Cooperation Agreement between Lufthansa Technik AG and Hawker Pacific Aerospace for Aircraft Component Services
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Summary
Lufthansa Technik AG and Hawker Pacific Aerospace, including its UK subsidiary, have entered into a cooperation agreement to jointly provide aircraft component services, starting with landing gear services and potentially expanding to other products. The agreement establishes a joint management board and operational groups to coordinate activities, share resources, and optimize efficiency. Both parties agree to subcontract work to each other, maintain high quality and cost efficiency, and strive for a unified customer experience. The agreement includes terms on confidentiality, liability, and dispute resolution, and outlines conditions for duration and termination.
EX-10.58 4 v74981ex10-58.txt EXHIBIT 10.58 1 EXHIBIT 10.58 LUFTHANSA TECHNIK - HAWKER PACIFIC AEROSPACE COOPERATION AGREEMENT APPENDIX 03: General Supporting Contract July 11th, 2001 NOTE: THIS DOCUMENT OMITS CERTAIN INFORMATION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED INFORMATION HAS BEEN FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF THE OMITTED INFORMATION IS INDICATED HEREIN BY AN ASTERIX. LUFTHANSA TECHNIK AG AND HAWKER PACIFIC AEROSPACE AND HAWKER PACIFIC AEROSPACE, LTD. COOPERATION AGREEMENT 2 CONTENTS
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5 COOPERATION AGREEMENT BETWEEN: HAWKER PACIFIC AEROSPACE, having its principal office at 11240 Sherman Way, Sun Valley, CA 91352 -- 4942, USA, and HAWKER PACIFIC AEROSPACE, Ltd. having its principal office at Unit 3 Dawley Park, Kestrel Way, Hayes, Middlesex UB3 1HP, UK, collectively hereinafter referred to as HPA and LUFTHANSA TECHNIK AKTIENGESELLSCHAFT, having its principal office at Weg beim Jager 193, 22335 Hamburg, Germany, hereinafter referred to as LHT, each also referred to as a "Party" and together referred to as the "Parties", 6 WHEREAS Hawker Pacific Aerospace and its wholly owned subsidiary Hawker Pacific Aerospace, Ltd. shall operate collectively or individually, as required, to effect the terms of this Cooperation Agreement, WHEREAS HPA and LHT wish to establish a Cooperation covering aircraft Component services in all areas deemed to be beneficial in order to create a win-win situation for both Parties, WHEREAS the production scope of the Cooperation will start with landing gear services and may further expand to other Component products to be added to the Cooperation, WHEREAS the Parties expect to be able by way of this Cooperation to offer to their customers the full range of landing gear services with the highest quality profile, highest cost efficiency and the shortest turnaround times possible, WHEREAS the Parties will strive for a similar image of all facility locations with regard to the customers' perception, WHEREAS the Parties will strive for highest cost efficiency by, but not limited to, establishing centers of excellence optimizing the joint usage of the spare sets already owned by HPA and LHT and by keeping the workload within the Cooperation, WHEREAS the Parties, in order to support the overall objectives, will subcontract to each other in the way described in this Cooperation Agreement and give each other access to their respective capabilities and capacities, WHEREAS the Parties hope to gain and secure a substantial share of the market that may be created as a result of the Cooperation of the Parties under this Cooperation Agreement NOW THEREFORE THE PARTIES HAVE AGREED AS FOLLOWS: 7 2. 1. ORGANIZATION (a) 1.1 Management Board The Parties shall establish a board (the "Management Board") to supervise and coordinate the implementation and operation of the Cooperation. The decisions of the Management Board shall, provided they are made within the scope of this Cooperation, be binding to the Parties and the Parties shall take all necessary steps to ensure that such decisions are implemented throughout their respective organizations. The Management Board shall consist of the Senior Vice President of LHT-WG and the Chief Executive Officer (CEO) of HPA. The responsibility of the Management Board is to ensure the proper operation of the Cooperation. This shall be accomplished by the establishment of Operational Groups (so defined in Art. 1.2 below) and other means. The decisions of the Management Board shall be taken by unanimous decision with both members present. The Members of the board may appoint representatives in case they themselves do not attend the meeting. These representatives shall be vested with the power to take any decision that the board member would be able to take if in attendance. The Management Board shall meet on a regular basis two (2) times a year and extraordinarily whenever called upon by the operational groups for the first two years and thereafter as necessary, but at least once yearly. (b) 1.2 Operational Groups Operational units will be established by the Management Board in order to coordinate the daily business between the Parties and towards the customers ("Operational Groups" or "OG"). The following Operational Groups will be established from the day of the signature of this Cooperation Agreement. - Customer Support Group - Sales & Marketing Group 8 - Production Group - Business Data Group - Purchasing Group Other Operational Groups will be established if the need arises. OGs shall also serve as a forum to discuss ideas and innovations regarding the products and processes. Benchmark between all locations shall help to identify the optimum solutions for each location. Therefore the groups shall meet on a regular base. (1) 1.2.1 Customer Support The Customer Support OG will work on the customer interface with the goal to reach a similar image for all three landing gear production locations (Sun Valley, London, Hamburg), such as but not restricted to: - Quality - Standardized Turnaround Times - Documentation to be delivered with the serviceable Components - Establishment of an exchange asset management including slot availability plans - Integration of capability lists 1.2.2 Sales and Marketing The Sales and Marketing OG will concentrate on exploiting the synergies of both Parties' marketing and sales functions. They shall work on topics such as but not restricted to: - Definition of a joint marketing plan for the products to be offered under this Cooperation, containing the workload impact on each facility - Definition of a joint marketing strategy - Implementation of the Frontrunner principle (see Section 3 and Appendix 01) 9 - Regular exchange of market know-how 1.2.3 Production The Production OG will focus on the benchmark of the different locations and the implementation of the center of excellence strategy. The goal is to operate only one center of excellence per region (Europe and North America). Therefore especially in Europe the Hamburg and London facilities shall implement step by step centers of excellence for landing gear repair and overhaul: 1st step: London as Boeing facility Hamburg as Airbus facility 2nd step: London as Boeing and wide body Airbus facility Hamburg as narrow body Airbus and Regional Jet facility Unless otherwise agreed upon, the only facility to handle Airbus narrow body landing gears will be Hamburg. The goal is not to duplicate capabilities in Europe. Whenever capabilities are planned to be built up the issue shall be discussed by this OG taking into account the already existing capabilities of all locations and the calculated economical feasibility. In case the OG cannot come to a decision the Management Board shall decide. 1.2.4 Business Data The Business Data OG will have a service function for the Management Board and the other OGs. The main goal is to produce comparability of operational data, such as revenue, costs, results and TAT per event. Topics to work at will be: 10 - Comparison of existing calculation models and methods - Establishment of a standard calculation model for all locations - To create a small business plan model for the sales people to calculate landing gear programs - Definition of a standard report (see Section 1.3) 1.2.5 Purchasing The Purchasing OG will concentrate on exploiting the synergies related to the interface with the OEM's and other suppliers. In detail the OG shall work on the following issues: - Improvements of the provisioning of documentation from the OEM in general - Intellectual property, payment of royalties - Employment of purchase power - Issuance of specific Orders and adjustment of the Order Form, if need arises (c) 1.3 Reporting The development of the Cooperation shall be continuously monitored by the Management Board. The Parties agree to exchange information per facility on event and Customer Contract level to the extent such Customer Contract permits as well as for the total Cooperation such as e.g.: - Shop load events - Workload - Total costs - Turnover - Degree of contribution - Performance (TAT ...) 11 The Business Data OG shall collect the requirements of the Management Board and the other OGs in order to define a report which will meet the needs of both the Management Board and the OGs and be issued on a monthly basis. The currency used shall be in EURO, GBP and USD with the exchange rates stated. 3. 2. PRODUCT (a) 2.1 Landing Gear Services This Cooperation will start with all services around a landing gear, such as repair, overhaul, modification, exchange, sampling, engineering, transport, AOG support for the complete gear and for single parts of it ("Landing Gear Services"). Unless otherwise agreed upon all aircraft types are covered by this Cooperation. (b) 2.2 Other Products Both Parties will evaluate possible other products to be covered by this Cooperation such as hydraulic components, wheels & brakes, flap tracks and services like plating or on-wing-support. Concepts for other areas of cooperation shall be addressed to the Management Board which will decide about the implementation. If the procedures described within this Cooperation Agreement are not sufficient to cover the new product the latter and its related procedures within the Cooperation shall be described in an amendment to this Cooperation Agreement. 4. Customer PROCESS 12 Each Party shall retain its own corporate identity, and shall carry out its business in its own name. Both Parties will offer the products described in Section 2, and additional products of both Parties may be offered individually according to the respective capability. Each Party should promote the other Party's products beyond the products described in Section 2 whenever possible. To ensure only one point of contact responsibility, the Customer Contract will be negotiated and signed by only one of the Parties. The Cooperation shall strive for the maximum usage of existing Customer Contacts and a minimum of administration provided that the customers' requirements are met. Appendix 01 shows the four possible customer processes covered by this Cooperation Agreement. In case IV. described in Appendix 01 the Parties shall switch the Frontrunner function to the Contracting Party and thereby reach case I. described in Appendix 01. (a) 3.1 Frontrunner The Party being in or establishing the contact to the customer is the Frontrunner. Each customer shall be assigned to one Frontrunner, either LHT or HPA. The OG Marketing & Sales (see Section 1.2.2) shall be in charge of the Frontrunner assignment and maintaining an up-to-date customer list. The criteria for the Frontrunner decision is the already existing relationship between the customer and the respective Party also taking into account the customer's philosophy regarding suppliers in order to establish and / or maintain the best contact possible. The assignments shall be reviewed on a regular basis and be revised if need arises. The task of the Frontrunner is the contact to the customer in general and to introduce the other Party if the customer requires products which due to the Cooperation's decision shall be produced at the other Party's facility. 13 The Frontrunner's compensation shall be the same independent of which Party will hold the contract. Details concerning a compensation for the Frontrunner's services will be described in a separate agreement which will be negotiated at a later point of time. (b) 3.2 Contracting Party and Supporting Party The customer shall always be free to choose the Party it wishes to sign the contract with. This Party will be named the Contracting Party. The Contracting Party is not necessarily the Party who performs the work which will depend on the Parties' capabilities and the customer's wishes. Nevertheless the Parties shall strive for unity of these two functions (contract and performance of work). If the Contracting Party is not the Party who performs the work the latter is named the Supporting Party. (1) 3.2.1 Long-term Agreements When a customer -- who always shall be free to choose his Contracting Party -- turns to the presumptive Contracting Party, the latter shall define the needs and desire of the customer. The Contracting Party shall then inform the presumptive Supporting Party, which services and/or products the Contracting Party wants the Supporting Party to provide. The Supporting Party shall thereafter quote this part to the Contracting Party. The quotation shall contain the target price as well as the minimum price, being the borderline below which renegotiations have to take place. The Contracting Party shall thereafter offer the customer the services and/or products and negotiate with the customer in order to conclude and execute a Customer Contract. During this negotiation process the Contracting Party shall inform the Supporting Party regularly about the status and the Parties shall renegotiate the prices if necessary. An Order shall be entered into between the Parties, regulating the Supporting Party's performance (see Section 4. General Supporting Contract). The validity of 14 such Order shall always be subject to the corresponding Customer Contract entering into force. Unless otherwise agreed, the Contracting Party shall act as sole contact for the customer and initiate each and every performance of services from the Supporting Party. (2) 3.2.2 "Ad hoc" Customers --Single Events For assistance to customers needing short-term service or support on a single event basis, the following procedure will be followed: When a customer who always shall be free to choose his Contracting Partyfirst turns to the presumptive Contracting Party, the latter may offer the service for the single event directly but along the guidelines of this Cooperation Agreement, the Contracting Party taking into account the interests of the Supporting Party. Also in these cases unless flexibility is affected both Parties shall strive for the unity of the Contracting and the performing function. For this single event purpose each Party will issue a modular price catalogue containing prices per aircraft type and service module (see Section 8. Pricing). The Supporting Party's delivery will be regulated in the General Supporting Contract described in Appendix 03 as described under Section 4. General Supporting Contract. In order to support the Parties' flexibility in offering the product on a short-term both Parties will provide each other with slot availability information. (see Section 1.2.1 Customer Support). 5. 4. GENERAL SUPPORTING CONTRACT Appendix 03 contains the General Supporting Contract terms and conditions regulating the Supporting Party's performance of work and services under this Cooperation unless otherwise agreed upon in the respective Order (see Appendix 02 and 03). Besides the prices for the Supporting Party's services the Order can 15 contain specific terms and conditions related to the corresponding Customer Contract, e.g. transport conditions. 6. 5. PERFORMANCE In case the Contracting Party is performing the work, the Contracting Party is fully responsible for the whole process without any sharing of work or responsibilities. In case the Supporting Party is involved and unless other specific agreements have been made the following responsibility sharing concerning the Supporting Party's products will be in force: (a) 5.1 Repair and Overhaul The Supporting Party will be responsible for the performance of the work according to the regulations laid down in the General Supporting Contract (Section 4). (b) 5.2 Engineering The Contracting Party will have the engineering responsibility stated in the respective Customer Contract for the whole range of products covered by this Customer Contract. The Supporting Party will in all cases perform advisory engineering services for the Contracting Party for those products within their production responsibility (see Section 1.2.3) which means that the decision about quality and those issues to be addressed to the customer lies within the Contracting Party. (c) 5.3 Customer Support As the Contracting Party shall act as sole contact point towards the customer (Section 3.2.1) the Contracting Party will perform the customer support also for those products the Supporting Party will deliver unless the customer wishes the direct contact with the Supporting Party. The Supporting Party will in all cases support this function indirectly via the Contracting Party or directly towards the customer if this is explicitly required by the customer. 16 (d) 5.4 Documentation The Supporting Party is responsible for the delivery of all required documentation together with the overhauled Component or landing gear to the customer. A joint standard will be evaluated by the OG Customer Support (Section 1.2.1). In case the Contracting Party wants the Supporting Party to perform certain work which is not covered by the Supporting Party's existing capabilities the Contracting Party will provide the necessary documentation. (e) 5.5 Landing Gear Shipsets If not otherwise agreed upon the Supporting Party will provide the exchange shipset for the customer. If the Supporting Party has no shipset available, the Contracting Party will provide an own shipset or if not available will support the Supporting Party in finding other sources. 7. 6. OTHER SUBCONTRACTING The Supporting Party may itself subcontract parts of its work e.g. for reasons of temporary lack of capacity or economical feasibility. Subcontracting in this way is only allowed to JAR 145 and FAR 145 approved organizations or a company working under the quality system of the Supporting Party. Whenever a Party decides to subcontract its work under this Cooperation Agreement to a third party, the Party shall, before doing so, request a proposal for the subcontract of the other Party if the latter has got the capability to perform the work. 8. 7. CERTIFICATION AND AUDITING The Parties confirm that they hold the certification as Approved Repair Station according to JAR 145 and FAR 145 regulations and the authorities' approvals (FAA / JAA) and will provide a copy of said certifications to the other Party prior to the effective date of this 17 Cooperation Agreement. All serviced parts shall be accompanied by a dual release certificate. Certification requirements to other standards may be mutually agreed upon. Upon prior notice the Airworthiness Authorities and/or an auditor appointed by one of the Parties and acceptable to the other Party shall at any reasonable time be allowed access to the other Party's and its subcontractors' facilities to audit the compliance with this Cooperation Agreement. The auditor may only disclose to the appointing Party information necessary to achieve the purpose of the audit. 9. 8. PRICING (a) 8.1 Cost and price calculations For each presumptive long-term Customer Contract with the Supporting Party involved the Parties shall calculate a financial plan. For single events each Party will issue a modular price catalogue containing prices per aircraft type and service module. These price lists will be updated every year. (b) 8.2 Invoicing The Contracting Party shall invoice the customer. The Supporting Party shall invoice the Contracting Party in accordance with the General Supporting Contract. The Contracting Party shall bear the risk for the customer's non-payment. 10. 9. CONSULTING, TRAINING AND PERSONNEL ASSIGNMENT If the Parties support each other in the areas of consulting, training and/or personnel assignment payment for these services shall be invoiced according to Appendix 04. 11. 10. Confidentiality, Intellectual Property 18 The Parties will treat as strictly confidential for the duration of this Cooperation Agreement and for four (4) years thereafter any information pertaining to this Cooperation Agreement, including the document itself as well as individual provisions contained therein. In particular each Party will treat as strictly confidential the contents of the negotiations leading up to this Cooperation Agreement, any business, technical and strategic data disclosed by the other Party or its Subcontractors at any time for any reason - comprising any and all such information in oral or visual form - including but not limited to prices for materials and services, the scope of services offered, legal provisions, Turnaround Times and man-hours needed. Neither Party will disclose any such confidential information to any employee, third party or other person except where such disclosure is necessary in order to fulfill the obligations under this Cooperation Agreement or to the extent required by law. Professional advisors, such as lawyers or accountants, of a Party will not be deemed third parties hereunder provided they are equally required to maintain confidentiality as herein described. The disclosure of any documents, data and other information in connection with this Cooperation Agreement, including without limitation when such disclosure is made in fulfillment of a contractual obligation hereunder or under any Order, will not be construed as a grant or transfer of any rights, in particular but not limited to intellectual and industrial property rights such as patents or copyrights. Such rights will never be transferred to the other Party unless such transfer is explicitly provided for elsewhere in this Cooperation Agreement. 12. 11. Limitation of Liability, Consequential Damages and Support in Litigation (a) 11.1 Limitation of Liability and Exclusion of Consequential Damages Each Party will be liable to the other Party only in case of its gross negligence or willful misconduct. However, in no event shall either Party be liable to the other Party for any indirect, special, incidental or consequential damages, including lost revenue, lost profits or lost prospective economic advantage, and each Party hereby releases and waives any claims against the other Party regarding such damages. 19 (b) 11.2 Support in Litigation In case of dispute with a customer or third party, in particular in case of litigation, the Parties shall support each other, except in matters which in no way concern this Cooperation Agreement. 13. 12. Governing Law and Arbitration This Cooperation Agreement shall be governed by and construed in accordance with the laws of Germany excluding German law's conflict of laws provisions and further excluding the CISG (United Nations Convention on the International Sale of Goods). In case of a dispute the Parties agree that they will use best efforts to come to an amicable and fair solution under the terms of this Cooperation Agreement or to amend the terms of this Cooperation Agreement in order to bring about a fair solution to such dispute. Should this not be possible the Parties agree to submit their dispute to an arbitration board consisting of one arbitrator to be named by each of the Parties who will in turn agree upon a third arbitrator (each to belong to the Lufthansa Group, the third arbitrator not to belong to either Party or its subsidiaries). All arbitrators shall have a legal background. In case of a dispute of a fundamental or political nature the "Konzernlenkungskreis" may be called upon. The Parties expressly agree not to call upon the court of law of any jurisdiction to settle disputes and to be bound by and accept as final ruling the decision of the arbitration board as described. 14. 15. 13. MISCELLANEOUS (a) 13.1 Addresses Any notice or communication given or made under this Cooperation Agreement shall be given to the following addresses (or such other address as the relevant Party may notify to the other Party in writing for the purposes of this Cooperation Agreement): 20 For LHT: a) Lufthansa Technik AG Senior Vice President Aircraft Component Services HAM WG Weg beim Jager 193 D-22335 Hamburg Fax: +49-40-5070-2371 b) Lufthansa Technik AG Chief Executive Product and Services HAM T/VO Weg beim Jager 193 D-22335 Hamburg Fax: +49-40-5070-8899 For HPA: Hawker Pacific Aerospace Executive Vice President 11240 Sherman Way Sun Valley, CA 91352 -- 4942 USA Fax: +1 ###-###-#### and 21 Hawker Pacific Aerospace, Ltd. Managing Director Unit 3 Dawley Park Kestrel Way Hayes, Middlesex UB3 1HP UK Fax: +44 ###-###-#### (b) 13.2 Service Notices shall be deemed served when received if transmitted by prepaid mail or courier. Notices transmitted by facsimile shall be confirmed by mail and deemed served when confirmed as sent if transmitted before 16.30h local time of the addressee, but shall be deemed given on the next day if so transmitted after 16.30h local time of the addressee. (c) 13.3 Conflict of document In the event of any inconsistency between the terms and provisions of this Cooperation Agreement and the particular terms and conditions of attachments or annexes or other documents hereto, this Cooperation Agreement shall prevail. (d) 13.4 Invalidity and Severance In case any provision of this Cooperation Agreement in any respect under the law of any jurisdiction is or becomes for any reason illegal or invalid or is pronounced illegal or invalid by way of arbitration, government authorities, courts or any other means or is for any reason unenforceable, the remaining provisions of this Cooperation Agreement will remain unaffected and in force. In this case the Parties will re-negotiate the invalid clause and endeavor to replace it in the spirit of this Cooperation Agreement, finding a solution which is 22 economically as near to the intent of the invalid clause as possible. This new provision shall replace the invalid provision only under the jurisdiction where the original provision is invalid, the original provision remaining in force under all other jurisdictions. (e) 13.5 No Assignment No Party shall assign all or any part of the benefit of, or its rights or benefits or obligations under this cooperation agreement to any third party, which is not an Affiliate of the assigning Party without the prior written consent by the other Party. 16. 14. DURATION AND TERMINATION (a) 14.1 Duration The Cooperation Agreement shall become effective as from the date of signature by the Parties hereto, and shall remain in force for an unlimited period of time. It may be terminated by either Party with 6 months prior written notice. (b) 14.2 Termination In case of the termination of this Cooperation Agreement, all Customer Contracts entered into or extended by either Party from the date of service of the notice of termination shall not be covered by this Cooperation Agreement. Existing Customer Contracts and the corresponding existing Orders between the Contracting Party and the Supporting Party will continue to be performed in accordance with the provisions of this Cooperation Agreement. Neither Party will be required to prematurely terminate Customer Contracts. Notwithstanding the above this Cooperation Agreement shall survive termination as long as one Order is still valid. 23 SIGNATURES: LUFTHANSA TECHNIK AG HAWKER PACIFIC AEROSPACE /s/ Dr. Gerald Gallus /s/ David Lokken - ------------------------------ ------------------------------------- Dr. Gerald Gallus David Lokken Chief Executive Product and Services Chief Executive Officer and President /s/ Uwe Mukrasch - ------------------------------ Uwe Mukrasch Senior Vice President of Aircraft Component Services HAWKER PACIFIC AEROSPACE, LTD. /s/ David Lokken ------------------------------------- David Lokken Director Date July 11, 2001 ------------------------- 24 LUFTHANSA TECHNIK - HAWKER PACIFIC AEROSPACE COOPERATION AGREEMENT Appendix 01; Customer Process July 11th, 2001 - -------------------------------------------------------------------------------- APPENDIX 01 - CUSTOMER PROCESS - FR = FRONTRUNNER CP = CONTRACTING PARTY PP = PERFORMING PARTY SP = SUPPORTING PARTY (IF CONTRACTING PARTY IS NOT PERFORMING THE WORK) EXAMPLE ------- --------------- I. CUSTOMER FR CP PP SAS (NWA) --------------- HPA (LHT): FR = CP = PP --------------- II. CUSTOMER FR CP PP1 FEDEX --------------- HPA: FR = CP = PP1 ------ LHT: PP2 = SP PP2 =SP ------ --------- III. CUSTOMER FR CP NATIONAL AIRWAYS --------- LHT: FR = CP ------ HPA: SP SP ------ ----- IV. CUSTOMER FR A320 Airline ----- HPA: FR ---------- LHT: CP = PP CP PP ---------- due to the targeted unity of CP and PP the FR will bring in the PP as CP - -------------------------------------------------------------------------------- 25 LUFTHANSA TECHNIK - HAWKER PACIFIC AEROSPACE COOPERATION AGREEMENT Appendix 02: Contract set-up July 11th, 2001 - -------------------------------------------------------------------------------- APPENDIX 02 - CONTRACT SET-UP - ------------------------- COOPERATION AGREEMENT ------------------------- APPENDIX ------------------------------------------------------------ GENERAL SUPPORTING CONTRACT in force unless other specifics are agreed upon in Order ------------------------------------------------------------ HPA LHT-WG - ------------ CUSTOMER --------- CONTRACT 1 ORDER 1 - ------------ --------- ------------ --------- CUSTOMER ORDER 2 CONTRACT 2 --------- ------------- page 1 of 1 26 LUFTHANSA TECHNIK - HAWKER PACIFIC AEROSPACE COOPERATION AGREEMENT APPENDIX 03: General Supporting Contract July 11th, 2001 NOTE: THIS DOCUMENT OMITS CERTAIN INFORMATION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED INFORMATION HAS BEEN FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF THE OMITTED INFORMATION IS INDICATED HEREIN BY AN ASTERIX. - -------------------------------------------------------------------------------- APPENDIX 03 - GENERAL SUPPORTING CONTRACT - BETWEEN: HAWKER PACIFIC AEROSPACE, HAVING ITS PRINCIPAL OFFICE AT 11240 SHERMAN WAY, SUN VALLEY, CA 91352 -- 4942, USA, AND HAWKER PACIFIC AEROSPACE, LTD. HAVING ITS PRINCIPAL OFFICE AT UNIT 3 DAWLEY PARK, KESTREL WAY, HAYES, MIDDLESEX UB3 1HP, UK, COLLECTIVELY HEREINAFTER REFERRED TO AS HPA AND LUFTHANSA TECHNIK AKTIENGESELLSCHAFT, HAVING ITS PRINCIPAL OFFICE AT WEG BEIM JAGER 193, 22335 HAMBURG, GERMANY, HEREINAFTER REFERRED TO AS LHT, each also referred to as a "Party" and together referred to as the "Parties". - -------------------------------------------------------------------------------- Page 1 of 68 27 CONTENTS
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Page 3 of 68 29 PART I: GENERAL 0. PREAMBLE WHEREAS the Parties have signed a cooperation agreement dated July 11th, 2001 (the "Cooperation Agreement"); and WHEREAS this Agreement is a General Supporting Contract in the terms of Section 4 of such Cooperation Agreement which the Parties intend will describe order process for the services contemplated and the terms and conditions under which such services will be performed; WHEREAS each of the Parties may be the Supporting Party or the Contracting Party as defined in the Order Now therefore the Contracting Party and the Supporting Party agree upon the following: Page 4 of 68 30 1. DEFINITIONS AND ABBREVIATIONS
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Terms not defined herein shall have the meanings attributed them in the Cooperation Agreement. Page 8 of 68 34 2. SUBJECT MATTER OF AGREEMENT This Agreement constitutes general terms applicable to all Orders placed by the Contracting Party with the Supporting Party. 3. ORDER PROCESS For all Services to be performed the Parties will agree on an individual order (the "Order") in accordance with the following provisions, unless otherwise specified in an Attachment. If the Contracting Party requires the performance of certain services, it will make a request using the Order form attached as Attachment F (the "Order Form"). The Order Form will be fully completed and signed. Any such request will be irrevocable for fourteen (14) days. If the request as stated in the Order Form is acceptable to the Supporting Party, it will sign the Order Form, thereby accepting the request, and send it back to the Contracting Party. Such returned Order Form will constitute a binding Order. If the request is not acceptable to the Supporting Party, it will immediately notify the Contracting Party thereof. The Parties will then negotiate in order to come to mutually acceptable terms. Once the Parties have agreed on such terms, they will complete the Order Form accordingly and sign the Order Form. Such signed Order Form will constitute a binding Order. Page 9 of 68 35 PART II: PERFORMANCE 4. SCOPE OF SERVICES The Services to be performed will be described in the relevant Order. Such Order may refer to standard Services as listed and detailed in Attachment "A". 5. PERFORMANCE OF SERVICES All Services will be performed in accordance with JAR 145 and FAR 145 (dual release) or such other regulations as specified in the Order for approved maintenance organizations. New spare parts shall be traceable to the OEM by means of a Certificate (JAA FORM ONE, FAA Form 8130-3, TCA Form 24-0078 or other Certificate of Conformance as may be available) . Used spare parts shall be traceable to maintenance organizations and repair stations accepted/approved by the JAA and FAA or such other authority as specified in the Order. Such maintenance and repair stations will have certified the previous Maintenance by means of a Certificate (JAA FORM ONE, FAA Form 8130-3 or TCA Form 24-0078). Used spare parts only bearing a Certificate of conformance may not be used. Used life limited parts or FAA -- PMA Parts or Parts which have been subjected to extreme stress or heat (as in major engine failure, accident or fire) or which derive from military or government material stock intended to be used as a spare part may only be used if so confirmed in the Order or with other prior written consent of the Contracting Party. Aviation Authorities and/or the Contracting Party's representatives shall have access to the Supporting Party's facilities at any time to audit the compliance with the applicable standards and procedures. 6. EXCHANGE AND LOAN 6.1 Exchange In case of an Exchange the Supporting Party shall on request and on availability provide an offer defining data requirements (e.g. time since Overhaul), conditions and the exchange fee excluding the price for required Maintenance Services. In case of a landing gear Exchange the applicable conditions are described in Attachment A1 if not otherwise specified in the Order. In case of a Component Exchange except whole landing gears the Exchange Order form specified in Attachment "H" states the applicable conditions and shall be used. 6.1 Loan Page 10 of 68 36 In case of a loan the lending Party shall on request and on availability provide an offer defining conditions and the loan fee excluding the price for required Maintenance Services. The loan Order form specified in Attachment "I" states the applicable conditions and shall be used. 7. REPORTING, APPROVAL AND ACCEPTANCE All Items returned to the Contracting Party after Maintenance must be released and accompanied by a Combined Certificate in accordance with the regulations of JAR 145 and FAR 145. Technical Defects on Items not being part of the scope of Services identified during Maintenance which lead to a non-airworthy condition of the Item must be reported to the Contracting Party's quality department. Upon Redelivery the Supporting Party shall provide a report detailing the condition at Delivery and the Services performed by the Supporting Party ("Repair Report"). A copy of the invoice, if available, and the Repair Report shall be attached to each particular Item being Redelivered to the Contracting Party. In case of an Exchange the Supporting Party shall provide a report detailing the condition at Delivery and the Services performed on the Exchange Part provided to the Contracting Party ("Exchange Repair Report"). In case of a landing gear Exchange (see Cooperation Agreement, Section 5.5) a copy of the partial invoice covering the fixed price for the landing gear Services to be performed on the Exchanged Part, if available, and the Exchange Repair Report shall be attached to the Exchange Part being Redelivered to the Contracting Party. The final invoice shall be sent by the Supporting Party to the Contracting Party not later than 21 days after completion of the Service performance. 8. SUBCONTRACTING The Supporting Party may subcontract any of the Services agreed upon in any Order only to approved maintenance facilities according to Attachment "E". Any alterations of Attachment "E" shall be mutually agreed upon. Subject to the warranty provisions in Section 17 the Supporting Party warrants that any Services rendered by Subcontractors will be of the same standards and of the same quality as the Services rendered by the Supporting Party itself. Page 11 of 68 37 9. MODIFICATIONS The Supporting Party agrees to perform all mandatory Modifications ordered by Aviation Authorities. Modifications issued as recommended or optional will be performed upon the Contracting Party's written request. 10. SCRAP HANDLING Scrap will be handled as specified in the Order. If not otherwise agreed upon, the Parts will be scrapped at the Supporting Party's facility after a grace period of 60 days after the completion of the Service at no charge. Any further commercial use of scrap material by the Supporting Party will be subject to a separate written agreement between the Supporting Party and the Contracting Party. The Supporting Party will in no event make use of scrap material unless such agreement has been entered into by and between the Supporting Party and the Contracting Party. 11. TRANSPORTATION AND PACKING The Contracting Party will ensure that all Items will be accompanied by appropriate shipping documents enabling the Supporting Party to identify the Item accordingly. The responsibility for transportation of the Items (including risk and cost) is as follows:. Transportation from the Contracting Party to the Supporting Party: DDP (Delivered Duty Paid) the Supporting Party's facilities as stated in the respective Order ("Delivery Location"). Transportation from the Supporting Party to the Contracting Party: EXW (Ex Works) to the designated location as stated in the respective Order ("Redelivery Location") The Contracting Party has no obligation to accept partial shipments unless otherwise agreed. Payment will be effected after receipt of complete shipments. If partial shipments are agreed payment will also be effected for partial shipments. The Contracting Party will ship the Items in appropriate packing and the Supporting Party will prepare the Items for return by using the same standard of packing as provided by the Contracting Party, provided that such packing conforms to such all applicable transport and quality assurance regulations at the time of return ship. Title to special transportation equipment, e.g. A320 shipping equipment, shall remain with the Party owning such equipment and if not otherwise agreed the units shall be returned to such Party. There will be no charges for packing. In the event of damaged shipping equipment the Supporting Party will provide a suitable replacement and charge the Contracting Party accord- Page 12 of 68 38 ingly. 12. TURNAROUND TIME The Turnaround Times for the standard Services described in Attachment "A" are listed in such Attachment "A". The Parties may agree upon other Turnaround Times or other performance dates (dead-lines) in the relevant Order, such agreed Turnaround Time or performance date taking precedence over such Turnaround Times listed in Attachment "A". The Supporting Party commits to such Turnaround Times or other performance dates as the Parties may agree upon. 12.1 Status Report If agreed in the Order, for the Items being Serviced by the Supporting Party under such Order, the Supporting Party will provide an individual weekly status report to the respective addressee stipulated in the Order using the form attached as Attachment "D". 12.2 Failure to meet Turnaround Time In case the Supporting Party has reason to believe that it will not be able to Redeliver within the agreed Turnaround Time, it will inform the Contracting Party immediately about the reasons and the new Redelivery date as well as the measures undertaken to remedy the situation. In the event the Supporting Party fails to meet the guaranteed TAT, including any extension mutually agreed between the Parties, then at the Contracting Party's choice the Supporting Party will provide the Contracting Party with (i) an Exchange or (ii) a loan Item. Such Items will be delivered EXW Redelivery location within thirty-six (36) hours upon receipt of the Contracting Party's request on a no charge basis. In case of loan any direct expenses for removal, reinstallation and transport of the Item will be reimbursed by the Supporting Party. The maximum obligation of the Supporting Party shall not exceed the equivalent of 6 days rental fees after the delivery of the delayed Item. In case of Exchange, the Exchange Item will be of the same condition, value and Modification status as the Item originally Delivered to the Supporting Party in the condition such Item would have been after Maintenance. The Supporting Party may provide the Contracting Party with an Item with a higher Modification status after having received a written approval of the Contracting Party and only if the Items are two ways interchangeable. In case the Supporting Party is not in the position to provide a sufficient number of Exchange/loan Items as requested by the Contracting Party, the Contracting Party may, after notifying the Supporting Party of its intent, purchase, Exchange or loan such Item from other Page 13 of 68 39 sources or Exchange it with a part from its own stock and the Supporting Party will reimburse the Contracting Party for the amount reasonably paid by Contracting Party for the purchase of such Items from any other source or as loan charges or for usage fees, however Parts with a value over 5000 USD may only be purchased with the consent of the Supporting Party. In case the Contracting Party purchases an Item, such Item at the Contracting Party's sole discretion can be treated either as an Exchange Part or a loan Part. 12.3 CRIT/AOG In CRIT/AOG situations the Supporting Party regardless of any delay of the Supporting Party will with all reasonable means support the Contracting Party to ensure that normal operations resume. 13. THE CONTRACTING PARTY'S INVENTORY The Supporting Party will issue an inventory report provided yearly to the Contracting Party regarding part number, quantity and serial number (if possible) of the Contracting Party's inventory being held in the Supporting Party's facilities for Maintenance. This report will be sent to the Contracting Party no later than on December 15th of the current year. Page 14 of 68 40 PART III: COMMERCIAL 14. PRICES The applicable prices mutually agreed upon between the Parties for the Services rendered by the Supporting Party are listed in Attachment "A" or will be stated in the Order. Services between Lufthansa Technik AG and Hawker Pacific Aerospace, Sun Valley, California will be charged in USD. Services between Lufthansa Technik AG and Hawker Pacific Aerospace Ltd., United Kingdom will be charged in GBP. 15. PRICE ADJUSTMENT Prices will be reviewed on an annual basis and any adjustment will be agreed by the Parties or specified in the Order. 16. INVOICING AND PAYMENT For all payments to be made by the Contracting Party in accordance with this Agreement the Supporting Party will issue and submit an invoice. All invoices will be issued in three-fold and will be sent to the invoice address stated in the Order. Payment will be effected within thirty (30) days net upon receipt of the invoice. Invoices shall not be sent out before Services are completed. The invoices shall indicate: - - The Contracting Party's applicable V.A.T. identification number - - The Contracting Party's Order-number - - man-hours needed for Maintenance (unless a fixed price is applicable) - - man-hour rate (unless a fixed price is applicable) - - material used (insignificant material in one position) (unless a fixed price is applicable) - - Subcontractors invoice (unless a fixed price is applicable) If the Contracting Party disputes any amount of an invoice such amount nevertheless will remain due and the Contracting Party will pay the total amount of the invoice. The Supporting Party and the Contracting Party will negotiate in good faith to resolve the disputed part of the invoice. If such dispute is resolved in favor of the Contracting Party, the Supporting Party will pay to the Contracting Party promptly the amount determined by such negotiations plus interest in the amount of LIBOR (London Inter Bank Offered rate) plus one (1) percent. Page 15 of 68 41 The Contracting Party agrees that any dispute of the Supporting Party's invoices and any claim for reimbursement will be made within twelve (12) months from the date of issuance of the respective invoice. Disputes or claims not made within such period will be deemed barred by the Statue of Limitations. The Supporting Party may invoice a pro rata late payment charge of one (1) percent per month on all payments due. Title to all Material supplied by the Supporting Party under this Agreement will remain with the Supporting Party until complete payment of all amounts due has been received. In case of non-payment by the Contracting Party the Supporting Party has by virtue of its Services rendered a contractual right of retention and a contractual lien over the subject matter in its custody. These rights as well as a set-off right may also be claimed for Services rendered or Material supplied previously. The Supporting Party also has the right to immediately stop current Services until payments due have been received. Payments will be effected to the Supporting Party's Bank Account as stated in the Order. Page 16 of 68 42 PART IV: LEGAL 17. TITLE TO THE ITEMS / PARTS EXCHANGED Title to the Items remains with the respective owner of the Items at all times while in the custody of the Supporting Party or any Subcontractor. Parts replacing removed Parts ("Exchange") on the Item will become the property of the Contracting Party or the respective owner of the Item upon installation and Parts removed from the Item will become the property of the Supporting Party at the same time. The Exchange Part will be in the same condition, value and Modification status as the Item originally Delivered to the Supporting Party in the condition such Item would have been after Maintenance. The Supporting Party may provide the Contracting Party with a Part with a higher Modifications status after having received a written approval of the Contracting Party and only if the Parts are two ways interchangeable. 18. QUALITY AND WARRANTY 18.1 Quality The Supporting Party will perform this Agreement and all Services in accordance with the Supporting Party's quality system approved by the JAA and the FAA. The Contracting Party at any time will have the right to perform quality surveillance and quality audits upon the Supporting Party. In case of discrepancies the Supporting Party will immediately make any and all necessary corrections and will inform the Contracting Party accordingly. 18.2 Warranty The Supporting Party warrants that all Services rendered and all material manufactured by the Supporting Party under this Agreement will be free from Defects and will: - - conform to the original equipment manufacturer's and the Contracting Party's applicable descriptions, specifications and drawings, - - be free from Defects in design and -- to the extent manufactured by the Supporting Party - material, and including Defects arising from the selection of materials, - - be suitable for the intended purposes as set forth in this Agreement or the relevant speci Page 17 of 68 43 fications. Any acceptance upon Redelivery of a Maintained Item by the Contracting Party shall not limit the Supporting Party's responsibility under this Section. As the sole remedy, if an Item fails to comply with the warranty as set forth above the Supporting Party will at its own expense promptly perform all Repairs and Modifications necessary to make such Item comply with the warranty. Any direct expenses for removal, reinstallation, error search and transportation of the Defective Item will be reimbursed by the Supporting Party. The Contracting Party will arrange, at the Supporting Party's risk and expense, for transportation of the Defective Item from the location where the respective Item is located to the location where the Repair and/or Modification will be made. The Supporting Party will redeliver such Items at its risk and expense to the Contracting Party to the facility named in the respective warranty order. Any warranty Repair and/or Modification will be performed as soon as possible but in any case within the Turnaround Time stipulated for the original work scope. If the TAT is exceeded Section 11.2 will apply. The warranty is subject to the following conditions: A Defect will only be regarded as subject to warranty if it arises within twelve (12) months or within one thousand five hundred (1,500) flight hours after Redelivery, whichever may occur first. In case of a complete landing gear Overhaul the warranty period will be thirty-six (36) months or three thousand (3,000) cycles, whichever comes first. A warranty claim must be raised in written form by the Contracting Party within forty-five (45) days after the Defect has become apparent and the Supporting Party must be provided with the Defective part for inspection and Repair within an additional forty-five (45) days after the warranty claim has been raised. The cause of the Defect must be related to material manufactured by or to Services rendered by the Supporting Party. For material not manufactured by the Supporting Party the rights to warranty granted to the Supporting Party by the respective manufacturer will be assigned to the Contracting Party or such other party as the Contracting Party may designate and the Supporting Party will use all reasonable efforts to support the Contracting Party (or such other party, as applicable) in pursuing such warranty claim. After Redelivery the Defective Part must not have been Serviced, Repaired, Overhauled, or Modified by anyone other than the Supporting Party or its Subcontractors. Material must at all times have been stored, handled and operated in accordance with manufacturer's recommendations. Page 18 of 68 44 Notwithstanding Section 18. hereof the remedies for breach of the warranty set forth in this Section 17.2 will be the exclusive and sole remedy for the Contracting Party in case of any Defect and any other rights to warranty as well as to damages including incidental or consequential damages or loss of revenue of any kind arising by law or otherwise are explicitly excluded. For Services rendered by the Supporting Party's Subcontractors the same warranty will apply as if such Services had been rendered by the Supporting Party itself. The Contracting Party may assign the right to claim under this warranty as granted hereunder in whole or in part to its customers. 18.3 In-house-Warranty With the consent of the Supporting Party (such consent not to be withheld if in-house warranty is more cost efficient than Repair by the Supporting Party or if the Supporting Party cannot meet the Contracting Party's time requirements) the Contracting Party may carry out the Repair and/or Modification of Items under warranty of the Supporting Party at its own facilities or have such Repair and/or Modification performed by a third party at the Supporting Party's costs, such cost not to exceed the cost of Repair by the Supporting Party. For all such Repairs and/or Modifications the Supporting Party shall credit the Contracting Party the labor costs (including direct costs for removal, reinstallation and administration) as defined in Attachment "B" plus the actual cost of the material used at the current acquisition or average purchase price. For Items under warranty which cannot be Repaired and/or Modified economically the Supporting Party will either furnish the Contracting Party at the Contracting Party's discretion with a no charge replacement or full credit according to the current acquisition or average purchase price. In case of In-house-warranty performed, the Contracting Party will file a Warranty Claim on its own form ("In-house Warranty Repair Claim" -- Attachment "C") within ninety (90) days after rectification of the Defect. Within ninety (90) days after receipt of the Contracting Party's Warranty Claim, the Supporting Party will reimburse the Contracting Party by means of a credit note all material and labor cost. The claim will be deemed to be accepted if the Supporting Party does not reject the warranty claim within such ninety (90) days period. Page 19 of 68 45 19. LIABILITY AND INDEMNIFICATION -- INSURANCE 19.1 Liability and Indemnification The Supporting Party, its personnel, and its Subcontractors shall not be liable towards the Contracting Party, except in cases of willful misconduct or gross negligence of the Supporting Party, its personnel and its Subcontractors. This release by the Contracting Party includes any damage or loss of property as well as bodily injury or death or other damages sustained by the Contracting Party. This provision shall apply for any such liabilities arising in any way in connection with this Agreement during or after the performance of Services by the Supporting Party, its personnel or its Subcontractors. Regardless of the above, the Supporting Party, its personnel and its Subcontractors shall not be responsible for any consequential damages, including, but not limited to, loss of use, revenue or profit. The Contracting Party shall indemnify and hold harmless the Supporting Party, its personnel, and its Subcontractors from any and all liabilities towards any third party arising in any way in connection with this Agreement during or after the performance of Services by the Supporting Party, its personnel and its Subcontractors. This indemnification and hold harmless provision shall not apply in cases of willful misconduct or gross negligence of the Supporting Party, its personnel and its Subcontractors. This indemnification includes cost and expenses incident thereto as well as consequential damages. 19.2 Insurance Each Party will maintain adequate insurance to cover the risks assumed hereunder and provide the other upon request with a certificate of insurance. 20. TERM AND TERMINATION This Agreement becomes effective upon signature of both Parties and will remain effective for an indefinite period of time unless terminated in accordance with this article ("Term"). The attachments, annexes and side letters hereto will become effective from the same date or the date expressly specified therein and will remain effective for the Term unless otherwise stated therein. Page 20 of 68 46 This Agreement and any Order hereunder may only be terminated in accordance with the provisions of the Cooperation Agreement. This provision is not intended to limit either Party's right to terminate for cause. 21. CONFIDENTIALITY The Parties will treat as strictly confidential for the duration of this Agreement and for two (2) years thereafter any information pertaining to this Agreement, including the individual provisions contained therein. In particular each Party will treat as strictly confidential the contents of the negotiations leading up to this Agreement, any business, technical and strategic data disclosed by the other Party or its Subcontractors at any time for any reason - comprising any and all such information in oral or visual form - including but not limited to prices for Services, the scope of Services offered, legal provisions, Turnaround Times and man-hours needed. Neither Party will disclose any such confidential information to any employee, third party or other person except where such disclosure is necessary in order to fulfill the obligations under this Cooperation Agreement or to the extent required by law. Professional advisors, such as lawyers or accountants, of a Party will not be deemed third parties hereunder provided they are equally required to maintain confidentiality as herein described. The disclosure of any documents, data and other information in connection with this Agreement will not be construed as a grant or transfer of any rights, in particular but not limited to intellectual and industrial property rights such as patents or copyrights. 22. NOTICES AND COMMUNICATION For messages and correspondence other than invoices exchanged in connection with this Agreement in day to day business the addresses stated in the Order are applicable. No Party may claim that the other Party has received such messages or correspondence if other addresses than those listed in the Order were used. Messages including any requests or Orders sent by e-mail or other electronic means will be deemed received only when the message has been accessed by the receiving Party. The burden of proof for the receipt and time of receipt of such messages will lie with the Party sending the message. Page 21 of 68 47 23. MISCELLANEOUS 23.1 Law and Jurisdiction This Agreement shall be governed by and construed in accordance with the laws of Germany excluding German law's conflict of laws provisions and further excluding the CISG (United Nations Convention on the International Sale of Goods). In case of a dispute the Parties agree that they will use best efforts to come to an amicable and fair solution under the terms of this Agreement or to amend the terms of this Agreement in order to bring about a fair solution to such dispute. Should this not be possible the Parties agree to submit their dispute to an arbitration board consisting of one arbitrator to be named by each of the Parties who will in turn agree upon a third arbitrator belonging to the Lufthansa Group but not belonging to either party or its subsidiaries. All arbitrators shall have a legal background. In case of a dispute of a fundamental or political nature the "Konzernlenkungskreis" may be called upon. The Parties expressly agree not to call upon the court of law of any jurisdiction to settle disputes and to be bound by and accept as final ruling the decision of the arbitration board as described. 23.2 Assignment Except as provided for in this Agreement neither Party may assign its position under this Agreement without the prior written consent of the other Party, except that either Party may assign its position under this Agreement with any of its rights and obligations in total or in part to a company directly or indirectly controlled by Deutsche Lufthansa Aktiengesellschaft. 23.3 Form of Agreement Two originals of this Agreement will be signed and executed by the Parties. One original will remain with each Party. Each page of each original of the Agreement (including any attachments, exhibits, side-letters etc.) will be initialed by each Party. 23.4 Alteration This Agreement will not be varied in terms or amended except by an instrument in writing explicitly named an amendment to this Agreement and signed by duly authorized representatives of the Parties. Page 22 of 68 48 Verbal agreements reached during the negotiations or during the period of this Agreement will not be binding upon either Party unless and until mutually confirmed in writing. All communication between the Parties will be in English and all documentation will be made available to the other Party in English. In case any other language is used or any document including this Agreement is translated into any other language it will be for convenience only. The version in English will be binding. 23.5 Order of Precedence In the event a provision in an attachment, annex, letter agreement or Order deviates from Parts I-IV of this Agreement such attachment, annex or letter agreement will prevail only if such provision explicitly refers to the provision of such Sections to be deviated from. In all other cases Parts I-IV will prevail. Orders will prevail if the Order Form attached is used and one of the alternatives provided on such Order Form is used. Other deviations must refer to the provision being deviated from. 23.6 Waiver and Severability Failure by either Party to enforce any of the provisions of this Agreement will not be construed as a waiver of such provisions. Nothing contained in this Agreement will require either Party to take any action contrary to the law or to any order or regulation of any government or contrary to any permit or authorization granted to either Party by any government. If any of the provisions of this Agreement are held unlawful or otherwise ineffective by any court of competent jurisdiction, the remainder of this Agreement will remain in full force and the unlawful or otherwise ineffective provision will be substituted by a new provision mutually agreed upon by the Contracting Party and the Supporting Party reflecting the intent of the provision so substituted. Page 23 of 68 49 IN WITNESS THEREOF the Contracting Party and the Supporting Party have caused this Agreement to be executed as of the day and year written below. LUFTHANSA TECHNIK AG HAWKER PACIFIC AEROSPACE - ------------------------------------ ------------------------------------- Dr. Gerald Gallus David Lokken Chief Executive Product and Services Chief Executive Officer and President - ------------------------------------ Uwe Mukrasch Senior Vice President of Aircraft Component Services HAWKER PACIFIC AEROSPACE, LTD. ------------------------------------ David Lokken Director Hamburg, July 11th, 2001 Page 24 of 68 50 ATTACHMENT A 1 - LANDING GEAR (LDG): SCOPE OF SERVICES/SERVICES TO BE PERFORMED - LHT will subcontract landing gear Services to HPA as per Attachment "A 1.1" HPA will subcontract landing gear Services to LHT as per Attachment "A 1.2" Page 25 of 68 51 ATTACHMENT A 1.1 - LANDING GEAR: SCOPE OF SERVICES/SERVICES TO BE PERFORMED BY LHT - 1. PRICES AND TAT PER A/C TYPE FOR SINGLE AD-HOC EVENTS (see Cooperation Agreement Section 3.2.2)
2. SCOPE OF SERVICE 2.1 LABOR COSTS (MAN- AND MACHINE HOURS) FOR COMPLETE OVERHAUL INCLUDING: - Overhaul / Repair in accordance with CMM-limits and Lufthansa Technik approved data - standard Modifications (details to be specified in the Order) - functional check of hydraulic parts (Section 3) - complete engineering Services for Overhaul performance 2.2 MATERIAL The price covers all spare parts up to an amount of USD [*],- per Item and includes the material handling charge ("mark up"). "Mark up" for Items higher than USD [*],- is [(*)] percent with a ceiling of USD [*].- per Item. * INFORMATION OMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST. Page 26 of 68 52 2.3 STATEMENT OF WORK A. Complete teardown and inspection of all major Component Parts B. Replace as required all standard AN, MS, NAS, and manufacturer's hardware Items, including seals, packing rings and other standard replacement Parts. C. Replace all bushings. D. Deburr and polish all lug faces and holes to remove corrosion. E. Hone or polish all chrome plated diameters and dimensions. Inspect for in-service wear and general surface condition. F. Identify and disposition all areas requiring rework and Repair in accordance with the LHT Standard Workscope. G. Surface temper inspect (nital etch) as required by the manufacturer's Overhaul manual. H. N.D.T. inspect all Component Parts for inclusion, indications and cracks. I. Repair all areas requiring chrome plate per manufacturer's Overhaul manual. J. Repair all areas requiring sulphamate nickel plate per the manufacturer's Overhaul manual. K. Re-application of cadmium plate (low hydrogen embrittlement) in accordance with manufacturer's Overhaul manual. L. Incorporation of all mandatory service bulletins M. Test of all hydraulic accessories of the landing gear N. Prime and paint as required by manufacturer's Overhaul manual. O. Carry out Overhaul of wiring harnesses. P. Assemble and function test per manufacturer's Overhaul manual, final inspect. Q. Certify on JAA Form 1 as Overhauled in accordance with the manufacturers Overhaul manuals. Page 27 of 68 53 2.4 EXCHANGE Exchange gears in Overhauled condition will be provided by the Supporting Party to cover the scheduled events. Actual delivery of exchange gears to be mutually agreed well in advance. The removed gears shall be available at the Delivery Location that is specified in the Order not later than calendar days after receipt of the delivered Exchange gears Each day thereafter will be charged additionally with [*] % of the agreed Exchange fee up to a maximum of 100% of the agreed exchange fee. 2.5 ADDITIONAL WORK Hydraulic attached Parts are handled according to Attachment "A2". Replacement of life limited Parts, missing, damaged or misused Parts, performance of extraordinary Modifications, AD-notes and Repairs beyond CMM-limits will be additionally charged if applicable. THE MAN-HOUR RATE FOR SUCH WORK IS USD [*],-- Any work on Brakes and Wheels is excluded. 2.6 DOCUMENTATION AND PRODUCTION PLANNING 2.6.1 The following documentation will be provided by the Supporting Party: - JAA/FAA Dual Release Certificate - Modification status, history data - workshop-report and detailed finding-report for the supplied gears 2.6.2 In case of Exchange the following history data shall be provided by the Contracting Party upon delivery of the removed gears: - total time / total cycles in service - current status of life-limited parts - current status of applicable AD-notes - ---------- * INFORMATION OMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST. Page 28 of 68 54 ATTACHMENT A 1.2 - LANDING GEAR: SCOPE OF SERVICES/SERVICES TO BE PERFORMED BY HPA - 23.7 1. PRICES AND TAT PER A/C TYPE FOR SINGLE AD-HOC EVENTS (see Cooperation Agreement Section 3.2.2)
- ---------- * INFORMATION OMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST. Page 29 of 68 55 NOTES: 1 MATERIAL CAP OF [*] USD 2 MATERIAL CAP OF [*] USD 3 MATERIAL CAP OF [*] USD 2. 2.SCOPE OF SERVICE 2.1 LABOR COSTS (MAN-HOUR AND MACHINE HOURS) FOR COMPLETE OVERHAUL INCLUDING: - OVERHAUL/REPAIR IN ACCORDANCE WITH CMM -- LIMITS AND HPA STATEMENT OF WORK - STANDARD MODIFICATIONS - FUNCTIONAL CHECK OF HYDRAULIC PARTS - COMPLETE ENGINEERING SERVICES FOR OVERHAUL PERFORMANCE 2.2 MATERIAL - THE PRICE COVERS ALL STANDARD REPLACEMENT PARTS ("SRP") AND BUSHINGS AND ALL MATERIAL UP TO AND INCLUDING THE MATERIAL CAPS AS NOTED IN SECTION 1 ABOVE. - "MARK UP" FOR ITEMS HIGHER THAN THE NOTED MATERIAL CAP IS [*] PERCENT WITH A CEILING OF USD [*] PER ITEM. 2.3 STATEMENT OF WORK A. Complete teardown and inspection of all major Component Parts B. Replace as required all standard AN, MS, NAS, and manufacturer's hardware Items, including seals, packing rings and other SRP. - ---------- * INFORMATION OMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST. Page 30 of 68 56 C. Replace all bushings. D. Deburr and polish all lug faces and holes to remove corrosion. E. Hone or polish all chrome plated diameters and dimensions. Inspect for in-service wear and general surface condition. F. Identify and disposition all areas requiring rework and Repair as requested by manufacturer's Overhaul manual. G. Surface temper inspect (nital etch) as required by the manufacturer's Overhaul manual. H. N.D.T. inspect all Component Parts for inclusion, indications and cracks. I. Repair all areas requiring chrome plate per manufacturer's Overhaul manual. J. Repair all areas requiring sulphamate nickel plate per the manufacturer's Overhaul manual. K. Perform gland nut Repair as necessary. L. Carry out any additional specialist Repairs. M. Re-application of cadmium plate (low hydrogen embrittlement) in accordance with manufacturer's Overhaul manual. N. Prime and paint as required by manufacturer's Overhaul manual. O. Carry out Overhaul of wiring harnesses. P. Assemble and function test per manufacturer's Overhaul manual, final inspect. Q. Certify on JAA Form 1 as Overhauled in accordance with the manufacturers Overhaul manuals. 2.4 EXCHANGE EXCHANGE GEARS IN OVERHAULED CONDITION WILL BE PROVIDED BY THE SUPPORTING PARTY TO COVER THE SCHEDULED EVENTS. ACTUAL DELIVERY OF EXCHANGE GEARS TO BE MUTUALLY AGREED WELL IN ADVANCE. THE REMOVED GEARS SHALL BE AT THE SUPPORTING PARTY NO LATER THAN TEN (10) Page 31 of 68 57 CALENDAR DAYS AFTER RECEIPT OF THE DELIVERED EXCHANGE GEARS. 2.5 ADDITIONAL WORK HYDRAULIC ATTACHED PARTS ARE HANDLED ACCORDING TO ATTACHMENT "A2". REPLACEMENT OF LIFE LIMITED PARTS, MISSING PARTS, DAMAGED OR MISUSED PARTS, PERFORMANCE OF EXTRAORDINARY MODIFICATIONS, AD NOTES AND REPAIRS BEYOND THE CMM LIMITS WILL BE ADDITIONALLY CHARGED IF APPLICABLE. STANDARD OVERHAUL DOES NOT INCLUDE TELESCOPIC STRUTS, LOCK LINKAGES, STRUCTURAL LINKAGES, WALKING BEAMS, FORWARD TRIM BEARINGS, REACTION LINKAGES, SUPPORT ASSEMBLIES OR PILLOW BLOCKS. The man-hour rate for such work is USD [*].-- ANY WORK ON BRAKES AND WHEELS IS EXCLUDED. 2.6 DOCUMENTATION AND PRODUCTION PLANNING 2.6.1 The following documentation will be provided by the Supporting Party: - JAA/FAA DUAL RELEASE CERTIFICATE - MODIFICATION STATUS, HISTORICAL DATA - WORKSHOP REPORT AND DETAILED FINDINGS REPORT FOR SUPPLIED GEARS: - TOTAL TIME/TOTAL CYCLES IN SERVICE - CURRENT SATUS OF LIFE LIMITED PARTS - Current status of applicable AD notes. - ---------- * INFORMATION OMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST. Page 32 of 68 58 ATTACHMENT A 2 - HYDRAULIC LANDING GEAR ATTACHED PARTS: PRICES AND SCOPE OF SERVICES/SERVICES TO BE PERFORMED - GENERAL TEST AND RE-CERTIFICATION OF HYDRAULIC COMPONENTS IS INCLUDED IN THE WORKSCOPE OF THE LDG OVERHAUL. 1.FOR THE LDG OVERHAUL LHT IS CONTRACTING PARTY, HPA IS SUPPORTING PARTY 1.1 The LDG will be Overhauled in London LDG-related hydraulic Components will be removed by HPA in London and delivered to LHT in HAM (DDP). LHT will test and re-certify the Components and HPA will collect them (EXW) according to the prices and TAT stipulated in Attachment "A2.1". If a unit is unserviceable after the test, LHT will Repair the unit at LHT's expense and provide either the Repaired Component or an Exchange Component. Closed loop Repair is preferred. However, it is LHT's sole responsibility to choose between closed loop Repair or providing of an Exchange Component. Neither the Repair nor an Exchange fee will be charged to HPA. 1.2 The LDG will be Overhauled in Sun Valley HPA Sun Valley will test and re-certify the Components on HPA's expense. If a unit is unserviceable after the test, HPA Sun Valley will Repair the unit at LHT's expense and provide either the Repaired Component or an Exchange Part. Closed loop Repair is preferred. However, it is HPA's sole responsibility to choose between closed loop Repair or providing of an Exchange Component. The Exchange shall be free of charge. HPA will only charge The Repair or Overhaul Services according to prices and TAT stipulated in Attachment "A2.3". 2. FOR THE LDG OVERHAUL HPA IS CONTRACTING PARTY, LHT IS SUPPORTING PARTY LHT Hamburg will test and re-certify the Components on LHT's expense. Page 33 of 68 59 If a unit is unserviceable after the test, LHT Hamburg will Repair the unit at HPA's expense and provide either the Repaired Component or an Exchange Part. Closed loop Repair is preferred. However, it is LHT's sole responsibility to choose between closed loop Repair or providing of an Exchange Component. The Exchange shall be free of charge. LHT will only charge the Repair or Overhaul Services according to prices and TAT stipulated in Attachment "A2.2". Page 34 of 68 60 ATTACHMENT A 2.1 - TEST AND RE-CERTIFICATION -
ATTACHMENT A 2.2 - OVERHAUL PERFORMED BY LHT TO BE CHARGED TO HPA - - ---------- * INFORMATION OMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST. Page 35 of 68 61
Terms: - - Fixed overhaul price includes all labor and material up to $ 500 per material Item. - - Service bulletins and AD's are not included in the above-mentioned prices. - - Prices are quoted net and based on normal wear and tear, damage or misuse is not included. - - All prices are valid until December 31st, 2001. - - Material handling charge for material not included: [*] % with a maximum charge of USD [*].- per purchased Item. - ---------- * INFORMATION OMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST. Page 36 of 68 62 ATTACHMENT A 2.3 -- OVERHAUL PERFORMED BY HPA TO BE CHARGED TO LHT --
Terms: - - Fixed overhaul price includes all labor and standard replacement parts (SRP). - - Service bulletins and AD's are not included in the above-mentioned prices. - - Prices are quoted net and based on normal wear and tear, damage or misuse is not included. - - All prices are valid until December 31st, 2001. - - Material handling charge for material not included: [*] % with a maximum charge of USD [*],- per purchased Item - ---------- * INFORMATION OMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST. Page 37 of 68 63 ATTACHMENT A 3 - OTHER COMPONENTS: PRICES AND SCOPE OF SERVICES/SERVICES TO BE PERFORMED - Services performed for Components not removed during a LDG event shall be handled as described in this Attachment. LHT's prices for Components HPA will subcontract for Repair and Overhaul to LHT are listed in Attachment "A 3.1". HPA's prices for Components LHT will subcontract for Repair and Overhaul to HPA are listed in Attachment "A 3.2". ATTACHMENT A 3.1 - LHT PRICES FOR COMPONENTS HPA WILL SUBCONTRACT FOR REPAIR AND OVERHAUL TO LHT - open Page 38 of 68 64 ATTACHMENT A 3.2 - HPA PRICES FOR COMPONENTS LHT WILL SUBCONTRACT FOR REPAIR AND OVERHAUL TO HPA -
Terms: - - Fixed repair price includes all labor and material up to listed each prices. - - Service bulletins and AD's are not included in the above-mentioned prices. - - Prices are based on normal wear and tear, damage or misuse is not included. - - Turn-around-time = 15 calendar days. - - All prices are valid until December 31st, 2001. - - Material handling charge for material not included: [*]% with a maximum charge of USD [*],- per purchased Item. - ---------- * INFORMATION OMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST. Page 39 of 68 65 ATTACHMENT A 4 - OTHER COMPONENTS WHICH ARE NOT LISTED UNDER ATTACHMENT A 1 TO A 3 - If a Component is not listed under the previous Attachments "A1", "A2", "A3" the following procedure shall apply: After performing the required Services the latter shall be charged on a fixed labor plus material on consumption basis. For material consumption the following handling charge shall be applicable: Material Handling: [*]% with a maximum charge of USD [*],- per purchased Item. - ----------------- * INFORMATION OMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST. Page 40 of 68 66 ATTACHMENT B - AGREED LABOR RATE FOR IN-HOUSE WARRANTY REPAIRS - In-house Warranty rate: USD [*],-- Handling charges: see Attachment "A4" - ----------------- * INFORMATION OMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST. Page 41 of 68 67 ATTACHMENT C 1 IN-HOUSE WARRANTY CLAIM LHT -- Page 42 of 68 68 LUFTHANSA TECHNIK-HAWKER PACIFIC AEROSPACE COOPERATION AGREEMENT APPENDIX 03: General Supporting Contract July 11th, 2001 - --------------------------------------------------------------------------------
Page 43 of 69 69 ATTACHMENT C 2 IN-HOUSE WARRANTY CLAIM HAWKER PACIFIC --
Page 44 of 68 70 ATTACHMENT D -TAT REPORT ACCORDING TO SECTION 10 - EXAMPLE FOR CONTRACTING PARTY = HPA / SUPPORTING PARTY = LHT Status Report for [LUFTHANSA TECHNIK LOGO] Hawker Pacific Aerospace
Page 45 of 68 71 ATTACHMENT E LIST OF APPROVED SUBCONTRACTORS -- Attachment E1: LHT list Attachment E2: HPA Sun Valley list (including the AMS subcontractors) Attachment E3: HPA LHR list Page 46 of 68 72 ATTACHMENT E1 LIST OF APPROVED SUBCONTRACTORS OF LHT --
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Page 48 of 68 74 ATTACHMENT E2 -- LIST OF APPROVED SUBCONTRACTORS OF HPA SUN VALLEY (INCL. AMS) --
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Page 50 of 68 76 ATTACHMENT E3 -- LIST OF APPROVED SUBCONTRACTORS OF HPA LONDON --
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Page 54 of 68 80 ATTACHMENT F Order Form This is an Order under the General Supporting Contract between Lufthansa Technik AG and Hawker Pacific Aerospace dated July 11th, 2001. Capitalized terms shall have the definitions attributed to them in the General Supporting Contract. Customer: __________________ Contracting Party: __________________ Supporting Party : __________________ The Supporting Party will perform the Services as set out below: 1. Scope of Services (Section 4 General Supporting Contract) [ ] Standard Service described in Att. "A" _____________ [ ] Other Service (specify separately) 2. The following parts may/may not be used (Section 5 General Supporting Contract): Used life limited Parts [ ] no [ ] yes Restrictions: ______________ PMA-Parts [ ] no [ ] yes Restrictions: ______________ Parts subjected to extreme heat/stress [ ] no [ ] yes Restrictions: ______________ Parts from military or government stock Page 55 of 68 81 [ ] no [ ] yes Restrictions: ______________ 3. Deviation from authority requirements stated in Section 5 (FAR/JAR-145): _________________________________________________________________ 4. Performance of non-mandatory (recommended or optional) Modifications? (Section 8 General Supporting Contract) [ ] all Modifications [ ] no non-mandatory Modifications [ ] only the following: ______________________________________________ 5. Scrap Handling (Section 9 General Supporting Contract) [ ] Notification in writing of any scrap material with a value above USD ___________ [ ] Scrap should not be sent back. [ ] Scrap to be sent back to: _________________________________________ 6. Delivery Location/Redelivery Location (Section 10 General Supporting Contract) Contracting Party delivers to (Delivery Location) [ ] LAX [ ] LON [ ] AMS [ ] FRA [ ] HAM [ ] ___ Contracting Party collects from (Redelivery Location)[ ] LAX [ ] LON [ ] AMS [ ] FRA [ ] HAM [ ] ___ Page 56 of 68 82 Deviations:____________________________________________________________ 7. Turnaround Time (TAT) (Section 11 General Supporting Contract) [ ] Standard TAT listed in Att. "A"______________ [ ] Other TAT: ______________days [ ] No TAT, but Redelivery shall occur on or before ____/___/_____(Date) 8. Weekly status report in accordance with Section 11 required? [ ] yes [ ] no If yes, addressee for status reports: _______________________________ _______________________________ _______________________________ e-mail:_________________________ Fax:_____________Tel:___________ 9. Price (Section 13 General Supporting Contract) [ ] as in Att. "A" ______________ [ ] Other: ______________________________________________________ Page 57 of 68 83 10. Price Adjustment (Section 14 General Supporting Contract) _________________________________________________________________ 11. Invoice Address: (Section 15 General Supporting Contract) _______________________________ _______________________________ _______________________________ _______________________________ Fax: _____________ Tel:___________ 12. Invoices will be paid to the Supporting Party's following bank account: _________________________________________________________________ 13. Additional information for specific customer invoices (Section 8.2 Cooperation Agreement): The Supporting Party shall provide the following additional information to the Contracting Party to enable the latter to meet specific customer needs concerning the customer invoice: _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ 14. Warranty: (Section 17 General Supporting Contract) [ ] Standard as described in Art 17 General Supporting Contract Page 58 of 68 84 [ ] Other: ______________________________________________________ 15. Address(es) for day to day communication (not notices): (Section 21 General Supporting Contract) _______________________________ _______________________________ _______________________________ _______________________________ e-mail__________________________ Fax:_____________Tel:____________ _______________________________ _______________________________ _______________________________ _______________________________ e-mail__________________________ Fax:_____________Tel:____________ Page 59 of 68 85 16. Deviations from the General Supporting Contract. [Note: Deviation listed hereunder are valid only if they refer to the provision in the General Supporting Contract they deviate from] ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ _____________________________________________ (continue on separate sheet) 17. Further provisions: ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ _____________________________________________ (continue on separate sheet) Signatures: For the Contracting Party For the Supporting Party Place, Date: _______________ Place, Date: _______________ ____________________________ _____________________________ ____________________________ _____________________________ (Lufthansa Technik must sign with two signatures) Page 60 of 68 86 ATTACHMENT G - Shipping Addresses - HAWKER PACIFIC AEROSPACE: Sun Valley Hawker Pacific Aerospace 11240 Sherman Way Sun Valley, CA ###-###-#### USA London Hawker Pacific Aerospace Ltd. Unit 3 Dawley Park Kestrel Way Hayes Middlesex UB3 1HP UK Amsterdam Hawker Pacific Aerospace Bennebroekerweg ###-###-#### CJ Rijsenhout The Netherlands LUFTHANSA TECHNIK AG: Hamburg Lufthansa Technik Logistik GmbH Goods Receiving Page 61 of 68 87 HAM UH / BR1 Weg beim Jager 193 D-22335 Hamburg Germany Frankfurt Lufthansa Technik Logistik GmbH Goods Receiving FRA UH/BL1 Airport D-60546 Frankfurt a.M. Germany Page 62 of 68 88 ATTACHMENT H - Exchange Order Form - Supplied by: Exchanged by: [ ] [ ] Lufthansa Technik AG Postfach 63 03 00, D-22313 Hamburg, Germany [ ] [ ] Hawker Pacific Aerospace 11240 Sherman Way, Sun Valley, CA ###-###-####, USA [ ] [ ] Hawker Pacific Aerospace Unit 3 Dawley Park, Kestrel Way, Hayes, Middlesex UB3 1HP, UK [ ] [ ] Hawker Pacific Aerospace Bennebroekerweg 265, 1435 CJ Rijsenhout, The Netherlands No. Date of exchange MAT. CODE : DESCRIPTION : STATION : PART-NUMBER : QTY : A/C TYP : SERIAL-NUMBER : TOTAL DM PRICE : A/C REG. : REMARKS : Ladies and gentlemen, Upon request, the material specified above has been lent to your Company with Shipping Order No. _________________________ under the agreed conditions: 1. Indemnify and hold harmless the Supplying Party from any liability for damage including consequential damage in case of death or injury of persons or property damage arising out of, resulting from, or in any way connected with the Exchange of spares under this Agreement. 2. Indemnify and hold harmless the Supplying Party, its officers, directors or employees from or against all proceedings, claims, demands, suits and liabilities arising out of, resulting from, or in any way connected with the Exchange of Component(s) under this Agreement. 3. Pay a predetermined exchange fee plus administration charge of USD 130,- per each Component(s) and serial no. Page 63 of 68 89 4. Pay the repair cost for the Component(s) Exchanged according to the invoice issued by the Supplying Party after completion of the repair. 5. If the Component(s) received from the Exchanging Party should not be repairable, the Component(s) shall be returned to the Exchanging Party in its unserviceable condition and the Exchange 1 : 1 can be converted into a sale or loan. In case of sale the Exchanging Party shall be charged with the manufacturer's list price or another agreed upon price plus an administration fee of USD 250,-. In case of loan the loan conditions specified in Attachment I shall be applicable. 6. In case the Part for Exchange is sent to the Exchanging Party all cost as packing, customs duties, taxes, forwarding, if any, shall be borne by the Exchanging Party. 7. Kindly acknowledge and confirm your acceptance of the conditions of this exchange 1 : 1 by returning this copy duly signed on behalf of your Company. Page 64 of 68 90 SIGNATURES: Lufthansa Technik AG Hawker Pacific Aerospace Place, Date: ___________________ Place, Date: _________________ ___________________ _________________ Page 65 of 68 91 ATTACHMENT I -- Loan Order Form -- Lender: Borrower: [ ] [ ] Lufthansa Technik AG Postfach 63 03 00, D-22313 Hamburg, Germany [ ] [ ] Hawker Pacific Aerospace 11240 Sherman Way, Sun Valley, CA ###-###-####, USA [ ] [ ] Hawker Pacific Aerospace Unit 3 Dawley Park, Kestrel Way, Hayes, Middlesex UB3 1HP, UK [ ] [ ] Hawker Pacific Aerospace Bennebroekerweg 265, 1435 CJ Rijsenhout, The Netherlands No. Date of loan Date of expiry Mat. Code : Description : Station : Part-Number : QTY : A/C Typ : Serial-Number : Total DM Price : A/C Reg. : Remarks : Ladies and gentlemen, Upon request, the material specified above has been lent to your Company with Shipping Order No. _________________________ under the agreed conditions: 1. Return material at your earliest convenience, however, not later than _______________________ or earlier, if requested to: [ ] Lufthansa Technik AG, Hamburg-Flughafen, Material Supply, Attn.: Loan Control, HAM UH/BM2 [ ] Hawker Pacific Aerospace 11240 Sherman Way, Sun Valley, CA ###-###-####, USA [ ] Hawker Pacific Aerospace Unit 3 Dawley Park, Kestrel Way, Hayes, Middlesex UB3 1HP, UK Page 66 of 68 92 [ ] Hawker Pacific Aerospace Bennebroekerweg 265, 1435 CJ Rijsenhout, The Netherlands The shipping documents must show the above loan agreement no. and for all repairable Components the number of operating hours and landings, whilst the Part was installed into your company's aircraft. 2. Handle the material in good airline manner under the provisions of the appropriate technical manuals. 3. Indemnify and hold harmless the Lender from any liability for damage including consequential damage in case of death or injury of persons or property damages arising out of, resulting from, or in any way connected with the loan of spares under this Agreement. 4. Indemnify and hold harmless the Lender, its officers, directors or employees from and against all proceedings, claims, demands, suits and liabilities arising out of or resulting from, or in any way connected with the loan of spares under this Agreement. 5. Cover all charges arising from damages or undue wear of loan material up to the above listed Component value. 6. Accept inspection and eventual overhaul costs involved in the routine maintenance of the material returned as well as payment of forwarding and packing charges, customs duties and taxes, if any. 7. Pay a rental of 1.0% from the latest manufacturer's list price per day of loan. Administration charge = USD 130,- per each and serial no. 8. The loan period will be from the day the Part is loaned up to and including the day the Part is received to the above listed address. 9. If loaned material is not returned within the loan period agreed upon nor an extension has been granted, the Lender can on his sole discretion convert the loan either into a sale or into an Exchange 1:1. In case the loan shall be converted into a sale the Borrower will be charged with the latest manufacturer's list price plus an administration fee of USD 250,-. The loan fee already chargeable to the Borrower at the date of conversion will be added. In case the loan shall be converted into an Exchange 1:1 the Exchange conditions specified in Attachment H shall be applicable. 10. The Borrower hereby accepts and acknowledges that no repair shall be performed on the loaned item except in cases wherein the Lender has allowed such repair in a form of a written authorization. Cost shall be borne by Borrower unless otherwise agreed, the regulations of Section 3 and 4 shall apply accordingly. Page 67 of 68 93 11. Kindly acknowledge and confirm your acceptance of the conditions of this loan agreement by returning this copy duly signed. SIGNATURES: Lufthansa Technik AG Hawker Pacific Aerospace Place, Date: ___________________ Place, Date: _________________ ___________________ _________________ Page 68 of 68 94 LUFTHANSA TECHNIK - HAWKER PACIFIC AEROSPACE COOPERATION AGREEMENT APPENDIX 04: General Services July 11th, 2001 - -------------------------------------------------------------------------------- APPENDIX 04 - GENERAL SERVICES - 1. SCOPE OF SERVICE General services performed under this Cooperation, such as but not limited to consulting, training or personnel assignment have to be specified separately. 2. PRICES The following rates shall apply wherever the performance will be provided (locally or in the back office).
These Prices are based on year 2001 and will be updated on a yearly basis. The following items will be charged separately. - Overtime (above 8 hours per day) and work at weekends - Additional services provided by 3rd parties - Travel expenses, accommodation, local transportation 3. PAYMENT CONDITIONS If not otherwise agreed upon the performing Party shall invoice the fees after the respective services have been delivered or at the end of each quarter of a year (31.03.; 30.06.; 30.09.; 31.12) whatever comes first. The receiving Party shall pay within 30 days thereafter. If the receiving Party does not question the amounts invoiced within thirty (30) days of receipt, this will be deemed acceptance of such amounts (including the calculation and sums it was based on) as payment for the period of time for which such payment was made and the receiving Party waives its right to question such payments thereafter. If the receiving Party disputes any amount of an invoice such amount nevertheless will remain due and the receiving Party will pay the total amount of the invoice. The performing Party and the receiving Party will negotiate in good faith to resolve the disputed part of the invoice. If such dispute is resolved in favor of the receiving Party, the performing Party will pay to the - -------------------------------------------------------------------------------- Page 1 of 3 95 LUFTHANSA TECHNIK - HAWKER PACIFIC AEROSPACE COOPERATION AGREEMENT APPENDIX 04: General Services July 11th 2001 - ------------------------------------------------------------------------------- receiving Party promptly the amount determined by such negotiations plus interest in the amount of LIBOR (London Inter Bank Offered rate) plus one (1) percent. The performing Party may invoice a daily Late Payment Charge of one (1) percent per month on all payments due. In case of non-payment by the receiving Party the performing Party has by virtue of its Services rendered a set-off right, that may also be claimed for Services rendered or material supplied previously. The performing Party also has the right to immediately stop current Services until payments due have been received. Services between Lufthansa Technik AG and Hawker Pacific Aerospace, Inc., Sun Valley, California will be charged in USD. Services between Lufthansa Technik AG and Hawker Pacific Aerospace Ltd., United Kingdom will be charged in GBP. - ------------------------------------------------------------------------------- Page 2 of 3 96 LUFTHANSA TECHNIK-HAWKER PACIFIC AEROSPACE COOPERATION AGREEMENT APPENDIX 04: General Services July 11th, 2001 - -------------------------------------------------------------------------------- IN WITNESS THEREOF the contracting parties hereto have caused this Agreement to be executed in two originals as of the day and year written below. LUFTHANSA TECHNIK AG HAWKER PACIFIC AEROSPACE - ------------------------------------ ------------------------------------- Dr. Gerald Gallus David Lokken Chief Executive Product and Services Chief Executive Officer and President - ------------------------------------ Uwe Mukrasch Senior Vice President of Component Services HAWKER PACIFIC AEROSPACE, LTD ------------------------------------- David Lokken Director Date --------------------------------- Page 3 of 3
