Exhibit 10.4

 

[g78539kq01i001.jpg]

 

EXECUTION VERSION

 

THE SECURITIES REPRESENTED HEREBY (THE “WARRANTS”) WERE ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AS THE WARRANTS MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
THEREOF.

 

 

March 18, 2011

 

To:

Hawaiian Holdings, Inc.

 

3375 Koapaka Street, Suite G-350

 

Honolulu, Hawaii 96819

 

 

From:

JPMorgan Chase Bank, National Association

 

P.O. Box 161

 

60 Victoria Embankment

 

London EC4Y 0JP

 

England

 

 

Re:

Base Warrants

 

The purpose of this letter agreement (this “Confirmation”) is to confirm the
terms and conditions of the Warrants issued by Hawaiian Holdings, Inc.
(“Company”) to JPMorgan Chase Bank, National Association (“Dealer”) as of the
Trade Date specified below (the “Transaction”).  This letter agreement
constitutes a “Confirmation” as referred to in the ISDA Master Agreement
specified below.  This Confirmation shall replace any previous agreements and
serve as the final documentation for the Transaction.

 

The definitions and provisions contained in the 2002 ISDA Equity Derivatives
Definitions (the “Equity Definitions”), as published by the International Swaps
and Derivatives Association, Inc. (“ISDA”), are incorporated into this
Confirmation. In the event of any inconsistency between the Equity Definitions
and this Confirmation, this Confirmation shall govern.  The Transaction shall be
deemed to be a Share Option Transaction within the meaning set forth in the
Equity Definitions.

 

Each party is hereby advised, and each such party acknowledges, that the other
party has engaged in, or refrained from engaging in, substantial financial
transactions and has taken other material actions in reliance upon the parties’
entry into the Transaction to which this Confirmation relates on the terms and
conditions set forth below.

 

1.             This Confirmation evidences a complete and binding agreement
between Dealer and Company as to the terms of the Transaction to which this
Confirmation relates.  This Confirmation shall supplement, form a part of, and
be subject to an agreement in the form of the 2002 ISDA Master Agreement (the
“Agreement”) as if Dealer and Company had executed an agreement in such form
(but without any Schedule except for the election of the laws of the State of
New York as the governing law (without reference to choice of law doctrine)) on
the Trade Date.  In the event of any inconsistency between provisions of that
Agreement and this Confirmation, this Confirmation will prevail for the purpose
of the Transaction to which this Confirmation relates.  The parties hereby agree
that no Transaction other than the Transaction to which this Confirmation
relates shall be governed by the Agreement.

 

2.             The Transaction is a Warrant Transaction, which shall be
considered a Share Option Transaction for purposes of the Equity Definitions. 
The terms of the particular Transaction to which this Confirmation relates are
as follows:

 

JPMorgan Chase Bank, National Association

Organised under the laws of the United States as a National Banking Association

Main Office 1111 Polaris Parkway, Columbus, Ohio 43271

Registered as a branch in England & Wales branch No. BR000746

Registered Branch Office 125 London Wall, London EC2Y 5AJ

Authorised and regulated by the Financial Services Authority

 

--------------------------------------------------------------------------------

 

General Terms.

 

 

 

Trade Date:

March 18, 2011

 

 

Effective Date:

The third Exchange Business Day immediately prior to the Premium Payment Date,
or such other date as agreed to between the parties, subject to
Section 8(v) below.

 

 

Warrants:

Equity call warrants, each giving the holder the right to purchase a number of
Shares equal to the Warrant Entitlement at a price per Share equal to the Strike
Price, subject to the terms set forth under the caption “Settlement Terms”
below.  For the purposes of the Equity Definitions, each reference to a Warrant
herein shall be deemed to be a reference to a Call Option.

 

 

Warrant Style:

European

 

 

Seller:

Company

 

 

Buyer:

Dealer

 

 

Shares:

The common stock of Company, par value USD 0.01 per share (Exchange symbol “HA”)

 

 

Number of Warrants:

3,806,190.  For the avoidance of doubt, the Number of Warrants shall be reduced
by any Warrants exercised or deemed exercised hereunder.  In no event will the
Number of Warrants be less than zero.

 

 

Warrant Entitlement:

One Share per Warrant

 

 

Maximum Number of Shares:

For any day, 4,011,973 Shares, minus the aggregate number of Shares delivered
prior to such day pursuant to (i) this Confirmation and (ii) any other
substantially similar confirmation for Warrants sold by Company to Dealer with a
trade date within 13 days of the Trade Date and with expiration dates the same
as the Expiration Dates.

 

 

 

Notwithstanding anything to the contrary in the Agreement, this Confirmation or
the Equity Definitions, in no event shall the Maximum Number of Shares be
subject to adjustment, except for any adjustment pursuant to the terms of this
Confirmation and the Equity Definitions in connection with stock splits or
similar changes to Company’s capitalization.

 

 

Strike Price:

USD 10.00

 

 

Premium:

USD 4,155,863.20

 

 

Premium Payment Date:

March 23, 2011

 

 

Exchange:

The NASDAQ Global Market

 

 

Related Exchange(s):

All Exchanges; provided that Section 1.26 of the Equity Definitions shall be
amended to add the words “United

 

2

--------------------------------------------------------------------------------

 

 

States” before the word “exchange” in the tenth line of such Section.

 

 

Procedures for Exercise.

 

 

 

Expiration Time:

The Valuation Time

 

 

Expiration Dates:

Each Scheduled Trading Day during the period from, and including, the First
Expiration Date to, but excluding, the 90th Scheduled Trading Day following the
First Expiration Date shall be an “Expiration Date” for a number of Warrants
equal to the Daily Number of Warrants on such date; provided that,
notwithstanding anything to the contrary in the Equity Definitions, if any such
date is a Disrupted Day, the Calculation Agent shall make reasonable
adjustments, if applicable, to the Daily Number of Warrants or shall reduce such
Daily Number of Warrants to zero for which such day shall be an Expiration Date
and shall designate a Scheduled Trading Day or a number of Scheduled Trading
Days as the Expiration Date(s) for the remaining Daily Number of Warrants or a
portion thereof for the originally scheduled Expiration Date; and provided
further that if such Expiration Date has not occurred pursuant to this clause as
of the eighth Scheduled Trading Day following the last scheduled Expiration Date
under the Transaction, the Calculation Agent shall have the right to declare
such Scheduled Trading Day to be the final Expiration Date and the Calculation
Agent shall determine its good faith estimate of the fair market value for the
Shares as of the Valuation Time on that eighth Scheduled Trading Day or on any
subsequent Scheduled Trading Day, as the Calculation Agent shall determine using
commercially reasonable means.

 

 

First Expiration Date:

June 14, 2016 (or if such day is not a Scheduled Trading Day, the next following
Scheduled Trading Day), subject to Market Disruption Event below.

 

 

Daily Number of Warrants:

For any Expiration Date, the Number of Warrants that have not expired or been
exercised as of such day, divided by the remaining number of Expiration Dates
(including such day), rounded down to the nearest whole number, subject to
adjustment pursuant to the provisos to “Expiration Dates”.

 

 

Automatic Exercise:

Applicable; and means that for each Expiration Date, a number of Warrants equal
to the Daily Number of Warrants (as adjusted pursuant to the terms hereof) for
such Expiration Date will be deemed to be automatically exercised.  For the
avoidance of doubt, Warrants are not exercisable, and shall not be exercised or
deemed exercised, other than in accordance with the preceding sentence.

 

3

--------------------------------------------------------------------------------

 

Market Disruption Event:

Section 6.3(a)(ii) of the Equity Definitions is hereby amended by replacing
clause (ii) in its entirety with “(ii) an Exchange Disruption, or” and inserting
immediately following clause (iii) the phrase “; in each case that the
Calculation Agent determines is material.”

 

 

Valuation Terms.

 

 

 

Valuation Time:

Scheduled Closing Time; provided that if the principal trading session is
extended, the Calculation Agent shall determine the Valuation Time in its
reasonable discretion.

 

 

Valuation Date:

Each Exercise Date.

 

 

Settlement Terms.

 

 

 

Settlement Method Election:

Applicable; provided that Company may elect Cash Settlement only if on or prior
to the Settlement Method Election Date (i) Company represents and warrants to
Dealer in writing on the date of such election that, as of such date,
(A) Company is not aware of any material nonpublic information concerning itself
or the Shares, (B) Company is electing Cash Settlement in good faith and not as
part of a plan or scheme to evade compliance with the federal securities laws
and (C) the assets of Company at their fair valuation exceed the liabilities of
Company (including contingent liabilities), the capital of Company is adequate
to conduct the business of Company, and Company has the ability to pay its debts
and obligations as such debts mature and does not intend to, or does not believe
that it will, incur debt beyond its ability to pay as such debts mature; and
(ii) any election of settlement method shall apply to all Warrants. At any time
prior to electing Cash Settlement, Company may, without the consent of Dealer,
amend this Confirmation by notice to Dealer to eliminate Company’s right to
elect Cash Settlement.

 

 

Electing Party:

Company

 

 

Settlement Method Election Date:

The third Scheduled Trading Day immediately preceding the first Expiration Date

 

 

Default Settlement Method:

Net Share Settlement

 

 

Net Share Settlement:

On the relevant Settlement Date, Company shall deliver to Dealer a number of
Shares equal to the Share Delivery Quantity for such Settlement Date to the
account specified hereto free of payment through the Clearance System.

 

 

Share Delivery Quantity:

For any Settlement Date, a number of Shares, as calculated by the Calculation
Agent, equal to the Net Share Settlement Amount for such Settlement Date divided
by the Settlement Price on the Valuation Date in respect of such Settlement
Date, rounded down to the nearest whole number plus any Fractional Share Amount;
provided that in no event shall the Share Delivery

 

4

--------------------------------------------------------------------------------

 

 

Quantity for any Settlement Date exceed the Maximum Number of Shares for such
Settlement Date.

 

 

Net Share Settlement Amount:

For any Settlement Date, an amount equal to the product of (i) the Number of
Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the
Strike Price Differential in respect of the relevant Valuation Date and
(iii) the Warrant Entitlement.

 

 

Strike Price Differential:

Strike Price Differential means in respect of each Valuation Date, an amount
equal to the greater of (a) the excess of the relevant Settlement Price over the
Strike Price and (b) zero.

 

 

Cash Settlement:

For any Exercise Date, the product of (i) the number of Warrants exercised or
deemed exercised on such Exercise Date, (ii) the Warrant Entitlement and
(iii) (A) the excess of the Settlement Price on the Valuation Date occurring on
such Exercise Date over the Strike Price (or, if there is no such excess, zero).

 

 

Settlement Price:

For any Valuation Date, the per Share volume-weighted average price as displayed
under the heading “Bloomberg VWAP” on Bloomberg page HA.UQ <equity> AQR (or any
successor thereto) (“VWAP”) in respect of the period from the scheduled opening
time of the Exchange to the Scheduled Closing Time on such Valuation Date (or if
such volume-weighted average price is unavailable, the market value of one Share
on such Valuation Date, as determined by the Calculation Agent). Notwithstanding
the foregoing, if (i) any Expiration Date is a Disrupted Day and (ii) the
Calculation Agent determines that such Expiration Date shall be an Expiration
Date for fewer than the Daily Number of Warrants, as described above, then the
Settlement Price for the relevant Valuation Date shall be the volume-weighted
average price per Share on such Valuation Date on the Exchange, as determined in
a good faith reasonable manner by the Calculation Agent based on such sources as
it deems appropriate using a volume-weighted methodology, for the portion of
such Valuation Date for which the Calculation Agent determines there is no
Market Disruption Event.

 

 

Settlement Dates:

As determined pursuant to Section 9.4 of the Equity Definitions, subject to
Section 9(l)(i) hereof.

 

 

Other Applicable Provisions:

The provisions of Sections 9.1(c), 9.8, 9.9, 9.11, 9.12 and 10.5 of the Equity
Definitions will be applicable, except that all references in such provisions to
“Physically-settled” shall be read as references to “Net Share Settled.” “Net
Share Settled” in relation to any Warrant means that Net Share Settlement is
applicable to that Warrant.

 

 

Representation and Agreement:

Notwithstanding Section 9.11 of the Equity Definitions, the parties acknowledge
that any Shares delivered to Dealer may be, upon delivery, subject to
restrictions and

 

5

--------------------------------------------------------------------------------

 

 

limitations arising from Company’s status as issuer of the Shares under
applicable securities laws.

 

 

3.             Additional Terms applicable to the Transaction.

 

 

 

Adjustments applicable to the Transaction:

 

 

 

Method of Adjustment:

Calculation Agent Adjustment; provided that the parties agree that open market
Share repurchases at prevailing market price or accelerated share repurchases,
forward contracts or similar transactions on customary terms (including without
limitation any discount to average VWAP prices) shall not be considered
Potential Adjustment Events.  For the avoidance of doubt, in making any
adjustments under the Equity Definitions, the Calculation Agent may make
adjustments, if any, to any one or more of the Strike Price, the Number of
Warrants, the Daily Number of Warrants and the Warrant Entitlement. 
Notwithstanding the foregoing, any cash dividends or distributions on the
Shares, whether or not extraordinary, shall be governed by Section 9(f) of this
Confirmation in lieu of Article 10 or Section 11.2(c) of the Equity Definitions.

 

 

Extraordinary Events applicable to the Transaction:

 

 

 

New Shares:

Section 12.1(i) of the Equity Definitions is hereby amended (a) by deleting the
text in clause (i) thereof in its entirety (including the word “and” following
clause (i)) and replacing it with the phrase “publicly quoted, traded or listed
(or whose related depositary receipts are publicly quoted, traded or listed) on
any of the New York Stock Exchange, The NASDAQ Global Select Market or The
NASDAQ Global Market or any other United States national securities exchange (or
their respective successors)” and (b) by inserting immediately prior to the
period the phrase “and (iii) of an entity or person organized under the laws of
the United States, any State thereof or the District of Columbia that also
becomes Company under the Transaction following such Merger Event or Tender
Offer”.

 

 

Consequence of Merger Events:

 

 

 

Merger Event:

Applicable; provided that if an event occurs that constitutes both a Merger
Event under Section 12.1(b) of the Equity Definitions and an Additional
Termination Event under Section 9(h)(ii)(B) of this Confirmation, then (i) if
such event does not result in Cancellation and Payment under Section 12.2 of the
Equity Definitions, Dealer may elect, in its commercially reasonable judgment,
whether the provisions of Section 12.1(b) of the Equity Definitions or
Section 9(h)(ii)(B) will apply, and (ii) otherwise, the provisions of
Section 9(h)(ii)(B) will apply.

 

 

Share-for-Share:

Modified Calculation Agent Adjustment

 

6

--------------------------------------------------------------------------------

 

Share-for-Other:

Cancellation and Payment (Calculation Agent Determination)

 

 

Share-for-Combined:

Cancellation and Payment (Calculation Agent Determination); provided that Dealer
may elect, in its commercially reasonable judgment, Component Adjustment
(Calculation Agent Determination).

 

 

Consequence of Tender Offers:

 

 

 

Tender Offer:

Applicable; provided that if an event occurs that constitutes both a Tender
Offer under Section 12.1(d) of the Equity Definitions and Additional Termination
Event under Section 9(h)(ii)(A) of this Confirmation, then (i) if such event
does not result in Cancellation and Payment under Section 12.3 of the Equity
Definitions, Dealer may elect, in its commercially reasonable judgment, whether
the provisions of Section 12.3 of the Equity Definitions or
Section 9(h)(ii)(A) will apply, and (ii) otherwise, the provisions of
Section 9(h)(ii)(A) will apply; provided further that for purposes of
Section 12.3(d) of the Equity Definitions, only in the case of a self-tender by
Company references in the definition of Tender Offer under the Equity
Definitions to 10% shall be replaced with 20%.

 

 

Share-for-Share:

Modified Calculation Agent Adjustment

 

 

Share-for-Other:

Modified Calculation Agent Adjustment

 

 

Share-for-Combined:

Modified Calculation Agent Adjustment

 

 

Nationalization, Insolvency or Delisting:

Cancellation and Payment (Calculation Agent Determination); provided that, in
addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it
will also constitute a Delisting if the Exchange is located in the United States
and the Shares are not immediately re-listed, re-traded or re-quoted on any of
the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ
Global Market (or their respective successors); if the Shares are immediately
re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The
NASDAQ Global Select Market or The NASDAQ Global Market (or their respective
successors), such exchange or quotation system shall thereafter be deemed to be
the Exchange.

 

 

Announcement Event:

If an Announcement Date occurs in respect of a Merger Event or Tender Offer
(such occurrence, an “Announcement Event”), then on the earliest of the
Expiration Date, Early Termination Date or other date of cancellation (the
“Announcement Event Adjustment Date”) in respect of each Warrant, the
Calculation Agent will determine the economic effect on such Warrant of the
Announcement Event (regardless of whether the Announcement Event actually
results in a Merger Event or Tender Offer, and taking into account such factors
as the Calculation Agent may determine, including, without limitation, changes
in volatility, expected

 

7

--------------------------------------------------------------------------------

 

 

dividends, stock loan rate or liquidity relevant to the Shares or the
Transaction whether prior to or after the Announcement Event or for any period
of time, including, without limitation, the period from the Announcement Event
to the relevant Announcement Event Adjustment Date).  If the Calculation Agent
determines that such economic effect on any Warrant is material, then on the
Announcement Event Adjustment Date for such Warrant, the Calculation Agent may
make such adjustment to the exercise, settlement, payment or any other terms of
such Warrant as the Calculation Agent determines appropriate to account for such
economic effect, which adjustment shall be effective immediately prior to the
exercise, termination or cancellation of such Warrant, as the case may be.

 

 

Announcement Date:

The definition of “Announcement Date” in Section 12.1 of the Equity Definitions
is hereby amended by (i) replacing the words “a firm” with the word “any” in the
second and fourth lines thereof, (ii) replacing the word “leads to the” with the
words “, if completed, would lead to a” in the third and the fifth lines
thereof, (iii) replacing the words “voting shares” with the word “Shares” in the
fifth line thereof, and (iv) inserting the words “by any entity” after the word
“announcement” in the second and the fourth lines thereof.

 

 

Additional Disruption Events:

 

 

 

Change in Law:

Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is
hereby amended by (i) replacing the phrase “the interpretation” in the third
line thereof with the phrase “or announcement or statement of the formal or
informal interpretation,” and (ii) immediately following the word “Transaction”
in clause (X) thereof, adding the phrase “in the manner contemplated by Hedging
Party on the Trade Date”; provided further that Section 12.9(a)(ii)(X) of the
Equity Definitions is hereby amended by replacing the word “Shares” with the
phrase “Hedge Positions.”

 

 

Failure to Deliver:

Not Applicable

 

 

Insolvency Filing:

Applicable

 

 

Hedging Disruption:

Applicable; provided that:

 

 

 

(i)

Section 12.9(a)(v) of the Equity Definitions is hereby amended by inserting the
following two phrases at the end of such Section:

 

 

 

 

 

“For the avoidance of doubt, the term “equity price risk” shall be deemed to
include, but shall not be limited to, stock price and volatility risk. And, for
the further avoidance of doubt, any such transactions or assets referred to in
phrases (A) or (B) above must be available on commercially reasonable pricing
terms.”; and

 

8

--------------------------------------------------------------------------------

 

 

(ii)

Section 12.9(b)(iii) of the Equity Definitions is hereby amended by inserting in
the third line thereof,  after the words “to terminate the Transaction”, the
words “or a portion of the Transaction affected by such Hedging Disruption”.

 

 

Increased Cost of Hedging:

Applicable

 

 

Loss of Stock Borrow:

Applicable

 

 

Maximum Stock Loan Rate:

200 basis points

 

 

Increased Cost of Stock Borrow:

Applicable

 

 

Initial Stock Loan Rate:

50 basis points

 

 

Hedging Party:

For all applicable Additional Disruption Events, Dealer.

 

 

Determining Party:

For all applicable Extraordinary Events, Dealer.

 

 

Non-Reliance:

Applicable

 

 

Agreements and Acknowledgments

 

Regarding Hedging Activities:

Applicable

 

 

Additional Acknowledgments:

Applicable

 

 

4.             Calculation Agent.

Dealer; provided that all determinations made by the Calculation Agent shall be
made in good faith and in a commercially reasonable manner. Following any
calculation by the Calculation Agent hereunder, upon a prior written request by
Company, the Calculation Agent will provide to Company by email to the email
address provided by Company in such prior written request a report (in a
commonly used file format for the storage and manipulation of financial data)
displaying in reasonable detail the basis for such calculation; provided,
however, that in no event will Dealer be obligated to share with Company any
proprietary models used by it or any other party.

 

5.             Account Details.

 

(a)

Account for payments to Company:

 

 

 

To be provided by Company.

 

 

 

Account for delivery of Shares from Company:

 

 

 

To be provided by Company.

 

 

(b)

Account for payments to Dealer:

 

 

 

Bank:

JPMorgan Chase Bank, N.A.

 

ABA#:

021000021

 

Acct No.:

099997979

 

Beneficiary:

JPMorgan Chase Bank, N.A. New York

 

Ref:

Derivatives

 

9

--------------------------------------------------------------------------------

 

 

Account for delivery of Shares to Dealer:

 

 

 

DTC 0060

 

6.             Offices.

 

 

(a)

The Office of Company for the Transaction is: Inapplicable, Company is not a
Multibranch Party.

 

 

(b)

The Office of Dealer for the Transaction is: London

 

 

 

JPMorgan Chase Bank, National Association

 

London Branch

 

P.O. Box 161

 

60 Victoria Embankment

 

London EC4Y 0JP

 

England

 

 

7.             Notices.

 

 

(a)

Address for notices or communications to Company:

 

 

 

Hawaiian Holdings, Inc.

 

3375 Koapaka Street, Suite G-350

 

Honolulu, Hawaii 96819

 

Attention:

Treasurer

 

Telephone No.:

(808) 835-3700

 

Facsimile No.:

(808) 835-3690

 

 

 

Address for notices or communications to Dealer:

 

 

 

JPMorgan Chase Bank, National Association

 

4 New York Plaza, Floor 18

 

New York, NY 10004-2413

 

Attention:

Jason M. Wood

 

Telephone No.:

(415) 315-8783

 

Facsimile No.:

(415) 226-0616

 

8.             Representations and Warranties of Company.

 

Company hereby represents and warrants to Dealer on the date hereof, on and as
of the Premium Payment Date and, in the case of the representations in
Section 8(f), at all times until termination of the Transaction, that:

 

(a)           Company is duly organized and validly existing and in good
standing under the laws of its jurisdiction of incorporation.

 

(b)           Company has the corporate power and authority to execute and
deliver this Confirmation and to perform its obligations hereunder; and all
action required to be taken for the due and proper authorization, execution and
delivery by it of this Confirmation and the consummation by it of the
transactions contemplated hereby has been duly and validly taken.

 

(c)           This Confirmation has been duly authorized by Company and, when
duly executed and delivered in accordance with its terms by each of the parties
hereto, will constitute a valid and legally binding agreement of Company
enforceable against Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors’ rights generally or by equitable principles relating
to enforceability.

 

10

--------------------------------------------------------------------------------

 

(d)           The execution, delivery and performance by Company of this
Confirmation and the consummation of the transactions contemplated hereby will
not (i) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which Company or any
of its subsidiaries is a party or by which Company or any of its subsidiaries is
bound or to which any of the property or assets of Company or any of its
subsidiaries is subject, (ii) result in any violation of the provisions of the
charter or by-laws or similar organizational documents of Company or any of its
subsidiaries or (iii) result in the violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority applicable to Company or any of its subsidiaries, except
for such conflicts, breaches or violations in clauses (i) and (iii) above that
would not have a material adverse effect on Company’s ability to perform its
obligations under this Confirmation (“Material Adverse Effect”); provided that,
in the case of clause (1) above, such representation and warranty is based on
the assumption that any cash payment by Company upon any termination,
cancellation or early unwind of the Transaction shall, at the time the cash
payment is made, be made in compliance with the terms and conditions of that
Amended and Restated Credit Agreement, entered into as of December 10, 2010, by
and among the lenders party thereto, Wells Fargo Capital Finance, Inc., as
agent, Company and Hawaiian Airlines, Inc., as amended by that certain Waiver,
Extension and Amendment under Credit Agreement, dated as of January 24, 2011,
and that certain Amendment Number Two to Amended and Restated Credit Agreement,
dated as of March 16, 2011.

 

(e)           No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory
authority is required for the execution, delivery and performance by Company of
this Confirmation and the consummation of the transactions contemplated hereby,
except for (i) such consents, approvals, authorizations, orders and
registrations or qualifications (“Consents”) as may be required under applicable
state securities laws, (ii) as may be required and have been or will be obtained
under the rules of The NASDAQ Stock Market in connection with the issuance of
the Warrant Shares (as defined below) by Company, (iii) as contemplated by
Section 9(l) of this Confirmation or (iv) where the failure to obtain or make
any such Consents would not reasonably be expected to have a Material Adverse
Effect.

 

(f)            A number of Shares equal to the Maximum Number of Shares (as
defined below) (the “Warrant Shares”) have been reserved for issuance by all
required corporate action of Company.  The Warrant Shares reserved for issuance
upon exercise of the Warrants have been duly authorized and reserved and, when
issued upon exercise of the Warrants in accordance with the terms of the
Warrants, will be validly issued, fully paid and non-assessable, and the
issuance of the Warrant Shares will not be subject to any preemptive or similar
rights.

 

(g)           Company is not and, after giving effect to the transactions
contemplated hereby, will not be required to register as an “investment company”
or an entity “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations of the
Securities and Exchange Commission thereunder.

 

(h)           Company is an “eligible contract participant” (as such term is
defined in Section 1a(12) of the Commodity Exchange Act, as amended, other than
a person that is an eligible contract participant under Section 1a(12)(C) of the
Commodity Exchange Act).

 

(i)            Company and each of its affiliates is not, on the date hereof, in
possession of any material non-public information with respect to Company or the
Shares.

 

11

--------------------------------------------------------------------------------

 

9.             Other Provisions.

 

(a)           Opinions.  Company shall deliver to Dealer an opinion of counsel,
dated as of the Trade Date, with respect to due incorporation, existence and
good standing of Company in Delaware, the due authorization, execution and
delivery of this Confirmation, the matters set forth in Section 8(f) above, and
the absence of conflict of the execution, delivery and performance of this
Confirmation with any material agreement required to be filed as an exhibit to
Company’s Annual Report on Form 10-K and Company’s constituent documents.

 

(b)           Repurchase Notices.  Company shall, on any day on which Company
effects any repurchase of Shares, promptly give Dealer a written notice of such
repurchase (a “Repurchase Notice”) on the Business Day following the date of
such repurchase if following such repurchase, the number of outstanding Shares
on such day, subject to any adjustments provided herein, is (i) less than 50
million (in the case of the first such notice) or (ii) thereafter more than 1
million less than the number of Shares included in the immediately preceding
Repurchase Notice.  Company agrees to indemnify and hold harmless Dealer and its
affiliates and their respective officers, directors, employees, affiliates,
advisors, agents and controlling persons (each, an “Indemnified Person”) from
and against any and all losses (including losses relating to Dealer’s hedging
activities as a consequence of becoming, or of the risk of becoming, a
Section 16 “insider”, including without limitation, any forbearance from hedging
activities or cessation of hedging activities and any losses in connection
therewith with respect to the Transaction), claims, damages, judgments,
liabilities and expenses (including reasonable attorney’s fees), joint or
several, which an Indemnified Person actually may become subject to, as a result
of Company’s failure to provide Dealer with a Repurchase Notice on the day and
in the manner specified in this paragraph.  If any suit, action, proceeding
(including any governmental or regulatory investigation), claim or demand shall
be brought or asserted against the Indemnified Person, such Indemnified Person
shall promptly notify Company in writing, and Company, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others Company
may designate in such proceeding and shall pay the reasonable out-of-pocket fees
and expenses of such counsel related to such proceeding.  Company shall not be
liable for any settlement of any proceeding effected without its written
consent, such consent not to be unreasonably withheld, but if settled with such
consent or if there be a final judgment for the plaintiff, Company agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment.  Company shall not, without the prior
written consent of the Indemnified Person, effect any settlement of any pending
or threatened proceeding in respect of which any Indemnified Person is a party
and indemnity has been sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding on terms
reasonably satisfactory to such Indemnified Person.  If the indemnification
provided for in this paragraph is unavailable to an Indemnified Person or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then Company under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities.  The remedies provided for in this paragraph are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
Indemnified Person at law or in equity.  The indemnity and contribution
agreements contained in this paragraph shall remain operative and in full force
and effect regardless of the termination of the Transaction.

 

(c)           Regulation M.  Company is not on the Trade Date engaged in a
distribution, as such term is used in Regulation M under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), of any equity or equity-linked
securities of Company, other than (i) a distribution meeting the requirements of
the exception set forth in Rules 101(a), 101(b)(10), 102(a) and 102(b)(7) of
Regulation M (the “Exclusions”).  Company shall not, until the second Scheduled
Trading Day immediately following the Effective Date, engage in any such
distribution (subject to the Exclusions) other than the distribution of USD
75,000,000 of 5.00% Convertible Senior Notes due 2016.

 

12

--------------------------------------------------------------------------------

 

(d)           No Manipulation.  Company is not entering into the Transaction to
create actual or apparent trading activity in the Shares (or any security
convertible into or exchangeable for the Shares) or to manipulate the price of
the Shares (or any security convertible into or exchangeable for the Shares) or
otherwise in violation of the Exchange Act.

 

(e)           Transfer or Assignment.  Company may not transfer any of its
rights or obligations under the Transaction without the prior written consent of
Dealer.  Dealer may, without Company’s consent, transfer or assign all or any
part of its rights or obligations under the Transaction at any time to any third
party; provided that any such transfer or assignment shall be subject to the
conditions that (I) following such transfer or assignment, the terms and
conditions of the Agreement as so transferred or assigned (the “Transferred
Agreement”) shall be substantially the same as the terms and conditions of the
Agreement immediately prior to such transfer or assignment, (II) Company will
not be required to pay to the transferee an amount in respect of an
Indemnifiable Tax under Section 2(d)(i)(4) of the Transferred Agreement greater
than the amount in respect of which Company would have been required to pay to
Dealer under Section 2(d)(i)(4) in the absence of the transfer, (III) Company
will not receive any payment under the Transferred Agreement from which an
amount is required to be withheld or deducted for or on account of a Tax with
respect to which no additional amount is required to be paid by the transferee
under Section 2(d)(i)(4) of the Transferred Agreement (other than by reason of
Section 2(d)(i)(4)(A) or (B) thereof), (IV) neither an Event of Default with
respect to which Dealer is the Defaulting Party nor a Termination Event with
respect to which Dealer is the sole Affected Party has occurred and is
continuing at the time of the transfer, and neither an Event of Default nor a
Termination Event shall occur as a result of the transfer, (V) each of Dealer
and the transferee is a dealer in “notional principal contracts” within the
meaning of Section 1.446-3(c)(4)(iii) of the U.S. Treasury Regulations and in
other derivatives, and (VI) Dealer has used its good faith efforts to provide
prior notice to Company of such transfer and the proposed date of such transfer,
and shall provide written notice to Company reasonably promptly following such
transfer.  In addition, if at any time (A) the Section 16 Percentage exceeds
7.5%, (B) the Warrant Equity Percentage exceeds 14.5%, or (C) the Share Amount
exceeds the Applicable Share Limit (if any applies) (any such condition
described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer
may, without Company’s consent, transfer or assign all or any part of its rights
or obligations under the Transaction to any third party who is a dealer in
“notional principal contracts” within the meaning of
Section 1.446-3(c)(4)(iii) of the U.S. Treasury Regulations and in other
derivatives. If at any time an Excess Ownership Positions exists, Dealer may
designate any Exchange Business Day as an Early Termination Date with respect to
all or a portion of the Transaction (the “Terminated Portion”) such that
following such termination no Excess Ownership Position exists; provided that
Dealer may only designate an Early Termination Date pursuant to this
Section 9(e) if Dealer has used its good faith efforts to notify Company of the
existence of such Excess Ownership Position, and Dealer is unable, acting in
good faith and after using its commercially reasonable efforts, to effect a
transfer or assignment of Warrants to a third party in accordance with this
Section 9(e) on pricing terms reasonably acceptable to Dealer and within a time
period reasonably acceptable to Dealer such that no Excess Ownership Position
exists.  In the event that Dealer so designates an Early Termination Date with
respect to a Terminated Portion, a payment shall be made pursuant to Section 6
of the Agreement as if (1) an Early Termination Date had been designated in
respect of a Transaction having terms identical to the Transaction and a Number
of Warrants equal to the number of Warrants underlying the Terminated Portion,
(2) Company were the sole Affected Party with respect to such partial
termination and (3) the Terminated Portion were the sole Affected Transaction
(and, for the avoidance of doubt, the provisions of Section 9(k) shall apply to
any amount that is payable by Company to Dealer pursuant to this sentence as if
Company was not the Affected Party).  The “Section 16 Percentage” as of any day
is the fraction, expressed as a percentage, (A) the numerator of which is the
number of Shares that Dealer and each person subject to aggregation of Shares
with Dealer under Section 13 or Section 16 of the Exchange Act and
rules promulgated thereunder directly or indirectly beneficially own (as defined
under Section 13 or Section 16 of the Exchange Act and rules promulgated
thereunder) and (B) the denominator of which is the number of Shares
outstanding.  The “Warrant Equity Percentage” as of any day is the fraction,
expressed as a percentage, (A) the numerator of which is the sum of (1) the
product

 

13

--------------------------------------------------------------------------------

 

of the Number of Warrants and the Warrant Entitlement and (2) the aggregate
number of Shares underlying any other warrants purchased by Dealer from Company,
and (B) the denominator of which is the number of Shares outstanding.  The
“Share Amount” as of any day is the number of Shares that Dealer and any person
whose ownership position would be aggregated with that of Dealer (Dealer or any
such person, a “Dealer Person”) under any insurance or other law, rule,
regulation, regulatory order or organizational documents or contracts of Company
that are, in each case, applicable to ownership of Shares (“Applicable
Restrictions”), owns, beneficially owns, constructively owns, controls, holds
the power to vote or otherwise meets a relevant definition of ownership under
any Applicable Restriction, as determined by Dealer in its reasonable
discretion.  The “Applicable Share Limit” means a number of Shares equal to
(A) the minimum number of Shares that could give rise to reporting or
registration obligations or other requirements (including obtaining prior
approval from any person or entity) of a Dealer Person minus (B) 1% of the
number of Shares outstanding.  Notwithstanding any other provision in this
Confirmation to the contrary requiring or allowing Dealer to purchase, sell,
receive or deliver any Shares or other securities, or make or receive any
payment in cash, to or from Company, Dealer may designate any of its affiliates
to purchase, sell, receive or deliver such Shares or other securities, or make
or receive such payment in cash, and otherwise to perform Dealer’s obligations
in respect of the Transaction and any such designee may assume such
obligations.  Dealer shall be discharged of its obligations to Company only to
the extent of any such performance.

 

(f)            Dividends.  If at any time during the period from and including
the Effective Date, to and including the last Expiration Date, an ex-dividend
date for a cash dividend occurs with respect to the Shares (an “Ex-Dividend
Date”), then the Calculation Agent will adjust any of the Strike Price, Number
of Warrants and/or Daily Number of Warrants to preserve the fair value of the
Warrants to Dealer after taking into account such dividend.

 

(g)           Role of Agent.  Each party agrees and acknowledges that (i) J.P.
Morgan Securities LLC, an affiliate of JPMorgan (“JPMS”), has acted solely as
agent and not as principal with respect to the Transaction and (ii) JPMS has no
obligation or liability, by way of guaranty, endorsement or otherwise, in any
manner in respect of the Transaction (including, if applicable, in respect of
the settlement thereof). Each party agrees it will look solely to the other
party (or any guarantor in respect thereof) for performance of such other
party’s obligations under the Transaction.

 

(h)           Additional Provisions.

 

(i)            Amendments to the Equity Definitions:

 

(A)          With respect to any Potential Adjustment Event, Section 11.2(a) of
the Equity Definitions is hereby amended by deleting the words “a diluting or
concentrative” and replacing them with the words “a material”; and adding the
phrase “or Warrants” at the end of the sentence.

 

(B)           Section 11.2(c) of the Equity Definitions is hereby amended by
(x) replacing the words “a diluting or concentrative” with “a material”,
(y) adding the phrase “or Warrants” after the words “the relevant Shares” in the
same sentence and (z) deleting the phrase “(provided that no adjustments will be
made to account solely for changes in volatility, expected dividends, stock loan
rate or liquidity relative to the relevant Shares)” and replacing it with the
phrase “(provided that, solely in the case of Sections 11.2(e)(i), (ii)(A),
(iv) and (v), no adjustments will be made to account solely for changes in
volatility, expected dividends, stock loan rate or liquidity relative to the
relevant Shares but, for the avoidance of doubt, solely in the case of Sections
11.2(e)(ii)(B) through (D), (iii), (vi) and (vii), adjustments may be made to
account solely for changes in volatility, expected dividends, stock loan rate or
liquidity relative to the relevant Shares).”

 

14

--------------------------------------------------------------------------------

 

(C)           Section 11.2(e)(vii) of the Equity Definitions is hereby amended
by adding the phrase “or Warrants” at the end of the sentence.

 

(D)          Section 12.6(a)(ii) of the Equity Definitions is hereby amended by
(1) deleting from the fourth line thereof the word “or” after the word
“official” and inserting a comma therefor, and (2) deleting the semi-colon at
the end of subsection (B) thereof and inserting the following words therefor “or
(C) at Dealer’s option, the occurrence of any of the events specified in Section
5(a)(vii) (1) through (9) of the ISDA Master Agreement with respect to that
Issuer.”

 

(E)           Section 12.9(b)(iv) of the Equity Definitions is hereby amended
by:

 

(x)            deleting (1) subsection (A) in its entirety, (2) the phrase “or
(B)” following subsection (A) and (3) the phrase “in each case” in subsection
(B); and

 

(y)           deleting the phrase “neither the Non-Hedging Party nor the Lending
Party lends Shares in the amount of the Hedging Shares or” in the penultimate
sentence.

 

(F)           Section 12.9(b)(v) of the Equity Definitions is hereby amended by:

 

(x)            adding the word “or” immediately before subsection “(B)” and
deleting the comma at the end of subsection (A); and

 

(y)           (1) deleting subsection (C) in its entirety, (2) deleting the word
“or” immediately preceding subsection (C) and (3) deleting the penultimate
sentence in its entirety and replacing it with the sentence “The Hedging Party
will determine the Cancellation Amount payable by one party to the other.”

 

(ii)           Notwithstanding anything to the contrary in this Confirmation,
upon the occurrence of one of the following events, with respect to the
Transaction, (1) Dealer shall have the right to designate such event an
Additional Termination Event and designate an Early Termination Date pursuant to
Section 6(b) of the Agreement, (2) Company shall be deemed the sole Affected
Party with respect to such Additional Termination Event and (3) the Transaction
shall be deemed the sole Affected Transaction:

 

(A)          A “person” or “group” (as those terms are used in Sections
13(d) and 14(d) of the Exchange Act), other than Company, its subsidiaries or
its and their employee benefit plans files a Schedule 13D or a Schedule TO, or
any successor schedule, form or report under the Exchange Act disclosing, or
Company otherwise becomes aware, that such person or group is or has become the
“beneficial owner” (as that term is used in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 50% or more of the total outstanding voting power of
all classes of the capital stock of Company entitled to vote generally in the
election of its directors.

 

(B)           There occurs a sale, transfer, lease, conveyance or other
disposition of all or substantially all of Company’s consolidated property or
assets to any “person” or “group” (as those terms are used in Sections 13(d) and
14(d) of the Exchange Act), including any group acting for the purpose of
acquiring, holding, voting or disposing of securities within the meaning of
Rule 13d-5(b)(1) under the Exchange Act;

 

(C)           Company consolidates with, or merges with or into, another person
or any person consolidates with, or merges with or into, Company, unless either
(I) the

 

15

--------------------------------------------------------------------------------

 

persons that “beneficially owned,” directly or indirectly, the shares of
Company’s voting stock immediately prior to such consolidation or merger
“beneficially own,” directly or indirectly, immediately after such consolidation
or merger, shares of the surviving or continuing corporation’s voting stock
representing at least a majority of the total outstanding voting power of all
outstanding classes of voting stock of the surviving or continuing corporation
in substantially the same proportion as such ownership immediately prior to such
consolidation or merger; or (II) at least 90% of the consideration (other than
cash payments for fractional shares or pursuant to statutory appraisal rights)
in such consolidation or merger consists of common stock or depositary receipts
in respect of common stock listed and traded or quoted on the New York Stock
Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of
their respective successors) (or which will be so listed and traded or quoted
when issued or exchanged in connection with such consolidation or merger).

 

(D)          Any of the following persons cease for any reason to constitute a
majority of Company’s board of directors: (I) individuals who on the Effective
Date constituted Company’s board of directors; and (II) any new directors whose
election to Company’s board of directors or whose nomination for election by
Company’s shareholders was approved by at least a majority of Company’s
directors then still in office, or by a nominating committee thereof consisting
of directors, either who were directors on the Effective Date or whose election
or nomination for election was previously so approved.

 

(E)           Company is liquidated or dissolved or holders of its capital stock
approve any plan or proposal for its liquidation or dissolution.

 

(F)           Dealer, despite using commercially reasonable efforts, is unable
or reasonably determines, based on the advice of legal counsel, that it is
impractical or illegal, to hedge its exposure with respect to the Transaction in
the public market without registration under the Securities Act or as a result
of any legal, regulatory or self-regulatory requirements or related policies and
procedures (whether or not such requirements, policies or procedures are imposed
by law or have been voluntarily adopted by Dealer).

 

(G)           If on any day during the period from and including the Trade Date,
to and including the final Expiration Date, (I) the Threshold Unwind Shares (as
defined below) as of such day exceeds a number of Shares equal to 66% of the
Maximum Number of Shares, or (II) Company makes a public announcement of any
transaction or event that, in the reasonable opinion of Dealer would, upon
consummation of such transaction or upon the occurrence of such event, as
applicable, and after giving effect to any applicable adjustments hereunder,
cause the Threshold Unwind Shares immediately following the consummation of such
transaction or the occurrence of such event to exceed a number of Shares equal
to 66% of the Maximum Number of Shares.  The “Threshold Unwind Shares” as of any
day is a number of Shares equal to (1) the amount that would be payable pursuant
to Section 6 of the Agreement (determined as of such day as if an Early
Termination Date had been designated in respect of the Transaction and as if
Company were the sole Affected Party and the Transaction were the sole Affected
Transaction), divided by (2) the Settlement Price (determined as if such day
were a Valuation Date).

 

(i)                                  [Reserved]

 

(j)            No Collateral or Setoff.  Notwithstanding any provision of the
Agreement or any other agreement between the parties to the contrary, the
obligations of Company hereunder are not secured by any collateral.  Obligations
under the Transaction shall not be set off by Company against any other
obligations of the parties, whether arising under the Agreement, this
Confirmation, under any other agreement between the parties hereto, by operation
of law or otherwise.  Any provision in the Agreement with respect to the
satisfaction of Company’s payment obligations to the extent of

 

16

--------------------------------------------------------------------------------

 

Dealer’s payment obligations to Company in the same currency and in the same
Transaction (including, without limitation Section 2(c) thereof) shall not apply
to Company and, for the avoidance of doubt, Company shall fully satisfy such
payment obligations notwithstanding any payment obligation to Company by Dealer
in the same currency and in the same Transaction. In calculating any amounts
under Section 6(e) of the Agreement, notwithstanding anything to the contrary in
the Agreement, (1) separate amounts shall be calculated as set forth in such
Section 6(e) with respect to (a) the Transaction and (b) all other Transactions,
and (2) such separate amounts shall be payable pursuant to Section 6(d)(ii) of
the Agreement.  For the avoidance of doubt and notwithstanding anything to the
contrary provided in this Section 9(i), in the event of bankruptcy or
liquidation of either Company or Dealer, neither party shall have the right to
set off any obligation that it may have to the other party under the Transaction
against any obligation such other party may have to it, whether arising under
the Agreement, this Confirmation or any other agreement between the parties
hereto, by operation of law or otherwise.

 

(k)           Alternative Calculations and Payment on Early Termination and on
Certain Extraordinary Events.

 

(i)            If, in respect of the Transaction, an amount is payable by
Company to Dealer, (A) pursuant to Section 12.7 or Section 12.9 of the Equity
Definitions or (B) pursuant to Section 6(d)(ii) of the Agreement (any such
amount, a “Payment Obligation”), Company shall have the right, in its sole
discretion, to satisfy the Payment Obligation by the Share Termination
Alternative (as defined below) (except that Company shall not have the right to
make such an election in the event of (I) a Nationalization, Insolvency, Merger
Event or Tender Offer in which the consideration to be paid to holders of Shares
consists solely of cash, (II) a Merger Event or Tender Offer that is within
Company’s control, or (III) an Event of Default in which Company is the
Defaulting Party or a Termination Event in which Company is the Affected Party,
other than an Event of Default of the type described in Section 5(a)(iii), (v),
(vi), (vii) or (viii) of the Agreement or a Termination Event of the type
described in Section 5(b) of the Agreement, in each case that resulted from an
event or events outside Company’s control (collectively, the “Share Termination
Exceptions”)) and shall give irrevocable telephonic notice to Dealer, confirmed
in writing within one Scheduled Trading Day, no later than 12:00 p.m. (New York
City time) on the Merger Date, Tender Offer Date, Announcement Date (in the case
of a Nationalization, Insolvency or Delisting), Early Termination Date or date
of cancellation, as applicable; provided that if Company does not validly elect
to satisfy the Payment Obligation by the Share Termination Alternative, Dealer
shall have the right to require Company to satisfy its Payment Obligation by the
Share Termination Alternative.

 

Share Termination Alternative:

If the Share Termination Alternative is applicable in respect of any Payment
Obligation, Company shall deliver to Dealer the Share Termination Delivery
Property on the date (the “Share Termination Payment Date”) on which the Payment
Obligation would otherwise be due pursuant to Section 12.7 or Section 12.9 of
the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable,
subject to Section 9(l)(i) below, in satisfaction, subject to
Section 9(l)(ii) below, of the Payment Obligation in the manner reasonably
requested by Dealer free of payment.

 

 

Share Termination Delivery Property:

A number of Share Termination Delivery Units, as calculated by the Calculation
Agent, equal to the Payment Obligation divided by the Share Termination Unit
Price. The Calculation Agent shall

 

17

--------------------------------------------------------------------------------

 

 

adjust the amount of Share Termination Delivery Property by replacing any
fractional portion of a security therein with an amount of cash equal to the
value of such fractional security based on the values used to calculate the
Share Termination Unit Price.

 

 

Share Termination Unit Price:

The value to Dealer of property contained in one Share Termination Delivery Unit
on the date such Share Termination Delivery Units are to be delivered as Share
Termination Delivery Property, as determined by the Calculation Agent in its
discretion by commercially reasonable means. The Calculation Agent shall notify
Company of such Share Termination Unit Price at the time of notification of the
Payment Obligation. In the case of a Private Placement of Share Termination
Delivery Units that are Restricted Shares (as defined below), as set forth in
Section 9(l)(i) below, the Share Termination Unit Price shall be determined by
the discounted price applicable to such Share Termination Delivery Units. In the
case of a Registration Settlement of Share Termination Delivery Units that are
Restricted Shares (as defined below) as set forth in Section 9(l)(ii) below, the
Share Termination Unit Price shall be the Settlement Price on the Merger Date,
the Tender Offer Date, the Announcement Date (in the case of a
Nationalization, Insolvency or Delisting), the date of cancellation or the Early
Termination Date, as applicable.

 

 

Share Termination Delivery Unit:

In the case of a Termination Event, Event of Default Additional Disruption Event
or Delisting, one Share or, in the case of Nationalization, Insolvency, Tender
Offer or Merger Event, a unit consisting of the number or amount of each type of
property received by a holder of one Share (without consideration of any
requirement to pay cash or other consideration in lieu of fractional amounts of
any securities) in such Nationalization, Insolvency, Tender Offer or Merger
Event. If such Nationalization, Insolvency, Tender Offer or Merger Event
involves a choice of consideration to be received by holders, such holder shall
be deemed to have elected to receive the maximum possible amount of cash.

 

 

Failure to Deliver:

Inapplicable

 

 

Other applicable provisions:

If Share Termination Alternative is applicable, the provisions of Sections 9.8,
9.9, 9.11, 9.12 and 10.5 (as modified above) of the Equity Definitions will be
applicable, except that all references in such provisions to
“Physically-settled” shall be read as references to “Share Termination Settled”
and all references to “Shares” shall be read as references to “Share Termination
Delivery Units”. “Share Termination Settled” in relation to the Transaction

 

18

--------------------------------------------------------------------------------

 

 

means that the Share Termination Alternative is applicable to the Transaction.

 

(ii)           Notwithstanding anything to the contrary in this Confirmation,
any Payment Obligation under this Confirmation shall, for all purposes, be
calculated as if the Maximum Number of Shares were equal to two times the Number
of Shares (without regard to the limitations on adjustment set forth in the
second paragraph opposite the caption “Maximum Number of Shares” in Section 2)
but any deliveries under Section 9(j)(i) shall be limited to the Maximum Number
of Shares as defined in Section 2 hereof.

 

(iii)          Notwithstanding anything to the contrary in this Confirmation,
if, in respect of the Transaction, an amount (a “Cash Payment Amount”) is
payable by Company to Dealer, (A) pursuant to Section 12.7 or Section 12.9 of
the Equity Definitions or (B) pursuant to Section 6(d)(ii) of the Agreement, in
each case, pursuant to the Share Termination Exceptions, Dealer shall have the
right, but not the obligation, to elect for the provisions set forth in
Section 9(k)(i) and 9(k)(ii) to apply to such Cash Payment Amount as if (x) it
were a Payment Obligation and (y) Dealer elected to require Company to satisfy
its Payment Obligation by the Share Termination Alternative pursuant to the
proviso in Section 9(k)(i).

 

(l)            Registration/Private Placement Procedures.  If, in the reasonable
opinion of Dealer, based on the advice of legal counsel, following any delivery
of Shares or Share Termination Delivery Property to Dealer hereunder, such
Shares or Share Termination Delivery Property would be in the hands of Dealer
subject to any applicable restrictions with respect to any registration or
qualification requirement or prospectus delivery requirement for such Shares or
Share Termination Delivery Property pursuant to any applicable federal or state
securities law (including, without limitation, any such requirement arising
under Section 5 of the Securities Act as a result of such Shares or Share
Termination Delivery Property being “restricted securities”, as such term is
defined in Rule 144 under the Securities Act, or as a result of the sale of such
Shares or Share Termination Delivery Property being subject to paragraph (c) of
Rule 145 under the Securities Act) (such Shares or Share Termination Delivery
Property, “Restricted Shares”), then delivery of such Restricted Shares shall be
effected pursuant to either clause (i) or (ii) below at the election of Company,
unless Dealer waives the need for registration/private placement procedures set
forth in (i) and (ii) below.  Notwithstanding the foregoing, solely in respect
of any Daily Number of Warrants exercised or deemed exercised on any Expiration
Date, Company shall elect, prior to the first Settlement Date for the First
Expiration Date, a Private Placement Settlement or Registration Settlement for
all deliveries of Restricted Shares for all such Expiration Dates which election
shall be applicable to all Settlement Dates for such Warrants and the procedures
in clause (i) or clause (ii) below shall apply for all such delivered Restricted
Shares on an aggregate basis commencing after the final Settlement Date for such
Warrants.  The Calculation Agent shall in good faith make commercially
reasonable adjustments to settlement terms and provisions under this
Confirmation to reflect a single Private Placement or Registration Settlement
for such aggregate Restricted Shares delivered hereunder.

 

(i)            If Company elects to settle the Transaction pursuant to this
clause (i) (a “Private Placement Settlement”), then delivery of Restricted
Shares by Company shall be effected in customary private placement procedures
with respect to such Restricted Shares reasonably acceptable to Dealer; provided
that Company may not elect a Private Placement Settlement if, on the date of its
election, it has taken, or caused to be taken, any action that would make
unavailable either the exemption pursuant to Section 4(2) of the Securities Act
for the sale by Company to Dealer (or any affiliate designated by Dealer) of the
Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of
the Securities Act for resales of the Restricted Shares by Dealer (or any such
affiliate of Dealer).  The Private Placement Settlement of such Restricted
Shares shall include customary representations, covenants, blue sky, if any, and
other governmental filings and/or registrations, indemnities to Dealer, due
diligence rights (for Dealer or any

 

19

--------------------------------------------------------------------------------

 

designated buyer of the Restricted Shares by Dealer), opinions and certificates,
and such other documentation as is customary for private placement agreements of
companies of comparable size, maturity and line of business, all reasonably
acceptable to Dealer.  In the case of a Private Placement Settlement, Dealer
shall, subject to the execution by such recipients of customary confidentiality
agreements acceptable to Company determine the appropriate discount to the Share
Termination Unit Price (in the case of settlement of Share Termination Delivery
Units pursuant to Section 9(k) above) or any Settlement Price (in the case of
settlement of Shares pursuant to Section 2 above) applicable to such Restricted
Shares in a commercially reasonable manner and appropriately adjust the number
of such Restricted Shares to be delivered to Dealer hereunder.  Notwithstanding
the Agreement or this Confirmation, the date of delivery of such Restricted
Shares shall be the Exchange Business Day following notice by Dealer to Company,
of such applicable discount and the number of Restricted Shares to be delivered
pursuant to this clause (i).  For the avoidance of doubt, delivery of Restricted
Shares shall be due as set forth in the previous sentence and not be due on the
Share Termination Payment Date (in the case of settlement of Share Termination
Delivery Units pursuant to Section 9(k) above) or on the Settlement Date for
such Restricted Shares (in the case of settlement in Shares pursuant to
Section 2 above).

 

(ii)           If Company elects to settle the Transaction pursuant to this
clause (ii) (a “Registration Settlement”), then Company shall promptly (but in
any event no later than the beginning of the Resale Period) file and use its
commercially reasonable efforts to cause to become effective under the
Securities Act a registration statement or supplement or amend an outstanding
registration statement in form and substance reasonably satisfactory to Dealer,
to cover the resale of such Restricted Shares in accordance with customary
resale registration procedures, including covenants, conditions,
representations, underwriting discounts (if applicable), commissions (if
applicable), indemnities, due diligence rights, opinions and certificates, and
such other documentation as is customary for equity resale underwriting
agreements of companies of comparable size, maturity and line of business, all
reasonably acceptable to Dealer, subject to the execution by such recipients of
customary confidentiality agreements acceptable to Company.  If Dealer, in its
reasonable discretion, is not satisfied with such procedures and documentation,
Private Placement Settlement shall apply.  If Dealer is satisfied with such
procedures and documentation, it shall sell the Restricted Shares pursuant to
such registration statement during a period (the “Resale Period”) commencing on
the Exchange Business Day following delivery of such Restricted Shares (which,
for the avoidance of doubt, shall be (x) the Share Termination Payment Date in
case of settlement in Share Termination Delivery Units pursuant to
Section 9(k) above or (y) the Settlement Date in respect of the final Expiration
Date for all Daily Number of Warrants) and ending on the earliest of (i) the
Exchange Business Day on which Dealer completes the sale of all Restricted
Shares or, in the case of settlement of Share Termination Delivery Units, a
sufficient number of Restricted Shares so that the realized net proceeds of such
sales equals or exceeds the Payment Obligation (as defined above), (ii) the date
upon which all Restricted Shares have been sold or transferred pursuant to
Rule 144 (or similar provisions then in force) or Rule 145(d)(2) (or any similar
provision then in force) under the Securities Act and (iii) the date upon which
all Restricted Shares may be sold or transferred by a non-affiliate pursuant to
Rule 144 (or any similar provision then in force) or Rule 145(d)(2) (or any
similar provision then in force) under the Securities Act.  If the Payment
Obligation exceeds the realized net proceeds from such resale, Company shall
transfer to Dealer by the open of the regular trading session on the Exchange on
the Exchange Trading Day immediately following the last day of the Resale Period
the amount of such excess (the “Additional Amount”) in cash or in a number of
Shares (“Make-whole Shares”) in an amount that, based on the Settlement Price on
the last day of the Resale Period (as if such day was the “Valuation Date” for
purposes of computing such Settlement Price), has a dollar value equal to the
Additional Amount.  The Resale Period shall continue to enable the sale of the
Make-whole Shares.  If Company elects to pay the Additional Amount in

 

20

--------------------------------------------------------------------------------

 

Shares, the requirements and provisions for Registration Settlement shall
apply.  This provision shall be applied successively until the Additional Amount
is equal to zero.  In no event shall Company deliver a number of Restricted
Shares greater than the Maximum Number of Shares.

 

(iii)                               Without limiting the generality of the
foregoing, Company agrees that any Restricted Shares delivered to Dealer, as
purchaser of such Restricted Shares, (i) may be transferred by and among Dealer
and its affiliates and Company shall effect such transfer without any further
action by Dealer and (ii) after the period of 6 months from the Trade Date (or 1
year from the Trade Date if, at such time, informational requirements of
Rule 144(c) are not satisfied with respect to Company) has elapsed after any
Settlement Date for such Restricted Shares, Company shall promptly remove, or
cause the transfer agent for such Restricted Shares to remove, any legends
referring to any such restrictions or requirements from such Restricted Shares
upon request by Dealer (or such affiliate of Dealer) to Company or such transfer
agent, without any requirement for the delivery of any certificate, consent,
agreement, opinion of counsel, notice or any other document, any transfer tax
stamps or payment of any other amount or any other action by Dealer (or such
affiliate of Dealer).

 

If the Private Placement Settlement or the Registration Settlement shall not be
effected as set forth in clauses (i) or (ii), as applicable, then failure to
effect such Private Placement Settlement or such Registration Settlement shall
constitute an Event of Default with respect to which Company shall be the
Defaulting Party.

 

(m)                               Limit on Beneficial Ownership. 
Notwithstanding any other provisions hereof, Dealer may not exercise any Warrant
hereunder or be entitled to take delivery of any Shares deliverable hereunder,
and Automatic Exercise shall not apply with respect to any Warrant hereunder, to
the extent (but only to the extent) that, after such receipt of any Shares upon
the exercise of such Warrant or otherwise hereunder, (i) the Section 16
Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the
Applicable Share Limit.  Any purported delivery hereunder shall be void and have
no effect to the extent (but only to the extent) that, after such delivery,
(i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would
exceed the Applicable Share Limit. If any delivery owed to Dealer hereunder is
not made, in whole or in part, as a result of this provision, Company’s
obligation to make such delivery shall not be extinguished and Company shall
make such delivery as promptly as practicable after, but in no event later than
one Business Day after, Dealer gives notice to Company that, after such
delivery, (i) the Section 16 Percentage would not exceed 7.5%, and (ii) the
Share Amount would not exceed the Applicable Share Limit.

 

(n)                                 Share Deliveries. Company acknowledges and
agrees that, to the extent the holder of this Warrant is not then an affiliate
and has not been an affiliate for 90 days (it being understood that Dealer will
not be considered an affiliate under this paragraph solely by reason of its
receipt of Shares pursuant to the Transaction), and otherwise satisfies all
holding period and other requirements of Rule 144 of the Securities Act
applicable to it, any delivery of Shares or Share Termination Delivery Property
hereunder at any time after 6 months from the Trade Date (or 1 year from the
Trade Date if, at such time, informational requirements of Rule 144(c) are not
satisfied with respect to Company) shall be eligible for resale under Rule 144
of the Securities Act and Company agrees to promptly remove, or cause the
transfer agent for such Shares or Share Termination Delivery Property, to
remove, any legends referring to any restrictions on resale under the Securities
Act from the Shares or Share Termination Delivery Property.  Company further
agrees that any delivery of Shares or Share Termination Delivery Property prior
to the date that is 6 months from the Trade Date (or 1 year from the Trade Date
if, at such time, informational requirements of Rule 144(c) are not satisfied
with respect to Company), may be transferred by and among Dealer and its
affiliates (in accordance with the provisions of applicable law) and Company
shall effect such transfer without any further action by Dealer. 
Notwithstanding anything to the contrary herein, Company agrees that any
delivery of Shares or Share Termination Delivery

 

21

--------------------------------------------------------------------------------

 

Property shall be effected by book-entry transfer through the facilities of DTC,
or any successor depositary, if at the time of delivery, such class of Shares or
class of Share Termination Delivery Property is in book-entry form at DTC or
such successor depositary.  Notwithstanding anything to the contrary herein, to
the extent the provisions of Rule 144 of the Securities Act or any successor
rule are amended, or the applicable interpretation thereof by the Securities and
Exchange Commission or any court change after the Trade Date, the agreements of
Company herein shall be deemed modified to the extent necessary to comply with
Rule 144 of the Securities Act, as in effect at the time of delivery of the
relevant Shares or Share Termination Delivery Property.

 

(o)                                 Waiver of Jury Trial.  Each party waives, to
the fullest extent permitted by applicable law, any right it may have to a trial
by jury in respect of any suit, action or proceeding relating to the
Transaction.  Each party (i) certifies that no representative, agent or attorney
of the other party has represented, expressly or otherwise, that such other
party would not, in the event of such a suit, action or proceeding, seek to
enforce the foregoing waiver and (ii) acknowledges that it and the other party
have been induced to enter into the Transaction, as applicable, by, among other
things, the mutual waivers and certifications provided herein.

 

(p)                                 Tax Disclosure.  Effective from the date of
commencement of discussions concerning the Transaction, Company and each of its
employees, representatives, or other agents may disclose to any and all persons,
without limitation of any kind, the tax treatment and tax structure of the
Transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to Company relating to such tax treatment and tax
structure.

 

(q)                                 Maximum Share Delivery.

 

(i)                                     Notwithstanding any other provision of
this Confirmation, the Agreement or the Equity Definitions, in no event will
Company at any time be required to deliver a number of Shares greater than the
Maximum Number of Shares to Dealer in connection with the Transaction.

 

(ii)                                  In the event Company shall not have
delivered to Dealer the full number of Shares or Restricted Shares otherwise
deliverable by Company to Dealer pursuant to the terms of the Transaction
because Company has insufficient authorized but unissued Shares (such deficit,
the “Deficit Shares”), Company shall be continually obligated to deliver, from
time to time, Shares or Restricted Shares, as the case may be, to Dealer until
the full number of Deficit Shares have been delivered pursuant to this
Section 9(q)(ii), when, and to the extent that, (A) Shares are repurchased,
acquired or otherwise received by Company or any of its subsidiaries after the
Trade Date (whether or not in exchange for cash, fair value or any other
consideration), (B) authorized and unissued Shares reserved for issuance in
respect of other transactions prior to such date that prior to the relevant date
become no longer so reserved or (C) Company additionally authorizes any unissued
Shares that are not reserved for other transactions; provided that in no event
shall Company deliver any Shares or Restricted Shares to Dealer pursuant to this
Section 9(q)(ii) to the extent that such delivery would cause the aggregate
number of Shares and Restricted Shares delivered to Dealer to exceed the Maximum
Number of Shares.  Company shall immediately notify Dealer of the occurrence of
any of the foregoing events (including the number of Shares subject to clause
(A), (B) or (C) and the corresponding number of Shares or Restricted Shares, as
the case may be, to be delivered) and promptly deliver such Shares or Restricted
Shares, as the case may be, thereafter.

 

(r)                                    Wall Street Transparency and
Accountability Act.  In connection with Section 739 of the Wall Street
Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree
that neither the enactment of WSTAA or any regulation under the WSTAA, nor any
requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise
impair either party’s otherwise applicable rights to terminate, renegotiate,
modify, amend or supplement this

 

22

--------------------------------------------------------------------------------

 

Confirmation or the Agreement, as applicable, arising from a termination event,
force majeure, illegality, increased costs, regulatory change or similar event
under this Confirmation, the Equity Definitions incorporated herein, or the
Agreement (including, but not limited to, rights arising from Change in Law,
Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or
Illegality (as defined in the Agreement)).

 

(s)                                  Right to Extend.  Dealer may postpone, in
whole or in part, any Expiration Date or any other date of valuation or delivery
with respect to some or all of the relevant Warrants (in which event the
Calculation Agent shall make appropriate adjustments to the Daily Number of
Warrants with respect to one or more Expiration Dates) if Dealer determines, in
its commercially reasonable judgment, that such extension is reasonably
necessary or appropriate to preserve Dealer’s hedging or hedge unwind activity
hereunder in light of existing liquidity conditions or to enable Dealer to
effect purchases of Shares in connection with its hedging, hedge unwind or
settlement activity hereunder in a manner that would, if Dealer were Issuer or
an affiliated purchaser of Issuer, be in compliance with applicable legal,
regulatory or self-regulatory requirements, or with related policies and
procedures applicable to Dealer.

 

(t)                                    Status of Claims in Bankruptcy.  Dealer
acknowledges and agrees that this Confirmation is not intended to convey to
Dealer rights against Company with respect to the Transaction that are senior to
the claims of common stockholders of Company in any United States bankruptcy
proceedings of Company; provided that nothing herein shall limit or shall be
deemed to limit Dealer’s right to pursue remedies in the event of a breach by
Company of its obligations and agreements with respect to the Transaction;
provided, further, that nothing herein shall limit or shall be deemed to limit
Dealer’s rights in respect of any transactions other than the Transaction.

 

(u)                                 Securities Contract; Swap Agreement.  The
parties hereto intend for (i) the Transaction to be a “securities contract” and
a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United
States Code) (the “Bankruptcy Code”), and the parties hereto to be entitled to
the protections afforded by, among other Sections, Sections 362(b)(6),
362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code, (ii) a party’s
right to liquidate the Transaction and to exercise any other remedies upon the
occurrence of any Event of Default under the Agreement with respect to the other
party to constitute a “contractual right” as described in the Bankruptcy Code,
and (iii) each payment and delivery of cash, securities or other property
hereunder to constitute a “margin payment” or “settlement payment” and a
“transfer” as defined in the Bankruptcy Code.

 

(v)                                 Early Unwind. In the event the sale of the
“Firm Notes” (as defined in the Underwriting Agreement) is not consummated with
the Underwriter for any reason by 5:00 p.m. (New York City time) on the Premium
Payment Date, or such later date as agreed upon by the parties (the Premium
Payment Date or such later date the “Early Unwind Date”), the Transaction shall
automatically terminate (the “Early Unwind”), on the Early Unwind Date and
(i) the Transaction and all of the respective rights and obligations of Dealer
and Company under the Transaction shall be cancelled and terminated and
(ii) each party shall be released and discharged by the other party from and
agrees not to make any claim against the other party with respect to any
obligations or liabilities of the other party arising out of and to be performed
in connection with the Transaction either prior to or after the Early Unwind
Date; provided that Company shall purchase from Dealer on the Early Unwind Date
all Shares purchased by Dealer or one or more of its affiliates in connection
with the Transaction at the then prevailing market price.  Each of Dealer and
Company represent and acknowledge to the other that, subject to the proviso
included in this Section 9(v), upon an Early Unwind, all obligations with
respect to the Transaction shall be deemed fully and finally discharged.

 

(w)                               Payment by Dealer. In the event that (i) an
Early Termination Date occurs or is designated with respect to the Transaction
as a result of a Termination Event or an Event of Default (other than an Event
of Default arising under Section 5(a)(ii) or 5(a)(iv) of the Agreement) and, as
a result, Dealer owes to Company an amount calculated under Section 6(e) of the
Agreement, or (ii) Dealer

 

23

--------------------------------------------------------------------------------

 

owes to Company, pursuant to Section 12.7 or Section 12.9 of the Equity
Definitions, an amount calculated under Section 12.8 of the Equity Definitions,
such amount shall be deemed to be zero.

 

(x)                                   Delivery or Receipt of Cash. For the
avoidance of doubt, other than receipt of the Premium by Company, nothing in
this Confirmation shall be interpreted as requiring Company to deliver or
receive cash in respect of the settlement of the Transaction contemplated by
this Confirmation, except in circumstances where the cash settlement thereof is
within Company’s control (including, without limitation, where an Event of
Default by Company has occurred under Section 5(a)(ii) or Section 5(a)(iv) of
the Agreement, where Company elects to deliver or receive cash or fails timely
to elect to deliver or receive Share Termination Delivery Property in respect of
the settlement of such Transaction) or in those circumstances in which holders
of the Shares would also receive cash.

 

24

--------------------------------------------------------------------------------

 

Please confirm that the foregoing correctly sets forth the terms of our
agreement by signing and returning this Confirmation to EDG Confirmation Group,
J.P. Morgan Securities LLC, 277 Park Avenue, 11th Floor, New York, NY
10172-3401, or by fax to (212) 622 8519.

 

 

Yours faithfully,

 

 

 

 

 

 

J.P. MORGAN SECURITIES LLC,
as agent for JPMorgan Chase Bank, National Association

 

 

 

 

 

By:

/s/ Jason M. Wood

 

 

Name:

Jason M. Wood

 

 

Title:

Managing Director

 

 

Accepted and confirmed as of the Trade Date:

 

HAWAIIAN HOLDINGS, INC.

 

 

 

 

 

By:

/s/ Peter Ingram

 

Name:

Peter R. Ingram

 

Title:

Executive Vice President and Chief Financial Officer

 

 

JPMorgan Chase Bank, National Association

Organised under the laws of the United States as a National Banking Association

Main Office 1111 Polaris Parkway, Columbus, Ohio 43271

Registered as a branch in England & Wales branch No. BR000746

Registered Branch Office 125 London Wall, London EC2Y 5AJ

Authorised and regulated by the Financial Services Authority

 

--------------------------------------------------------------------------------