EXHIBIT 2.1
Dated 20th December 1997
BRITISH AIRWAYS PLC
and
HAWKER PACIFIC AEROSPACE LIMITED
and
HAWKER PACIFIC AEROSPACE
AGREEMENT
relating to
the Sale and Purchase
of part of the Business of
BRITISH AIRWAYS PLC
Linklaters & Paines
One Xxxx Xxxxxx
Xxxxxx X00X 0XX
Tel: 0000-000 0000
Ref: CXLC
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THE [*] INDICATES THAT PORTIONS OF TEXT HAVE BEEN DELETED AND ARE BEING FILED
UNDER SEPARATE COVER WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
CONTENTS
CLAUSE HEADING PAGE
1 Interpretation . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Subordinate Legislation . . . . . . . . . . . . . . . . . . . 7
1.3 Modification etc. of Statutes . . . . . . . . . . . . . . . . 7
1.4 Companies Xxx 0000 . . . . . . . . . . . . . . . . . . . . . 7
1.5 Interpretation Xxx 0000 . . . . . . . . . . . . . . . . . . . 7
1.6 References. . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.7 Information . . . . . . . . . . . . . . . . . . . . . . . . . 7
2 Agreement to sell the Business . . . . . . . . . . . . . . . 7
2.1 Sale and purchase of Business . . . . . . . . . . . . . . . . 7
2.2 Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3 Business Intellectual Property and Business Know-How . . . . 9
3 Consideration . . . . . . . . . . . . . . . . . . . . . . . . 9
3.1 Amount and Payment. . . . . . . . . . . . . . . . . . . . . . 9
3.2 Allocation of Consideration . . . . . . . . . . . . . . . . . 9
3.3 Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.4 Method of Payment . . . . . . . . . . . . . . . . . . . . . . 9
3.5 VAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4 Conditions. . . . . . . . . . . . . . . . . . . . . . . . . .10
4.1 Conditions Precedent . . . . . . . . . . . . . . . . . . . .10
4.2 Responsibility for Satisfaction . . . . . . . . . . . . . . .11
4.3 Non-Satisfaction. . . . . . . . . . . . . . . . . . . . . . .11
5 Action pending completion . . . . . . . . . . . . . . . . . .11
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CONTENTS
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5.1 Vendor's General Obligations . . . . . . . . . . . . . . . .11
5.2 Restrictions on the Vendor . . . . . . . . . . . . . . . .. 12
5.3 Purchaser's Obligations . . . . . . . . . . . . . . . . . . 12
5.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . .12
6 Completion . . . . . . . . . . . . . . . . . . . . . . . . .13
6.1 Date and Place of Completion . . . . . . . . . . . . . . . .13
6.2 Vendor's Obligations . . . . . . . . . . . . . . . . . . . .13
6.3 Purchaser's Obligations . . . . . . . . . . . . . . . . . . .14
6.4 Right to Terminate . . . . . . . . . . . . . . . . . . . . .14
6.5 OEM Warranties . . . . . . . . . . . . . . . . . . . . . . 16
6.6 Title and Risk . . . . . . . . . . . . . . . . . . . . . . .15
6.7 Arrangements in relation to the Property . . . . . . . . . .15
7 Warranties . . . . . . . . . . . . . . . . . . . . . . . . .15
7.1 Incorporation of Schedule 3 . . . . . . . . . . . . . . . .15
7.2 Effect of Events Occurring Prior to Completion . . . . . . .15
7.3 Effect of Completion . . . . . . . . . . . . . . . . . . . .16
7.4 Right of Termination. . . . . . . . . . . . . . . . . . . . .16
7.5 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . .16
8 The Assumed Contracts . . . . . . . . . . . . . . . . . . . .16
8.1 Purchaser to complete Assumed Contracts . . . . . . . . . . .16
8.2 The Vendor's obligations in respect of Assumed Contracts. . .17
8.3 Payments received by the Vendor . . . . . . . . . . . . . . .17
8.4 Prepayments made by the Vendor . . . . . . . . . . . . . . .17
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CONTENTS
CLAUSE HEADING PAGE
9 Third Party Consents. . . . . . . . . . . . . . . . . . . . .17
9.1 Failure to Obtain Consents. . . . . . . . . . . . . . . . . .17
9.2 Notice to Convey, Transfer, Assign etc. . . . . . . . . . . .18
9.3 Notice to accept Conveyance, Transfer, Assignment etc . . . .18
10 The Relevant Employees . . . . . . . . . . . . . . . . . . .18
10.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . .18
10.2 Transfer Regulations . . . . . . . . . . . . . . . . . . . .18
10.3 Purchaser's Obligations . . . . . . . . . . . . . . . . . . .20
10.4 Purchaser's Indemnity . . . . . . . . . . . . . . . . . . . .21
10.5 Purchaser's Indemnity in respect of Services Employees. . . .21
10.6 Secondment of Vendors Employees . . . . . . . . . . . . . . .22
11 Pensions. . . . . . . . . . . . . . . . . . . . . . . . . . .23
12 Post-Completion Obligations . . . . . . . . . . . . . . . . .23
12.1 Vendor's Continuing Obligations . . . . . . . . . . . . . . .23
12.2 Vendor's General Obligations. . . . . . . . . . . . . . . . .24
12.3 Purchaser's General Obligations . . . . . . . . . . . . . . .24
12.4 Marks . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
12.5 Certain Excluded Contracts . . . . . . . . . . . . . . . . .25
12.6 Certain Rotable Inventories . . . . . . . . . . . . . . . . .25
13 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . .25
14 Other Provisions . . . . . . . . . . . . . . . . . . . . . .26
14.1 Announcements . . . . . . . . . . . . . . . . . . . . . . . .26
14.2 Successors and Assigns . . . . . . . . . . . . . . . . . . .27
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CONTENTS
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14.3 Variation etc.. . . . . . . . . . . . . . . . . . . . . . . .27
14.4 Time of the Essence . . . . . . . . . . . . . . . . . . . . .27
14.5 References to the Expert. . . . . . . . . . . . . . . . . . .27
14.6 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
14.7 Interest . . . . . . . . . . . . . . . . . . . . . . . . . .28
14.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .28
14.9 Severance . . . . . . . . . . . . . . . . . . . . . . . . . .29
14.10 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . .29
14.11 Restrictive Trade Practices, . . . . . . . . . . . . . . . 29
14.12 Filings with Regulatory Authorities . . . . . . . . . . . . .29
14.13 Governing Law, Appointment of Process Agents and
Submission to Jurisdiction . . . . . . . . . . . . . . . . .29
Schedule 1
Part 1
The Excluded Contracts. . . . . . . . . . . . . . . . . . . 31
Part 2
The Property . . . . . . . . . . . . . . . . . . . . . . . .32
Schedule 2
Part 1
Allocation of Consideration . . . . . . . . . . . . . . . . .33
Part 2. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
The Completion Statement. . . . . . . . . . . . . . . . . . .34
Schedule 3
Warranties given by the Vendor under Clause 7 . . . . . . . .37
1 Authority and Capacity of the Vendor . . . . . . . . . . . .37
2 Legal Matters . . . . . . . . . . . . . . . . . . . . . . . .37
2.1 Compliance with Laws . . . . . . . . . . . . . . . . . . . .37
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CONTENTS
CLAUSE HEADING PAGE
2.2 Environment . . . . . . . . . . . . . . . . . . . . . . . . .37
2.3 Licences and Consents . . . . . . . . . . . . . . . . . . . .37
2.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . .38
3 Assumed Contracts . . . . . . . . . . . . . . . . . . . . . .38
3.1 Material Contracts . . . . . . . . . . . . . . . . . . . . 38
3.2 Anti-trust . . . . . . . . . . . . . . . . . . . . . . . . .38
4 Employees . . . . . . . . . . . . . . . . . . . . . . . . . .38
4.1 Employees and Terms of Employment . . . . . . . . . . . . . .38
4.2 Liabilities to and for Employees. . . . . . . . . . . . . . .39
4.3 Trade Disputes. . . . . . . . . . . . . . . . . . . . . . . .39
4.4 Pensions . . . . . . . . . . . . . . . . . . . . . . . . . .40
4.6 Definitions . . . . . . . . . . . . . . . . . . . . . . . . .41
5 Taxation Matters . . . . . . . . . . . . . . . . . . . . . .41
5.1 Records and Returns . . . . . . . . . . . . . . . . . . . . .41
5.2 VAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
5.3 Absence of Disputes . . . . . . . . . . . . . . . . . . . . .41
6 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . .41
6.1 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
6.2 Intellectual Property . . . . . . . . . . . . . . . . . . . .41
Schedule 4
Limitations on Liability. . . . . . . . . . . . . . . . . . .42
1 Limitation of Liability . . . . . . . . . . . . . . . . . . .42
1.1 Time Limits . . . . . . . . . . . . . . . . . . . . . . . . .42
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CONTENTS
CLAUSE HEADING PAGE
1.2 Minimum Claims. . . . . . . . . . . . . . . . . . . . . . . .42
1.3 Aggregate Minimum Claims . . . . . . . . . . . . . . . . . .42
1.4 Maximum Claims. . . . . . . . . . . . . . . . . . . . . . . .42
1.5 Contingent Liabilities . . . . . . . . . . . . . . . . . . .42
1.6 Other Matters . . . . . . . . . . . . . . . . . . . . . . . .42
1.7 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . .43
1.8 Fraud . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
2 Mitigation of Loss . . . . . . . . . . . . . . . . . . . . .43
3 Conduct of Claims . . . . . . . . . . . . . . . . . . . . . .43
4 Prior Receipt . . . . . . . . . . . . . . . . . . . . . . . .44
5 Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
Schedule 5
Pensions . . . . . . . . . . . . . . . . . . . . . . . . . .45
1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . .45
2 The Purchaser's Pension Scheme . . . . . . . . . . . . . . .45
2.1 Purchaser to set up sections of scheme that reflect
Vendors Pension Schemes . . . . . . . . . . . . . . . . . . .45
2.3 Invitation to Relevant Employees to join sections of
Purchaser's Pension Scheme . . . . . . . . . . . . . . . . .46
3 Transitional period of participation . . . . . . . . . . . .47
4 Transfer payment from Vendor's Pension Schemes . . . . . . .48
5 Calculation and adjustment of amount to be transferred. . . .48
6 Service to be credited by the Purchaser's Pension Scheme in
respect of membership of the Vendor's Pension Schemes . . . .49
7 Voluntary contributions . . . . . . . . . . . . . . . . . . .49
8 Disputes. . . . . . . . . . . . . . . . . . . . . . . . . . .50
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CONTENTS
CLAUSE HEADING PAGE
9 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . .50
Schedule 6
The Related Agreements . . . . . . . . . . . . . . . . . . .51
Schedule 7
Documents in the Agreed Terms . . . . . . . . . . . . . . . .52
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AGREEMENT FOR PURCHASE OF BUSINESS
THIS AGREEMENT is made on 20 December 1997
BETWEEN,
(1) BRITISH AIRWAYS PLC whose registered office is at Xxxxxxxxx Xxxxx, X.X.
Xxx 00, Xxxxxxxx Xxxxxxx (Xxxxxx), Xxxxxxxx XX0 0XX (the "VENDOR");
(2) HAWKER PACIFIC AEROSPACE LIMITED whose registered office is at Number 0
Xxxxxx Xxxx, Xxxxxxxxxxx X000 0XX, (the "PURCHASER"); and
(3) HAWKER PACIFIC AEROSPACE whose principal place of business is at 00000
Xxxxxxx Xxx, Xxx Xxxxxx, XX 00000 Xxxxxx Xxxxxx of America (the
"GUARANTOR").
IT IS AGREED as follows:
1 INTERPRETATION
In this Agreement, including its Schedules, the headings shall not affect
its interpretation and, unless the context otherwise requires, the
provisions in this Clause 1 apply:
1.1 DEFINITIONS
"AGREED TERMS" means in relation to any document such document in the terms
agreed between the parties, signed by or on behalf of the Purchaser and the
Vendor for the purposes of identification and listed in Schedule 7;
"ADDITIONAL ASSETS" means any property, rights and assets, other than the
Assets referred to In Clause 2.1.2(i) to 2.1.2(vii) (inclusive), used in
the Business and which the Vendor may agree to sell and the Purchaser may
agree to buy between the date of this Agreement and Completion;
"ASSETS" means the property, rights and assets agreed to be sold pursuant
to Clause 2.1 of this Agreement;
"ASSUMED CONTRACTS" means the contracts entered into by or on behalf of the
Vendor exclusively in connection with the Business, details of which are
set out in the document in the agreed terms, in each case to the extent
that at Completion the same remain to be completed or performed or remain
in force;
"BUSINESS" means the business carried on by the Vendor (through its
division known as Landing Gears Repair and Overhaul which, at the date
hereof, forms part of the Component Overhaul division within the Vendor's
Engineering Department) of repairing and overhauling Landing Gears, Flap
Tracks and Flap Carriages and in each case associated or related components
and parts at Heathrow Airport, as outlined in general terms in the
Information Memorandum, including the Assets subsisting at Completion but,
for the avoidance of doubt, excluding the business of repairing and
overhauling Landing Gears, Flap Tracks or Flap Carriages in respect of DC10
and ATP aircraft types and excluding the business of repairing and
overhauling Landing Gears in respect of the A320 aircraft type;
"BUSINESS DAY" means a day on which banks are open for business in England
(excluding Saturdays, Sundays and public holidays);
"BUSINESS INTELLECTUAL PROPERTY" means the Intellectual Property owned by
the Vendor and used exclusively in the Business as at Completion;
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"BUSINESS KNOW-HOW" means the Know-How owned by the Vendor and used
exclusively in the Business as at Completion;
"CASH BALANCES" means cash in hand. or credited to any account with a bank;
"CHAPS" means clearing houses automated payment systems;
"CLAIMS" means all rights and claims of the Vendor arising at any time
(whether before or after Completion) out of or in connection with the
Business (whether arising under any warranties, conditions, guarantees,
indemnities, insurance policies, contracts, agreements (in each case
whether express or implied) or otherwise howsoever) insofar as they relate
to the Assets;
"COMPLETION" means the completion of the sale and purchase of the Business
pursuant to Clause 6;
"COMPLETION STATEMENT" means the statement to be drawn up pursuant to Part
2 of Schedule 2 which shall state the Fixed Asset Value and the Rotable
Inventory Value as at the Valuation Date;
"CONDITION" means Serviceable Condition. Non-Serviceable Condition or
Unserviceable Condition, as the case may be;
"DEBTORS" means the book and other debts receivable by or owing to the
Vendor in connection with the Business (and whether or not yet due and
payable) as at Completion (including, without limitation, trade debts,
deposits, prepayments, retrospective rebates and overpayments) and interest
thereon, where appropriate,
"DISCLOSURE LETTER" means the letter in the agreed terms of even date with
this Agreement from the Vendor to the Purchaser disclosing:
(i) information constituting exceptions to the Warranties; and
(ii) details of other matters referred to In this Agreement;
"ENCUMBRANCE" means any claim, charge, mortgage, security, lien, option,
equity, power of sale, hypothecation or other third party rights;
"ENVIRONMENT" means living organisms (including humans) including the
ecological systems of which they form part and the following media (alone
or in combination); air (including air within buildings and the air within
other natural or man-made structures whether above or below the ground):
water (including, without limitation, water under or within land or in
drains or sewers and coastal and inland waters); and land (including land
under water); and in the case of man includes his property;
"ENVIRONMENTAL AUTHORITY" means any legal person (including any government
department or government agency) having regulatory authority under
Environmental Laws or any court of law or tribunal which has jurisdiction
to determine any matter arising under Environmental Laws or relating to the
Environment:
"ENVIRONMENTAL LAWS" means, in each case to the extent they relate to the
protection of the Environment and/or the prevention of and/or the provision
of remedies in respect of harm or damage to or other interference with the
Environment, the following:
(i) any and all laws including European Community or European
Union regulations, directives and decisions, together with
statutes and subordinate legislation in force from time to
time to the extent that the same are enforceable In England;
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(ii) all regulations, orders, ordinances, permits, codes of
practice, circulars, guidance notes and the like issued under
(1) above from time to time to the extent that the same are
enforceable in England;
(iii) common law and equity under English law;
(iv) local laws and bye-laws in force from time to time; and
(v) judgments, decisions, notices, orders, directions, consent
agreements, Instructions or awards by, with or of any
Environmental Authority under (i), (ii), (iii) and (iv) above.
"EXCLUDED CONTRACTS" means those contracts, undertakings, arrangements and
agreements to which the Vendor is a party in connection with the Business
which are not Assumed Contracts, including without limitation those
described in Part 1 of Schedule 1;
"EXPENDABLE INVENTORY" means, in respect of Landing Gears, Flap Tracks
and/or Flap Carriages, items for which no authorised repair procedure
exists and for which (if such items are capable of repair) the cost of
repair would normally exceed that of replacement, which are retained for
use exclusively in the Business as at the Valuation Date, a list of which
(with anticipated quantities) is set out in the document in the agreed
terms;
"EXPERT" means such expert Inventory valuer as the Vendor and the Purchaser
agree to appoint as such or, if the parties do not so agree, as may be
appointed by the President of the Royal Aeronautical Society upon the
request of either the Vendor or the Purchaser;
"FINAL PAYMENT DATE" means the date which is seven Business Days after the
Completion Statement has been agreed by the parties or has been determined
by the Expert, pursuant to Part 2 of Schedule 2;
"FIXED ASSETS" means those identified fixed assets which are owned by the
Vendor and used exclusively in the Business, the list of which is set out
in the document in the agreed terms;
"FIXED ASSET VALUE" means the aggregate value of the Fixed Assets as at the
Valuation Date, namely the sum of L2,192,728 representing the agreed
anticipated value of such Inventory as adjusted in accordance with Part 2
of Schedule 2 to reflect the condition of such Assets at the Valuation
Date;
"FLAP CARRIAGES" means flap carriages In respect of A320, B737, B747, B757,
B767 and L1011 aircraft types which are repaired and overhauled by the
Vendor through the Business immediately prior to Completion;
"FLAP TRACKS" means flap tracks in respect of A320, B737, B747, B757, B767
and L1011 aircraft types which are repaired and overhauled by the Vendor
through the Business immediately prior to Completion;
"GOODWILL" means the exclusive right of the owner of the Business to
represent itself as such and, in the case of the Purchaser, to represent
itself as the successor to the Vendor as the owner of the Business;
"INFORMATION MEMORANDUM" means the document entitled BA Engineering Landing
Gears Repair & Overhaul Activity - Confidential Information Memorandum
produced by the Vendor and sent to the Guarantor under cover of a letter
dated 1 May 1997 relating to the sale of Business;
"INITIAL FIXED ASSETS VALUE" means the value allocated to Fixed Assets as
set out in Part 1 of Schedule 2;
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"INITIAL ROTABLE INVENTORY VALUE" means the value allocated to Rotable
Inventory as set out in Part 1 of Schedule 2;
"INTELLECTUAL PROPERTY" means trade marks, service marks, trade names,
logos, get-up, patents, inventions, registered and unregistered design
rights, copyrights, rights of extraction relating to databases, and all
other similar proprietary rights which may subsist (but excluding Know-How)
including, where such rights are obtained or enhanced by registration, any
registration of such rights and applications and rights to apply for such
registrations;
"INVENTORIES" means the Rotable Inventory and the Expendable Inventory and
"INVENTORY" means any one of them;
"KNOW-HOW" means confidential and proprietary industrial and commercial
information and techniques in any form (including paper, electronically
stored data, magnetic media, film and microfilm) including (without
limiting the foregoing) test results, reports, project reports and testing
manuals and procedures, workshop practices, instruction and training
manuals, tables of operating conditions, market forecasts, quotations and
particulars of suppliers;
"LANDING GEARS" means lending gears In respect of B737, B747, B757, B767
and L1011 aircraft types which are repaired and overhauled by the Vendor
through the Business immediately prior to Completion but, for the avoidance
of doubt, excluding the Quarantine Gear;
"LIABILITIES" means all liabilities, duties and obligations of every
description, whether deriving from contract, common law, statute or
otherwise, whether present or future, actual or contingent, ascertained or
unascertained or disputed and whether owed or incurred severally or jointly
and as principal or surety and "LIABILITY" means any one of them;
"LOCKHEED MANUALS" means the overhaul manuals used exclusively in the
Business which are published by Lockheed Xxxxxx and have been adapted by
the Vendor;
"LOSSES" means all losses, liabilities, costs (including without limitation
legal costs), charges, expenses, actions, proceedings, claims and demands;
"MARKS" means the trade marks, service marks, trade names, logos, liveries
and get-up from time to time used by the Vendor in connection with its
business and any registration of such rights and applications and rights to
apply for such registrations;
"NON-SERVICEABLE CONDITION" means, in relation to any item of Rotable
Inventory, that such item is neither in Unserviceable Condition nor
Serviceable Condition and that no Work in Progress is attributable to such
item;
"ORDER" means the Value Added Tax (Special Provisions) Order 1995;
"PAYMENT ACCOUNT DETAILS" means, in relation to any payment to be made
under or pursuant to this Agreement, the name, account number, sort code,
account location and other details specified by the payee and necessary to
effect payment (whether by cheque, banker's draft, telegraphic or other
electronic means of transfer) to the payee;
"PROPERTY" means the property brief details of which are set out in Part 2
of Schedule 1;
"QUARANTINE GEAR" means the B747-400 shipset (excluding nose gear) relating
to aircraft No. G-BNLF and currently consigned to the Guarantor under the
Quarantine Gear Agreement;
"QUARANTINE GEAR AGREEMENT" means the testing, repair and overhaul
agreement dated December 1997 between the Vendor and the Guarantor;
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"RELATED AGREEMENTS" means the agreements listed in Schedule 6, each in the
agreed terms, which are to be entered into at Completion;
"RELEVANT EMPLOYEES" means those employees of the Vendor who are
immediately prior to Completion employed in the Business (other than any
specifically excluded by agreement with the Purchaser, the names of whom
are set out in the document in the agreed terms);
"RETAINED BUSINESS" means all businesses carried on by the Vendor other
than the Business;
"ROTABLE INVENTORY" means, in respect of Landing Gears, Flap Tracks and
Flap Carriages, items (including sub-assemblies) which can economically be
restored to a Serviceable Condition and, in the normal course of
operations, can be repeatedly rehabilitated to a Serviceable Condition,
which are retained for use exclusively in the Business as at the Valuation
Date, a list of which (with anticipated quantities) is set out in the
document in the agreed terms;
"ROTABLE INVENTORY ASSEMBLY" means any assembly identified as such in the
document in the agreed terms and defined by reference to the Vendor's Build
Standard (which shall include, for the avoidance of doubt, any LRUs (as
defined in the Services Agreement) which is/are normally attached to a
Landing Gear, Flap Carriage or Flap Track (as the case may be) at the point
at which such Inventory would be considered by the Vendor to be in
Serviceable Condition);
"ROTABLE INVENTORY SUB-ASSEMBLY" means any item of Rotable Inventory
contained on the list of Rotable Inventory Assemblies and Sub-assemblies in
the agreed terms which is neither Rotable Inventory Assembly nor any
sub-assembly specifically assigned to an Assembly by reference to the
Vendor's stock records of the same as at the Valuation Date;
"ROTABLE INVENTORY VALUE" means the aggregate value of the Rotable
Inventory as at the Valuation Date, namely the sum of L7,247,307
representing the agreed anticipated value of such Inventory as adjusted in
accordance with Part 2 of Schedule 2;
"SENIOR EMPLOYEE" means any employee or consultant employed or engaged by
the Vendor in relation to the Business on an annual cash salary in excess
of L40,000;
"SERVICEABLE CONDITION" in relation to an item of Rotable Inventory means
such item is ready for fitment to an aircraft;
"SERVICES AGREEMENT" means the Landing Gear Overhaul Services Agreement to
be entered into between the Vendor, the Purchaser and the Guarantor in the
agreed terms being the document referred to in paragraph 1 of Schedule 6;
"TAXATION" or "TAX" means all forms of taxation whether direct or indirect
and whether levied by reference to income, profits, gains, net wealth,
asset values, turnover, added value or other reference and statutory,
governmental, state, provincial, local governmental or municipal
impositions, duties, contributions, rates and levies (including without
limitation social security contributions and any other payroll taxes),
whenever and wherever imposed (whether imposed by way of a withholding or
deduction for or on account of tax or otherwise) and in respect of any
person and all penalties, charges, costs and interest relating thereto;
"THIRD PARTY CONSENTS" means all consents, licences, approvals,
authorisations or waivers required from third parties for the operation of
the Business or any part of it and in particular for the transfer,
assignment or novation in favour of the Purchaser of any of the Assets in
terms reasonably acceptable to the Purchaser and "THIRD PARTY CONSENT"
means any one of them;
"TOOLS" means those loose tools and tooling which are owned by the Vendor
and used exclusively in connection with the Business as at Completion, a
list of which is set out in the document in the agreed terms;
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5
"TRANSFER REGULATIONS" means the Transfer of Undertakings (Protection of
Employment) Regulations 1981;
"UNDERLEASE" means the underlease to be granted pursuant to Clause 6.7 in
the form of the document in the agreed terms or with such amendments as the
Vendor and Purchaser may agree;
"UNSERVICEABLE CONDITION" in relation to an item of Rotable Inventory means
that such Item requires repair/overhaul before it is ready for fitment to
an aircraft and that Work In Progress is attributable to such item;
"VALUATION DATE" means 23.59 hrs on the date on which Completion takes
place pursuant to Clause 6 or such other date as may be agreed between the
Purchaser and the Vendor;
"VAT" means United Kingdom Value Added Tax and "VATA 1994" means the Value
Added Tax Xxx 0000;
"VENDOR'S BUILD STANDARD" means the build standard contained in the BA
Specification (as defined In the Services Agreement);
"VENDOR'S PENSION SCHEMES" means the pension schemes of the Vendor in force
at the date of this Agreement known as the Airways Pension Scheme and the
New Airways Pension Scheme (which includes the New Airways Pension Scheme
2);
"VENDOR'S SOLICITORS" means Linklaters & Paines of Xxx Xxxx Xxxxxx, Xxxxxx
XX0X 0XX;
"WARRANTIES" means the warranties and representations contained In Schedule
3 and "WARRANTY" means any one of them;
"WORK IN PROGRESS" means, in relation to any Item of Rotable Inventory, the
work in progress attributable to such item calculated by reference to the
following formula and providing that
LTD+MTD shall not be greater than 1:
---------
LSTD+MSTD
LTD + MTD
L (------------------) x Z
LSTD + MSTD
where:
LSTD means the standard value of labour (calculated at the standard labour
rate of the Business as at the time of Completion) in pounds sterling
required to return any item of Rotable Inventory In Non-Serviceable
Condition to Serviceable Condition as identified in the WIP Report as at
the Valuation Date;
LTD means the value of labour (calculated at the standard labour rate of
the Business as at the time of Completion) in pounds sterling attributable
to any item of Rotable Inventory as shown in the WIP Report as at the
Valuation Date provided that such amount is not greater than LSTD;
MSTD means the standard value of expendable materials in pounds sterling
required to return any item of Rotable Inventory in Non-Serviceable
Condition to Serviceable Condition as identified in the WIP Report as at
the Valuation Date excluding for the avoidance of doubt any Rotable
Inventory Sub-assembly that is scrapped or missing by reference to the
Vendor's Build Standard;
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6
MTD means the value of materials in pounds sterling attributable to any
item of Rotable Inventory as shown in the WIP Report as at the Valuation
Date provided that such amount is not greater than MSTD; and
Z means the value of such item in Serviceable Condition minus the value of
such item in Non-Serviceable Condition both as shown in the list of Rotable
Inventory Assembly prices in the document in the agreed terms;
"WIP Report" means the report(s) generated by the Vendor from its stock
control systems, which shows at any time the value of materials and labour
attributable to any item of Rotable Inventory.
1.2 SUBORDINATE LEGISLATION
Any reference to a statutory provision shall include any subordinate
legislation made from time to time under that provision except to the
extent that any subordinate legislation made after the date hereof would
increase the liability of the party in question;
1.3 MODIFICATION ETC. OF STATUTES
Any reference to a statutory provision shall include such provision as from
lime to time modified or re-enacted or consolidated whether before or after
the date of this Agreement so far as such modification, re-enactment or
consolidation applies or is capable of applying to any transactions entered
into under this Agreement on or prior to Completion except to the extent
that any modification, re-enactment or consolidation made after the date
hereof would increase the liability of the party in question;
1.4 COMPANIES XXX 0000
The words "subsidiary" and "holding company" shall have the same meanings
in this Agreement as their respective definitions in the Companies Xxx 0000
and references in this Agreement to a "Group" in relation to the Vendor or
the Purchaser shall mean the Vendor or the Purchaser, as the case may be,
and any undertaking which, at the relevant time, is a group undertaking of
the Vendor or the Purchaser, as the case may be, within the meaning of
Section 259 of that Act;
1.5 INTERPRETATION XXX 0000
The Interpretation Act 1978 shall apply to this Agreement in the same way
as it applies to an enactment;
1.6 REFERENCES
References to this Agreement shall include any Schedules to it and
references to Clauses and Schedules are to Clauses of and Schedules to this
Agreement; and
1.7 INFORMATION
Any reference to books, records or other information means books, records
or other information in any form including paper, electronically stored
data, magnetic media, film and microfilm.
2 AGREEMENT TO SELL THE BUSINESS
2.1 SALE AND PURCHASE OF BUSINESS
2.1.1 With effect from Completion, the Vendor shall sell with full title
guarantee and the Purchaser shall purchase with the benefit of the
several representations, warranties and undertakings contained in
this Agreement free from all Encumbrances as at Completion the
Assets specified in Clause 2.1.2.
2.1.2 Subject to Clause 2.1.3, there shall be included in the sale under
this Agreement the following:
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7
(i) the Fixed Assets;
(ii) the Rotable Inventory;
(iii) the Expendable Inventory;
(iv) the Goodwill:
(v) the Tools;
(vi) subject to Clause 2.3, the Business Intellectual Property
and the Business Know-How;
(vii) the benefit, subject to the burden, of the Assumed
Contracts, and
(viii) any Additional Assets.
2.1.3 There shall be excluded from the sale under this Agreement the
following:
(i) the Cash Balances and Debtors;
(ii) the benefit and burden of the Excluded Contracts;
(iii) the benefit of any Claims which relate otherwise than to the
Assets or to the Assumed Liabilities and/or to matters which
occur before Completion;
(iv) all interests in real property;
(v) Intellectual Property and Know-How except the Business
Intellectual Property and the Business Know-How;
(vi) data communications, telecommunications and other IT
equipment except as included in Clause 2.1.2; and
(vii) any other assets excluded by the terms of this Agreement.
2.2 INDEMNITIES
2.2.1 Except to the extent that they accrue as a result of any breach by
the Vendor of any obligation prior to Completion and except as may
otherwise be limited or agreed by the parties under the terms of
this or any Related Agreement, the Purchaser shall indemnify and
agrees to keep indemnified the Vendor against:
(i) any Liability assumed or undertaken by the Purchaser under
this Agreement or incurred by the Purchaser in the course of
carrying on the Business after Completion; and
(ii) any Losses which the Vendor may suffer by reason of the
Vendor taking any reasonable action to avoid, resist or
defend against any Liability referred to in Clause 2.2.1
(i),
2.2.2 The Vendor shall indemnify and agrees to keep indemnified the
Purchaser against.
(i) any Liability of the Vendor which is not assumed or
undertaken by the Purchaser under this Agreement, and
(ii) any Losses which the Purchaser may suffer by reason of the
Purchaser taking any reasonable action to avoid, register or
defend against any Liability referred to in Clause 2.2.2(i).
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8
2.3 BUSINESS INTELLECTUAL PROPERTY AND BUSINESS KNOW-HOW
2.3.1 The Purchaser hereby grants to the Vendor a perpetual,
non-exclusive, royalty free licence effective as at Completion to
use the Business intellectual Property and/or the Business
Know-How. The Purchaser further undertakes that it will promptly
give notice of any improvements, modifications or adaptations to
such Intellectual Property and/or Know-How as are developed by or
on behalf of the Purchaser and to grant a perpetual, non-exclusive
licence to the Vendor of any such improvements, modifications and
adaptions on standard commercial terms.
2.3.2 The Lockheed Manuals shall remain the property of the Vendor and
remain in the Vendor's possession unless and until the Purchaser
has an existing Proprietary Data Agreement with Lockheed Xxxxxx
which enables the Purchaser to use and receive amendments for the
Lockheed Manuals, at which time the Vendor shalt deliver or make
available such manuals to the Purchaser.
3 CONSIDERATION
3.1 AMOUNT AND PAYMENT
The consideration for the purchase of the Business shall (subject to
adjustment as provided in Part 2 of Schedule 2) be the amount of
L11,274,095 (calculated as being the aggregate of the agreed value of the
Expendable Inventory, the Goodwill, the Business Intellectual Property, the
Business Know-How and the Tools and the anticipated values of the remaining
Assets as at Completion, subject to adjustment in accordance with Part 2 of
Schedule 2) (the "PURCHASE PRICE") which will (subject to the provisions
contained in Part 2 of Schedule 2) be payable on Completion.
3.2 ALLOCATION OF CONSIDERATION
The Purchase Price shall initially be allocated as set out in Part 1 of
Schedule 2, subject to adjustment, except in relation to Expendable
Inventory, Goodwill, Business Intellectual Property, Business Know-How and
Tools, in accordance with Part 2 of Schedule 2.
3.3 SET-OFF
The amounts (if any) payable by the Purchaser to the Vendor or by the
Vendor to the Purchaser pursuant to Clauses 8.3, 8.4 and/or Part 2 of
Schedule 2 shall be set off against each other so that only any net balance
payable shall be paid on or before the Final Payment Date.
3.4 METHOD OF PAYMENT
Wherever in this Agreement provision is made for the payment by one party
to another, such payment shall be effected by crediting the account
specified in the Payment Account Details of the party entitled to payment
by way of CHAPS on or before the due date for payment unless the payee by
notice to the payer, not later than three Business Days prior to the due
date for payment, elects to be paid by banker's draft drawn on any
international bank reasonably acceptable to the payer and having an office
in London. Payment of such sum shall be a good discharge to the payer of
its obligation to make such payment.
3.5 VAT
3.5.1 GENERAL
The parties intend that the Business shall be sold under this
Agreement as a going concern for VAT purposes and accordingly:
(i) the Vendor and the Purchaser shall (when required to do so)
give notice of such sale to H.M. Customs & Excise pursuant
to paragraph 11 of Schedule 1 VATA 1994
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9
or paragraph 6 of the Value Added Tax Regulations 1995 or
as otherwise required by law:
(ii) the Vendor shall apply to H.M. Customs & Excise and obtain
a direction that all records referred to in Section 49
VATA 1994 may be retained and the Vendor undertakes to
preserve those records in such a manner and at such
periods as may be required by law and to give to the
Purchaser as from Completion reasonable access during
normal business hours to such records; and
(iii) the Purchaser declares that it is a taxable person for
VAT purposes and holds a certificate registration number
GB 707180353.
3.5.2 GOING CONCERN
(i) The Vendor and the Purchaser shall use all reasonable
endeavors to secure that the sale of the Business is
treated under the Order as neither a supply of goods nor a
supply of services.
(ii) If and to the extent H.M. Customs & Excise has before
Completion expressly indicated that the sale of the
Business cannot be treated in the manner contemplated by
Clause 3.5.2(i) the Purchaser shall (against production of
tax invoices in respect thereof) in addition to any
amounts expressed in this Agreement to be payable by the
Purchaser pay on Completion the amount of any VAT which as
a result of that indication may be chargeable on the sale
of the Business under this Agreement. If no such
indication shall have been given before Completion, then
no amount in respect of VAT shall be paid by the Purchaser
on Completion but, to the extent that VAT shall
subsequently be determined by H.M. Customs & Excise to be
payable on the sale, the Purchaser shall in addition to
any amount expressed in the Agreement to be payable by the
Purchaser pay to the Vendor such VAT and any penalty or
interest incurred by the Vendor for late payment thereof,
such payment by the Purchaser to be made forthwith against
evidence that the due date for payment of such tax has
fallen due or will fall due within seven Business Days or
if later against delivery by the Vendor to the Purchaser
of the appropriate tax invoice.
(iii) Nothing in this Clause 3.5 shall require the Vendor to
make any appeal to any tribunal or court against or
otherwise challenge any determination of H.M. Customs &
Excise that the sale does not fall to be treated as the
transfer of a going concern.
3.5.3 CONTINUITY OF BUSINESS
After Completion the Purchaser shall as required by the Order use the
Assets in carrying on the Business, whether or not as part of any
existing business of the Purchaser, and authorises the Vendor to make
such obligation known to H.M. Customs & Excise in any application seeking
confirmation that Article 5 of the Order shall apply to the sale of the
Business.
4 CONDITIONS
4.1 CONDITIONS PRECEDENT
Completion of this Agreement is conditional upon receipt by the Purchaser
of all necessary approvals from the Civil Aviation Authority, the Federal
Aviation Authority and the Joint Airworthiness Authority to the operation
by the Purchaser of the Business as a separate business from the business
of the Vendor.
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10
4.2 RESPONSIBILITY FOR SATISFACTION
The Vendor will provide all reasonable assistance to ensure the
satisfaction of the conditions set out in Clause 4.1. Without prejudice
to the foregoing, it is agreed that all requests and enquiries from any
government, governmental, supranational or trade agency, court or other
regulatory body shall be dealt with by the Vendor and the Purchaser in
consultation, to the extent practicable, with each other and the Vendor
and the Purchaser shall promptly co-operate with and provide all
necessary information and assistance reasonably required by such
government, agency, court or body upon being requested to do so by the
other.
4.3 NON-SATISFACTION
The Purchaser shall promptly give notice to the Vendor of the
satisfaction of the conditions set out in Clause 4.1 within two Business
Days of becoming aware of the same through receipt of notification in
writing from a duly authorised person in the Civil Aviation Authority of
approval identified as JAR145 and from a duly authorised person in the
Federal Aviation Authority of approval identified as FAR145. If the
conditions in Clause 4.1 are not satisfied by the Purchaser on or before
26 January 1998 (or such later date as the Vendor and the Purchaser may
in writing agree) then, save as expressly provided herein, this Agreement
shall lapse and no party shall have any claim against any other under it,
save for any claim arising from breach of the undertaking contained in
Clause 4.2.
5 ACTION PENDING COMPLETION
5.1 VENDOR'S GENERAL OBLIGATIONS
The Vendor undertakes to procure that during the period from the date of
this Agreement to Completion:
5.1.1 the Business will be carried on in the ordinary course, save in
so far as agreed in writing by the Purchaser, and, without
limitation, the carrying out or the procuring of the carrying out
of the routine maintenance and repair of Landing Gears, Flap
Tracks and Flap Carriages will be carried on in the same manner
as before the date of this Agreement;
5.1.2 the Vendor will, upon reasonable notice, provide to the Purchaser
and its agents such information and copies of such documents
relating exclusively to the Business as the Purchaser may
reasonably request, provided that the obligations of the Vendor
under this Clause shall not require the Vendor to allow the
Purchaser or its agents access to Information which is reasonably
regarded as confidential to the activities of the Vendor and is
not used exclusively in connection with the Business or to
activities which do not relate exclusively to the Business;
5.1.3 such representatives and advisers as the Purchaser reasonably
requests may be designated by the Purchaser to work with the
Vendor with regard to the management and operations of the
Business. Subject to such representatives and advisers being
available at the appropriate times, the Vendor will consult with
such representatives and advisers with respect to any action
which may materially affect the Business after Completion. The
Vendor will furnish to such representatives and advisers such
information as they may reasonably request for this purpose (but
subject to the same provisos as are set out in Clause 5.1.2); and
5.1.4 the Vendor will not negotiate with any third party for the sale
of the Business.
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5.2 RESTRICTIONS ON THE VENDOR
Without prejudice to the generality of Clause 5.1, the Vendor shall not,
between the date of this Agreement and Completion, without the prior
written consent of the Purchaser (such consent not to be unreasonably
withheld or delayed) and, in each case, exclusively in relation to the
Business:
5.2.1 incur or enter into or amend any agreement or commitment
involving any capital expenditure in excess of L2,500 per item;
5.2.2 make any material amendment to the terms and conditions of
employment of any Relevant Employee (other than minor increases
in the ordinary course of business (which shall, for these
purposes, include any increases arising out of the negotiations
between the Vendor and its recognised Trade Unions which will
take effect from 1 January 1998) which the Vendor shall notify to
the Purchaser as soon as reasonably possible):
5.2.3 settle or compromise any Liability arising prior to Completion on
a basis which results in an obligation on the part of the
Purchaser to make any payment or take any other action after
Completion.
5.3 PURCHASER'S OBLIGATIONS
5.3.1 The Purchaser undertakes that it will use its best endeavors to
obtain authorisation under the Inward Processing Relief ("IPR")
European Community Regulations EEC 2913/192 and EEC 2454/93 prior
to Completion so as to enable the Vendor to transfer any
Inventory subject to such Regulations to the Purchaser without
incurring any duty. The Purchaser further undertakes that, if it
does not obtain such authorisation prior to Completion, it will
pay in addition to the Rotable Inventory Value and/or the
Expendable Inventory Value, as the case may be, an amount equal
to the amount of any duty which, as a result of the Purchaser's
failure to obtain such authorisation, may be chargeable on the
sale of the Business under this Agreement.
5.3.2 The Purchaser undertakes that it will use its best endeavors to
obtain consent from the relevant authorities for the transfers
from the Vendor to the Purchaser of the Part A authorisation
Number A00130 relating to the cadmium electroplating process in
the plating shop and the consent to discharge trade effluent
issued by Thames Water Utilities Limited respectively in each
case with effect from Completion provided always that, for the
avoidance of doubt, the transfer of such consents is not a
condition precedent to Completion. The Vendor undertakes to give
all reasonable assistance to the Purchaser to effect such
transfers.
5.3.3 The Purchaser undertakes that it will use its best endeavors to
obtain the approval identified as JAR21 (or equivalent) from the
Civil Aviation Authority together with any other approvals from
the Civil Aviation Authority, the Federal Aviation Authority and
the Joint Airworthiness Authority which are necessary to the
operation by the Purchaser of the Business as a separate business
from the business of the Vendor as soon as practicable following
Completion and which it has not already obtained pursuant to
Clause 4. The Vendor undertakes to give all reasonable assistance
to the Purchaser to enable the Purchaser to obtain any such
approval.
5.4 CONFIDENTIALITY
Subject to any provisions expressly to the contrary in this Agreement,
each party undertakes to, and to procure that its employees, agents and
contractors, treat as confidential:
5.4.1 any specific provisions of this Agreement and the Related
Agreements or the financial commercial terms reflected therein
and all information obtained from either of the other parties
which by its nature should be treated as confidential or the
disclosing party
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12
clearly indicates as such which has or may come into its possession or
into the possession of any of its employees, agents or contractors, as a
result of or in connection with this Agreement; and
5.4.2 any and all information which has been or which may be derived or
obtained from any such information described in Clause 5.4.1
(together the "CONFIDENTIAL INFORMATION").
The provisions of this Clause 5.4 do not apply to any Confidential
Information which the receiving party proves:
5.4.3 was in or enters into the public domain other than by breach of
this Clause 5.4;
5.4.4 has been obtained from a third party who is lawfully authorised
to disclose such information to the receiving party;
5.4.5 is required to be disclosed by law, by any rule, regulation or
request of a competent regulatory authority or any stock or
securities exchange on which the securities of the receiving
party are listed, quoted or dealt in or by order of a court of
competent jurisdiction or pursuant to a formal or informal
request of a tax authority;
5.4.6 was already in the possession of the receiving party; and
5.4.7 was developed independently by the receiving party,
provided always that:
5.4.8 the onus shall be on the disclosing party to prove through the
use of documentary evidence that the information was in or has
entered the public domain otherwise than through unauthorised
disclosure by the disclosing party or is required to be
disclosed; and
5.4.9 if either party is required to make a disclosure in accordance
with this Clause 5.4, that party will, if it is not so
prohibited, provide the other with prompt notice of any such
requirement or request to disclose any such confidential
information so that it may seek an appropriate order. The
disclosing party will provide the other with all reasonable
assistance in any action taken by that party to obtain an
appropriate order including an order providing that the
information does not have to be disclosed, an appropriate
protection order or other reliable assurance that confidential
treatment will be accorded the information that the disclosing
party is required to disclose.
6 COMPLETION
6.1 DATE AND PLACE OF COMPLETION
Subject to Clause 4, Completion shall take place at the offices of the
Vendor's Solicitors on 10 February 1998 or, if earlier, the date referred
to in the date of notification by the Purchaser to the Vendor pursuant to
Clause 4.3 of the satisfaction of the conditions set out in Clause 4.1
being no earlier than the third Business Day following the date of such
notification or at such other place, time or date being before 10
February 1998 as may be agreed between the Purchaser and the Vendor.
6.2 VENDOR'S OBLIGATIONS
6.2.1 On the date hereof the Vendor shall deliver or make available to
the Purchaser a certified copy of a resolution of the Board of
the Vendor authorising the signatory of this
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13
Agreement to enter into this Agreement and the Related Agreements
on behalf of the Vendor;
6.2.2 On Completion the Vendor shall deliver or make available to the
Purchaser:
(i) such transfers and assignments in the agreed terms
together (where appropriate) with the relative documents
of title and such Third Party Consents as the Vendor may
have obtained to vest in the Purchaser with effect from
Completion the full benefit of the Assets (other than
those Assets referred to in paragraph 3.3 of Part 2 of
Schedule 2) and permit the Purchaser to enter into and
take possession of the Business with effect from
Completion;
(ii) duly executed copies of those Related Agreements to which
it or any member of the Vendor's Group is a party; and
6.2.3 deliver or make available to the Purchaser those Assets which are
capable of transfer by delivery (other than those Assets referred
to in Clause 2.3.2 and paragraph 3.3 of Part 2 of Schedule 2);
6.2.4 permit the Purchaser to enter into and take possession of the
Business; and
6.2.5 in each case where the said information is not at the Property,
deliver or make available to the Purchaser (save to the extent the
Vendor is constrained from so doing by reason of any
confidentiality obligations) all books, records and other
information relating exclusively to the Business or to customers,
suppliers, agents and distributors of the Business (including the
Relevant Employees), copies of all consents, permits or licences
from any regulatory authority held by the Vendor in connection
with the Business (except where previously supplied to the
Purchaser or its advisers), and such other information relating
to the Business as the Purchaser may reasonably require.
6.3 PURCHASER'S OBLIGATIONS
Against compliance with the foregoing provisions and the provisions of
Clause 6.5 the Purchaser shall:
6.3.1 on the date hereof deliver to the Vendor a certified copy of a
resolution of the Board of the Purchaser approving the entry into
this Agreement and the Related Agreements by the Purchaser and
authorising the signatory of this Agreement to sign this
Agreement and the Related Agreements on behalf of the Purchaser;
6.3.2 on Completion deliver to the Vendor duly executed copies of those
Related Agreements to which it or any member of the Purchaser's
Group is a party; and
6.3.3 on Completion satisfy the amount payable under Clause 3.1 in the
manner specified in Clause 3.1
6.4 RIGHT TO TERMINATE
If the foregoing provisions of this Clause are not complied with in all
material respects by the Vendor or the Purchaser by or on the date set
for Completion, the Purchaser, in the case of material non-compliance by
the Vendor, or the Vendor, in the case of material non-compliance by the
Purchaser, shall be entitled (in addition to and without prejudice to all
other rights or remedies available to it including the right to claim
damages) by written notice to the Vendor or, as the case may be, the
Purchaser served on such date:
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14
6.4.1 to elect to terminate this Agreement; or
6.4.1 to effect Completion so far as practicable having regard to the
defaults which have occurred and with such adjustments which the
parties agree are appropriate to reflect such defaults; or
6.4.3 to fix a new date for Completion (not being more than 20 Business
Days after the agreed date for Completion) in which case the
foregoing provisions of this Clause 6.4 shall apply to Completion
as so deferred but provided such deferral may only occur once.
6.5 OEM WARRANTIES
To the extent that the benefit of any express or implied warranties given
by a manufacturer or previous seller of any Item of Rotable Inventory in
favour of the Vendor and relating to merchantable quality or fitness for
purpose or like conditions of sale in respect of such Inventory can
reasonably be assigned to the Purchaser then the Vendor hereby assigns
such benefit to the Purchaser.
6.6 TITLE AND RISK
Title and risk of loss or damage to the Assets transferred on (and, in
relation to loss or damage, occurring after) Completion shall pass to the
Purchaser on Completion and, pending Completion, the Vendor shall
maintain its existing insurance cover in relation to the same.
6.7 ARRANGEMENTS IN RELATION TO THE PROPERTY
Upon Completion the Vendor shall grant to the Purchaser and the Purchaser
shall accept an Underlease in the agreed form for the Prop to take
effect on and from Completion.
7 WARRANTIES
7.1 INCORPORATION OF SCHEDULE 3
7.1.1 The Vendor hereby warrants and represents to and undertakes with
the Purchaser in the terms set out in Schedule 3 subject only to:
(i) any matter which 1s fully and fairly disclosed in or
pursuant to the Disclosure Letter and any matter provided
for under the terms of this Agreement;
(ii) the provisions of Schedule 4 (Limitations on Liability).
7.1.2 The Vendor acknowledges that the Purchaser has entered into this
Agreement in reliance upon, amongst other things, the Warranties.
7.1.3 Where any Warranty refers to the knowledge, information or belief
of the Vendor and such knowledge, information or belief is
qualified by the phrase "so far as the Vendor is aware" the
Vendor acknowledges that it has made due and careful enquiry into
the subject matter of the Warranty.
7.2 EFFECT OF EVENTS OCCURRING PRIOR TO COMPLETION
The Vendor undertakes to and with the Purchaser that if after the signing
of this Agreement and before Completion any event shall occur or matter
shall arise of which the Vendor becomes aware and which if it had
occurred or arisen before the date hereof would have rendered any of the
Warranties untrue, misleading or incorrect in any material respect, the
Vendor shall immediately notify the Purchaser in writing thereof prior to
Completion and the Vendor (at its own cost) shall make any investigation
concerning the event or matter which the Purchaser may reasonably
require. No right to damages or compensation shall arise in favour of the
Purchaser or its successors in title under this Clause 7.2 in consequence
only of an event occurring or matter
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arising after the signing of this Agreement and before Completion which
if it had occurred or arisen before the date hereof would have rendered
any of the Warranties untrue, misleading or incorrect in any material
respect, whether or not this Agreement is terminated in consequence
thereof, if the event or matter in question has been duly notified in
accordance with this Clause 7.2.
7.3 EFFECT OF COMPLETION
The Warranties, and all other provisions of this Agreement in so far as
the same shall not have been performed at Completion, shall not be
extinguished or affected by Completion, or by any other event or matter
whatsoever (including, without limitation, any satisfaction of the
conditions contained in Clause 4.1), except by a specific and duly
authorised written waiver or release by the Purchaser.
7.4 RIGHT OF TERMINATION
If prior to Completion it shall be found that any of the Warranties was,
when given, will or would be, at Completion (if they were to have been
given again at Completion) not complied with in any material respect or
otherwise untrue or misleading in any material effect, and if (but only
if) the effect thereof is or would, in the reasonable opinion of the
Purchaser, be material in the context of the purchase by the Purchaser of
the Business as a whole, the Purchaser shall be entitled (in addition to
and without prejudice to all other rights or remedies available to it
including the right to claim damages) by notice in writing to the Vendor
to terminate this Agreement but failure to exercise this right shall not
constitute a waiver of any other rights of the Purchaser arising out of
any breach of Warranty.
7.5 REMEDIES
7.5.1 This Agreement contains the whole agreement between the parties
relating to the subject matter of this Agreement at the date
hereof to the exclusion of any terms implied by law which may be
excluded by contract. The parties each acknowledge that they have
not been induced to enter this Agreement by and, so far as is
permitted by law and except in the case of fraud, each party
hereby waives any remedy in respect of, any warranties,
representations and undertakings not incorporated into this
Agreement.
7.5.2 So far as is permitted by law and except as otherwise expressly
provided in this Agreement or in the case of fraud, the parties
agree and acknowledge that the only right and remedy which shall
be available to the Purchaser in connection with or arising out
of or related to any of the statements contained in the
Warranties shall be damages in contract for breach of this
Agreement and not rescission of this Agreement, or damages in tort
or under statute (whether under the Xxxxxxxxxxxxxxxxx Xxx 0000 or
otherwise), or any other remedy.
7.5.3 Each party to this Agreement confirms it has received independent
legal advice relating to all the matters provided for in this
Agreement, including the provisions of this Clause, and agrees,
having considered the terms of this Clause and the Agreement as a
whole, that the provisions of this Clause are fair and
reasonable.
7.5.4 In Clause 7.5.1 to 7.5.3, "this Agreement" includes the
Disclosure Letter and all documents entered into pursuant to this
Agreement or to be entered into at Completion as provided by
this Agreement.
8 THE ASSUMED CONTRACTS
8.1 PURCHASER TO COMPLETE ASSUMED CONTRACTS
The Purchaser shall procure that with effect from Completion each of the
Assumed Contracts is carried out and, where appropriate, completed (so
far as the Purchaser is lawfully able and
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16
obligated to do so) and that the Vendor's obligations under the Assumed
Contracts are performed (to the extent that the same have not been
previously carried out or completed) in the ordinary course (where
applicable) in a proper manner and in accordance with their respective
terms and shall indemnify the Vendor against all Losses incurred by the
Vendor in respect of the Assumed Contracts solely by reason of or in
connection with the non-performance or the negligent or defective
performance after Completion by the Purchaser to the extent aforesaid of
the Assumed Contracts.
8.2 THE VENDOR'S OBLIGATIONS IN RESPECT OF ASSUMED CONTRACTS
The Vendor shall procure that up to Completion the Assumed Contracts are
carried out and, where appropriate, completed and that the Vendor's
obligations under the Assumed Contracts are performed in the ordinary
course (where applicable) in a proper and workmanlike manner and in
accordance with their respective terms and shall indemnify the Purchaser
against all Losses incurred by the Purchaser in respect of the Assumed
Contracts by reason of the non-performance or the negligent or defective
performance prior to Completion to the extent aforesaid of the Assumed
Contracts.
8.3 PAYMENTS RECEIVED BY THE VENDOR
8.3.1 To the extent that any payment (other than any payment comprised
in the Debtors, which shall be retained by the Vendor for its own
account) is made to the Vendor in respect of any Assumed Contract
after Completion the Vendor shall receive the same as trustee,
shall place the same in a separate bank account, shall record
such payment separately in its books and shall account to the
Purchaser for the same within 20 Business Days of receipt unless
and to the extent such payment relates to work completed before
Completion.
8.3.2 In determining the liability under Clause 8.3.1 of the Vendor to
account to the Purchaser for amounts received by the Vendor
regard shall be had to any liability of the Vendor to account to
H.M. Customs & Excise for any VAT in respect of the supplies of
goods and/or services (made under any Assumed Contract) to which
such amounts relate, and the liability of the Vendor under Clause
8.3.1 shall be reduced accordingly.
8.4 PREPAYMENTS MADE BY THE VENDOR
8.4.1 Subject to Clause 8.4.2, if and to the extent that the Vendor has
prior to Completion made any payment to suppliers in respect of
any Assumed Contract in respect of goods or services to be
provided or supplied after Completion the Purchaser shall
reimburse to the Vendor the amount thereof within 20 Business
Days of Completion.
8.4.2 In determining the liability under Clause 8.4.1 of the Purchaser
to reimburse the Vendor for amounts paid by the Vendor, regard
shall be had to the extent to which the Vendor has been or is
able to obtain credit or repayment of input tax for VAT purposes
in respect of supplies of goods and/or services to which such
amounts relate, and the liability of the Purchaser under Clause
8.4.1 shall be reduced accordingly.
9 THIRD PARTY CONSENTS
9.1 FAILURE TO OBTAIN CONSENTS
Nothing in this Agreement shall be construed as an attempt to assign any
Assumed Contract which by its terms or by law is not assignable without a
Third Party Consent unless such consent shall have been given. The Vendor
and the Purchaser agree to use their respective reasonable endeavors to
obtain the Third Party Consent in each case where it is required and is
requested by the Purchaser. If any required consent is not obtained before
Completion the Vendor will co-operate with the Purchaser in any reasonable
arrangements designed to provide for the Purchaser the benefits under any
such Assumed Contract, provided that if within six months of
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17
Completion the Third Party Consent required in relation to any Assumed
Contract shall not have been obtained then the Purchaser shall be
entitled to notify the Vendor in writing that with effect from such date
the relevant contract, undertaking, arrangement or agreement shall no
longer be deemed to be an Assumed Contract and the Purchaser shall not be
responsible for any Liability in relation thereto arising after such
date.
9.2 NOTICE TO CONVOY, TRANSFER, ASSIGN ETC.
Following Completion, the Purchaser may serve notice on the Vendor at any
time after the relevant Third Party Consents are obtained requiring the
Vendor to execute a conveyance, transfer or assignment to, or a novation
in favour of, the Purchaser of any relevant Asset and the Vendor will
arrange for the execution and delivery of such conveyance, transfer,
assignment or novation (together with the relative documents of title) to
the Purchaser not later than five Business Days after the receipt either
of such notice or of the engrossment of such conveyance, transfer,
assignment or novation by the Vendor's Solicitors whichever is the later.
9.3 NOTICE TO ACCEPT CONVEYANCE, TRANSFER, ASSIGNMENT ETC.
The Vendor may by notice to the Purchaser require the Purchaser to accept
a conveyance, transfer or assignment of any relevant Asset at any time
after the relevant Third Party Consents are obtained but prior to the
date falling six months after Completion.
10 THE RELEVANT EMPLOYEES
10.1 DEFINITIONS
For the purposes of this Clause 10 the terms CONTRACT OF EMPLOYMENT,
COLLECTIVE AGREEMENT, RELEVANT TRANSFER and TRADE UNION shall have the
same meanings respectively as in the Transfer Regulations.
10.2 TRANSFER REGULATIONS
The parties accept that this Agreement and the sale of the Business to be
affected by it are governed by the Transfer Regulations and the following
provisions shall apply in connection therewith:
10.2.1 the contract of employment of each of the Relevant Employees
(save insofar as such contract relates to any occupational
pension scheme) shall be transferred to the Purchaser with
effect from Completion which shall be the date of completion of
the relevant transfer under regulation 5(2)(f) of the Transfer
Regulations;
10.2.2 the Vendor shall perform and discharge all its obligations
(whether arising under statute or common law) in respect of all
the Relevant Employees for its own account up to and including
Completion including, without limitation, discharging all costs
and expenses relating to, payable or accruing in respect of the
Relevant Employees up to and including Completion and shall
indemnify the Purchaser and keep the Purchaser Indemnified
against all Losses arising from the Vendor's failure so to
discharge
For the avoidance of doubt, reference to costs and expenses shall
include:
(i) "LIEU DAYS" accrued by each Relevant Employee up to the
date of Completion. To achieve this, the Vendor will pay
to each Relevant Employee who has accrued such lieu days
an amount equal to that employee's basic pay for the
number of lieu days he has accrued up to Completion;
(ii) the "TOTAL HOLIDAY DEFICIT" in respect of the Relevant
Employees. For this purpose, each Relevant Employee's
holiday deficit is calculated as the number of day's
holiday entitlement for that Relevant Employee for the
year ending 31 March 1998 pro-rated up to Completion; less
(b) the total number of day's holiday actually
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18
taken by that Relevant Employee as at Completion
multiplied by that employee's basic pay per day. "TOTAL
HOLIDAY DEFICIT" is the sum of holiday deficits for all
Relevant Employees;
(iii) the amount of payments made to any Relevant Employees
being sums equal to the profit share such employees would
have received for the Vendor's 1997/98 financial year had
they remained in the Vendor's employment until 31 March
1998 (as described in letter to Relevant Employees in
agreed terms referred to in Clause 10.2.7);
(iv) the amount of any performance related bonus due to any
Relevant Employee who is entitled to such bonus under the
terms of the Vendor's management and senior management
performance pay scheme or any other performance related
bonus scheme operated by the Vendor (pro rated to reflect
the length of the Relevant Employees service with the
Vendor during the Vendor's 1997/98 financial year). For
the avoidance of doubt, the Vendor will complete
performance reviews from which performance ratings will be
determined for each eligible manager prior to Completion.
The amount of each manager's entitlement will be
determined in accordance with the Vendor's Corporate
Mandate which is determined after the announcement of the
Vendor's year end results for the 1997/98 financial year;
10.2.3 the Vendor shall indemnify the Purchaser and keep the Purchaser
indemnified against all Losses which relate to or arise out of
any act or omission by the Vendor or any other event or
occurrence prior to Completion and which the Purchaser may incur
concerning one or more of the Relevant Employees pursuant to the
provisions of the Transfer Regulations or otherwise including,
without limitation, any such matter relating to or arising out
of:
(i) the Vendor's rights, powers, duties and/or liabilities
(including, without limitation, any Taxation) under or in
connection with any such contract of employment or
collective agreement which rights, powers, duties and/or
liabilities (as the case may be) are or will be
transferred to the Purchaser in accordance with the
Transfer Regulations; or
(ii) anything done or omitted before Completion by or in
relation to the Vendor in respect of any such contract of
employment or collective agreement or any Relevant
Employee, which is deemed by the Transfer Regulations to
have been done or omitted by or in relation to the
Purchaser; or
(iii) the Vendor's failure to comply with its obligations to
inform and consult employees pursuant to the Transfer
Regulations except where such failure arises out of the
Purchaser's failure to comply with its obligations under
Clause 10.3.1 of this Agreement;
10.2.4 if any contract of employment or collective agreement not
disclosed in writing to the Purchaser shall have effect as if
originally made between the Purchaser and any employee
("UNDISCLOSED EMPLOYEE") or a trade union as a result of the
provisions of the Transfer Regulations (without prejudice to any
other rights or remedies which may be available to the
Purchaser);
(i) the Purchaser shall upon becoming aware of such operation
of the Transfer Regulations in relation to any such
contract of employment or collective agreement notify the
Vendor in writing thereof. The Vendor may within 14
Business Days of receiving such written notice offer
employment to any Relevant Undisclosed Employee and, if it
makes any such offer, shall notify the Purchaser in
writing of
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19
such offer. Following the expiry of the period of 28
Business Days from the receipt by the Vendor of the
Purchaser's notice (whether an offer of employment is made
by the Vendor or not) the Purchaser may terminate such
contract or collective agreement immediately; and
(ii) the Vendor shall indemnify the Purchaser and keep the
Purchaser indemnified against all Losses relating to or
arising out of any termination made pursuant to paragraph
(i) above and reimburse the Purchaser for all costs and
expenses (including, without limitation, any Taxation)
incurred in employing such employee in respect of his
employment following Completion until the date of such
termination; and
(iii) the Vendor shall indemnify the Purchaser and keep the
Purchaser indemnified in respect of any Undisclosed
Employee on the same terms MUTATIS MUTANDIS as the Vendor
has indemnified the Purchaser in respect of a Relevant
Employee pursuant to the term of Clauses 10.2.2 and
10.2.3;
10.2.5 the Vendor shall indemnify the Purchaser and keep the Purchaser
indemnified against all Losses which relate to or arise out of
the employment of or any dismissal by the Vendor of any employee
(not being a Relevant Employee) and which the Purchaser may incur
pursuant to the provisions of the Transfer Regulations;
10.2.6 the Vendor shall not take any steps to terminate the contracts of
employment of or collective agreements concerning the Relevant
Employees; and
10.2.7 the Vendor shall on Completion deliver to each of the Relevant
Employees a letter from the Vendor and the Purchaser in the
agreed terms.
10.3 PURCHASER'S OBLIGATIONS
10.3.1 In accordance with its obligations under the Transfer
Regulations, the Purchaser will provide the Vendor in writing
with such information and at such time as will enable the Vendor
to carry out its duties under Regulations 10(2)(d) and 10(6) of
the Transfer Regulations concerning measures envisaged by the
Purchaser in relation to the Relevant Employees.
10.3.2 The Purchaser and the Vendor will comply with the terms of the
Staff Plan contained in the document in the agreed terms (the
"STAFF PLAN").
10.3.3 The parties acknowledge that following termination of the
Services Agreement (either in whole or in part) the services
provided under that agreement may be provided by the Vendor or by
third parties appointed by the Vendor and that as a consequence
of the Vendor or a third party assuming responsibility for
providing such services, employees engaged in providing those
services during the term of this Agreement may transfer to the
Vendor or to such new service providers under the Transfer
Regulations. To facilitate any such transfers the Purchaser will:
(i) at all times while it provides services under the Services
Agreement maintain an information pack containing full and
accurate details of all Services Employees (including
numbers of Services Employees, details of pay and
benefits, terms and conditions of employment, job
descriptions, staff duty allocations and collective
agreements);
(ii) at the request of the Vendor, the Purchaser will make the
information pack referred to in Clause 10.3.3(i)
available to the Vendor or any replacement (or prospective
replacement) service provider nominated by the Vendor; and
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(iii) at the request of the Vendor comply with any obligations
which fall on it pursuant to Regulation 10 of the Transfer
Regulations in respect of the Services Employees (or any
of them).
10.4 PURCHASER'S INDEMNITY
The Purchaser shall indemnify the Vendor and keep the Vendor indemnified
against all Losses (which, for the purposes of this Clause 10.4 shall not
include any sums paid or payable by the Purchaser pursuant to Clause 10.3
above) arising out of or in connection with:
10.4.1 any change in the working conditions of the Relevant Employees or
any of them occurring on or after Completion;
10.4.2 the change of employer occurring by virtue of the Transfer
Regulations and/or this Agreement;
10.4.3 the employment by the Purchaser on or after Completion of any of
the Relevant Employees other than on terms (including terms
relating to any occupational pension scheme) which are not
different from those enjoyed immediately prior to Completion
(provided that the Purchaser shall be under no obligation to
indemnify the Vendor solely by reason of any diminution in
pension rights if the Purchaser has complied with its obligations
under Schedule 5) or (subject to Clause 10.2.3(ii) the
termination of the employment of any of them on or after
Completion; or
10.4.4 any claim by any Relevant Employee (whether in contract or in
tort or under statute (including the Treaty of Rome and any
directives made under the authority of that Treaty) for any
remedy including, without limitation, in respect of unfair
dismissal, redundancy, statutory redundancy, equal pay, sex or
race discrimination) as a result of any act or omission by the
Purchaser after Completion; or
10.4.5 the Purchaser's failure to comply with its obligations under
Clause 10.3.
10.5 PURCHASER'S INDEMNITY IN RESPECT OF SERVICES EMPLOYEES
10.5.1 The Parties accept that on the termination of the Services
Agreement (whether in whole or part and howsoever occasioned) the
Services Employees engaged to provide services under the Services
Agreement or, as the case may be, the part(s) of the Services
Agreement which has/have been terminated may transfer to the
Vendor or to the Purchaser's successor(s) by virtue of the
Transfer Regulations and the following provisions shall apply in
connection therewith:
(i) the Purchaser shall perform and discharge all its
obligations (whether arising under statute or common law)
in respect of those Services Employees for its own account
from Completion up to and including the relevant Transfer
Date including, without limitation, discharging all costs
and expenses relating to, payable or accruing in respect
of those Services Employees up to and including the
relevant Transfer Date and agrees with the Vendor (acting
for itself and as trustee for the Purchaser's successor(s))
that, subject as provided in Clause 10.5.2, it shall
indemnify the Vendor and the Purchaser's successor(s) and
keep the Vendor and the Purchaser's successor(s)
indemnified against all Losses (whether incurred directly
by the Vendor or as a result of any indemnity in respect
thereof (under which the Vendor undertakes to the
Purchaser's successor(s) liabilities which correspond to
but do not exceed those undertaken by the Purchaser to the
Vendor in this Clause 10.5.(i)) given by the Vendor to the
Purchaser's successor(s) arising from the Purchaser's
failure so to discharge;
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(ii) the Purchaser agrees with the Vendor (acting for itself
and as trustee for the Purchaser's successor(s)) that,
subject as provided in Clause 10.5.2, it shall indemnify
the Vendor and the Purchaser's successor(s) directly and
keep the Vendor and the Purchaser's successor(s)
indemnified against all Losses (whether incurred directly
by the Vendor or as a result of any indemnity in respect
thereof (under which the Vendor undertakes to the
Purchaser's successor(s) liabilities which correspond to
but do not exceed those undertaken by the Purchaser to
the Vendor in this Clause 10.5.1(ii)) given by the Vendor
to the Purchaser's successor(s)) which relate to or arise
out of any act or omission by the Purchaser or any other
event or occurrence after Completion but prior to the
relevant Transfer Date and which the Vendor or the
Purchaser's successor(s) may incur in relation to any
contract of employment or collective agreement concerning
any of those Services Employees pursuant to the provisions
of the Transfer Regulations or otherwise including,
without limitation, any such matter relating to or
arising out of:
(a) the Purchaser's rights, powers, duties and/or
liabilities (including, without limitation, any
Taxation) under or in connection with any such
contract of employment or collective agreement,
which rights, powers, duties and/or liabilities
(as the case may be) are or will be transferred to
the Vendor or the Purchasers successor(s) in
accordance with the Transfer Regulations;
(b) anything done or omitted after Completion but
before the relevant Transfer Date by or in
relation to the Purchaser in respect of any such
contract of employment or collective agreement for
any relevant Services Employee, which is deemed by
the Transfer Regulations to have been done or
omitted by or in relation to the Vendor or the
Purchaser's successor(s); or
(c) the Purchaser's failure to comply with its
obligations to inform and consult with those
Services Employees or any of them pursuant to the
Transfer Regulations at any time after the
Valuation Date.
10.5.2 If the Purchaser lawfully terminates the Services Agreement (or
part thereof) by reason of the Vendor's default there shall be
excluded from the indemnity of the Purchaser pursuant to Clause
10.5.1(ii) any Losses which arise as a result of the default or
breach on the part of the Vendor which resulted in such
termination.
For the purposes of this Clause 10:
"SERVICES EMPLOYEE" means any employee employed by the Purchaser at any
time after Completion for the purposes of providing services under the
Services Agreement;
"TRANSFER DATE" means any date on which the Purchaser ceases to provide
services (or any part thereof) under the Services Agreement.
10.6 SECONDMENT OF VENDOR'S EMPLOYEES
10.6.1 The Vendor will second to the Purchaser those employees whose
names are set out below (the "SECONDED EMPLOYEES") until the
dates set out beside their names (in each case, the "SECONDMENT
PERIOD").
------------------------------------------
SECONDED EMPLOYEE SECONDMENT PERIOD
------------------------------------------
------------------------------------------
[ ************ ] 31 January 1998
------------------------------------------
[ ************ ] 31 March 1999
------------------------------------------
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------------------------------------------
SECONDED EMPLOYEE SECONDMENT PERIOD
------------------------------------------
------------------------------------------
[ ************ ] 31 January 1998
------------------------------------------
10.6.2 The Vendor will pay the Seconded Employees' salaries and provide
all contractual benefits during the relevant Secondment Periods
and will be responsible for making appropriate tax and national
insurance deductions from the Seconded Employees' remuneration.
10.6.3 The Purchaser will observe the terms and conditions of employment
of each Seconded Employee as if it were the actual employer of
each of them (and will indemnify the Vendor in respect of any
Losses which the Vendor incurs as a consequence of the Purchaser's
failure to observe such terms and conditions. For these purposes,
if the Vendor incurs liability for any such losses by reason of
any unlawful act on the part of the Purchaser (or any of its
employees, directors, agents or officers) such Losses will
include but not be limited to compensation for unfair dismissal,
sex, race and disability discrimination and damages for wrongful
dismissal).
10.6.4 In the event that the Transfer Regulations apply so that the
contracts of employment of the Seconded Employees are transferred
to the Purchaser, the Vendor agrees to indemnify the Purchaser in
relation to any Losses which the Purchaser incurs as a
consequence of any unlawful act or breach of contract of the
Vendor in relation to any Seconded Employee (including any
unlawful act of the Vendor which by virtue of the Transfer
Regulations is deemed to have been done by the Purchaser (or any
of its employees, directors, agents or officers)) whether
relating to the employment of such Seconded Employee or the
termination of such employment, such Losses to include but not be
limited to compensation for unfair dismissal, sex race and
disability discrimination and damages for wrongful dismissal.
10.6.5 The Purchaser will reimburse the Vendor in full for all amounts
payable to or in respect of the Seconded Employees under their
terms and conditions of employment (including the Seconded
Employees' salary, all tax and national insurance contributions,
employer's pension contributions and health insurance premiums)
during the relevant Secondment Periods.
10.6.6 The Vendor will send to the Purchaser an invoice for the fees due
under Clause 10.6.5 each month, showing VAT payable separately.
The Purchaser will pay the amount due within seven days of
receiving the Vendor's invoice.
10.6.7 In addition to the fees payable under Clause 10.6.6 the Purchaser
is responsible for all reasonable and proper expenses and
disbursements incurred by the Seconded Employees in connection
with their secondment to the Purchaser and will reimburse the
Seconded Employees and/or the Vendor (as appropriate) directly
for these.
11 PENSIONS
The provisions of Schedule 5 shall have effect.
12 POST-COMPLETION OBLIGATIONS
12.1 VENDOR'S CONTINUING OBLIGATIONS
Notwithstanding Completion, the Vendor shall at its own expense:
12.1.1 procure that, if any property, rights or assets acquired by the
Purchaser under this Agreement are not transferred by the Vendor
with effect from Completion, the Vendor
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transfers (without cost to the Purchaser) such property, rights
or assets to the Purchaser immediately after it is discovered
that such property, rights or assets should have been transferred
to the Purchaser at Completion;
12.1.2 continue to give to the Purchaser such information, co-operation
and assistance as the Purchaser may reasonably require relating
to the Business, its employees, customers and suppliers, its
current contracts and engagements, pass on any trade enquiry
which the Vendor receives and provide the Purchaser with access
to such data and records (excluding proprietary, confidential and
unrelated BA business records) of the Vendor as the Purchaser may
reasonably request in connection with the obtaining or renewal of
any consents, permits or licences required by the Purchaser from
any regulatory authority in connection with the Business;
12.1.3 (without prejudice to the provisions of Clause 9) from time to
time execute and perform all such acts, deeds and documents and
afford to the Purchaser such assistance as the Purchaser may
reasonably require without charge by the Vendor:
(i) for the purpose of vesting in the Purchaser the full
benefit of the Business and implementing all the
provisions of this Agreement;
(ii) for the purpose of vesting in the Purchaser or as it may
direct the full benefit of any rights, powers, remedies,
claims or defences (including without limitation rights of
set-off and counterclaim) which the Vendor may have in
relation to any Claim or otherwise ensuring that the same
enure for the benefit of the Purchaser;
(iii) to enable any claim, action, suit, prosecution,
litigation, proceeding, dispute or arbitration to which
the Vendor was a party and which relates to any Claim to
be continued by or against the Purchaser; and
(iv) to enable any judgment or award obtained by the Vendor and
not fully satisfied as at Completion, to the extent to
which it is a Claim enforceable by the Vendor, to be
enforced by the Purchaser, whether by the Purchaser
joining itself as a defendant or by the Purchaser
consenting to any plaintiff concerned joining it as a
defendant or otherwise.
12.2 VENDOR'S GENERAL OBLIGATIONS
If at any time after Completion, the Vendor receives any monies in
respect of any debts relating exclusively to the Business and arising
after Completion, then the Vendor shall pay to the Purchaser as soon as
reasonably practicable the amount recovered less any Taxation which would
not have arisen but for the receipt of such monies.
12.3 PURCHASER'S GENERAL OBLIGATIONS
If at any time after Completion the Purchaser receives any monies
representing Debtors, then the Purchaser shall pay to the Vendor as soon
as reasonably practicable the amount so received less any Taxation which
would not have arisen but for the receipt of such monies.
12.4 MARKS
The Purchaser shall not, and shall procure that each other member of the
Purchaser's Group shall not, after Completion, use in any way whatsoever
any of the Marks otherwise than as specifically provided for in the
Services Agreement. The Purchaser shall procure that as soon as
practicable and in any event not later than three months (or such other
period as the Vendor may agree in writing in any case) after Completion
all such trade marks, logos or other devices shall be removed from all
assets used in the Business.
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12.5 CERTAIN EXCLUDED CONTRACTS
The Vendor and the Purchaser acknowledge that certain of the Excluded
Contracts contain provisions relating to the supply to the Vendor of
goods and/or services which it may be to the advantage of the Purchaser
(and the Vendor) for the Purchaser to receive the benefit of in
connection with the fulfilment of its obligations pursuant to the
Services Agreement. In the event that either the Vendor shall notify the
Purchaser of any such provisions of any Excluded Contract and the
Purchaser shall confirm to the Vendor that it wishes to receive the
benefit of such provisions, or, within 28 days of Completion, the
Purchaser shall notify the Vendor that it wishes to receive the benefit
of any such provisions of any Excluded Contract which relates exclusively
to the supply of materials (including Expendable Inventory), the Vendor
and the Purchaser shall each use their reasonable endeavours to procure
that the counterparty to the relevant Excluded Contract shall consent to
the partial assumption of each contract by the Purchaser or enter into a
new contract or arrangement for the provision of the relevant goods
and/or services direct to the Purchaser or otherwise to provide to the
Purchaser the benefits of the relevant provisions, failing which the
Vendor and the Purchaser shall co-operate in such arrangements as either
the Vendor or the Purchaser may reasonably propose to obtain for the
Purchaser the benefits of the relevant provisions.
12.6 CERTAIN ROTABLE INVENTORIES
If the amounts comprised within the Rotable Inventory Value attributable
to B747-100 and/or L1011 aircraft types owned by the Vendor as at
Completion are in excess of the respective values set out in paragraph
3.2 of Part 2 of Schedule 2, the Vendor shall deliver to the Purchaser on
Completion those items of Rotable Inventory for such aircraft types with
an aggregate value equivalent to such excess ("EXCESS ROTABLE
INVENTORIES") and thereafter the Purchaser shall use all reasonable
endeavours to sell the Excess Rotable Inventories, at the best price
reasonably obtainable and otherwise on arm's length terms, as agent for
and on behalf of the Vendor. The Purchaser shall receive the proceeds of
all such disposals as trustee, shall place the same in a separate bank
account, shall record the payment separately in its books and shall
account to the Vendor for the same within 20 Business Days of receipt.
The Vendor shall pay the Purchaser a fee of 5% of the gross sale price of
any item of Excess Rotable Inventories disposed of pursuant to this
Clause 12.6, which fee the Purchaser shall be entitled to retain (with
any applicable VAT, for which it shall deliver a tax invoice to the
Vendor) when accounting to the Vendor for the sale proceeds of the
relevant item.
13 GUARANTEE
13.1 In part consideration of the Vendor entering into this Agreement at the
request of the Guarantor and in consideration of the sum of L1 (receipt
of which is hereby acknowledged) the Guarantor hereby unconditionally and
irrevocably guarantees the full, prompt and complete performance and
observance by the Purchaser of all its obligations, commitments,
undertakings, warranties and indemnities under or pursuant to this
Agreement and any document entered into pursuant to the terms of this
Agreement (the "GUARANTEED OBLIGATIONS") which are stated to be binding
on the Purchaser including, without limitation, the due and punctual
payment of all sums now or subsequently payable by the Purchaser
hereunder when the same shall become due and the Guarantor undertakes
with the Vendor to indemnify the Vendor against all Losses which the
Vendor may suffer through or arising from any breach by the Purchaser. If
and whenever the Purchaser defaults for any reason whatsoever in the
performance of any of the Guaranteed Obligations the Guarantor shall
forthwith upon demand unconditionally perform (or procure performance of)
and satisfy (or procure the satisfaction of) the Guaranteed Obligations
in regard to which such default has been made in the manner prescribed by
this Agreement and so that the same benefits shall be conferred on the
Vendor as it would have received if the Guaranteed Obligations had been
duly performed and satisfied by the Purchaser.
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25
13.2 The guarantee contained in Clause 13.1 is a continuing guarantee and
shall remain in force until all the Guaranteed Obligations have been
fully performed and all sums payable by the Purchaser have been fully
paid. This guarantee is in addition to and without prejudice to and not
in substitution for any rights or security which the Vendor may now or
hereafter have or hold for the performance and observance of the
Guaranteed Obligations.
13.3 The obligations of the Guarantor shall not be affected by any act,
omission, matter or thing which, but for this provision, might operate to
release or otherwise exonerate the Guarantor from his obligations or
affect such obligations, including without limitation and whether or not
known to the Guarantor:
13.3.1 any time, indulgence, neglect, delay, waiver or consent at any
time given to the Purchaser or any other person;
13.3.2 any compromise or release of or absentation from perfecting or
enforcing any right or remedies against the Purchaser or any
other person;
13.3.3 any legal limitation, liability, disability, incapacity or other
circumstances relating to the Purchaser or any other person or
any amendment to or variation of the terms of the Guaranteed
Obligations;
13.3.4 any irregularity, unenforceability or invalidity of any
obligations of the Purchaser under this Agreement, or the
dissolution, amalgamation, reconstruction or insolvency of the
Purchaser,
and shall nevertheless be enforceable against and recoverable from the
Guarantor as though the same had been incurred by the Guarantor and the
Guarantor were the sole or principal obligor in respect thereof.
14 OTHER PROVISIONS
14.1 ANNOUNCEMENTS
14.1.1 As soon as practicable following the signing of this Agreement
the Vendor and the Purchaser shall release the announcements in
the agreed terms. Thereafter, and pending Completion, the Vendor
and the Purchaser shall, subject to the requirements of law or
any regulatory body or the rules and regulations of any
recognised stock exchange and so far as practicable in the
circumstances, consult together and agree prior to despatch, as
to the terms of, the timetable for and manner of publication of,
any formal announcement or circular to shareholders, employees,
customers, suppliers, distributors and sub-contractors and to any
recognised stock exchange or other authorities or to the media or
otherwise which either party may desire or be obliged to make
regarding this Agreement and the transactions contemplated by
this Agreement. Any other communication which the Purchaser or
the Vendor may make concerning the foregoing matters shall,
subject to the requirements of law or any regulatory body or the
rules and regulations of any recognised stock exchange, be
consistent with any such formal announcement or circular as
aforesaid.
14.1.2 Subject to Clause 14.1.1, neither the Vendor nor the Purchaser
shall pending Completion make or authorise or issue any formal
announcement or circular or other communication concerning the
subject matter of this Agreement or any transaction referred to
in or contemplated by this Agreement.
14.1.3 If Completion does not take place the Purchaser shall forthwith
deliver up all accounts, records, documents and papers of or
relating to the Vendor which shall have been made available to
either of them and all copies or other records derived from such
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26
materials and expunge any information derived from such materials
or otherwise concerning the subject matter of this Agreement from
any computer, wordprocessor or other device containing
information, in each case in accordance with the provisions of
the Confidentiality Agreement dated 15 April 1997 between the
Vendor and the Purchaser.
14.2 SUCCESSORS AND ASSIGNS
14.2.1 Subject to Clause 14.2.2, this Agreement is personal to the
parties to it. Accordingly, neither the Purchaser nor the Vendor
may, without the prior written consent of the other parties
hereto, assign the benefit of all or any of the relevant party's
obligations under this Agreement, nor any benefit arising under
or out of this Agreement.
14.2.2 Except as otherwise expressly provided in this Agreement, either
the Vendor or the Purchaser may, without the consent of the
other, assign to a connected company the benefit of all or any of
the other party's obligations under this Agreement provided
however that such assignment shall not be absolute but shall be
expressed to have effect only for so long as the assignee remains
a connected company. For the purposes of this sub-clause a
"CONNECTED COMPANY," is a company which is a subsidiary of the
party concerned or which is a holding company of such party or a
subsidiary of such holding company.
14.3 VARIATION ETC.
14.3.1 No variation of this Agreement shall be effective unless in
writing and signed by or on behalf of each of the parties to this
Agreement.
14.3.2 For the purposes of Section 2 of the Law of Property
(Miscellaneous Provisions) Xxx 0000 this Agreement shall be
deemed to incorporate all documents directly or indirectly
required to be executed pursuant to it.
14.4 TIME OF THE ESSENCE
Any time, date or period referred to in any provision of this Agreement
may be extended by mutual agreement between the parties but as regards
any time, date or period originally fixed or any time, date or period so
extended time shall be of the essence.
14.5 REFERENCES TO THE EXPERT
Whenever any matter is referred under this Agreement to the decision of
the Expert:
14.5.1 the Expert shall be deemed to act as expert and not as
arbitrator;
14.5.2 the Expert shall have power to allocate his fees and expenses for
payment in whole or in part by either party at his discretion.
Save as aforesaid, if not otherwise allocated the fees and
expenses of the Expert shall be paid as to half by the Vendor and
as to half by the Purchaser;
14.5.3 the Vendor and the Purchaser shall promptly on request supply to
the Expert all such documents and information as he may require
for the purpose of the reference; and
14.5.4 the decision of the Expert shall (in the absence of objection on
the grounds of any error discovered within 10 Business Days of
the issue of his decision) be conclusive and binding and shall
not be the subject of any appeal by way of legal proceeding or
arbitration or otherwise.
14.6 COSTS
The Vendor shall bear all legal, accountancy and other costs and
expenses incurred by it in connection with this Agreement and the sale of
the Business. The Purchaser shall bear all such
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27
costs and expenses incurred by it. Subject to Clause 14.5 and Part 2 of
Schedule 2, the costs of the Expert shall be borne by the parties
equally.
14.7 INTEREST
If the Vendor or the Purchaser defaults in the payment when due of any
sum payable under this Agreement (whether determined by agreement or
pursuant to an order of a court or otherwise) the liability of the Vendor
or the Purchaser (as the case may be) shall be increased to include
interest on such sum from the date when such payment is due until the
date of actual payment (as well after as before judgment) at a rate per
annum of 3 per cent above the base rate from time to time of Barclays
Bank PLC. Such interest shall accrue from day to day.
14.8 NOTICES
14.8.1 Any notice or other communication requiring to be given or served
under or in connection with this Agreement shall be in writing
and shall be sufficiently given or served if delivered or sent:
In the case of the Vendor to:
Xxxxxxxxx Xxxxx
X.X. Xxx 00
Xxxxxxxx Xxxxxxx (Xxxxxx)
Xxxxxxxx
Xxxxxxxxx XX0 0XX
Fax: 0000 000 0000
Attention: The Company Secretary
In the case of the Purchaser to:
Number 0 Xxxxxx Xxxx
Xxxxxxxxxxx
Xxxxxxxxx
X000 0XX
Fax: 00000 000000
Attention: The Company Secretary
In the case of the Guarantor to:
00000 Xxxxxxx Xxx
Xxx Xxxxxx
XX 00000
Xxxxxx Xxxxxx of America
Fax: 000 000 000 0000
Attention: Xx. X. Xxxxxx
14.8.2 Any such notice or other communication shall be delivered by hand
or sent by courier, fax or prepaid first class or (as
appropriate) airmail post. If sent by courier or fax such notice
or communication shall conclusively be deemed to have been given
or served at the time of despatch unless the same is given or
served other than before 5 pm on a Business Day in which event
service shall be deemed to take place at 9 am on the Business Day
next following despatch. If sent by post such notice or
communication
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28
shall conclusively be deemed to have been received two Business
Days from the time of posting (or four Business Days in the case
of airmail post).
14.9 SEVERANCE
If any term or provision of this Agreement is held to be illegal or
unenforceable, in whole or in part, under any enactment or rule of law,
such term or provision or part shall to that extent be deemed not to form
part of this Agreement but the enforceability of the remainder of this
Agreement shall not be affected.
14.10 COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which shall be deemed an original, but all the counterparts shall together
constitute one and the same instrument.
14.11 RESTRICTIVE TRADE PRACTICES
Notwithstanding any other provision of this Agreement, no provision of
this Agreement which is of such a nature as to make the Agreement liable
to registration under the Restrictive Trade Practices Act 1976 shall take
effect until the day after that on which particulars thereof have been
duly furnished to the Director General of Fair Trading pursuant to the
said Act. For the purposes of this Clause 14.11, "Agreement" shall
include any agreement forming part of the same arrangement.
14.12 FILINGS WITH REGULATORY AUTHORITIES
The Purchaser shall use its best efforts to obtain confidential treatment
of any provisions reasonably identified by the Vendor as being
commercially sensitive contained in this Agreement, the Related
Agreements and/or any other documents required to be filed with or
submitted to the US Securities and Exchange Commission, any State
securities regulatory body, the National Association of Securities
Dealers, any stock exchange or any other US or other governmental or
regulatory body or any other securities exchange or self-regulatory body
or similar agency, authority or body ("REGULATORY AUTHORITIES") in
connection with a proposed offering of any securities of the Guarantor
and/or the Purchaser. The Purchaser shall consult with the Vendor and/or
its advisers on a timely basis in advance of any such filing or
submission or any such request for such confidential treatment and shall
take into account the Vendor's reasonable comments prior to requesting or
submitting an application to obtain such confidential treatment from any
Regulatory Authority or Regulatory Authorities and in respect of any
related communications with any Regulatory Authority or Regulatory
Authorities.
14.13 GOVERNING LAW, APPOINTMENT OF PROCESS AGENTS AND SUBMISSION TO
JURISDICTION
This Agreement and, save as expressly referred to therein, the documents
to be entered into pursuant to it shall be governed by and construed in
accordance with English law and the parties irrevocably agree that the
courts of England are to have non-exclusive jurisdiction to settle any
disputes which may arise out of or in connection with this Agreement and
such documents.
The Guarantor hereby irrevocably appoints Xxxxx Xxxxx & Xxxxxxx of Number
0 Xxxxxx Xxxx, Xxxxxxxxxxx, X000 0XX as its agent for the service of
process in England in relation to any matter arising out of or pursuant
to this Agreement, service upon whom shall be deemed completed whether or
not forwarded to or received by the Guarantor.
The Guarantor undertakes that it will inform the Vendor in writing of any
change in the address of its process agent within 28 days. If such
process agent ceases to have an address in England, the Guarantor
irrevocably agrees to appoint a new process agent acceptable to the
Vendor and to deliver to the Vendor within 14 days a copy of written
acceptance of appointment by its new process agent.
In witness whereof this Agreement has been duly executed.
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SIGNED by Xxxxx Xxxxxxxx, Director
on behalf of BRITISH AIRWAYS PLC /s/ XXXXX XXXXXXXX
in the presence of:
/s/ C.L. [ILLEGIBLE]
Solicitor
Linklaters & Paines
London
SIGNED by Xxxxx Xxxxxx, Director
on behalf of
HAWKER PACIFIC, AEROSPACE LIMITED /s/ XXXXX X. XXXXXX
in the presence of:
/s/ [ILLEGIBLE]
Southampton
[ILLEGIBLE]
SIGNED by Xxxxx Xxxxxx, Director
on behalf of
HAWKER PACIFIC AEROSPACE /s/ XXXXX X. XXXXXX
in the presence of:
/s/ [ILLEGIBLE]
as above
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30
SCHEDULE 1
PART I
THE EXCLUDED CONTRACTS
1 Any contracts or policies of insurance.
2 Any contracts, undertakings, arrangements or agreements entered into by
or on behalf of the Vendor relating to the Retained Business.
3 Employment and other contracts with Relevant Employees.
4 Any contracts relating to computer software.
5 The contracts or arrangements entered into by the Vendor relating to the
Business which are not Assumed Contracts and any agreements entered into
pursuant to those contracts or arrangements.
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31
PART 2
THE PROPERTY
Offices, storage and workshops within Technical Block A, East Base, Heathrow
Airport, London, shown coloured pink, pink hatched black, pink hatched green and
pink cross-hatched black on the plans attached to the Underlease.
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SCHEDULE 2
PART 1
ALLOCATION OF CONSIDERATION
The consideration for the purchase of the Business shall initially be
allocated as follows (subject to adjustment, except in relation to
Goodwill, Business Intellectual Property/Know-How and Tools in accordance
with Part 2 of Schedule 2):
ITEM AMOUNT
L
1.1 Fixed Assets [ ****** ]
1.2 Rotable Inventory [ ****** ]
1.3 Expendable Inventory [ ****** ]
1.4 Tools [ ****** ]
1.5 Goodwill and Business Intellectual [ ****** ]
Property/Know-How
----------
11,274,095
----------
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PART 2
THE COMPLETION STATEMENT
1 The Fixed Asset Value and the Rotable Inventory Value as at the Valuation
Date shall be determined according to the principles set out in this
Schedule 2. No account shall be taken of events occurring after the
Valuation Date.
1.1 The Vendor in consultation with the Purchaser shall procure that, as soon
as practicable after the Valuation Date and in any event not later than
one month thereafter, there shall be drawn up a statement showing the
amount of the Fixed Asset Value and the Rotable Inventory Value
respectively.
1.2 The Completion Statement shall be drawn up by a representative(s) of the
Vendor and the Purchaser respectively in the manner described in this
Schedule 2. If the Vendor and the Purchaser's respective representatives
fall to agree the amount of the Fixed Asset Value and the Rotable
Inventory Value within one month of Completion, the matter in dispute
shall be referred to the Expert who shall settle and complete the draft
Completion Statement as soon as practicable and shall determine the
amount of the Fixed Asset Value and/or the Rotable Inventory Value, as
appropriate. Any fees and expenses of the Expert incurred pursuant to
this Schedule 2 shall be paid as to half by the Vendor and as to half by
the Purchaser.
1.3 If the Purchase Price is less than L11,274,095 the Vendor shall pay to
the Purchaser any shortfall due and if such amount exceeds L11,274,095
the Purchaser shall pay to the Vendor any excess due, on the Final
Payment Date, together in either case with interest from the date of
Completion until the Final Payment Date at a rate per annum of 2 per cent
above the base rate from time to time of Barclays Bank PLC (such interest
to accrue from day to day), and the allocation of the consideration in
Part 1 of Schedule 2 shall be adjusted accordingly.
2 The Fixed Asset Value shall be determined by a routine inspection of the
Fixed Assets carried out by a representative of the Vendor and a
representative of the Purchaser prior to the Valuation Date and shall be
the Initial Fixed Asset Value less the agreed cost of repairing or
replacing any Fixed Asset(s) which have become inoperable between 20
December 1997 and the date of such inspection. In the event of any
dispute the matter shall be referred to the Expert.
3 The Rotable Inventory Value shall be determined by calculating the
aggregate value of the Rotable Inventory Assemblies and the Rotable
Inventory Sub-assemblies an the following basis:
3.1.1 any assembled Rotable Inventory Assembly shall be valued at the
relevant price of such Assembly in the relevant Condition as set
out in the document in the agreed terms; and
3.1.2 any unassembled Rotable Inventory Assembly shall be valued at the
aggregate of the Work in Progress attributable to such Assembly
and the value of such item in Non-Serviceable Condition;
provided that if any Sub-assembly or LRU attributable to any Rotable
Inventory Assembly (whether assembled or not) has been scrapped or is
missing by comparison with the Vendor's Build Standard, the value of such
Assembly shall be the aggregate of value of such Assembly in
Non-Serviceable Conditions plus the amount of any Work-in-Progress
attributable thereto and less the value of any such Sub-assembly or LRU
at the relevant price for such Sub-assembly or LRU in Serviceable
Condition as set out in sections b) or c) (as appropriate) of the list of
prices of Rotable Inventory Sub-assemblies in the agreed terms.
3.2 The value attributable to each category of Rotable inventory Sub-assembly
or LRU shall be calculated as follows:
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34
3.2.1 the value of any category of Ratable Inventory Sub-assembly or
LRU per aircraft type as set out in section a) of the list of
Rotable Inventory Sub-assembly prices in the agreed terms (the
"CATEGORY PRICE") shall be adjusted where necessary on the basis
that, if there are more Sub-assemblies or LRUs within any given
category than is indicated on the list of Rotable Inventory
Sub-assembly prices in the agreed terms, the value(s) of such
additional items (by reference to sections b) and c) of the list
of Rotable Inventory Sub-assembly prices in the agreed terms)
will be added to the relevant Category Price. If there are fewer
Sub-assemblies or LRUs within any specific category than is
indicated on such list, the values of such item (by reference to
sections b) and c) of the list of Rotable Inventory Sub-assembly
prices in the agreed terms) shall be deducted from the relevant
Category Price. In no event shall any Category Price be less than
Lzero; and
3.2.2 the value of any other Rotable Inventory Sub-assembly components
shall be calculated on the assumption that 50 per cent. Work in
Progress is attributable to each such Sub-assembly and determined
by reference to the relevant percentage of the OEM list price
then in force as set out in section c) of the list of Rotable
Inventory Sub-assembly prices in the agreed terms;
provided that:
3.2.3 in relation to Rotable Inventory for B747-100 and L1011 aircraft
types the Purchaser shall not purchase Rotable Inventory to a
total value (determined as above) in excess of L243,530
(B747-100) and L233,580 (L1011) respectively. Rotable Inventory
for these aircraft types in excess of such values shall be
disposed of by the Purchaser on behalf of the Vendor pursuant to
Clause 12.6; and
3.2.4 where an item of Rotable Inventory can be used on either (i)
B747-100 or B747-200 aircraft types or (ii) B747-200 or B747-400
aircraft types respectively the value of any such item shall
assume that It will be fitted to (i) a B747-100 or (ii) a
B747-200, as the case may be, and shall be determined by
reference to the relevant price as set out in the document in the
agreed terms.
3.3 Title to and risk in any Rotable Inventory Assemblies that are in the
Possession of any third party on Completion and to which the Vendor has
title (a list of which as at Completion will be provided to the Purchaser
by the Vendor) will, for the avoidance of doubt, be acquired by the
Purchaser on Completion and valued on the basis that such items are in
Serviceable Condition and that such Assemblies are assembled and,
notwithstanding the provisions of Clause 6 of this Agreement, such items
will be delivered to the Purchaser in a timely manner following return of
such item to the Vendor by such third party. For the avoidance of doubt,
any charges incurred in overhauling such Inventory shall be the
responsibility of the Vendor.
4 In the event that, during the preparation of the Completion Statement, it
appears to either party that the value of the Work in Progress calculated
as being attributable to any item of Rotable Inventory does not reflect
the Condition of such item and if such disparity amounts to a difference
of more than 20 per cent from (i) the value of labour and materials that
would be expected to have been expended on an item of Rotable Inventory
in the same condition or (ii) the value of such item in the Condition it
is actually in, the Rotable Inventory Value shall be adjusted
accordingly. In the event of any dispute, the matter shall be referred to
the Expert who shall assess the actual Condition of such item and, if he
assesses that the disparity between the value of the Work in Progress
attributable to such item and the value of such item in the Condition it
is actually in amounts to more than 20 per cent he shall adjust the
Rotable Inventory Value accordingly by the difference between the
original value ascribed to such item and its value as ascertained by him
and the provisions of Clause 14.6 and of paragraph 1.2 of this Part 2
shall apply.
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35
5 The value of any of the Additional Assets will be such value as is agreed
between the Vendor and the Purchaser.
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36
SCHEDULE 3
WARRANTIES GIVEN BY THE VENDOR UNDER CLAUSE 7
1 AUTHORITY AND CAPACITY OF THE VENDOR
1.1 The Vendor is duly incorporated under the laws of England and Wales and
has the legal right and full power and authority to enter into and
perform this Agreement and any other documents to be executed by the
Vendor pursuant to or in connection with this Agreement.
1.2 The Vendor has the legal right and full power and authority to carry on
the Business.
1.3 All corporate action required by the Vendor validly and duly to authorise
the execution and delivery of, and to exercise its rights and perform its
obligations under, this Agreement and any other documents to be executed
by the Vendor pursuant to or in connection with this Agreement has been
duly taken.
2 LEGAL MATTERS
2.1 COMPLIANCE WITH LAWS
The Business is being carried on in compliance in all material respects
with applicable laws, regulations and bye-laws and there is no
investigation or enquiry by, or order, decree, decision or judgment of,
any court, tribunal, arbitrator, governmental agency or regulatory body
outstanding or anticipated against the Vendor in connection with the
Business which, in any such case, has had or may have a material adverse
effect upon the Business, nor has any notice or other communication from
any court, tribunal, arbitrator, governmental agency or regulatory body
been received by the Vendor with respect to an alleged actual or
potential violation and/or failure to comply with any such applicable
law, regulation or bye-law or requiring it to take or omit any action
which, in any such case, may have a material adverse effect upon the
Business.
2.2 ENVIRONMENT
2.2.1 All Environmental Laws relating to the Business have been
compiled with in all material respects and, in particular, the
terms and conditions of all permits, licences and other
authorisations, and all notifications, that are required under
such Environmental Laws have been obtained and complied with in
all material respects, or duly filed.
2.2.2 There is no civil, criminal or administrative action, claim,
investigation or other proceeding of suit pending or threatened
in respect of the Business arising from or relating to
Environmental Laws and so far as the Vendor is aware there are no
circumstances existing which may lead to any such action, claim,
investigation, proceeding or suit.
2.2.3 As far as the Vendor is aware, the Disclosed Documents contain
all reports and correspondence of a material nature concerning
any non-compliance with Environmental Laws by the Vendor for the
period of one year immediately preceding the date of this
Agreement.
2.3 LICENCES AND CONSENTS
2.3.1 All statutory and regulatory licences, consents, authorisations,
orders, certificates, approvals and authorities ("LICENCES")
necessary for the carrying on of the Business as now carried on
(including but not limited to those relating to environmental or
health and safety at work requirements) have been obtained, are
in full force and effect and are being complied with in all
material respects.
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37
2.3.2 The Vendor has received no official notice of any investigation,
enquiry or proceeding which is outstanding or anticipated which
is likely to result in the suspension, cancellation, refusal,
material modification or revocation of any such Licences.
2.4 LITIGATION
The Vendor is not involved whether as plaintiff or defendant or other
party in any claim, legal action, proceeding, suit, litigation,
prosecution, investigation, enquiry or arbitration in connection with the
Business in any such case which is material in the context of the
Business (other than as plaintiff in the collection of debts arising in
the ordinary course of business) and so far as the Vendor is aware no
such claim, legal action, proceeding, suit, litigation, prosecution,
investigation, enquiry or arbitration is pending or threatened by or
against the Vendor which may have a material adverse effect upon the
Business.
3 ASSUMED CONTRACTS
3.1 MATERIAL CONTRACTS
3.1.1 The copies of the Assumed Contracts delivered to the Purchaser
are true, accurate and complete in all respects, none of the
Assumed Contracts has been terminated and the Vendor is not aware
of any material breaches or defaults, or alleged material
breaches or defaults, or of any fact that is likely to lead to
any material breach or default, in each case of any Assumed
Contract. None of the Assumed Contracts has been varied in any
material respect by a course of dealings between the parties.
3.1.2 None of the Assumed Contracts has been entered into otherwise
than on an arm's length basis in the ordinary course of business,
in connection with the Business.
3.1.3 The Vendor is not party to any agreement or arrangement which
restricts in any material respect its freedom to carry on the
Business as currently carried on in such manner as it thinks fit.
3.1.4 Other than the Assumed Contracts, the lease of the Property and
the Excluded Contracts the Vendor has not entered into any other
contracts which are material to the Business.
3.2 ANTI-TRUST
The Vendor is not in relation to the Business a party to any agreement,
arrangement or concerted practice nor is carrying on any practice which
in whole or in any material part contravenes or is invalidated by any
anti-trust, fair trading, consumer protection or similar legislation in
the United Kingdom or any similar provision of EC law or in respect of
which any filling, registration or notification is required pursuant to
such legislation and the Vendor has not received notice of any official
investigation or enquiry in respect of any such matters in relation to
the Business.
4 EMPLOYEES
4.1 EMPLOYEES AND TERMS OF EMPLOYMENT
4.1.1 The employees whose details are set out in the document in the
agreed terms attached to the Disclosure Letter, subject to any
additions thereto or deletions therefrom agreed between the
Vendor and the Purchaser to reflect cessations and commencements
of employment between the data of this Agreement and Completion,
will be the only employees transferred to the Purchaser by reason
of the Purchaser acquiring the Business or in respect of whom the
Purchaser will inherit liabilities pursuant to the provisions of
the Transfer Regulations.
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38
4.1.2 All such employees are employed by the Vendor and all employees
engaged in connection with the Business within 12 months prior to
the date of this Agreement were employed by the Vendor. All such
employees are employed exclusively in the Business and none is
required to perform employment duties for any other person. None
of such employees has outstanding any material claim against the
Vendor in respect of his or her employment by the Vendor.
4.1.3 The document in the agreed terms attached to the Disclosure
Letter contains full details in relation to the Business of:
(i) the total number of employees (including those who are on
maternity or paternity leave or absent on the grounds of
disability or other long-term leave of absence, and have
or may have a statutory or contractual right to return to
work in the Business):
(ii) the name, date of commencement of employment, period of
continuous employment, location, salary and benefits
(which cannot be ascertained by reference to the
appropriate grade and collective agreement), grade and age
of each of the employees;
(iii) trades unions recognised by the Vendor and other employee
representative bodies;
(iv) the terms of each contract of employment of each of the
employees entitled to salary at a rate, or an average
annual rate over the last three financial years, in excess
of L40,000 a year;
(v) the terms of all consultancy agreements with the Vendor
relating to the Business; and
(vi) all profit-sharing, incentive and bonus arrangements
applicable to any of the employees.
4.1.4 There are no proposals to terminate the employment of any of the
employees of the Vendor referred to in paragraph 4.1.1 or to vary
or amend their terms of employment (whether to their detriment or
benefit) in any material respect and no such variations or
amendments have been made in the six months preceding the date of
this Agreement.
4.2 LIABILITIES TO AND FOR EMPLOYEES
4.2.1 Except as set out in the Disclosure Letter and the Staff Plan, no
material liability has been incurred by the Vendor for breach or
termination of any contract of employment with an employee
engaged in connection with the Business including, without
limitation, redundancy payments, protective awards, compensation
for unfair dismissal or any other compensation awarded by an
Industrial Tribunal including any award of damages for unlawful
discrimination, compensation for wrongful dismissal or otherwise
or for failure to comply with any order for reinstatement or
re-engagement of any employee engaged in connection with the
Business within the 12 months preceding the date of this
Agreement.
4.2.2 Except as stated in the Disclosure Letter, as at the date of this
Agreement the Vendor is not aware of any existing or threatened
material claims against the Vendor by any employee engaged in the
Business.
4.3 TRADE DISPUTES
The Vendor is not in connection with the Business involved in any dispute
or negotiation regarding any material claim by employees of the Business
or the dismissal, suspension,
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disciplining or varying of terms or conditions of employment of any
present or former employee of the Business with any trade union or
association of trade unions, works council, staff association or other
similar organisation or body of employee.
4.4 PENSIONS
4.4.1 The Vendor's Pension Schemes are the only schemes to which the
Vendor makes payments for providing retirement, death, disability
or life assurance benefits in respect of the Relevant Employees.
No proposal has been announced to establish any other scheme for
providing any such benefits and the Vendor does not provide and
has not promised any such benefits except under the Vendor's
Pension Schemes.
4.4.2 The Vendor's Pension Schemes are exempt approved schemes within
the meaning of Chapter I Part XIV of the Income and Corporation
Taxes Xxx 0000. Members of the Vendor's Pension Schemes are
contracted-out of the State Earnings Related Pension Scheme. So
far as the Vendor is aware after having made reasonable enquiries
of the trustees of the Vendors Pension Schemes, the Vendor's
Pension Schemes comply with, and have been managed in accordance
with all applicable laws, regulations and requirements and, so
far as the, Vendor is aware, there are no circumstances that
might give rise to the withdrawal or cancellation of such
approval and of such contracted-out status.
4.4.3 There are attached to the Disclosure Letter copies of:
(i) the current trust deeds and rules of the Vendor's Pension
Schemes which apply to the Relevant Employees; and
(ii) all current explanatory booklets and announcements
relating to the Vendor's Pension Schemes which apply to
the Relevant Employees.
These documents contain full details of all benefits payable
under the Vendor's Pension Schemes in respect of the Relevant
Employees and there have been no augmentations of such benefits
which are not reflected in these documents. There are no
established customs for discretionary benefits or increases in
benefits to be awarded under the Vendor's Pension Schemes in
respect of the Relevant Employees other than those detailed in
the Disclosure Letter.
4.4.4 So far as the Vendor is aware after having made reasonable
enquiries of the trustees of the Vendor's Pension Scheme, all
material amounts due to the Vendor's Pension Schemes from and in
respect of the Relevant Employees have been paid.
4.4.5 There are no circumstances which would give rise to a debt being
due from the Purchaser under section 144 of the Xxxxxxx Xxxxxxx
Xxx 0000 or section 75 of the Pensions Xxx 0000.
4.4.6 So far as the Vendor is aware, there are no actions, suits or
claims, submissions or referrals, whether to the Pensions
Ombudsman or otherwise, pending or threatened in respect of the
Vendor's Pension Schemes or the benefits payable under the
Vendor's Pension Schemes that would affect the benefit
entitlements of Relevant Employees other than those detailed in
the Disclosure Letter.
4.5 Membership of the Vendor's Pension Schemes has been determined and the
Vendor's Pension Schemes have been operated in accordance with the
requirements of Article 119 of the Treaty of Rome and with domestic law
relating to sex discrimination and equal treatment.
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4.6 DEFINITIONS
For the purposes of this paragraph 4. "EMPLOYEE" includes any person who
works under a contract of service or apprenticeship or contract
personally to execute any work or labour, or receives any training.
5 TAXATION MATTERS
5.1 RECORDS AND RETURNS
All proper records have been kept for the periods required by law and all
proper returns and payments have been made as required by law for the
purposes of PAYE, National Insurance and VAT in connection with the
Business are accurate in all material respects.
5.2 VAT
5.2.1 None of the Assets are the subject of any security in favour of
H.M. Customs & Excise under paragraph 4 of Schedule 11 to VATA
1994 or Section 157 Customs & Excise Management Xxx 0000.
5.2.2 There are set out in the Disclosure Letter details of each item
which the Vendor uses in the course or furtherance of its
business, and for the purpose of that business, otherwise than
solely for the purpose of selling the item, being an item to
which Part XV of the Value Added Tax Regulations 1995 applies and
in respect of which the period of adjustment will not have
expired by Completion. Such details are sufficient to enable the
Purchaser (or any group of which it will form part for the
purposes of Section 43 VATA 1994 following Completion) to comply
with its obligations under the said Part.
5.3 ABSENCE OF DISPUTES
The Vendor is not involved in any dispute with the Inland Revenue or H.
M. Customs & Excise concerning any matter which is or is likely to be
material in the context of the Business as a whole.
6 ASSETS
6.1 TITLE
All the Assets are the absolute property of the Vendor and none is the
subject of any assignment or Encumbrance (excepting only liens arising by
operation of law in the normal course of trading) or the subject of any
factoring arrangement, hire-purchase, conditional sale or credit sale
agreement.
6.2 INTELLECTUAL PROPERTY
6.2.1 So far as the Vendor is aware, the Business Intellectual Property
and Business Know-How is not being infringed or attacked or
opposed by any person.
6.2.2 So far as the Vendor is aware, the current conduct of the
Business does not use or infringe any rights in Intellectual
Property or Know-How other than those belonging or licensed to,
or used under the authority of the owner by, the Vendor and no
pending claims of infringement of any Intellectual Property rights
or rights in Know-How have been made by any third party.
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SCHEDULE 4
LIMITATIONS ON LIABILITY
1 LIMITATION OF LIABILITY
Notwithstanding the provisions of Clauses 7.1 and 7.2. the Vendor shall
not be liable in respect of a warranty claim under this Agreement:
1.1 TIME LIMITS
In respect of any claim unless notice of such claim is given in writing
by the Purchaser to the Vendor setting out reasonable details of the
specific matter in respect of which the claim is made including an
estimate of the amount of such claim, if practicable, by 31 March 2000,
and any such claim shall (if it has not been previously satisfied,
settled or withdrawn) be deemed to be withdrawn nine months after the
relevant time limit set out above unless legal proceedings in respect of
it (i) have been commenced by being both issued and served and (ii) are
being pursued with reasonable diligence;
1.2 MINIMUM CLAIMS
In respect of any claim arising from any single circumstance if the
amount of the claim does not exceed L10,000 (save that claims relating to
a series of connected matters or matters arising out of the same or
substantially the same facts or circumstances shall be aggregated for this
purpose) the Vendor shall not be liable for a claim in excess of that
amount unless the liability determined in respect of any such claim
(excluding interest, costs and expenses) also exceeds that amount;
1.3 AGGREGATE MINIMUM CLAIMS
In respect of any claim unless the aggregate amount of all claims for
which the Vendor would otherwise be liable under this Agreement exceeds
L100,000 (but the Vendor shall be liable for the whole amount of such
claim and not merely the excess);
1.4 MAXIMUM CLAIMS
in respect of any claim to the extent that the aggregate amount of the
liability of the Vendor for all claims made under this Agreement would
exceed the Purchase Price;
1.5 CONTINGENT LIABILITIES
in respect of any liability which is contingent unless and until such
contingent liability becomes an actual liability and is due and payable
but this paragraph shall not operate to avoid a claim made in respect of
a contingent liability within the applicable time limit specified in
paragraph 1.1 above if the requisite details of such claim have been
delivered before the expiry of such period (even if such liability does
not become an actual liability until after the expiry of the relevant
period) and the period of nine months referred to in paragraph 1.1 shall
only commence if and when such contingent liability becomes an actual
liability;
1.6 OTHER MATTERS
in respect of any matter, act, omission or circumstance (or any
combination thereof) (including, for the avoidance of doubt, the
aggravation of a matter or circumstance) to the extent that the same
would not have occurred but for:
1.6.1 CHANGES IN LEGISLATION
the passing of, or any change in, after the date of this
Agreement, any law, rule, regulation or administrative practice
of any government, governmental department, agency or regulatory
body including (without prejudice to the generality of the
foregoing) any increase in the rates of Taxation or any
imposition of Taxation or any
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withdrawal of relief from Taxation not actually (or
prospectively) in effect at the date of this Agreement; or
1.6.2 ACCOUNTING AND TAXATION CHANGES
any change in accounting or Taxation policy, bases or practice of
the Purchaser introduced or having effect after Completion;
1.7 INSURANCE
in respect of any claim to the extent that any Losses arising from such
claim are recovered by a policy of insurance in force on the date at this
Agreement or would have been so covered had such policy of insurance been
maintained beyond the date of this Agreement;
1.8 FRAUD
None of the limitations contained in this paragraph 1 shall apply to any
claim which arises or is increased, or to the extent to which it arises
or is increased, as the consequence of, or which is delayed as a result
of, fraud by the Vendor or any officer or employee of the Vendor.
2 MITIGATION OF LOSS
Without prejudice to the validity of the claim or the alleged claim in
question, the Purchaser shall procure that all reasonable steps are taken
and all reasonable assistance is given to avoid or mitigate any Losses
which in the absence of mitigation might give rise to a liability in
respect of any claim under this Agreement.
3 CONDUCT OF CLAIMS
3.1 Without prejudice to the validity of the claim or the alleged claim in
question, if the Purchaser becomes aware of any matter that may give rise
to a claim against the Vendor under this Agreement notice of that fact
shall be given as soon as possible to the Vendor.
3.2 Without prejudice to the validity of the claim or alleged claim in
question, the Purchaser shall allow the Vendor and its accountants and
professional advisers to investigate the matter or circumstance alleged
to give rise to such claim and whether and to what extent any amount is
payable in respect of such claim and for such purpose the Purchaser shall
give, subject to its being paid all reasonable costs and expenses, all
such relevant information and reasonable assistance, including access to
premises and personnel on prior reasonable notice and without disruption
of the Purchaser's Business, and the right to examine and copy or
photograph any non proprietary, non confidential assets, accounts,
documents and records, as the Vendor or its accountants or professional
advisers may reasonably request.
3.3 Without prejudice to the validity of the claim or the alleged claim in
question, if the claim in question is a result of or in connection with a
claim by or liability to a third party then provided the Vendor conducts
the matter reasonably:
3.3.1 no admission of liability shall be made by or on behalf of the
Purchaser and the claim shall not be compromised, disposed of or
settled without the consent of the Vendor which shall not be
unreasonably withheld;
3.3.2 the Vendor shall, subject to the Vendor indemnifying the
Purchaser to its reasonable satisfaction against any increased
losses the Purchaser may suffer as a result, be entitled at its
own expense to take such action as it shall reasonably deem
necessary to avoid, dispute, deny, defend, resist, appeal,
compromise or contest such claim or liability (including, without
limitation, making counterclaims or other claims against third
parties) in the name of and on behalf of the Purchaser and to
have the conduct of any related proceedings, negotiations or
appeals;
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3.3.3 the Purchaser will give, subject to being paid all reasonable
costs and expenses, all such information and assistance,
including access to premises and personnel, and the right to
examine and copy or photograph any assets, accounts, documents
and records, for the purpose of avoiding, disputing, denying,
defending, resisting, appealing, compromising or contesting any
such claim or liability as the Vendor or its professional
advisers reasonably request. The Vendor agrees to keep all such
information confidential and only to use it for such purpose.
4 PRIOR RECEIPT
If the Vendor pays an amount in discharge of any claim under this
Agreement and the Purchaser subsequently recovers (whether by payment,
discount, credit, relief or otherwise) from a third party a sum which is
referable to the subject matter of the claim and which would not
otherwise have been received by the Purchaser, the Purchaser shall pay to
the Vendor an amount equal to (i) the sum recovered from the third party
less any reasonable costs and expenses (including applicable taxes)
incurred in obtaining such recovery or (ii) if less, the amount
previously paid by the Vendor to the Purchaser.
5 TAX
In calculating the liability of the Vendor for any breach of this
Agreement, there shall be taken into account the amount (if any) by which
any Taxation for which the Purchaser would otherwise have been
accountable or liable to be assessed is actually reduced or extinguished
as a result of the matter giving rise to such liability.
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SCHEDULE 5
PENSIONS
1 DEFINITIONS
"ACTUARY'S LETTER" means the letter from the Vendor's Actuary to the
Purchaser's Actuary (including the Appendix to that letter) in the agreed
terms.
"MEMBERSHIP TRANSFER DATE" means the date [******************].
"PAYMENT DATE" means the date after the Membership Transfer Date which is
10 Business Days after the fulfilment of all of the following conditions:
- the amount to be transferred has been determined and confirmed in
accordance with paragraph 5.1 of this Schedule 5,
- the Inland Revenue has consented to the making of the payment,
- the Purchaser has complied with its obligations in this Schedule,
- the trustees of the Purchaser's Pension Scheme have confirmed that they
will accept the payment on the terms in paragraph 6 of this Schedule
5.
"PURCHASER'S ACTUARY" means N.J.R. Xxxxx Esq. of Xxxx Xxxxx & Peacock of
Xx. Xxxx'x Xxxx, Xxxxxxxxxx X000 0XX or another actuary appointed by the
Purchaser for the purposes of this schedule.
"PURCHASER'S PENSION SCHEME" means the pension scheme to be established
or nominated by the Purchaser to meet the requirements of paragraph 2.
"TRANSFERRING MEMBER" means a Relevant Employee who is a member of the
Vendor's Pension Schemes and who consents, in a form satisfactory to the
trustees of the relevant Vendor's Pension Scheme, to a transfer of assets
being made for him to one of the sections in the Purchaser's Pension
Scheme.
"VENDOR'S ACTUARY" means X.X. Xxxxxxxxx Esq. of Xxxxxx Xxxxx Partners of
Xxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxxx XX0 0XX or another actuary appointed
by the Vendor for the purposes of this Schedule.
"1998 PAY AWARD" means the increase in pay agreed or to be agreed by the
Vendor for employees for 1998.
2 THE PURCHASER'S PENSION SCHEME
2.1 PURCHASER TO SET UP SECTIONS OF SCHEME THAT REFLECT VENDOR'S PENSION
SCHEMES
The Purchaser will set up two sections of the Purchaser's Pension
Scheme:
2.1.1 one section to provide benefits that are the same as the Benefits
to which Relevant Employees who are members of the Airways
Pension Scheme would have been entitled had they remained members
of that scheme;
2.1.2 one section to provide benefits that are the same as the Benefits
to which Relevant Employees who are members of the New Airways
Pension Scheme would have been entitled had they remained members
of that scheme.
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Provided that:
2.1.3 the obligations on the Purchaser contained in paragraphs 2.1.1
and 2.1.2 above are subject to any legislative or regulatory
requirements which the Purchaser has to comply with in respect of
the Purchaser's Pension Scheme;
2.1.4 the Purchaser may at any time before the Membership Transfer
Date, with the consent of the Vendor (such content not to be
unreasonably withheld) determine to provide benefits other than
those described in paragraphs 2.1.1 and 2.1.2 above but which are
the same in all material respects as those benefits. Except that
for each Transferring Member the value of any benefits payable
under this paragraph 2.1.4 must not be less than the value of the
benefits described in paragraphs 2.1.1 and 2.1.2 (both values to
be calculated on the basis set out in the Actuary's Letter); and
2.1.5 nothing herein contained shall be construed as to prevent the
Purchaser [********************************************].
"BENEFITS" means benefits guaranteed under the Trust Deed and Rules of
the relevant Vendor's Pension Scheme adjusted in accordance with the
changes to benefits referred to in the Disclosure Letter.
For clarification nothing in this paragraph shall prevent the Purchaser
and/or the trustees of the Purchasers' Pension Scheme from determining
the financial terms for the operation of benefit options in the
Purchasers' Pension Scheme that are intended to be cost neutral, in
accordance with the advice of their own actuary(ies).
The Purchaser's Pension Scheme will contain a provision allowing the
Purchaser and/or the trustees of that scheme to exercise a discretion to
augment benefits to provide additional benefits from time to time, such
discretion being exercisable in the manner determined solely by the
person(s) exercising the discretion.
Nothing in this paragraph requires the Purchaser to amend the Purchaser's
Pension Scheme to incorporate amendments made to the Airways Pension
Scheme or the New Airways Pension Scheme after Completion (other than
amendments in respect of the Benefits as defined in this paragraph 2.1).
2.2 THE PURCHASER'S PENSION SCHEME WILL BE;
2.2.1 a contracted-out scheme and (subject to the proviso below) will
be contracted out on the same basis as the Vendor's Pension
Schemes for a period of at least [*****], provided always that
the Purchaser shall be entitled to change the basis of
contracting-out at any time with the prior written consent of the
Vendor (such consent not to be unreasonably withheld or delayed):
and
2.2.2 an exempt approved scheme or capable of approval as an exempt
approved scheme for the purposes of Chapter 1 Part XIV of the
Income and Corporation Taxes Xxx 0000.
2.3 INVITATION TO RELEVANT EMPLOYEES TO JOIN SECTIONS OF PURCHASER'S PENSION
SCHEME
The Purchaser will invite each Relevant Employee who is a member of the
Airways Pension Scheme immediately before the Membership Transfer Date to
join the section of the Purchaser's Pension Scheme set up in accordance
with paragraph 2.1.1 on the Membership Transfer Date.
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The Purchaser will invite each Relevant Employee who is a member of the
New Airways Pension Scheme immediately before the Membership Transfer
Date, to join the part of the section of the Purchaser's Pension Scheme
set up in accordance with paragraph 2.1.2 that corresponds to the part of
the New Airways Pension Scheme of which the employee is a member
immediately before the Membership Transfer Date.
The Purchaser will invite any Relevant Employee who would have become
eligible to join the New Airways Pension Scheme if it had continued to
apply to him or her to join the section of the Purchaser's Pension Scheme
set up in accordance with paragraph 2.1.2 on the later of the Membership
Transfer Date and the date on which that employee would have become
eligible.
2.4 The Purchaser's invitations to the Relevant Employees will give them the
opportunity to transfer their past service to the Purchaser's Pension
Scheme and will be:
2.4.1 in a form prepared by the Purchaser and agreed by the Vendor
(such agreement not to be unreasonably withheld or delayed) and
the trustees of the relevant Vendor's Pension Scheme; and
2.4.2 issued promptly once agreed and at least eight weeks before the
Membership Transfer Date.
2.5 The Purchaser will notify the Relevant Employees that a reply to the
invitation must be given at least seven days before the Membership
Transfer Date.
3 TRANSITIONAL PERIOD OF PARTICIPATION
3.1 Subject to Inland Revenue approval, the Vendor will use all reasonable
endeavours to ensure that the Purchaser may participate in the Vendor's
Pension Schemes (but only in respect of Relevant Employees who were
members of the Vendor's Pension Schemes immediately before Completion or
who join the Vendor's Pension Schemers before the Membership Transfer
Date) from Completion to the day before the Membership Transfer Date. For
this purpose the Vendor and the Purchaser will enter into deeds of
inclusion in the form of the documents in the agreed terms and the Vendor
will use reasonable endeavours to ensure that the trustees of the Vendor's
Pension Schemes execute such deeds.
Provided that the Purchaser has used all reasonable endeavours to assist
the trustees of the Vendor's Pension Schemes in connection with its
participation in those Schemes (including providing any information that
the trustees of the Vendor's Pension Schemes reasonably require), the
Vendor will promptly indemnify the Purchaser in respect of any reasonable
costs, claims, liabilities and expenses which it incurs as a result of
the failure of the trustees of the Vendor's Pension Schemes to execute
such deeds.
3.2 The Purchaser will do everything necessary to enable Relevant Employees
who are members of the Vendor's Pension Schemes to remain contracted-out
by reference to the Vendor's Pension Schemes and to cease to be
contracted-out by reference to the Vendor's Pension Schemes on the day
before the Membership Transfer Date.
3.3 If before the Membership Transfer Date the pay of any Relevant Employee is
increased by the Purchaser by an amount of more than [*] per cent. per
annum, the Purchaser will write and tell the trustees of the relevant
Vendor's Pension Scheme. [************************************]. In this
paragraph "pay" means pay at Completion as increased by the 1998 Pay
Award.
3.4 Except as necessary to comply with all applicable law, regulations and
requirements (including Inland Revenue requirements), the Vendor will
not without the Purchaser's written consent (not to
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be unreasonably withheld or delayed) make any amendment to the Vendor's
Pension Schemes prior to the Membership Transfer Date which will affect
the benefits payable in respect of Relevant Employees or the amount to be
transferred to the Purchaser's Pension Scheme nor will the Vendor
exercise its discretion prior to the Membership Transfer Date to augment
benefits payable to or in respect of the Relevant Employees without the
Purchaser's written consent (such consent not to be unreasonably withheld
or delayed).
3.5 The Purchaser will not exercise any power or discretion conferred on it
as an employer participating in the Vendor's Pension Schemes which, in
the reasonable opinion of the Vendor, would have the effect of increasing
the amount or value of any benefit to which any person is or may become
entitled under the Vendor's Pension Schemes or the amount of any
contributions due from an employer under those Schemes unless it shall
have been agreed between the Vendor and the Purchaser or unless the
Vendor shall consent (such consent not to be unreasonably withheld)
provided that the Vendor shall procure that the Purchaser may increase
the early retirement benefits to which any Relevant Employee is entitled
under the Vendor's Pension Schemes in accordance with the Vendor's
discretionary practice and the Vendor shall pay the amount of any
contribution due to those Schemes as a result of such increases.
3.6 The Purchaser will pay all contributions and expenses in respect of the
Relevant Employees to the Vendor's Pension Schemes in accordance with the
deeds of inclusion in the agreed terms.
4 TRANSFER PAYMENT FROM VENDOR'S PENSION SCHEMES
Where a Relevant Employee chooses to transfer his or her past service,
the Vendor will use reasonable endeavours to ensure that, on (or within 10
Business Days before) the Payment Date, the trustees of the relevant
Vendor's Pension Scheme transfer an amount equal to the value of the
benefits payable under those schemes in respect of that service
(calculated according to paragraph 5) to the Purchaser's Pension Scheme.
5 CALCULATION AND ADJUSTMENT OF AMOUNT TO BE TRANSFERRED
5.1 The amount described in paragraph 4 will be determined by the Vendor's
Actuary and confirmed by the Purchaser's Actuary in accordance with the
methods and assumptions set out in the Actuary's Letter, with the
adjustments set out in paragraph 5.2 and as if there was no requirement
to equalise guaranteed minimum pensions.
The amount will be determined within three months of the Membership
Transfer Date (or, if later, within two months of receipt by the Vendor's
Actuary of the data required for the purposes of the calculation) and
confirmed by the Purchaser's Actuary within six weeks of the amount being
determined. The Vendor's Actuary will send the Purchaser's Actuary all
data reasonably necessary to confirm the determination promptly and in
any case not later than seven days after the determination of the amount,
The Purchaser's Actuary will notify the Vendor's Actuary whether or not
the Purchaser's Actuary confirms the calculation of the amount.
The amount will be paid in cash.
The Vendor and the Purchaser shall use reasonable endeavours to ensure
that the trustees of the Vendor's Pension Schemes obtain as soon as
reasonably practicable the Inland Revenue's consent to the transfer of
the amount calculated under this paragraph.
5.2 The amount referred to in paragraph 5.1 will be adjusted in line with the
movement of the price of the British Airways Pension Investment Fund
Units between the Membership Transfer Data and the date on which payment
is made to the Purchaser's Pension Scheme.
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5.3 If the trustees of the Vendor's Pension Schemes do not pay the amount
calculated and adjusted in accordance with paragraphs 5.1 and 5.2 in full
on or before the Payment Date the Vendor will pay to the Purchaser the
amount of the difference reduced by an amount equal to the current rate
of corporation tax on that difference adjusted in line with the movement
of the price of the British Airways Pension Investment Fund Units in
respect of the period from the Payment Date until the date on which
payment is made.
Immediately on receipt of the shortfall payment in accordance with this
paragraph 5.3, the Purchaser will pay the amount of the shortfall payment
to the Purchaser's Pension Scheme.
As soon as the Purchaser's corporation tax liability (if any) has been
determined in respect of the tax year in which the shortfall payment is
paid to the Purchaser's Pension Scheme, to the extent the Purchaser, using
all reasonable endeavours, has not been able to obtain relief from
corporation tax which it would have paid in that tax year in respect of
the payment of the shortfall payment to the Purchaser's Pension Scheme,
the Vendor shall pay to the Purchaser an amount equal to the amount of
corporation tax relief which the Purchaser has been unable to obtain
adjusted in line with the movement of the price of the British Airways
Pension Investment Fund Units in respect of the period from making the
initial shortfall payment to the date of paying the relevant balancing
amount.
5.4 Without prejudice to any party's liability or obligations under this
Schedule if it is determined at any time within one year after the
Payment Date that there was a manifest error in the determination of any
amount to be transferred under paragraph 4 above then there shall be
calculated the difference between the amount transferred on the Payment
Date and what it would have been had no manifest error been made in its
determination. The Vendor shall procure that such difference is paid as
soon as reasonably possible by the Vendor's Pension Schemes to the
Purchaser's Pension Scheme where the amount transferred was less than it
should have been but for the error. The Purchaser shall procure that such
difference shall be paid as soon as reasonably possible by the
Purchaser's Pension Scheme to the Vendor's Pension Schemes where the
amount transferred was greater than it would have been but for the error.
6 SERVICE TO BE CREDITED BY THE PURCHASER'S PENSION SCHEME IN RESPECT OF
MEMBERSHIP OF THE VENDOR'S PENSION SCHEMES
6.1 The obligations in paragraph 6.2 are conditional upon the receipt by the
Purchaser's Pension Scheme of the amount described in paragraph 4 and
calculated according to paragraph 5.
6.2 The Purchaser will use reasonable endeavours to ensure that the
Purchaser's Pension Scheme credits each Transferring Member who chooses
to join that scheme with pensionable service equal to the pensionable
service that Transferring Member had under the relevant Vendor's Pension
Scheme before the Membership Transfer Date and ranking for benefit to the
same extent.
7 VOLUNTARY CONTRIBUTIONS
Nothing previously contained in this Schedule will apply to voluntary
contributions or to benefits secured by them. However, the Vendor will
use reasonable endeavours to ensure that the assets representing a
Transferring Member's voluntary contributions will be transferred to the
Purchaser's Pension Scheme and the Purchaser will ensure that in that
event that scheme provides benefits for the member concerned equal in
value to the value from time to time of the assets transferred.
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8 DISPUTES
If the amount to be transferred cannot be determined and confirmed by the
Vendor's and Purchaser's Actuaries the question will be referred to an
independent actuary. The independent actuary will be nominated firstly by
the Vendor and Purchaser or failing agreement between them be nominated
by the President of the Institute of Actuaries at the request of the
party first applying to him. The independent actuary shall act as an
expert and not as an arbitrator, his decision shall be final except in
the case of manifest error and his fees shall be paid as he shall direct.
9 INDEMNITY
If a debt becomes due from the Purchaser in respect of its participation
in the Vendor's Pension Schemes under section 144 of the Xxxxxxx Xxxxxxx
Xxx 0000 or section 75 of the Pensions Xxx 0000 and the application of
those sections is not due to any act or omission of the Purchaser (other
than an omission to pay contributions in excess of the normal monthly
contributions determined in the manner described in the deeds referred to
in paragraph 3.1, above), the Vendor will indemnify the Purchaser on
demand for the amount of that debt together with interest thereon from
the date the Purchaser pays the debt to the date the Vendor indemnifies
under this paragraph.
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50
SCHEDULE 6
THE RELATED AGREEMENTS
1 The Services Agreement
2 Underlease in relation to the Property to be granted by the Vendor to
the Purchaser
3 Consultancy Agreement.
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51
SCHEDULE 7
DOCUMENTS IN THE AGREED TERMS
1 List of the Fixed Assets
2 List of the Rotable Inventory Assemblies
3 List of the Rotable Inventory Sub-assemblies as contained in the list
attached to the Information Memorandum
4 List of the Expendable Inventory
5 List of the Tools
6 Details of the Assumed Contracts
7 The Related Agreements
8 Letter from the Vendor and the Purchaser to the Relevant Employees
9 The Staff Plan
10 Employees expected as at the date of this Agreement to be transferred or
in respect of whom the Purchaser will inherit liabilities pursuant to the
Transfer Regulations
11 Deeds of inclusion
12 Actuary's Letter (as defined in Schedule 5)
13 The documents containing prices for inventories referred to in Part 2 of
Schedule 2.
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52
Dated 1998
BRITISH AIRWAYS PLC
and
HAWKER PACIFIC AEROSPACE LIMITED
and
HAWKER PACIFIC AEROSPACE
LANDING GEAR OVERHAUL SERVICES
AGREEMENT
/s/ XXXXX X. XXXXXX
Signature
20 December 1997
/s/ XXXXX XXXXXXXX
Signature
[logo]
LINKLATERS
LINKLATERS & PAINES
One Xxxx Xxxxxx
Xxxxxx XX0X 0XX
Tel: (x00) 000 000 0000
Ref: JDDW/SAYR
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THE [*] INDICATES THAT PORTIONS OF TEXT HAVE BEEN DELETED AND ARE BEING FILED
UNDER SEPARATE COVER WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
LANDING GEAR OVERHAUL SERVICES AGREEMENT
This agreement is made on 1998
BETWEEN:
(1) BRITISH AIRWAYS PLC whose registered office is at Xxxxxxxxx Xxxxx,
Xxxxxx Xxxxxxxx Xxxxxxx, Xxxxxxxx XX0 0XX("XX");
(2) HAWKER PACIFIC AEROSPACE LIMITED whose registered office is at
Number One, Xxxxxx Xxxx, Xxxxxxxxxxx XX00 0XX("XXXXXX),"
(3) HAWKER PACIFIC AEROSPACE whose registered office is at 00000 Xxxxxxx
Xxx, Xxx Xxxxxx, XX 00000 XXX ("THE GUARANTOR").
It is agreed as follows:
WHEREAS
(A) Hawker has acquired the Business (as defined in the Sale of Business
Agreement) from BA pursuant to the Sale of Business Agreement.
(B) BA requires, and Hawker has agreed to provide, repair and overhaul
services for landing gear assemblies, flap tracks, flap carriages and
related components pursuant to the terms and conditions of this
Agreement.
(C) It is envisaged by the parties that Hawker will deliver improvements
in the provision of the Services and reductions in the cost to BA of the
Services, with the assistance and co-operation of BA.
(D) Whilst no partnership or agency is created by this Agreement, the
parties intend to conduct their activities under it in close
co-operation in order to maximise the benefit to both parties and to
BA's customers.
1 INTERPRETATION
In this Agreement, including its Schedules, the headings shall not
affect its interpretation and, unless the context otherwise
requires, the provisions in this Clause 1 shall apply:
1.1 DEFINITIONS
ACCOUNTING RECORDS means accounting records to be kept by Hawker in the
form and in accordance with the provisions of Schedule 7;
ADVANCED EXCHANGE means the process whereby Hawker Supplies Serviceable
Inventory to BA which thereupon becomes the property of BA in accordance
with Clause 14.2 and collects from BA Unserviceable Inventory which
thereupon becomes the property of Hawker also in accordance with Clause
14.2;
AFFILIATE means any company or other entity of which BA owns shares
which represent or are convertible into 20% or more of the equity share
capital of that company or entity;
AGREED TERMS means, in relation to any document, such document in the
terms agreed between the parties, signed by or on behalf of BA and
Hawker for the purposes of identification and listed in Schedule 8;
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1
AIRCRAFT MEANS:
(i) in respect of Flap Tracks and Flap Carriages and related
components, the A320, B737, B747, B757, B767, B777,
L1011 and Concorde aircraft types, and such other
aircraft types as are notified to Hawker pursuant to
Clause 8;
(ii) in respect of Landing Gear and related components, the
B737, B747, B757, B767, B777, L1011 and Concorde
aircraft types, and such other aircraft types as are
notified to Hawker pursuant to Clause 8;
AIRCRAFT MAINTENANCE MANUALS means any technical manuals and other
technical data issued by an aircraft manufacturer relevant to the
operation, maintenance, overhaul and repair of any item of Rotable
Inventory or its installation and attachment to any Aircraft as updated
from time to time;
AIRSIDE PASS means a pass issued by HAL, GAL or other appropriate
authority for airside access;
BAA means BAA plc;
BA PASS means a pass issued by BA for access to BA Property;
BA PROPERTY means any real property from which BA conducts its business;
BA REPRESENTATIVE means the person who is nominated by BA from time to
time pursuant to Clause 17.1 as Hawker's principal point of contact for
matter arising out of or in connection with this Agreement which relate
to the provision of Services;
BA SAFETY OBLIGATIONS means the written statement of health and safety
policy prepared by BA in accordance with Section 2(3) of the Health and
Safety at Work etc Xxx 0000 and shall include (but not be limited to)
any rules, procedures, arrangements, systems, working practices or codes
of practice determined or adopted by BA whether in accordance with that
policy or with any applicable legal or Regulatory Requirements from time
to time to the extent that they are applicable to the provision of the
Services by Hawker to BA;
BA SPECIFICATION means the technical specification in the agreed terms
with which Serviceable Inventory must be in accordance;
BA SYSTEM means the TIME computer system;
BUSINESS DAY means a day on which banks are open for business in England
(excluding Saturdays, Sundays and public holidays);
CAA means the Civil Aviation Authority;
CHANGE CONTROL PROCEDURE means the procedure by which changes may be
made to the Services pursuant to Clause 7, as set out in Schedule 4 and
CHANGE shall mean a change to the Services resulting from the operation
of the Change Control Procedure;
COMMENCEMENT DATE means the date of this Agreement;
COMPLIANCE PLANS means any plans made pursuant to Clause 5.1 as a result
of a material change in Regulatory Requirements;
COMPONENTS means the constituent sub-assembly units and any parts
thereof which are comprised in any item of Rotable Inventory;
CONCORDE INVENTORY means Serviceable Inventory in respect of the
Concorde aircraft type;
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2
CONFIDENTIAL INFORMATION MEMORANDUM means the document titled BA
Engineering Landing Gears Repair & Overhaul Activity Confidential
Information Memorandum sent to the Guarantor under cover of a letter
dated 1 May 1997;
CONTAMINATION means any harm or damage or other interference with the
Environment arising on account of the presence, release, seepage, leak
or escape of any Hazardous Materials;
CONTAMINATION LIABILITY means any liability (including liability in
respect of Remedial Action) on the part of BA or Hawker under
Environmental Laws in respect of Contamination;
CONTAMINATION LOSS means actions, proceedings, losses, damages,
liabilities, claims, (including without limitation fines and/or
penalties) and, if reasonably incurred, costs and/or expenses of
Remedial Action and legal and other professional fees which are suffered
by Hawker or BA as the case may be (but excluding loss of profits or
consequential loss or consequential damage of any kind) and which arise
as a direct or indirect result of Contamination;
DISPUTE RESOLUTION PROCEDURE means the procedure by which the parties
will resolve disputes which arise in connection with this Agreement, set
out in Clauses 25, 26, and 27;
DoT means the Department of Transport;
EMPLOYEE means any employee of Hawker involved in the provision of
Services under this Agreement;
ENVIRONMENT means living organisms (including humans) including the
ecological systems of which they form part and the following media
(alone or in combination): air (including air within buildings and the
air within other natural or man-made structures whether above or below
the ground); water (including, without limitation, water under or within
land or in drains or sewers and coastal and inland waters); and land
(including land under water); and in the case of man includes his
property;
ENVIRONMENTAL AGREEMENT means any agreement with an Environmental
Authority which is binding on either BA or Hawker as the case may be but
only to the extent that such agreement relates, either wholly or in
part, to the prevention, remediation or mitigation of Contamination;
ENVIRONMENTAL AUTHORITY means any legal person (including any government
department or government agency) having regulatory authority under
Environmental Laws and or any court of law or tribunal which has
jurisdiction to determine any matter arising under Environmental Laws or
relating to the Environment;
ENVIRONMENTAL LAWS means in each case to the extent that the same are
enforceable in England and relate to the protection of the Environment,
and/or the prevention of and/or the provision of remedies in respect of
harm or damage to or other interference with the Environment, excluding
general planning laws and Safety Laws, other than Safety Laws which
relate to or have as a purpose the prevention of exposure to dangerous
or hazardous materials, but including the following:
(i) any and all laws including European Community or European
Union regulations, directives and decisions, together
with statutes and subordinate legislation in force from
time to time including for the avoidance of doubt Part
IIA of the Environmental Protection Xxx 0000 and/or
Sections 161A-D of the Water Resources Act 1991 (as
enacted by Section 57 and Schedule 22 paragraph 162
respectively of the Environment Act 1995) and all
notices, codes of practice, guidance notes and all
subordinate legislation made under the above statutory
provisions whether or not these provisions are in force
at the Commencement Date;
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3
(ii) all regulations, orders, ordinances, Permits, Environmental
Agreements, codes of practice, circulars, guidance notes
and the like issued under (i) above in force from time to
time;
(iii) common law and equity;
(iv) local laws and bye-laws in force from time to time; and
(v) judgments, decisions, notices, orders, directions, consent
agreements, instructions or awards by, with or of any
Environmental Authority under (i), (ii), (iii) and (iv)
above;
EUROPE means United Kingdom, Ireland, Portugal, Spain, France, Belgium,
the Netherlands, Germany, Switzerland, Austria, Luxembourg, Italy, Czech
Republic, Poland, Xxxxxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx, Xxxxxx, Xxxxxxx,
Xxxxxx;
EXCHANGE FEE means a one-off fee payable by Hawker to BA where Hawker
uses an item from the Inventory Pool for the provision of Third Party
Services as set out in the list of exchange fees in the agreed terms;
EXISTING EMPLOYEE means any Employee who is employed by BA in the
Business on the day before the Commencement Date;
EXPERT has the meaning set out in Clause 26.1;
EXPENDABLE INVENTORY means in respect of the Aircraft, items comprised
in a Landing Gear, Flap Track or Flap Carriage for which no authorised
repair procedure exists and for which the cost of repair would normally
exceed the cost of replacement;
FAA means the Federal Aviation Authority;
FIXED CHARGES means the charges applicable per aircraft type for the
provision of Overhaul Services as set out in Schedule 3;
FLAP CARRIAGES means flap carriages, or any part thereof, in respect of
the Aircraft which are repaired and overhauled by BA through the
Business immediately prior to the Effective Date and any other flap
carriage added to or substituted for such flap carriages;
FLAP TRACKS means flap tracks, or any part therof, in respect of the
Aircraft which are repaired and overhauled by BA through the Business
immediately prior to the Effective Date and any other flap tracks added
to or substituted for such flap tracks;
GAL means Gatwick Airport Limited;
GOOD INDUSTRY PRACTICE means in relation to any undertaking and any
circumstances, the exercise of such skill as would be expected from a
reasonably skilled and reasonably experienced person engaged in the same
type of undertaking under the same or similar circumstances;
HAL means Heathrow Airport Limited;
HAWKER REPRESENTATIVE means the person nominated by Hawker from time to
time pursuant to Clause 17.2 as BA's principal point of contact for
matters arising out of or in connection with this Agreement which relate
to the provision of Services;
HAWKER SYSTEMS means the computer systems to be implemented by Hawker in
accordance with Clause 20.1;
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4
HAZARDOUS MATERIALS means wastes, pollutants, contaminants or other
substances (including without limitation, liquids, solids, gases, ions
and noise) that may be harmful to the Environment or interfere with any
ecological system or a nuisance to any person or make the use or ownership
of any affected land more costly;
IMPROVEMENT means any amendment, modification or addition to the
Licensed Intellectual Property or any new Intellectual Property which
Hawker may develop for, or in the course of, the provision of the
Services which enables the Services to be provided more economically or
efficiently;
INITIAL TERM means the period of 7 years commencing on the Commencement
Date;
INTELLECTUAL PROPERTY means trade marks, service marks, trade names,
logos, get-up, patents, inventions, registered and unregistered design
rights, copyrights, rights of extraction relating to databases,
confidential information, know-how, trade secrets and all other similar
proprietary rights which may subsist including, where such rights are
obtained or enhanced by registration, any registration of such rights
and applications and rights to apply for such registrations;
INVENTORY means the Rotable Inventory and the Expendable Inventory;
INVENTORY AVAILABILITY FEE means L1.75 million per annum as amended from
time to time pursuant to Clause 4.4 and 4.5;
INVENTORY POOL means the items of Rotable Inventory held by Hawker for
use in providing the Services to BA pursuant to Clause 4.1;
JOINT VENTURE ENTITY means any entity which is engaged in a joint
venture or similar co-operative arrangement with BA in relation to the
operation of aircraft;
LANDING GEARS means landing gears, or any part thereof, in respect of
the Aircraft which are repaired and overhauled by BA through the
Business immediately prior to the Effective Date and any other landing
gear added to or substituted for such landing gear;
LICENSED INTELLECTUAL PROPERTY means the intellectual property rights
owned by BA listed in Schedule B;
MONTHLY CHARGES means, for any month, the charges set out in Clause 12
applicable to that month;
NOTICE PERIOD means the period between the serving of a notice to
terminate the whole or part of this Agreement and the effective date of
termination of the whole or the relevant part of this Agreement;
OEM means the original equipment manufacturer or any item of inventory
or any Component;
OVERHAUL SERVICES means the Services detailed in Part A of Schedule 1;
OTHER SERVICES means the Services detailed in Part B of Schedule 1;
PARTNER means any alliance partner of BA or any airline to which BA has
granted a franchise or which it has otherwise licensed to use any BA
trade xxxx;
PERMITS means any and all licenses, consents, permits, authorisations or
the like, made or issued pursuant to or under, or required by,
Environmental Laws in relation to providing the Services;
POSSESSION, in relation to the Inventory, has the following meaning: the
Inventory shall be in the Possession of Hawker if it is physically on
any of Hawker's or its agents' or sub-contractors' premises, or if it is
being handled by or it is under the control of Hawker; and inventory
shall be in
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5
the Possession of BA in all other circumstances save as otherwise agreed
between BA and Hawker;
PREMISES means the premises to be occupied by Hawker during he
Transitional Period pursuant to the terms of the Underlease;
RATES means the hourly or daily rates to be used to determine the
Variable Charges as set out in Schedule 3;
REGULATORY AUTHORITY means, HAL, GAL, BAA, JAA, CAA, FAA, DoT or any
other competent authority or entity having responsibility for the
regulation or governance of the Services or any part thereof;
REGULATORY REQUIREMENTS means Environmental Laws, Safety Laws and any
other obligations relevant to the Services which are imposed by any
Regulatory Authority from time to time;
REMEDIAL ACTION means any step required by any Environmental Authority
for:
(i) preventing, mitigating, limiting, removing, remedying,
cleaning-up, abating, containing or ameliorating the
presence or effect of any Hazardous Material in the
Environment; or
(ii) carrying out investigative work and obtaining legal and
other professional advice that is reasonably required in
relation to (i);
ROTABLE INVENTORY means in respect of Landing Gear, Flap Tracks and Flap
Carriages, items which at the relevant point in time can economically be
restored to a serviceable condition;
SAFETY LAWS means any duties or obligations relating to the protection
of the health and safety of employees and other persons whilst at work
arising under any applicable law or Regulatory Requirements form time to
time;
SALE OF BUSINESS AGREEMENT means the agreement dated 20 December 1997
between BA and Hawker pursuant to which Hawker purchased the Business
from BA;
SERVICE BULLETINS means any update to the Service Manuals issued from
time to time by an OEM;
SERVICE LEVEL means the level of service required of Hawker in supplying
the Services as set out in paragraph 1 of the SLA;
SERVICE LEVEL AGREEMENT or SLA means the document attached as Schedule 2;
SERVICE MANUALS mean any technical manuals and other technical data
relating to the operation, maintenance, overhaul and repair of the
Rotable Inventory or any Component and issued by an OEM as updated by
Service Bulletins from time to time;
SERVICEABLE INVENTORY means an item of Rotable Inventory which has been
repaired and/or overhauled to the BA Specification in accordance with
this Agreement but not redelivered to BA;
SERVICES means those services detailed in Schedule 1, as amended from
time to time in accordance with the Change Control Procedure, by
agreement between BA and Hawker, and any tasks or services connected
with or ancillary to those set out in Schedule 1;
THIRD PARTY SERVICES means services similar to the Services supplied by
Hawker to parties other than BA;
TRANSFER REGULATIONS means the Transfer of Undertakings (Protection of
Employment) Regulations 1981;
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6
TRANSITIONAL PERIOD means the period from the Commencement Date until
the Business has been fully relocated to Hawker's premises in accordance
with Clause 6.2 and Hawker has ceased to occupy the Premises;
UNDERLEASE means the lease entered into by the parties pursuant to the
Sale of Business Agreement in respect of the Premises;
UNSERVICEABLE INVENTORY means any item or Rotable Inventory which
requires repair and/or overhaul before it is ready for fitment to an
Aircraft; and
VARIABLE CHARGES means the charges applicable to the provision of Other
Services.
1.2 SUBORDINATE LEGISLATION
Any reference to a statutory provision shall include any subordinate
legislation made from time to time under that provision.
1.3 MODIFICATION ETC. OF STATUTES
Any reference to a statutory provision shall include such provision as
from time to time modified or re-enacted or consolidated whether before
or after the date of this Agreement so far as such modification,
re-enactment or consolidation applies or is capable of applying to any
transactions entered into under this Agreement and (so far as liability
thereunder may exist or can arise) shall include also any past statutory
provision (as from time to time modified, re-enacted or consolidated)
which such provision has directly or indirectly replaced.
1.4 COMPANIES XXX 0000
The words "subsidiary" and "holding company" shall have the same
meanings in this Agreement as their respective definitions in the
Companies Xxx 0000 and references in this Agreement to a "Group" in
relation to BA or Hawker shall mean BA or Hawker, as the case may be,
and any undertaking which, at the relevant time, is a group undertaking
of BA or Hawker, as the case may be, within the meaning of Section 259
of that Act;
1.5 INTERPRETATION XXX 0000
The Interpretation Act 1978 shall apply to this Agreement in the same
way as it applies to an enactment.
1.6 REFERENCES
References to this Agreement shall include any Schedules to it, and
references to Clauses and Schedules are to Clauses of and Schedules to
this document.
1.7 INFORMATION
Any reference to books, records or other information means books,
records or other information in any form including paper,
electronically stored data, magnetic media, film and microfilm.
1.8 CONFLICT
If there is any conflict in this document (excluding the Schedules) and
the contents of any Schedule, then the provisions of this document shall
prevail to the extent of that conflict.
2 TERM
2.1 This Agreement shall commence on the Commencement Date and continue
until the expiration of the Initial Term unless terminated earlier by
either party pursuant to the terms of this Agreement or otherwise by law
or unless extended by BA pursuant to Clause 2.2.
2.2 BA may, exercisable in its absolute discretion not less than 6
months prior to the expiration of the Initial Period, notify Hawker in
writing that it wishes to extend the term of this Agreement for a
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7
further period of one year or such other period as is agreed in writing,
in which case the Agreement shall continue in force for an additional
year or such other period unless terminated earlier by either party
pursuant to the terms of this Agreement or otherwise by law. Upon the
giving of such notice the parties shall enter into bona fida
negotiations to agree the Fixed Charges and Rates for such extended term
on a basis commensurate with the Fixed Charges and Rates applicable
during the then current year. If the parties fail to agree such Fixed
Charges and Rates before 30 days prior to the commencement of the
additional period then either party may request determination of the
Charges and Rates by an Expert pursuant to Clause 26 and, pending such
determination the Charges and Rates applicable to the previous year
shall apply.
3 SERVICES
3.1 Hawker shall provide to BA the Services in respect of the Aircraft
with effect from the Commencement Date and for the duration of this
Agreement in accordance with:
3.1.1 the terms and conditions of this Agreement;
3.1.2 Good Industry Practice;
3.1.3 all relevant Regulatory Requirements; and
3.1.4 subject to Clause 3.2, the appropriate BA Specifications,
Service Manuals and Aircraft Maintenance Manuals as
applicable, in each case in force from time to time.
3.2 In the event that there is any conflict between the requirements
set out in the documents referred to in Clause 3.1.4, the terms of those
documents shall prevail to the extent of that conflict in the following
descending order of priority: BA Specifications, Service Manuals and
Aircraft Maintenance Manuals.
3.3 The provisions of the Service Level Agreement shall apply. For
Services which have no performance level specified in the Service Level
Agreement, Hawker shall provide those Services to a standard which
Hawker can reasonably be expected to achieve having regard to Good
Industry Practice and, in any event, at least to the level provided by
BA in the 12 months prior to the execution of the Sale of Business
Agreement.
3.4 Hawker shall ensure that in providing the Services, Hawker and each
item of the Inventory will comply with all applicable Regulatory
Requirements at all times. Hawker shall maintain such records as are
necessary in order to prove compliance, including but not limited to
history and maintenance records and shall promptly make these available
for inspection by such Regulatory Authorities as are entitled to inspect
them.
3.5 If BA determines that the Services are being provided otherwise than
in a manner consistent with the image and reputation of BA, it may give
Hawker notice of the same at the Weekly Meeting (as defined in Schedule
1) and of any reasonable steps it requires Hawker to take to remedy this
inconsistency and, upon receipt of such notice, Hawker shall take such
steps.
3.6 Hawker shall immediately (i) notify the BA Representative of any
damage caused to any aircraft in the course of providing the Services,
and (ii) notify the BA Representative of any incident or circumstance
which materially jeopardises its ability to perform all or any of the
Services in accordance with this Agreement.
3.7 Hawker shall be responsible for the cost of transport of Scheduled
and/or Unscheduled Overhauls (as defined in Schedule 1) within Europe.
For the avoidance of doubt, Hawker shall not be responsible for the cost
of transport required in the performance of AOG Support (as defined in
Schedule 1)(which costs shall be borne by BA).
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8
3.8 Hawker shall at BA's request on at least 30 days prior written
notice offer to provide the Services in accordance with the Service
Levels to BA Affiliates, Joint Venture Entities and Partners (excluding
American Airlines), offering the same Fixed Charges and Rates as exist
under this Agreement as stipulated in Schedule 3.
3.9 Subject to Clause 21, BA shall during the initial Term and any
extensions thereto pursuant to Clause 2.2 acquire the Services in respect
of the Aircraft (excluding the Concorde aircraft type), exclusively from
Hawker and shall not provide the Services in respect of the Aircraft
itself or through any other person, firm or company.
4 INVENTORY POOL
4.1 In consideration of the payment of the Inventory Availability Fee
in accordance with Clause 12, Hawker shall, subject to Clause 4.2, at
all times retain the number of items or Rotable Inventory acquired by it
pursuant to the Sale of Business Agreement in respect of each Aircraft
(or as otherwise agreed in writing in accordance with Clause 4.5) for
use in providing the Services to BA.
4.2 Hawker shall not use any item of Rotable Inventory held as part of
the Inventory Pool in the provision of Third Party Services without the
prior written consent of BA, which consent shall not be unreasonably
withheld or delayed provided that it shall be unreasonable for BA to
withhold or delay consent if at the date consent is sought there is no
reasonable prospect (according to BA's knowledge at the time) of BA
having a requirement for an Arising (as defined in Schedule 1) at the
same time.
4.3 If Hawker uses any Item held in the Inventory Pool for the
provision of Third Party Services, it shall pay to BA an Exchange Fee.
4.4 If, following a request by BA, Hawker uses in the provision of the
Services an item of Rotable Inventory not forming part of the Inventory
Pool, the provisions of paragraph 2.8.2 of Schedule 1 shall apply. If
such inventory is in respect of the L1011 aircraft type there shall not
be any increase in the Inventory Availability Fee.
4.5 Without prejudice to BA's other rights in this Agreement, either
party may recommend a change to the number of items of Rotable Inventory
held in the Inventory Pool due to a change in the requirements of BA and
if the other party agrees to such change, such agreement not to be
unreasonably withheld or delayed, the Inventory Pool shall be so changed
and the Inventory Availability Fee shall be amended in accordance with
the methodology in the agreed terms, effective from the date of the
change in the Inventory Pool.
5 ONGOING REGULATORY AND TECHNOLOGY REVIEW
5.1 Hawker shall monitor and keep BA advised of material changes in
Regulatory Requirements which are applicable to the Services provided by
Hawker, and shall provide BA with timely plans wherever necessary,
setting out alterations to the Services required to comply with such
material changes and (without compromising the requirement of
compliance) designed to minimise both the resultant cost to BA and any
potential operational disruption. Hawker shall advise BA of cases where
BA must provide any relevant Regulatory Authority with evidence of
compliance, and shall provide BA with the required evidence in good
time. Any changes to the Services which are identified in any Compliance
Plans will be requested by BA or proposed by Hawker in accordance with
the Change Control Procedure.
5.2 Hawker and BA acknowledge that it is in the interests of both
parties to take advantage of improvements in any relevant technology
which will improve the quality and efficiency of the Services or reduce
the cost of providing such Services and which will improve Hawker's
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9
efficiency and performance under this Agreement. To this end, Hawker shall
review developments in technology applicable to the provision of the
Services and shall recommend to BA any changes utilising new technologies
which it believes will improve the quality or efficiency of the Services
and/or reduce the cost to BA of the provision of the Services. Any proposed
changes in the Services resulting from such implementation shall be in
accordance with the Change Control Procedure.
6 TRANSITIONAL PERIOD
PROPERTY
6.1 BA and Hawker agree that for the Transitional Period Hawker may occupy
the Premises in order to perform the Services and Third Party Services
in accordance with the terms of the Underlease as amended or
supplemented by this Agreement.
6.2 Hawker will relocate the Business to alternate premises in accordance
with the Underlease. Upon the relocation of the Business, Hawker and BA
shall confirm such relocation in writing signed by an authorised
representative of each party. For each day that the Transitional Period
extends beyond a period of 150 days from the signature of the Sale of
Business Agreement, Hawker shall pay to BA the rent stipulated in and in
accordance with the provisions of the Underlease.
6.3 Hawker will vacate the Premises forthwith in the event of termination of
this Agreement during the Transitional Period; or, if no part of the
Premises continues to be used for the purposes of providing the Services
or Third Party Services under this Agreement during the Transitional
Period, Hawker shall have a reasonable right of access to the Premises
following its vacating the Premises in order to recover assets and
equipment.
6.4 BA shall, in accordance with the Underlease or as otherwise agreed by
the Parties, upon vacation of the Premises disconnect the prime services
and utility connections from all equipment, fixtures and fittings acquired
by Hawker pursuant to the Sale of Business Agreement. Hawker shall
disconnect such items from any control consoles that are to remain at
the Property at its own expense, remove or procure the removal of all
such equipment, fixtures and fittings and make good any damage to the
Premises caused by such relocation.
ENVIRONMENT
6.5 It is acknowledged and agreed that BA has for some time carried on the
Services (and other work) at the Premises and that BA is responsible for
all Contamination Liability (whether at the Premises or resulting from
Contamination thereat) arising on or before the Commencement Date for
any reason and BA shall indemnify and keep indemnified Hawker from any loss
(including Contamination Loss) in respect thereof.
6.6 Without prejudice to the other provisions of this Clause 6, during the
Transitional Period and in respect of Hawker's occupation of the Premises
(but not otherwise):
6.6.1 Hawker shall in providing the Services use its reasonable
endeavours to work towards the objectives set out in the BA Annual
Environmental Report 1997 to the extent that such objectives are
applicable to the Services;
6.6.2 BA and Hawker shall promptly notify the other party in writing of
any act, omission, occurrence or state of affairs of which it has
actual knowledge which has resulted in or which may give rise to
any Contamination at the Premises or any other BA Property
adjacent to the Premises and/or to any claim from any third party
in respect thereof;
6.6.3 BA and Hawker shall promptly notify the other of any action taken
by any Environmental Authority in respect of the Premises and
shall permit the other to review any written
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correspondence in relation thereto (save where disclosure would
lead to a breach of legal privilege);
6.6.4 Hawker shall give BA or its agents or representatives access to
the Premises at reasonable times and on reasonable prior written
notice for the purposes of auditing, monitoring, inspecting or
reviewing matters relating to the Environment at the Premises or
other BA Property;
6.6.5 at any time following audit, monitoring, inspection or review by
BA pursuant to Sub-clause 6.6.4, BA may propose in accordance
with the Change Control Procedure that Hawker implement such
changes as BA considers to be necessary to comply with
Environmental Laws; and
6.6.6 Without prejudice to Clause 6.8, Hawker will allow BA to carry
out at its own cost such modifications of the Premises as are
required in order to comply with any new Environmental Law. BA
shall schedule such work so as to minimise any potential
disruption to Hawker's business and the provision of the Services
provided that any such disruption shall constitute a Force Majeure
Event (as set out in Clause 29).
6.7 Unless Hawker and BA shall at any time agree otherwise, waste which is
generated by Hawker in the course of the provision of the Services (and
which is not discharged into a sewer under a trade effluent discharge
consent granted pursuant to Section 118 of the Water Industry Act 1991),
shall be disposed of by a waste contractor or waste contractors appointed
by Hawker at Hawker's cost with the approval of BA which approval shall
not be unreasonably withheld or delayed.
6.8 Hawker shall at its own expense and without any liability on BA's part
procure that the cadmium plating process including vapour degreaser in
the plating shop (workshop W818) which forms part of the Premises shall
be upgraded in accordance with Environmental Laws and to the reasonable
requirements of the relevant Environmental Authority within the time
period specified by the relevant Environmental Authority and
notwithstanding Clause 6.6 Hawker shall indemnify BA for any costs,
expenses, damages, liabilities, claims (including without limitation
fines and/or penalties) incurred by BA whatsoever as a result of
Hawker's failure to comply with this time limit and/or with the
requirements of the relevant Environmental Authority with regard
to the upgrade.
6.9 Subject to Clauses 6.6 and 6.12, Hawker hereby agrees and covenants to
pay to BA an amount equal to any Contamination Liabilities on the part
of BA in respect of Contamination which occurs at the Premises or which
emanates from the Premises during the Transitional Period including but
not limited to the presence of and/or actual or threatened Contamination
on, under or over the Premises, excluding any Contamination Liabilities
arising on account of any incidents, events, states of affairs, conditions,
circumstances, activities, practices or actions existing on or prior to
the Commencement Date except where the Contamination Liability or part
of Contamination Liability is incurred as a result of Hawker during the
Transitional Period continuing to carry out activities, practices or
actions carried out by the existing Business prior to the Commencement
Date which Hawker could reasonably have been expected to discontinue
before the date on which the Contamination Liability was incurred taking
into account any limits on Hawker's discretion to discontinue such
activities, practices or actions in the light of any prescribed policies or
programmes of BA.
6.10 Hawker and BA covenant to pay to the other an amount equal to any
Contamination Liability on the part of BA or Hawker in respect of
Contamination at the Premises caused by the wilful misconduct or
negligent acts or omissions or breach of contract of the other, its
agents, employees and contractors.
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6.11 Upon Hawker vacating the Premises, BA shall be responsible for the
decommissioning of and any clean up works in relation to the plating
shop which forms part of the Premises as well as the rest of the Premises
to comply with all Environmental Laws including any requirements of any
Environmental Authority relating to the plating shop and the activities
undertaken therein and BA shall indemnify Hawker against any liability
in respect of such matters (including the payment of fines and penalties
for failure to do so) and, without prejudice to Clause 6.10, in the
event that material additional work is required or the cost of such work
is otherwise materially increased due to the acts and omissions of
Hawker, its agents, employees and/or contractors the cost of undertaking
the additional work shall be paid for by Hawker or (if BA so elects) the
proper costs incurred by BA and directly or indirectly attributable to the
acts and omissions of Hawker its agents, employees and/or contractors
shall be duly repaid to BA.
6.12 Neither party shall be entitled to use any breach of any of the terms of
this Clause 6 as a breach of this Agreement for the purposes of Clause 21
or otherwise as a reason for terminating or purporting to terminate this
Agreement.
MISCELLANEOUS
6.13 During the four weeks following the Commencement Date, Hawker may
request an item of Inventory from BA and BA shall, where practicable,
supply such item of Inventory to Hawker. Hawker shall pay BA for the
supply of such item of Inventory the OEM list price plus 10% (due upon
receipt of the Inventory), such amounts to be deducted from the Monthly
Charges for the month in which they fall.
7 CHANGE CONTROL PROCEDURE
7.1 At any time either BA or Hawker may recommend a change to the Services
which shall be dealt with in accordance with the Change Control Procedure
provided that BA shall be entitled to refuse any change so proposed at
its absolute discretion except where such change is required to comply
with applicable Regulatory Requirements.
7.2 Any Change required to comply with Regulatory Requirements shall be
implemented in accordance with Hawker's notice in writing to BA.
7.3 This Agreement shall be deemed amended in accordance with any agreed
change from the date such change is agreed to be implemented and
thereafter the Services shall be performed on the basis of this
Agreement as so amended, but until then Hawker shall continue to perform
the Services on the previous basis, unless otherwise required by any
Regulatory Requirement.
7.4 The Change Control Procedure is without prejudice to BA and Hawker's
rights to terminate all or part of this Agreement under Clause 21.
8 NEW AIRCRAFT TYPES
8.1 BA may, by not less than 6 months prior written notice to Hawker,
require Hawker to offer to provide the Services to BA or its Joint
Venture Partners, Affiliates or Partners in respect of any new aircraft
type notified in such request and Hawker shall (following signature of an
agreement with such Joint Venture Partner, Affiliates or Partners on
substantially the same terms as this Agreement including same or better
pricing terms) provide such Services from the expiry of such notice
(except where the relevant OEM requires a longer lead time to supply the
relevant inventory, in which case from the expiration of that lead time).
8.2 The relevant parties shall agree amounts to be charged by Hawker and if
the parties fail to agree before 30 days prior to the expiration of the
notice then either party may request the determination of the Fixed
Charges by an Expert pursuant to Clause 26.
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9 MEASUREMENT OF PERFORMANCE
9.1 The performance of Hawker in providing the Services shall be monitored
and recorded by reference to the Service Levels according to the
procedure set out in Schedule 5. Hawker shall be responsible for
implementing and operating this procedure and shall provide BA with
regular reports in the form described in Schedule 5.
9.2 Hawker shall provide BA with access to or copies of any information on
which the reports on the performance of the Services made by Hawker are
based in order to confirm the validity and accuracy of such reports and
to ensure that the reports on the performance of the Services made by
Hawker reconcile with any records of the performance of the Services
maintained by BA.
9.3 BA shall be entitled to challenge the validity and/or accuracy of the
records maintained by Hawker pursuant to this Clause 9 within 12 months
of the dates to which the records relate and any disputes arising out of
or in connection with this Clause 9 shall be received in accordance with
the Dispute Resolution Procedure.
10 FAILURE TO MEET SERVICE LEVELS
10.1 Without prejudice to BA's rights under Clause 21, on each occasion on
which Hawker fails to meet the Service Levels in providing the Services,
BA may within 12 months from the date of the Performance Review (as
defined in Schedule 5) identifying such failure require Hawker to, in
which case Hawker shall, grant to BA a credit in an amount as stipulated
in Schedule 2 in relation to the Service Level which Hawker has failed
to meet and BA agrees, that Hawker shall not be liable for any other
loss or liability of any kind (whether in contract, tort for negligence
or otherwise howsoever arising) relating to such failure to meet such
Service Levels.
10.2 Hawker acknowledges and agrees that the amounts stipulated in Schedule 2
are a reasonable and fair estimate of the damages likely to be suffered
by BA as a result of a failure by Hawker to meet the relevant Service
Level.
10.3 The credits granted by Hawker pursuant to this Clause 10 shall be
payable by way of a reduction in the Monthly Charges in the month
immediately following the month in which the credits are agreed in a
Performance Review or, if not so agreed, at the conclusion of the
Dispute Resolution Procedure as set out in Schedule 5.
10.4 Without prejudice to BA's rights under Clause 21, if BA reasonably
anticipates that Hawker will be unable to provide any item of inventory
at the time required by BA or as otherwise set out in the Service Levels
from the inventory held by Hawker and provided that BA has complied with
its obligations contained in Schedule 1;
10.4.1 BA may serve a notice on Hawker requiring Hawker to obtain the
item of inventory from a third party at Hawker's own cost; and
10.4.2 if after BA gives such a notice and Hawker informs BA that it
will be unable to obtain the necessary inventory from a third
party, or if BA reasonably suspects that this will be the case,
BA may itself elect to obtain the item of inventory from a third
party and charge to Hawker all costs incurred by itself in doing
so.
11 EMPLOYEES
11.1 Hawker shall ensure that all Employees are suitably skilled and
competent to undertake the tasks assigned to them and that they meet
airside and/or BA Safety Obligations, as applicable, and all legal
requirements and Regulatory Requirements.
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11.2 BA shall be entitled to require Hawker to remove from performance of the
Services any Employee whom BA reasonably believes has breached BA Safety
Obligations.
11.3 Hawker shall be responsible for any and all taxation and payroll tax
liabilities in respect of the Employees which may arise under any
legislation as a result of or in connection with this Agreement. Hawker
hereby indemnifies BA in relation to claims, liabilities and costs which
BA may incur as a result of any such transaction and payroll tax
liabilities.
12 PRICE/CHARGES
12.1 The Monthly Charges for the Services shall comprise the following:
12.1.1 one twelfth of the Inventory Availability Fee adjusted by the
amount of any Exchange Fees falling due within the relevant month
pursuant to Clauses 4.3 and 4.4 or otherwise; and
12.1.2 the Fixed Charges accruing during the month; and
12.1.3 the Variable Charges accruing during that month.
12.2 The Rates shall remain fixed for a period of 3 years from the
Commencement Date. Thereafter Hawker may vary the Rates by 90 days prior
written notice to BA but shall not increase the Rates more than once in
any 12 month period nor by more than the equivalent percentage increase
in the UK Manufacturing Average Hourly Earnings Index published by the
Office of National Statistics over a corresponding period.
12.3 The provision of all Services relating to Concorde aircraft will
initially be deemed to be Other Services and charged on the basis of the
Rates. The parties will review the basis of pricing the services for
Concorde with a view to agreeing Fixed Charges within 18 months from the
Commencement Date.
13 PAYMENT
13.1 Hawker shall invoice BA in pounds sterling for the Monthly Charges
monthly or, where it deems it appropriate, weekly. BA shall, subject to
Clause 12 and this Clause 13, pay all invoices by way of bank transfer
by the end of the month following the month in which they were received.
13.2 With each invoice delivered pursuant to Clause 13.1, Hawker shall
provide to BA details of the relevant Services and how the charges
contained in the invoice have been calculated. For the avoidance of
doubt, if a repair or overhaul takes place over two periods to which
different pricing applies pursuant to Schedule 3, the charge shall be
that applicable at the time the invoice for the repair or overhaul may
be submitted.
13.3 For Advanced Exchanges Hawker shall be entitled to submit an invoice to
BA for the provision of Overhaul Services on the relevant Rotable
inventory at any time after the expiration of 4 weeks after collection
by Hawker of that inventory.
13.4 For Repair and Return (as defined in Schedule 1) Hawker may only submit
an invoice to BA for the provision of Overhaul Services once the
relevant Serviceable inventory has been returned to BA.
13.5 If any sums are due to BA from Hawker, as agreed by BA and Hawker or as
determined by an Expert pursuant to the Dispute Resolution Procedure,
whether in respect of reductions in Monthly Charges, previous
overpayments or othewise, BA shall be entitled to set these off against
any sums owed to Hawker under this Agreement.
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13.6 The Monthly Charges and any other payments due under this Agreement
shall be exclusive of any VAT (or any replacement or similar tax) which,
subject to the provisions of this Clause 13 and the provision of a
proper VAT or other appropriate invoice, shall be paid by BA.
13.7 If BA disagrees with any amount invoiced for any reason or requires any
further information with respect to any amount invoiced, it shall notify
Hawker of the reason(s) for such disagreement or request such further
information within 20 Business Days of receiving the invoice, giving a
breakdown of the amount which it believes should have been invoiced and
an explanation for the discrepancy or, as the case may be, giving an
explanation of the further information required. If the disagreement
over the amount has not been resolved, or the required information has
not been provided, by the due date for payment of the invoice, BA shall
pay such sum as is not in dispute or question and may withhold payment
of the amount in dispute or question. If Hawker disputes that BA is
entitled to any reduction in or to withhold the invoiced amount or the
amount of any such reduction, then the dispute shall be resolved in
accordance with the Dispute Resolution Procedure.
13.8 BA and Hawker shall promptly pay the other party any amounts which are
agreed or determined pursuant to the Dispute Resolution Procedure as
being due to the other party following the agreement or determination as
appropriate. Any invoices relating thereto which are required to be
raised shall bear the notation "Per dispute resolution of (date)" or
"Per agreement of (date)", as the case may be.
13.9 The costs of any Expert to whom any disputes arising under this
Clause 13 are referred shall be borne by BA only if the Expert
determines that additional amounts are due to Hawker or that Hawker was
entitled to the amount withheld by BA, and shall be borne by Hawker in
all other cases.
13.10 If any amount payable by one party to the other under this Agreement is
outstanding after the due date for payment, the other party may
(whether or not the outstanding amount is the subject of a dispute
pursuant to Clause 13.7) charge the first party interest on the
outstanding amount at the rate of 2% above Barclays Bank Plc's base
rate from the due date to be compounded monthly until payment of the
amount in full.
14 TITLE IN THE ROTABLE INVENTORY
14.1 Subject to Clause 14.5, with effect from the Commencement Date, title in
the Rotable Inventory in Hawker's Possession shall reside with Hawker
and title in the Rotable Inventory in BA's Possession shall reside with
BA.
14.2 Subject to Clauses 14.5 and 14.6, if as part of the Services Hawker is
required to deliver an item of Serviceable Inventory and collect an item
of Unserviceable Inventory then title in the Rotable Inventory being
delivered shall pass to BA upon delivery to the requested location.
Title in the Rotable Inventory being collected shall pass to Hawker upon
collection. If the parties agree that BA has no immediate requirement
for an item of Rotable Inventory which has been delivered by Hawker as
part of an Advanced Exchange, Hawker may, collect such item and title in
that item shall pass to Hawker upon collection.
14.3 If as part of the Services Hawker is required to Repair and Return (as
defined in Schedule 1) an item of Rotable Inventory, without being
required to deliver a replacement, then title in that item shall remain
with BA at all times.
14.4 Hawker shall keep a record of all Rotable Inventory subject to this
Agreement and in whose possession each item is and in whom the title in
each Unit resides from time to time. Hawker shall permit BA upon
reasonable notice to view and take copies of the record from time to
time.
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14.5 Notwithstanding anything to the contrary in this Agreement, title in all
Concorde Inventory and all A320 Landing Gear shall remain at all times
with BA or the relevant third party.
14.6 Where as part of the Services the location for delivery of any item of
Rotable Inventory is outside the United Kingdom, BA may and if so
requested by Hawker shall in order to comply with the customs or import
regulations of any country, acquire that item from Hawker prior to
such delivery and arrange for the delivery (either using Hawker or a
third party) at its own cost. In this case title in the item of Rotable
Inventory shall pass to BA upon receipt of notification by Hawker that
BA is acquiring the item pursuant to this Clause 14.6.
15 RISK AND DAMAGE TO THE INVENTORY
Risk of loss or damage to an item of inventory shall be borne by
the party in Possession of that item at the time the loss or damage
occurred. Without limiting the generality of the foregoing Hawker shall
be responsible for Concorde Inventory, A320 Landing Gear and any other
Landing Gear, Flap Tracks and Flap Carriages (and associated
components) owned by BA which BA requests Hawker to maintain in its
Possession and shall maintain in force appropriate insurance over such
Rotable Inventory.
16 THIRD PARTY SERVICES
Hawker is entitled to provide services equivalent or similar to the
Services to third parties and undertakes to do so only on the terms
that such services shall not adversely affect the provision of the
Services to BA.
17 PARTIES' REPRESENTATIVES
17.1 BA shall from time to time notify Hawker of the identity of the persons
nominated as the BA Representative. The BA Representative shall be the
principal point of contact for Hawker in respect of the provision of
the Services.
17.2 Hawker shall from time to time notify BA of the identity of the person
nominated as the Hawker Representative. The Hawker Representative shall
be the principal point of contact for BA in respect of the provision of
the Services.
17.3 The BA and Hawker Representatives may from time to time by written notice
to their counterpart at Hawker or BA (as appropriate) delegate all or
any part of their responsibilities in connection with this Agreement
to an alternate.
17.4 The BA Representative and Hawker Representative shall have day to day
responsibility for the implementation and provision of the Services
which they shall manage and administer by meeting and otherwise
communicating with each other as often as may reasonably be necessary,
keeping minutes of such meeting or communications wherever appropriate.
17.5 The BA Representative and the Hawker Representative are each authorised
representatives of BA and Hawker respectively and are each empowered to
act on behalf of them in connection with the provision of Services to
BA under this Agreement, except in respect of matters which are
expressly reserved to any other person or group of persons. Any notice,
information, instruction or other communication given or made to either
of them is deemed to have been given or made to BA or Hawker as the
case may be.
18 SECURITY
18.1 AIRSIDE PASSES
18.1.1 Hawker shall ensure that:
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(i) all Airside Passes held by Existing Employees in the name
of BA are terminated and re-issued in Hawker's name as
appropriate within three months after Commencement Date;
and
(ii) all Employees are issued with Airside Passes, in the name
of Hawker to the extent necessary to enable the Employees
to carry out the Services. Hawker will use its best
endeavours to supply the relevant airport authorities
promptly with all information which they request to
enable them to issue the Airside Passes,
and BA shall give Hawker such co-operation as is reasonably
necessary to enable Hawker to fulfil these obligations.
18.1.2 Hawker shall procure that all Employees shall be required to and
shall comply with all terms and conditions in force from time to
time applicable to the holders of Airside Passes.
18.2 BA PASSES
18.2.1 All Employees who require access to BA Property for the purpose
of providing the Services must hold a BA pass and must comply
with all terms and conditions in force from time to time
applicable to the holders of BA Passes.
18.2.2 BA and Hawker shall co-operate to ensure that such passes are
issued promptly to all relevant Employees.
18.2.3 BA shall be entitled to withdraw BA Passes from Employees at any
time upon reasonable grounds and (except in emergencies) on
reasonable notice and shall provide Hawker with written notice
of such grounds within twenty four hours of any such withdrawal.
18.3 COMPUTER SECURITY
18.3.1 During such time as there are any communications links between
Hawker's computer systems or any other system used by Hawker
and any of BA's computer systems, Hawker shall permit BA or its
nominated representative to conduct such security audits of
those systems as are necessary to ensure that any risk to the
security or integrity of the software or data comprising or
contained in the relevant Hawker Systems is minimised. Such
security audits shall be conducted in such a way as to minimise
any disruption to Hawker's business within normal business
hours and on reasonable notice no more than twice in any year,
save that a breach of computer security has occurred as a
result of the activities of Hawker or any of its employees or
the connections with its systems.
18.3.2 For the avoidance of doubt, in conducting the audit reviews
provided for in Schedule 7, BA and its designated auditors and
other agents shall be given such reasonable access to the
Hawker's computer systems and any other relevant computer
system used by Hawker in connection with the provision of the
Services as is reasonably necessary to enable BA to satisfy
itself that the Accounting Records reflect a true and accurate
picture of the conduct of and charges for the Xxxxxxxx.XX
Security Regulations.
18.3.3 Hawker shall ensure that all Employees, agents or
sub-contractors who are required to enter or leave any BA
Property are aware that BA or persons authorised on BA's behalf
may challenge persons who do not visibly display any proof of
identity or who behave suspiciously and may stop and search any
person, their vehicle and any articles they may be carrying
with them to ascertain whether they are carrying unauthorised
items.
18.3.4 In the event that any Employee involved in the performance of
the Services:
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(i) is convicted of any offence involving drugs, violence,
dishonesty or smuggling goods through customs; or
(ii) is reasonably suspected by BA or Hawker of being involved
in any such offence or in any form of dishonesty or in
taking drugs; or
(iii) is reasonably suspected by BA or Hawker to be a person
who might enable or allow others to commit any such
offence or any acts of dishonesty or taking drugs; or
(iv) causes, or BA or Hawker reasonably believes might cause
Loss or damage to BA or to its reputation; or
(v) fails to submit to a BA security search; or
(vi) breaches BA's security procedures or security regulations
or any generally applicable rules or procedures in force
at BA Property of which Hawker has notice from time to
time.
BA may request that any such person be removed from the
performance of the Services and Hawker shall remove the person and
replace him as necessary.
18.3.5 BA and Hawker shall use their best endeavours to minimise any
disruption or adverse effect on the Services resulting from the
removal or replacement of any person performing the Services
pursuant to Clause 18.4.2. For the avoidance of doubt, the
removal or replacement of any person pursuant to Clause
18.4.2 shall not affect the obligation on Hawker to continue to
provide the Services in accordance with the Service Level
Agreement.
18.3.6 The parties shall consult together regularly about the nature
and level of their security arrangements and policies aimed at
reducing losses arising from dishonesty or misconduct.
18.4 SECURITY AUDITS
Hawker shall give BA access to its premises and its computer systems at
reasonable times and on reasonable written notice for the purposes of
auditing, inspecting or reviewing Hawker's security arrangements,
records and documents, and confirming that the security measures taken
by Hawker in order to comply with this Clause 18 are fully adequate. BA
shall have the right to conduct such audit or inspection at least once
per year and more frequently where BA has reasonable belief that such
audit or inspection is necessary.
19 INTELLECTUAL PROPERTY
19.1 BA hereby grants to Hawker, its agents and sub-contractors appointed
pursuant to Clause 33 a non-exclusive, non-assignable, royalty-free
licence to use the Licensed Intellectual Property provided that Hawker
shall, and shall ensure that its agents and sub-contractors shall, only
use the Licensed Intellectual Property in connection with the provision
of the Services, and any Third Party Services which be provided by
Hawker pursuant to Clause 16, and as permitted by this Agreement.
19.2 To the extent that any of the Licensed Intellectual Property includes
copyright works and/or designs, and pursuant to the licence granted in
Clause 19.1 above, BA also grants a non-exclusive royalty-free licence
to copy, reproduce and adapt such copyright and design material and to
use the copyright works and designs in reports, instruction manuals and
the like solely for the purpose of providing the Services and any Third
Party Services which BA has agreed or may from time to time be provided
by Hawker pursuant to Clause 16.
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19.3 Hawker shall disclose to BA all Improvements which it puts into practice
in the provision of the Services to BA. BA shall have the perpetual
non-exclusive right to use and sub-license without payment any
Improvements disclosed to it pursuant to this Clause 19.43 and such right
shall survive termination of this Agreement for any reason in respect of
Improvements developed or invented during the term of this Agreement.
19.4 Hawker shall promptly notify BA of any material unauthorised use of the
Licensed Intellectual Property of which it becomes aware during the term
of this Agreement. BA shall have the exclusive right to take and conduct
whatever action it deems appropriate in its absolute discretion to prevent
such unauthorised use and Hawker shall give BA such assistance as it may
reasonably require (such as the provision of witnesses or documents) in
taking such action subject to the payment by BA of Hawker's reasonable
expenses in the provision of such assistance.
20 INFORMATION SYSTEMS
20.1 Hawker shall from the Commencement Date and throughout the term of this
Agreement, implement and use computer systems for use in the Business in
substitution for the existing computer systems (except the BA System).
20.2 The Hawker Systems shall provide comprehensive management information to
support the provision of the Services and will have at least the
functionality of the existing computer systems based on the description of
BA's systems in the Confidential Information Memorandum.
20.3 BA shall procure that the BA System will be available for access by
Hawker to the extent reasonably necessary to allow Hawker to provide the
Services to BA subject to security measures put in place by BA from time
to time.
20.4 Hawker shall access the BA System solely in connection with the
provision of Services to BA and for no other purpose.
20.5 Hawker shall not be liable for breach of any of its obligations under
this Agreement to the extent that such breach arises as a result of any
failure of the BA System which is not caused by Hawker or as a result of
BA failing to make the BA System available for Hawker to access in
connection with the Services (but only to the extent that it was available
to the existing Business prior to the Commencement Date).
20.6 Hawker shall by the Commencement Date have in place via an external
telecommunications link an e-mail system which will enable the parties to
correspond electronically. The implementation and maintenance of such
telecommunications link will be the responsibility and at the cost
of Hawker.
20.7 Hawker shall allow BA access to the Hawker Systems at all reasonable
times save in case of emergency in order to report accidents, breakdowns
and faults, track the status of each item of Rotable Inventory through
the workshops, ascertain the overall status of all Rotable Inventory
and compare these with operational requirements and check the accuracy
of the reports provided by Hawker under Clause 9.1.
20.8 Hawker will ensure that there will be no disruption or delay in the
provision of the Services in accordance with the Service Levels as a
result of the Hawker Systems being affected by the change of date on
its computers, on and from, 1 January 2000, including accepting date
input, providing date output and performing calculations on dates or
particulars of dates.
20.9 Hawker shall not and shall ensure that no Employee, agent or
sub-contractor shall gain or attempt to gain access to or interfere
with any BA network, data, computer systems or software of BA in respect
of which it has not been given specific written authority from BA to
access.
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21 TERMINATION
21.1 Either party may terminate this Agreement in whole (but not in part)
with immediate effect by notice in writing to the other party if the
other is unable to pay its debts or enters into liquidation (except for
the purposes of a solvent amalgamation or re-construction on terms
previously approved in writing by the other party) or makes an
arrangement with its creditors or becomes subject to an administration
order or a receiver or administrative receiver is appointed over all or
any of its assets or it takes or suffers to be taken any similar action
in consequence of a debt or ceases or threatens to cease trading or is
dissolved or any equivalent procedure in any other jurisdiction occurs.
21.2 BA or Hawker may terminate this Agreement (either in it's entirety or by
reference to one or more specific aircraft types to which the default
relates) with immediate effect by notice in writing to the other if:
21.2.1 the other commits a material breach of this Agreement which is
not remedied within 30 days of written notice of the breach from
the first party;
21.2.2 the other commits a series of three or more similar unremedied
breaches within a rolling period of three months which together
amount to a material breach and which are not remedied within
30 days of written notice from the other requiring remedy of such
breaches (which shall be fairly described therein) or the other
reasonably considers that the breaches are not capable of remedy
within 30 days. The other shall be entitled within 10 Business
Days of the receipt of such notice to refer to Expert's Decision
pursuant to Clause 26 the question of whether or not the series
of breaches referred to in the notice reasonably together amount
to a material breach of this Agreement.
21.3 BA may terminate this Agreement (either in it's entirety or by reference
to one or more specific aircraft types to which the default relates) with
immediate effect by notice in writing to the other if:
21.3.1 from the date of service by BA on Hawker of written notice in
the event that Hawker has failed during any period of 3 months
to provide the Services in accordance with the requirements of
the Service Level Agreement in excess of 10% of occasions in
any 3 month period;
21.3.2 it becomes clear for any reason that Hawker will be unable to
continue to supply the Services including, without limitation,
loss of CAA/JAA/FAA certification; or
21.3.3 at BA's reasonable discretion, upon a change of 51% of
ownership of the capital stock of Hawker or the Guarantor
(as defined within Section 840 of the Income and Corporation
Taxes Act 1988)
21.4 Either party shall be entitled to utilise the Dispute Resolution
Procedure to challenge any termination.
21.5 If the term of this Agreement is not extended pursuant to Clause 2.2, it
shall terminate automatically on the seventh anniversary of the
Commencement Date. If the term of this Agreement is extended pursuant to
Clause 2.2 it shall terminate automatically at the end of the period to
which it is extended pursuant to Clause 2.2.
21.6 If BA has the right to terminate this Agreement, (in whole or in part)
BA may, as an alternative to termination, and at its complete discretion,
either;
21.6.1 suspend the Agreement (in whole or by reference to specific
aircraft types(s)) for a period of up to 3 months while Hawker
tries to improve the quality of the Services to the correct level.
During any such period of suspension BA shall not be liable to pay
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20
Monthly Charges to Hawker (in respect, where the Agreement is
suspended by reference to specific aircraft types(s), to those
aircraft types) and Hawker shall pay to BA any additional costs
incurred by BA in obtaining the relevant Services from third
parties; or
21.6.2 require Hawker to utilise such resources or to do or omit from
doing anything stipulated by BA which is required to raise the
quality and performance of the Services to the levels stipulated
or as are otherwise acceptable to BA.
22 CONSEQUENCES OF TERMINATION
22.1 Termination of this Agreement for whatever reason shall not affect the
rights of either party which have accrued due on or prior to termination
including the right to claim damages or be indemnified as a result of a
breach of this Agreement.
22.2 The provisions of Clauses 22, 25, 26, 27, 28 and 30 shall survive the
termination of this Agreement.
22.3 Immediately upon termination of this Agreement Hawker shall deliver up
to BA or at BA's option, destroy all BA Confidential Information (as
defined in Clause 30.1) then in the possession or control of Hawker,
the Guarantor or any member of the Guarantor's group of companies, and
in the case of destruction, shall certify in writing that this has taken
place.
22.4 If this Agreement is terminated for any reason, BA may, exercisable by
notice in writing to Hawker on or before termination, require Hawker to:
22.4.1 continue to provide the Services on the terms and conditions of
this Agreement until;
(i) BA notifies Hawker by not less than 30 days notice in
writing to expire not later than 18 months after
termination that it no longer requires the provision of
the Services;
(ii) BA notifies Hawker by not less than 30 days notice in
writing that it wishes to exercise the option set out
Sub-clause 22.4.2 below; or
(iii) the expiration of 18 months from the date of termination;
or
22.4.2 for a period of 18 months after the date of termination, make
available to BA, or a third party nominated by BA, at the then
current market value for the leasing of Inventory, such Inventory
(whether Serviceable or Unserviceable) as contained in the
Schedule of Requirements (and for this purpose the provisions of
paragraph 2.7 of Schedule 1 shall continue to apply).
22.4.3 provide to BA (or to any contractor or contractors nominated by
BA) such information as is reasonably required by BA relevant to
the potential employment liabilities of BA or any new contractor
arising under the Transfer Regulations including but not limited
to information on the following:
(a) the names of the Existing Employees who are then
employed by Hawker, their salaries and other
conditions of employment, ages and length of service;
(b) the method of organisation of the relevant Existing
Employees and documentary evidence relating to such
organisation; and
(c) the proposals for consultation with affected Existing
Employees; and
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21
22.4.4 provide to BA (subject to the provisions of any applicable
confidentiality obligations) such information as BA may
reasonably request about any sub-contractors involved in
providing any Services that are to be terminated and to enter
into novation agreements with such sub-contractors and BA or a
third party nominated by BA.
22.5 Hawker shall provide full cooperation with the intent that the Services
continue to be supplied in compliance with the Service Levels and the
terms of this Agreement to BA during the Notice Period and, subject to
appropriate security and confidentiality arrangements, shall allow BA
representatives to be involved in the running of the existing Business
during the Notice Period.
22.6 BA may, upon giving Hawker notice of termination in any of the
circumstances described in Clause 21, or within 20 Business Days after
receiving notice of termination from Hawker in any such circumstances,
notify Hawker that the Notice Period in relation to any or all of the
Services being terminated shall be longer than that specified in the
relevant provision of Clause 21, such extension to be for the length of
time that BA and Hawker may agree in any particular case, provided that
if BA and Hawker fail to agree the length of the extension in any case
then the Notice Period shall be the period specified by BA up to a
maximum of six months.
22.7 The licences of Intellectual Property granted under Clause 19 shall
terminate in relation to any intellectual Property of BA which is not
required by Hawker to provide Services to BA or continuing Third Party
Services following termination of this Agreement.
23 REPRESENTATIONS AND WARRANTIES
23.1 Each party warrants, represents and undertakes to the other that:
23.1.1 it has full power and authority to execute, deliver and perform its
obligations under this Agreement;
23.1.2 there are no existing agreements or arrangements with third parties
the terms of which prevent it from entering into this Agreement
or would materially impede the performance by it of its
obligations under this Agreement;
23.1.3 it is not and nor is any of its directors a party to any litigation,
proceedings or disputes which will have a material adverse affect
its ability to perform its obligations under this Agreement.
23.2 Hawker warrants, represents and undertakes to BA that all Rotable
Inventory provided by Hawker as Serviceable Inventory will comply with all
relevant regulations and standards including CAA/JAA/FAA requirements and
safety standards.
23.3 Subject to Clause 23.6, Hawker warrants the workmanship of any Services
and any materials provided in respect of a particular item of Rotable
Inventory for each Aircraft for the duration set out in Part 3 of
Schedule 2 (unless Hawker has the benefit of any greater duration of
warranty from the relevant OEM in respect of any part, in which case
such greater duration). Upon failure of the item of Rotable Inventory
due to such workmanship or materials Hawker shall undertake the relevant
action stipulated in paragraph 2.1 of the SLA, the costs of which shall
be borne as stipulated in paragraph 2.1 of the SLA.
23.4 If an item of Rotable Inventory, or part thereof, in the possession of BA
which is not covered in the warranty referred to in Clause 23.3 fails
Hawker shall undertake the relevant action stipulated in paragraph 2.2
of the SLA, the costs of which shall be borne as stipulated in
paragraph 2.2 of the SLA.
23.5 For the avoidance of doubt, Hawker does not warrant the workmanship or
materials of any item of inventory fitted to an Aircraft as at the
Commencement Date until title in such item passes to
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22
Hawker pursuant to this Agreement. In addition, if any item of Inventory
has a mandatory life duration or time between Overhauls set by any
Regulatory Authority, OEM or BA, the warranty provided by Hawker
pursuant to Clause 23.3 shall be limited to the duration of such life or
time between Overhauls.
23.6 Notwithstanding any other provision of this Agreement, under no
circumstances shall Hawker be liable for any consequential losses or
damages.
24 INDEMNITIES
24.1 Subject to Clauses 23.6 and 24.2, Hawker is liable for and will indemnify
BA from and against all losses arising out of or in connection with;
24.1.1 a material breach by Hawker of clauses 18.1, 18.3, 18.4, 20.8,
20.9 and 28;
24.1.2 any item of Rotable Inventory failing to comply with all
relevant regulations and standards including CAA/JAA/FAA
requirements and safety standards as required by Clause 3;
24.1.3 the willful misconduct or grossly negligent acts or omissions of
Hawker, its agents, Employees or contractors in connection
with this Agreement; or
24.1.4 claims that BA has infringed any Intellectual Property rights of
a third party as a result of the acts or omissions of Hawker, its
agents, Employees or contractors in providing the Services under
this Agreement.
24.2 Hawkers' liability and indemnities arising under this Clause 24 do not
affect any other rights which BA may have against Hawker under this
Agreement.
25 DISPUTE RESOLUTION PROCEDURE
25.1 Any question or difference which may arise concerning the construction,
meaning or effect of this Agreement and any dispute arising out of or in
connection with this Agreement shall in the first instance be considered
internally by an appropriate officer who, in the case of BA, shall be
the General Manager Aircraft Maintenance Purchasing and, in the case of
Hawker, shall be the Managing Director. If the appropriate officers are
unable to resolve the matter within 30 days it may be referred for
decision by an Expert or by arbitration as the parties shall agree.
Expert's Decision pursuant to Clause 26 shall be used if the dispute
arises out of Clauses 3.1.3, 3.1.4, 3.3, 5.20 and 23.2 and arbitration
pursuant to Clause 27 if arising as a result of any other reason.
25.2 Subject to the terms of this Agreement, while the Dispute Resolution
Procedure is being followed, both BA and Hawker shall be obliged to
fulfil in full their respective obligations under this Agreement. In
particular, but without limitation, Hawker shall continue to supply the
Services to BA in accordance with this Agreement and BA shall pay all
amounts owing to Hawker under this Agreement (other than any amount the
subject of the Dispute Resolution Procedure).
26 EXPERT'S DECISION
26.1 Any matter or dispute to be determined by Expert's Decision shall be
referred for determination to the President of the Royal Aeronautical
Society and the person to which BA or Hawker may apply in the absence of
agreement shall be the then President of the Royal Aeronautical Society;
26.2 BA and Hawker agree:
26.2.1 to supply the Expert with the assistance, documents and
information he requires for the purposes of his determination; and
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23
26.2.2 that in all cases the terms of appointment of the Expert shall
include a requirement on the Expert to give his determination
within 15 Business Days or such other period as may be agreed,
to hold professional indemnity insurance both at the time of
his appointment and for 3 years following the date of his
determination, and to establish his own reasonable procedures
to enable him to give his determination.
26.3 Any decision by the Expert (an "EXPERT'S DECISION") shall be
final and binding on the parties in the absence of negligence, manifest
error or bad faith. The Expert shall act as an expert and not an
arbitrator; the Expert's Decision shall not be a quasi-judicial
procedure. Save as provided elsewhere in this Agreement, each party
shall bear its own costs and the costs of the Experts shall be borne
equally between the parties.
27 ARBITRATION
Any matter referred to arbitration pursuant to Clause 25 shall be
referred to and finally resolved by arbitration in London by a single
arbitrator to be appointed by agreement between BA and Hawker or, if
such agreement is not reached within 10 Business Days of the date on
which the name of a proposed arbitrator shall have been submitted by
either BA or Hawker for the purpose of the reference, to be appointed by
the President or in his absence the Vice-President for the time being of
The Law Society of England and Wales. The arbitration shall be conducted
pursuant to the Rules of the London Court of International Arbitration
which apply at the date of the dispute, save if and to the extent that
they are inconsistent with any provision of this Agreement. Save as
provided elsewhere in this Agreement, each party shall bear its own
costs and the costs of the arbitrator shall be borne equally between the
parties. The arbitrator's award shall be final and binding on the
parties and may be entered as a judgment by the successful party at the
English High Court.
28 INSURANCE
28.1 BA and Hawker will maintain adequate insurance in respect of loss or of
damage to the inventory from time to time whilst it is in their
Possession.
28.2 BA and Hawker will be responsible for the administration of insurance
claims made under their respective policies and will provide the other
with any information necessary to do so. Hawker will be responsible for
ensuring that all Rotable Inventory repairs approved following or during
an insurance claim are carried out without delay.
28.3 Hawker will maintain insurance in respect of:
28.3.1 general third party, public and product legal liability insurance
for risks arising out of or in connection with this Agreement
for US$500 million (or such higher or lower amount as BA and
Hawker may from time to time agree) for any one accident
and/or occurrence (and in the aggregate in respect of product
liability); and
28.3.2 any other insurance policy providing third party cover required
by any relevant airport operator or other regulatory authority,
to the extent required by such operator or authority.
28.4 Hawker will upon request provide BA with suitable evidence of all insurance
policies and will notify BA immediately of any cancellation, material
alteration or non payment of premiums.
29 FORCE MAJEURE
29.1 For the purposes of this Agreement, a Force Majeure Event in relation to
BA or Hawker means acts of God, riots, war, terrorist activities,
strikes, lock-outs or other industrial disputes (except
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24
strikes, lock-outs or other industrial disputes solely in relation to
its own employees, agents or sub-contractors), epidemics, governmental
restraints, act of legislature and a directive or requirement of a
competent authority governing BA or Hawker, as the case may be, beyond
the reasonable control of (and not reasonably foreseen and planned for
by) the party liable to effect performance, and provided that neither
lack of funds nor manpower nor default or misconduct by any third party
employed or engaged as an independent contractor by BA or Hawker, as the
case may be, shall be interpreted as a cause beyond the reasonable
control of that party.
29.2 Neither BA nor Hawker shall be liable for failure to perform, or
delay in performing, any of its obligations under this Agreement in so
far (but only insofar) as the performance of such obligations is
prevented by a Force Majeure Event in relation to it.
29.3 BA or Hawker, as the case may be, shall notify the other of the
occurrence of such a Force Majeure Event in relation to it and shall use
all reasonable endeavours to continue to perform its obligations
hereunder for the duration of such Force Majeure Event. In the event
that a Force Majeure Event prevents BA or Hawker, as the case may be,
from performing some only, but not all, of its obligations hereunder, BA
or Hawker, as the case may be, shall not be relieved from the
performance of such of its obligations hereunder as are not affected by
such Force Majeure Event.
29.4 If any such Force Majeure Event prevents a party from performing
all its obligations hereunder for a period of more than 3 months, the
other party may terminate this Agreement by notice in writing. In the
event that a Force Majeure Event prevents Hawker from performing all its
obligations hereunder with respect to any one or more Aircraft, but not
all Aircraft, for a period of more than 3 months, BA may in addition,
and without prejudice to its rights pursuant to the preceding sentence,
terminate this Agreement by notice in writing to Hawker only in relation
to those Aircraft affected by such Force Majeure Event.
29.5 If any such Force Majeure Event prevents Hawker from performing
its obligations hereunder for a period of more than 24 hours, BA may
serve a notice on Hawker suspending this Agreement in respect of those
obligations affected or, if such obligations are incapable of being
separately contracted for by BA, in whole until Hawker notifies BA that
the Force Majeure Event has ended and BA may during such suspension
arrange for such part of the Services as are specified in the notice to
be carried out by its own employees or any other person.
29.6 BA shall not be required to pay the Monthly Charges whilst, and to
the extent that, the provision of the Services is affected by a Force
Majeure event.
30 CONFIDENTIALITY
30.1 Subject to Clause 30.2, each party undertakes to, and to procure
that its employees, agents and contractors, treat as confidential:
30.1.1 any and all information obtained from either of the other
parties which by its nature should be treated as confidential
or is marked as such which may come into its possession or into
the possession of any of its employees, agents or contractors,
as a result of or in connection with this Agreement; and
30.1.2 any and all information which has been or which may be derived or
obtained from any such information described in Clause 30.1.1
(together the "Confidential Information").
30.2 The provisions of Clause 30.1 do not apply to any Confidential
Information which the receiving party proves:
30.2.1 is in or enters into the public domain other than by breach of
Clause 30.1;
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25
30.2.2 has been obtained from a third party who is lawfully authorised
to disclose such information to the receiving party; or
30.2.3 is required to be disclosed by law, by any rule, regulation or
request of a competent regulatory authority or any stock or
securities exchange on which the securities of the receiving
party are listed, quoted or dealt in or by order of a court of
competent jurisdiction or pursuant to a formal or informal
request of a tax authority,
provided always that:
30.2.4 the onus shall be on the disclosing party to prove through
the use of documentary evidence that the information was in or has
entered the public domain otherwise than through unauthorised
disclosure by the disclosing party or is required to be disclosed;
and
30.2.5 if either party is required to make a disclosure in
accordance with Clause 30.2.3, that party will, if it is not so
prohibited, provide the other with prompt notice of any such
requirement or request to disclose any such confidential
information so that it may seek an appropriate order. The
disclosing party will provide the other with all reasonable
assistance in any action taken by that party to obtain an
appropriate order including an order providing that the
information does not have to be disclosed, an appropriate
protection order or other reliable assurance that confidential
treatment will be accorded the information that the disclosing
party is required to disclose.
30.3 Independently of the foregoing provisions of this Clause 30, BA
shall not use or disclose any information obtained by BA in carrying out
any audit of Hawker pursuant to this Agreement for any purpose other
than the relevant audit and any follow-up report or discussions relating
to it.
31 PARENT COMPANY GUARANTEE
31.1 In part consideration of BA entering into this Agreement at the request
of the Guarantor and in consideration of the sum of L1 (receipt of which
is hereby acknowledged) the Guarantor hereby unconditionally and
irrevocably guarantees the full, prompt and complete performance and
observance by Hawker of all its obligations, commitments, undertakings,
warranties and indemnities under or pursuant to this Agreement and any
document entered into pursuant to the terms of this Agreement (the
"Guaranteed Obligations") which are stated to be binding on Hawker
including, without limitation, the due and punctual payment of all sums
now or subsequently payable by Hawker hereunder when the same shall
become due and the Guarantor undertakes with BA to indemnify BA against
all losses which BA may suffer through or arising from any breach by
Hawker. If and whenever Hawker defaults for any reason whatsoever in the
performance of any of the Guaranteed Obligations the Guarantor shall
forthwith upon demand unconditionally perform (or procure performance
of) and satisfy (or procure the satisfaction of) the Guaranteed
Obligations in regard to which such default has been made in the manner
prescribed by this Agreement and so that the same benefits shall be
conferred on BA as it would have received if the Guaranteed Obligations
had been duly performed and satisfied by Hawker.
31.2 The guarantee contained in Clause 31.1 is a continuing guarantee
and shall remain in force until all the Guaranteed Obligations have been
fully performed and all sums payable by Hawker have been fully paid.
This guarantee is in addition to and without prejudice to and not in
substitution for any rights or security which BA may now or hereafter have
or hold for the performance and observance of the Guaranteed Obligations.
31.3 The obligations of the Guarantor shall not be affected by any act,
omission, matter or thing which, but for this provision, might operate
to release or otherwise exonerate the Guarantor from his
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26
obligations or affect such obligations, including without limitation and
whether or not known to the Guarantor:
31.3.1 any time, indulgence, neglect, delay, waiver or consent at
any time given to Hawker or any other person;
31.3.2 any compromise or release of or absentation from perfecting
or enforcing any right or remedies against Hawker or any other
person;
31.3.3 any legal limitation, liability, disability, incapacity or
other circumstances relating to Hawker or any other person or any
amendment to or variation of the terms of the Guaranteed
Obligations;
31.3.4 any irregularity, unenforceability or invalidity of any
obligations of Hawker under this Agreement, or the dissolution,
amalgamation, reconstruction or insolvency of Hawker,
and shall nevertheless be enforceable against and recoverable from the
Guarantor as though the same had been incurred by the Guarantor and
the Guarantor were the sole or principal obligor in respect thereof.
32 WHOLE AGREEMENT
32.1 This Agreement supersedes any previous written or oral agreement
between the parties in relation to the matters dealt with in this
Agreement and, together with the Sale of Business Agreement, the Related
Agreements (as defined in the Sale of Business Agreement) and the
documents in the agreed terms, contains the whole agreement between the
parties relating to the subject matter of this Agreement at the
Commencement Date to the exclusion of any terms implied by law which are
not otherwise excluded by this Agreement and which may be excluded by
contract. Each party acknowledges that it has not been induced to enter
into this Agreement by any representation, warranty or undertaking not
previously incorporated into it.
32.2 Subject to the specific limitations set out in this Agreement, no remedy
conferred by any provision of this Agreement is intended to be exclusive
of any other remedy except as expressly provided in this Agreement and
each and every remedy shall be cumulative and shall be in addition to
every other remedy given thereunder or existing at law, in equity, by
statute or otherwise.
33 ASSIGNMENT, NOVATION, SUB-CONTRACTING AND OUTSOURCING
33.1 Subject to Clause 33.2 neither BA nor Hawker shall be entitled to
nor shall assign the benefit or obligations under this Agreement in
whole or in part without the other's prior written consent.
33.2 BA shall be entitled to assign the benefit of or novate this
Agreement at any time and from time to time in whole or in part, to any
other member of the BA Group.
33.3 Hawker shall not be permitted to enter into sub-contracting
arrangements in respect of any of its obligations pursuant to Clause 3
without the prior written consent of BA such consent not to be
unreasonably withheld or delayed. Hawker shall be responsible for acts,
omissions and neglects of its sub-contractors as if they were its own
acts, omissions or neglects and its obligations under this Agreement and
Hawker's liability to BA shall not be in any way affected or reduced as
a consequence of any sub-contract into which it enters.
34 WAIVER
No failure of any party to exercise, and no delay by exercising, any
right, power or remedy in connection with this Agreement (each being a
Right) will operate as a waiver thereof, nor will any
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27
single or partial exercise of any Right preclude any other or further
exercise of such Right or the exercise of any other Right. Any express
waiver of any breach of this Agreement shall not be deemed to be a
waiver of any subsequent breach.
35 FURTHER ASSURANCE
At any time after the date of this Agreement each party shall, and
shall use its best endeavours to procure that any necessary third party
shall, at the cost of that party execute such documents and do such
acts or things as the other party may reasonably require for the
purpose of giving to the other party the full benefit of this Agreement.
36 PARTNERSHIP/AGENCY
36.1 Nothing in this Agreement shall be construed as constituting a
partnership between BA and Hawker or, except as otherwise expressly
agreed between the parties, as constituting either BA or Hawker as the
agent of the other. Otherwise than as expressly provided herein,
neither BA nor Hawker has the authority to act or incur obligations on
behalf of the other and neither BA nor Hawker has any responsibility
for the acts or omissions of the other. BA and Hawker shall each ensure
that its employees, agents, delegates or sub-contractors do not hold
themselves out as employees or agents of the other.
36.2 BA and Hawker shall not and shall ensure that their employees,
agents, delegates and subcontractors do not enter or attempt or purport
to enter into any contractual arrangement or agreement, or borrowing
arrangement, or pledge credit on behalf of the other or any member of
the other's Group.
36.3 Notwithstanding Clause 36.1 and Clause 36.2 BA and Hawker may
from time to time agree in writing that the other may procure items,
such as inventory, and administer warranty claims and other contractual
rights of BA, on its behalf as agents when it is to the parties' mutual
benefit to do so.
37 MEDIA RELEASES
37.1 All media releases, public announcements and public disclosures
by BA, Hawker or their employees or agents relating to this Agreement
or its subject matter, including promotional or marketing materials,
shall be co-ordinated between and approved by BA and Hawker prior to
release.
37.2 The above restriction does not apply to any disclosure required
by any rule, regulation or request of a competent regulatory authority
or any stock or securities exchange on which the securities of BA or
Hawker are listed, quoted or dealt in.
37.3 If either BA or Hawker is required to make a disclosure in
accordance with Clause 37.2 it will, if it is not so prohibited,
provide the other with prompt notice of any such requirement or
request, to disclose any such confidential information so that the
other may seek an appropriate order. The party being required to make
the disclosure will provide the other with all necessary assistance in
any action taken by the other to obtain an appropriate order including
an order providing that the information does not have to be disclosed,
an appropriate protection order or other reliable assurance that
confidential treatment will be accorded the information that party is
required to disclose.
38 VALUE ADDED TAX AND INTEREST
Where under this Agreement one party has agreed to reimburse or
indemnify the other in respect of any payment made or cost incurred by
the other than the first party shall also reimburse any
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28
Value Added Tax paid by the other which forms part of its payment or
cost incurred to the extent that such Value Added Tax is not available
for credit for the other under Sections 25 and 26 of the Value Added
Tax Xxx 0000.
39 TIME OF THE ESSENCE
Any time, date or period referred to in any provision of this Agreement
may be extended by mutual agreement between the parties but as regards
any time, date or period originally fixed or any time, date or period
so extended time shall be of the essence.
40 COSTS
Each party shall bear its own legal, accountancy and other costs and
expenses incurred by it in connection with the preparation and
negotiation of this Agreement.
41 NOTICES
41.1 Save where otherwise provided for in this Agreement, any notice
or other communication requiring to be given or served under or in
connection with this Agreement shall be in writing and shall be
sufficiently given or served if delivered or sent:
In the case of BA to:
British Airways Plc
Xxxxxxxxx Xxxxx
XX Xxx 00
Xxxxxxxx Xxxxxxx (Xxxxxx)
Xxxxxxxx
XX0 0XX
Fax: 0000-000 0000
Attention: General Manager, Aircraft Maintenance
Purchasing
In the case of Hawker to:
Hawker Pacific Aerospace Limited
Number One
Xxxxxx Xxxx
Xxxxxxxxxxx X000 0XX
Fax: 00000 000 000
Attention: The Company Secretary
In the case of Hawker Pacific Aerospace to:
Hawker Pacific Aerospace
00000 Xxxxxxx Xxx
Xxx Xxxxxx
XX 00000 XXX
Fax: 000 000 000 0000
Attention: Xx. Xxxxx Xxxxxx
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29
41.2 Any such notice or other communication shall be delivered by hand
or sent by courier, fax or prepaid first class airmail post. If sent by
courier or fax such notice or communication shall conclusively be
deemed to have been given or served at the time of receipt unless the
same is on a non Business Day or after 5pm on a Business Day in which
event service shall be deemed to take place at 9am on the Business Day
next following receipt. If sent by post such notice or communication
shall conclusively be deemed to have been received two Business Days
from the time of posting.
42 SEVERANCE
If any term or provision of this Agreement is held to be illegal
or unenforceable, in whole or in part, under any enactment or rule of
law, such term or provision or part shall to that extent be deemed not
to form part of this Agreement but the enforceability of the remainder
of this Agreement shall not be affected.
43 COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which shall be deemed an original, but all the counterparts shall
together constitute one and the same instrument.
44 RESTRICTIVE TRADE PRACTICES
Notwithstanding any other provision of this Agreement, no provision of
this Agreement which is of such a nature as to make this Agreement
liable to registration under the Restrictive Trade Practices Act 1976
shall take effect until the day after that on which particulars thereof
have been duly furnished to the Director General of Fair Trading
pursuant to the said Act. For the purposes of this Clause 44, the
expression "this Agreement" shall include any agreement forming part of
the same arrangement.
45 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English law.
46 APPOINTMENT OF PROCESS AGENT
The Guarantor hereby irrevocably appoints Xxxxx Xxxxx & Xxxxxxx of
Number 0, Xxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx X000 0XX as its agent to
accept service of process in England in any legal action or proceedings
arising out of or in connection with this agreement, service upon whom
shall be deemed completed whether or not forwarded to or received by
the individual parties. If such process agent ceases to act as such or
to have an address in England, the Guarantor irrevocably agrees to
appoint a new process agent in England acceptable to BA and to deliver
to BA within 14 days a copy of a written acceptance of appointment by
the process agent. Nothing in this Agreement shall affect the right to
serve process in any other matter permitted by law.
In witness whereof this Agreement has been duly executed.
SIGNED by
---------------------------------
Director, on behalf of British Airways Plc
in the presence of:
----------------------------------
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30
SIGNED by
---------------------------------
Director, on behalf of Hawker Pacific Aerospace
Limited
in the presence of:
----------------------------------
SIGNED by
---------------------------------
Director, on behalf of Hawker Pacific
Aerospace
in the presence of:
----------------------------------
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31
SCHEDULE 1
THE SERVICES
GENERAL
1 INTERPRETATION
1.1 In this Agreement the following terms and expressions shall, unless the
context requires otherwise, have the following meanings:
AIRCRAFT ON GROUND or AOG means a critical operational status involving
the actual or likely grounding of an aircraft due to the failure or
non-availability of a part governed by this Agreement and AOG Support
means the provision of landing gear, flap track and flap carriage repair
and overhaul services in respect of an AOG;
ARISING means a requirement for the performance of the Services in
relation to an individual event;
COLLECTION means a collection of Unserviceable inventory from BA in
accordance with paragraph 6.2 of this Schedule and Collect shall be
construed accordingly;
DELIVERY means the delivery of Serviceable inventory to the appropriate BA
employee in accordance with paragraph 6.3 of this Schedule 1 and Deliver
shall be construed accordingly;
FORECAST OF REQUIREMENTS means a broad indication of BA's requirements
for Serviceable Inventory for a period of 18 months from the date of the
forecast;
FTC means a Flap Track or a Flap Carriage;
LINE REPLACEABLE UNIT or LRU means any inventory or part thereof which is
replaceable on the ramp in the ordinary course of providing repair and
overhaul services;
NDT means non-destructive testing;
OVERHAUL means in respect of an item of inventory to:
(i) make necessary modifications to Rotable Inventory comprised
in the item;
(ii) replace as necessary Expandable Inventory comprised in the
item;
(iii) assemble all Components comprised in the item;
(iv) test the strength, composition, durability, functionality of
the item, to ensure it complies with all applicable
Regulatory Requirements, BA Specifications, Service Manuals
and Aircraft Maintenance Manuals or such other specifications
and requirements as are agreed between the parties from time
to time; and
(v) return all items to the condition required in the BA
Specification;
POSTPONEMENT means a postponement of an Arising by BA pursuant to
paragraph 2.7.3 of this Schedule by more than 6 months from the date
originally scheduled;
PROCESSING means the processing of Serviceable Inventory in accordance
with paragraph 6.1 of this Schedule 1 in preparation for Delivery to BA
and Process shall be construed accordingly;
REPAIR AND RETURN means the Collection, Overhaul, Processing and Delivery
of an item of inventory not owned by Hawker without replacing that item
with an item of Serviceable Inventory;
32
SUB-CONTRACT ADVICE NOTE or SCAN means a note which details the nature of
the Overhaul to be undertaken by Hawker and the time by which it is to be
completed;
SCHEDULE OF REQUIREMENTS means a detailed schedule of Arisings in respect
of each Aircraft for a period of 26 weeks from the date of the schedule;
SERVICEABLE means in respect of any item, that it is in accordance with
the BA Specification and ready for fitment to an aircraft;
STRUCTURAL LANDING GEAR PARTS means any Landing Gear parts but excluding
LRUs:
TRT or TURNAROUND TIME means the time between the Collection of an item
of Unserviceable Inventory and the Delivery of that item as Serviceable
Inventory (for the avoidance of doubt, TRT shall commence 3 days after
notification by BA of the availability of the item or upon Collection,
whichever occurs first, with the exception of Other Services, in which
case TRT will commence on delivery to Hawker);
UNSCHEDULED OVERHAUL has the meaning given to it in paragraph 2.8 of this
Schedule;
UNSERVICEABLE means, in respect of any item, that it is not Serviceable
and to which there has been no WIP attributable; and
WEEKLY MEETINGS means the weekly meetings to take place pursuant to
paragraph 2.1 of this Schedule.
A OVERHAUL SERVICES
2 MANAGEMENT OF CONTRACTS
WEEKLY MEETING
2.1 From the Commencement Date a weekly management meeting will take place
between the BA Representative and the Hawker Representative.
2.2 At each Weekly Meeting:-
2.2.1 BA will provide Hawker;
(i) a Schedule of Requirements in accordance with paragraphs 2.6
to 2.9 of this Schedule including any changes to the
Schedule of Requirements agreed in accordance with the
procedures set out in paragraph 2.7;
(ii) dates of the Arisings;
(iii) delivery location of Arisings;
(iv) whether each Arising is to be supplied by means of an
Advanced Exchange or Repair and Return; and
(v) Unscheduled Overhauls.
2.2.2 Hawker shall provide to BA in writing in the agreed terms a draft
workshop schedule which will detail the availability of Rotable
Inventory up to and including 26 weeks from the date of the Weekly
Meeting;
2.2.3 once included within the Schedule of Requirements, Arisings can
only be moved in accordance with the procedure set out in
paragraph 2.7;
33
2.2.4 the Schedule of Requirements will, when agreed, bear the
signatures of the BA Representative and Hawker Representative and
shall be binding on both BA and Hawker and shall be updated weekly
in accordance with paragraph 2.7;
and the parties shall discuss any other matters affecting the day to day
provision of the Services.
MONTHLY MANAGEMENT MEETING
2.3 From the Commencement Date a monthly meeting is to take place at which
the BA Representative shall provide to Hawker in writing in the agreed
terms an 18 month Forecast of Requirements when available. The Forecast
of Requirements is intended to be indicative only and not contractually
binding. The parties shall also undertake a review of:-
2.3.1 Hawker's operational performance
2.3.2 price performance of the contract
2.3.3 warranty and indemnity claims
2.3.4 new business opportunities
2.3.5 changes to specification/contract
2.3.6 availability of Rotable Inventory
and discuss any other matters relating to Hawker's and BA's performance
under and compliance with this Agreement.
COMMITMENT BY HAWKER
2.4 Hawker commits to Processing and Delivery (in accordance with the terms
of this Agreement) of 100% of the Arisings listed in the Schedule of
Requirements.
2.5 Hawker shall also accommodate any Unscheduled Overhaul (pursuant to
paragraph 3.5 of this Schedule).
THE SCHEDULE OF REQUIREMENTS - CHANGES
2.6 The Schedule of Requirements will be updated weekly.
2.7 Arisings may be varied by BA at no additional cost in accordance with the
following conditions:
2.7.1 at any time up to 12 weeks prior to the delivery date contained in
the Schedule BA may bring forward any Arising by up to 35 days from
that originally scheduled;
2.7.2 at any time up to the delivery date (as may have been amended
pursuant to paragraph 2.7.1 above) BA may bring forward any Arising
by and up to a further 21 days:
2.7.3 subject to the paragraph immediately below BA may at any time up
to the delivery date (as may have been amended pursuant to
paragraphs 2.7.1 or 2.7.2 above) postpone any Arising by up to six
months from the date the Arising first appeared in the Schedule of
Requirements;
BA shall have the right in respect of individual Landing Gears, to
require 12 Postponements in any 12 month period and, in respect of
individual Flap Track and individual Flap Carriages require up to 16
Postponements in any 12 month period at no extra cost.
2.8 Any Arisings:
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2.8.1 not included in the Schedule of Requirements will be classed as
an "Unscheduled Overhaul" (see paragraph 3.5 below) and delivery
date and time will be subject to mutual agreement. In the event
that the Arising can be met using existing Hawker Inventory
(including the Inventory Pool) the Fixed Charges shall apply. In
the event that an alternative source of Inventory is used to
meet the Arising, Hawker may charge BA at the cost of acquisition
with no xxxx-up.
2.8.2 which cannot be matched with the Inventory Pool but which are
included in the Schedule of Requirements shall be defined as
"Extraordinary Arising" and the following sequence of events
shall be followed:
(i) BA and Hawker shall use reasonable endeavours to ensure
that such Arising can be covered using existing Hawker
Inventory in which case the Fixed Charges shall apply;
(ii) Hawker will use reasonable endeavours to rearrange internal
production schedules to accommodate the Arising using
existing Hawker Inventory, which, for the avoidance of
doubt, shall be charged for at Fixed Charges;
(iii) Hawker will use best endeavours to locate an alternate
source at minimum cost and will notify such cost to BA
and, upon BA's acceptance of this cost, Hawker may charge
BA the amount of such cost with a xxxx-up of 15%;
(iv) in the absence of BA's acceptance such further action
shall be subject to mutual agreement.
2.9 The Schedule of Requirements will only be used for BA's
requirements for the Overhaul of Landing Gear/ Flap Track/ Flap
Carriages. Delivery dates for all other processes contained in this
Service Level Agreement shall be decided by reference to the agreed
TRT for each part or by mutual agreement.
3 OVERHAUL OF LANDING GEARS, FLAP TRACKS, FLAP CARRIAGES AND
ASSOCIATED PARTS
Hawker and BA will follow the following processes in meeting the
Schedule of Requirements.
3.1 LANDING GEARS (INCLUDING STRUTS) - ADVANCED EXCHANGE
PROCESS FOR DELIVERY OF SERVICEABLE LANDING GEAR TO BA
- Hawker will Process the Serviceable Landing Gear prior to it
leaving Hawker's premises.
- Hawker will declare the Landing Gear Serviceable and update TIME
with workshop history and life declaration in respect of all
Serviceable Inventory of such Landing Gear
- The Landing Gear will conform to the relevant BA Specification
contained in Schedule 8
- Hawker will Deliver the Serviceable Landing Gear in accordance
with the dates, locations and times in the Schedule of
Requirements unless notified otherwise pursuant to paragraph 2.7
of this Schedule at an earlier Weekly Meeting.
PROCESS FOR COLLECTION OF UNSERVICEABLE LANDING GEAR
- BA will notify Hawker that the Unserviceable Landing Gear is
ready for Collection from the specified location. Notification
will take place no longer than 5 days after the removal of the
Unserviceable Landing Gear from the aircraft.
- Hawker shall Collect the Unserviceable Landing Gear from the
specified location within 3 days of notification by BA that the
Unserviceable Landing Gear is ready for Collection.
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Collection will take place between the times of 0900 and 1600 (at
the place of collection) unless otherwise agreed.
- Hawker will Overhaul the Unserviceable Landing Gear.
3.2 LANDING GEARS (INCLUDING STRUTS) - REPAIR AND RETURN
If the Schedule of Requirements specifies and Overhaul of Landing
Gear by Repair and Return then the following process shall apply:
- Hawker shall Collect the Unserviceable Landing Gear in
accordance with the Schedule of Requirements and the latest
return delivery date shall be calculated in accordance with the
maximum TRT for each Landing Gear type as set out below.
747-100/200/300/400 737-200/400 Concorde
747-SP (nose only)
757
767-200/300ER
777
Tristar-1/50/100/500
1st 6 months 70 DAYS 50 DAYS 140 DAYS
2nd 6 months 60 DAYS 40 DAYS 128 DAYS
Year 1+ 55 DAYS 38 DAYS 112 DAYS
Year 2+ 50 DAYS 30 DAYS 100 DAYS
- BA may notify Hawker of any extensions to the specified delivery
date.
- Hawker will Overhaul the Unserviceable Landing Gear.
- Hawker will declare the Landing Gear Serviceable and update TIME
with workshop history and life declaration in respect of all
serviceable parts.
- For parts other than Assemblies (as defined in the Sale of
Business Agreement) it will be the responsibility of BA to
deliver the Repair and Return part to Hawker's premises.
- Once the Landing Gear has been Overhauled, Hawker will notify
the BA Representative that Overhaul is complete.
- BA will advise a date, location and time for delivery of the
Serviceable Landing Gear to BA (to take place before the latest
date and time specified unless extended by BA pursuant to this
paragraph 3.2) and Hawker will Deliver the Serviceable Landing
Gear in accordance with such dates and time and at the locations
stipulated by BA.
- Hawker shall then Deliver the Serviceable Landing Gear during
business hours to the location stipulated by BA at the relevant
Weekly Meeting.
3.3 FLAP TRACKS AND FLAP CARRIAGES - ADVANCED EXCHANGE
If the Schedule of Requirements specifies that a Flap Track or Flap
Carriage is to be Overhauled by Advanced Exchange, the following
process shall apply:
PROCESS FOR DELIVERY OF SERVICEABLE TO FTC TO BA
- Hawker will Process the Serviceable FTC following Overhaul prior
to it leaving Hawker's premises.
36
- Hawker will ensure that the required FTC is Overhauled to the BA
Specification unless otherwise agreed.
- Hawker will declare the FTC Serviceable and update TIME with
workshop history and life declaration in respect of Serviceable
parts of such FTC.
- Hawker will Deliver the Serviceable FTC in accordance with the
dates, locations and times specified in the Schedule of
Requirements as amended pursuant to paragraph 2.7 of this
Schedule at an earlier Weekly Meeting.
PROCESS FOR COLLECTION OF UNSERVICEABLE FTC
- BA will notify Hawker that the Unserviceable FTC is ready for
Collection from the specified location. Notification will take
place no longer than 5 days after the removal of the
Unserviceable FTC from the aircraft.
- Hawker shall Collect the Unserviceable FTC from the specified
location within 3 days of notification by BA that the
Unserviceable FTC is ready for Collection. Collection will take
place between the times of 0900 and 1600 unless otherwise agreed.
3.4 FLAP TRACKS AND FLAP CARRIAGES - REPAIR AND RETURN
If the Schedule of Requirements specifies that an FTC is to be
Overhauled by Repair and Return, then the following process shall
apply:
- Hawker will Collect the Unserviceable FTC in accordance with the
Schedule of Requirements.
The latest return delivery date shall be calculated in accordance
with the following maximum TRTs for each FTC type.
FLAP TRACKS:
737-200/300/400 747-100/200/400
757
767
777
A320
DC10
1st 6 months 35 DAYS 40 DAYS
2nd 6 months 30 DAYS 36 DAYS
1 year + 28 DAYS 32 DAYS
2 year + 27 DAYS 30 DAYS
FLAP CARRIAGES:
737-200 747-100/200/400
1st 6 months 40 DAYS 40 DAYS
2nd 6 months 35 DAYS 36 DAYS
1 year + 30 DAYS 32 DAYS
2 year + 28 DAYS 30 DAYS
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- Hawker will Overhaul the Unserviceable FTC unless otherwise agreed
between the parties.
- Hawker will declare the FTC Serviceable and update TIME with
workshop history and life declaration in respect of all serviceable
parts.
- Once the FTC has been Overhauled, Hawker will notify the BA
Representative that Overhaul is complete.
- BA will advise Hawker of the dates, locations and times for
Delivery of the Serviceable FTC to BA (to take place before the
latest date and time specified in the above table).
- Hawker will Deliver the Serviceable FTC in accordance with such
dates and times and to the locations stipulated by BA.
- Hawker will invoice all charges in accordance with Schedule 3 on
delivery of the Serviceable Inventory to BA.
3.5 LANDING GEARS, FLAP TRACKS AND FLAP CARRIAGES - UNSCHEDULED OVERHAULS
BA will advise Hawker of any Unscheduled Overhaul requirements as soon
as they are identified. In the case where there is a requirement for an
Unscheduled Overhaul, BA will advise whether this is to be completed by
the Advanced Exchange or Repair & Return method of Overhaul at the Weekly
Meeting.
- If Repair & Return is required then the process in paragraphs 3.2
or 3.4 of this Schedule, as appropriate, should be followed and BA
shall pay the standard pricing for the item concerned contained in
Schedule 3.
- If Advanced Exchange is required then provided that Hawker has
sufficient inventory to service the requirement, then the process
in paragraphs 3.1 or 3.3 of this Schedule, as appropriate, should
be followed and BA shall pay at the prices contained in Schedule 3.
- If Hawker does not have available inventory for the Unscheduled
Overhaul, Hawker will use best endeavours to find an alternative
supply for the Landing Gear/FTC required to be charged at Hawker's
cost with no markup.
B OTHER SERVICES
4 LRU'S, AD HOC, ON-WING AND QUARANTINE OVERHAULS
4.1 LINE REPLACEABLE UNITS (LRUs)
The process for the overhaul of LRU's will be as follows:
- BA will send the Unserviceable LRU to Hawker with a SCAN attached
which will advise:
(i) the nature of the overhaul required by BA;
(ii) the unique SCAN number applicable to that LRU;
(iii) the date in accordance with relevant TRTs and location
of delivery of the LRU back to BA.
- Hawker shall complete the required recertification, repair or
overhaul on the LRU and Process the LRU.
- The return delivery shall be calculated in accordance with the
following TRTs:
(TRTs as agreed in the agreed terms)
38
- Hawker will Deliver the Serviceable LRU on the date and time and to
the location specified by BA on the SCAN.
- Hawker will invoice all charges in accordance with Schedule 3 after
Delivery of the overhauled LRU has been completed.
4.2 AD-HOC MACHINING, PLATING OR NDT
PART PROCESS
- BA may from time to time advise Hawker that any item requires
machining, plating or NDT and BA shall deliver such item to
Hawker. For the avoidance of doubt, if BA requests part
process of a full assembly landing gear or FTC Hawker will be
responsible for the collection of such inventory.
- On Delivery to or Collection by Hawker, as the case may be, of
Unserviceable Inventory, BA will provide Hawker with
worksheets detailing the work which Hawker is required to
complete.
- Hawker will perform the required work to specification
provided by BA at the time of Collection of the part by BA.
- Hawker will complete the workscope and update TIME with
workshop history and life declaration on Serviceable parts of
the Rotable Inventory.
- Hawker will Deliver the inventory on the date and time and to
the location specified in the SCAN (unless advised otherwise).
- Hawker will invoice all charges in accordance with Schedule 3
after Delivery.
FULL PROCESS
- BA will send the Unserviceable Inventory to Hawker with a SCAN
attached which will advise:
(i) the nature of the work required by BA;
(ii) the unique SCAN number applicable to that inventory;
(iii) the date and location of delivery of the
inventory/ back to BA.
- The date for return of the Serviceable Inventory will be
agreed at the time of Collection between Hawker and BA
depending on the level of work that is required.
- Hawker will complete the required work on the Inventory and
Process the Inventory.
- Hawker will Deliver the Serviceable Inventory on the date and
time and to the location specified by BA on the SCAN unless
told otherwise.
- Hawker will invoice all charges after delivery of the
Serviceable Inventory has been completed.
4.3 QUARANTINED INVENTORY
Where BA may require Rotable Inventory to be quarantined for a
period of time BA will advise Hawker of its requirements at
the Weekly Meetings and the following process will be followed:
- Hawker will provide a Serviceable Inventory to the BA
Specification and Collect the Unserviceable Inventory to be
quarantined on an Advanced Exchange basis.
- In consultation with BA, Hawker will liaise with the OEM to
determine what work, repair, testing or other requirements
need to be carried out on the Unserviceable Inventory by
39
Hawker, such work, repair or testing to be carried out by
Hawker and priced at the Rates (unless otherwise agreed
between the parties).
In the event that it is necessary to quarantine a part BA and Hawker
will enter into discussions to re-imburse Hawker for loss of use of
Hawker's exchange asset.
4.4 ON-WING / AOG SUPPORT
Hawker will provide at BA's request from time to time AOG Support. If BA
require On-Wing/AOG Support BA will contact Hawker giving details of the
location of the Aircraft and the support requirement(s).
- Hawker shall make sufficient adequately qualified and experienced
personnel (the "AOG Team") available 24 hours a day, 7 days a week
to assist BA worldwide with unscheduled aircraft problems relating
to the items covered by this Agreement including providing AOG
Support.
- Hawker's AOG Team will arrive at the location specified above with
necessary equipment within the following performance measures:
Heathrow Airport/Gatwick Airport WITHIN 3 HOURS OF CALL OUT BY
BA (OR ITS REPRESENTATIVE)
Other United Kingdom and Europe WITHIN 24 HOURS OF CALL OUT BY
BA (OR ITS REPRESENTATIVE)
Rest of the world WITHIN 48 HOURS OF CALL OUT BY
BA (OR ITS REPRESENTATIVE)
- If Hawker does not have the necessary part in stock, Hawker shall
use best endeavours to obtain the part from an alternative source
to satisfy BA's requirement.
- Where required, Hawker will Deliver Advanced Exchange Inventory, or
part thereof, in accordance with paragraph 3.5 of this Schedule,
and will Collect the Unserviceable Inventory, or part thereof, from
the location.
- Where applicable, Hawker will investigate reasons why an early
failure of the part had occurred and provide to BA a report within
a mutually agreed time period of the Collection of the Inventory
setting out its conclusions and findings.
- After each occasion on which AOG Support is provided, Hawker and BA
will undertake a joint review to establish the effectiveness of the
process.
- Hawker will ensure that any replacement item, including inventory,
that is fitted to an Aircraft as part of the provision of AOG
Support will have approximately the same remaining overhaul life as
the defective inventory.
- Where the replacement inventory has a lower remaining overhaul life
than the removed inventory, Hawker will ensure that an appropriate
replacement inventory is temporarily fitted to the Aircraft while
the defective part is being Overhauled using the Repair & Return
method.
- Hawker will fit the equivalent life inventory to the Aircraft, to
replace the temporary replacement at an appropriate time agreed in
advance between the parties.
- BA and Hawker shall agree the remedial action associated with any
removed inventory (Repair or Overhaul) before work commences. In
the event that Hawker sources inventory and/or services from any
third party in support of Unscheduled Overhaul or On-Wing/AOG
40
requirements where the removed inventory is not covered by Hawker's
warranty in Clause 23 then Hawker will charge BA for the cost of
such Inventory or services without additional xxxx-up.
* Labour and material prices in respect of the above shall be charged
at the Rates in Schedule 3. There will be no charge for the
availability of the AOG Support Team. The time spent travelling to
and from the location of the AOG incident shall be charged at the
labour rate in Schedule 3 and reasonable incidental expenses shall
be charged without any additional xxxx-up.
OVERHAUL
- Removed Inventory which requires Overhaul, shall be charged in accordance
with the Overhaul pricing contained in Schedule 3.
REPAIR
Inventory which requires repair to return it to a Serviceable condition,
shall be charged in accordance with the Rates.
4.5 OTHER
At BA's request, Hawker shall use its reasonable endeavours to provide
overhaul services in respect of one-off Inventory Arisings for aircraft
types other than the Aircraft (but excluding B777s) and BA shall pay
exchange fees and overhaul charges for such services at the then
current market rate.
Hawker shall provide such other services related to the Services as
BA may reasonably request from time to time.
5 MISCELLANEOUS MATTERS
5.1 WARRANTY ADMINISTRATION
Hawker shall manage all warranty claims against third parties including
claims for inventory and/or services (including new purchase items).
BA shall provide Hawker with any information and assistance necessary
in support of a claim.
If a warranty claim with any third party results in a benefit
(financial or otherwise) to BA then Hawker will pass on all of this
benefit back to BA via a credit note or other mutually agreed process.
5.2 MISSING PARTS
Hawker will use reasonable endeavours to highlight any missing parts in
relation to the BA Build Standard (contained in the BA Specification)
to the BA Representative within 14 days of Collection by Hawker of the
Unserviceable Inventory.
BA will promptly verify such missing parts, and will promptly supply
the missing part or a replacement part or give Hawker authority to
supply a replacement to be charged in accordance with Schedule 3,
paragraph 2.3.1.
5.3 MISCELLANEOUS SUPPORT
Hawker will provide the following support;
TECHNICAL SUPPORT
Hawker will provide to BA upon request technical support within its
capability related to all parts covered by this Agreement, 24 hours per
day, 365 days per year.
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41
SPECIAL HANGAR CHECKS
Hawker shall provide personnel to support special hangar checks.
SAMPLES
Hawker shall provide technical support for any sampling programmes.
5.4 AMENDMENTS TO BA SPECIFICATIONS
From time to time BA will request that the BA Specification for a
particular item of Inventory should be amended (and Hawker will be
notified of the amendment at the Weekly Meeting in accordance with
paragraph 2.1) in which case:
* Hawker will from the date of such Weekly Meeting provide the Services
in accordance with the BA Specification.
* Hawker may Overhaul Inventory which are part way through Overhaul
when notification is given to the previous BA specification.
* Hawker shall incorporate all mandatory/non-mandatory service
bulletins, modifications, Airworthiness Directives that do not impact
on the prices contained in Schedule 3.
* In the event of mandatory changes being made to build standards
contained in the BA Specification, Hawker will ensure that
compensation for the changes is recovered from the OEM and, where
necessary, passed back to BA.
* Once the amendment has been agreed the parties shall follow the
Change Control Procedure.
6 COLLECTION, PROCESSING AND DELIVERY
6.1 PROCESS TO BE FOLLOWED PRIOR TO DELIVERY OF ANY SERVICEABLE INVENTORY
TO XX
Xxxxxx is to declare the part Serviceable and complete the following
paperwork (as applicable) before the Serviceable Inventory leaves
Hawker's premises:
* Provide a JAR Form 1/FAA 8130-5 with all Components supplied to BA.
* A serviceable TIME tag, if BA agrees to such a facility.
* A condition report for all Unserviceable Component provided to BA.
* Hawker shall retain a record of all work undertaken on Components
provided to BA and should be able to furnish these at reasonable
notice.
* Hawker shall provide a report of all parts fitted to an Item of
Inventory, including part number, serial number, CSN (cycle since
new), CSO (cycle since overhaul), TSN (time since new) and TSO
(time since overhaul) where appropriate.
* Hawker shall provide a manufacturer's certificate in the event of a
new part being fitted to an item of Inventory.
* Hawker shall provide Audit paperwork and reports on life extension
or accident/incident reports or specified Components.
* Hawker shall supply a list of any missing Components from an item
of Inventory by part number and description.
* In respect of Landing Gear only:
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42
* Before Delivery Hawker shall label appropriate parts with the
BA/SA number. In respect of outer cylinders this label shall be
positioned above the name plate. In respect of drag struts the
label shall be positioned on the side of the strut in a clearly
visible location. Each label shall have black lettering on a
white background and shall be approximately 3/4 inch high. Once
the label is attached to the cylinder or strut a clear coat of
varnish shall be applied over the label.
* Hawker shall ensure that the Landing Gear is packaged in
suitable packaging in accordance with the ATA 300 packaging
standard or in accordance with normal BA procedures existing
after the Commencement Date.
* Hawker will store all paperwork described above in fireproof cabinet
in Hawker's facility. BA will be allowed access to this paperwork in
accordance with Schedule 7.
* Hawker will unload all parts from the delivery vehicle.
6.2 PROCEDURE TO BE FOLLOWED ON COLLECTION OF ANY PART
* Hawker shall be responsible for loading the Unserviceable Inventory
on to the delivery vehicle.
* BA will package the part ready for Collection on the collection
date for Advanced Exchange using, for Landing Gear and FTC, the
packaging from the relevant exchange item and for Repair and Return
Hawker will provide adequate packaging and if requested will
provide this 3 days before collection date. If such packaging
supplied by Hawker is damaged in transit, BA shall promptly advise
Hawker and Hawker shall supply adequate replacement packaging 3
days before collection is to take place.
* Hawker will sign (sight unseen and not inspected) for collection of
Unserviceable Inventory by the Hawker Representative authorised to
confirm collection of an item of Unserviceable Inventory as
notified to BA from time to time.
6.3 PROCEDURE FOR DELIVERY OF ANY INVENTORY TO BA PREMISES
* Delivery shall take place between 0800 and 1700 local time or other
time agreed with BA.
* If XX xxxxx packaging to be unsatisfactory on Delivery of the
Serviceable Inventory to BA, Hawker will provide additional
suitable packaging on Collection of the Unserviceable Inventory.
* Responsibility for unloading the Serviceable Inventory from the
delivery vehicle will be Hawker's. For Gatwick and Heathrow
airports (and such other locations as agreed from time to time by
BA and Hawker) Hawker will provide the means by which Landing Gear
can be moved around the hangar.
* Hawker will provide the BA Representative a copy of JAA Form 1 for
each item of Serviceable Inventory delivered.
* The BA representative authorised to accept delivery of an item of
Serviceable Inventory as notified to Hawker from time to time will
sign for Delivery of the Serviceable Inventory.
* It shall be the responsibility of BA to provide access to BA
Property and to use its reasonable endeavours to provide access to
any other areas to Hawker to allow Delivery and Collection of item
of Inventory in accordance with the terms of this Agreement.
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43
7 MISCELLANEOUS
7.1 INVOICING PROCEDURE
7.1.1 Invoices shall be sent to the following address:
Purchase Ledger
British Airways Plc
9th Floor Technical Block C (s102)
XX Xxx 00
Xxxxxxxx (Xxxxxx) Xxxxxxx
Xxxxxxxx
Xxxxxxxxx XX0 0XX
7.1.2 All invoices will contain the following information:
(i) BA Purchase Order Number or SCAN Numbers
(ii) The number of the part
(iii) The quantity
(iv) The serial number of the part
(v) Main pricing elements
-------------------------------------------------------------------------------
44
SCHEDULE 2
SERVICE LEVEL AGREEMENT
1 PERFORMANCE SHORTFALL
In the event of failure by Hawker in breach of its obligations under this
Agreement to deliver to the agreed delivery dates in circumstances where BA
has suffered disruption or delay as result of its failure the following
credits if requested by BA shall apply:
----------------------------------------------------------------------------------------
SERVICE SERVICE LEVELS CREDITS
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
Landing Gears Delivery of Serviceable Landing Gear in L[****] per day
(including struts) accordance with the Schedule of
Advanced Exchange Requirements
----------------------------------------------------------------------------------------
Landing Gears Delivery of Serviceable Landing Gear in L[****] per day
(including Struts) accordance with the maximum TRT as
Repair and Return set out in paragraph 3.2 of Schedule 1
----------------------------------------------------------------------------------------
Flap Tracks and Delivery of Serviceable FTC in L[****] per day
Flap Carriages accordance with the the Schedule of
Advanced Exchange Requirements
----------------------------------------------------------------------------------------
Flap Tracks and Delivery of Serviceable FTC in L[****] per day
Flap Carriages accordance with the maximum TRT set
Repair or Return out in paragraph 3.4 of Schedule 1
----------------------------------------------------------------------------------------
Landing Gears, As agreed between the parties as set out L[****] per day
Flap Tracks and in paragraph 3.5 of Schedule 1
Carriages Unscheduled
Overhauls
----------------------------------------------------------------------------------------
LRUs Delivery in accordance with the SCAN L[****] per day
and TRT's set out in the document in the
agreed terms.
----------------------------------------------------------------------------------------
Ad hoc Machining, PART PROCESS: L[****] per day
Plating, or NDT and Collection and Delivery as agreed
LRUs between the parties, in accordance with
the SCAN
----------------------------------------------------------------------------------------
FULL PROCESS; L[****] per day
Delivery in accordance with the SCAN
----------------------------------------------------------------------------------------
On Wing Support/ Arrival of AOG support team as set out L[****] per hour
Aircraft on Ground in paragraph 4.4 of Schedule 1,
performance of service in accordance
with relevant procedure listed above.
----------------------------------------------------------------------------------------
-------------------------------------------------------------------------------
45
2 QUALITY LAPSE
2.1 FAILURE OF PARTS UNDER WARRANTY
-------------------------------------------------------------------------------------------
PART ACTION COSTS
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Landing Gear, FTC or Hawker immediately provides a If quality failure is not covered
component resulting in replacement part and AOG by Hawker's warranty than
AOG Support support, if requested. follow the process in
accordance with paragraph 3.5
of Schedule 1.
If quality failure is covered by
Hawker's warranty (i) Hawker
makes good the failure and (ii)
[******************]
-------------------------------------------------------------------------------------------
Quality lapse in LRU/ Hawker immediately replaces If quality failure is covered by
Process Part/Ad Hoc LRU, if requested. Hawker's warranty (i) Hawker
work makes good the failure and (ii)
[*****************************].
If quality failure is not covered
by Hawker's warranty, charges
for the part are invoiced in
accordance with paragraph 3.5
of Schedule 1.
-------------------------------------------------------------------------------------------
2.2 FAILURE OF PARTS NOT UNDER WARRANTY
-------------------------------------------------------------------------------------------
PART ACTION COSTS
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Landing Gear/FTC or Hawker immediately sends an If quality failure is not the fault
component part AOG Support team and of Hawker, follow process in
resulting in AOG replaces the part following accordance with paragraph 3.5
support procedure in paragraph 3.5, of Schedule 1.
Schedule 1, if requested, If quality failure is fault of
Hawker investigates the reason Hawker (i) Hawker makes good
for failure in consultation the failure and (ii) [***********]
with BA and retains the part
for inspection.
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------
46
-------------------------------------------------------------------------------------------
PART ACTION COSTS
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
LRU/Process Parts/Ad BA highlights quality issue with If quality failure is not
Hoc Work Hawker following removal of the fault of Hawker, follow
part. Hawker shall re-do any work process in accordance with
if requested. Hawker investigates paragraph 4.1 of Schedule 1.
reasons for failure and submits If quality failure is fault
report to BA. Hawker retains the of Hawker (i) Hawker makes
part for inspection by BA. good the failure and (ii)
[************************]
-------------------------------------------------------------------------------------------
3 WARRANTY PERIODS
3.1 Hawker shall provide the following warranties:
-------------------------------------------------------------------------------------------
PART LENGTH OF WARRANTY PROVIDED BY HAWKER
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Flap Tracks 5 years
-------------------------------------------------------------------------------------------
Flap Carriages 5 years
-------------------------------------------------------------------------------------------
LRU's 1 year (subject to Clause 23.5)
-------------------------------------------------------------------------------------------
Ad hoc Machining, Plating and Part 6 months
Processing
-------------------------------------------------------------------------------------------
Structural Landing Gear parts The length of time between overhauls as
stipulated by the relevant OEM
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------
47
SCHEDULE 3
PRICE
The Monthly Charges for the Services will comprise the elements set out
below:
1 FIXED CHARGES
1.1 A Fixed Charge will be payable for Overhaul of each Landing Gear
and FTC in accordance with the table contained in this Schedule.
1.2 FIXED CHARGES INCLUDE THE FOLLOWING MATERIALS:
* - 100% bushing replacement
* - SRL (Standard Replacement List) as per CMM
* - Any parts required for mandatory/agreed service bulletin
* - Incorporation or repairs
* - Scrapped parts with an individual then current OEM list
* - price of materials up to $20,0000 USD
Note: an item is classed as BER (beyond economic repair) at 70%+ of list
price
1.3 FIXED CHARGES DO NOT INCLUDE THE FOLLOWING MATERIALS:
* - Incident related parts
* - Scrapped parts (including parts that have reached their ultimate
fatigue life as specified by the OEM) with a then current OEM list
price greater than $20,000 USD.
* - Missing parts
* - Misused parts (other than parts misused by Hawker)
N.B. Expendable Inventory for Concorde is owned by BA and shall not be
charged to BA.
1.4 LABOUR INCLUDED IN FIXED CHARGES:
All labour involved in the provision of the Overhaul Services, including
out of scope activities and labour required for any repair schemes and
service bulletin (SB) incorporation (both current repair schemes/SB's
and any repair schemes/SB's subsequently developed/required, either
mandatory or discretionary).
2 VARIABLE CHARGES
Variable charges will be payable based on:
2.1 "out of scope activities" for materials listed in paragraph 1.3
above but not any labour associated therewith. Materials to be charged
at Hawker's cost plus 10% (up to a maximum of US$1,500 per item);
2.2 "AOG Support", on a man-hour basis (including travel time). Reasonable
incidental expenses shall be charged separately with no xxxx-up (provided
that there shall be no charge where AOG Support is provided as a result
of a failure of an item under warranty);
-------------------------------------------------------------------------------
48
2.3 for matters not covered by paragraph 2.1 or 2.2 any other services
not covered by the Fixed Charge will be charged on a time (based on
Rates) and materials basis, where:
2.3.1 a material xxxx-up of [**]% shall be applied to the purchase of the
material by Hawker (not to exceed USD [***] per item) (except for an
Extraordinary Arising where the xxxx-up is [**]%);
2.3.2 labour shall be charged at the rate of L[*****] per hour ("Rate");
2.3.3 ad hoc expenses associated with AOG Support shall be charged at
Hawker's cost plus [**]% xxxx-up (applied to the specific service
only)
2.4 and any other employee costs not covered by the Fixed Charge, the
amount of such costs to be agreed between the parties from time to time.
-------------------------------------------------------------------------------
49
SERVICE PRICING - FIXED CHARGES
ADVANCED EXCHANGE
-----------------------------------------------------------------------------------------------------------
YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
B737-200 NLG [********] [********] [********] [********] [********] [********] [********]
MLG [********] [********] [********] [********] [********] [********] [********]
B737-400 NLG [********] [********] [********] [********] [********] [********] [********]
MLG [********] [********] [********] [********] [********] [********] [********]
B747-100 NLG [********] [********] [********] [********] [********] [********] [********]
BLG [********] [********] [********] [********] [********] [********] [********]
WLG [********] [********] [********] [********] [********] [********] [********]
B747-200 NLG [********] [********] [********] [********] [********] [********] [********]
BLG [********] [********] [********] [********] [********] [********] [********]
WLG [********] [********] [********] [********] [********] [********] [********]
B747-400 NLG [********] [********] [********] [********] [********] [********] [********]
BLG [********] [********] [********] [********] [********] [********] [********]
WLG [********] [********] [********] [********] [********] [********] [********]
B757-200 NLG [********] [********] [********] [********] [********] [********] [********]
MLG [********] [********] [********] [********] [********] [********] [********]
B767-300 NLG [********] [********] [********] [********] [********] [********] [********]
MLG [********] [********] [********] [********] [********] [********] [********]
B777 NLG [********] [********] [********] [********] [********] [********] [********]
MLG [********] [********] [********] [********] [********] [********] [********]
L1011 NLG [********] [********] [********] [********] [********] [********] [********]
MLG [********] [********] [********] [********] [********] [********] [********]
-----------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------
50
-----------------------------------------------------------------------------------------------------------
YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
TRACKS B737 [********] [********] [********] [********] [********] [********] [********]
B747 [********] [********] [********] [********] [********] [********] [********]
B757-200 [********] [********] [********] [********] [********] [********] [********]
B767-300 [********] [********] [********] [********] [********] [********] [********]
B777 [********] [********] [********] [********] [********] [********] [********]
CARRIAGES B737 [********] [********] [********] [********] [********] [********] [********]
B747 [********] [********] [********] [********] [********] [********] [********]
B757-200 [********] [********] [********] [********] [********] [********] [********]
B767-300 [********] [********] [********] [********] [********] [********] [********]
B777 [********] [********] [********] [********] [********] [********] [********]
-----------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------
51
SCHEDULE 4
CHANGE CONTROL PROCEDURE
1 CHANGES
1.1 BA may request a Change by giving notice in writing to Hawker setting
out the reasons for and details of the proposed change, including the
proposed date of implementation.
Subject to paragraph 2.1 Hawker will as soon as practicable provide BA
with an evaluation report on the proposed Change which will cover
feasibility, impact on Services, resource requirement, likely
implementation date and the change in the amounts payable by BA to Hawker.
If an evaluation report cannot be provided within 15 Business Days of
receipt of the request for a Change, Hawker will give BA, within 10
Business Days of receiving the request for a change, a written
acknowledgement of the request and an indication of when the report will
be available (which shall be within a reasonable time).
BA will consider Hawker's evaluation report and will notify Hawker in
writing, within 15 Business Days of receipt of the report, of BA's decision
whether or not to request Hawker to proceed with the Change in accordance
with the evaluation report (subject to any amendments thereto agreed
between BA and Hawker).
If BA requests Hawker to proceed, the change shall be implemented by the
nominated BA or Hawker Representative signing the notice of the proposed
Change and the Services shall be amended accordingly. If BA does not
consider that Hawker's proposal as set out in the evaluation report is
acceptable, it shall notify Hawker in writing within 10 Business Days of
receipt of the report of this opinion and provide Hawker with a proposal
considered by BA to be reasonable.
The relevant BA and Hawker Representative will then attempt to agree the
proposal.
1.2 If the proposal is not agreed within 15 Business Days of the receipt by
Hawker of the proposal from BA, either party may refer the matter to be
dealt with pursuant to the Dispute Resolution Procedure.
1.3 Within 10 Business Days of a final decision under the Dispute Resolution
Procedure, BA will notify Hawker in writing of its decision whether or not
to request Hawker to proceed with the Change in accordance with the
evaluation report (as amended, if such be the case, by Expert's Decision as
appropriate). If BA requests Hawker to proceed, then the Change shall be
implemented by the relevant BA or Hawker Representative countersigning the
notice of the proposed Change (as amended if appropriate) and the Services
shall be amended accordingly.
2 REFUSAL TO IMPLEMENT AND/OR EVALUATE
2.1 Hawker may refuse to implement a Change and/or provide BA with an
evaluation report in respect of any request for a change only where the
change should not be implemented because of Regulatory Requirements or
other valid legal reasons.
2.2 If Hawker so refuses to implement a Change and/or provide BA with an
evaluation report in respect of a request for change, Hawker will give
written notice of this decision to BA promptly after such decision is made
and shall specify the reason for such refusal in full detail.
3 CHANGES PROPOSED BY HAWKER
Hawker may also propose changes to the Services by giving notice in writing
to BA together with an evaluation report as described in paragraph 1 above.
Upon receipt of such notice and report the provisions of paragraph 1.1
above shall apply mutatis mutandis provided that BA shall be
-------------------------------------------------------------------------------
52
entitled to refuse any change proposed by Hawker in its discretion, except
in the case of changes required to prevent non-compliance with a Regulatory
Requirement.
4 PRICE ADJUSTMENTS
4.1 Charges for implementing Changes in accordance with this Schedule 4
which are agreed to be changes to the Other Services, or determined
pursuant to the Dispute Resolution Procedure, to be within the category
of Other Services shall be included in the Monthly Charges as Variable
Charges. Charges for changes which are agreed to be changes to the Overhaul
Services, or determined pursuant to the Dispute Resolution Procedure, to
be within the category of Overhaul Services shall be effected by an
adjustment to the relevant Fixed Charges provided that if any change to
the BA Specifications proposed by Hawker pursuant to clause 7.1 results
in a reduction in the cost to Hawker of providing any of the Overhaul
Services, the Overhaul Charges shall be reduced to reflect half such
reduction (in order to encourage Hawker to propose cost efficient changes
to the BA Specifications).
-------------------------------------------------------------------------------
53
SCHEDULE 5
MONITORING PERFORMANCE
1 MONITORING AND REPORTING
1.1 Hawker shall monitor its provision of the Services with reference to the
Service Levels and shall within 14 days after the end of each calendar
month prepare and submit to BA monthly progress reports and financial
statements based on the Accounting Records, in a form to be agreed between
BA and Hawker.
1.2 The monitoring shall, inter alia record how Hawker has performed with
respect to the Service Levels.
2 PERFORMANCE REVIEWS
2.1 The Hawker Representative and the BA Representative will meet to conduct
a performance review as often as shall reasonably be requested by either
party, but at least monthly, to review Hawker's performance of the Services
(PERFORMANCE REVIEW).
2.2 The Hawker Representative in each case shall keep written minutes of
such meetings and give copies of these to the BA Representative who shall
agree their content or, in the case of disagreement, set out in a separate
document his version of the minutes.
2.3 If any Performance Review carried out pursuant to paragraph 2.1 of this
Schedule concludes that Hawker's performance is not in accordance with the
Service Levels, and/or the terms of this Agreement and/or BA's performance
is not in accordance with the terms of this Agreement the parties shall
agree an action plan specifying appropriate measures by which Hawker's or
BA's performance (as the case may be) shall be improved and the timetable
for achievement of the improvements and the party in question shall
implement the action plan in accordance with the timetable. The party in
question will be responsible for the costs and expenses incurred in
carrying out the action plan.
2.4 If Hawker or BA disputes the findings of any Performance Review or
assessment, Hawker shall be entitled to resolve the matter through the
Dispute Resolution Procedure.
-------------------------------------------------------------------------------
54
SCHEDULE 6
THE LICENSED IP
Any Intellectual Property rights resulting from the following projects:
1 [******************************]
2 [******************************]
3 [******************************]
4 [******************************]
55
SCHEDULE 7
ACCOUNTING RECORDS
Open book policy, rights of audit
1 Hawker shall maintain books of account in relation to the provision of the
Services to BA in a form to be agreed between the parties (ACCOUNTING
RECORDS). Hawker shall adopt open book accounting in relation to the
provision of the Services to BA.
2 BA shall be permitted to carry out audit reviews (whether by BA or BA's
auditors) of these Accounting Records at BA's expense for the purpose of (and
only of) satisfying itself that Hawker is complying with the terms of
paragraph 1 above and Hawker shall allow BA access to them on reasonable
prior notice and, for this purpose, to Hawker's Premises, subject to
appropriate restrictions to protect the confidentiality of any information
relating to any Third Party Services.
3 Hawker shall provide BA with such financial and other management information
regarding the provision of the Services as BA may from time to time
reasonably require to support BA's monthly forecasting and accruals and its
annual budgeting and business planning processes.
4 Upon reasonable notice, Hawker shall provide BA and such auditors and
employees as BA may from time to time designate in writing to Hawker with a
right of reasonable access to Hawker's Premises for the purposes of
ascertaining that the information which has been provided to BA under this
Schedule is accurate and in accordance with the stated intention of the
Schedule.
5 BA, its auditors and other agents so designated shall have the right to take
copies of the Accounting Records, financial books and other records relating
to the Services that they reasonably require and Hawker shall provide all
reasonable available facilities free of charge.
6 Such audits shall be conducted by an internal BA auditor or an independent
auditor appointed by BA, at BA's expense.
7 Hawker may require BA's auditors and other agents involved in carrying out
any audit hereunder to enter into confidentiality agreements.
56
SCHEDULE 8
DOCUMENTS IN THE AGREED TERMS
1 BA's Specification;
2 Methodology for permanent variations to the Inventory Availability
Fee;Exchange Fee Methodology; andLRU TRTs.
57
THE BA SPECIFICATION
REFERS TO LANDING GEAR OVERHAUL SERVICES AGREEMENT BETWEEN
BRITISH AIRWAYS AND HAWKER PACIFIC
TECHNICAL SPECIFICATION AND CONTROL FOR THE LANDING GEAR OVERHAUL SERVICES
AGREEMENT BETWEEN BRITISH AIRWAYS AND HAWKER PACIFIC
LANDING GEAR/FLAP TRACKS/FLAP CARRIAGES
This document highlights the main areas of the BA Specification. The BA
Specification per item of Rotable Inventory is defined in the relevant CMM
manuals as amended by BA. All work completed under this agreement must comply
with these manuals.
GENERAL POLICY
The goal is a Safe and Reliable operation. Therefore every effort must be made
to achieve the following targets:-
No inservice structural failures
No inservice failures due to assembly deficiencies
No treadsheds due to manufacturing defects
No unscheduled removals due to Quality Control issues
LIFE CONTROL
Life control of Landing Gear is defined in the British Airways Approved
Maintenance Schedule (AMS) for the particular aircraft type. These life
controls/maintenance requirements must be adhered to and maybe varied by
British Airways Systems Group from time to time.
POOLING OF LANDING GEAR
The list of critical parts defined are considered exclusive to BA and pooling
is not permitted without approval by British Airways Systems Group. All other
parts fitted to BA components must have been reworked in accordance with this
document.
TECHNICAL RECORDS
Technical Records must be maintained on Assemblies so that any component can be
readily identified by part number and serial number. These records must
contain any modification/repair references, time since new, time since overhaul
data. Technical records must retained for the life of the relevant fleet of
aircraft plus two years and in accordance with JAR-OPS 1.920.
NOTE:- CAA Fatigue Life Limitations are more restrictive than the FAA
and therefore FAA Approved Fatigue Lives cannot be read across on
to British Registered Aircraft Components.
1
MODIFICATIONS/SPECIAL CHECKS
British Airways Systems Engineering and the Overhaul Vendor will agree
workscopes, modification standards, embodiment schedules, refurbishment and the
repair specifications for the Landing Gear.
All CAA/FAA Airworthiness Directives/Notices and Mandatory modifications must
be complied with. British Airways will supply a copy of the documentation.
Specific NDT Inspections/Requirements will be controlled through British
Airways Technical Publications :-ATP588 Volume 2, ATP1447 and XXXX00000 or
equivalents as approved by British Airways Systems Group
OVERHAUL/RECTIFICATION
Overhaul/rectification to be carried out in accordance with the OEM's CMM as
amended by British Airways, plus any conditions specified herein. Future
changes would be by consultation
Process specifications as agreed by British Airways Systems Group/Overhaul
Vendor
The Overhaul Vendor must maintain a significant defect register which is open
to inspection by British Airways Systems Engineering and any defect that meets
CAP382 Mandatory Occurrence Reporting Procedures criteria must be reported to
the CAA, copy to BA..
Strip reports to be provided on request by British Airways.
Any component advised by British Airways that is subjected to an
incident/accident investigation must not be reworked until written clearance by
BA Systems Group.
Overhaul Vendor to support British Airways life optimisation programmes as
required.
British Airways reserves the right to update and amend any CMM manual at any
time.
REPAIRS/PARTS CONTROL
All Non OEM Repair Schemes i.e. those raised by companies other than those
which hold the design data for the component, must be approved by British
Airways Systems Group before being applied to British Airways Landing Gear.
NOTE: FAA DER Approval does not constitute the right to repair/fit/fly
on passenger revenue, on British registered aircraft. All repair
schemes must be CAA Approved.
Any Non OEM Repair Schemes carried out on principal structural elements or
critical parts must be supported by a No Technical Objection (NTO) statement
from the OEM. Again these must be CAA Approved. Copy of scheme sent to
British Airways Systems
No PMA (Parts Manufacture Approval) parts to be used on BA Landing Gear without
written agreement by British Airways Systems Group.
New materials not obtained directly from Landing Gear manufacturer may only be
obtained from a BA approved supplier and shall be issued with documentary
evidence of traceability back to the OEM and supplied with a CAA Authorised
Release Certificate or FAA 8130-3 Authorised Release Certificate or a JAA form
1 Authorised Release Certificate. All materials obtained in this way must be
readily traceable as to the source of those materials and be readily audited
technically as to their approved source by BA.
2
CRITICAL PARTS
While every effort must be made to turnround British Airways parts, the
following list are considered exclusive and substitution is not permitted.
This list is subject to change on written notification by British Airways
Systems Group
B767 MLG centre torque rod bolt
B767 Brake Piston housing brake rod attachment pin
PAINT STRIPPING
No plastic media or similar shall be used for the stripping of paint from ANY
hydraulic components without specific approval by part number by British
Airways QSD Systems department.
SURFACE FINISH
Control of surface finish of chrome plated surfaces which are wiped by
dynamic seals, I.e. Inner Cylinders. The finish shall be maintained within
the range of 12 to 16 microinch CLA unless otherwise noted.
HYDRAULIC HOSES ON OVERHAULED LANDING GEAR LEGS
All flexible hoses fitted on Landing Gear Assemblies are to be replaced with
new at each overhaul. (Refer to requirements of JAR - OPS para 4.1.4).
All references above also apply to Flap Carriages, Flap Tracks and Landing
Gears.
3
VARIATIONS TO INVENTORY AVAILABILITY FEE
----------------------------------------
REFERS TO LANDING GEAR OVERHAUL SERVICES AGREEMENT BETWEEN
BRITISH AIRWAYS AND HAWKER PACIFIC
VARIATIONS TO INVENTORY AVAILABILITY FEE
----------------------------------------
The numbers contained on on this matrix are to be used in order to
reduce the Inventory Availability Fee on occasions where there is a
permanent reduction in the amount of BA inventory.
INVENTORY AVAILABILITY FEE PER ITEM
B737-200 NLG L 9,822
MLG L 10,804
Nose Drag Strut L 982
Main Drag Strut L 1,473
B737-400 NLG L 17,679
MLG L 14,733
Nose Drag Strut L 982
Main Drag Strut L 1,964
B747-100 WLG L 6,875
BLG L 5,893
NLG L 3,928
Wing Side Strut L 392
Body Side Strut L 392
Nose Drag Strut X 000
X000-000 XXX X 9,822
BLG L 8,840
NLG L 4,911
Wing Side Strut L 3,929
Body Side Strut L 3,929
Nose Drag Strut L 1,964
B747-400 WLG L 73,665
BLG L 68,754
NLO L 34,377
Wing Side Strut L 2,456
Body Side Strut L 2,456
Body Drag Strut L 1,964
B757-200 NLG L 29,466
MLG L 54,021
Side Strut L 2,455
Nose Drag Strut L 1,473
B767-300 NLG L 39,288
MLG L 73,666
Side Strut L 4,911
Nose Drag Strut L 2,455
B737 Flap Track L 982
B747 Flap Track L 1,670
B737-200 Flap Carriage L 295
B737-400 Flap Carriage L 688
B747 Flap Carriage L 982
BREAKDOWN FOR INITIAL L1,75M CHARGE
LANDING GEAR FLAP TRACKS FLAP CARRIAGES TOTAL
B737-200 L 126,705 L 12,769 L 2,357 L 141,831
B737-400 L 69,737 L L 2,750 L 72,487
B747-100 L 35,752 L L 35,752
B747-200 L 116,293 L 18,367 L 62,870 L 197,530
B747-400 L 662,001 L L 662,001
B757-200 L 431,680 L L 431,680
B767-300 L 208,719 L L 208,719
L 160,887 L 31,136 L 67,977 L 1,750,000
INVENTORY AVAILABILITY FEE PER SHIPSET
LANDING GEAR FLAP TRACKS FLAP CARRIAGES
B737-200 L 35,000 L 8,000 L 2,500
B737-400 L 52,000 L L 5,500
B747-100 L 31,000 L
B747-200 L 44,000 L 13,500 L 8,000
B747-400 L 331,000 L
B757-200 L 144,000 L
B767-300 L 209,000 L
EXCHANGE FEES
REFERS TO LANDING GEAR OVERHAUL SERVICES AGREEMENT BETWEEN
BRITISH AIRWAYS AND HAWKER PACIFIC
EXCHANGE FEES (L)
-----------------------------------------------------------------------------
B737-200 NLG (minus drag brace) 4,000
-----------------------------------------------------------------------------
NLG drag brace 800
-----------------------------------------------------------------------------
MLG (minus side strut) 5,000
-----------------------------------------------------------------------------
MLG side strut 1,000
-----------------------------------------------------------------------------
B737-400 NLG (minus drag brace) 4,000
-----------------------------------------------------------------------------
NLG drag brace 800
-----------------------------------------------------------------------------
MLG (minus side strut) 6,000
-----------------------------------------------------------------------------
MLG side strut 1,500
-----------------------------------------------------------------------------
B747-100 NLG (minus drag brace) N/A
-----------------------------------------------------------------------------
NLG drag brace N/A
-----------------------------------------------------------------------------
BLG (minus side strut) N/A
-----------------------------------------------------------------------------
BLG side strut N/A
-----------------------------------------------------------------------------
WLG (minus side strut) N/A
-----------------------------------------------------------------------------
WLG side strut N/A
-----------------------------------------------------------------------------
B747-200 NLG (minus drag brace) 5,000
-----------------------------------------------------------------------------
NLG drag brace 1,500
-----------------------------------------------------------------------------
BLG (minus side strut) 7,000
-----------------------------------------------------------------------------
BLG side strut 2,000
-----------------------------------------------------------------------------
WLG (minus side strut) 8,000
-----------------------------------------------------------------------------
WLG side strut 2,000
-----------------------------------------------------------------------------
B747-400 NLG (minus drag brace) 10,000
-----------------------------------------------------------------------------
NLG drag brace 2,000
-----------------------------------------------------------------------------
BLG (minus side strut) 12,000
-----------------------------------------------------------------------------
BLG side strut 2,500
-----------------------------------------------------------------------------
WLG (minus side strut) 14,500
-----------------------------------------------------------------------------
WLG side strut 2,500
-----------------------------------------------------------------------------
B757-200 NLG (minus drag brace) 6,000
-----------------------------------------------------------------------------
NLG drag brace 1,800
-----------------------------------------------------------------------------
MLG (minus side strut) 8,000
-----------------------------------------------------------------------------
MLG side strut 2,000
-----------------------------------------------------------------------------
B767-300 NLG (minus drag brace) 7,800
-----------------------------------------------------------------------------
NLG drag brace 1,800
-----------------------------------------------------------------------------
MLG (minus side strut & drag brace) 9,600
-----------------------------------------------------------------------------
MLG side strut 2,000
-----------------------------------------------------------------------------
MLG drag brace 2,000
-----------------------------------------------------------------------------
B777 NLG (minus drag brace) 55,000
-----------------------------------------------------------------------------
NLG drag brace 5,000
-----------------------------------------------------------------------------
MLG (minus side strut & drag brace) 80,000
-----------------------------------------------------------------------------
MLG side strut 5,000
-----------------------------------------------------------------------------
MLG drag brace 5,000
-----------------------------------------------------------------------------
SSC NLG N/A
-----------------------------------------------------------------------------
MLG N/A
-----------------------------------------------------------------------------
L1011 NLG N/A
-----------------------------------------------------------------------------
MLG N/A
-----------------------------------------------------------------------------
B737 TRACKS 2,000
-----------------------------------------------------------------------------
B737 CARRIAGES 1,500
-----------------------------------------------------------------------------
B747 TRACKS 4,890
-----------------------------------------------------------------------------
B747 CARRIAGES 2,550
-----------------------------------------------------------------------------
LINE REPLACEABLE UNITS - TURNAROUND TIMES (TRT's)
This document refers to the Agreement between British Airways and Hawker Pacific
for the supply of Landing Gear (and related component) Overhaul Services.
Contained in the following pages of this document are a non-exhaustive list of
Line Replaceable Units for which Hawker Pacific agree to overhaul on a Repair
and Return basis within the following Turnaround Times:
1. TRT'S FOR ALL LRU'S WITH THE EXCEPTION OF THOSE HIGHLIGHTED IN 2 AND 3
BELOW
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Year 1 Year 2 Year 3 Year 4 Years 5 to 7
--------------------------------------------------------------------------------
28 days 26 days 24 days 21 days Reduction subject to mutual agreement
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2. TRT's FOR:
Description Part Number
Steering Plate 1523354-117
Steering N/G Collar 00-00000-00
Steering Collar 00-00000-00
Inner BLG Cylinder 65B01439-3
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Year 1 Year 2 Year 3 Year 4 Years 5 to 7
--------------------------------------------------------------------------------
55 days 53 days 50 days 46 days Reduction subject to mutual agreement
--------------------------------------------------------------------------------
3. TRT's FOR:
Description Part Number
Assembly Beam 162T5000-3
HP Cylinder 201355632
MLG Actuator Beam 00-00000-0
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Year 1 Year 2 Year 3 Year 4 Years 5 to 7
--------------------------------------------------------------------------------
45 days 43 days 40 days 36 days Reduction subject to mutual agreement
--------------------------------------------------------------------------------
Matplan Workshop Part Number Keyword Description Wac
------- -------- ------------ -------- ---------------- ---
60 775 421388 0 XXXXXXXX XXX XX
801 65-46461-37 0 CARRIAGE ASSEMBLY WING O/ LN
00-00000-00 0 CARRIAGE ASSEMBLY WING O/ LN
00-00000-00 0 CARRIAGE ASSEMBLY WING R/ LN
00-00000-0 0 XXXXXX XXXX XXXXXX XX
00-00000-00 0 GIMBAL - LN
00-00000-0 0 GIMBAL 000 XXXX XXXXXX XX
00-00000-0 0 GIMBAL - LN
65808032-1D 0 BOGIE ASSY-AFT LN
65808032-7 0 BOGIE ASSY-AFT LN
65808032-8 0 BOGIE ASSY-AFT LN
65808032-9 0 XXXXX XXX XX
000 XX00X00000-00 0 XXXXX XXXXXXXXX XX
XX00X00000-00 0 LINER RETAINING LN
AB91N28427-26 0 LINER RETAINING LN
AB91N28429-30 0 LINER RETAINING LN
AB91N28443-44 0 LINER RETAINER LN
AB91N28445-488A 0 LINER RETAINING LN
AQ43A6 0 XXXX XXXX (XXXXX) XX
XXX0000-000 0 VALVE REBOUND CHECK LN
BAC830LJ20CD43 0 XXXX XXX, 0-0/0, XXX. 95 LN
BAC830LJ20CD46 0 XXXX XXX, 0-0/0, XXX. 95 LN
BAC830LJ20CD48 0 XXXX XXX, 0-0/0, XXX. 95 LN
BAC830NG23-134 0 BOLT 12PT. 1-3/8, STD. 1 LN
C22836-2-3 0 ARM ASSY LN
D73278100 0 FITTING XXXXXX XX
XXX00000-00 0 PIN TORQUE LINK LN
EZ43A4MK2 0 ABSORBER SHOCK LN
EZ44A13 0 ABSORBER SHOCK LN
G15T1433-12 0 ROD BRAKE LN
113N1000-1 0 BOLT MLG FWD TRUNNION LN
113N1138-1 0 BOLT MLG FWD TRUNNION LN
1523015-101 0 ARM TORQ ASS LWR M/G LN
1523054-101 0 PIN RETRACTION LOWER LN
1523146-107 0 BEARING ASSY LWR MLG LN
1523216-103 0 PIN RETRACTION UPPER LN
1523331-108 0 COLLAR DC LN
1523333-101 0 PIN TRUNION DRAG BRC LN
1523335-105 0 PIN STEERING-ACT LN
1523337-103 0 PIN STEERING COLLAR LN
M&1plan Workshop Part Number Keyword Description Wac
------- -------- ------------ -------- ---------------- ---
80 603 1523341-103 0 PIN TORQ ARM LWR N/G LN
1523353-101 0 PIN TOW LN
1523353-103 0 PIN TORQ ARM UPP N/G LN
1523354-117 0 PLATE ASSY-STEERING LN
1523383-101 0 NUT UPP TORQ ARM N/G LN
1523384-102 0 ASSY STABILISER, NLG J LN
1523431-103 0 PIN TRUNNION N/G LN
1523435-101 0 PIN STEERING PLATE N LN
1523478-101 0 CLEVIS ASSY LN
1523467-103 0 PIN FUSELAGE-NLG LN
1535821-101 0 SLEEVE NLG SHOCK STRT LN
160U0100-11 0 SENSOR LOAD BRAKE ROD W LN
161N1632-1 0 SPACER WHEEL LN
161N1632-2 0 SPACER MLG LN
161N1806-1 0 PIN BRAKE ROD INBD LN
161N1806-2 0 PIN BRAKE ROD INBD LN
161N1807-1 0 PIN BRAKE ROD OUTBD LN
161N1809-3 0 PIN ASSY LN
161N2511-1 0 PIN REACT-LINK LN
161N4001-1 0 PIN RETRACT ACTUATOR LN
161T1010-1 0 PIN BRAKE LN
161T1025-1 0 PIN KEEPER PIN LN
161T3336-15 0 RODAY BRAKE MLG LN
161T1136-16 0 ROD BRAKE LN
161T1149-1 0 SLEEVE BRAKE LN
161T1180-3 0 DONOTUSE OC PART LN
181T1180-4 0 XXXX XXXXX XXX XX
000X0000-0 0 PINAY BRAKE ATTACHMENT LN
161T1201-3 0 PIN BRAKE ATTACHMENT LN
161T1202-1 0 SPACER AXLE MLG LN
161T5000-2 0 BOLT RETRACT ACTR WL LN
181W1213-1 0 PIN ASSY. LOCK CENTE LN
181W3016-1 0 PIN APEX SIDE STRUT LN
181W3016-2 0 PIN APEX SIDE STRUT LN
1613264-101 0 ADAPTER BEARING MLG LN
162N1133-1 0 LINK TORSION UPPER LN
162N1134-1 0 LINK TORSION LOWER LN
162N1134-7 0 LINK TORSION LOWER LN
162N1137-1 0 PIN TORSN LINK APEX LN
162N1137-2 0 PIN TORSN LINK APEX LN
162N1220-1 0 SPACER ASSY NLG WHEEL LN
162T1118-4 0 LINK ASSY-TORQUE XXX XX
000X0000-0 0 PIN TORSION LINK-UPR LN
162T1998-2 0 PIN TORSION LINK LOW LN
162T1301-1 0 XXXXXXX XXX XX
162T1817-3 0 LINK ASSY TWR TORSION LN
Matplan Workshop Part Number Keyword Description Wac
------- -------- ------------ -------- ---------------- ---
80 803 162T5000-3 0 BEAM ASST MN
162T5005-2 0 PIN ACTUATOR BEAM AF LN
162T5007-3 0 PIN RETRACT ACT. UPP LN
162T5007-4 0 PIN RETRACT ACT. LOW LN
1642699-101 0 PIN ASSY MLG RETRACT LN
1648024-103 0 WRONG USE ID 3 LN
1648024-103 0 XXX XXXXX XXXXXX XX
1648024-106 0 ARM TORQ ASS, LOWER, N LN
201385832 0 CYLINDER HF LN
212N3051-8 0 XXXX XXXX XX
000X0000-0 0 COVER STEERING XXXX XX
000X0000-0 0 XXXXXXXX XXXX, XXX STEERI LN
284N1756-990 0 BOX ASSY R/H LN
0-00000-0 0 ARM ACTUATOR BEAM, AR LN
300-889-804-0 0 PENASSY PIN LN
00-000-0000 0 LINK BRAKE TRQ AFT LN
00-000-0000 0 LINK BRAKE TRQ FWD LN
00-000-0000 0 LINK BRAKE TRQ AFT LN
60810033-1 0 GAUGE PRESSURE LN
60940048-16 0 COMPNSTR FUEL LN
60840049-16 1 COMPNSTR COMPNSTR LN
00-00000-00 0 LINK LWR TORSION M/G LN
00-00000-00 0 LINK SEE - 6 ASSEMBLY LN
00-00000-0 0 ASSY UNIVERSAL LN
00-00000-0 0 BEAM MLG ACTUATOR LN
00-00000-0 0 BEAM MLG ACTUATOR LN
00-00000-00 0 ARM ACTUATOR XXXX, XX XX
00-00000-0 0 XXX XX ACTUATOR BEAM LN
00-00000-00 0 LINK MLG ACT BEAM LN
00-00000-00 0 LINK MLG ACT BEAM LN
00-00000-00 0 LINK MLG ACT BEAM LN
00-00000-00 0 LINK MLG ACT BEAM LN
65-46113-12RAXXX 0 PIN TRUNNION M/G MN
65-48141-11 0 UPLOCK XXX X/X XX
00-00000-00 0 XXXXXX XXX X/X LN
00-00000-00 0 UPLOCK XXX X/X XX
00-00000-00 0 XXXXXX XXX X/X LN
00-00000-0 0 SHAFT UPLOCK LN
00-00000-0 0 LINK UPPER TORSION NG LN
00-00000-00 0 COLLAR STEERING N/G LN
00-00000-00 0 COLLAR STEERING COLLAR LN
00-00000-00 0 LINK ASSY. TORSION-NLG LN
00-00000-00 0 LINK ASSY. TORSION-NLG LN
00-00000-0 0 GIMBAL - LN
65801290-10 0 ASSEMBLY UPLOCK R/H NLG LN
65801291-5 0 UPLOCK ASSY LH & RH NLG LN
Matplan Workshop Part Number Keyword Description Wac
------- -------- ------------ -------- ---------------- ---
80 803 65BO1331-14 0 SPTAY UPLOCK WING L.G. LN
65BG1331-6 0 SUPPORT ASSY UPLOCK ATTA LN
65BD1332-8 0 SPTAY UPLOCK WING L.G. LN
65BO1438-3 0 CYLINDER INNER BLG M AB
65BO1443-1 0 SPACER ASSY WHEEL BEARI LN
65BO4488-6 0 ROD BRAKE ASSY LN
65BO5102-2 0 LINK UPPER TORSION LN
65BO5102-3 0 LINK UPPER TORSION LN
65BO5104-1 0 LINK LOWER TORSION LO
65BO5167-5 0 UPLOCK ASSY LH.RH BLG LN
65BO5182-7 0 LINK UPPER TORSION LN
65BO5183-3 0 SLEEVE AXLE-MLG LN
65BO5195-1 0 SLEEVE AXLE SLEEVE LN
65BO3247-1 0 LINK LOWER TORSION AB
65BO5254-1 0 ROD ASS. BRAKE LN
65BO5317-25 0 XXXXX XXX XXXXXXXX XXX XX
00XX0000-0 0 LINK LOWER TORSION LN
65BO5428-13 0 SPACER ASSY MLG AXLE LN
65BO5428-14 O SPACER ASSY MLG AXLE LN
65BO5470-2 O WASHER TAND-AXLE LN
65BO5475-3 0 BOLT BRAKE LN
65BO5478-4 0 BOLT BRAKE LN
65BO5481-3 0 BOLT SPECIAL LN
65BO7788-1 I 0 TRUNNION HOUSING ASSY LN
65BO7709-2 INS 0 TRUNNION HOUSING ASSY LN
65BO8807-3 0 INSERT ASSY LUBRICATION LN
65BO8807-9 0 INSERT ASSY LUBRICATION LN
65BO8854-10 0 BEARING ASSY WLG TRUNNIO LN
65BO8854-11 0 RACE INNER WLG TRUNNI LN
65BO8854-7 0 RACE RACE LN
65BO8882-3 0 INSERT ASSY LN
65BO8885-4 0 RING ASSY TRUNNION BR LN
65BO9829-2 0 XXXX XX
65B11135-17 0 BRKE OLEO STRUT AFT M LN
65B70287-111 0 CONDUIT ASSY LN
65B70287-175 0 CONDUIT ASSY LH WLG LN
65B70287-176 0 CONDUIT ASSY RH WLG LN
00-00000-0 0 LIGHT ASSY WLG LN
00-00000-0 0 PIN LN
00-00000-0 0 PIN LN
00-00000-0 0 BOLT MLG ACT BEAM LN
00-00000-0 0 BOLT MLG ACT. BEAM LN
00-00000-0 0 XXXXXXX XXX XX
00-00000-0 0 ROLLER UPLOCK LN
00-00000-0 0 COLLAR BELLCRANK LN
00-00000-0 0 BEARING ASSY LN
M&1plan Workshop Part Number Keyword Description Wac
------- -------- ------------ -------- ---------------- ---
80 803 69-72023-3 0 PIN TORSION LINK LN
00-00000-0 0 PIN TORSION LINK. N. LN
69804030-3 0 ROLLER ASSY UPLOCK LN
69804053-1 0 BOLT SEE STY LN
69812970-10 0 LUG ASSY RH LN
69812970-12 0 LUG ASSY LN
69813972-3 0 STRUT ACTUATOR OLEO ST LN
6905-778 0 GAUGE PRESSURE LN
738763 0 PIN UNIVSL ATTACH LN
74739-1 0 BEARING ASSY LN
748250 0 SLEEVE SLEEVE LN
760582 0 FITTING END LN
784067-1 0 LINK ASSY TORQUE MLG LN
784725-0-8 0 STRUT ASSY SHOCK-MLG LG
00000-00-000 0 BOLT LN
9544023 0 COMPNSTR ASSY LN
807 77245580 0 CASE OUTER LN
81001-15001 0 LENS LENS ASSY-LH LN
814 05754103200200 0 BEAM BEAM ASSY-FLAP T LN
823 747580-4 0 SWITCH OVER PRESSURE LN
824 AC64050 0 XXXXX XX-XXXX XXXXX XX
XX00000 0 VALVE HP3 XXXXX XX
XX00000 0 VALVE SOLENOID XXXXX XX
XX00000 0 XXXXX XX XXXXX XX
XX00000 0 VALVE HP3 XXXXX XX
XX00000 0 REVERSER THRUST RAM LOCK LN
AC65422 0 REVERSER THRUST RAM PRMRY LN
AC86148 0 HOUSING SEQUENCE LN
AC55586 0 XXXXX XX0 XXXXX XX
XX00000 0 VALVE HP3 XXXXX XX
XX00000 0 VALVE ASSY. XXXXXXXX-X.X. XX
XX00000 0 VALVE 1P3 XXXXX XX
XX00000 0 SOLENOID HP3 BLEED H/SET LN
AC69178 0 SOLENOID HP3 XXXXX XX
X0000-000 0 VALVE CHECK-RELIEF LN
800A210251A 0 SEPARATR WATER *V LN
800214254A 0 VALVE EJECTOR *V LN
800214258A 0 VALVE TEMP CONTROL *V LN
800A214280A 0 XXXXX XXX XXXXXX XX
800A214785A 0 VALVE WATER DRAIN LN
800A214288A 0 VALVE CABIN ISOLATION LN
800A214255A 0 VALVE MASS FLOW LN
