Price on the twentieth such day, by written notice
delivered to the Company (the "Holders' Provisional Redemption Demand Notice"),
to require the Company to redeem, no later than ninety (90) days after the
Company's receipt of the Holders' Provisional Redemption Demand Notice, all or
any portion of the Series B Notes owned by such holder at a price equal to the
Put Redemption Price (as defined below), in accordance with the procedures set
forth in Section 9.06. If the Closing Price has exceeded the Conversion Price
for at least 20 out of 30 consecutive Trading Days from and after the first
anniversary of the Closing Date and prior to the third anniversary of the
Closing Date, then each holder of Series B Notes, to the extent it desires to
have all or any portion of the Series B Notes redeemed in accordance with this
Section 9.04, must deliver the Holders' Provisional Redemption Demand Notice
within 10 Trading Days after such twentieth day, and the Company shall redeem
the Series B Notes, or the portion thereof specified in the Holders' Provisional
Redemption Demand Notice, within thirty (30) days after the third anniversary of
the Closing Date. To the extent the Holder has not given notice within such 10
Trading Day period, the right to give the Holders' Provisional Redemption Demand
Notice shall terminate until such time as the price has again exceeded the
Conversion Price for at least 20 out of 30 consecutive Trading Days. As used
herein, "Put Redemption Price" shall mean the greater of (1) the Redemption
Price and (2) an aggregate amount equal to the product of: (x) the number of
shares of Common Stock into which the Series B Notes subject to redemption would
have been convertible into as of the date of the Holders' Provisional Redemption
Demand Notice had the Amendment become effective and the Requisite Stockholder
Approval been obtained, and (y) the Market Price of the Common Stock as of the
date of the Holders' Provisional Redemption Demand Notice. The provisional
redemption right pursuant to this Section 9.04 shall automatically expire on the
later to occur of (a) such date, if any, that the Amendment becomes effective,
and (b) such date, if any, that the Requisite Stockholder Approval is obtained.
Section 9.05. Redemption at the Option of the Holders Upon a Change of
Control. In the event of a Change of Control (as defined below), each holder of
Notes shall have the right, by written notice delivered to the Company (the
"Holders' Change of Control Redemption Demand Notice"), to require the Company
to redeem, no later than thirty (30) days after the Company's receipt of the
Holders' Change of Control Redemption Demand Notice, all or any portion of the
22
Notes owned by such holder at a price equal to the Redemption Price, in
accordance with the procedures set forth in Section 9.06. For the purposes of
this Section 7, "Change of Control" means the occurrence of any of the
following: (a) at any time, RC Aviation Management, LLC ceases to have appointed
at least 2, or at least 15%, whichever is greater, of the individuals who
compose the Board, (b) the Company fails to own and control, directly or
indirectly, 100% of the capital stock of Hawaiian Airlines, or (c) any "person"
or "group" (within the meaning of Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), other than RC Aviation
Management, LLC, becomes the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 25%, or more, of the capital stock
of Company having the right to vote for the election of members of the Board.
Section 9.06. Redemption Procedure.
(a) At least 10 days (or such shorter period as any holder of Notes may
accept) and not more than 60 days prior to any intended Redemption Date, written
notice (the "Redemption Notice") shall be given by facsimile or first class
mail, postage prepaid, to each holder of record on the record date fixed for
such redemption of Notes at such holder's facsimile number or address as it
appears on the stock books of the Company; provided, that, no failure to give
such notice nor any deficiency therein shall affect the validity of the
procedure for the redemption of any Notes to be redeemed except as to the holder
or holders to whom the Company has failed to give said notice or to whom such
notice was defective.
(b) From and after the Redemption Date, unless there shall have been a
default in payment of the Redemption Price (which amount, for the purposes of
this Section 9.06, shall refer to the Optional Redemption Price in the event of
a redemption pursuant to Section 9.03 hereof or the Put Redemption Price in the
event of a redemption pursuant to Section 9.04 hereof), all rights of the
holders of Notes (except the right to receive the Redemption Price upon
surrender of their Notes) shall cease as to those Notes redeemed, and such Notes
shall not thereafter be transferred on the books of the Company or be deemed to
be outstanding for any purpose whatsoever. If on the Redemption Date the funds
of the Company legally available for redemption of Notes are insufficient to
redeem the total number of Notes to be redeemed on such date, then the Company
will use those funds which are legally available therefor to redeem the maximum
possible principal amount of Notes ratably among the holders of such Notes to be
redeemed based upon their holdings of Notes. Payments shall first be applied
against accrued and unpaid interest and thereafter against the remainder of the
Redemption Price. The Notes not redeemed shall remain outstanding and entitled
to all the rights and preferences provided herein. At any time thereafter when
additional funds of the Company are legally available for the redemption of
Notes such funds will immediately be used to redeem the balance of the Notes to
be redeemed. No dividends or other distributions shall be declared or paid on,
nor shall the Company redeem, purchase or acquire any shares of, the Common
Stock or any other class or series of stock of the Company unless the Redemption
Price per for all Notes elected to be redeemed shall have been paid in full.
Until the Redemption Price for each Note elected to be redeemed shall have been
paid in full, such Note shall remain outstanding for all purposes and entitle
the holder thereof to all the rights and privileges provided herein, including,
without limitation, that interest thereon shall continue to accrue and, if
unpaid prior to the date such
23
Notes are redeemed, shall be included as part of the Redemption Price as
provided in this Section 9.06.
ARTICLE X
EVENT OF DEFAULT
Section 10.01. Event of Default. An "Event of Default" shall exist if any
of the following conditions or events shall occur and be continuing:
(a) the Company fails to pay the Redemption Price on the Mandatory
Redemption Date pursuant to Section 9.01;
(b) the Company defaults in the payment of any interest on the Notes
for more than five (5) days after the same becomes due and payable; or
(c) a court or governmental authority of competent jurisdiction enters
an order appointing, without consent by the Company or any of its subsidiaries,
a custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, or constituting
an order for relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company or any of its subsidiaries, or any such
petition shall be filed against the Company or any of its subsidiaries and such
petition shall not be dismissed within 60 days.
ARTICLE XI
FEES, EXPENSES AND COSTS
Section 11.01. Expenses. Except as otherwise expressly provided herein, the
Company shall pay all expenses (including without limitation reasonable
attorneys', consultants' and accountants' fees and expenses) incurred by itself
and the Investor in connection with this Agreement, whether or not the
transactions contemplated by this Agreement are consummated.
24
ARTICLE XII
SUBORDINATION
Section 12.01. Subordination. Notwithstanding anything in this Agreement or
the Notes to the contrary, the Company, for itself and its successors, and the
Investor, for itself and its successors and assigns, by its acceptance of the
Notes, agrees that, to the extent and in the manner provided in Section 7 of the
Notes, (i) the payment of the principal of, and interest on, the Notes and (ii)
any payment on account of the acquisition or redemption of the Notes by the
Company is subordinated, to the prior payment in full in cash of all the
Indebtedness of the Company.
ARTICLE XIII
MISCELLANEOUS
Section 13.01. Note Register.
(a) The Company hereby acknowledges and makes the Notes registered
obligations for United States withholding tax purposes. The Company shall be the
registrar for the Notes (the "Registrar") with full power of substitution. In
the event the Company becomes unable or unwilling to act as registrar under this
Agreement, the Company shall reasonably designate a successor Registrar.
Notwithstanding any contrary provision contained in this Agreement or any of the
other Transaction Documents, neither the Notes nor any interests therein may be
sold, transferred, hypothecated, participated or assigned to any Person except
upon satisfaction of the conditions specified in this Section 13.01. Each
holder, by its acceptance of its interest in the Notes, agrees to be bound by
the provisions of this Section 13.01 .
(b) The Registrar shall keep at its principal executive office (or an
office or agency designated by it by notice to the last Registrar) a ledger, in
which, subject to such reasonable regulations as it may prescribe, but at its
expense (except as specified below), it shall provide for the registration and
transfer of the Notes or interests therein (the "Register"). No sale, transfer,
hypothecation, participation or assignment of any interest in the Notes shall be
effective for any purpose until it shall be entered on the Register. Prior to
the registration of assignment or sale of any interest in the Notes, the
Registrar shall treat the Person in whose name such Note is registered as the
owner thereof for the purpose of receiving all payments thereon and for all
other purposes, notwithstanding notice to the contrary. In the event of a sale,
transfer, hypothecation, participation or assignment of the Notes or any
interest therein, the holder prior to such sale, transfer, hypothecation,
participation or assignment of such interest therein shall provide the Registrar
with notice of such transaction at the time of such transaction. The Registrar
shall record the transfer of the Notes on the Register maintained for this
purpose upon receipt by the Registrar at the office or agency designated by the
Registrar of (i) a written assignment of the Notes being assigned (or the
applicable interest therein), (ii) funds sufficient to pay any transfer taxes
payable upon the making of such transfer as well as the cost of reviewing the
documents presented to the Registrar, and (iii) such evidence of due execution
as the
25
Registrar shall reasonably require. The Registrar shall record the transfer of
the Notes on the books maintained for such purpose at the cost and expense of
the assignee.
(c) In the event that any holder sells participations in the Notes,
such holder shall maintain a register on which it enters the names of all
participants in the Notes held by it (the "Participant Register"). A Note may be
participated in whole or in party only by registration of such participation on
the Participant Register, and any participation of such Note or transfer of such
participation may be effected only by the registration of such participation on
the Participant Register
Section 13.02. DTC; CUSIP. In the event that the Notes remain outstanding
after the first anniversary of the Closing Date, the Company shall use its best
efforts to (a) take all actions necessary or appropriate to cause the Notes to
be eligible for deposit with The Depository Trust Company, and (b) take all
actions necessary or appropriate to obtain CUSIP numbers for the Notes.
Section 13.03. Notices and Addresses. Any notice, demand, request, waiver,
or other communication under this Agreement shall be in writing and shall be
deemed to have been duly given on the date of service, if personally served or
sent by facsimile; on the Business Day after notice is delivered to a courier or
mailed by express mail, if sent by courier delivery service or express mail for
next day delivery; and on the third day after mailing, if mailed to the party to
whom notice is to be given, by first class mail, registered, return receipt
requested, postage prepaid and addressed as follows:
If to the Company:
Hawaiian Holdings, Inc.
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Chief Financial Officer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Dechert LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
If to the Investor:
26
RC Aviation, LLC
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
With a copy to:
Xxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Section 13.04. No Survival. The representations and warranties in this
Agreement shall not survive the execution and delivery of this Agreement
Section 13.05. Captions. The captions in this Agreement are for convenience
of reference only and shall not be given any effect in the interpretation of
this Agreement.
Section 13.06. No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any waiver must be
in writing. Any of the covenants or agreements contained in this Agreement may
be waived only by the written consent of the Investor.
Section 13.07. Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable Law, such provision(s) shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms so long as the economic or legal substance of the
transactions contemplated by this Agreement are not affected in any manner
materially adverse to any party.
Section 13.08. Exclusive Agreement. This Agreement and the other
Transaction Documents supersede all prior agreements among the parties with
respect to its subject matter, is intended (with the documents referred to
herein) as a complete and exclusive statement of the terms of the agreement
among the parties with respect thereto.
Section 13.09. Amendment. This Agreement cannot be amended except by a
written instrument executed by the Company and the holder or holders of at least
fifty (50%) of the aggregate outstanding principal amount under the Notes;
provided, that the consent of each holder of Notes shall be required in
connection with any amendment of the interest rate set forth in the Notes or the
provisions contained in Articles VIII or IX hereof or the termination of this
27
Agreement; provided, further, that this Agreement cannot be amended without the
consent of a holder of Notes to the extent such holder would be adversely
affected by such amendment.
Section 13.10. Limitation on Assignment; Parties in Interest.
(a) This Agreement shall be binding upon, and shall inure to the
benefit of, and be enforceable by, the parties and their respective successors,
transferees and assigns.
Section 13.11. Governing Law. This Agreement and (unless otherwise
provided) all amendments hereof and waivers and consents hereunder shall be
governed by the internal Laws of the State of Delaware, without regard to the
conflicts of Law principles thereof which would specify the application of the
Law of another jurisdiction.
Section 13.12. Jurisdiction. The Investor and the Company (i) hereby
irrevocably and unconditionally submits to the exclusive jurisdiction of any
state or federal court sitting in the State of Delaware for the purposes of any
suit, action or other proceeding arising out of this Agreement or the subject
matter hereof brought by the Company, or any Investor, and (ii) hereby waives
and agrees not to assert, by way of motion, as a defense, or otherwise, in any
such suit, action or proceeding, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that the suit, action or proceeding is
brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper or that this Agreement or the subject matter hereof may
not be enforced in or by such court.
Section 13.13. No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person.
Section 13.14. Injunctive Relief. In the event that any party threatens to
take any action prohibited by this Agreement, the parties agree that there may
not be an adequate remedy at law. Accordingly, in such an event, a party may
seek and obtain preliminary and permanent injunctive relief (without the
necessity of posting any bond or undertaking). Such remedies shall, however, be
cumulative and not exclusive and shall be in addition to any other remedies
which any party may have under this Agreement or otherwise.
Section 13.15. Counterparts. This Agreement may be executed via facsimile
and in any number of counterparts, each of which shall be deemed to be an
original instrument and all of which together shall constitute one and the same
instrument.
Section 13.16. Actions Simultaneous. All actions to be taken and all
documents to be executed and delivered by all parties at the Closing shall be
deemed to have been taken and executed and delivered simultaneously and no
actions shall be deemed to have been taken nor shall any documents be deemed to
have been executed and delivered until all actions have been taken and all
documents have been executed and delivered.
28
Section 13.17. Acknowledgement by the Company, the Investor and HHIC. Each
of the Company, the Investor and HHIC acknowledge that the purchase of Notes
pursuant hereto in exchange for an interest in the claims in the Bankruptcy
Proceeding of Hawaiian is intended to be part of the reorganization within the
meaning of Section 368 of the Internal Revenue Code of 1986, as amended,
involving the merger of Hawaiian Airlines, Inc., a Hawaii corporation, with and
into HHIC and to which the Company, HHIC and Hawaiian Airlines, Inc., a Hawaii
corporation, are parties within the meaning of Section 368(b), and that the
claims received in consideration of the issuance of the Notes will be deemed
satisfied upon the exchange.
[SIGNATURE PAGES FOLLOW]
29
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
HAWAIIAN HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer,
Treasurer & Secretary
HHIC, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
INVESTOR:
RC AVIATION, LLC
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Manager & Vice President
SCHEDULE 3.04
-------------
NO VIOLATIONS; CONSENTS
-----------------------
None
SCHEDULE 3.08
-------------
FINANCIAL ADVISORS
------------------
The Company has agreed to pay Imperial Capital, LLC placement fees in
connection with the issuance of the Notes and as well as the placement of $75
million of senior secured debt financing, and success fees in connection with
Hawaiian Airlines, Inc.'s emergence from bankruptcy. Imperial Capital will also
receive a non-contingent fee in connection with rendering a fairness opinion
with respect to certain of these and other related transactions.
2
SCHEDULE 4.04
-------------
FINANCIAL ADVISORS
------------------
None
3
