Document:

Exhibit 10.5

 

AMENDMENT
NO. 2 TO LEASE AGREEMENT

 

This Amendment No. 2 to Lease Agreement (“Amendment”),
dated as of May 7, 2003, is entered into by and between AWMS I, a Delaware
statutory business trust, having a place of business at c/o Ansett Worldwide
Aviation Services, Inc., 445 Park Avenue, 20th Floor, New York,
New York 10022 (herein called “Lessor”), and Hawaiian Airlines, Inc., a
Hawaii corporation, having its principal place of business at 3375 Koapaka
Street, Suite G350, Honolulu, Hawaii 96819 (herein called “Lessee”).

 

RECITALS

 

A.                                   Lessor and Lessee have heretofore entered
into a Lease Agreement dated as of September 20, 2001, as supplemented by
a Lease Supplement dated September 23, 2002, which were both recorded with
the Federal Aviation Administration as one document on October 3, 2002,
and assigned Conveyance Number F81267, as amended by an Amendment No. 1 to
Lease Agreement dated as of September 23, 2002, which was recorded by the
FAA on December 18, 2002 and assigned Conveyance Number II027157
(hereafter, jointly, the “Lease”), pursuant to which Lessor has leased to
Lessee one Boeing Model 767-33AER aircraft bearing manufacturer’s serial number
33421 and US Registration Number N587HA, together with two Pratt &
Whitney Model PW4060 engines installed thereon bearing manufacturer’s serial
numbers P729108 and P729109, respectively.

 

B.                                     On
March 21, 2003, Lessee commenced a bankruptcy case, Bankruptcy Case No. 03-00817,
in the United States Bankruptcy Court for the District of Hawaii (the “Bankruptcy
Court”) seeking relief under Chapter 11 of Title 11 of the United States Code.

 

C.                                     In
connection with the Lessee’s Chapter 11 Bankruptcy Case, Lessor and Lessee wish
to amend the terms of the Lease and, in consideration thereof, Lessee wishes to
assume all of the rights, benefits and obligations of the Lease, as amended
hereby, and to obtain the necessary approval of the Bankruptcy Court approving
the terms of this Amendment and the assumption of the Lease, as amended hereby,
by Lessee.

 

D.                                    Capitalized
terms used herein and not otherwise defined herein shall have the meaning
assigned to such terms in the Lease and reference to “Articles” herein shall be
construed to refer to Articles of the Lease.

 

TERMS
AND CONDITIONS

 

Therefore, in consideration of the premises, and for
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto hereby agree as follows:

 

 

1.                                       The
definition of “Companion Lease” in Article 1 of the Lease is amended and
restated as follows:

 

“Companion Lease” means: (i) the Lease Agreement
dated as of June 8, 2001, between Lessor and Lessee, pursuant to which
Lessor has leased to Lessee one Boeing Model 767-33AER aircraft bearing
Manufacturer’s Serial Number 28139, (ii) the Lease Agreement dated as of June 8,
2001, between Lessor and Lessee, pursuant to which Lessor has leased to Lessee
one Boeing Model 767-33AER aircraft bearing Manufacturer’s Serial Number 28140,
(iii) the Lease Agreement dated as of June 8, 2001, between Lessor
and Lessee, pursuant to which Lessor has leased to Lessee one Boeing Model 767-33AER
aircraft bearing Manufacturer’s Serial Number 28141, (iv) the Lease
Agreement dated as of September 20, 2001, between Lessor and Lessee,
pursuant to which Lessor has leased to Lessee one Boeing Model 767-33AER
aircraft bearing Manufacturer’s Serial Number 33422, (v) the Lease
Agreement dated as of September 20, 2001, between Lessor and Lessee,
pursuant to which Lessor has leased to Lessee one Boeing Model 767-33AER
aircraft bearing Manufacturer’s Serial Number 33423, and (vi) the Lease
Agreement dated as of September 20, 2001, between Lessor and Lessee,
pursuant to which Lessor has leased to Lessee one Boeing Model 767-33AER
aircraft bearing Manufacturer’s Serial Number 33424.

 

2.                                       Article 3(a) of
the Lease is hereby amended by adding the following language at the end
thereof:

 

“Notwithstanding anything herein to the contrary,
without further approval of the Bankruptcy Court, Lessor may elect to terminate
the Term of this Lease, and all of Lessee’s rights in respect of the Aircraft
hereunder, on any date (such date being hereafter referred to as the “Early
Termination Date”) occurring on or after March 21, 2007, subject to the
following conditions:

 

(i)                                     Lessor
shall give Lessee at least 180 days’ prior written notice of Lessor’s election
to terminate the Term pursuant to this paragraph, specifying the Early
Termination Date in such written notice (and, for the avoidance of doubt, such
written notice may be given to Lessee at any time prior to or after March 21,
2007); and

 

(ii)                                  Lessor
may terminate the Term of this Lease pursuant to this paragraph during the
period March 21, 2007, through September 20, 2007, only if, during
the period March 21, 2007, through September 20, 2007, Lessor has not
terminated the lease term of more than one of the Companion Leases pursuant to
the second paragraph of Article 3(a) of any of the Companion
Leases.  Lessor may terminate the Term of
this Lease pursuant to this paragraph during the period September 21,
2007, through March 20, 2008, only if, during the period September 21,
2007, through March 20, 2008, Lessor has not terminated the lease term of
more than two of

 

2

 

the Companion Leases
pursuant to the second paragraph of Article 3(a) of any of the
Companion Leases.  Lessor may terminate
the Term of this Lease pursuant to this paragraph during the period March 21,
2008, through September 20, 2009, only if, during the period March 21,
2008, through September 20, 2009, Lessor has not terminated the lease term
of more than one of the Companion Leases pursuant to the second paragraph of Article 3(a) of
any of the Companion Leases.  On or after
September 21, 2009, Lessor shall be entitled to terminate the Term of this
Lease without any restrictions under this clause (ii) or under clause (ii) of
the second paragraph of Article 3(a) of any of the Companion
Leases.  For the avoidance of doubt,
during the period set forth below, Lessor may terminate the Term of this Lease
and the lease term of Companion Leases in a maximum number set forth below:

 

 

	
  Period

  	
   

  	
  Number
  of Terms of Companion

  Leases and this Lease That May Be

  Terminated

  
	
  March 21,
  2007 to September 20, 2007

  	
   

  	
  2

  
	
  September 21,
  2007 to March 20, 2008

  	
   

  	
  3

  
	
  March 21,
  2008 to September 20, 2009

  	
   

  	
  2

  
	
  On or
  after September 21, 2009

  	
   

  	
  No limitation.

  

 

“Following Lessee’s receipt of Lessor’s notice of its
election to terminate the Term of this Lease, Lessee shall, on the Early
Termination Date, return the Aircraft and Aircraft Documentation to Lessor in
compliance with the terms of Article 13 hereof as if the Aircraft were
being returned at the normal expiration of the 15-year Term, whereupon the Term
shall end and Lessee shall have no further obligation to pay Basic Rent for any
period after the date on which the Early Termination Date occurs and the
Aircraft is returned to Lessor in compliance with the terms of this Lease.  For the avoidance of doubt, if the Term of
this Lease is terminated as contemplated in this second paragraph of Article 3(a),
such termination shall not be deemed a termination as the result of an Event of
Default and, therefore, damages measured by reference to Stipulated Loss Values
shall not become payable hereunder.”

 

3

 

3.                                       With
effect from the “Effective Date” (as defined in paragraph 9 of this Amendment),
and as contemplated by the order of the Bankruptcy Court approving this
Amendment, Lessor shall be relieved of the automatic stay under Section 362
of the Bankruptcy Code and be entitled to retain the Security Deposit, and any
interest accrued thereon, in full, as additional consideration for the
agreements of Lessor contained in this Amendment, including Lessor’s agreement
to accept a reduction in Basic Rent payments contemplated hereby.  Consequently, from and after the Effective
Date, Lessor shall no longer be deemed to hold the Security Deposit, any
interest accrued thereon, or any other property of Lessee as security for the
performance of Lessee’s obligations under the Lease, Lessee shall not have any
obligation to pay any additional amounts to Lessor as a Security Deposit
pursuant to the terms of the Lease, and all references in the Lease to “Security
Deposit” shall be deemed deleted.

 

4.                                       Lessee
represents and warrants to Lessor on the date this Amendment is signed by
Lessor and Lessee, and on the Effective Date, that:

 

(i)                                     Lessee
is a corporation duly organized and existing in good standing under the laws of
Hawaii, has full power, authority and legal right to own its properties and to
carry on its business as presently conducted and to perform its obligations
under the Lease, as amended hereby, holds all licenses, certificates and
permits from all governmental authorities necessary for the conduct of its
business, and is duly qualified to do business as a corporation in good
standing in each jurisdiction in which the failure to be so qualified would
have a materially adverse effect on Lessee or on its ability to perform its
obligations under the Lease, as amended hereby.

 

(ii)                                  This
Amendment has been duly authorized by all necessary action on the part of
Lessee, and neither the execution and delivery hereof nor the consummation of
the transactions contemplated hereby nor compliance by Lessee with any of the
terms and provisions hereof does or will violate any provision of the articles
of incorporation or by-laws of Lessee or any law, rule, regulation, judgment,
order or decree of any government or governmental instrumentality or court
having jurisdiction over Lessee, or any of its activities or properties, or
does or will result in any breach of, or constitute any default under, or
result in the creation of any Lien upon any property of Lessee under, any
indenture, mortgage, deed of trust, conditional sale contract, loan or credit
agreement, or other agreement or instrument to which Lessee is a party or by
which Lessee or its properties may be bound or affected.

 

(iii)                               Neither
the execution and delivery by Lessee of this Amendment nor the performance by
Lessee of any of the transactions contemplated hereby require the consent,
approval, order or authorization of, or registration with, or the giving of
notice to, the Aeronautics Authority or any other domestic or foreign
governmental authority, except for the approvals, authorizations and consents
that have heretofore been obtained, including the order of the Bankruptcy Court
approving the terms hereof and the transactions contemplated hereby, true and
complete copies of which have been delivered to Lessor.

 

(iv)                              This
Amendment has been duly executed and delivered by Lessee and, subject to
obtaining the order of the Bankruptcy Court contemplated herein, constitutes
the legal, valid, binding and enforceable obligation of Lessee.

 

4

 

 (v)                                 Lessee is a
Certificated Air Carrier within the meaning of Section 41102 of Title 49
of the United States Code Annotated, and Lessor is entitled to the benefits and
protections of Section 1110 of the Bankruptcy Code (11 U.S.C. Section 1110)
in respect of the Aircraft leased to Lessee under the Lease, as amended hereby.

 

5.                                       The
phrase “Article 10(d), or Article 12” in Article 14(c) of
the Lease is replaced with the phrase “ Article 10(d), Article 12, or
Schedule ‘3’”.

 

6.                                       Lessee
shall cause this Amendment, so far as required or permitted by applicable law
or regulation, to be kept, filed, registered and recorded at all times in
accordance with Article 12 of the Lease.

 

7.                                       Paragraph
3 of Schedule “1” to the Lease is amended and restated in its entirety as
provided in Schedule “1” hereto.

 

8.                                       The
Lease is hereby amended by adding a new Schedule “3” as provided in Schedule “2”
hereto which shall be incorporated into the Lease as Schedule “3”.  Lessee agrees to comply with the terms and
conditions of the new Schedule “3.”

 

9.                                       This
Amendment shall become effective, and Lessee will be deemed to have assumed the
rights and obligations of the Lease, as amended hereby, on the date (the “Effective
Date”) that Lessee complies with the following conditions to the reasonable
satisfaction of Lessor:

 

(i) Lessee shall have provided Lessor with a copy of a resolution
of the Board of Directors of Lessee, certified by the Secretary or an Assistant
Secretary of Lessee, duly authorizing and ratifying the execution, delivery and
performance by Lessee of the obligations of Lessee contemplated by this
Amendment, together with an incumbency certificate as to the person or persons
authorized to execute and deliver this Amendment and related documents on
behalf of Lessee;

 

(ii) Lessor shall have received satisfactory evidence that the
Bankruptcy Court has entered a final, non-appealable order, in form and
substance satisfactory to Lessor, approving this Amendment and the transactions
contemplated hereby;

 

(iii) Lessor shall have received satisfactory legal opinions from
FAA counsel, and New York and Hawaii counsel as to the matters referred to in
Paragraph 4(i) through (v) and Paragraph 6, above, and as to such
other matters as Lessor may reasonably request;

 

(iv) Lessee shall have reimbursed (and from time to time after the
Effective Date will reimburse) Lessor for all its reasonable costs and
expenses, including legal fees, incurred in connection with Lessee’s bankruptcy
case, this Amendment and the amendment of each Companion Lease, up to a maximum
sum of $200,000; and

 

(v) All conditions precedent to the effectiveness of each “Amendment
to Lease Agreement,” dated as of the date hereof, between Lessor and Lessee,
amending

 

5

 

each of the Companion Leases on substantially the same
terms and conditions as set forth herein, shall have been fulfilled and the
same shall be in full force and effect.

 

If Lessee fails to comply with the conditions set
forth in the foregoing clauses (i) through (v) on or before May 19,
2003, this Amendment shall become null and void.

 

10.                                 Lessee
acknowledges that Lessee’s failure to perform the terms of the Lease as they
existed prior to this Amendment has resulted in aggregate damages to Lessor in
the sum of $14,815,835.  Lessee agrees
that Lessor shall apply the $585,000 Security Deposit paid to Lessor at the
time of entering into the Lease to reduce the amount of such damages to
$14,230,835, and that Lessor shall be allowed an unsecured claim for damages against
Lessee’s bankruptcy estate in the sum of $14,230,835.  Lessee acknowledges that Lessor’s claim for
such damages is an accurate and liquidated claim for damages incurred by Lessor
as the result of Lessee’s failure to perform the terms of the Lease without
giving effect to this Amendment, and that the foregoing agreements constitute
an integral part of the consideration between the parties to enter into this
Amendment.

 

11.                                 In
all other respects, the Lease, as amended hereby, is hereby ratified and confirmed
and remains in full force and effect, and is hereby assumed for all purposes by
Lessee.

 

12.                                 On
and after the Effective Date of this Amendment, each reference in the Lease to “this
Lease”, “hereunder”, “hereof”, or words of like import referring to the Lease
shall mean and be a reference to the Lease as amended by this Amendment.  The Lease, except to the extent amended by
this Amendment, remains in full force and effect and is hereby in all respects
ratified and confirmed.

 

13.                                 This
Amendment may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement. 
Delivery of an executed counterpart of this Amendment by facsimile shall
be equally as effective as delivery of an originally executed counterpart.  Any party hereto delivering an executed
counterpart of this Amendment by facsimile shall also deliver an originally
executed counterpart but the failure to so deliver a manually executed
counterpart shall not affect the validity, enforceability or binding effect
hereof.

 

14.                                 This
Amendment shall in all respects be governed by, and construed in accordance
with, the internal laws of the State of California, United States of America (without
regard to any conflict of laws rule that might result in the application
of the laws of any other jurisdiction), including all matters of construction,
validity and performance.

 

15.                                 Lessor
and Lessee acknowledge and agree that upon Lessee’s assumption of the Lease (as
amended hereby), as contemplated herein, the obligations of Lessee under the
Lease, as amended hereby, constitute obligations of Lessee that have priority
as an administrative expense in Lessee’s Chapter 11 Bankruptcy Case.  Lessor agrees, however, that, during the
pendency of Lessee’s bankruptcy case, in the event Lessee ceases operations and
liquidates its assets pursuant to a liquidating plan of reorganization in its
Chapter 11 Bankruptcy Case or through the conversion of its Chapter 11
Bankruptcy Case to a Chapter 7 Bankruptcy Case (and,

 

6

 

for the avoidance of doubt, the transfer of Lessee’s
assets to a successor company in connection with a plan of reorganization shall
not be deemed a ceasing of business by Lessee or a liquidation of Lessee’s
assets), Lessor agrees that, provided Lessee returns the Aircraft to Lessor in
accordance with the requirements of the Lease, Lessor’s administrative claim
for damages under the Lease measured by Lessee’s non-payment of Basic Rent
shall be limited to $1,500,000, and the balance of Lessor’s claim for damages
under the Lease will be classified as a general unsecured claim.  Except as provided in the preceding sentence,
if an Event of Default occurs (other than an Event of Default based on the
existence of Lessee’s Chapter 11 case) or Lessee attempts to reject this Lease,
whether in a plan of reorganization or otherwise, Lessee and its assets shall
be fully liable for all damages incurred by Lessor as the result of such Event
of Default and Lessor shall be entitled to exercise all its rights and remedies
as provided in the Lease to the same extent as if this Paragraph 15 did not
exist.

 

[signature page follows]

 

7

 

IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed by their respective authorized officers or
representatives as of the date first written above.

 

	
   

  	
  AWMS I

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kimberly Karavasilis

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HAWAIIAN AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark B. Dunkerley

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark B. Dunkerley

  
	
   

  	
  Title:

  	
   

  
				

 

8

 

Schedule I

 

Paragraph 3 of Schedule “1” to the Lease is
amended and restated in its entirety as follows:

 

“Lessee agrees to pay Lessor Basic Rent for the
Aircraft in 216 consecutive monthly in advance payments as provided in Article 3(b),
unless the Term is terminated early in accordance with the terms of the
Lease.  [***]”

 

[***] Intentionally omitted as containing confidential information, which has
been filed separately with the Securities and Exchange Commission.

 

S-1

 

Schedule 2

 

The Lease is hereby amended by adding the following as
a new Schedule “3”:

 

“Schedule 3

 

Except as may otherwise be provided in a plan of
reorganization proposed or recommended by the Official Committee of Unsecured
Creditors in Lessee’s Chapter 11 Bankruptcy Case as approved by the Bankruptcy
Court, and provided that the relevant terms of such plan that affect the
limitations set forth in this Schedule “3” are reasonably acceptable to
Lessor, Lessee may not, and Lessee shall ensure that each of Hawaiian Holdings, Inc.,
a Delaware corporation (“HHI”), and each “Subsidiary” (as hereafter defined) of
Lessee or of HHI, and the respective successors and assigns of each, will not: (a) declare,
pay, incur any liability to make or make any dividend or distribution on shares
of its capital stock (“Dividends”), other than “Permitted Dividends” (as
hereafter defined); (b) apply any of its funds, property or assets to the
purchase, repurchase, redemption, defeasance, sinking fund or other retirement
(“Repurchase”) of any shares of its capital stock, or of any warrants, options
or other rights to purchase or acquire any shares of its capital stock, which
are beneficially owned by a “Restricted Person” (as hereafter defined) (whether
or not as part of an offer to all holders of such shares of capital stock); (c) make
any payment of a claim for the rescission of the purchase or sale of, or for
damages arising from the purchase or sale of, any shares of capital stock of
Lessee, HHI or any direct or indirect Subsidiary of HHI, except as required by
law, or of a claim made for reimbursement, indemnification or contribution
arising out of or related to any such claim for rescission or damages (“Payment
of Claim”), other than a Payment of Claim arising out of an indemnification
obligation to an officer or director of Lessee or HHI, or any of their
Subsidiaries, and permitted by such entity ‘s certificate of incorporation or
bylaws as in effect on the date hereof; or (d) make any payment, loan,
contribution or other transfer of funds, property or other assets in excess of
$100,000 during any twelve (12) month period to any Restricted Person (“Other
Payment”), other than payment of reasonable compensation in the ordinary course
of business that has been approved by the compensation committee of the board
of directors of such entity (provided the compensation committee is comprised
solely of Disinterested Directors (as hereafter defined)); unless, in each of
the cases referred to in clauses (a), (b), (c) or (d), if otherwise
prohibited by such clauses the Dividend, Repurchase, Payment of Claim or Other Payment,
as appropriate, has been approved by both a majority of the Board of Directors
of HHI or Lessee, as appropriate, and all of the “Disinterested Directors” (as
hereafter defined) of HHI.

 

“Disinterested Directors” means any director who is
not (a) an officer or employee of, or consultant to, HHI, the Lessee or
any direct or indirect

 

S-1

 

Subsidiary of HHI or the Lessee, (b) an officer,
director (other than HHI) or employee of, or consultant to, a Restricted
Person, (c) a member of the “immediate family” (as defined in the ‘34 Act
Regulations) of a Restricted Person, or (d) financially interested in the
relevant transaction (other than as a shareholder generally and not a
Restricted Person by virtue of being a shareholder or as a union member
generally).

 

“Permitted Dividends” shall mean Dividends approved by
a majority of the board of directors of the applicable entity, including all of
the Disinterested Directors, (a) by direct or indirect Subsidiaries of HHI
to HHI or Lessee, (b) payable in the capital stock of Lessee, HHI or any
Subsidiary of Lessee or in options, warrants or rights to purchase such capital
stock or (c) provided no Event of Default has occurred and is continuing,
payable in cash ratably to all holders of common stock of HHI, Lessee or Lessee’s
successor from unrestricted cash determined in accordance with United States
generally accepted accounting principles in effect on the date hereof.

 

“Restricted Person” means any person (other than the
Lessee) that possesses the power to direct or cause the direction of the
management and policies of HHI or the Lessee, or any of their Subsidiaries,
through the beneficial ownership of 10% or more of the capital stock such
person, by contract or otherwise as well as any (i) affiliate (as defined
in Rule 405 under the Securities Act of 1933, as amended) including a
member of the “immediate family” (as defined in the ‘34 Act Regulations) of
such person, (ii) a corporation or organization of which such person is a
director, officer or partner or such person is the beneficial owner of 10% or
more of any class of equity securities or otherwise possesses the power to
direct or cause the direction of the management or policies of such corporation
or organization, provided, however, a director of HHI shall not be deemed to be
a Restricted Person solely by virtue of being a director, or (iii) any
trust or similar entity in which such person is the grantor, has a substantial
beneficial interest, has the power to direct, appoint or designate the trustee
or any beneficial interest therein, or as to which such person serves as
trustee or in a similar capacity, in each case of such person.  Any two or more persons acting in concert by
agreement, contract, understanding or arrangement for the purpose of acquiring,
holding, voting or disposing of capital stock of HHI or the Lessee or
influencing the management or policies or either HHI or Lessee shall be deemed
one person for the purposes of determining whether each such person shall be
deemed a Restricted Person for the purpose of this Agreement.

 

“Subsidiary” with respect to any particular person
means (a) any corporation of which an aggregate of more than 50% of the
outstanding capital stock having voting power to elect a majority of the board
of directors of such corporation (irrespective of whether, at the time, capital
stock of any other class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) is at the time
beneficially owned, directly or indirectly, 
by such person, or with respect to which any such entity has the right
to vote or designate the vote, directly or indirectly, of 50% or more of such
capital stock

 

2

 

whether by proxy, agreement, operation of law or
otherwise, and (b) any partnership or limited liability company in which
such person and/or one or more Subsidiaries of such person shall have an
interest (whether in the form of voting or participation in profits or capital
contribution) of more than 50% or of which any such entity is a general partner
or may exercise the powers of a general

 

3EXHIBIT 10.6

 

AMENDMENT #1 TO AIRCRAFT LEASE
AGREEMENT

 

THIS AMENDMENT #1 TO  AIRCRAFT LEASE AGREEMENT dated as of August   ,
2003 (this “Amendment”) is entered into between INTERNATIONAL
LEASE FINANCE CORPORATION (“LESSOR”) and HAWAIIAN AIRLINES, INC., (“LESSEE”) in light of the following facts:

 

RECITALS

 

A.                                   LESSOR
and LESSEE have previously entered into that certain Aircraft Lease Agreement
more particularly described in Schedule 1 attached hereto (as amended and
supplemented, the “Lease”), pursuant to which LESSOR leased to LESSEE one (1) Boeing
767-33AER aircraft bearing manufacturer’s serial number 24257 and U.S.
Registration Number N585HA with two (2) Pratt & Whitney PW 4062
engines each with a rated take-off power of over 750 horsepower bearing manufacturer’s
serial numbers P724119 and P724739 (collectively, the “Aircraft”).

 

B.                                     On
March 21, 2003, in the United States Bankruptcy Court for the District of
Hawaii (the “Bankruptcy Court”), LESSEE commenced a bankruptcy case (Bankruptcy Case No. 03-00817-RJF)
seeking relief under Chapter 11 of Title 11 of the United States Code (the “Chapter 11 Case”).

 

C.                                     In
connection with the Chapter 11 Case, LESSEE and LESSOR have agreed to amend
certain terms and provisions in the Lease and, in consideration thereof, LESSEE
wishes to assume all of the rights, benefits, and obligations of the Lease, as
amended hereby, and to obtain the necessary approval of the Bankruptcy Court
approving the terms of this Amendment and the assumption of the Lease, as
amended hereby, by LESSEE.

 

D.                                    LESSOR
and LESSEE now desire by this Amendment to memorialize the terms of the amended
Lease as set forth below.

 

NOW, THEREFORE, in consideration
of the mutual covenants, terms and conditions set forth below and other good
and valuable consideration (the receipt and adequacy of which is hereby
acknowledged), LESSOR and LESSEE hereby agree as follows:

 

AGREEMENT

 

1.  Defined Terms.  Any and all initially capitalized terms not
otherwise defined herein have the meanings given to them in the Lease.  Unless the context requires otherwise, any
reference to the plural includes the singular, the singular includes the
plural, the part includes the whole, and the terms “including” or “includes”
are not limiting.

 

2.  Table of Contents.  The Table of Contents of the Lease is amended
by:

 

(a)                                  deleting
the words “AND EXTENSION OPTIONS” at Article 3 of the Table of Contents.

 

(b)                                 deleting
the word “Initial” at Article 3.1 of the Table of Contents.

 

 

(c)                                  deleting
the words “Lease Extension Option” at Article 3.2 of the Table of Contents
and inserting in their place the words “Intentionally Deleted”.

 

(d)                                 deleting
the words ‘Lease Term’ and” at Article 3.3 of the Table of Contents.

 

(e)                                  deleting
the word “Initial” at Exhibit C.3 of the Table of Contents.

 

(f)                                    deleting
the words “Lease Extension Option” at Exhibit C.4 of the Table of Contents
and inserting in their place the words “Intentionally Deleted”.

 

(g)                                 deleting
the word “Initial” at Exhibit C.6 of the Table of Contents.

 

(h)                                 deleting
the words “Rent During Extension Term” at Exhibit C.7 of the Table of
Contents and inserting in their place the words “Intentionally Deleted”.

 

3.  Article 1.2.  Article 1.2 of the Lease is amended by:

 

(a)                                  deleting
the words “First Extension Lease Term” in the Terms list and the word “3.2.1”
in the Article list.

 

(b)                                 deleting
the words “Initial Lease Term” in the Terms list and the word “3.1” in the Article list.

 

(c)                                  replacing
the words “Modification Loan” in the Terms list and replacing them with the
words “Modification Payment”.

 

(d)                                 deleting
the words “Second Extension Lease Term” in the Terms list and the word “3.2.1”
in the Article list.

 

(e)                                  deleting
the article reference “3.3” relating to “Lease Term” in the Article list
and replacing it with an article reference to “3.1”.

 

4.  Article 3.  Article 3 of the Lease is amended by
deleting the words “and Extension Options” from the title to Article 3 and
from the footer reference on each page of Article 3.

 

5.  Article 3.1.  Article 3.1 of the Lease is amended by
deleting Article 3.1 in its entirety and inserting in its place the
following new Article 3.1:

 

“3.1.  Lease Term.  The term of leasing of the
Aircraft will commence on the Delivery Date and continue for a lease term of
ten (10) years (the “Lease Term”).”

 

6.  Article 3.2.  Article 3.2 of the Lease is amended by
deleting Article 3.2 in its entirety and inserting in its place the words “Intentionally
Deleted”.

 

7.  Article 3.3.  Article 3.3 of the Lease is amended by
deleting Article 3.3 in its entirety and inserting in its place the
following new Article 3.3:

 

 

“3.3                           ‘Expiration Date’.  ‘Expiration Date’ means the date on which LESSEE is required to redeliver the
Aircraft to LESSOR in the condition required by this Lease on the last day of
the Lease Term.”

 

8.  Exhibit C.  Exhibit C of the Lease is amended by:

 

(a)                                  deleting
Paragraph 3 of Exhibit C in its entirety and adding and inserting in its
place the following new Paragraph 3:

 

“3.                                 Lease Term

 

10
years”

 

(b)                                 deleting
Paragraph 4 of Exhibit C in its entirety and adding and inserting in its
place the words “Intentionally Deleted”.

 

(c)                                  deleting
Paragraph 6 of Exhibit C in its entirety and adding and inserting in its
place the following new Paragraph 6:

 

[SEE EXHIBIT A]

 

(d)                                 deleting
Paragraph 7 of Exhibit C in its entirety and adding and inserting in its
place the words “Intentionally Deleted”.

 

(e)                                  deleting
Paragraph 12 of Exhibit C in its entirety and adding and inserting in its
place the following new Paragraph 12:

 

[SEE EXHIBIT A]

 

9.  Exhibit D.  Exhibit D of the Lease is amended by:

 

(a)                                  adding
the following new Paragraph 1(d):

 

[SEE EXHIBIT A]

 

(b)                                 deleting
Paragraph 2 of Exhibit D in its entirety and adding and inserting in its
place the following new Paragraph 2:

 

[SEE EXHIBIT A]

 

(c)                                  Paragraph
5 of Exhibit D is amended by deleting Paragraph 5 of Exhibit D in its
entirety and adding and inserting in its place the following new Paragraph 5:

 

[SEE EXHIBIT A]

 

10.  Miscellaneous.

 

1.  Effective
Date.  This Amendment shall become
effective, and LESSEE will be deemed to have assumed the rights and obligations
of the Lease, as amended hereby, on the date

 

 

(the “Effective Date”) that the Bankruptcy Court has entered a final,
non-appealable order, in form and substance satisfactory to LESSOR, approving
this Amendment and the transactions contemplated hereby.

 

2.  Assumption.  As of the Effective Date, except as expressly
modified by this Amendment or by the order of the Bankruptcy Court, in form and
substance satisfactory to LESSOR, approving this Amendment, all of the terms
and conditions of the Lease remain unchanged and are in full force and effect,
and the Lease, as amended hereby, is hereby assumed for all purposes by LESSEE.

 

3.  Security
Deposit.  LESSOR and LESSEE
acknowledge and agree that as of the Effective Date the LESSOR has, and will
continue to hold, the Security Deposit, which Security Deposit will serve as
security for the performance by LESSEE of its obligations under, and as set
forth in, the Lease, as amended hereby.

 

4.  Administrative
Claim LESSOR and LESSEE acknowledge and agree that upon LESSEE’s assumption
of the Lease (as amended hereby), as contemplated herein, the obligations of
LESSEE under the Lease, as amended hereby, constitute obligations of LESSEE
that have priority as an administrative expense in LESSEE’s Chapter 11
Case.  LESSOR agrees, however, that,
during the pendency of LESSEE’s Chapter 11 Case, in the event LESSEE ceases
operations and liquidates its assets pursuant to a liquidating plan of
reorganization in its Chapter 11 Case or through the conversion of its Chapter
11 Case to a case under Chapter 7 of Title 11 of the United States Code (and,
for the avoidance of doubt, the transfer of LESSEE’s assets to a successor
company in connection with a plan of reorganization shall not be deemed a
ceasing of business by LESSEE or a liquidation of LESSEE’s assets), LESSOR
agrees that, provided LESSEE returns the Aircraft to LESSOR in accordance with
the requirements of the Lease (including Article 22 of the Lease), LESSOR’s
administrative claim for damages under the Lease measured by LESSEE’s
non-payment of Rent shall be limited to $1,500,000, and the balance of LESSOR’s
claim for damages under the Lease will be classified as a general unsecured
claim.  Except as provided in the
preceding sentence, if an Event of Default occurs (other than an Event of
Default based on the existence of LESSEE’s Chapter 11 Case) or LESSEE attempts
to reject this Lease, whether in a plan of reorganization or otherwise, LESSEE
and its assets shall be fully liable for all damages incurred by LESSOR as the
result of such Event of Default and LESSOR shall be entitled to exercise all
its rights and remedies as provided in the Lease to the same extent as if this
Paragraph did not exist.

 

5.  Counterparts.  This Amendment may be executed in any number
of identical counterparts, each of which will be deemed to be an original, and
all of which together will be deemed to be one and the same instrument.

 

6.  Delivery
by Fax.  Delivery of an executed
counterpart of this Amendment by fax will be deemed as effective as delivery of
an originally executed counterpart.  Any
party delivering an executed counterpart of this Amendment will also deliver an
originally executed counterpart, but the failure of any party to deliver an
originally executed counterpart of this Amendment will not affect the validity
or effectiveness of this Amendment.

 

 

7.  Confidentiality.  The provisions of the Lease with respect to
confidentiality are incorporated in this Amendment by this reference as if such
provisions were set forth herein.

 

8.  Governing
Law; Jurisdiction and Venue; and Service of Process.  The provisions of the Lease with respect to
governing law, jurisdiction and venue, and service of process are incorporated
in this Amendment by this reference as if such provisions were set forth
herein.

 

 

IN WITNESS WHEREOF,
the parties hereto have executed this Amendment on the date first set forth
hereinabove.

 

	
  INTERNATIONAL
  LEASE

  	
   

  	
  HAWAIIAN
  AIRLINES, INC.

  
	
  FINANCE
  CORPORATION

  	
   

  	
  by Chapter 11
  Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ John Plueger

  	
   

  	
  By:

  	
  /s/ Joshua
  Gotbaum

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Joshua
  Gotbaum

  
	
  Its:

  	
   

  	
   

  	
   

  	
  Title: Trustee

  
							

 

 

Schedule 1

 

Description of Lease

 

Aircraft Lease Agreement dated as of July 16,
2001 between International Lease Finance Corporation, as lessor, and Hawaiian
Airlines, Inc., as lessee, which was recorded by the Federal Aviation
Administration on April 12, 2002, and assigned Conveyance No. H105395,
as supplemented by the following described instrument:

 

	
  Instrument

  	
   

  	
  Date of

  Instrument

  	
   

  	
  FAA

  Recording Date

  	
   

  	
  FAA

  Conveyance No.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Estoppel and
  Acceptance Certificate

  	
   

  	
  05/10/02

  	
   

  	
  08/15/02

  	
   

  	
  E001210

  	
   

  

 

 

EXHIBIT A                                  FINANCIAL
INFORMATION

 

1.  Exhibit C,
Paragraph 6 Rent During Lease Term.

 

“6.  Rent During
Lease Term

 

LESSEE will pay LESSOR the following amounts monthly
in advance as rent for the Aircraft (‘Rent”):

 

	
  Period of Lease Term

  	
   

  	
  Amount of Monthly Rent

  (in U.S. Dollars)

  
	
  [***]

  	
   

  	
  [***]

  

 

[***] Intentionally
omitted as containing confidential information, which has been filed separately
with the Securities and Exchange Commission.

 

 

2.  Exhibit C,
Paragraph 12 Agreed Value of Aircraft

 

“12.  Agreed
Value of Aircraft

 

	
  Period of Lease Term

  	
   

  	
  Amount 

  (in U.S. Dollars)

  
	
   

  	
   

  	
   

  
	
  Delivery Date through and including [***]

  	
   

  	
  [***]

  
	
  [***] through and including
  the Termination Date

  	
   

  	
  [***]”

  

 

3.  Exhibit D.  Paragraph 1(d).

 

“(d) Notwithstanding the provisions of Paragraphs
1(b) and (c) of this Exhibit D and solely for purposes of this
Paragraph 1, LESSEE’s March 21, 2003 commencement of a bankruptcy case (Bankruptcy
Case No. 03-00817-RJF) seeking relief under Chapter 11 of Title 11 of the
United States Code in the United States Bankruptcy Court for the District of
Hawaii shall not constitute a Default or Event of Default under this Lease or a
default under any other agreements between LESSOR and LESSEE; provided that
this Paragraph 1(d) shall be of no force or effect in the event LESSEE
ceases operations and liquidates its assets pursuant to a liquidating plan of
reorganization in its Chapter 11 Case or through the conversion of its Chapter
11 Case to a case under Chapter 7 of Title 11 of the United States Code (and,
for the avoidance of doubt, the transfer of LESSEE’s assets to a successor
company in connection with a plan of reorganization shall not be deemed a
ceasing of business by LESSEE or a liquidation of LESSEE’s assets).”

 

4.  Exhibit D.  Paragraph 2 Rent.

 

“2.  Rent

 

(a)          LESSEE will pay LESSOR
the following amounts monthly in advance as rent for the Aircraft (‘Rent”):

 

	
  Period of Lease Term

  	
   

  	
  Amount of Monthly Rent

  (in U.S. Dollars)

  
	
  [***]

  	
   

  	
  [***]

  

 

The first payment of Rent during the Lease Term will
be paid no later than [***] prior to the Scheduled Delivery Date, [***].  Each subsequent payment of Rent will be due
monthly thereafter no later than the same day of the month as the Delivery Date
of the Aircraft except that, if such day is not a Business Day, the Rent will
be due on the immediately preceding Business Day.  If Delivery occurred on the 29th,
30th or 31st of the month, and in any given month during
the Lease Term there is no such corresponding date, Rent will be payable on the
last Business Day of such month.  [***]

 

 

5.  Exhibit D,
Paragraph 5 Agreed Value.

 

“5.                                 Agreed Value.  “Agreed
Value” means the
amounts set forth below during the periods set forth below (in U.S. Dollars):

 

	
  Period of Lease Term

  	
   

  	
  Amount

  
	
   

  	
   

  	
   

  
	
  Delivery Date through and including [***]

  	
   

  	
  [***]

  
	
  [***] through and including
  the Termination Date

  	
   

  	
  [***]

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