REPAIR, OVERHAUL, EXCHANGE, WARRANTY
AND
DISTRIBUTION AGREEMENT
BETWEEN
DUNLOP LIMITED, AVIATION DIVISION
AND
HAWKER PACIFIC, INC.
NOVEMBER 1, 1996
THE [*] INDICATES THAT PORTIONS OF TEXT HAVE BEEN DELETED AND ARE BEING FILED
UNDER SEPARATE COVER WITH THE SECURITIES EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.
REPAIR, OVERHAUL, EXCHANGE, WARRANTY AND DISTRIBUTION AGREEMENT
This Repair, Overhaul, Exchange, Warranty and Distribution Agreement
("Agreement") is made and effective as of this 1st day of November 1996 by and
between:
DUNLOP LIMITED, AVIATION DIVISION, a Company existing and organized under the
laws of England and having a place of business at Xxxxxxxx Xxxx, Xxxxxxxx XX0
0XX, Xxxxxxx, hereinafter referred to as "Dunlop",
represented by Xxxx XXXXXX-XXXXXX, Managing Director
and
HAWKER PACIFIC, INC., a Company existing and organized under the laws of the
State of California and having a place of business at 00000 Xxxxxxx Xxx, Xxx
Xxxxxx, XX 00000 - USA, hereinafter referred to as "Hawker",
represented by Xxxxx X. XXXXXX, President and Chief Executive Officer,
herein collectively referred to as the "Parties" or individually as a "Party".
2 OF 25
REPAIR, OVERHAUL, EXCHANGE, WARRANTY AND DISTRIBUTION
AGREEMENT
CONTENTS
THE PARTIES
page
----
CONTENTS
WITNESSETH
1. SUBJECT AND SCOPE 6
2. DUNLOP'S OBLIGATIONS 6
2.1 Technical and Logistics Support 6
2.2 Special Tooling and Test Benches 8
2.3 Sole Rights 8
3. HAWKER'S OBLIGATIONS 9
3.1 Quality Requirements 10
3.2 Technical and Logistics Support 10
3.3 Non-Competition 11
4. JOINT COMMERCIAL MARKETING PROGRAMS 11
5. PIECE PARTS AND END ITEMS 11
5.1 Manufacture and Distribution 11
5.2 Purchase of End-Items 12
5.3 Initial Provisioning 12
5.4 Price Catalogues 12
5.5 Discounts 13
5.6 Special Pricing 13
5.7 Priority 13
6. CONDITIONS OF DELIVERY, INVOICES AND PAYMENT 13
7. WARRANTIES 14
7.1 Dunlop Vendor Standard Warranty 14
8. LIABILITY 16
8.1 Hawker's Indemnification 16
8.2 Dunlop's Indemnification 16
9. EXCUSABLE DELAY 16
3 OF 25
page
----
10. TERM OF AGREEMENT AND TERMINATION 17
11. NOTICES 17
12. APPLICABLE LAW AND LITIGATION 18
13. SURVIVORSHIP 18
14. ASSIGNMENT 19
15. INVENTORY BUY BACK 19
16. MISCELLANEOUS 19
17. WAIVER 20
18. VOID PROVISIONS 20
19. AMENDMENTS 20
20. INSPECTION VISITS 21
21. ENTIRE AGREEMENT 21
Appendix 1: Discount Structure by Aircraft Type 22
Appendix 2: Record of Joint CBL Guarantee Agreements 23
Appendix 3: Memorandum of Agreement 24,25,26
Appendix 4: Special Pricing 27
Appendix 5: XXXX List Pricing (1996) 28
4 OF 25
WITNESSETH
WHEREAS, Dunlop, is an Original Equipment Manufacturer (O.E.M.) and seller of
various wheel, brake, brake management system and ice protection equipment and
provides certain repair, overhaul and exchange services in connection therewith,
WHEREAS, Hawker heretofore provided such aforementioned services for Dunlop as
well as distribution for Dunlop brake management equipment,
WHEREAS, in connection with the sale of Hawker, the Parties wish to enter into
this Agreement providing for the continuation of such services upon the terms
and conditions contained herein,
NOW THEREFORE, in consideration of the mutual convenants contained herein, the
Parties agree as follows:
5 OF 25
1 SUBJECT AND SCOPE
Subject to the terms and conditions contained herein, Dunlop hereby
appoints Hawker as its sole source for all repair, overhaul and exchange
work whether warranty or otherwise (hereinafter collectively referred to as
the "Work") of Dunlop manufactured wheel, brake, brake management system
equipment (hereinafter collectively referred to as the "Equipment") fitted
to the aircraft types as noted in Appendix 1 hereto (hereinafter referred
to as the "Aircraft"). Hawker's sole rights pursuant to this Article 1
shall be for Aircraft operated only in the territories of North, Central
and South America, including the Caribbean (hereinafter referred to as the
"Territory").
Further, subject to the terms and conditions contained herein, Dunlop
hereby appoints Hawker as the sole distributor for all brake management
system piece parts and end-items for the Aircraft in the Territory.
2 DUNLOP'S OBLIGATIONS
2.1 TECHNICAL AND LOGISTICS SUPPORT
In order to give Hawker all required qualifications for support
of the Equipment, Dunlop shall provide the following to Hawker:
A. Documentation (Free of Charge)
- Components Maintenance Manuals (CMM) and their revisions
- Service Bulletins, Service Newsletters and technical
instructions
- General procedures
- Tooling and other drawings (as required)
- Material Specification Data Sheets (MSDS)
- Price lists of end-items and piece parts
B. Training
As and when agreed by the parties, Dunlop shall train a
reasonable number of Hawker technicians in Dunlop's and/or
Hawker's facilities for familiarization with:
1. Overhaul and maintenance procedures
2. All technical data relating to the operational
characteristics of such Equipment including for example load
limits, service lives etc.
As consideration for such services, Hawker shall pay a basic
training fee to be agreed by the Parties. In addition,
reasonable and ordinary travel, food and lodging expenses
6 OF 25
incurred by Dunlop employees or agents connected with the
training of Hawker personnel at Hawker's facility shall be
reimbursed by Hawker upon receipt of proper evidential matter.
Hawker's personnel will be required to meet any requirements of
regulatory authorities having jurisdiction relating to security
matters before being allowed to enter Dunlop facilities.
All costs and expenses incurred by Hawker personnel in connection
with such training shall be borne by Hawker.
C. Quality and Technical Assistance
Dunlop shall have the right from time to time to perform quality
audits with no less than 48 hours prior written notice.
Reasonable corrective actions shall be applied by Hawker as
recommended by Dunlop in relation thereto.
D. Technical Support
Dunlop shall provide technical support to Hawker by way of
promptly answering technical queries raised by Hawker relating to
the repair, overhaul, exchange and warranty of the Equipment in
order that Hawker will be in good position to meet its
commitments to its customers with Mean Time To Repair ("MTTR")
consistent with market standards. Dunlop's answers shall include
technical opinions and repair and servicing solutions and
procedures.
Dunlop will also provide technical personnel for assistance in
Hawker field support visits, when deemed necessary by both
Parties.
Dunlop and Hawker will exchange visit reports that include
sufficient information regarding Dunlop product performance,
technical issues and data collection for operator visits
conducted in Hawker territory.
All services and information described in this Section D shall be
provided by Dunlop at no charge to Hawker.
E. Operator Support
To the extent it is aware of the same, Dunlop will keep Hawker
appraised of any and all operator conferences, meetings, vendor
liaison, cost-of-ownership programs, etc. that concern, or
involve, Aircraft operators in the Territory.
7 OF 25
2.2 SPECIAL TOOLING AND TEST BENCHES
The specific tooling and test benches necessary to repair and overhaul
the Equipment shall be provided by Dunlop, if required subject to
Hawker acceptance of Dunlop's quotation.
Subject to the reasonable approval of Dunlop quality personnel, Hawker
may adapt at its own expense its test benches so as to perform the
tests required in the Dunlop CMM's.
2.3 SOLE RIGHTS
In recognition of Hawker's sole rights hereunder Dunlop covenants and
agrees as follows;
X. Xxxxxx shall not in any manner, directly or indirectly, solicit,
accept or otherwise conduct any Work on Aircraft operated only in
the Territory. Dunlop specifically shall not enter into any cost
per brake landing (CBL) type agreements relating to Aircraft
operated only in the Territory without Hawker's participation and
agreement. Excluded from this requirement shall be agreements
currently in force between Dunlop and Delta Airlines and cost of
ownership guarantees between Dunlop and Aircraft constructors
that are assignable by the constructor to operators. Dunlop
shall refer all inquiries for Work in or originating from the
Territory to Hawker.
X. Xxxxxx shall not distribute or sell in any manner, directly or
indirectly, piece parts or end-item spares for brake management
systems Equipment for Aircraft operated only in the Territory.
X. Xxxxxx shall not appoint any other facility as an "approved"
Dunlop repair, overhaul, exchange and/or warranty facility
located in or providing service to or Work on Aircraft operated
only in the Territory nor consent or agree for any such facility
to represent itself as "approved" by Dunlop.
D. The Parties recognize that Hawker has a repair, overhaul,
exchange, warranty and distribution agreement with Dunlop
Equipment Division (hereinafter referred to as "DEQ") that is
also exclusive to the Territory. Further, the Parties recognize
that a division of Dunlop, Dunlop Aviation Services (hereinafter
referred to as "DAS"), performs, in the United Kingdom, repair,
overhaul and warranty services on DEQ products as an approved
repair source. Therefore, in recognition of the exclusivity of
Hawker's agreement with DEQ, DAS shall not in any manner,
directly or indirectly, solicit, accept or otherwise conduct
repair, overhaul, exchange or warranty services on DEQ products
in or originating from the Territory. DAS and/or Dunlop shall
refer all inquiries for DEQ related business in or originating
from the Territory to Hawker.
8 OF 25
E. Notwithstanding the foregoing, nothing herein shall prevent Dunlop
from:
(i) selling wheel and brake piece parts and end items directly to
any operator of Aircraft operated in the Territory;
(ii) entering into agreements otherwise prohibited pursuant to this
Section 2.3 if it becomes essential to do so in order to
obtain or retain sole source status on an Aircraft from the
Aircraft constructor thereof providing Dunlop and Hawker have
thoroughly discussed such a necessity in a timely manner
before Dunlop consummates any such agreements;
(iii) distributing or selling piece parts and end item spares for
brake management systems Equipment on Aircraft operated only
in the Territory if Dunlop has an existing contractual
obligation to do so or if it becomes essential to do so to
obtain or retain sole source status on an Aircraft from the
Aircraft constructor thereof providing Dunlop and Hawker have
thoroughly discussed such a necessity in a timely manner
before such changes in distribution and selling arrangements
are consummated;
(iv) dealing directly with OEM constructors with respect to
aircraft production and new product development together with
technology development, transfer or counter trade within the
Territory.
(v) dealing directly with those customers within the Territory who
insist upon transacting repairs, overhauls or exchanges with
Dunlop by virtue of it's position as OEM designer and
manufacturer of the Equipment or where such Work is an
extension of an agreement made and principally operated
outside the Territory (eg Canada 3000). Dunlop shall not seek
to develop repair, overhaul and exchange Work for Aircraft
within the Territory and shall refer all customers to Hawker
in the first instance. Dunlop shall notify Hawker of any
instances where direct Work for Aircraft is undertaken.
F. The foregoing provisions in this Section 2.3 shall be deemed to bind
Dunlop and all of its affiliates and a breach of said provisions by
any such affiliate shall be deemed to be a breach by Dunlop.
3 HAWKER'S OBLIGATIONS
Hawker commits itself to repair and overhaul the Equipment within MTTR
consistent with prevailing standards and in a manner that will not
materially prejudice Dunlop's
9 OF 25
market position and reputation. Hawker further commits to deliver service
quality (workmanship) at industry standards and to price such services at
reasonable levels.
3.1 QUALITY REQUIREMENTS
Hawker's capacity to comply satisfactorily with Dunlop's quality
standards shall be audited by Dunlop at timely intervals. Any audit
of Hawker's facilities by Dunlop shall be done consistent with Section
2.1.C hereof.
Hawker shall employ technicians and quality assurance personnel fully
competent to perform the work required by this Agreement and, in
compliance with all regulatory authorities having jurisdiction.
It is mutually agreed and understood that neither Dunlop's appointment
of Hawker as its sole source for repair, overhaul, exchange and
warranty work, nor Dunlop's quality approval will, in any way, be
construed as a guarantee by Dunlop of Hawker performance.
3.2 TECHNICAL AND LOGISTICS SUPPORT
Hawker shall use all technical information given by Dunlop for the
sole purpose of providing qualified repairs, and shall not use such
data (such as drawings, etc.) for the manufacture of parts without
Dunlop's written permission. Similarly, Hawker shall not publish this
technical information nor disclose it to third parties.
All such information and data (including but not limited to, any and
all copies and reproductions thereof in whole or in part) shall remain
the property of Dunlop and shall be promptly returned to Dunlop at the
expiration of this Agreement.
In conjunction with Dunlop, Hawker agrees to provide all Aircraft
operators with technical support for maintenance of Equipment. This
support will include, but not be limited to:
A. Operator contact and product performance monitoring and feedback.
B. Coordinated technical visits with Dunlop technical personnel
where deemed appropriate by Dunlop.
X. Xxxxxx will provide comprehensive visit reports that include
sufficient information regarding Dunlop product performance,
technical issues and data collection for warranty adjudication.
10 OF 25
3.3 NON-COMPETITION
Hawker agrees not to solicit or accept any repair, overhaul, exchange
or warranty business, directly or indirectly, generated outside the
Territory.
Hawker agrees not to distribute directly or indirectly any brake
management or ice protection Equipment outside the Territory.
Furthermore, Hawker under the Agreement is prohibited from and agrees
not to manufacture and not to distribute, directly or indirectly,
Dunlop wheel and brake piece parts or end-items in or outside the
Territory.
Hawker shall refer all inquiries on Dunlop related business outside
the Territory to Dunlop. Further, Hawker shall refer all inquiries
for wheel and brake distribution within the Territory to Dunlop.
4 JOINT COMMERCIAL MARKETING PROGRAMS
4.1 Where, as mutually defined, a commercial policy for Equipment for
an Aircraft operated only in the Territory are to be covered by
specific, individual operator agreements (service support,
price/cost guarantees, etc.) then the Parties reasonably shall
agree on the basis upon which the Parties jointly or severally
shall establish and administer such agreements. A record of said
existing agreements in force as of the date of this Agreement
appears in Appendix 2 hereto.
4.2 Memorandum of Agreement referenced DABS/HPI/MOA executed on 20
March 1996 defines the basic principals under which the Parties
shall combine to enter into such agreement (see Appendix 3
hereto).
4.3 The basis of sharing cost or reduced revenues between the Parties
shall be reasonably agreed upon between the Parties before any
binding agreement is made to the customer.
5 PIECE PARTS AND END-ITEMS
5.1 MANUFACTURE AND DISTRIBUTION
The manufacture and distribution (including initial provisioning by
new operators) of wheel and brake piece parts and end-items are the
responsibility of Dunlop.
The manufacture of braking systems and ice protection piece parts and
end items are the responsibility of Dunlop while the distribution of
braking systems piece parts and end
11 OF 25
items (including initial provisioning by new operators) of same in the
Territory is the sole responsibility of Hawker.
Hawker shall utilize published lead times as noted in Dunlop's current
year price list for provisioning of said parts. In addition, where
Dunlop takes advance action to provision spare part manufacture in
support of Aircraft operators, Hawker shall receive the benefit of
identical provisioned lead times to the extent Dunlop's capacity
allows.
Both Dunlop and Hawker acknowledge that certain modifications or
equipment failures can result in unexpected piece parts consumption by
operators. In view of that fact, Dunlop agrees to exert reasonable
commercial efforts so that Dunlop can give reasonable priority to
deliver piece parts ordered by Hawker so as to protect Hawker and the
operator from long lead time exposures. These reasonable commercial
efforts may include affording Hawker the opportunity to purchase parts
directly from Dunlop Aviation North America (XXXX) an affiliate of
Dunlop, for the same price which Hawker would pay Dunlop.
5.2 PURCHASE OF END-ITEMS
The Parties recognize that in order to fulfill Hawker's unit exchange
program objectives under the Agreement, that Hawker must, from time to
time, purchase wheel and brake end-items (for example, Line
Replaceable Units) from Dunlop to facilitate such exchanges. Dunlop
hereby agrees to sell same end-items to Hawker for said purpose and,
in turn, Hawker agrees not to sell the same to operators. Hawker
shall purchase such items at the discounts set forth in Appendices 1
and/or 4 as appropriate.
5.3 INITIAL PROVISIONING
Hawker shall issue purchase orders for the provisioning of an initial
piece parts inventory based on the CMM's sent by Dunlop. It will then
be Hawker's responsibility to replenish such inventory according to
its expected consumption.
Dunlop will provide, on request, recommendations of spares arising for
its products which will include bills of materials and "100 off
lists".
5.4 PRICE CATALOGUES
Following Dunlop announcement of a spares price increase (for which
normally 90 days noticed will be given) Dunlop will provide Hawker
with at least one (1) printed copy of the price catalogue in US
Dollars (the identical catalogue provided to XXXX) and one (1)
diskette copy (Lotus 123 or Excel format). The Parties anticipate
that, under normal circumstances, prices will be maintained for a 12
month period commencing January 1 each year. Prices for items
scheduled to be delivered within 90
12 OF 25
days of order shall be those set forth in the current price list less
the applicable discount established pursuant to Section 5.5. Prices
for items scheduled to be delivered more than 90 days after the date
of order shall be priced in accordance with the price list in effect
at the date of scheduled delivery, less the applicable discount.
5.5 DISCOUNTS
The sales prices for all Equipment purchased by Hawker from Dunlop,
whether piece parts or end items, shall be priced to Hawker at a
discount from the list prices set forth in the appropriate US Dollar
price Catalogue. For the first three years from the date of the
Agreement, such discount, shall be the percentage set forth in
Appendix 1 hereto. From time to time thereafter, Dunlop may change
the discount but only in a manner that, together with the discounts
made available to and xxxx ups charged to other customers of Dunlop,
will maintain Hawker's competitive position embodied in the discount
amount set forth in Appendix 1 and the pricing formulae in Appendix 5.
Dunlop shall provide Hawker at least 90 days notice before such change
in discount.
5.6 SPECIAL PRICING
Prior to the date hereof, the Parties identified circumstances and
market pressures which necessitated special pricing for certain
Equipment, as set forth in Appendix 4 hereto, which special pricing
superseded the prices obtained using the Hawker discount described in
Section 5.5 hereof. Under normal circumstances, Hawker shall be given
at least 90 days notice of any revision to such special pricing. In
any event, any revision must be made in a manner that, together with
discounts made available to and xxxx ups charged to other customers of
Dunlop, will maintain Hawker's competitive position embodied in the
special pricing set forth in Appendix 4 and the pricing formulae in
Appendix 5. The Parties anticipate that Special Pricing will be
reflected in the US Dollar Price Catalogue.
5.7 PRIORITY
Subject to timely ordering in accordance with published lead times,
Hawker shall receive equivalent delivery priority with respect to
piece part and end item orders as given to Dunlop's operator
customers.
6. CONDITIONS OF DELIVERY, INVOICES AND PAYMENT
Prices charged Hawker by Dunlop shall be established in accordance
with Section 5. All other delivery conditions shall be as indicated
in the price catalogue then in effect.
All prices including Special prices shall be established in dollars.
Payment terms shall be net forty-five (45) days from date of invoice,
which shall be the date of dispatch from Dunlop.
13 OF 25
7. WARRANTIES
7.1 DUNLOP VENDOR STANDARD WARRANTY
Dunlop warrants all materials supplied to be:
In compliance with applicable regulations and with approved drawings,
as well as with agreed specifications and test procedures included in
the order.
Free from defects in material, workmanship and operation, and from
faults inherent in design and manufacture.
Unless otherwise agreed in agreements between Dunlop and aircraft
constructors and subsequent flow down to Aircraft operators (details
of which shall be supplied to Hawker) the duration of the warranty for
Dunlop components is as follows:
- twelve (12) months after delivery to the operator of the aircraft in
which the item is incorporated, or twelve (12) months after delivery
of the Equipment to Hawker, as the case may be.
The warranty covers the repair or replacement (at Dunlop's option) of
the defective Equipment at no charge to the customer.
The warranty covers expenses actually incurred which are related to
transportation and customs, inward and outward, from the operator base
to Hawker's plant.
The warranty does not cover labor expenses related to installation,
removal, or tests by operator and does not include any indemnity
either for possible use of an alternate piece of Equipment or for
aircraft unserviceability.
In no event shall Dunlop be liable for incidental or consequential
losses or damages. The warranties of merchantability and fitness for a
particular use or purpose, and all other warranties, express or
implied, are disclaimed.
The warranty does not apply to failures caused by the improper use,
handling, installation, operation or maintenance.
Unauthorized opening, altering, tampering or modification of a piece
of Equipment or of a spare part are considered as improper use.
The components of the Equipment or spare parts which are not
manufactured by Dunlop and can be considered as vendor parts cannot be
guaranteed beyond the warranty period given by their respective
vendor.
14 OF 25
The operator must be capable of proving that the operation time
covered by the warranty has not expired. The operator must also
provide all necessary documentary evidence to substantiate his claim.
No defective piece of Equipment or spare part is to be returned to
Dunlop except with the written consent of one of Dunlop's authorized
representatives.
The return of any piece of Equipment or spare part will be made in
accordance with Dunlop shipping instructions.
The warranty obligation only exists if Dunlop or one of its authorized
representatives is informed of the failure within sixty (60) days of
its discovery.
Equipment or spare parts repaired or replaced under warranty shall be
re-warranted for the remaining portion of the effective warranty.
Hawker will comply with the agreed warranty claim procedure effective
as of the date of signature of this Agreement, or, as may be amended
from time to time by mutual consent between the Parties, including the
filing of a report which sets forth the reasons for acceptance or
rejection of any warranty claim.
Hawker is not responsible for placing an advance order for the stock
necessary for warranty work. Upon Hawker's request the parts which are
not available at Hawker will be shipped by Dunlop on an expedited
basis.
- WORK PERFORMED IN CONNECTION WITH WARRANTY CLAIMS:
The work performed in connection with warranty claims which are
accepted by Hawker and which may require prior approval by Dunlop as
described below shall be invoiced by Hawker to Dunlop in the following
manner:
a) Replacement piece parts shall be invoiced by Hawker at their
actual "landed" cost to Hawker.
b) Direct man hours expended by Hawker for test, disassembly,
repair, calibration, re-assembly, inspection and final tests
shall be invoiced at the current agreed billing rate in effect
on the date the work is performed. The agreed billing rate is
sixty (60) US Dollars per manhour for 1996. The Parties will
reasonably revise the agreed billing rate annually.
c) Subcontracting incurred by Hawker in fulfillment of these
warranty claims shall be invoiced by Hawker to Dunlop at actual
and substantiated incurred costs.
d) Terms of payment accepted by Dunlop for these warranty
charge-backs are net forty five (45) days from date of invoice.
15 OF 25
Hawker is authorized to accept or to reject the validity of any
routine warranty claim by operators and to proceed with the accepted
warranty repair.
Hawker shall notify Dunlop at the end of each month of the receipt of
all warranty claims. Hawker shall attach to any claim and related
notification a shop findings report and a technical opinion summary.
After repair, Hawker shall send a complete report to Dunlop.
Dunlop reserves the right, at its option, in case of the repeated and
unusual failure of any Equipment, or in other specific cases
(modification programs, or special investigation possibly
necessitating a fleet-wide rework), either to delegate the work to
Hawker, if Hawker accepts to perform this activity, or to carry out
needed repair and/or modification and/or investigation at Dunlop's
facility if Hawker declines.
8 LIABILITY
8.1 HAWKER'S INDEMNIFICATION
Hawker shall be solely liable for and hereby agrees to defend, indemnify
and hold harmless Dunlop and its affiliates and their officers, directors,
shareholders, agents and employees, from and against any and all
liabilities, losses, damages, claims, costs and expenses for all injuries
or death to persons and for all damages, losses of or loss of use of
property caused by or arising out of the improper performance by Hawker of
services pursuant to this Agreement.
8.2 DUNLOP'S INDEMNIFICATION
Dunlop shall be solely liable for and hereby agrees to defend, indemnify
and hold harmless Hawker and its affiliates and their officers, directors,
shareholders, agents and employees, from and against any and all
liabilities, losses, damages, claims, costs and expenses for all injuries
or death to persons and for all damages, losses of or loss of use of
property caused by or arising out the improper performance by Dunlop of any
obligation hereunder and/or defective Equipment manufactured by Dunlop.
9 EXCUSABLE DELAY
Dunlop shall not be liable for any delay in delivery or failure in
performance herein due to causes beyond Dunlop's reasonable control
including acts of God, acts of civil or military authorities, fires,
strikes, floods, epidemics, war, civil disorder, riot, or other causes
beyond Dunlop's reasonable control and not due to Dunlop's fault or
negligence.
16 OF 25
In the event of any such delay, the date of delivery shall be extended for
a period equal to the time lost by reason of the delay. This provision
shall not, however, relieve Dunlop from using reasonable efforts to
continue prompt delivery performance while such causes exist and whenever
such causes are removed. Dunlop promptly shall notify Hawker when such
delays occur and shall continue to advise it of new shipping schedules
and/or changes thereto.
10 TERM OF AGREEMENT AND TERMINATION
This Agreement shall become effective as of November 1, 1996 and shall
remain in effect for a period of ten (10) years. It is to be automatically
renewed thereafter for subsequent one (1)-year periods unless either Party
provides the other Party with a six (6) month prior written notice not to
renew.
However, this Agreement may be terminated immediately:
a) by either Party upon written notice to the other Party if:
1) The other party commits a material breach under this Agreement,
and fails to remedy such material breach in a reasonable amount
of time after receipt of written notice thereof or
2) a receiver is appointed for the whole or any substantial part of
the other Party's assets,
or
3) the other Party enters into liquidation whether voluntary or
compulsory, or
b) by Dunlop upon written notice to Hawker, if:
1) Hawker consistently fails to reasonably maintain Dunlop's
existing required standards of quality in Hawker's performance
of services pursuant to this Agreement, or
2) Hawker ceases, on a permanent basis, to hold a valid certificate
from the relevant authorities as referred to in Article 3.1
"Quality requirements".
11 NOTICES
11.1 Notices under this Agreement shall be addressed to the respective
Parties as follows:
1. The President and Chief Executive Officer
HAWKER PACIFIC, INC.
00000 Xxxxxxx Xxx
Xxx Xxxxxx, XX 00000-XXX
17 OF 25
2. The Managing Director
DUNLOP LIMITED
AVIATION DIVISION
Xxxxxxxx Xxxx Xxxxxxxx
XX0 0XX England
11.2 All communication under this agreement shall be given in writing
either by personal delivery, by reputable air courier or by
electronic transmission. The effective date for any such
communication shall be deemed to be the date on which it is received
by the addressee, unless later effectivity is specified therein.
12 APPLICABLE LAW AND LITIGATION
12.1 The validity, construction and performance of this Agreement shall
be governed by and interpreted in accordance with the laws of the
State of New York.
12.2 The Parties shall endeavor in good faith to mutually resolve any
disputes between them involving the interpretation, application or
performance of this Agreement. Any such dispute which cannot be so
resolved shall be settled under the Rules of Conciliation and
Arbitration of the International Chamber of Commerce by one or more
arbitrators appointed in accordance with said Rules. The place of
arbitration shall be Winnipeg, Manitoba or other mutually agreeable
location.
12.3 In the event of any dispute resolved pursuant to paragraph 12.2
above all expenses (including reasonable attorney's fees and costs)
shall be apportioned as determined by the arbitrator(s).
13 SURVIVORSHIP
13.1 In the event of termination or expiration of this Agreement, the
rights and obligations of the Parties up to the date of such
termination or expiration shall be honored by the Parties unless
otherwise mutually agreed, and appropriate settlement of accounts
shall be made.
13.2 In any event, the rights and obligations of the Parties under the
following Articles of this Agreement shall survive any expiration or
termination of this Agreement:
Article 3.2 Technical and Logistical Support
Article 8 Liability
Article 12 Applicable Law and Litigation
Article 15 Inventory Buy Back
18 OF 25
Article 16 Miscellaneous
14 ASSIGNMENT
Hawker shall not assign any rights or obligations arising under this
Agreement without the prior written consent of Dunlop and/or its successors.
However, in the event that Hawker may be sold (whether by stock or asset
sale or merger), this Agreement shall be assigned and transferred in its
entirety to the Buyer of Hawker without the need for Dunlop's prior written
consent and shall remain fully enforceable thereafter. Notwithstanding the
foregoing, under no circumstances shall any rights under this Agreement be
transferred (whether by sale of stock of Hawker, operation of law,
assignment or other arrangement) to a competitor of Dunlop.
Dunlop shall not assign any rights or obligations arising under this
Agreement without the prior written consent of Hawker and/or its successors.
However, in the event that Dunlop may be sold (whether by stock or asset
sale or merger), this Agreement shall be assigned and transferred in its
entirety to the Buyer of Dunlop without the need for Hawker's prior written
consent and shall remain fully enforceable thereafter.
15 INVENTORY BUY BACK
15.1 Subject to Section 15.3, Dunlop shall buy back from Hawker all
provisioned parts which become obsolete only as a result of
mandatory modifications ordered by regulatory authorities or Dunlop.
15.2 For all other parts that Hawker is restricted from selling or
otherwise dealing in hereunder and that become surplus to Hawker's
requirements, Hawker shall offer Dunlop the right of refusal to
purchase the same and, if Dunlop declines, Hawker may sell the same.
15.3 All parts bought back by Dunlop (or which Hawker may be entitled to
sell pursuant to Section 15.2) shall be in new condition, free from
shocks or marks. Dunlop will credit Hawker upon receipt and
inspection of parts bought back by Dunlop at an amount equal to
Hawker's "landed cost" (cost of acquisition and freight) for such
parts.
16 MISCELLANEOUS
16.1 Hawker is an independent contractor and shall be solely responsible
under any contract or agreement it enters into for the provision of
the services contemplated to be provided by Hawker hereunder except
only to the extent of joint marketing programs contemplated in
Section 4 hereto.
19 OF 25
16.2 Without limiting Section 16.1 hereof, Hawker, its employees, agents,
subsidiaries and affiliates are not to be construed as being the
legal representatives of Dunlop for any purpose whatsoever and have
no right or authority to endeavor or create, in writing or in any
other ways, any obligation of any kind, expressed or implied, in the
name of or on the behalf of Dunlop.
16.3 The rights herein granted and this Agreement are for the benefit of
the Parties hereto and not for the benefit of any third person, firm
or corporation, and nothing contained herein shall be construed to
create any right of any third parties under, as a result of, or in
connection with, this Agreement.
16.4 The term "Dunlop" throughout this Agreement includes, and this
Agreement shall be binding upon, all subsidiaries, affiliates and
other entities owned or controlled by Dunlop and/or its parent.
17 WAIVER
The failure of either Party to enforce any of the provisions of this
Agreement or to require at any time performance by the other Party of any
provisions hereof, shall in no way affect the validity of this Agreement or
any part thereof, or the right thereafter to enforce each and every such
provision.
The waiver of an express condition or requirement of this Agreement shall
not constitute a waiver of any future obligation to comply with such
provision, condition or requirement.
Anything done by either Party before this Agreement becomes effective, which
would be in fulfillment of an obligation thereunder, shall, after this
Agreement becomes effective, be treated as being in fulfillment of such
obligation under this Agreement.
18 VOID PROVISIONS
If any provision of this Agreement is determined to be void by any court of
competent jurisdiction, than such determination shall not affect any other
provision of this Agreement, and all such other provisions shall remain in
full force and effect. It is the intention of the Parties that if any of the
provisions of this Agreement are capable of two constructions, one of which
would render the provision void and the other of which would render the
provision valid, then the provision shall have the meaning which renders it
valid.
19 AMENDMENTS
20 OF 25
No modification, extension, waiver or amendment of this Agreement, or any of
the provisions herein contained, shall be binding upon the Party against
whom enforcement of such modification, extension, waiver or amendment is
sought, unless it is made in writing and signed by an officer of such Party.
Either Party may, by appropriate written notice, designate other individuals
to whom the foregoing authority has been delegated.
20 INSPECTION VISITS
At its sole expense, Dunlop shall have the right to send technical,
engineering and commercial representatives to Hawker's facilities for the
purpose of conducting inspections during the term of this Agreement. All
inspections shall be conducted during Hawker's normal business hours, and
persons conducting such inspections shall coordinate their visits with
Hawker's personnel prior to their arrival.
21 ENTIRE AGREEMENT
This Agreement including Appendices 1, 2, 3, 4 and 5 attached hereto is the
entire Agreement of the Parties and shall supersede any previously executed
agreements or oral understandings between the Parties which relate to the
subject matter of this Agreement.
In WITNESS WHEREOF, the Parties have executed this Agreement by their duly
authorized representatives on the date indicated.
For:
DUNLOP LIMITED, AVIATION DIVISION HAWKER PACIFIC, INC.
/s/ XXXXXX MELBOURNE /s/ XXXXX X. XXXXXX
------------------------------- -------------------------------
On behalf of Xxxx XXXXXX-XXXXXX Xxxxx X. XXXXXX
Managing Director President and CEO
Date: Date: 1 November 1996
/s/ R.C. HAMABERG
-------------------------------
R.C. Hamaberg
Product Group Chief Executive
BTR Aerospace
Date:
Signed by Dunlop conditional upon the incorporation of changes and
deletions identified in the attached pages. DLL
21 OF 25
APPENDIX 1
DISCOUNT STRUCTURE BY AIRCRAFT TYPE
AIRCRAFT DISCOUNT
-------- --------
ATP/J61 [*]%
ATR72 [*]%
B737-500 and prior [*]%
B757-200 and prior [*]%
BAC1-11 - all series [*]%
BAe146/RJ Series [*]%
CN212/235 [*]%
DO328 TBD
F27/28/50/100 [*]%
HS125- all series [*]%
HS748 [*]%
J31/32 [*]%
J41 25%
SD3-30/3-60 [*]%
SKYVAN [*]%
22 OF 25
APPENDIX 2
RECORD OF JOINT CBL GUARANTEE AGREEMENTS
OPERATOR A/C TYPE DATE/SIGNED DURATION
-----------------------------------------------------------------------------------------------
(YRS)
1.AMR Eagle (dba Wings West/Nashville Eagle) J32 19.06.91 5
2.Atlantic Coast Airlines (dba United Express) J41 21.10.93 3
3.Chicago Express J31 No Copy of
Agreement
0.Xxxxxxx Airlines, I Inc. (dba Northwest Airlink) J31 25.09.92 4
5.Transstates (dba USAir Express) J32 06.01.94 In Service
6.Transstates ATR72 03.06.93 3
7.Transstates ATP 03.06.93 3
8.AMR Eagle ATR72 01.01.96 5
Note:
Agreements numbered 1,2,4,6 and 7 have, by their written terms, expired.
Any written renewal shall be in accordance with Articles 4 hereto.
23 OF 25
APPENDIX 4
SPECIAL PRICING
PART NUMBER DESCRIPTION GROSS 1996 US$ NET 1996 US$
----------- ----------- -------------- ------------
AH43615 HALF HUB $ [*] $ [*]
AHO89676 HEATPACK $ [*] $ [*]
AHO89903 HEATPACK - $ [*]
AHO90944 HEATPACK $ [*] $ [*]
AHO90945 HEATPACK $ [*] $ [*]
AHO90946 HEATPACK $ [*] $ [*]
AHO89620 HEATPACK $ [*] $ [*]
AH52997 NOSE WHEEL $ [*] $ [*]
AH85484/4 PAD $ [*] $ [*]
AH83829/6 PAD $ [*] $ [*]
AHO86040/2 PAD $ [*] $ [*]
AHO83322/9 PAD $ [*] $ [*]
AHO85484/3 PAD $ [*] $ [*]
AHO83829/8 PAD $ [*] $ [*]
AHM7129 SEGMENT $ [*] $ [*]
AHM9128 SEGMENT $ [*] $ [*]
AHM9053 SEGMENT $ [*] $ [*]
AHM8252 SEGMENT $ [*] $ [*]
AHM8875 SEGMENT $ [*] $ [*]
AHM6748 SEGMENT $ [*] $ [*]
AHM10038 SEGMENT $ [*] $ [*]
AHM7284 SPIDER $ [*] $ [*]
24 OF 25
APPENDIX 5
XXXX LIST PRICING (1996)
CATEGORY OF CUSTOMER CALCULATION OF PRICE PAID BY DANA'S
CUSTOMER
Operator, FBO, OEM, Private Operator (Dunlop List - A/C Discount) x [*]
Brokers/Repair Stations (Dunlop List - A/C Discount) x [*]
AI(R) (Dunlop List - A/C Discount) x [*]
Distributors (HS125) (Dunlop List - A/C Discount) x [*]
Tools (Dunlop List - A/C Discount) x [*]
Exceptions:
a. BAe146 Heatpacks (AHO90944) Coventry List = $[*] (XXXX pays $[*])
Air Wisconsin pays $[*]
Atlantic Southeast pays $[*]
ADI pays $[*]
All others pay $[*] (no core returns, price is $[*])
b. B757 Heatpacks (AHO89903) Coventry List = $[*] (XXXX pays $
[*]
Avianca pays $[*]
Aviation Brake Service pays $[*]
Note: "A/C Discount" above is the Discount off Dunlop List in dollars for
Hawker in accordance with Appendix 1 of the Agreement and "(Dunlop List - A/C
Discount)" above is the Price paid by Hawker.
25 OF 25
