Document:

Exhibit 10.23

 

 

PORTIONS
OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH

THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR

CONFIDENTIAL
TREATMENT.  SUCH PORTIONS ARE DESIGNATED
[REDACTED].

 

 

FIRST AMENDMENT TO AGREEMENT

 

THIS FIRST AMENDMENT TO AGREEMENT
(“Amendment”) is entered into as of December 12, 2002, by and between Hawaiian
Airlines, Inc., a corporation organized under the laws of the State of Hawaii
(the “Carrier”) and U.S. Bank National Association (“Bank”).

 

RECITALS

 

A.                                   Carrier
and Bank are parties to a certain Agreement with an effective date of December
31, 1999 (as the same may be further amended, extended, supplemented or
restated from time to time, the “Agreement”) pursuant to which Carrier and Bank
agreed to the terms and conditions whereby Bank processes payments of [REDACTED], and

 

B.                                     Carrier
and Bank have agreed to amend the Agreement as set forth herein, but only under
the terms and conditions set forth herein.

 

NOW, THEREFORE, IT IS HEREBY AGREED by and
between Carrier and Bank as follows:

 

1.                                       Definitions.
All capitalized terms used in this Amendment, unless otherwise defined herein,
shall have the meanings ascribed to them in the Agreement. All references
contained in the Agreement and the Schedules thereto to “Agreement” shall mean
the Agreement as amended hereby, and all references to “Schedule 2” shall mean
Schedule 2 to the Agreement as further amended hereby.

 

2.                                       Amendments to
Agreement. Section 23 of the Agreement is hereby amended and restated in
its entirety as follows:

 

Unless earlier terminated pursuant to Section 15 of this Agreement,
this Agreement shall continue in effect until December 31, 2003; provided,
however, that at any time during the term hereof of either party may terminate
this Agreement with or without cause upon ninety (90) days written notice to
the other party.

 

3.                                       Amendments to
Schedule 2. Schedule 2 of the Agreement is hereby amended and restated in
its entirety in the form attached hereto as Exhibit A.

 

4.                                       Representations
and Warranties. Carrier hereby represents and warrants to Bank that on and
as of the date hereof and after giving effect to this Amendment:

 

(a.)                               All
of Carrier’s representations and warranties contained in the Agreement  are true, correct and complete in all respects
as of the date hereof as though made on and as of such date; provided,
that references in Section 9.5  to
financial statements shall be to the most recent financial statements of such
type delivered to Bank by Carrier.

 

(b.)                              Carrier
has the power and legal right and authority to enter into this Amendment and
has duly authorized as appropriate the execution and delivery of this Amendment
and none of the agreements contained herein contravene or constitute, or

 

 

upon
performance would constitute, a default under any agreement, instrument or
indenture to which Carrier is a party or a signatory or a provision of
Carrier’s Articles or Certificate of Incorporation, bylaws or, to the best of
Carrier’s knowledge, any other agreement or requirement of law, or result in
the imposition of any lien on any of its property under any agreement binding
on or applicable to Carrier or any of its property except, if any, in favor of
Bank.

 

(c.)                               Carrier
is duly organized and in good standing under the laws of the state of its
organization and is qualified to do business in each state where the nature of
its activities or the character of its properties makes such qualification
necessary or desirable and the failure to so qualify would have a material
adverse effect on the assets or operations of such Carrier.

 

(d.)                              Upon
the effective date of this Amendment, this Amendment and the Agreement, as
modified hereby, will constitute the legal, valid and binding obligations of
Carrier enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and other laws affecting the
rights of creditors generally, and to the exercise of judicial discretion in
accordance with general principles of equity.

 

5.                                       Ratification
of  Agreement; Acknowledgment. 
Except as expressly modified under this Amendment, all of the terms,
conditions, provisions, agreements, requirements, promises, obligations,
duties, covenants and representations of Carrier and Bank, respectively, under
the Agreement and all related agreements are hereby ratified by Carrier and
Bank, respectively.

 

6.                                       Effective
Date.  This Amendment shall become
effective upon execution and delivery of duly executed counterparts hereof by
Bank and Carrier.

 

7.                                       Reimbursement
of  Expenses.  Promptly upon
execution of this Agreement, Carrier shall reimburse Bank for all reasonable
out-of-pocket expenses (including attorneys' fees and legal expenses of Dorsey
& Whitney LLP, counsel for Bank) incurred in connection with this Amendment
and all related agreements.

 

8.                                       Merger and
Integration, Superseding Effect. 
This Amendment, from and after the date hereof, embodies the entire
agreement and understanding between the parties hereto, and supersedes and has
merged into it all prior oral and written agreements, on the same subjects by
and between the parties hereto with the effect that this Amendment, shall
control with respect to the specific subjects hereof and thereof.

 

9.                                       Governing Law.  This Amendment shall be governed by and
construed in accordance with the laws of the State of Minnesota.

 

10.                                 Counterparts.  This Amendment may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed
to be an original, and all of which counterparts of this Agreement when taken
together, shall constitute one and the same instrument.

 

2

 

IN WITNESS WHEREOF, the parties hereto have
duly executed this Amendment as of the day and year first written above.

 

 

	
   

  	
  U.S. BANK
  NATIONAL ASSOCIATION

  
	
   

  
	
   

  
	
   

  	
  By

  	
  /s/

  
	
   

  	
   

  	
  Its
  Authorized Representative

  
	
   

  
	
   

  
	
  Accepted and
  Agreed as of

  December 19th, 2002

  
	
   

  
	
  HAWAIIAN
  AIRLINES, INC.

  
	
   

  
	
   

  
	
  By

  	
  /s/ Christine R. Deister

  	
   

  
	
   

  	
  Its Exec.
  V.P., CRO & Treasurer

  
	
   

  
	
   

  
	
  By

  	
  /s/ Lyn Flanigan Anzai

  	
   

  
	
   

  	
  Its Vice
  President, General Counsel and

  Corporate Secretary

  
					

 

3

 

EXHIBIT A TO

FIRST AMENDMENT TO AGREEMENT

 

 

AMENDED AND RESTATED SCHEDULE 2

EXPOSURE PROTECTION

 

 

SCHEDULE 2

 

1.                                      Certain
Definitions.

 

All terms not otherwise defined herein that
are capitalized and used herein shall have the meanings given to them in the
Agreement. Except as may be expressly provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP. To the extent
any change in GAAP affects any computation or determination required to be made
pursuant to this Agreement, such computation or determination shall be made as
if such change in GAAP had not occurred unless the Bank agrees in writing on an
adjustment to such computation or determination to account for such change in
GAAP. As used in this Schedule 2, the following terms shall have the meanings
indicated:

 

“ASM” shall mean available seat miles

 

“Capitalized Leases” shall mean a lease (or other agreement
conveying the right to use) real or personal property with respect to which at
least a portion of the rent or other amounts thereon constitute Capitalized
Lease Obligations.

 

“Capitalized Lease Obligations” shall mean the obligations of
Carrier to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real or personal property which obligations are
required to be classified and accounted for as a capital lease on the balance
sheet of Carrier under GAAP.

 

“Cash Reserves” shall mean [REDACTED]

 

“Cure of First Stage Triggering Event” shall mean Carrier’s cure
(which in the case of all financial covenants shall mean compliance therewith
at a level that equals or exceeds that necessary to avoid the occurrence of a
First Stage Triggering Event for two consecutive months following the latest
date of any outstanding First Stage Triggering Event) of all outstanding First
Stage Triggering Events and the non-occurrence of any new Triggering Event.

 

“Cure of Second Stage Triggering Event” shall mean Carrier’s
cure of all outstanding Second Stage Triggering Events and the non-occurrence
of any new Second Stage Triggering Event, which in the case of (i) each of the
Cash Reserve Triggering Event, the Minimum Days of Cash Triggering Event, and
the financial information delivery Triggering Event, described respectively in
Section (g)(i), (g)(ii) and (i) of the definition of Second Stage Triggering
Event, shall mean performance at a level that equals or exceeds that necessary
to avoid occurrence

 

A-1

 

of a Second Stage Triggering Event of the types described therein for
two consecutive month periods following the latest date of any outstanding
Second Stage Triggering Event related to such Triggering Events, (ii) the load
factor Triggering Event, described in Section (g)(iii) of the definition of
Second Stage Triggering Event, shall mean performance at a level that equals or
exceeds that necessary to avoid occurrence of a Second Stage Trigger Event of
such type for eight consecutive weeks following the latest date of any
outstanding Second Stage Triggering Event related to such load factor
Triggering Event, (iii) EBIT Triggering Event, described in Section (g)(v) of
the definition of Second Stage Triggering Event, shall mean performance at a
level that equals or exceeds that necessary to avoid the occurrence of a Second
Stage Triggering Event of such type for one quarter following the latest date
of any outstanding Second Stage Triggering Event related to such EBIT
Triggering Event.

 

“First Stage Triggering Event” shall mean Carrier’s failure to
maintain any one or more of the following:

 

(a)                                  as
of the last day of each calendar month, Cash Reserves in an aggregate amount of
not less than [REDACTED];

 

(b)                                 as
of the last day of each calendar month, a Minimum Days of Cash in excess of [REDACTED]

 

“GAAP” shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of any
date of determination.

 

“Indebtedness” shall mean with respect to any Person at the time
of any determination, without duplication, all obligations, contingent or
otherwise, of such Person which in accordance with GAAP should be classified
upon the balance sheet of such Person as liabilities, but in any event
including: (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid or accrued, (d) all obligations of such Person
under conditional sale or other title retention agreements relating to property
purchased by such Person, (e) all obligations of such Person issued or assumed
as the deferred purchase price of property or services excluding accounts
payable arising in the ordinary course of business, (f) all obligations of
others secured by any Lien on property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (g) all
Capitalized Lease Obligations of such Person, (h) all obligations of such
Person in respect of interest rate protection agreements, (i) all obligations
of such Person, actual or contingent, as an account party in respect of

 

A-2

 

letters of credit or bankers’ acceptances and (j) all obligations of
any partnership or joint venture as to which such Person is or may become
personally liable. Indebtedness shall not include current accruals incurred in
the ordinary course of business so long as the same are not of the type
encompassed by clauses (a)-(j) above.

 

“Interest Expense” shall mean for any period of determination,
the aggregate amount, without duplication, of interest paid, accrued or
scheduled to be paid in respect of any Indebtedness of Carrier including (a)
all but the principal component of payments in respect of conditional sale
contracts, Capitalized Leases and other title retention agreements, (b)
commissions, discounts and other fees and charges with respect to letters of
credit and bankers’ acceptance financings and (c) net costs (excluding fees
paid in full for and at the time of purchase of an interest rate cap) under
interest rate protection agreements, in each case determined in accordance with
GAAP.

 

“Lien” shall mean any security interest, mortgage, pledge, lien,
charge, encumbrance, title retention agreement or analogous instrument or
device (including the interest of each lessor under any Capitalized Lease), in,
of or on any assets or properties of Carrier, now owned or hereafter acquired,
whether arising by agreement or operation of law.

 

“Material Adverse Occurrence” shall mean any occurrence of
whatsoever nature (including, without limitation, any adverse determination in
any litigation, arbitration or governmental investigation or proceeding),
which, in the reasonable determination of Bank, does, or is likely to,
materially adversely affect the then present or prospective financial condition
of Carrier or does, or is likely to, materially impair the ability of Carrier
to perform its obligations under this Agreement.

 

“Minimum Days of Cash” shall mean as of any date of
determination, the number of days of cash calculated by dividing the amount of
Cash Reserves as of the end of each month by the amount that is the result of
dividing (i) the sum of monthly operating expenses and interest expenses, minus
depreciation and amortization, and minus non-cash special charges or non-cash
extraordinary items for such month by (ii) thirty-one (31) days.

 

“Person” shall mean any individual, partnership, corporation, or
other entity.

 

“RPM” shall mean revenue passenger mile. RPMs equal the total
number of passengers enplaned multiplied by the average distance flown, for any
given period.

 

“Second Stage Triggering Event” shall mean any of the following:

 

(a)                                  the
commencement of any bankruptcy, insolvency, moratorium, liquidation,
reorganization, dissolution, arrangement or other similar proceeding by or
against Carrier, any application for,

 

A-3

 

consent by
Carrier to, or acquiescence by Carrier in, the appointment of any trustee,
receiver, or other custodian for Carrier or a substantial part of its property,
any appointment of a trustee, receiver or other custodian for Carrier or a
substantial part of its property, or any assignment by Carrier for the benefit
of creditors;

 

(b)                                 a
Material Adverse Occurrence;

 

(c)                                  the
merger or consolidation of Carrier, or entry by Carrier into any analogous
reorganization or transaction, with any other corporation, company or other
entity;

 

(d)                                 the
sale, transfer, lease or other conveyance of all or any substantial part of
Carrier’s assets;

 

(e)                                  any
change in the ownership or control of Carrier which Bank deems to constitute a
Material Adverse Occurrence;

 

(f)                                    the
maturity of any Indebtedness in the aggregate principal amount of [REDACTED] or more of Carrier shall be
accelerated, or Carrier shall fail to pay any such Indebtedness when due (after
the lapse of any applicable grace period) or, in the case of such Indebtedness
payable on demand, when demanded (after the lapse of any applicable grace period),
or any event shall occur or condition shall exist and shall continue for more
than the period of grace, if any, applicable thereto and shall have the effect
of causing, or permitting the holder of any such Indebtedness or any trustee or
other Person acting on behalf of such holder to cause, such Indebtedness to
become due prior to its stated maturity or to realize upon any collateral given
as security therefor;

 

(g)                                 Carrier’s
failure to maintain any one or more of the following:

 

(i)                                     as
of the last day of each calendar month, Cash Reserves in an aggregate amount of
not less than [REDACTED]

 

(ii)                                  as
of the last day of each calendar month, a Minimum Days of Cash in excess of 19
days;

 

(iii)                               an
amount of ASMs for a calendar month that is equal to at least [REDACTED] of the ASMs for the immediately
preceding calendar month;

 

(iv)                              the
average weekly load factor for any consecutive fourteen (14) days is less than
[REDACTED]

 

(v)                                 the
failure to have earnings, before interest and taxes, in the amounts and for the
time periods listed below;

 

A-4

 

	
  4th
  Q 2002

  	
  1st Q 2003

  	
  2nd
  Q 2003

  	
  3rd Q 2003

  	
   

  
	
  [REDACTED]

  

 

(h)                                 if
negotiations between Carrier and any labor organization representing any of
Carrier’s employees concerning changes in rates of pay, rules or other working
conditions as defined in 45 U.S.C. Section 155 should result in either (a) an
invocation by any party of the services of the National Mediation Board or (b)
a proffer of services by the National Mediation Board itself; provided,
that in the case of the negotiations concerning changes in rates of pay, rules
or other working conditions as defined in 45 U.S.C. §155 between
Carrier and the labor organization representing Carrier’s employees that were
in existence at or about the time of the entry into the First Amendment to
Agreement, a Triggering Event shall occur only if such negotiations should
result in either (x) a termination of negotiation meetings between the parties
without an invocation by any party of the services of the National Mediation
Board or a proffer of services by the National Mediation Board itself, or (y)
the commencement of a “cooling  off’
period prior to the utilization of self help by the parties;

 

(1)                                  Carrier’s
failure to deliver required financial information within five Business Days
after notice is provided by Bank of Carrier’s failure to deliver when due any
financial, operational or other reports and certificates required to be
delivered pursuant to Section 25 of the Agreement and any provision of this
Schedule 2;

 

(j)                                     if
the Agreement is not renewed at least [REDACTED]
days prior to  its scheduled date of
expiration, Carrier gives written notice of its intent to terminate the
Agreement or Bank gives to Carrier notice of the termination of the Agreement;

 

“Triggering Event” shall mean a First Stage Triggering Event or
a Second Stage Triggering Event.

 

2.                                      Compliance
Certificate

 

As soon as practicable and in any event
within [REDACTED] Business Days
after the end of each fiscal month, Carrier shall furnish to Bank, together
with such supporting financial information as Bank may require, a compliance
certificate for the applicable month in the form attached hereto as Attachment
1 (such certificate and supporting financial information being the “Monthly
Compliance Certificate”) signed by the chief financial officer of Carrier and
demonstrating in reasonable detail the Cash Reserves, total and unrestricted
cash balances, and the monthly ASMs and RPMs.

 

As soon as practicable, and in any event no
later than the Thursday of each week (or if such a date is not a Business Day,
the next Business Day), Carrier shall furnish to Bank, together with such
supporting financial information as Bank may require, a compliance certificate
in the

 

A-5

 

form attached hereto as
Attachment 2 (such certificate and supporting financial information being the
“Weekly Compliance Certificate”) signed by the chief financial officer of
Carrier and demonstrating in reasonable detail (i) the Cash Reserves and the
total and unrestricted cash balances each as of Saturday of the preceding week,
(ii) the ASMs for the preceding calendar week, and (iii) the RPMs for the
preceding calendar week.

 

3.                                      Exposure
Protection

 

Subject to Section 4 of this Schedule 2, Bank
may retain and hold all funds paid to it by a Card Association on account of
Sales Slips submitted by Carrier to Bank as Reserved Funds until the Deposit
equals the amount required hereunder, as determined in accordance with Sections
4 and 8 of this Schedule 2. Throughout the term of this Agreement, the Deposit
amount shall be subject to adjustment as provided in Section 4 of this Schedule
2. Bank will hold the Deposit as security for the due and punctual payment of
and performance by Carrier of all its obligations under this Agreement, whether
now existing or hereafter arising (the “Obligations”). Carrier hereby grants to
Bank a continuing first security interest in its interest (if any) in the
Deposit and in all amounts added to the Deposit at any time and in all monies,
securities, instruments purchased therewith, all interest, profits and/or
dividends accruing thereon and proceeds thereof; to secure payment of all
Obligations of Carrier to Bank, whether now existing or hereinafter arising.
Carrier hereby acknowledges that notwithstanding the foregoing grant of a
security interest, Reserved Funds represent only a future right to payment owed
to Carrier hereunder, payment of which is subject to the terms and conditions
of this Agreement, and do not constitute funds of Carrier.

 

Carrier further acknowledges that Bank
disputes the existence of any interest of Carrier in rights to payment from
Cardholders or Card issuers arising out of the Sales Slips described below and
further acknowledges that to the extent that Carrier may have an interest
therein, such right is subordinate to the interest of Bank. To the extent of
Carrier’s interest therein, if any, Carrier hereby grants to Bank a first
priority security interest in all Sales Slips initiated in the United States
bearing a Transaction Date on or prior to the date of termination of this
Agreement and all rights to payment (including, without limitation, actual
collections held by Bank on account of Sales Slips), from Cardholders or Card
issuers for United States initiated Travel Costs incurred on a Transaction Date
on or prior to the date of termination of this Agreement and paid for by Cards,
in the amount of and as a result of such Sales Slips, in accordance with this
Agreement, and in any or all proceeds thereof; whether now existing or
hereafter created or arising, to secure payment of the Obligations of Carrier
to Bank, whether now in existence or hereafter arising. Such security interest
is in addition to Bank’s security interest in the Deposit. Carrier further
agrees that during the term of this Agreement, Carrier shall not grant, or
attempt to grant, to any other party or suffer to exist in favor of any other
party any interest in the Deposit, in any Sales Slips and rights to payment
from Cardholders or Card issuers or in any proceeds thereof.

 

Carrier will do all acts and things, and will
execute, endorse, deliver, file or record all instruments and agreements
(including pledges, assignments, security agreements, financing statements,
continuation statements, etc.) reasonably requested by Bank, in form reasonably
satisfactory to Bank, to establish, perfect, maintain and continue the
perfection and priority of the

 

A-6

 

security interest of Bank in
Carrier’s interest (if any) in the Deposit, all Sales Slips and rights to
payment from Cardholders or Card issuers and all proceeds of the foregoing, and
Carrier will pay the reasonable costs and expenses of all filings and recordings,
including taxes thereon and all searches reasonably necessary or deemed
necessary by Bank, to establish and determine the validity and priority of such
security interest of Bank. Carrier’s address as stated in the preamble to the
Agreement is Carrier’s chief executive office. Carrier hereby irrevocably
appoints Bank (and all Persons, officers, employees or agents designated by
Bank), its agent and attorney-in-fact to do all such acts and things
contemplated by this paragraph in the name of Carrier.  Without limiting the foregoing, Carrier
hereby authorizes Bank to file one or more financing statements or continuation
statements in respect hereof; and amendments thereto, relating to any part of
the collateral described herein without the signature of Carrier.  A carbon, photographic or other reproduction
of this Agreement or of a financing statement shall be sufficient as a
financing statement and may be filed in lieu of the original in any or all
jurisdictions which accept such reproductions.

 

4.                                      Adjustments
to Deposit

 

Bank will use the Methodology described in
Section 8 of this Schedule 2 (the “Methodology”) to calculate Gross Exposure
(as defined in Section 8 of this Schedule 2) on a daily, weekly, bi-weekly, or
monthly basis, as the Bank elects in its sole discretion. Carrier acknowledges
that Bank has explained to it and it understands Bank’s Methodology for
determining Gross Exposure and the amount of the Deposit and hereby agrees to
be bound by such Methodology and the determinations made by Bank as a result
thereof. Carrier understands that Gross Exposure includes, among other things,
the value of Travel Costs for goods or services sold to Cardholders who used
their Cards to purchase such goods or services with respect to which Carrier
has not yet provided such goods or services. Bank and Carrier may change the
Methodology by mutual agreement.

 

Prior to the occurrence of any Triggering
Event, the amount of the Deposit shall not be greater than [REDACTED] of Gross Exposure. From and after
the occurrence of a Triggering Event, the amount of the Deposit shall be
increased or decreased, as appropriate, based on the Methodology, to be in the
following amount for the specified periods of time (such amount for the
applicable date, the “Required Amount”)

 

(a)                                  During
any period in which (i) a First Stage Triggering Event has occurred and is
continuing and (ii) no Second Stage Triggering Event has occurred and is
continuing, the Deposit shall at all times be equal to the amount that is [REDACTED]  of Gross Exposure.

 

(b)                                 During
any period in which a Second Stage Triggering Event has occurred and is
continuing, the Deposit shall at all times be equal to the amount that is [REDACTED] of Gross Exposure.

 

(c)                                  Following
any period in which Carrier has effected a Cure of Second Stage Triggering
Event and so long as no other Triggering Event has occurred, the Deposit shall
be reduced to an amount equal to the amount that is [REDACTED] of Gross Exposure.

 

A-7

 

(d)                                 Following
any period in which Carrier has effected a Cure of First Stage Triggering Event
and so long as no other Triggering Event has occurred, the Deposit shall be
reduced to an amount not greater than [REDACTED]
of Gross Exposure.

 

Upon the
occurrence of a Triggering Event, Carrier immediately, upon Bank’s written
demand therefor, shall remit to Bank by wire transfer an amount sufficient to
increase the amount of the Deposit to the Required Amount. Without limiting the
foregoing, any increases to the Deposit required to be made under this
Agreement may be made, at Bank’s sole discretion, by Bank immediately
withholding on a daily basis as Reserved Funds an amount up to [REDACTED] of amounts otherwise payable to
Carrier under the Agreement until the Deposit is at least equal to the Required
Amount

 

Upon Carrier’s
Cure of First Stage Triggering Event, and no later than the fifth (5th)  Business
Day after Bank’s receipt of the Monthly Compliance Certificate that
demonstrates such cure, Bank will remit to the Carrier an amount that will
reduce the amount of the Deposit to an amount not greater than [REDACTED] of Gross Exposure. Upon Carrier’s
Cure of Second Stage Triggering Event that does not qualify as a Cure of First
Stage Triggering Event, and no later than the [REDACTED] Business Day after Bank’s receipt of the applicable
Weekly and Monthly Compliance Certificates that demonstrate such cure, Bank
will remit to the Carrier an amount that will reduce the amount of the Deposit
to an amount equal to [REDACTED of
Gross Exposure.

 

Other than as
provided in the immediately preceding paragraph, Bank shall remit to the
Carrier by the second (2nd) Business Day after any determination is made by
Bank that Carrier is entitled to a payment hereunder, any amount necessary to
reduce the Deposit to the Required Amount. Bank may reduce the amount due
Carrier under this Section 4 by the amount of any increase required to be made
to the Deposit resulting from Bank’s Methodology applied prior to the date the
funds are to be remitted to the Carrier hereunder.

 

The amount of
the Deposit to be maintained hereunder may be reduced in accordance with
Section 10 of this Schedule 2 pursuant to which Bank, in its sole discretion,
may accept an irrevocable standby letter of credit in lieu of all or a portion
of the required Deposit.

 

5.                                      Control
and Nature of Deposit

 

Carrier
acknowledges that any funds remitted to Bank by Carrier and funds paid to Bank
by Card Associations and held by Bank as the Deposit may be commingled with
other funds of Bank and further acknowledges that all such funds, and any
investment of funds shall be in the name and control of Bank, and Carrier shall
have no interest in any securities, instruments or other contracts or any
interest, dividends or other earnings accruing thereon or in connection
therewith. It is the understanding of the parties that the sole obligation of
Bank with respect to the Deposit shall be the obligation to pay to Carrier
amounts equal to the amount attributable to Travel Costs with respect to which
Carrier has provided goods or services and that such obligation on the part of
Bank is at all times subject to the terms of this Agreement.  To the extent permitted by applicable law or
regulation, all amounts held as the Deposit will be invested in the name of
Bank so as to result in a yield equal to the monthly average of the H-15 index
for

 

A-8

 

overnight federal funds
transactions, or any other equivalent investment approved by the Bank. The
amount so earned shall be credited to the Deposit.

 

6.                                      Right
of Offset

 

At any time that an amount is due Bank from
Carrier and Bank does not obtain payment of such amount due as provided in this
Agreement, Bank shall have the right to apply or set off any amounts otherwise
owed by Bank to Carrier hereunder, including, without limitation, any amounts
attributable to the Deposit, to the amount owed by Carrier.

 

7.                                      Retention
of Deposit

 

During the period not to exceed [REDACTED] months from the earlier of
termination of this Agreement or, if applicable, from the date upon which
Carrier permanently ceases flight operations, Bank shall have no obligation to
reduce the Deposit amount to an amount that is less than Gross Exposure and may
retain the Deposit in an amount equal to Gross Exposure until such time as the
Bank determines that Carrier has no further Obligations or potential
Obligations to Bank under this Agreement. In the event that any cessation of
flight operations by Carrier is temporary, Bank, at its option, may establish
and maintain separate flight calendars in the determination of Gross Exposure.
A flight calendar may be established to determine Gross Exposure arising from
Travel Costs purchased or paid by a customer of Carrier through use of a Card
with a Transaction Date for such purchase or payment that is prior to the
commencement of the temporary cessation (“Pre-Cessation Travel Costs”). An
additional flight calendar may be established to determine Gross Exposure
arising from Travel Costs purchased or paid by a customer of Carrier through
use of a Card with a Transaction Date for such purchase or payment that is on
or after the date of the commencement of the temporary cessation. In the event
of temporary cessation of flight operations by Carrier, Bank will not be obligated
to make any payments to Carrier on account of Sales Slips that were or are
submitted to it by Carrier with respect to Pre-Cessation Travel Costs for a
period of [REDACTED] months after
the commencement of such temporary cessation.

 

8.                                      Methodology

 

“Gross Exposure” shall be calculated by the Bank on a daily basis as
follows:

 

(a)                                  [REDACTED]

 

(b)                                 [REDACTED]

 

A-9

 

(c)                                  [REDACTED]

 

(d)                                 [REDACTED]

 

(e)                                  [REDACTED]

 

(f)                                    [REDACTED]

 

(g)                                 [REDACTED]

 

9.                                      Standby
Letter of Credit

 

The amount of the Deposit which Bank may
maintain pursuant to this Schedule 2 shall be decreased by the amount remaining
to be drawn upon any valid and outstanding irrevocable standby letter of credit
for the benefit of and expressly accepted by Bank, in its sole discretion, in
lieu of maintaining the amount of the Deposit in the Required Amount under
Section 4 of this Schedule 2. Any such letter of credit shall be in form and
substance acceptable to Bank and issued by a financial institution acceptable
to Bank, as determined by Bank in its sole discretion. The sum of the amount
remaining to be drawn upon any valid and outstanding standby letter of credit
and the amount of the Deposit maintained hereunder (“Aggregate Coverage”) shall
at all

 

A-10

 

times be no less than the
Required Amount and Bank may withhold from payment to Carrier Reserved Funds in
accordance with Section 4 of Schedule 2 to the extent necessary to cause
Aggregate Coverage to be not less than the Required Amount. At such time as the
Bank may no longer draw on the letter of credit, Bank may require that the
Deposit equal the Required Amount.

 

Upon the occurrence of any event that gives
rise to Bank’s right under this Agreement (i) to make demand on Carrier for
payment to Bank, (ii) to apply amounts represented by the Deposit to
obligations of Carrier under the Agreement or (iii) otherwise to retain and not
pay to Carrier amounts paid to Bank by MasterCard International or the Visa
System on account of Sales Slips submitted to Bank by Carrier, then Bank, at
its option, may draw on any standby letter of credit issued for its benefit
with respect to the Agreement without first taking any of the actions described
in clauses (i), (ii) and (iii) above.

 

In addition to Bank’s rights as set forth
above, Bank, at its option, may draw (in one or more draws) up to the lesser of
(i) the amount equal to [REDACTED]
of Gross Exposure less the amount of the Deposit on the date of any such draw
or (ii) the full amount remaining undrawn on a standby letter of credit upon
the occurrence of any one or more of the following events or as otherwise
provided below: (a) commencement whether by or against Carrier, of any
bankruptcy, reorganization, debt arrangement or other proceeding under any
bankruptcy, reorganization, debt arrangement or other proceeding under any
bankruptcy or insolvency law; (b) receipt by Bank of notification from the
issuer of the standby letter of credit that such issuer has elected not to
renew the standby letter of credit; (c) notification of termination of the
Agreement by either party; or (d) a substantial number of the scheduled flights
of Carrier fail to operate on any particular day.  In addition, Bank may draw upon the standby letter of credit
pursuant to any other condition for draw provided in the standby letter of
credit, and, in any event, on or after the thirtieth day prior to expiration of
the standby letter of credit. No failure to draw, or delay in making a draw, on
the standby letter of credit shall impair Bank’s right to draw thereon at a
later time.

 

Carrier acknowledges that it
has no interest in any proceeds of any draw on any letter of credit issued for
the benefit of Bank and that upon any draw on any letter of credit, Bank shall
be entitled to hold the proceeds thereof for payment of the Obligations under
the Agreement and apply such proceeds in payment thereof as and when Bank deems
appropriate. Bank shall have no obligation to remit to any person or entity any
excess proceeds of any draw on the letter of credit until expiration of the
period specified in Section 7 of this Schedule 2. In the event of any dispute
between Carrier and the issuer of such letter of credit or any subrogee
thereof, or any other person or entity with respect to entitlement to any
proceeds of the letter of credit, Bank may retain all such proceeds until final
resolution of such dispute by a court of competent jurisdiction, subject to
Bank’s right to retain and apply proceeds in payment of the Obligations. In the
event that Bank draws on the letter of credit and holds the proceeds thereof at
a time when Carrier is conducting normal flight operations, Bank, at its
option, may include such proceeds in its calculation of coverage for Gross Exposure
and make remittances to Carrier in accordance with Section 4 of this Schedule 2
as if the proceeds were part of the Deposit.

 

A-11

 

ATTACHMENT 1

TO SCHEDULE 2

TO AGREEMENT

 

MONTHLY COMPLIANCE
CERTIFICATE

 

This Monthly Compliance
Certificate is being submitted pursuant to Section 2 of Schedule 2 of the
Agreement dated as of December 31, 1999 (the “Agreement”) by and between
Hawaiian Airlines, Inc. (“Carrier”) and U.S. Bank National Association (“Bank”).
The undersigned, being the Chief Financial Officer of Carrier, hereby certifies
that, to the best of his/her knowledge after reasonable investigation as of the
date of this Certificate, the following are true and correct and were compiled
from the books and records of the Carrier in accordance with the terms of the
Agreement.

 

	
   

  	
   

  	
   

  	
  Present

  Month

  	
   

  	
  Immediately

  Preceding

  Month

  	
   

  	
  Second

  Preceding

  Month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Cash Reserves

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a) 
  Unrestricted Cash Balance

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b) 
  Total Cash Balance

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Available Seat Miles

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Revenue Passenger Miles

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Triggering Events  No Triggering Event has occurred and
  is continuing except:

  	
   

  

 

[Describe here any Triggering Event]

 

All capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in Schedule 2
of the Agreement thereto.

 

	
  Dated                                ,
         

  	
   

  
	
   

  	
  HAWAIIAN
  AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Its

  	
   

  
				

 

A-12

 

ATTACHMENT 2
TO SCHEDULE 2

TO AGREEMENT

 

WEEKLY COMPLIANCE
CERTIFICATE

 

This Weekly Compliance Certificate is being
submitted pursuant to Section 2 of Schedule 2 of the
Agreement dated as of December 31, 1999 (the “Agreement”) by and between
Hawaiian Airlines, Inc. (“Carrier”) and U.S. Bank National Association
(“Bank”). The undersigned, being the Chief Financial Officer of Carrier or a
duly authorized representative thereof, hereby certifies that, to the best of
his/her knowledge after reasonable investigation as of the date of this
Certificate, the following are true and correct and were compiled from the
books and records of the Carrier in accordance with the terms of the Agreement.

 

	
   

  	
   

  	
   

  	
  Present

  Month

  	
   

  	
  Immediately

  Preceding

  Month

  	
   

  	
  Second

  Preceding

  Month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Cash Reserves

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a) 
  Unrestricted Cash Balance

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b) 
  Total Cash Balance

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Available Seat Miles

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Revenue Passenger Miles

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Triggering Events  No Triggering Event has occurred and
  is continuing except:

  	
   

  

 

[Describe here any Triggering Event]

 

All capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in Schedule 2 of the
Agreement thereto. This Weekly Compliance Certificate may be sent to Bank by
e-mail (unsigned) at an e-mail address designed from time to time by Bank.

 

	
  Dated                                ,
         

  	
   

  
	
   

  	
  HAWAIIAN
  AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Its

  	
   

  
				

 

A-13Exhibit
10.24

 

 

PORTIONS OF
THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH

THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR

CONFIDENTIAL
TREATMENT.  SUCH PORTIONS ARE DESIGNATED
[REDACTED].

 

 

BANK OF
AMERICA/HAWAIIAN AIRLINES CO-BRAND CARD AGREEMENT

 

THIS AGREEMENT (the “Agreement”) is entered into the
19 day of December 2002, (the “Effective Date”), between BANK OF AMERICA, NA
(USA), a national banking association, with offices at 1825 East Buckeye Road,
Phoenix, AZ 85034 (“Bank”), and Hawaiian Airlines, Inc., with offices at 3375
Koapaka Street, G-350, Honolulu, HI 96819 (“Hawaiian Airlines”).

 

RECITALS

 

WHEREAS, Hawaiian Airlines provides scheduled airline
services and operates as part of its service a rewards program featuring airline
mileage or other travel credit or awards including, without limitation, the
current HawaiianMiles program; and

 

WHEREAS, the Bank is in the credit card issuing,
marketing and processing business; and

 

WHEREAS, the parties desire to enter into an agreement
to establish and maintain a general purpose co-branded credit card program for
the benefit of Hawaiian Airlines’ frequent flyers, customers and prospects; and

 

NOW, THEREFORE, in consideration of the terms and
conditions stated in this Agreement, and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties agree as follows:

 

SECTION 1.                                Definitions.  As used in this Agreement, the following
terms where written with an initial capital letter shall have the following
respective meanings (such terms to be equally applicable to both the singular
and plural forms of the terms defined):

 

(a)                                  “Account(s)”
shall mean [REDACTED]

 

(b)                                 “Activated
Account” means an Account to which a Net Purchase transaction has been posted.

 

(c)                                  “Card”
or “Cards” or “Card Products” shall mean a Visa or MasterCard, general purpose
credit card.

 

(d)                                 “Cardholder”
means a person who is issued a Co-branded Card and is primarily liable on the
Account.

 

(e)                                  “Cardholder
Agreement” means the agreement between each Cardholder and Bank governing the
Cardholder’s Account.

 

1

 

(f)                                    “Cardholder
Benefit” means any benefits provided to a Cardholder as listed on Exhibit A and,
if applicable, Exhibit C.

 

(g)                                 “Co-branded
Card” means any Card bearing a Bank Mark, the Hawaiian Airlines mark and the
trade names or logos of MasterCard or Visa.

 

(h)                                 “Contract
Year” shall mean each twelve (12) month period beginning on the Effective Date
or on the annual anniversary of the Effective Date.

 

(i)                                     “Hawaiian
Airlines Customer” shall mean any person or entity whose name appears on a list
delivered by Hawaiian Airlines to Bank or its agents.

 

(j)                                     “Hawaiian
Airlines Customer List” has the meaning set forth in Section 3(a).

 

(k)                                  “Hawaiian
Airlines’ Portfolio” shall mean all those Accounts whose credit cards bear
Hawaiian Airlines’ name and/or logo or which are otherwise established
hereunder.

 

(l)                                     “HawaiianMiles”
shall mean the Hawaiian Airlines frequent flyer loyalty program featuring
airline mileage or other travel credits or awards.

 

(m)                               “Initial
Term” has the meaning set forth in Section 13(a).

 

(n)                                 “Mutual
Customer” shall mean any person who is both a Hawaiian Airlines Customer and a
holder of an Account in the Hawaiian Airlines Portfolio.

 

(o)                                 “Net
Purchases” or “Net New Purchases” shall have the meaning ascribed to it in Exhibit
B.

 

(p)                                 “Person”
means any individual, partnership, corporation, Limited Liability Company,
business trust, Joint Stock Company, trust, unincorporated association, joint
venture or any governmental entity.

 

(q)                                 “Program”
shall mean the Co-branded Card program conducted pursuant to this Agreement.

 

(r)                                    “Revenue
Commitment” shall mean the annual amount set forth on Appendix A or Appendix B,
as applicable, for each Contract Year.

 

(s)                                  “Revenue
Share Formula” shall mean [REDACTED]
..

 

2

 

(t)                                    “Solicitation”
shall mean any promotion to acquire new Accounts or to increase usage of
existing Accounts by direct mail or other form of advertising sent or delivered
specifically to Hawaiian Airlines Customers or other prospects pursuant to the
terms of this Agreement.

 

SECTION 2.                                Program Description.

 

(a)                                  Upon
the terms and subject to the conditions set forth in this Agreement, Bank
agrees to establish and maintain a co-branded credit card program that is
developed, at its sole option and discretion, either by acquisition of the
Wells Fargo Bank credit card portfolio or without such acquisition.  In the event the Bank acquires the Wells
Fargo Bank credit card portfolio, (“Acquisition”), then Appendix A, is
applicable.  In the event the Bank does
not acquire the Wells Fargo Bank credit card portfolio, (“Non-Acquisition”),
then Appendix
B and Exhibit C shall apply. 
In both instances Exhibit A and Exhibit B governs.

 

(b)                                 The
Program is a Card program designed for Hawaiian Airlines Customers.  Under the Program, Hawaiian Airlines shall
provide Bank access to Hawaiian Airlines Customer Lists, as permitted by law
and Hawaiian Airlines’ contractual obligations, and limited use of Hawaiian
Airlines Marks, for use by Bank in marketing the Program to Hawaiian Airlines
Customers the Bank’s customers, and the general public.  Each Program Card will contain Hawaiian Airlines’
and Bank’s names and logos as well as other information required by Visa,
MasterCard, Bank or Hawaiian Airlines. 
Bank may offer one or more Card Products as mutually agreed upon for the
Program containing the Cardholder Benefits set forth in Exhibit A and, if applicable, Exhibit C.

 

SECTION 3.                                Solicitations.

 

(a)                                  Hawaiian
Airlines’ Customer List.  At no cost
to Bank and at Bank’s request, Hawaiian Airlines (subject to Hawaiian Airlines
privacy restrictions) will provide Bank with a list of HawaiianMiles members
who have not indicated to Hawaiian Airlines that they do not wish to have their
name disclosed to third parties (“Hawaiian Airlines Customer List”) in a format
satisfactory to Bank.  The Hawaiian
Airlines Customer List shall include (to the extent Hawaiian Airlines has such
information) with respect to each member the name, home and business addresses,
company name, HawaiianMiles account number, enrollment date, last activity
date, tier status, market indicator, program-to-date miles, number of redeemed
miles, date of last flight, number of times flown first/business class in the
last twelve months, and email address. All Hawaiian Airlines Customer Lists
will be used at Bank’s discretion only for the purpose of accomplishing
Solicitations for the credit cards to be issued pursuant to Section 3(c)
hereof.  Bank will have the list
screened at its expense by a credit reporting agency to see which persons meet
Bank’s credit criteria.

 

3

 

In addition, Bank may have a Hawaiian Airlines
Customer List screened to determine which names and addresses are good for
offers which are not pre-approved based on sources available for this
purpose.  The standards for determining
who falls into each category and which customers are eligible for an Account
shall be determined by Bank at its sole discretion exercised in accordance with
its customary standards, provided, however that Bank will always use standards
the same as those used for its other airline co-branded credit card
programs.  Bank may refuse to issue a
credit card to a customer where the customer’s application response or credit
history does not meet Bank’s criteria as permitted by law. Bank is not
obligated, under any circumstances, to inform Hawaiian Airlines of its credit
criteria or of any credit decision.

 

(b)                                 Solicitation
Package.  [REDACTED]

 

 

(c)                                  Issuance
of Credit Cards to Hawaiian Airlines’ Customers. (1) Bank shall issue
credit cards to those individuals responding to a Solicitation provided the individual
meets Bank’s criteria for an Account. 
Solicitations may include but not be limited to offers for the following
credit card and payment products (“Card Products”):

 

i.                                          Visa
Classic (“Classic Accounts”)

ii.                                       Visa
Platinum (“Platinum Accounts”); and

iii.                                    Visa
Signature Card (“Signature Card Accounts”)

 

(2)                                  The
amounts of any finance charge, annual fee or other charge and any other
provisions of any Cardholder Agreement for any Card Product may be amended upon
notice to the cardholder, to the extent prior notice is required by law,
subject to the following conditions:

 

(i)                                     no
such amendment shall otherwise be contrary to this Agreement;

 

(ii)                                  any
change to the annual percentage rate (“APR”), annual fee or charges for a Card
Product will be competitive with the same Card Program of other airline
co-brand credit card programs in Hawaiian Airlines’ markets, offered by
airlines flying to and from, or within Hawaii.

 

(iii)                               no
change to the APR, annual fee or other charges shall become effective unless
Bank has given Hawaiian Airlines thirty (30) days advance notice of such change
and an opportunity to submit comments to Bank regarding whether the proposed
change would

 

4

 

be competitive within Hawaiian Airlines’ markets as
required in Section 3(c)(2)(ii); and

 

(3)                                  The
change will be considered competitive for purposes of Sections 3(c)(2)(ii) and
(iii) unless the Bank determines, in good faith, that the proposed changes
would materially adversely affect the competitiveness of the portfolio.

 

(A)                              Accounts
will be opened under the terms of Bank’s cardholder agreement for the
applicable Card Product (collectively the “Cardholder Agreements”).

 

(4)                                  At
no cost to Hawaiian Airlines, Bank will offer travel-related insurance and
benefits that are standard for Bank’s Card Products.  Bank can modify or discontinue these benefits at Bank’s sole
discretion with thirty (30) days prior written notice to Hawaiian Airlines,
provided any changes to these benefits will be discussed with Hawaiian Airlines
and be competitive with other airline co-brand programs.

 

(5)                                  Bank
and Hawaiian Airlines will set up a process to ensure that Hawaiian Airlines
VIP’s receive special review by Hawaiian Airlines and Bank marketing managers
prior to credit card denial, provided Hawaiian Airlines submits a list of
Hawaiian Airlines’ VIPs to Bank and the VIPs are creditworthy.

 

(d)                               Cost
of Solicitations.  Bank shall bear
all the costs of the Solicitation pursuant to this Section 3, including without
limitation, costs of preparation and printing of the Solicitation material,
postage and handling, and costs of any services rendered by a mail-order house
or fulfillment house; and all other processing, evaluating, screening, or
handling costs and expenses.

 

(e)                                  Credit
Card Design.  Bank will provide
Hawaiian Airlines the necessary Visa design specifications for custom graphics
of the Hawaiian Airlines co-brand card. 
Bank will use its authorized vendor for the production of the custom
Hawaiian Airlines co-brand card.  There
will be no cost to Hawaiian Airlines in connection with the design,
preparation, production and issuance of the credit cards issued hereunder.
Subject to satisfaction of Visa regulations, and Bank’s requirements, Hawaiian
Airlines will have the right to approve the design of all the cards.

 

5

 

SECTION 4.                                  Marketing.

 

(a)                                  The
Bank’s Other Relationships. Hawaiian Airlines acknowledges that the Bank
may have existing relationships, or may develop future relationships, with
persons appearing on Hawaiian Airlines Customer Lists which Hawaiian Airlines
provides according to Section 3 above. 
Except as provided herein, this Agreement will not restrict or in any
manner affect Bank’s dealings with those persons, except with respect to
Solicitations directly using Hawaiian Airlines Customer Lists.

 

(b)                                 Strategies.  The parties will define marketing strategies
and responsibilities on an ongoing basis. 
Either party may propose marketing strategies or plans, and the other
party will review them and respond by not later than 30 days following receipt
of the proposal.  The parties may amend
this Agreement to add mutually agreeable requirements for marketing strategies
and plans.  At a minimum, Bank and
Hawaiian Airlines will meet at least once each calendar year to jointly develop
a marketing plan for the following calendar year.  The marketing plan will include goals for Hawaiian Airlines
Portfolio growth.

 

(c)                                  Marketing
Activity.  Each party will provide
to the other party, for its review and approval, any offer, promotional or
other material relating to the Program. 
The material will not be used before the other party’s prior approval,
which will not be unreasonably withheld. 
Marketing activity will include, without limitation, the following:

 

(i)                                     Statement
Inserts.

 

(A) Program. 
Hawaiian Airlines may advertise and promote products and services sold
by Hawaiian Airlines, its affiliates or marketing partners in the Hawaiian
Airlines Portfolio billing statements in accordance with a schedule to be
mutually agreed upon by Hawaiian Airlines and Bank, and at no cost to Hawaiian
Airlines except for the production cost to produce the statement inserts and
deliver the statement inserts to Bank or Bank’s fulfillment vendor.  The contents of the insert shall be subject
to review and approval by Bank, which approval shall not be unreasonably
withheld. Hawaiian Airlines shall inform Bank of its desire to mail such an
insert no less than ninety (90) days prior to the desired mail start date.  Hawaiian Airlines will produce all statement
inserts in accordance with Bank specifications and will be responsible for any
increase in postage due to weight in excess of envelop allowance, provided that
Bank gives Hawaiian Airlines advance notice of increase postage costs prior to
printing. Bank shall make available to Hawaiian Airlines for such solicitation
purposes, a maximum of 5 statement insert slots in all Accounts, per month,
provided, however that Bank reserves the right to use one or more of the insert
slots as needed for required operational, regulatory or legal notifications.

 

6

 

(B) HawaiianMiles.  During each Contract Year Hawaiian Airlines will allow Bank to
insert advertising and promotion materials into the HawaiianMiles mileage
statement a minimum of four times annually, at no cost to Bank except for the
production cost to produce the statement inserts and deliver the statement
inserts to Hawaiian Airlines or Hawaiian Airlines’ fulfillment vendor. Bank
will be responsible for any increase in postage due to weight in excess of
envelop allowance, provided that Hawaiian Airlines gives Bank advance notice of
increase postage costs prior to printing. The contents of the statement insert
shall be subject to review and approval by Hawaiian Airlines, which approval
shall not be unreasonably withheld. Bank shall inform Hawaiian Airlines of its
desire to mail such insert no less than ninety (90) days prior to the desired
mail start date.

 

(C) Contents of Statement.  The contents of billing statements and any
Bank inserts mailed with the statement shall be under the exclusive control of
Bank, provided that Hawaiian Airlines shall be entitled to review and approve
any inserts or non-bill related contents of statements prior to mailing.

 

(D) Notice and Approval.  With respect to the use of the insert slots
provided for in this Section, Hawaiian Airlines shall provide Bank with a
description of any product or service which it intends to offer three (3)
months prior to such proposed offering and shall obtain Bank’s prior written
consent to the type of product or service to be offered prior to printing,
which consent will not be unreasonably withheld or delayed.

 

(ii)                                  Hawaiian
Airlines Cross Sell Opportunities. 
Bank shall make Bank’s communication channels available to Hawaiian
Airlines for the purpose of advertising or promoting its products or services.
Bank will advise Hawaiian Airlines of production cost and other charges, if
applicable, associated with each communication channels at time of scheduling.
Such promotions must offer Bank customers a special value or benefit and is
subject to the prior written approval of Bank (not to be unreasonably
withheld). Communication channels available to Hawaiian Airlines may include:

 

Statement inserts non co-brand credit card and debit
card

Direct Mail non
co-branded credit card and debit card

Statement Messaging non
co-brand credit card and debit card

ATM receipts and screens
(potentially with transaction fees)

Banking center promotion

Website advertising

VRU / Call Center

 

7

 

Loan Statements

Checking Statements

Card Carriers

New Account Kits

 

 

(iii)                               Promotional
Materials.  From time to time, Bank
and Hawaiian Airlines may agree to insert promotional materials into each
other’s statements.  Bank Statements are
defined as cardholder statements excluding current co-brand portfolios and
Hawaiian Airlines statements are HawaiianMiles member statements.  Bank and Hawaiian Airlines will jointly
agree upon the size and content of the inserts.  Each will bear its own cost to print and deliver the inserts.

 

(iv)                                Solicitations.  Bank will develop all Solicitation packages
and Hawaiian Airlines will have an opportunity to review such Solicitation
packages pursuant to the approval rights set forth in Section 4(d) of this
Agreement.

 

(v)                                 Advertising
Media.  Bank and Hawaiian Airlines
will jointly discuss and agree upon all applicable advertising media, i.e.
Hawaiian Airlines channels, Bank channels and other broadcast and direct mail
vehicles.  Notwithstanding the
foregoing, during each Contract Year Hawaiian Airlines will allow Bank one
article in each issue of the In-flight magazine, an article in each general
membership newsletter and as appropriate each elite member newsletter, and use
one or more of their other advertising channels either separately or
concurrently including but not limited to, electronic messages, statement
inserts and/or messages, ticket jackets, airport kiosks and in-flight video
announcements. Bank shall be responsible for production of the above referenced
advertising media.

 

(vi)                              Take-Ones.

Bank will develop and provide at no cost to Hawaiian
Airlines “Take-One” applications and display materials that will carry the
Hawaiian Airlines graphics.  Such
materials shall be dedicated exclusively to Hawaiian Airlines. Hawaiian
Airlines shall display such applications at select locations mutually agreed by
Hawaiian Airlines and Bank, as permitted by airport regulations and other
contractual agreements, and include one with each new HawaiianMiles new member
kit mailings.  Bank shall provide branch
exposure in relevant markets consistent with Bank’s other airline card products
marketed in the United States.

 

(vii)                           Internet.  Bank and Hawaiian Airlines each at its own
expense shall promote the Program on its respective web site.

 

8

 

(viii)                        Other.  Bank and Hawaiian Airlines will mutually
agree on other marketing activities.

 

(ix)                                Transaction
Information.  From time to time
Hawaiian Airlines and Bank shall provide, at the expense of the provider,
information relating to Mutual Customers to assist the marketing efforts of the
other party.  Such information may include,
for example, information from Bank relating to purchases of travel on Hawaiian
Airlines’ competitors, or information from Hawaiian Airlines relating to
purchases made with credit cards issued by creditors other than Bank.  Neither party shall be required to provide
any information if in the provider’s reasonable opinion, the disclosure of such
information would violate any law, its internal policy or agreement to which it
is bound or otherwise subjects the provider to liability.

 

(d)                                 Approval
Rights.

(1)                                  Any
marketing activity materials produced or used by Bank that advertises the
HawaiianMiles Program, solicits an application for a HawaiianMiles Program Card
usage, and that also contains Hawaiian Airlines name or logo shall be subject
to prior written approval by Hawaiian Airlines before the materials are used by
the Bank.  Any marketing activity
materials produced by Hawaiian Airlines that solicits an application or
encourages the HawaiianMiles Program Card usage, or that contains Bank’s name
or logo, shall be subject to prior written approval by Bank before the
materials may be used by Hawaiian Airlines. 
Each party’s right to either require changes or to refuse to approve any
marketing activity materials shall be limited to the following reasons:

 

(i)                                     the
manner in which the party’s trade name or logo is used;

 

(ii)                                  the
inaccuracy of the information;

 

(iii)                               the
information is inconsistent with the corporate policy of or tends to injure the
corporate image of the reviewing party; or

 

(iv)                              the
materials would create a possibility of violating or actually violate a law or
existing agreement to which the party is subject

 

(2)                                  Each
party shall have ten (10) business days to review the initial draft and ten
(10) business days to review the final draft of any marketing activity
materials received from the other party. 
Delivery of comments, changes or approvals must be communicated in
writing by e-mail, facsimile, or mail between

 

9

 

employees of each party who are dedicated to the
HawaiianMiles Program.

 

(e) Marketing
Commitment.  During the Initial Term
of this Agreement, Bank shall spend a minimum of [REDACTED] (the “Marketing Commitment”) or such greater amount
as it shall determine in its sole discretion toward marketing the Program,
including but not limited to Solicitations. Bank shall determine in its sole
discretion when and how the Marketing Commitment shall be spent.  However in no case will the Bank use the Marketing
Commitment to offset fixed and customary overhead expense. The Marketing
Commitment amount is exclusive of any credit card association financial or
marketing consideration.  Within thirty
(30) days after the end of each Contract Year, Bank shall submit to Hawaiian
Airlines reasonable evidence of the costs and expenses paid by Bank for the
marketing of the Program.  

 

SECTION 5.                                Proprietary
Information; Confidentiality.

 

(a)                                  Hawaiian
Airlines.  Bank acknowledges and
agrees that Hawaiian Airlines has a proprietary interest in the Hawaiian Airlines
Customer Lists.  All such information
shall be referred to herein as “Hawaiian Airlines Proprietary Information.”
Bank will keep the Hawaiian Airlines Proprietary Information confidential, and
prevent Bank’s employees, agents and contractors from divulging Proprietary
Information or from using such Proprietary Information for any purpose not
herein contemplated.  Except as
otherwise provided below, Bank shall use Hawaiian Airlines Proprietary
Information only for purposes of the Solicitations and in connection with the
opening and administration of Accounts and issuance of cards as a result of the
Solicitations, and will not sell, rent, or otherwise make available Hawaiian
Airlines Proprietary Information to any third party for the third party’s marketing
purposes without the expressed written consent of Hawaiian Airlines.  Lists of Bank accountholders, obtained as a
result of the Solicitations, shall not be considered a part of Hawaiian
Airlines Proprietary Information and may be used for any purpose Bank wishes.

 

(b)                                 Bank.  Hawaiian Airlines acknowledges and agrees
that Bank claims a proprietary interest in (i) Bank’s customer lists and any
information concerning those customers and their credit card or other
relationships with Bank and (ii) the terms of this Agreement.  All such information shall be referred to
herein as “Bank’s Proprietary Information.” 
Hawaiian Airlines will keep Bank’s Proprietary Information confidential,
and prevent its agents and contractors from divulging Bank’s Proprietary Information.  Hawaiian Airlines will not use any of Bank’s
Proprietary Information that comes into its possession through any manner
including, but not limited to marketing reports, transaction reports, monthly

 

10

 

marketing meetings except in connection with its
obligations under this Agreement. 
Hawaiian Airlines Customer Lists obtained pursuant to the Solicitations
shall not be considered Bank’s Proprietary Information, provided, however, that
Hawaiian Airlines may not use the subset of such Hawaiian Airlines Customer
List that constitutes Bank’s customer list for any reason except in connection
with its obligations under this Agreement.

 

(c)                                  Not
Guarantors.  Neither party will be
considered a guarantor of the actions of any third party. Either party may
disclose the Proprietary Information of the other party to regulatory
authorities and government agencies where required to do so by such authority
or agency.  If one party learns of any
unauthorized disclosure or use of the other party’s Proprietary Information, it
will promptly notify the other party.

 

(d)                                 Duty
to Keep Customer Information Confidential. 
Bank and Hawaiian Airlines acknowledge that each has a responsibility to
its customers to keep information about its customers and their accounts
(“Customer Information”) strictly confidential.  In addition to the other requirements set forth in this Paragraph
regarding Proprietary and Confidential Information, Customer Information shall
also be subject to the additional restrictions set forth in this
Subparagraph.  Neither Bank nor Hawaiian
Airlines shall disclose or use any Customer Information other than on a “need
to know” basis to carry out the purposes of this Agreement (and in accordance
with an express direction given by such customers as to the use of their data)
and then only to: (i) affiliates of Bank or Hawaiian Airlines, (ii) Hawaiian
Airlines and Bank’s employees or officers, (iii) to carefully selected
subcontractors provided that such subcontractors shall have entered into a
confidentiality agreement no less restrictive than the terms hereof; (iv) to
independent contractors, agents and consultants designated by Bank or Hawaiian
Airlines, as applicable; or (v) pursuant to the exceptions set forth in 15 USC
6802(e) or accompanying regulations which disclosures are made in the ordinary
course of business.  The restrictions
set forth herein shall apply during the Term and after the termination of this
Agreement.

 

SECTION 6.                                Cooperation
on Solicitations.

 

Hawaiian Airlines and Bank will use all reasonable
efforts to cooperate in assuring the integrity, accuracy, and security of the
solicitation process for each Solicitation pursuant to this Agreement; however,
Bank shall remain solely responsible for ensuring that such Solicitations do
not violate any law or result in any other liability of any nature applicable
to credit card Solicitations. 
Notwithstanding the foregoing, Hawaiian Airlines shall remain solely responsible
for ensuring that the rules of the HawaiianMiles program, as such relates to
the

 

11

 

Accounts, are fully and accurately disclosed. Hawaiian
Airlines and Bank shall cooperate in the development of Bank’s solicitation
plans.

 

SECTION 7.                                  Program
Management.  

 

(a)                                Staffing.  The parties shall each designate qualified
employees to work on the Program, to properly implement and perform their
respective duties and obligations under this Agreement in a timely and
efficient manner. Each party shall notify the other party of such employee
designations and their respective addresses and phone numbers.  Each party will notify the other of any
changes to such information within 48 hours of any such change.  

 

(i) Primary responsibility for managing the growth and
development of the Hawaiian Airlines Portfolio will be:

 

Manager Partner Marketing

Hawaiian Airlines

3375 Koapaka Street, Suite G350

Honolulu, Hawaii 96819

 

Bank of America

Hawaiian Airlines Portfolio Manager

 

(b)                                 Performance
Review.  Bank and Hawaiian Airlines
shall use commercially reasonable efforts to hold at least one (1) performance
review meeting each month to discuss portfolio performance and marketing
initiatives.  The parties shall agree to
the time and place of each meeting.

 

(c)                                  Annual
Planning Meeting.  The parties shall
meet annually at a mutually agreed upon location for the purpose of discussing
the Program and planning for future marketing and growth. The parties will work
in good faith to agree on an annual marketing plan by October 31 of each year
during this Agreement.

 

(d)                                 Air
Transportation.  Hawaiian Airlines
shall provide air transportation to the performance review and annual planning
meetings in the form of up to twelve (12) airline tickets annually, if the
meetings are held in locations served by Hawaiian Airlines. Other than the air
transportation as described in the preceding sentence, each party shall bear
its own expense related to such meetings.

 

SECTION 8.                                Payments and Revenue Share.

(a)                                  Advance.  Bank will pay Hawaiian Airlines an advance
against Hawaiian Airlines revenue share as set forth in Appendix A or Appendix B,
as

 

12

 

applicable, of [REDACTED]
within five (5) business days of the Effective Date of this Agreement (the
“Advance Payment”).  The Advance Payment
of revenue share is being made against the Revenue Commitment described in
Section 8(b) of this Agreement until the revenue share generated by the Program
equals or exceeds the amount of the Advance Payment as set forth in Section
8(e).   If this Agreement is terminated
by Hawaiian Airlines for any reason or by Bank for cause or if any of the
conditions stated in Section 8(c) shall no longer be satisfied before the Program
has generated revenue in excess of the Advance Payment, then Hawaiian Airlines,
or its successor, shall pay the Bank the unearned amount against the Advance
Payment (the Advance Payment minus the earned and recouped revenue share).

 

(1)                                  Hawaiian
Airlines may enter into one or more stock repurchase programs prior to the full
recoupment of the Advance Payment provided that (i) the amount of cash utilized
for any such stock repurchase shall not exceed [REDACTED] of the cash and cash equivalents held by Hawaiian
Airlines at the time of the stock repurchase and (ii) the cash and cash
equivalents held by Hawaiian Airlines immediately after any such stock
repurchase shall not be less than [REDACTED].
Additionally, Hawaiian Airlines will notify  the Bank at least two (2)
weeks prior to initiating a stock repurchase program prior to the full
recoupment of the Advance Payment.  In
the event that such stock repurchase exceeds [REDACTED]
of cash and cash equivalents or reduces cash and cash equivalents to less than
[REDACTED] then: (i) any portion
of the Advance Payment that has not been earned and recouped shall be
immediately repayable to Bank as of the stock repurchase offering date, and
(ii) Bank shall have no further obligation to make payments pursuant to Section
4(e) and Section 8(b).

 

 (b)                              Revenue Commitment.  During the term of this Agreement Bank shall
pay Hawaiian Airlines a minimum of [REDACTED]
as set forth in Appendix A or Appendix B, as applicable, which
includes the [REDACTED] Advance
Payment.  The Revenue Commitment amount
may increase to a maximum of [REDACTED]
as set forth in Appendix A or Appendix B, as  applicable.  The Revenue Commitment amount is the
aggregate of all payments by the Bank for miles at the Base Rate, Bonus Rate,
and bounty payments as set forth on Exhibit B, and  any new product or services
offered pursuant to Section 10(c) of this Agreement.  The amount of the Revenue Share shall begin to accumulate on the
Effective Date of this Agreement.

 

13

 

(1)                                  In
the event that the number of HawaiianMiles Active Members who are under
eighteen years of age exceeds [REDACTED],
Hawaiian Airlines and Bank agree that the Commitment as stated in Appendix A
or Appendix
B for the applicable Contract Year, other than the first Contract
Year, shall be adjusted using the Minor Adjustment Formula in Appendix A or Appendix B.

 

(c)                                  Notwithstanding
the provisions of Section 4(e), Section 8(a), except as provided in therein,
and Section 8(b) the payment of the Marketing Commitment, Advance Payment and Revenue
Commitment shall be made only if all of the following conditions, to the extent
applicable in each particular case, are fully satisfied at the time of
Effective Date of this Agreement and at the time payment is payable:

 

(i)                                     Hawaiian
Airlines continues to maintain and offer membership in its HawaiianMiles
frequent flyer program and that program remains competitive within the airline
industry;

(ii)                                  The
HawaiianMiles thirty-six (36) month membership base as of the Effective Date is
at or above [REDACTED]

(iii)                               There
is no material deterioration to Hawaiian Airlines’ financial condition;

(iv)                              There
is no sale or change in control of Hawaiian Airlines;

(v)                                 Hawaiian
Airlines is not in default of any agreement to which it is a party;

(vi)                              Bank
is allowed full access to HawaiianMiles membership lists and access to member
communications for card solicitation purposes in accordance with legal
requirements, and privacy policies;

(vii)                           The
Bank has an opportunity to market through other Hawaiian Airlines customer
channels, as appropriate, feasible and consistent with government regulation;

(viii)                        Bank is
granted use of Hawaiian Airlines and HawaiianMiles trademarks, trade names and
logos to market the program to Hawaiian Airlines customers and the general
public;

(ix)                                Promotion
of the Program on Hawaiian Airlines and HawaiianMiles websites;

(x)                                   Bank
having access to, and contact with Hawaiian Airlines database management group;
and

(xi)                                A
designated contact person, with decision authority, to administer the daily operations
and marketing details of the Program.

 

14

 

(d)                               Excise
Tax.  Bank shall pay to Hawaiian
Airlines all taxes, surcharges or duties or other charges of a similar nature
payable in connection with the amounts due under this Agreement, including,
without limitation, the 7.5%, or applicable percentage amount, transportation
tax payable in connection with the purchase of miles (the “Transportation
Excise Tax”).

 

(e)                                  Payment
Calculation.

(i)             Bank will calculate
payments due to Hawaiian Airlines under this Agreement for each calendar month
of the Contract Year based upon the Revenue Share Formula stated in Exhibit B.  Bank will make each payment due to Hawaiian
Airlines by the fifteenth (15th) day of the calendar month following the month
in which the payment was earned.

 

(ii)                              Bank will make the Advance
Payment to Hawaiian Airlines pursuant to Section 8(a) of this Agreement and
such payment will constitute the Commitment for Contract Year 1 as set forth in
Appendix
A or Appendix B, as applicable.

 

(iii)          [REDACTED]

 

(iv)          [REDACTED]

 

(v)           [REDACTED]

 

15

 

(vi)          [REDACTED]

 

(vii)         [REDACTED]

 

(viii)                        In all
instances the Transportation Excise Tax will be paid monthly to Hawaiian
Airlines based on the miles earned by the Program Cardholders.

 

SECTION 9.                              Reports and Right to Audit.

 

(a)          Bank shall provide to
Hawaiian Airlines a report in reasonable detail showing how each payment,
pursuant to Section 8 and Exhibit B, was computed.  The report shall separately itemize all
bonus miles awarded.

 

(b)         Within three (3) days of
the beginning of each Contract Year, Hawaiian Airlines shall provide Bank a
report of the actual number of HawaiianMiles Active Members as the first day of
each Contract Year.  Such report shall
be accompanied by a certification of the Hawaiian Airlines Chief Financial
Officer.

 

(c)          Hawaiian Airlines shall
provide to Bank quarterly a report of the percentage of HawaiianMiles active
members who are under the age of eighteen (minors).  The report is due on or before the tenth (10th) day
after the end of each quarter.

 

 (d)      During the term of this Agreement and for a
period of one (1) year following the expiration or termination, each party at
its own expense, after at least five (5) days prior written notice, shall have
the right during regular business hours to conduct audits of the other party’s
books, records and data maintained for the purpose of this Agreement, including
but not limited to, information submitted by one party to the other pursuant to
this Agreement to determine compliance with this Agreement.  Each party shall retain and maintain such
books, records and data for a period of one (1) year following the expiration
or termination of this Agreement.

 

16

 

SECTION 10.                          Form of Card Issued and Use of
Hawaiian Airlines’ Name.

 

(a)                                Use
of Hawaiian Airlines’ Name on Cards and Marketing Materials.  All credit cards issued as a result of a
Solicitation described in this Agreement shall be Visa Cards bearing the name
and logo of Bank of America and Hawaiian Airlines.  Hawaiian Airlines hereby grants Bank an exclusive limited license
to use Hawaiian Airlines’ name on all such credit cards issued, Solicitations,
applications including take-ones, periodic statements, correspondence or other
communications to Program Cardholders during the term of this Agreement.  The foregoing license shall be expressly
subject to Hawaiian Airlines’ prior approval of any use of such name and
logo.  Cards issued during the term of
this Agreement may continue to bear the name and logo of Hawaiian Airlines
until such cards expire. Except as provided in the preceding sentence the
foregoing license shall automatically terminate upon the termination of this
Agreement.  The foregoing license may
not be sublicensed or assigned by Bank.

 

Bank shall not issue Cards or distribute Solicitation
materials bearing the name Hawaiian Airlines or logo after the term of this
Agreement.  Hawaiian Airlines
understands that issuance of Visa credit cards by Bank is subject to the
requirements of Visa, USA Inc. and that the rules may be changed, thus
requiring the form of the card to change. 
Hawaiian Airlines consents to any such changes which are required by
changes in the Visa rules, other than those which would result in an additional
cost to Hawaiian Airlines without their prior approval.  Other than as allowed under this Agreement
or as agreed to in writing by Hawaiian Airlines, Bank will not use Hawaiian
Airlines’ name or logo or any variant thereof.

 

(b)                                 Use
of Hawaiian Airlines’ Name on Other Cards Prohibited.  During the term of this Agreement:

 

(i)                                     Hawaiian
Airlines shall not use or allow its name or logo to be used on or, except as
provided in this Section 10, in connection with any other credit card program
or otherwise participate in or facilitate a credit card solicitation or
program;

 

(ii)                                  Hawaiian
Airlines will not initiate promotions or marketing activities with another bank
in the United States without first offering Bank a like or similar opportunity
to participate in the promotion;

 

(iii)                               It
is understood and agreed to by Bank that Hawaiian Airlines may enter into an
intra-island debit/check card agreement with a bank based in Hawaii, whereby
holders of a debit/check card issued by

 

17

 

such bank would be able to earn miles in the
HawaiianMiles program, provided, however, that such bank will not market the
debit/check card through a branch on the mainland; and

 

(iv)                              It
is understood and agreed to by Bank that Hawaiian Airlines may have entered
into one or more agreements and/or promotional programs with American Express
whereby American Express card members can convert miles to the HawaiianMiles
program.

 

(c)                                  New
Products and Services.  (1) Hawaiian
Airlines grants Bank the right of first refusal to offer HawaiianMiles members
miles for mortgages, HELOC, car loans, and investment products. Hawaiian
Airlines at its sole discretion may choose whether it wishes to accept the
Bank’s product or service. Bank will have the right to match any competitive
offers.

 

(2) Bank and Hawaiian Airlines shall use reasonable
and best efforts to develop and implement new product and services, as mutually
agreed upon by Hawaiian Airlines and Bank in writing.

 

(3) Bank and Hawaiian Airlines shall mutually agree in
writing by

Amendment to this
Agreement, to the benefits for other products

offered under this subsection.

 

SECTION 11.                          Status and Administration of Accounts.

 

(a)              Account Ownership.  Bank will have sole right, title and
interest in and to each Account opened under this Agreement and, if applicable,
to each account that Bank purchased from Wells Fargo Bank.  Hawaiian Airlines will have no right, title
or interest in or to the Accounts except as expressly provided herein.  Bank will have the sole option to sell,
assign, encumber, securitize or otherwise deal with the Accounts provided such
action does not hinder the sale of the Accounts remaining in the Hawaiian
Airlines Portfolio at termination of this Agreement.

 

(b)           Conversion of
MasterCard Accounts.  Hawaiian
Airlines agrees that Bank may convert all acquired or existing MasterCard
accounts in the HawaiianMiles Program to Visa accounts at the Bank’s expense in
accordance with a timetable to be determined by Bank in its sole discretion.
Bank shall use commercially reasonable efforts to minimize the loss of Accounts
as a result of such conversion.

 

(c)              Billing and
Collection.  Bank shall be solely
responsible for all processing, billing and administrative matters associated
with use of a Visa credit card issued by Bank hereunder.  Bank shall be responsible for sending
cardholder statements in accordance with the Cardholder Agreement.  Bank shall also be

 

18

 

responsible for all
collections on these accounts, and all collection activities shall solely be
under the control of Bank.

 

(d)             Mutual
Responsibilities.  Cardholders will
be instructed to make their payments to Bank or Bank’s designated agent and to
direct all correspondence about their Accounts to Bank.  However, if Hawaiian Airlines receives a
payment identified as a credit card payment or other correspondence directed to
Bank from a Bank cardholder whose card bears the Hawaiian Airlines’ name,
Hawaiian Airlines shall promptly forward the payment to Bank.  If Bank receives any payments for Hawaiian
Airlines which are not related to accounts established hereunder, or other
correspondence directed to Hawaiian Airlines, Bank shall promptly forward such
payments or correspondence to Hawaiian Airlines at the office designated.  The cardholder will also be instructed to
contact Bank if there is any problem with the cardholder’s account or the card
is lost or stolen or being used by someone without authority.  However, if a Bank cardholder whose card
bears the Bank logo informs Hawaiian Airlines of one of these events, Hawaiian
Airlines will promptly notify Bank, provided that Hawaiian Airlines’ failure to
so notify Bank shall not result in any liability to Hawaiian Airlines.

 

(e)              Representations
and Warranties; Indemnification.

 

(i)                                     Representations
and Warranties.

 

(A)                            Hawaiian
Airlines.  Hawaiian Airlines
represents and warrants that all information, promotional material and
correspondence which Hawaiian Airlines provides to the Bank in connection with
the Program will be accurate and in no manner misleading, and that the
information, promotional material and correspondence will fully comply with any
law or regulation which applies to Hawaiian Airlines or the Program.  Hawaiian Airlines represents and warrants
that its performance of its obligations under this Agreement will not violate
any applicable state or federal law or regulation, conflict in any material
respect with or violate in any material respect or cause any default under any
contract, agreement or other instrument.

 

(B)                                
The Bank.  The Bank represents
and warrants that all information, promotional material and correspondence
which the Bank provides to Hawaiian Airlines in connection with the Program
will be accurate and in no manner misleading, and that the information,
promotional material and correspondence will fully comply with any law or
regulation which applies to the Bank or the Program.  Bank represents and warrants that its performance

 

19

 

of its obligations under this Agreement will not
violate any applicable state or federal law or regulation.

 

(ii)                                  Indemnity.

 

(A)                            Hawaiian
Airlines.  Hawaiian Airlines will
hold the Bank, its directors, officers, employees and agents harmless from each
claim, suit, or proceeding for liability, loss, damage, cost, and expense
(including reasonable attorney fees and costs of suit), arising from Hawaiian
Airlines’ failure to perform any obligation, including any breach or alleged
breach of any representation or warranty in this Agreement, except that
Hawaiian Airlines’ indemnity will not extend to a claim, suit or proceeding to
the extent it arises from the Bank’s negligence or wrongdoing.

 

(B)                              The
Bank.  Bank will hold Hawaiian
Airlines, its directors, officers, employees and agents harmless from each
claim, suit, or proceeding for liability, loss, damage, cost, and expense
(including reasonable attorney fees and costs of suit), arising from the Bank’s
failure to perform any obligation in this Agreement, except that the Bank’s
indemnity will not extend to a claim, suit or proceeding to the extent it
arises from Hawaiian Airlines’ negligence or wrongdoing.

 

(iii)                               Neither
party will be liable to the other party for indirect, incidental, consequential
or punitive damages (including, without limitation lost profits).

 

(f)                              Hawaiian
Miles Program Responsibilities.

 

(i)                                     Dollar-to-Mile
Ratio.

 

(A)                              For
each dollar of net new purchases made to an Account, Hawaiian Airlines will
award one (1) mile to the cardholder’s HawaiianMiles account.  The term “Net New Purchases” shall have the
meaning ascribed to it in Exhibit  B Section A  (2).  The Bank and Hawaiian Airlines shall
negotiate in good faith appropriate changes to the Net New Purchases payment
under Exhibit
B Section A, and any change to the dollar-to-mile ratio will become
effective on the same day as the changes to the Net New Purchases payment.

 

(B)                                Each
Account must be linked with a HawaiianMiles account to earn miles based on
Account’s Net New

 

20

 

Purchases. 
Hawaiian Airlines will post to each cardholder’s HawaiianMiles account
the number of miles which correspond with each net new purchases balance which
the Bank reports to Hawaiian Airlines for that cardholder’s Account.  Hawaiian Airlines will indemnify and hold
harmless the Bank from responsibility for awarding miles to cardholders and
from the redemption of such miles.

 

(C)                                Hawaiian
Airlines will treat, recognize and award miles which cardholders earn in the
Program in the same manner in which Hawaiian Airlines treats, recognizes and
awards other miles earned by different means.

 

(ii)                                  HawaiianMiles
Account Linkage.  Each Account must
be linked to a HawaiianMiles account. All Net New Purchases, whether made by
the primary cardholder or by a second or joint cardholder or authorized user,
which post to the co-brand Card Account, will earn miles.

 

(g)                           Transmissions.  The Bank will deliver to Hawaiian Airlines
timely transmissions containing the dollar amount of Net New Purchases that
each HawaiianMiles member charges to the HawaiianMiles member’s co-brand Card
Account.  The Bank will assign a new
HawaiianMiles identification number to each new account holder who is not a
HawaiianMiles member, until such time as the new account interface with
Hawaiian Airlines is completed.

 

SECTION 12.                          Merger.

 

In the event of a merger of Hawaiian Airlines with a
third party airline prior to the full recoupment of the Advance Payment made
pursuant Section 8(a) of this Agreement and the surviving entity is not
Hawaiian Airlines then: (i) any portion of the Advance Payment that has not
been earned and recouped shall be repayable to Bank as of the merger date, and
(ii) Bank will have no further obligation to make payments pursuant to Section
4(e) and Section 8(b), unless the surviving entity ratifies this Agreement
within ten (10) business days of the merger date, provided that Bank, in its
sole discretion,  agrees to such
ratification.

 

SECTION 13.                          Term of this Agreement.

 

(a)                                  Subject
to the provisions in Sections 13(b) and 13(e) below, this Agreement shall
remain in full force for seven (7) years in the event that Bank purchase the
existing credit card portfolio from Wells Fargo Bank, or eight (8) years in the
event that the purchase does not occur, from the Effective Date hereof
(“Initial Term”).  The term will be
automatically

 

21

 

extended for successive one-year periods (“Renewal
Term”) unless one party elects to terminate this Agreement by giving written
notice 90 days or more prior to the expiration of the Initial Term or the
applicable Renewal Term.  If such notice
is given, the Agreement will terminate effective on the last day of the
applicable term.

 

(b)                                 Termination.

 

(i)                                     A
party to this Agreement may terminate this Agreement for cause, reserving all
other remedies and rights hereunder in whole or in part upon the following
conditions:

 

(A) In the event that the other party has materially
breached any of the provisions of this Agreement, by giving at least sixty (60)
days prior written notice to the other party, which notice shall set forth a
description of the breach committed by the other party. If the party in breach
cures such breach, to the reasonable satisfaction of the party giving notice,
within the sixty (60) day period, this Agreement shall continue in effect in
accordance with its terms; provided that if such breach cannot be cured within
sixty (60) days through commercially reasonable efforts, neither Bank nor
Hawaiian Airlines may terminate this Agreement pursuant to this paragraph so
long as the breach is curable and the breaching party is making all
commercially reasonable efforts to cure such breach as soon as practicable and
gives written notice of the efforts being undertaken to cure such breach.

 

(B) If any material representation or warranty one
party makes to the other party in writing under or in connection with this
Agreement is false or misleading at the time made, the other party may
terminate this Agreement upon 30 days’ prior written notice if such condition
is not cured within 15 days of such notice.

 

(C) Upon thirty (30) days prior written notice in the
event that: (1) the other becomes insolvent, generally fails to pay its debts
as they become due, enters into receivership, is the subject of a voluntary or
involuntary bankruptcy proceeding (which involuntary proceeding is not
dismissed within thirty (30) days of the filing of said petition) or makes an
assignment for the benefit of creditors; or (2) a substantial part of the
other’s property is or becomes subject to any levy, seizure, assignment or sale
for or by any creditor or governmental agency without being released or
satisfied within thirty (30) days thereafter.

 

22

 

(ii)                                  Bank
shall have the right to terminate this Agreement, immediately upon notice, in
the event that Hawaiian Airlines ceases to exist or goes out of business.

 

(iii)                               Hawaiian Airlines shall
have the right to terminate this Agreement, immediately upon notice, in the
event that Bank ceases to exist, goes out of business, or ceases to offer a
credit card product to customers, or ceases to be a member in good standing of
MasterCard or VISA.

 

(iv)                              The
parties may mutually agree in writing to terminate this Agreement at any time
for any reason.

 

(c)                                  Sale
of Portfolio Upon Expiration or Termination for Cause by Hawaiian Airlines.

 

(i)            [REDACTED]

 

(ii)           [REDACTED]

 

 

23

 

(iii)          [REDACTED]

 

(iv)          [REDACTED]

 

(v)           [REDACTED]

 

 

24

 

(vi)          [REDACTED]

 

(vii)         [REDACTED]

 

(viii)        [REDACTED]

 

 

25

 

(ix)           [REDACTED]

 

(d)                                 Effect
of Expiration or Termination.

On the effective date of expiration or termination:

(1)                                  Accounts
and Cardholders will cease being such for purposes of this Agreement, even
though Cardholders may continue carrying or using the credit card.  The Bank will be under no obligation to
provide credit cards to Hawaiian Airlines’ customers who continue their
Accounts with the Bank after expiration or termination.

 

(2)                                Bank
may convert Accounts to any Bank Card product except another airline co-brand
card.

 

(3)                                Hawaiian
Airlines, and any new co-brand card issuer with whom Hawaiian Airlines may
contract to issue a credit card to replace the Program, may not solicit
HawaiianMiles Cardholders at time of expiration to apply for, request or accept
another credit card with a balance transfer offer for a period of three (3)
months following termination of this Agreement.

 

(4)                                Each
party will return to the other party all originals and copies of Confidential
Information belonging to the other party.

(d)                               Illegality.

 

If any regulatory authority having jurisdiction over
either party or any court of competent jurisdiction determines that the party
does not have the power, authority or authorization to comply with the terms of
this Agreement or that compliance violates any applicable law or regulation,
either party may terminate this Agreement immediately upon written notice.

 

 

SECTION 14.                          Notices.

 

All notices and other
communications between the parties will be written and will be deemed given if
delivered personally or by overnight courier service, or facsimile

 

26

 

transmission or two (2)
days after mailing by registered or certified mail, return receipt requested,
to a party at its address set forth below, or to such other address as a party
may designate at a later time, as follows:

 

Bank:

Senior Vice President

Partnership Marketing

NC1-022-17-01

201 North Tryon Street

Charlotte, North Carolina
28255

(704) 388 – 4871 Tel

(704) 386 – 9969 fax

 

cc:                               General
Counsel

100 North Tryon Street

Charlotte, North Carolina
28255

(704) 386 – 8009 fax

 

Hawaiian Airlines:

 

Sr. VP Marketing &
Sales

3375 Koapaka Street,
G-350

Honolulu, Hawaii 96819

(808) 838-6779 Tel

(808) 838-6746 fax

 

General Counsel

3375 Koapaka Street,
G-350

Honolulu, Hawaii 96819

(808) 835-3610 tel

(808) 835-3690 fax

 

SECTION 15.                          Force
Majeure.

 

(a)                                Neither
party will be responsible, nor incur any liability to the other for any failure
to comply with the terms of this Agreement due to causes beyond its control,
including but not limited to fire, storm, flood, accident, acts of war, nuclear
disaster, insurrection, sabotage, labor disputes, acts of God, acts of third
parties, acts of federal, state or local government or judicial action,
provided that such actions that do not substantially hinder or prohibit
performance shall not excuse performance. 
Furthermore, Bank will not be obligated to solicit Account business or
to continue the Program if doing so would cause Bank to be in violation of any
state or federal law or regulation.

 

27

 

SECTION 16.                          Survival.

 

All rights and
obligations under Sections 5, 9, 11, and 22 shall survive any such termination.

 

SECTION 17.                          Changes
in Law.

 

If Bank is required to decrease the annual fee or
periodic finance charge because of a change in applicable law on any Account
issued pursuant to this Agreement, the financial terms of this Agreement shall
be equitably adjusted to reflect the change. 
The parties shall meet to agree on the terms of the adjustment.  If the parties are unable to agree, the
matter shall be decided by arbitration.

 

SECTION 18.                          Entire
Agreement.

 

This Agreement (including its appendices and exhibits)
constitutes the entire agreement between Bank and Hawaiian Airlines with
respect to marketing of the Hawaiian Airlines Co-branded Cards and it may not
be amended except in writing signed by both Hawaiian Airlines and Bank.  This Section does not limit the right of
Bank stated in Section 3(c) to amend the Cardholder Agreement.

 

SECTION 19.                          Third
Party Beneficiaries.

 

It is expressly intended and agreed that there are no
third-party beneficiaries to this Agreement.

 

SECTION 20.                          Assignments.

 

This Agreement is binding on Bank and Hawaiian Airlines
and any successors and assigns.  Except
as otherwise provided in this Agreement, neither Bank nor Hawaiian Airlines may
assign its rights or delegate its obligations under this Agreement without the
written consent of the other.  This
Agreement shall apply to or be binding upon the successors and assigns of
parties hereto, specifically including a successor by operation of law,
following any merger or similar corporate reorganization.

 

SECTION 21.                          Governing
Law, Venue and Personal Jurisdiction.

 

The laws of the State of Arizona shall govern this
Agreement, without regard to conflicts of law provisions.  Hawaiian Airlines and Bank agree to submit
to the personal jurisdiction of any state or federal court located in Maricopa
County, Arizona and at the option of either party venue in any action
concerning this agreement may be placed in any state or federal court in
Maricopa County, Arizona.  In the event
of litigation or arbitration concerning the subject matter of this agreement,
the other party shall pay the prevailing party’s attorney’s fees.

 

28

 

SECTION 22.                          Arbitration.

 

All disputes between the parties concerning this
Agreement or its subject matter shall be decided by arbitration conducted in a
location agreeable to both parties pursuant to the commercial arbitration rules
of the American Arbitration Association. 
The arbitration shall be conducted by one arbitrator.  The decision of the arbitrator shall be
binding on the parties and may be enforced in any court of competent
jurisdiction.

 

SECTION 23.                          Waiver.

 

The waiver or failure of either party to this
Agreement to exercise any right granted to it under this Agreement is not a
waiver of any other right granted under this Agreement, nor may any waiver be
deemed to be a waiver of a subsequent right obtained by reason of the
continuation of any matter previously waived.  

 

SECTION 24.                          Severability.  

 

If any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement. 

 

SECTION 25.                          Counterparts.

 

This Agreement may be executed in counterparts, each
of which is deemed an original, but all of which constitute one and the same
instrument.

 

 

IN WITNESS WHEREOF, the parties execute this Agreement as of the date
first written above.

 

 

	
  BANK OF AMERICA, N.A. (USA)

  	
   

  	
   

  	
   

  	
  HAWAIIAN AIRLINES, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ James R. Sebo

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ John B. Happ

  	
   

  
	
  Name: 

  	
  James R. Sebo

  	
   

  	
   

  	
   

  	
  Name: John B. Happ

  	
   

  
	
  Title:

  	
  Senior Vice President

  Partnership Marketing

  	
   

  	
   

  	
   

  	
  Title: 

  	
  Senior Vice President

  Marketing & Sales

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Christine R. Deister

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Christine R. Deister

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title: 

  	
  Executive Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Chief Financial Officer

  and Treasurer

  	
   

  
												

 

29

 

APPENDIX
A

Commitment Schedule –
Acquisition

 

 

[REDACTED]

 

30

 

 

APPENDIX
B

 

Commitment Schedule – Non-Acquisition

 

 

[REDACTED]

 

31

 

EXHIBIT
A

CARDHOLDER PRICING AND BENEFITS

 

 

[REDACTED]

 

32

 

EXHIBIT B

 

Revenue
Share Formula

 

[REDACTED]

 

33

 

EXHIBIT C

 

TEMPORARY
NEW ACCOUNTS BENEFITS

 

 

[REDACTED]

 

34

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