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  Exhibit 10.19    
    

        Confidential treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the
confidential information subject to the confidentiality request. Omissions are designated by the symbol [...***...]. A complete version of this document has been filed
separately with the Securities and Exchange Commission. 

 
 

AIR TRANSPORTATION CHARTER AGREEMENT

        This
AIR TRANSPORTATION CHARTER AGREEMENT ("Agreement") dated as of October 31, 2008, by and between  ALLEGIANT AIR, LLC, a Nevada limited liability
company with principal offices at 8360 South Durango Drive, Las Vegas, Nevada 89113 ("Allegiant")
and Harrah's Operating Company, Inc ("HOC") a Delaware Corporation, with principal offices at One Harrah's Court, Las Vegas, NV 89119. Allegiant
and HOC shall each also be referred to as the "Party" or collectively as the "Parties". 

 
 

  RECITIALS    
    

        WHEREAS, Allegiant in its capacity as a direct air carrier under Parts 207, 212
and 380 of the regulations of the United States Department of Transportation ("DOT"), 14 C.F.R. Parts 207, 212 and 380, desires to provide air transportation services to HOC to and from
locations designated by HOC; and 

        WHEREAS, HOC in its capacity as a Public Charter Operator under Part 380 of the DOT regulations, 14 C.F.R. Part 380, has a
need for air transportation services and desires to utilize air transportation services provided by Allegiant; 

        NOW THEREFORE, in consideration of the promises and covenants contained herein, the Parties hereto, intending to be legally bound hereby,
do agree as follows: 

1.     AIRCRAFT  

        Allegiant shall provide the air transportation services using the Aircraft listed in Exhibit A (the "Aircraft") or equivalent aircraft. 

2.     SERVICES  

        2.1   In
accordance with Section 6 of this Agreement, Allegiant shall provide air transportation services (the "Services") as more fully described in Exhibit A. 

3.     PRICE  

        In consideration for the Services provided by Allegiant under this Agreement, HOC agrees to pay Allegiant the rates listed in Exhibit A. 

4.     TERM  

        Unless terminated earlier in accordance with the terms of this Agreement, the term of this Agreement shall commence upon execution of this Agreement and shall
remain in full force and effect thereafter until December 31, 2011 (the "Term"). Actual Services as described in Section 2 of this Agreement shall begin January 1, 2009. 

5.     REGULATORY APPROVALS AND DUTIES  

        5.1   Allegiant
and HOC shall each hold all licenses, certificates, and permits, including without limitation all DOT, United States Federal Aviation Administration (the
"FAA"), and the Mississippi Gaming Commission ("MGC") approvals, required to fulfill their respective obligations specified in or contemplated by the terms of this Agreement. 

 

        5.2   Pursuant
to 14 C.F.R. Part 380 and other applicable regulations, Allegiant shall be responsible for its own compliance with DOT regulations, except as agreed to
by the Parties in Section 5.4, and shall indemnify defend and hold harmless HOC from any fines, claims or penalties resulting from noncompliance with any governing laws, rules or regulations
associated therewith. 

        5.3   Pursuant
to 14 C.F.R. Part 380 and other applicable regulations, including the responsibility agreed to under Section 5.4, HOC shall be responsible for its
compliance with DOT regulations, and shall defend and hold harmless Allegiant from any fines, claims or penalties resulting from noncompliance with any governing laws, rules or regulations associated
therewith, including its noncompliance with Section 5.4. 

        5.4   HOC
shall be responsible to submit all public charter filings as required to the DOT without delay and no later than ten (10) days after the Schedule is finalized
pursuant to Section 6.1. HOC shall provide a DOT conformed copy, including a Public Charter Number, to Allegiant no later than ten (10) days prior to the first flight scheduled in the
filing. 

        5.5   Allegiant
through its gate agent shall collect the Tour Participation Agreements ("TPA"). HOC shall provide Allegiant with an adequate supply of TPAs to distribute and
collect from the passengers. Allegiant shall deliver the executed TPA to HOC's authorized representatives upon arrival of each flight. 

6.     OPERATIONAL BLOCK TIMES / SCHEDULING  

        6.1   HOC
agrees to provide Allegiant a flight schedule (the "Proposed Schedule") at least ninety (90) days before the date of the first flight and the Proposed
Schedule period shall cover at least ninety (90) days. Allegiant shall have fifteen (15) days from receipt of the Proposed Schedule to consent to the flights contained therein.
Allegiant's consent shall not be unreasonably withheld. Once Allegiant has consented to the proposed flight schedule, Allegiant shall develop block time estimates for each flight ("Operational Block
Times" or "Block Hours") and these Operational Block Times shall be provided to HOC. (Operational Block Times are defined as the amount of time it takes from an aircraft's departure from the gate at
the origin airport until the aircraft's arrival at the gate at the destination airport). The Parties shall then agree to the final schedule ("the Schedule") and Operational Block Times. Allegiant
shall provide HOC the schedule, with flight times and baggage handlers for each flight, at least thirty (30) days prior to the operation of the flight. 

        6.2   Either
Party may request a change to the schedule. Both Parties agree to use their commercially reasonable efforts to accommodate changes requested by the other Party.
In the event changes are made by HOC to the Schedule with less than seven (7) days notice, HOC shall reimburse Allegiant for its out of pocket cost incurred as a result of accommodating HOC's
requested schedule change. HOC shall have no obligation to Allegiant for changes to the Schedule initiated or made by Allegiant. 

7.     MINIMUM BLOCK HOUR GUARANTEE  

        7.1   HOC
agrees to pay for a minimum number of Block Hours, as described in Exhibit A (the "Minimum Block Hour Guarantee"). Flights involved in positioning the
Aircraft (ferry flights) shall count towards meeting the Minimum Block Hour Guarantee. 

        7.2   HOC
shall pay Allegiant pursuant to Section 8.1, for Services to be operated pursuant to the Schedule. Within thirty (30) days of the completion of the
quarter, Allegiant shall provide a report to HOC that lists the actual Block Hours operated by Allegiant for HOC. This report will be compared with the estimated Block Hours that were used to
determine the appropriate advance payments made pursuant to Section 8.1. If the estimated Block Hours paid for by HOC is greater than the actual Block Hours operated by Allegiant, then
Allegiant shall roll the difference into the payment for the next 

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quarter's
estimated Block Hours and count as a reduction in the Minimum Block Hours Guaranteed during the next quarter. If the estimated Block Hours paid for by HOC is less than the actual Block Hours
operated by Allegiant, then Allegiant shall invoice HOC for the difference. Payment shall be due within thirty (30) days of receipt of invoice. 

        7.3   Within
ten days of the completion of each calendar quarter, Allegiant shall provide HOC with a report that lists the Services provided by flight during the subject
quarter. If the Services provided fail to meet the Minimum Block Hour Guarantee, then Allegiant shall invoice HOC for the difference between the Block Hours for the Services provided and the Minimum
Block Hour Guarantee. Allegiant agrees to use flight factors, such as direct flight paths and proximate fuel stops, to minimize Block Hours. HOC shall be excused from payment for actual Block Hours
incurred as a result of delays caused by factors within Allegiant's control. HOC shall be excused from the Minimum Block Hour Guarantee during any quarter in which flights are cancelled due to force
majeure events, as defined in Section 19, or factors within Allegiant's control (excluding weather). 

8.     PAYMENT TERMS  

        8.1   HOC
shall pay Allegiant for the Services as follows: 

          (i)  Initial
Payment Date. Upon execution of this Agreement, HOC shall deposit an amount equal to the projected cost for Services and the Actual Fuel Expense, as defined in
Section 10.1, to be provided under the Schedule between January 1, 2009 and January 16, 2009 shall be due December 15, 2008. 

         (ii)  1st Payment
Date. HOC shall deposit no later than the 1st day of each month (the "1st Payment Date") an amount equal to the projected
cost for Services and Actual Fuel Expense to be provided under the Schedule between the 16th day of the month through the end of that same month (the "1st Billing Period"). The projected
cost shall be based on a rolling 6 month average of the per gallon price per gallon and be based on the scheduled flight hours for the time period being paid. 

        (iii)  2nd Payment
Date. HOC will deposit by the 16th day of each month (the "2nd Payment Date"), an amount equal to the estimated cost for
Services and Actual Fuel Expense to be provided under the Schedule between the 1st day through the 15th day of the following month (the "2nd Billing Period"). The projected cost
shall be based on a rolling 6 month average of the per gallon price per gallon and be based on the scheduled flight hours for the time period being paid. 

        (iv)  Each
month a settlement for both services and Actual Fuel Expense shall be done no later than the 15th on the following month. The settlement shall
compare billed services and fuel to actual services and fuel. A credit or charge shall be added or subtracted from the next payment for services and fuel made by the property. 

        All
deposits shall be made by wire transfer to Allegiant's DOT approved escrow account listed in Exhibit C. Allegiant shall provide HOC a copy of the DOT letter approving the
escrow account. The Parties agree that payment for each flight shall only be released from the DOT escrow upon completion of the flight (from the origin airport to the destination airport). 

        8.2   All
reimbursable expenses, including but not limited to certain catering, liquor, and PFC charges (defined in Section 9.3), shall be invoiced in arrears monthly
by Allegiant to HOC for payment by wire transfer to Allegiant's operating account listed in Exhibit D. Reimbursable expenses shall be invoiced each month and HOC shall remit payment within
15 days of receipt of invoice. In the event that HOC fails to pay within 18 days of receipt of invoice, HOC shall pay a late charge equal to 2% of the invoice amount. All invoices for
reimbursable expenses shall list the expenses by flight wherever possible. 

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        8.3   All
payment terms are subject to the terms and conditions of Section 25 herein. 

        8.4   Allegiant
represents and warrants that it will maintain the DOT escrow account at all times and notify HOC of any changes to the DOT escrow account. 

        8.5   In
the event that HOC fails to make payment when due under Section 8.1, and such failure to make payment is not cured in accordance with Section 26.1,
Allegiant shall after giving written notice to HOC have the right to cancel flights scheduled on the eleventh day proceeding that date and such right shall continue until Allegiant has received
payment in full under Section 8.1. Any flights cancelled due to non-payment under Section 8.1 shall in no way limit or excuse HOC's obligation under the Minimum Block Hour
Guarantee. 

9.     TAXES AND OTHER CHARGES  

        9.1   HOC
shall be responsible for the collection and payment of any and all federal, state and local excise taxes (including federal segment fees) imposed upon the purchase
of air transportation. HOC agrees to indemnify, defend and hold harmless Allegiant from and against any claims made, or penalties or fines imposed as a result of any act or omission relating to
collection or payment of such taxes (including, but not limited to attorneys' fees, costs and expenses incurred in connection therewith) arising out of the performance of Services under this
Agreement, unless arising from Allegiant's negligence, misconduct or false information. 

        9.2   Allegiant
shall be responsible for the remittance of payment of any security charges (including the September 11th Security Fee) that are
assessed on a per passenger basis. Notwithstanding the foregoing, HOC shall be responsible for the collection of these charges from its passengers and for transmittal of same to Allegiant, and for
reimbursing outlays made by Allegiant for these charges. Allegiant shall invoice HOC pursuant to Section 8.2 above. 

        9.3   Allegiant
shall be responsible for the remittance of payment of all passenger facility charges ("PFC") imposed by airports on HOC's passengers carried by Allegiant.
Notwithstanding the foregoing, HOC shall be responsible for the collection of these charges from its passengers and for transmittal of same to Allegiant, and for reimbursing outlays made by Allegiant
for these charges. Allegiant shall invoice HOC pursuant to Section 8.2 above. 

        9.4   HOC
and Allegiant each warrant to the other that any commissions that are or will become due to any third party in connection with this Agreement or its performance
hereunder shall be payable at that Party's sole expense. 

10.   FUEL  

        10.1 HOC
shall be responsible for the cost of fuel for the operation of all flights under this Agreement. Included in fuel gallon price are the following: (i) supply
of jet fuel purchased at market price at each station; (ii) delivery of fuel; (iii) into-plane fueling services; and (iv) any applicable taxes and fees (collectively
hereinafter defined as "Actual Fuel Expense"). Estimated fuel expense shall be paid in advance in accordance with Section 8.1 of this Agreement and reconciled to Actual Fuel Expense on a
monthly basis. HOC shall only be responsible for fuel purchased at each station at the market price and shall not pay fuel costs based on any Allegiant fuel hedging program. 

        10.2 Allegiant
shall work in good faith to minimize fuel cost. 

        10.3 Each
month during the term of this Agreement, Allegiant shall provide HOC with a written fuel usage report that summarizes the Actual Fuel Expense and the total number
of gallons actually used in performance of the Services during the invoiced period. In accordance with the obligations outlined in Section 10.1 Allegiant shall be reimbursed for Actual Fuel
Expense as outlined in Section 8.1 of this Agreement. Allegiant shall fully document the Actual Fuel Expense. Allegiant shall 

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retain
all documents relating to its procurement of fuel for the Services including, but not limited to, actual contracts, receipts, invoices, and / or purchase orders (collectively referred to as
"Fuel Procurement Documents"). HOC and its authorized agents shall have the right to inspect, review, and audit all Fuel Procurement Documents. Upon request, Allegiant shall forward true and correct
copies of Fuel Procurement Documents to HOC. Allegiant shall be financially obligated to reimburse HOC for any overpayments of Actual Fuel Expense within 14 days of receiving notice of such
overpayment from HOC. 

11.   STATIONS  

        11.1 Allegiant
is responsible for station charges (as described in Exhibit A, Section 2). Allegiant shall not levy any surcharges against HOC nor request
reimbursement for station of charges to or from any U.S. city. HOC agrees to work in good faith with Allegiant to minimize stations costs, including the review of feasible alternative airports
identified by Allegiant. 

        11.2 In
certain instances, HOC may desire to fly to or from a city in Canada or Mexico. In these cases HOC shall pay for the portion of station costs per round trip
associated with those flights that are in excess of $[...***...]. 

12.   LIQUOR  

        12.1 Alcoholic
beverages shall be available at a nominal cost to passengers on all flights. Allegiant shall purchase the alcoholic beverages
[...***...]. 

        12.2 Allegiant
shall provide alcoholic beverages to certain passengers as designated by HOC at no cost to the passenger. These passengers shall present coupons to Allegiant
personnel in exchange for free alcoholic beverages. Allegiant shall invoice HOC at its cost, pursuant to Section 8.2, the amount due for alcoholic beverages provided at no charge to passengers. 

13.   CATERING  

        The Price for Services provided by Allegiant includes catering as described in Exhibit A. Allegiant may be able to provide other catering alternatives and
will attempt to do so at HOC's direction, but the expense incurred by Allegiant, if any, of additional catering shall be invoiced to and be borne solely by HOC. Allegiant shall invoice HOC pursuant to
Section 8.2 for any additional catering expenses. If HOC supplies the catering at its sole expense, there shall be no reimbursement due to Allegiant. 

14.   PERFORMANCE STANDARDS  

        14.1 Allegiant
agrees to perform the Services safely and professionally in accordance with the highest standards of the air transportation industry and in full compliance
with all applicable federal, state and local laws and regulations. 

        14.2 Allegiant
represents and warrants that it owns or leases the Aircraft at all times. Allegiant shall at all times have exclusive operational control of the Aircraft
performing the Services. Allegiant represents and warrants that they are the direct air carrier, unless substitute aircraft is provided pursuant to Section 16. Allegiant shall be charged with
responsibility for decisions with respect to the suitability of the Aircraft, weather conditions, flight conditions and any other decisions or issues relating to control and direction of the
activities associated with the flight of the Aircraft. Under no circumstances shall HOC or anyone other than Allegiant have the right to countermand or issue any directive pertaining to the foregoing
activities and issues. 

        14.3 At
its own cost (with no right to reimbursement), Allegiant shall clean the interior of the Aircraft, including but not limited to, trash pickup, wipe down seats, seat
back trays, and vacuuming prior to each flight departing from the base of operation and the exterior on an as-needed basis. 

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        14.4 Each
Allegiant pilot shall hold current and valid pilot licenses, be duly rated and qualified by the FAA, and be fully trained for operation of the Aircraft. 

        14.5 All
cabin crew personnel shall be courteous to each passenger, maintain good grooming and hygiene standards, wear easily identifiable full uniform outfits that are
professional in appearance in a manner similar to the standards of cabin crews for nationally recognized commercial passenger airlines, and shall not make any negative comments with respect to HOC,
its affiliates or Allegiant. 

        14.6 Allegiant
shall maintain in a current status all operating certificates, permits and licenses issued by all appropriate regulatory authorities and shall be in full
compliance with applicable regulations, standards, agency directives and laws and shall indemnify and defend HOC, its managers, officers, directors, parents, employees, agents, affiliated companies
and subsidiaries from and against any fines, penalties or claims resulting from noncompliance hereunder. 

        14.7 Upon
request by HOC, Allegiant will make available for inspection all records, documents, and data concerning accidents, violations, passenger safety and welfare,
licensing, and regulatory requirements. This documentation shall include, but not limited to, all certifications and licenses of pilots/copilots as required by the DOT, FAA, and other regulatory
agencies. HOC shall be entitled to true and accurate copies of all documents referenced in this Section 14.8. 

        14.8 Allegiant
agrees to meet the following operational performance metrics (the "Performance Metrics"): (1) on-time performance of
[...***...]%, as measured by arrivals within 15 minutes of scheduled arrival time; and (2) completion factor of [...***...]%. Allegiant's
performance shall be measured at the completion of every calendar quarter (January 1—March 31; April 1—June 30;
July 1—September 30; and October 1—December 31). Within ten (10) days of the completion of each quarter, Allegiant shall provide HOC a report
of its performance as measured by the Performance Metrics. Such report shall include FAA weather reports relied on by Allegiant to justify delays or cancellations caused by weather. If Allegiant is
deficient in meeting the Performance Metrics during any one quarter, it shall have a [...***...] day period, commencing with the first day of the following month to improve its
performance so as to meet or exceed the Performance Metrics measured during that [...***...]-day period. If Allegiant is unable to do so, HOC shall have the right
to cancel this Agreement [...***...]. Flight cancellations or delays that are due to force majeure reasons (except for delays or cancellations under Section 27), weather
conditions, air traffic control or other causes outside Allegiant's reasonable control or due to the request of HOC shall not be included in measuring performance against the Performance Metrics. 

        14.9 In
the event that HOC causes a flight to be delayed and it results in Allegiant being unable to provide Services on that day or as scheduled the following day due to
crew duty-time limitations and/or other Federal Aviation Regulations reasons, HOC will be liable to Allegiant for the reimbursement of costs incurred by Allegiant as a result of such
delay. In the event a trip is cancelled due to the foregoing, the cancelled trip shall not be charged against Allegiant's Performance Metrics and HOC shall have no right of reimbursement for payment
made pursuant to Section 8.1 for such cancelled flight. In the event, that a flight is cancelled by Allegiant due to a mechanical failure or the lack of qualified crew, the total cost for the
flight including ferry legs shall be refunded to HOC. 

        14.10  Exhibit C
shall govern the liability and treatment of passengers in the event of delays, cancelled flights or irregular operations. 

        14.11  Allegiant
shall notify HOC at least thirty (30) days in advance of the identity, location and contact information for the ground handling agent that will be
contracted by Allegiant at each airport that appears on the Schedule. 

        14.12  HOC
shall send via facsimile to Allegiant's Dispatch Office, at least 48 hours before each flight is scheduled, a copy of the latest flight manifest. Any
changes made to the manifest shall be communicated by HOC to Allegiant's Dispatch Office on a continuous basis up until the flight departure time. 

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15.   SUBCONTRACTORS  

        15.1 Under
no circumstances shall Allegiant subcontract its primary duties necessary to perform the Services, including but not limited to: (i) Subject to
Section 16 of this Agreement, its exclusive operational control of the Aircraft performing the Services; (ii) its decisions with respect to Aircraft suitability, weather conditions,
flight conditions as outlined in Section 14.2 of this Agreement; and (iii) its obligation to minimize fuel cost in accordance with Section 10.3 of this Agreement. 

        15.2 Allegiant
shall be entitled to hire independent third party contractors to provide secondary support services, including but not limited to: (i) ground handling
agents; (ii) ticket counter representatives; (iii) and service technicians used to fuel the Aircraft. In all circumstances where Allegiant elects to subcontract secondary support
services the following shall apply: (i) Allegiant shall remain liable to HOC for performance of all terms, obligations, and provisions of this Agreement; (ii) the third party
subcontractor must agree in writing to be bound by all requirements of this Agreement; and (iii) HOC shall have the right to require Allegiant terminate any third party subcontractors upon
directive of the MGC and/or the NDCB, or failure to adhere to safety and/or performance standards. 

16.   MAINTENANCE / SUBSTITUTE AIRCRAFT  

        16.1 At
its own cost (with no right of reimbursement), Allegiant shall at all times maintain the Aircraft in an airworthy condition in accordance with its
FAA-approved maintenance program. Allegiant shall schedule its maintenance of the Aircraft so that it does not interfere with flights scheduled in accordance with Section 6 of this
Agreement. 

        16.2 Subject
to HOC's consent Allegiant may at its own expense (without right for reimbursement) retain a substitute aircraft to perform the Services. In all cases where HOC
consent's to the use of substitute aircraft the following shall occur: (i) the owner of the substitute aircraft shall be required to comply with the requirements of this Agreement;
(ii) the substitute aircraft must be substantially similar to the Aircraft described in Exhibit A of this Agreement with regard to size and type of aircraft; (iii)l Allegiant and the
owner of the substitute aircraft have each executed a Supplementary Agreement with HOC in the form attached hereto as Exhibit F; and (iv) the owner of the substitute aircraft shall
submit an Insurance Certificate in compliance with the insurance requirements of Section 20 of this Agreement. . 

        In
all cases where Allegiant cannot perform Services (not due to Force Majeure conditions as defined below) and fails to provide an acceptable substitute to perform the flight in
question Allegiant shall pay HOC a full refund for the cost of such flight. 

17.   NO-SHOW PASSENGERS  

        Allegiant shall not be responsible or liable for the transportation of HOC's passengers who fail to report at the specified check-in point at the
departure airport at least thirty (30) minutes prior to the scheduled departure time of a flight, or who are, through no fault of Allegiant, not aboard at the time of scheduled departure.
Allegiant may depart as scheduled and shall in no way be responsible for or to such individual or HOC, and Allegiant shall be deemed to have completed its contractual obligation to HOC. 

18.   BAGGAGE AND HAZARDOUS MATERIALS  

        18.1 Allegiant
shall provide required baggage identification tags and claim checks to be distributed to passengers. 

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        18.2 Allegiant
assumes liability only for passenger baggage actually received by a representative of Allegiant from the individual passenger at the departing airport. Limit
of baggage liability shall be as prescribed by applicable DOT regulations (14 C.F.R. Part 254). As between HOC and Allegiant, HOC assumes all responsibility for baggage in possession of
transfer companies engaged by HOC. HOC agrees that Allegiant is not liable for property not delivered to it and agrees to indemnify, defend and hold harmless Allegiant from any claims brought against
it by third parties alleging loss or damage to such baggage. 

        18.3 UNDER
NO CIRCUMSTANCE SHALL ALLEGIANT ACCEPT FOR TRANSPORTATION IN CHECKED OR HAND-CARRIED BAGGAGE, OR AS CARGO, NOR MAY ANY PASSENGER BRING ABOARD
ALLEGIANT'S AIRCRAFT, ANY ARTICLE CONSTITUTING "HAZARDOUS MATERIAL", DEFINED AS ANY ARTICLE OR SUBSTANCE THE TRANSPORTATION OF WHICH BY AIR IS PROHIBITED, RESTRICTED OR OTHERWISE
AFFECTED BY ANY RULE OR REGULATION OF THE DOT, INCLUDING THE RESEARCH AND SPECIAL PROGRAMS ADMINSITRATION (the "RSPA") or successor administration, THE FAA, OR THE INTERNATIONAL CIVIL AVIATION
ORGANIZATION (the "ICAO"). 

19.   FORCE MAJEURE  

        Both Parties shall be excused from all performance and or payment obligations when the ability of either party to perform according to the terms of this Agreement
has been impeded as a result of, or arising from, any of the following: governmental or airport laws, regulations, orders, war, acts of terrorism, acts of God, riots, civil disobedience; or national
emergencies (hereinafter referred to as "Force Majeure conditions"). Any Force Majeure conditions shall be said to have impeded a Party's ability to perform when it has required that Party to cancel a
scheduled charter flight. The Parties shall only be excused from their performance and/or payment obligations during the duration of the Force Majeure condition. Either Party shall promptly notify the
other of any such conditions which may result in its inability to resume its obligations upon the cessation of the Force Majeure condition. Each Party shall make every effort to resume performance, at
the earliest time that it is safe and prudent to do so. In any case where the Force Majeure conditions last longer than three (3) months either Party shall have the right to terminate its
obligations under this Agreement, in all other cases the Parties shall have the right to cancel the specific flights scheduled to take place during the Force Majeure condition. Additionally, any
flights cancelled due to a Force Majeure shall be deducted from the minimum block hour requirement at no cost to HOC. 

20.   INSURANCE AND INDEMNITY  

        20.1 During
the Term of this Agreement it is expressly agreed that, ALLEGIANT shall at no expense to HOC maintain aircraft / aviation liability insurance ("Policy") with a
reputable insurer approved by HOC. ALLEGIANT shall provide a Certificate of Insurance naming HOC and/or any subsidiary company (or subsidiaries of division thereof), and/or any other affiliated,
allied or controlled entity of any of the foregoing that existed or may hereafter exist, and/or each of their officers, directors, trustees, employees and representatives as additional insureds. 

        20.2 The
required insurance Policy shall include the following: 

	(a)
	The
Policy shall include aviation liability, passenger liability, public liability, and property damage liability, providing coverage for all claims
resulting from use, and/or operation of the Aircraft including but not limited to claims of death or injury to persons or loss of or damage to property. The Policy shall have liability limits of
$500,000,000 for aircraft with a seating capacity of 125 passengers and / or $750,000,000 for aircraft with a seating capacity of between 126 to 185 passengers.

	(b)
	The
Policy shall include War Risk Liability coverage in an amount not less than $50,000,000; 

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	(c)
	The
Policy shall include Workers Compensation coverage at statutory limits;

	(d)
	The
Policy shall include Personal Injury Liability coverage of at least $25,000,000;

	(e)
	The
Policy shall be placed on a worldwide basis;

	(f)
	The
Policy shall not be subject to cancellation, material change or restriction, or reduction of coverage or limits except upon not less than sixty
(60) days written notice to HOC. The insurer shall immediately notify HOC in the event of default in payment of any premium or installment;

	(g)
	The
Policy shall be primary and not excess, subject to any co-insurance clause or contingent. The Policy shall not require contribution from any
insurance purchased by HOC, its employees, officers and directors, its affiliates and subsidiaries;

	(h)
	The
Policy shall include a Waiver of Subrogation clause in the HOC's favor;

	(i)
	The
Policy's certificate shall list the specific aircraft utilized to provide Services agreed to herein by Allegiant to HOC. Additionally, it shall apply to
any and all aircraft utilized under the terms of this agreement with HOC. 

        20.3 The
Aircraft shall not be operated and HOC shall have no obligation (financial or otherwise) during the Term unless the insurance described in this Section 20 is
in full force and effect, nor shall the Aircraft be operated in a location or any manner which would cause such insurance to be suspended, impaired or canceled, or its protection to be jeopardized. In
the event of loss or destruction of, or damage to, the Aircraft during the Term, Allegiant shall cooperate in good faith, and promptly furnish such information, execute such documents, and do all such
other acts and things, as may be reasonably necessary or appropriate to collect the proceeds provided under the Policy. Allegiant agrees that the above lease/hire or non-owned
aircraft/arrangements with the same limits set forth above. Allegiant agrees to comply with additional insurance requirements as determined from time to time in writing by HOC. 

        20.4 Allegiant
agrees to defend, indemnify and hold harmless HOC, its subsidiaries, partners, affiliated companies, officers, directors, agents and/or employees, from and
against any and all claims, actions, damages, expenses (including attorneys' fees and costs associated with in house legal professionals), or liability therefore, in connection with any and all loss,
theft, misappropriation and/or damage to property or equipment transported, including but not limited to baggage (and any other guest property which might be transported by Allegiant subject to the
Airline baggage liability limit), personal injury and/or loss of life sustained by any third parties arising from or on account of any flights or related Services provided by Allegiant hereunder
including without limitation any acts or omissions of Allegiant, its agents, employees or other representatives, including without limitation the owners and operators of substitute aircraft, of any of
the obligations of Allegiant described herein or related hereto, without regard to cause or peril. 

        20.5 Allegiant
shall agree to defend, indemnify, release, and hold harmless HOC, its parent and affiliated companies, their managers, agents, employees, officers, directors
and subsidiaries from and against any and all claims, suits, damages, liabilities, fines, penalties, proceedings, orders, decrees, settlements, and judgments of any kind or nature by or in favor of
anyone whomsoever and from and against any and all costs and expenses, including attorneys fees, resulting from or in connection with loss of life, bodily injury or damages to property arising
directly or indirectly, out of or from or on account of the services provided by Allegiant pursuant to this Agreement, except when such claims, suits, damages, liabilities, fines, penalties,
proceedings, orders, decrees, settlements, and judgments are due to the gross negligence or willful misconduct of the HOC. This indemnification shall be insured against by Allegiant and shall not be
limited or restricted by any other provision of this Agreement including but not limited to the insurance requirements. 

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        20.6 In
all cases of indemnification required under the terms of this Agreement, the Indemnitee shall give the Indemnitor prompt written notice of any such claim, and
provide the Indemnitor with the authority, information and assistance (at no out-of-pocket cost to such Indemnitee) that the Indemnitor deems necessary for the defense and
settlement of the claim, provided that the failure of any indemnified party to give timely notice hereunder shall not affect rights to indemnification except to the extent that such failure prejudices
the indemnitor's ability to direct the defense or settlement or otherwise damages the Indemnitor. Subject to the indemnitee's reasonable determination that its interest are prejudiced, the Indemnitor
shall be entitled to direct the defense and settlement of any claim for which indemnification is sought under this Agreement. 

        20.7 Each
provision of this Section 20 shall survive the termination or expiration of this Agreement. 

21.   LIABILITY  

        IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR INDIRECT DAMAGES, EVEN IF SUCH PARTY HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES. 

10

 

  22.   NOTICES  

        All notices required or permitted under this Agreement shall be in writing and shall become effective on the date of receipt and shall be hand delivered or faxed
(with receipt confirmed simultaneously) or mailed by registered or certified first class mail, return receipt requested, addressed to: 

			
	Allegiant:	 	Allegiant Air, LLC

8360 South Durango Drive

Las Vegas, Nevada 89113

Attn: Andrew Levy, CFO & Managing Director

Phone: (702) 851-7300

Fax: (702) 851-7310
	
with a copy to:	
 	

 Ellis, Funk et al

3490 Piedmont Rd, Suite 400

Atlanta, Georgia 30305

Attn: Rob Goldberg

Phone: (404) 233-2800

Fax: (404) 233-2188

	
HOC:	
 	

 Harrah's National Casino Marketing

13615 Old Highway 61 North

Robinsonville, MS 38664

Phone: (662) 357-6004

Fax: (662) 357-3430

	

 	
 	

 And

	

 	
 	

 Harrah's National Casino Marketing

2900 South Casino Drive

Laughlin, Nevada 89029

Phone: (702) 298-8588

Fax: (702) 298-8505

	
with a copy to:	
 	

 Corporate Counsel

Harrah's Law Department

365 Canal Street, Suite 900

New Orleans, LA 70130

Phone: (504) 533-6036

Fax: (504) 533-6107

        Such
addresses may be changed by written notice to the other party at any time. 

23.   INDEPENDENT CONTRACTOR, DIRECTION AND CONTROL  

        23.1 Allegiant
is an independent contractor with respect to all Services performed hereunder, and under no circumstances shall Allegiant or its directors, officers, agents,
affiliates, employees, or subcontractors, be deemed for any purpose to be the agent, servant, employee, "borrowed servants" or representative of HOC in the performance of all or any part of the work
or Services performed hereunder. HOC hereby expressly foregoes and disclaims any contractual or other right to direct or control Allegiant or its employees, agents, independent contractors for any
work or Services performed pursuant to this Agreement and is interested only in the results to be obtained. 

11

 

        23.2 No
agency relationship is created or intended by this Agreement. Neither Party shall have the right nor authority to act on the other's behalf, represent the other in
any manner, or bind the other to any agreement or undertaking. 

24.   CONFIDENTIALITY  

        24.1 Allegiant's
employees, officers, agents, directors and subcontractors shall treat as confidential and proprietary and not disclose to others during or subsequent to the
term of this Agreement, except as necessary to perform this Agreement, and then only on a confidential basis satisfactory to HOC, any information whether oral or written of any description whatsoever,
including, but not limited to, any technical information or data regarding HOC or HOC's plans, programs, This Agreement and its terms and conditions, marketing, strategies, facilities, processes,
products, costs, equipment, operations or customer lists which are designed or reasonably understood to be confidential or proprietary at the time divulged to Allegiant, its employees, officers,
agents, directors or subcontractors in the performance of this Agreement. Additionally, Allegiant may not use any of the confidential or proprietary information for any purposes other than to fulfill
its obligations under the terms of this Agreement, nor may Allegiant use any proprietary or confidential information for any of its own advertising, marketing, or other business purposes not connected
with its obligations under this Agreement. Notwithstanding the foregoing, Allegiant may disclose this Agreement and other information in response to court ordered subpoenas and administrative orders
to governmental agencies (FAA, DOT, GCB, SEC, and IRS) as reasonably required and only the term and projected revenue to be earned as a result of the Agreement to any financial institution in
connection with financial services. 

        24.2 HOC's
employees, officers, agents, directors and subcontractors shall treat as confidential and proprietary and not disclose to others during or subsequent to the term
of this Agreement, except as necessary to perform this Agreement, and then only on a confidential basis satisfactory to Allegiant, any information whether oral or written of any description
whatsoever, including any technical information or data regarding Allegiant or Allegiant's plans, programs, marketing, strategies, facilities, processes, products, costs, equipment, operations or
customers which are designed or reasonably understood to be confidential or proprietary at the time divulged to HOC, its employees, officers, agents, directors or subcontractors in the performance of
this Agreement. Notwithstanding the foregoing, HOC may disclose this Agreement and other information to governmental agencies (FAA, DOT, GCB, SEC, and IRS) as reasonably required and to any financial
institution in connection with financial services. 

25.   GAMING REGULATORY REQUIREMENTS  

        25.1 Allegiant
acknowledges that this Agreement is subject to the registration and other licensing, permitting or approval requirements imposed on Allegiant by the MGC
and/or NGCB and, if applicable, any manufacturer, distributor or supplier of the goods to be delivered hereunder. Allegiant hereby agrees that HOC may conduct investigations of Allegiant, its owners
and key employees regarding financial information and legal proceedings. In the event: (i) Allegiant fails to secure any MGC and/or NGCB required permits, licenses, and/or authorizations in a
timely fashion; or (ii) any material information provided by Allegiant, its owners or key employees to HOC is false or omitted, HOC may immediately and unilaterally terminate this Agreement.
Upon its unilateral termination for Allegiant's failure to comply with this Section 25.1 HOC shall have no obligation to Allegiant financial or otherwise. 

        25.2 Allegiant
shall be solely responsible for securing all required registrations, permits, approvals and licenses from the MGC and NGCB or otherwise, and failure to obtain
or maintain same shall be an event of material default under this Agreement. If (i) MGC and/or NGCB, at any time, require Allegiant or any related party to be found suitable and Allegiant
receives an initial decision finding 

12

 

Allegiant
or related party unsuitable, or (ii) MGC and/or NGCB, at any time, disapprove or object to this Agreement in any way, revoke any approval or registration for the transaction or
suspend any business activity between Allegiant and HOC, or (iii) MGC and/or NGCB deny, suspend or revoke any registration, license, permit or approval sought by or obtained by Allegiant or
related party, or Allegiant or a related party is placed by MGC or NGCB on a restricted list or similar list that restricts HOC or its affiliated companies from transacting business with Allegiant or
a related party, then HOC may, in its sole discretion and, in addition to any other remedy permitted hereunder and pursuant to law, unilaterally terminate this Agreement without liability to Allegiant
or to any third party, whether or not Allegiant may pursue or is pursuing any rights to challenge any action or inaction of MGC or NGCB, in which case termination shall become effective on the date of
written notice thereof to Allegiant. Allegiant acknowledges that this Agreement is subject to the continuing oversight and jurisdiction of MGC and NGCB and any orders, directives or mandates issued
thereby to Allegiant or HOC relating to any terms of this Agreement, including the payment terms and, further, agrees to be bound by the terms of any such MGC or NGCB order, directives or mandates. 

26.   DEFAULT AND EARLY TERMINATION.  

        26.1 Except
as otherwise set forth herein, in the event of a monetary default by HOC which is not cured within [...***...] of written notice thereof,
Allegiant may terminate this Agreement. Except as otherwise set forth herein, in the event of a material default by Allegiant, which is not cured within [...***...] of written
notice thereof, HOC may either terminate this Agreement or offset any monetary amounts owed by Allegiant in its subsequent payment under section 8.1 or 8.2. 

        26.2 The
following events may justify immediate termination of this Agreement by the non-affected Party: (i) the making by either Party of any general
assignments for the benefit of creditors; (ii) the filing by either Party of or a petition for the reorganization or arrangement under any laws relating to bankruptcy (unless, in the case of a
petition filed against either Party, the same is dismissed within thirty (30) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of such
Party's assets; (iv) the attachment, execution or other judicial seizure of substantially all of such Party's assets; or (v) either Party's convening of a meeting of any creditors or any
class thereof for the purpose of effecting a moratorium upon or composition of such party's debts, or any class thereof. 

        26.3 In
the event that either Party's authorization under the FAA and/or the DOT is revoked, cancelled or suspended, wholly or in part, the non-impaired Party
may immediately terminate this Agreement by giving the impaired Party notice thereof. 

        26.4 Either
Party shall have the right to terminate this Agreement, for any reason or no reason, at any time, with [...***...] written notice.
Additionally, Horseshoe Tunica, Harrah's Reno and Harrah's Laughlin may each individually terminate their obligations under this Agreement, for any reason or no reason, at any time, with
[...***...] written notice to Allegiant. 

        26.5 The
rights of termination contained in this Section are in addition to any other remedies available to any of the Parties hereunder. 

        26.6 Unless
otherwise indicated, any termination of the Agreement by either Party pursuant to Section 26 shall be without prejudice to the claims of either Party up
to the date of termination. The rights and obligations of the Parties shall cease on the date of termination, except those obligations and debts arising prior to the date of termination, including but
not limited to any amounts owed to Allegiant for Services provided, the insurance obligations under Section 20, and any amounts owed to HOC hereunder. 

13

 

27.   SERVICES FOR THIRD PARTIES  

        Allegiant agrees that HOC shall have priority use of the Aircraft. Allegiant reserves the right to utilize the Aircraft to provide air transportation services to
third parties only if these services do not impact its ability to provide Services to HOC. In all cases, it is expressly agreed that Allegiant shall give HOC priority in the scheduling and operation
of the Aircraft. 

28.   MISCELLANEOUS  

        28.1 If
a litigated dispute should arise herein between Allegiant and HOC, the prevailing Party shall be entitled to receive from the non-prevailing Party, in
addition to any other compensation or award, all reasonable attorney fees and all costs of suit or claim therein. 

        28.2 This
Agreement and all Exhibits shall be governed by the laws of the State of Nevada. Venue shall solely lie in Clark County, Nevada, and the Parties hereto submit to
such jurisdiction. 

        28.3 In
the event that one or more of the provisions of this Agreement are held invalid, illegal, or unenforceable, the remaining provisions of this Agreement shall be
unimpaired. 

        28.4 Neither
Party will use for any commercial purpose customer/passenger names and addresses that are procured by the other Party. Allegiant will not directly or indirectly
solicit HOC's passengers 

        28.5 This
Agreement is entered into by HOC and Allegiant on their own behalf. 

        28.6 HOC
shall, at any time from the date hereof through one (1) year after the termination of this Agreement, be entitled to an audit of Allegiant's records to
determine Allegiant's compliance with the terms of this Agreement. HOC shall conduct any audit during normal business hours at the principal place of business of Allegiant or at another location
designated by Allegiant. If it shall be determined as a result of such audit that there has been non-compliance with any provision of this Agreement, Allegiant shall have thirty
(30) calendar days from the date HOC gives it written notice of its non-compliance to cure such non-compliance. In the event the non-compliance is a listed
default that allows HOC a different and/or shorter remedy, HOC may utilize such remedy. In the event Allegiant fails to cure said non-compliance within said time frame, HOC may immediately
terminate this Agreement. Should any non-compliance be found, Allegiant shall reimburse HOC for the cost of the audit or HOC may deduct the cost of the audit from any funds owed to
Allegiant under invoices issued by Allegiant pursuant to Section 8.2 of this Agreement. 

        28.7 This
Agreement, including its Exhibits attached hereto, constitute the entire agreement between Allegiant and the HOC relating to the subject matter hereof and
supersedes all written or oral agreements and/or other writings with respect hereto the services provided herein and may be altered, amended or modified only by a written instrument signed by an
authorized officer of each of the Parties to this Agreement. 

        28.8 Each
of the persons signing this Agreement warrants that he/she is authorized and has authority to execute this Agreement on behalf of his/her respective Party. 

        28.9 This
Agreement and all or any part of Allegiant's or HOC's rights hereunder may not be assigned, transferred or otherwise conveyed by either Party in whole or in part,
except to a subsidiary, affiliated or parent company, without the prior written consent of the other Party. Notwithstanding the foregoing, HOC may sell or assign all or a portion of the passenger
seats on any flight to third parties. 

        28.10  No
term or condition of this Agreement shall be deemed waived by either Party unless the waiver is in writing and is executed by the Party alleged to be bound by the
waiver. A waiver by either Party of a breach of any of the terms or conditions hereof will not constitute a waiver of any subsequent breach thereof or a waiver of any breach of any other term or
condition. 

14

 
X

X 

15

 

  
        IN WITNESS WHEREOF, HOC and Allegiant, by and through their duly authorized representatives, have executed this instrument as of the date first written above. 

							
	 Allegiant:	 	HOC:
	

Signed the 31st day of October, 2008	
 	
Signed the 31st day of October, 2008
	

for and on behalf of Allegiant Air, LLC	
 	
for and on behalf of HOC
	
by	
 	

 Andrew Levy

 	
 	
by	
 	

 Thomas M. Jenkin

 
	
its	
 	

 CFO/Managing Director

 	
 	
its	
 	

 Western Division President

 
	
Signature:	
 	

   

 	
 	
Signature:	
 	

     

 

 

							
	STATE OF	 	  

 	 	)	 	 
	 	 	 	 	) ss:	 	 
	COUNTY OF	 	  

 	 	)	 	 

        On
this            day
of                                         
       , 2007, before me a Notary Public, personally
appeared                                        
                                personally known to me (or proved to me on the basis of
satisfactory
evidence) to be the person who executed the within instrument
as                                         
                   on behalf
of                                         
                               , the limited liability company that executed it. 

			
	    	 	  

  Notary Public
	

 	
 	
  

  Notary Statement and/or Seal

 

							
	STATE OF	 	  

 	 	)	 	 
	 	 	 	 	) ss:	 	 
	COUNTY OF	 	  

 	 	)	 	 

        On
this            day
of                                         
       , 2007, before me a Notary Public, personally
appeared                                    personally known to me (or
proved to me on the basis of satisfactory
evidence) to be the person who executed the within instrument
as                                         
                   on behalf
of                                         
                               , the limited liability company that executed it.
 

			
	    	 	  

  Notary Public
	

 	
 	
  

  Notary Statement and/or Seal

16

 

 
 

Exhibit A    
    

	1.
	Aircraft

        The
Aircraft shall include the following: 

	a.
	1
MD-87 based at Tunica Municipal Airport in Tunica, Mississippi (UTA)

	b.
	1
MD-87 at Reno/Tahoe International Airport in Reno, Nevada (RNO)

	c.
	1
MD-87 based at Laughlin/Bullhead International Airport in Bullhead City, Arizona (IFP #1)

	d.
	1
MD-83 available on Tuesdays, Wednesdays, and Saturdays at Laughlin/Bullhead International Airport in Bullhead City, Arizona (IFP #2)

	2.
	Services 

        The
Services shall include the following: 

	a.
	Aircraft;

	b.
	Crews;

	c.
	Insurance;

	d.
	Maintenance;

	e.
	Stations
(all services associated with customer processing and ground handling, including airport facilities, landing fees, and security screening charges);

	f.
	Deicing;

	g.
	Catering
(soft drinks, juice, and dry snacks such as peanuts and pretzels). 

        Other
services provided would be at an additional cost to HOC. 

X

X

X

X

X

X

X

X

X

X

X

X

X 

17

 
	3.
	Price
for Services 

        The
Price for Services provided under this Agreement shall be determined by the following matrix, which identified the rate per Actual Block Hour flown for each aircraft at the Average
Fuel Price (Total Fuel Expense / Total Gallons Uplifted) for each month: 

															
	Average Fuel Price 	 	UTA 	 	RNO 	 	IFP #1 	 	IFP #2 	 
	 $	4.00 or higher	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.95	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.90	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.85	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.80	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.75	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.70	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.65	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.60	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.55	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.50	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.45	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.40	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.35	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.30	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.25	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.20	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.15	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.10	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.05	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	3.00	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	2.95	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	2.90	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	2.85	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	2.80	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	2.75	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	2.70	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	2.65	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	2.60	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	2.55	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 
	$	2.50 or lower	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 	 	[...***...]	 

        Block
Hour rate for each level shall be estimated by rounding to the closest level. i.e. UTA service shall be [...***...] per hour when fuel is $2.50 to
$2.525 and [...***...] when fuel is $2.526 to $2.575. 

        Additional
Charges: 

	a.
	[...***...]
per fuel stop

	b.
	[...***...]
per aircraft overnight away from Base

	4.
	Reimbursable
Expenses 

        These
include, but are not limited to catering (Section 13), liquor (Section 12), and PFCs (Section 9.3), and shall be reimbursed at Allegiant's cost. 

18

 
	5.
	Minimum
Block Hour Guarantee:

	a.
	UTA

	i.
	[...***...]
Block Hours for January 1 - March 31 (the "1st Quarter")

	ii.
	[...***...]
Block Hours for April 1 - June 30 (the "2nd Quarter")

	iii.
	[...***...]
Block Hours for July 1 - September 30 (the "3rd Quarter")

	iv.
	[...***...]
Block Hours for October 1 - December 31 (the "4th Quarter")

	b.
	RNO

	i.
	[...***...]
Block Hours for January 1 - March 31 (the "1st Quarter")

	ii.
	[...***...]
Block Hours for April 1 - June 30 (the "2nd Quarter")

	iii.
	[...***...]
Block Hours for July 1 - September 30 (the "3rd Quarter")

	iv.
	[...***...]
Block Hours for October 1 - December 31 (the "4th Quarter")

	c.
	IFP
#1

	i.
	[...***...]
Block Hours for January 1 - March 31 (the "1st Quarter")

	ii.
	[...***...]
Block Hours for April 1 - June 30 (the "2nd Quarter")

	iii.
	[...***...]
Block Hours for July 1 - September 30 (the "3rd Quarter")

	iv.
	[...***...]
Block Hours for October 1 - December 31 (the "4th Quarter")

	d.
	IFP
#2—No Minimum Block Hour Guarantee 

X

X

X

X

X

X

X

X

X

X

X

X

X 

19

 
 
 

Exhibit B    
    

	A.
	Delayed
Flights 

        Provided
passenger boarding of the aircraft has not then commenced, the following amenities shall be furnished to passengers delayed three (3) hours or
more: 

	1.
	Meals

	a.
	3
to 6 Hour Delay: one meal

	b.
	6
to 8 Hour Delay: a second meal

	c.
	8
to 12 Hour Delay: a third meal

	d.
	12+
Delay: a fourth meal

	e.
	Meal
shall include delivery of food to passengers in the gate area or monetary allowances per passenger shall not exceed $7 for breakfast or snack, $10 for
lunch, $15 for dinner.

	2.
	Hotel
Accommodations and Ground Transportation 

        a.     Eligible
passengers (as determined in accordance with "b" below) shall be provided hotel accommodations only to the extent (a) the period of delay has exceeded
five (5) hours after the scheduled departure time; (b) the delay has extended or will be extended beyond 2100 hours (9:00 PM) local time; and (c) there is no reasonable
expectation that departure will occur within four (4) hours thereafter; provided, that clause "b" shall not apply in the case of flights having a scheduled departure time later than
2100 hours local time. Hotel accommodations shall be standard category (e.g. Days Inn,
Comfort Inn) unless no such accommodations are available, in which case the most economical accommodations in the next higher category shall apply. 

        b.     Passengers
residing within a 50-mile radius of the airport at which a delay occurs shall not be provided hotel accommodations. In lieu thereof, such
passengers shall receive the value of ground transfer from the airport to their place of residence and return, via taxicab, airport van/minibus/limo service, or standard category rental car, whichever
is most economical. To the extent any such passengers have driven to the airport and prefer to use their own transportation, such passengers may elect to do so and be reimbursed for parking charges
incurred since arrival at the airport plus mileage to their place of residence and return at the rate of 20 cents per mile. 

        c.     If
the delay occurs in a location where HOC has a hotel property, all guests will be housed at HOC hotel, or a hotel within a ten mile radius of HOC's hotel, subject to
availability.  

	3.
	Costs

        a.     If
the delay is caused by Force Majeure reasons, weather conditions, air traffic control delays, or other causes outside Allegiant's reasonable control, the costs shall
be borne solely by HOC. Any costs incurred by Allegiant in such a situation shall be invoiced and reimbursed by HOC pursuant to Section 8.2. 

        b.     If
the delay is caused by any other reason than those listed in 3(a) above, then the costs shall be borne solely by Allegiant, provided that any stay at HOC's hotel shall
be at cost.  

	B.
	Cancelled
Flights

	1.
	If
a flight is cancelled due to Force Majeure reasons, weather conditions, air traffic control, or other causes outside Allegiant's reasonable control,
Allegiant shall use its best efforts to assist HOC in making alternative travel arrangements for HOC's passengers. Allegiant shall invoice and be reimbursed by HOC for any costs incurred by Allegiant
in making such arrangements. 

20

 

	2.
	If
a flight is cancelled due reasons other than those listed in B 1 above, Allegiant shall be fully and solely responsible to make necessary alternative
transportation arrangements. If no such arrangements are made and the passengers are unable to make their trip, then Allegiant shall reimburse payments made to it by HOC in advance for that particular
flight (or flights, in the event that the cancelled flight is for the first or outbound segment).

	C.
	Irregular
Operations

	1.
	If
a flight lands at an alternative airport and is unable to continue to its scheduled destination due to Force Majeure reasons, weather conditions, air
traffic control delays, or other causes outside Allegiant's reasonable control, Allegiant shall use its best efforts to make alternative transportation arrangements for HOC's passengers. Allegiant
shall invoice to and be reimbursed by HOC for any costs incurred by Allegiant in making such arrangements.

	2.
	If
a flight lands at an alternative airport and is unable to continue to its scheduled destination due to reasons other than those listed in C 1 above,
Allegiant shall be fully and solely responsible to make necessary alternative transportation arrangements and it shall bear all associated costs.

	D.
	Substitute
Aircraft 

Any
substitute aircraft used for any charter flight must be equal or superior, in terms of interior passenger cabin volume, seating capacity, baggage capacity, and cruising speed, to the make and
model of aircraft specified in Exhibit A, Paragraph 1, and shall be provided without additional charge to HOC. Allegiant shall not under any circumstances utilize any of the following
aircraft without the prior written approval of HOC, which approval may be withheld by HOC and is complete, absolute and unreviewable: 

	a.
	Any
aircraft, the type certificate for which was originally issued more than thirty (30) years prior to the date of this Agreement

	b.
	Any
single-engine aircraft

	c.
	Any
piston-engine aircraft

	d.
	Any
DC-2, 3, 4 or 6

	e.
	Lockheed
Lodestar

	f.
	Lockheed
Jet Stars

	g.
	Lockheed
Electra

	h.
	DC-2,3,4,
or 6

	i.
	Lockheed
Constellation

	j.
	Beech
18 Series

	k.
	Fairfield
F-27

	l.
	Mitsubishi
MU2

	m.
	BAC
III

	n.
	Lear
23, 24 or 25 

X

X

X

X

X 

21

QuickLinks

Exhibit 10.19

AIR TRANSPORTATION CHARTER AGREEMENT

RECITIALS

Exhibit A

Exhibit BExhibit 10.1(c)

 

SUB-ADVISORY
AGREEMENT

 

This SUB-ADVISORY AGREEMENT is made as of March 3,
2009 (this “Agreement”) by and among Crystal River Capital, Inc., a
Maryland corporation (the “Company”), Hyperion Brookfield Crystal River Capital
Advisors, LLC, a Delaware limited liability company (the “Manager”), and
Hyperion Brookfield Asset Management, Inc., a Delaware corporation (the “Sub-Advisor”).

 

WITNESSETH:

 

WHEREAS, pursuant to the terms of a Management
Agreement, dated as of March 15, 2005 (as amended from time to time, the “Management
Agreement”), between the Company and the Manager, the Company has retained the
Manager for the purpose of providing day-to-day management and administrative
services to the Company;

 

WHEREAS, the Manager desires to retain the
Sub-Advisor for the purpose of providing certain investment advisory services
to the Manager in connection with the Manager’s service as the manager of the
Company; and

 

WHEREAS, the Sub-Advisor is willing to render such
services on the terms and conditions hereinafter set forth.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual
agreements herein set forth, the parties hereto agree as follows:

 

1.                                       Definitions.

 

(a)                                  “Affiliate”
shall mean, with respect to any Person, any Person Controlling, Controlled by,
or under common Control with, such Person.

 

(b)                                 “Agreement”
has the meaning assigned in the first paragraph.

 

(c)                                  “Applicable Asset” has the meaning assigned
in Section 2(a).

 

(d)                                 “Board
of Directors” means the Board of Directors of the Company.

 

(e)                                  “Closing Price” means, with respect to any
security on any date, the last reported sale price for such security,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, for such security, in either
case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York Stock
Exchange (the “NYSE”) or, if
such security is not listed or admitted to trading on the NYSE, as reported on
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which such
security is listed or admitted to trading or, if such security is not listed or
admitted to trading on any national securities exchange, the last quoted price,
or, if not so

 

 

quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported
by the National Association of Securities Dealers, Inc. Automated
Quotation System or, if such system is no longer in use, the principal other
automated quotation system that may then be in use or, if such security is not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in such
security selected by the Sub-Advisor or, in the event that no trading price is
available for such security, the fair market value of such security, as
determined in good faith by the Sub-Advisor pursuant to its institutional
pricing policies and procedures.

 

(f)                                    “Code” means the Internal Revenue Code of
1986, as amended.

 

(g)                                 “Company” has the meaning assigned in the
first paragraph; provided that all references herein to the Company
shall, except as otherwise expressly provided herein, be deemed to include any
Subsidiaries of Crystal River Capital, Inc.

 

(h)                                 “Company Account” has the meaning assigned in
Section 5.

 

(i)                                     “Control”
shall mean, the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of another Person without the
consent or approval of any other Person.

 

(j)                                     “Exchange Act” means the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated
thereunder.

 

(k)                                  “GAAP” means generally accepted accounting
principles in effect in the U.S. on the date such principles are applied
consistently.

 

(l)                                     “Governing Instruments” means, with respect
to any Person, the articles of incorporation and bylaws in the case of a corporation,
the certificate of limited partnership (if applicable) and partnership
agreement in the case of a general or limited partnership or the articles of
formation and operating agreement in the case of a limited liability company.

 

(m)                               “Hyperion Brookfield” means Hyperion Brookfield
Asset Management, Inc.

 

(n)                                 “Investment Company Act” means the Investment
Company Act of 1940, as amended.

 

(o)                                 “Investment Guidelines” means the general
parameters and policies relating to Investments as established by the Board of
Directors as the same may be modified from time-to-time.

 

(p)                                 “Investments” means the investments of the
Company.

 

(q)                                 “Manager” has the meaning assigned in the
first paragraph.

 

(r)                                    “Market
Value” means, with respect to any security, the Closing Price for such security
on such date. The “Closing Price” on any date shall mean the last reported sale

 

2

 

price for the applicable security,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, for such security, in either
case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York Stock
Exchange (the “NYSE”) or, if such security is not listed or admitted to trading
on the NYSE, as reported on the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which such security is listed or admitted to trading or, if such security
is not listed or admitted to trading on any national securities exchange, the
last quoted price, or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System or, if
such system is no longer in use, the principal other automated quotation system
that may then be in use or, if such security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in such security selected by the Sub-Advisor
or, in the event that no trading price is available for such security, the fair
market value of such security, as determined in good faith by the Sub-Advisor
pursuant to its institutional pricing policies and procedures.

 

(s)                                  “Person” means any individual, corporation,
partnership, joint venture, limited liability company, estate, trust, unincorporated
association, any federal, state, county or municipal government or any bureau,
department or agency thereof and any fiduciary acting in such capacity on
behalf of any of the foregoing.

 

(t)                                    “REIT” means a corporation or trust which
qualifies as a real estate investment trust in accordance with Sections 856
through 860 of the Code and the Treasury Regulation promulgated thereunder.

 

(u)                                 “Sub-Advisor” has the meaning assigned in the
first paragraph.

 

(v)                                 “Sub-Advised Portfolio” has the meaning assigned
in Section 2(a).

 

(w)                               “Subsidiary” means any subsidiary of the
Company, any partnership, the general partner of which is the Company or any
subsidiary of the Company and any limited liability company, the managing
member of which is the Company or any subsidiary of the Company.

 

(x)                                   “Treasury
Regulations” means the Procedures and Administration Regulations promulgated by
the U.S. Department of Treasury under the Code, as amended.

 

2.                                       Retention and Duties of
Sub-Advisor.

 

(a)                                  The Manager hereby retains the Sub-Advisor as
its investment advisor with respect to the investment of a portion of the
Company’s assets in mortgage-backed securities and other real estate assets as
designated from time to time by the Manager (each an “Applicable Asset”) and to
provide investment research and advice with respect to, supervise and arrange
the purchase of Applicable Assets for, and the sale of Applicable Assets held
in, the Company’s investment portfolio (the portion of the Company’s portfolio
consisting of the Applicable Assets is referred to herein as the “Sub-Advised
Portfolio”), subject to the further

 

3

 

terms
and conditions set forth in this Agreement, and the Sub-Advisor hereby agrees
to perform each of the duties set forth herein in accordance with the
provisions of this Agreement.

 

(b)                                 Subject to the further terms and conditions
set forth in this Agreement, the Sub-Advisor will perform (or cause to be
performed) such services and activities relating to the Sub-Advised Portfolio
as is appropriate, including:

 

(i)                                     acting as investment adviser for, and
supervising and managing the investment and reinvestment of, the Sub-Advised
Portfolio and, in connection therewith, making recommendations relating to the
purchase and sale of Applicable Assets for the Company and relating to the
vote, exercise of consents, and exercise of all other rights appertaining to
such assets owned by the Company;

 

(ii)                                  supervising continuously the investment
program of the Company and the composition of its investment portfolio only as
such program and portfolio pertain to the Applicable Assets; and

 

(iii)                               arranging for the purchase and sale of
Applicable Assets held in the Sub-Advised Portfolio.

 

(c)                                  In the performance of its duties under this Agreement,
the Sub-Advisor shall at all times conform to, and act in accordance with, any
requirements imposed by (i) the provisions of the Investment Advisers Act
of 1940, as amended (the “Act”), and any rules or regulations in force
thereunder, (ii) the Investment Guidelines and other policies adopted and
implemented by the Board of Directors; (iii) any other written directions
of the Board of Directors or authorized officers of the Company; (iv) any
policies or written directions of the Manager; and (v) any other
applicable provision of law, including federal, state, county or city
regulations.

 

(d)                                 The
Manager will have sole and absolute discretion to determine the amount or
percentage of the Company’s assets to be invested in Applicable Assets. Subject
to Section 7(a), the Sub-Advisor shall recommend for investment that
portion of the Company’s assets designated by the Manager for Applicable Assets
as soon as practicable or at such later time as the Manager may direct after
such funds are made available for investment. From time to time, the Manager
may, subject to the Investment Guidelines, determine to increase or decrease
the amount or percentage of the Company’s assets to be invested in Applicable
Assets. If the Manager determines to increase such amount or percentage, the
Sub-Advisor shall recommend for investment such additional funds in Applicable
Assets as soon as practicable, or at such later time as the Manager may,
subject to the Investment Guidelines, direct, after (i) notice of such
increase is given to the Sub-Advisor and (ii) such additional funds are
made available for investment. If, on the other hand, the Manager determines to
decrease such amount or percentage, the Sub-Advisor shall, as soon as
practicable, or at such later time as the Manager may direct, after notice of
such decrease is given to the Sub-Advisor, liquidate that portion of the
Sub-Advised Portfolio required for the Sub-Advised Portfolio to represent the
desired amount or percentage of the Company’s assets and cause such liquidated
assets to be available to the Manager.

 

4

 

(e)                                  Financing
assets in the Sub-Advised Portfolio and related hedging of exposure, if any,
will be undertaken by the Manager in consultation with the Sub-Advisor.

 

The Sub-Advisor is authorized, for the purchase and sale of the
securities in the Sub-Advised Portfolio, to employ such securities dealers as
may, in the judgment of the Sub-Advisor, implement the policy of the Company to
obtain the best net results taking into account such factors as price,
including dealer spread, the size, type and difficulty of the transaction
involved, the firm’s general execution and operational facilities and the firm’s
risk in positioning the securities involved. Consistent with this policy, the
Sub-Advisor is authorized to direct the execution of the Sub-Advised Portfolio
transactions to dealers and brokers furnishing statistical information or
research deemed by the Sub-Advisor to be useful or valuable to the performance
of its investment advisory functions for the Sub-Advised Portfolio.

 

(g)                                 The
cash and Applicable Assets managed by the Sub-Advisor on behalf of the Company
shall be held by the Company’s custodian, which initially shall be Credit
Suisse First Boston LLC (the “Custodian”), which the Sub-Advisor represents has
no affiliation with the Sub-Advisor and which the Manager hereby represents has
agreed to act in accordance with the Sub-Advisor’s instructions, as sole
custodian for the cash and Applicable Assets allocated by the Manager to the
Sub-Advisor. The Sub-Advisor may give
proper instructions to the Custodian in connection with the purchase or sale of
Applicable Assets. The Manager, upon
the Sub-Advisor’s request, shall confirm such authority of such custodian. The
Sub-Advisor shall at no time have custody, possession or direct control of the
Applicable Assets and cash in the investment account. In addition, the
Sub-Advisor shall not be liable for any act or omission of the Custodian. The
Sub-Advisor shall give instructions to the Custodian in writing or orally, but
if instructions are given orally, the Sub-Advisor shall confirm them in writing
or by facsimile as soon as practicable thereafter. The Manager shall instruct
the Custodian to provide the Sub-Advisor with such periodic reports concerning
the status of the Applicable Assets as the Sub-Advisor may reasonably request
from time to time. The Manager will provide the Sub-Advisor with reasonable
prior notice of a change in the Custodian by the Company.

 

(h)                                 The
Sub-Advisor shall assist the Manager in the preparation of ongoing reports to
the Board of Directors that review the Company’s acquisitions of Applicable
Assets, portfolio composition and characteristics, credit quality, performance
and compliance with the Investment Guidelines and policies approved by the
Board of Directors.

 

(i)                                     The
Sub-Advisor shall cooperate with the Manager and the Company in all matters
pertaining to its performance hereunder and under agreements among the Manager,
the Company and other sub-advisors, including, without limitation: (i) timely reporting of
all transaction information; (ii) responding in a timely manner to all
reasonable requests for information from the Manager and the Company and (iii) meeting
with staff of the Manager and the Company as requested.

 

(j)                                     The Sub-Advisor shall not be required to
expend money in excess of that contained in any applicable Company Account or
otherwise made available by the Company to be expended by the Sub-Advisor
hereunder.

 

5

 

(k)                                  In performing its duties under this Section 2,
the Sub-Advisor shall be entitled to rely on qualified experts and
professionals (including, without limitation, accountants, legal counsel and
other professional service providers) hired by the Sub-Advisor at the Company’s
sole cost and expense.

 

(l)                                     The Company shall pay all expenses, and
reimburse the Sub-Advisor for the Sub-Advisor’s expenses incurred on its
behalf, in connection with any such services to the extent such expenses are
reimbursable by the Company to the Sub-Advisor pursuant to Section 9
herein.

 

3.                                       Dedication; Other Activities.

 

(a)                                  The Sub-Advisor shall cause its officers and
employees to devote such portion of their time to the provision of services to
the Manager as the Sub-Advisor deems reasonably necessary and appropriate for
the proper performance of all of the Sub-Advisor’s duties hereunder,
commensurate with the level of activity of the Company from time to time. The
Company and the Manager shall have the benefit of the Sub-Advisor’s reasonable
judgment and effort in rendering services and, in furtherance of the foregoing,
the Sub-Advisor shall not undertake activities which, in its reasonable
judgment, will substantially adversely affect the performance of its
obligations under this Agreement.

 

(b)                                 Except to the extent set forth in
clause (a) above, nothing herein shall prevent the Sub-Advisor or any
of its Affiliates or any of the officers and employees of any of the foregoing
from engaging in other businesses or from rendering services of any kind to any
other Person, including investment in, or advisory services to others investing
in, any type of real estate, real estate-related investment or non-real
estate-related instrument, including investments which meet the principal
investment objectives of the Company.

 

4.                                       Agency; Authority. Subject to Section 7(a), the
Sub-Advisor shall act as the agent of the Company in originating, acquiring,
financing and disposing of Applicable Assets and, in connection therewith,
disbursing and collecting the Company’s funds, paying the debts and fulfilling
the obligations of the Company, supervising the performance of professionals
engaged by or on behalf of the Company and handling, prosecuting and settling
any claims of or against the Company, the Board of Directors, holders of the
Company’s securities or the Company’s representatives or assets and the
Sub-Advisor shall have the right to exercise all powers and authority which are
reasonably necessary and customary to perform its obligations under this
Agreement provided that all transactions in Applicable Assets shall require the
approval of the Manager and, as required by Section 7(a) herein, the
Board of Directors.

 

5.                                       Bank Accounts. At the direction of the Board of Directors
and the Manager, the Sub-Advisor may establish and maintain as an agent on
behalf of the Company one or more bank accounts in the name of the Company or
any other Subsidiary (any such account, a “Company Account”), collect and
deposit funds into any such Company Account and disburse funds from any such
Company Account, under such terms and conditions as the Board of Directors and
the Manager may approve. The Sub-Advisor shall from time-to-time render
appropriate accountings of such collections and payments to the Board of
Directors, the Manager and, upon request, to the auditors of Company.

 

6

 

 

 

 

6.                                       Book and Records;
Confidentiality.

 

(a)                                  The Sub-Advisor shall maintain appropriate
books of account, records data and files (including without limitation,
computerized material) (collectively, “Records”) relating to the Company and
the Applicable Assets generated or obtained by the Sub-Advisor in performing
its obligations under this Agreement, and such Records shall be accessible for
inspection by representatives of the Company and the Manager at any time during
normal business hours. The Sub-Advisor shall have full responsibility for the
maintenance, care and safekeeping of all Records.

 

(b)                                 The Sub-Advisor shall keep confidential any
nonpublic information obtained in connection with the services rendered under
this Agreement and shall not disclose any such information (or use the same
except in furtherance of its duties under this Agreement), except: (i) to
the Manager and Hyperion Brookfield; (ii) with the prior written consent
of the Board of Directors and the Manager; (iii) to legal counsel, accountants
and other professional advisors; (iv) to appraisers, financing sources and
others in the ordinary course of the Company’s business of investing in
Applicable Assets; (v) to governmental officials having jurisdiction over
the Company; (vi) in connection with any governmental or regulatory
filings of the Company or disclosure or presentations to Company investors or (vii) as
required by law or legal process to which the Sub-Advisor or any Person to whom
disclosure is permitted hereunder is a party. The foregoing shall not apply to
information which has previously become available through the actions of a
Person other than the Sub-Advisor not resulting from Sub-Advisor’s violation of this Section 6(b). The
provisions of this Section 6(b) shall survive the expiration or
earlier termination of this Agreement for a period of one year.

 

7.                                       Restrictions; Other Obligations.

 

(a)                                  The
Company shall not acquire any Investment from, sell any Investment to, or
engage in any co-investment with, any proprietary account of Hyperion
Brookfield, its principals, the Manager, the Sub-Advisor or any of their
respective Affiliates without the approval of the Board of Directors. The
Company shall not make any Investment in any collateralized debt obligation or
investment fund managed by Hyperion Brookfield, other than those structured or
co-structured on the Company’s behalf.

 

(b)                                 The
Sub-Advisor shall maintain “errors and omissions” insurance coverage and such
other insurance coverage which is customarily carried by property, asset and
investment managers performing functions similar to those of the Sub-Advisor
under this Agreement with respect to assets similar to the Applicable Assets,
in an amount which is comparable to that customarily maintained by other
managers or servicers of similar assets.

 

8.                                       Compensation. The Manager shall pay the
Sub-Advisor an annual investment advisory fee (the “Sub-Advisory Fee”) equal to
0.75% of the Market Value of (i) the Applicable Assets held by the Company
less (ii) the carrying value in the Company’s financial statements of the liabilities
of the Company’s two collateralized debt obligation structures, the March 2007
issuance of trust preferred securities and any other financing used to finance
the Applicable Assets (all such indebtedness, the “Applicable Liabilities”);
provided that in no event for any fiscal quarter of the Company shall the
Sub-Advisory Fee be more than the greater of (x) 50% of

 

7

 

all base management fees
and incentive management fees paid to the Manager for such period as calculated
pursuant to the Management Agreement and (y) an amount calculated as (A) the
base management fee for such period as calculated pursuant to the Management
Agreement multiplied by (B) a fraction, the numerator of which is the
Market Value of the Applicable Assets less the Market Value of the Applicable
Liabilities, and the denominator of which is the stockholders’ equity of the
Company as of the last date of such quarter, calculated in accordance with the
Management Agreement. The investment advisory fee shall be paid quarterly in
arrears in the same kind of consideration in which any base management fee and
any incentive management fee is paid to the Manager for such period. The
Sub-Advisor shall make available the quarterly calculation of the investment
advisory fee to the Manager as reasonably as practicable following the last day
of each calendar quarter, and the Manager shall pay the investment advisory fee
for such quarter within 20 business days after its receipt thereof.

 

9.                                       Expenses. Each of the Company, the Manager and the
Sub-Advisor shall bear all of its respective operating expenses, except
those specifically required to be borne by the Manager under the Management
Agreement and those required to be borne by the Sub-Advisor. The expenses
required to be paid by the Company include, but are not limited to:

 

(a)                                  issuance
and transaction costs incident to the acquisition, disposition and financing of
Investments;

 

(b)                                 legal,
regulatory, compliance, tax, accounting, consulting, auditing and
administrative fees and expenses;

 

(c)                                  the
compensation and expenses of the Company’s directors and the cost of liability
insurance to indemnify the Company’s directors and officers;

 

(d)                                 the
costs associated with the establishment and maintenance of any credit
facilities and other indebtedness of the Company (including commitment fees,
accounting fees, legal fees, closing costs, etc.);

 

(e)                                  expenses
associated with other securities offerings of the Company;

 

(f)                                    expenses
relating to the payment of dividends;

 

(g)                                 expenses
connected with communications to holders of the Company’s securities and in
complying with the continuous reporting and other requirements of the
Securities and Exchange Commission and other governmental bodies;

 

(h)                                 transfer
agent and exchange listing fees;

 

(i)                                     the
costs of printing and mailing proxies and reports to the Company’s stockholders;

 

(j)                                     costs
associated with any computer software or hardware, electronic equipment, or
purchased information technology services from third party vendors that is used
solely for the Company;

 

8

 

(k)                                  costs
and out of pocket expenses incurred by directors, officers, employees or other
agents of the Manager for travel on the Company’s behalf;

 

(l)                                     the
costs and expenses incurred with respect to market information systems and
publications, research publications and materials;

 

(m)                               settlement,
clearing, and custodial fees and expenses;

 

(n)                                 the
costs of maintaining compliance with all federal, state and local rules and
regulations, including securities regulations, or any other regulatory agency,
all taxes and license fees and all insurance costs incurred on the Company’s
behalf; and

 

(o)                                 expenses
relating to any office or office facilities, including disaster backup recovery
sites and facilities maintained for the Company or separate from offices of the
Manager or the Sub-Advisor.

 

In
addition, the Company will be required to pay its pro rata
portion of rent, telephone, utilities, office furniture, equipment, machinery
and other office, internal and overhead expenses of the Sub-Advisor and its
Affiliates required for the Company’s operations.

 

The Sub-Advisor is not entitled to be reimbursed for
wages, salaries and benefits of its officers and employees. Subject to any
required approval of the Board of Directors and/or the Manager, the Sub-Advisor
may retain third parties including accountants, legal counsel, real estate
underwriters, brokers, among others, on the Company’s behalf, and be reimbursed
for such services. The provisions of this Section 9 shall survive the
expiration or earlier termination of this Agreement to the extent such expenses
have previously been incurred or are incurred in connection with such
expiration or termination.

 

10.                                 Expense Reports and
Reimbursements. The
Sub-Advisor shall prepare a statement documenting the operating expenses of the
Company incurred by the Sub-Advisor on behalf of the Company during each fiscal
quarter, and deliver the same to the Company and the Manager within 45 days
following the end of the applicable fiscal quarter. Such expenses shall be
reimbursed by the Company within 45 days following delivery of the expense
statement by the Sub-Advisor; provided, however, that such
reimbursements may be offset by the Sub-Advisor against amounts due to the
Company from the Sub-Advisor. The provisions of this Section 10 shall
survive the expiration or earlier termination of this Agreement.

 

11.                                 Limits of Manager
Responsibility; Indemnification.

 

(a)                                  Pursuant
to this Agreement, the Sub-Advisor will not assume any responsibility other
than to render the services called for hereunder and will not be responsible
for any action of the Board of Directors or the Manager in following or declining
to follow its advice or recommendations. The Sub-Advisor, its directors,
officers, managers and employees will not be liable to the Company, any
Subsidiary, the Manager, any of their directors, officers, stockholders,
managers, owners or partners for acts or omissions performed or not performed
in accordance with and pursuant to this Agreement, except by reason of acts or
omissions

 

9

 

constituting bad faith,
willful misconduct, gross negligence or reckless disregard of the Sub-Advisor’s
duties under this Agreement.

 

(b)                                 The
Company hereby agrees to indemnify, defend and hold harmless the Sub-Advisor,
the Manager and their respective Affiliates, officers, directors, members,
managers, employees, agents, successors and assigns from and against all
liabilities, judgments, costs, charges, losses, expenses and claims, including
attorneys’ fees, charges and expenses and expert witness fees, of any nature,
kind or description, arising out of claims by third parties based on acts or
omissions of the Sub-Advisor performed or not performed in accordance with and
pursuant to this Agreement, except (i) to the extent caused by or
resulting from acts or omissions constituting bad faith, willful misconduct,
gross negligence or reckless disregard of the Sub-Advisor’s duties under this
Agreement, as determined pursuant to a final, non-appealable order of a court
of competent jurisdiction or (ii) claims by the Sub-Advisor’s employees
relating to the terms and conditions of their employment with the Sub-Advisor.

 

(c)                                  The
Sub-Advisor hereby agrees to indemnify the Company, the Manager and their respective
directors and officers with respect to all liabilities, judgments, costs,
charges, losses, expenses and claims, including attorney’s fees, charges and
expenses and expert witness fees, of any nature, kind or description, arising
out of (i) claims by third parties based on acts or omissions of the
Sub-Advisor performed or not performed in accordance with and pursuant to this
Agreement constituting bad faith, willful misconduct, gross negligence or
reckless disregard of the Sub-Advisor’s duties under this Agreement, as
determined pursuant to a final, non-appealable order of a court of competent
jurisdiction or (ii) claims by the Sub-Advisor’s employees relating to the
terms and conditions of their employment with the Sub-Advisor.

 

(d)                                 The
party seeking indemnity (“Indemnitee”) will promptly notify the party against
whom indemnity is claimed (“Indemnitor”) of any claim for which it seeks
indemnification; provided, however, that the failure to so notify the
Indemnitor will not relieve Indemnitor from any liability which it may have
hereunder, except to the extent such failure actually prejudices Indemnitor. The
Indemnitor shall have the right to assume the defense and settlement of such
claim; provided that, Indemnitor notifies Indemnitee of its election to assume
such defense and settlement within thirty (30) days after the Indemnitee gives
the Indemnitor notice of the claim. In such case the Indemnitee will not settle
or compromise such claim, and the Indemnitor will not be liable for any such
settlement made without its prior written consent. If Indemnitor is entitled
to, and does, assume such defense by delivering the aforementioned notice to
Indemnitee, Indemnitee will (i) have the right to approve Indemnitor’s
counsel (which approval will not be unreasonably withheld or delayed), (ii) be
obligated to cooperate in furnishing evidence and testimony and in any other
manner in which Indemnitor may reasonably request and (iii) be entitled to
participate in (but not control) the defense of any such action, with its own
counsel and at its own expense.

 

(e)                                  Reasonable
expenses (including attorney’s fees) incurred by an Indemnitee in defense or
settlement of a claim that may be subject to a right of indemnification
hereunder may be advanced by the Company to such Indemnitee as such expenses
are incurred prior to the final disposition of such claim; provided that,
Indemnitee undertakes to repay such

 

10

 

amounts if its shall be
determined ultimately by a court of competent jurisdiction that Indemnitee was
not entitled to be indemnified hereunder.

 

(f)                                    The
Sub-Advisor shall remain entitled to exculpation from the Company and the
Manager and indemnification from the Company pursuant to this Section 11
(subject to the limitations set forth herein) with respect to any matter
arising prior to the termination of this Agreement and shall have no liability
to the Company or the Manager in respect of any matter arising after such
termination unless such matter arose out of events or circumstances that
occurred prior to such termination.

 

12.                                 No Joint Venture. Nothing in this Agreement shall be
construed to make the Company, the Manager and the Sub-Advisor partners or
joint venturers or impose any liability as such on either of them.

 

13.                                 Term; Termination.

 

(a)                                  This Agreement shall become effective on the
date first set forth above. This Agreement may be terminated by the Sub-Advisor
at any time without penalty upon giving the Manager 60 days’ prior written
notice (which notice may be waived by the Manager), and may be terminated by
the Manager at any time without penalty upon giving the Sub-Advisor 30 days’
prior written notice (which notice may be waived by the Sub-Advisor). This
Agreement shall terminate automatically (i) immediately upon termination
of the Management Agreement or (ii) in the event of its assignment (as “assignment”
is defined in the Investment Advisers Act of 1940).

 

(b)                                 If this Agreement is terminated pursuant to
this Section 13, such termination shall be without any further liability
or obligation of either party to the other, except as otherwise expressly
provided herein.

 

14.                                 Action Upon Termination or
Expiration of Origination Period. From and after the effective date of termination of this Agreement
pursuant to Section 13 herein, the Sub-Advisor shall not be entitled to
compensation for further services under this Agreement but shall be paid all
compensation accruing to the date of termination, reimbursement for all operating
expenses of the Company borne by the Sub-Advisor for the benefit of the Company and a termination fee, if applicable. Upon
such termination or expiration, the Sub-Advisor shall reasonably promptly:

 

(a)                                  after deducting any accrued compensation and
reimbursement for all expenses to which it is then entitled, pay over to the
Company all money collected and held for the account of the Company pursuant to
this Agreement;

 

(b)                                 deliver to the Board of Directors and the
Manager a full accounting, including a statement showing all payments collected
and all money held by it, covering the period following the date of the last
accounting furnished to the Board of Directors and the Manager with respect to
the Company and through the termination date; and

 

(c)                                  deliver to the Manager all property and
documents of the Company provided to or obtained by the Sub-Advisor pursuant to
or in connection with this Agreement,

 

11

 

including
all copies and extracts thereof in whatever form, then in the Sub-Advisor’s
possession or under its control.

 

15.                                 Assignment. None of the parties hereto may assign its
duties under this Agreement.

 

16.                                 Notices. Unless expressly provided otherwise in this
Agreement, all notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given, made and received when delivered against receipt or upon
actual receipt of (a) personal delivery, (b) delivery by a reputable
overnight courier, (c) delivery by facsimile transmission against
answerback or (d) delivery by registered or certified mail, postage
prepaid, return receipt requested, addressed as set forth below:

 

	
  If to the Company:

  	
   

  	
  Crystal River Capital, Inc.

  Three World Financial Center

  200 Vesey Street, 10th Floor

  New York, New York 10281
 Attn: General Counsel
 Facsimile:
  (212) 549-8310

  
	
   

  	
   

  	
   

  
	
  If to the Manager:

  	
   

  	
  Hyperion Brookfield Crystal River Capital

  Advisors, LLC

  Three World Financial Center

  200 Vesey Street, 10th Floor

  New York, New York 10281
 Attn: General Counsel
 Facsimile:
  (212) 549-8310

  
	
   

  	
   

  	
   

  
	
  If to the Sub-Advisor:

  	
   

  	
  Hyperion Brookfield Asset Management, Inc.

  Three World Financial Center

  200 Vesey Street, 10th Floor

  New York, New York 10281
 Attn: General Counsel
 Facsimile:
  (212) 549-8310

  

 

Any party may change the address to which
communications or copies are to be sent by giving notice of such change of
address in conformity with the provisions of this Section 16 for the
giving of notice.

 

17.                                 Binding Nature of Agreement;
Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors and permitted
assigns as provided in this Agreement.

 

18.                                 Entire Agreement; Amendments. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the
subject matter hereof and supersedes all prior and contemporaneous agreements, understandings,
inducements and

 

12

 

conditions,
express or implied, oral or written, of any nature whatsoever with respect to
the subject matter of this Agreement. The express terms of this Agreement
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms of this Agreement. This Agreement may not be
modified or amended other than by an agreement in writing signed by the parties
hereto.

 

19.                                 Governing Law. This Agreement and all questions relating
to its validity, interpretation, performance and enforcement shall be governed
by and construed, interpreted and enforced in accordance with the laws of the
State of New York.

 

20.                                 Indulgences, Not Waivers. Neither the failure nor any delay on the
part of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.

 

21.                                 Titles Not to Affect
Interpretation. The titles
of sections, paragraphs and subparagraphs contained in this Agreement are for
convenience only, and they neither form a part of this Agreement nor are
they to be used in the construction or interpretation of this Agreement.

 

22.                                 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts of this Agreement, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as
the signatories.

 

23.                                 Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that for
any reason any other or others of them may be invalid or unenforceable in whole
or in part.

 

24.                                 Principles of Construction. Words used herein regardless of the number
and gender specifically used, shall be deemed and construed to include any
other number, singular or plural, and any other gender, masculine, feminine or
neuter, as the context requires. All references to recitals, sections,
paragraphs and schedules are to the recitals, sections, paragraphs and
schedules in or to this Agreement unless otherwise specified.

 

[SIGNATURE PAGE FOLLOWS]

 

13

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.

 

 

	
   

  	
  THE COMPANY:

  
	
   

  	
   

  
	
   

  	
  CRYSTAL RIVER CAPITAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Craig J. Laurie

  
	
   

  	
  Name:

  	
  Craig J. Laurie

  
	
   

  	
  Title:

  	
  Chief Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE MANAGER:

  
	
   

  	
   

  
	
   

  	
  HYPERION BROOKFIELD CRYSTAL RIVER CAPITAL
  ADVISORS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan C. Tyras

  
	
   

  	
  Name:

  	
  Jonathan C. Tyras

  
	
   

  	
  Title:

  	
  Vice President and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE SUB-ADVISOR:

  
	
   

  	
   

  
	
   

  	
  HYPERION BROOKFIELD ASSET MANAGEMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John J. Feeney, Jr.

  
	
   

  	
  Name:

  	
  John J. Feeney, Jr.

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  

 

[Signature Page to
Hyperion Brookfield Asset Management Sub-Advisory Agreement]

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