Exhibit 10.41

 

AMENDMENT ONE

To

DISTRIBUTION SERVICES AGREEMENT

Between

Aviall Services, Inc.

and

ROLLS-ROYCE CORPORATION

 

WHEREAS the Parties have entered into a Distribution Services Agreement A01-596,
effective, December 17, 2001, and

 

WHEREAS, pursuant to Section 27, page 30, Amendments, the Parties are agreeable
to making changes to the Agreement, and

 

NOW THEREFORE, the parties agree as follows:

 

Section 5. (a)(1) Terms of Sale, Page 10 – Please delete paragraph (1) in its
entirety and replace with the following:

 

“Annually, individual suggested list prices may be changed, however, the Company
guarantees that on average, suggested list prices for all active T56 products
will increase a minimum ***% per year. The Company must give Service Provider
written notice of annual price changes at least 90 days before the increase
takes effect. Service Provider orders placed in a given year but scheduled for
delivery in the next year will be at the price in effect at time of delivery and
subject to the annual price increase. However, Service Provider orders scheduled
for delivery in a given year but not delivered until the next year will be price
protected at the previous year’s price.

 

The Company may reevaluate and increase suggested list prices on a quarterly
basis but only if it first gives Service Provider written notice of any increase
at least 90 days before the price increases takes effect. The price to Service
Provider for all items of Product ordered before receipt of notice by Service
Provider and for all items of Product ordered after receipt of notice by Service
Provider but which are deliverable by Company under established lead times
before the date of the price increase, shall be at the price applicable prior to
the price increase.”

 

Section 5. (c) Terms of Sale, Page 10 – Please delete paragraph (c) in its
entirety and replace with the following:

 

“Payment terms from the Service Provider due the Company are *** days from
receipt of Product or date of invoice, whichever is later. Service Provider will
make payments twice monthly (second Friday and last Friday) for all amounts due
in accordance with Exhibit R. If payment is not received by Company in
accordance with this Section, the Company shall be entitled to charge a late
payment fee at the rate of ***% per day, or the maximum allowable by law, of any
past due amount, on any Purchase Order undisputed in good faith. All payments
hereunder shall be made in U.S. dollars or such other currency which may be
agreed upon.”

 

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN PORTIONS
OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS
DOCUMENT WITH “***”.

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Section 5. (f) Terms of Sale, Page 10 – Please delete paragraph (f) in its
entirety and replace with the following:

 

“Payment terms for any amounts due Service Provider by Company are *** days from
date Service Provider ships Product on Rolls-Royce’s behalf. Company will make
payments twice monthly (second Friday and last Friday) for all amounts due in
accordance with Exhibit R. If payment is not received by the Service Provider in
accordance with this Section, the Service Provider shall be entitled to charge a
late payment fee at the rate of ***% per day, or the maximum allowable by law,
of any past due amount, on any Purchase Order undisputed in good faith. All
payments hereunder shall be made in U.S. dollars or other such currency which
may be agreed upon.”

 

Section 6. (b) Delivery Terms, Page 11 – Please delete paragraph (b) in its
entirety and replace with the following:

 

“If the Company does not deliver Products within *** days of the delivery date
as specified in a Purchase Order accepted by the Company, Service Provider has
the right to (i) cancel the Purchase Order with evidence of customer
cancellation of an order of such Product (or the portion of the Purchase Order
equal to any amount cancelled by customer) from Service Provider, or (ii) extend
the delivery date to a later date. The extended delivery date must be within six
months of the originally scheduled delivery date. Service Provider has the right
to cancel the Purchase Order if delivery is not made by the extended date.

 

Additionally, if market/political-economic or competitive environment shifts
make the delayed order excess to Service Provider then current needs, the
Service Provider may cancel products that the Company does not deliver within
*** days of the originally scheduled delivery date. Market/political-economic
shifts are events or actions that result in significant changes in the demand
for Product. Competitive environmental shifts are events or actions that result
in significant changes in the sources and nature of the availability of amongst
others, of new non-OEM parts, new repairs and surplus material. The Company will
receive written notification of these changes with the accompanying cancellation
request.

 

Exhibit H: Foreign Sales Agency Agreements – Please delete the paragraph that
begins “The Company will retain order management . . .” in its entirety and
replace with the following:

 

“The Company will retain order management responsibility for Shintoa
International. All orders received from Shintoa will be forwarded to the Service
Provider for forecasting requirements and order fulfillment, including shipping
Product to Shintoa. If Shintoa requires that parts be shipped directly from the
Company, the Service Provider will return such parts to the Company. The Service
Provider will pay the Company a ***% handling fee for parts that are shipped to
Shintoa from the Company. For parts sold to Shintoa, the Company will invoice
the Service Provider’s share of the commission payments in accordance with
Exhibit R.”

 

Exhibit K: Transfer Prices – Please delete Exhibit K in its entirety and replace
with the following:

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN PORTIONS
OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS
DOCUMENT WITH “***”.

--------------------------------------------------------------------------------

“Company agrees that it will sell Product to Service Provider at a discount of
not more than ***% and not less than ***% off the then-current list price. The
discount for year one will be ***% off list. Beginning with the second full
calendar year, the discount to the Service Provider will be based on sales
growth.

 

Joint Company and Service Provider sales, at list price, in 2001 (excluding
sales by Company to Service Provider) are estimated at $*** (based on actual
sales through September and an estimate for the remainder of the year). Using
actual Company and Service Provider 2001 sales data (excluding sales by Company
to Service Provider) as the initial baseline, if year-over-year sales increase
more than ***% (inclusive of inflation and list price changes), the discount
from list will be increased on a sliding scale to no more than ***% in the
subsequent year as set forth below. If sales increase less than ***% (inclusive
of inflation and list price changes) the discount will be reduced to no lower
than ***% off list as set forth below. Sales scheduled to occur prior to year
end but not achieved due to late Product delivery, may be accounted for in the
year that sales were due to occur. All delinquent customer orders outstanding on
12-31-2001 shall automatically be assigned by the Company to Service Provider.”

 

Sales

Performance

(% above of

target)

   Service
Provider
Discount

--------------------------------------------------------------------------------

***<

   ***%

*** – ***

   ***%

*** – ***

   ***%

*** – ***

   ***%

*** – ***

   ***%

***>

   ***%

 

Exhibit N: U.S. Military Sales – Please delete the last paragraph in its
entirety that begins, “In filing contracts and other agreements with U.S.
military customer…” and replace with the following:

 

“In filing contracts and other agreements with U.S. military customers (or their
contractors), the Service Provider will be required to fill part orders at a
price below the transfer price. For the parts shipped in fulfillment of these
contracts, the Company will reimburse Service Provider in accordance with
Exhibit R for the average cost of the Product plus a handling fee of ***% of
current year list price. Average cost is equal to ***% of current year list
price.”

 

Exhibit R: Payment Terms – Please delete this Exhibit in its entirety and
replace with the following paragraphs:

 

Service Provider Payment Terms

 

Service Provider payment terms for new part purchases are *** days paid twice
monthly. Payments will be made to Company via check. The check must be in
Company’s possession by close of business on the second Friday and last Friday
of a month unless payment schedule is otherwise mutually agreed.

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN PORTIONS
OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS
DOCUMENT WITH “***”.

--------------------------------------------------------------------------------

Company Payment Terms

 

Company payment terms for amounts due Service Provider are *** days paid twice
monthly. Payments will be made to Service Provider via wire on the second Friday
and last Friday of a month unless payment schedule is otherwise mutually
agreed.”

 

All other terms and conditions remain unchanged.

 

The foregoing Provisions are understood and agreed by the undersigned parties.

 

IN WITNESS WHEREOF, each party of this Amendment One of the Agreement has caused
it to be executed in duplicate below with an effective date of October 1, 2003.

 

AVIALL SERVICES, INC.

 

ROLLS ROYCE CORPORATION

/s/ D. P. Komnenovich

--------------------------------------------------------------------------------

 

/s/ Norman D. Britton

--------------------------------------------------------------------------------

Signature

 

Signature

Dan Komnenovich

--------------------------------------------------------------------------------

 

Norman D. Britton

--------------------------------------------------------------------------------

Name

 

Name

Chief Operating Officer, Aviall Services, Inc.

--------------------------------------------------------------------------------

 

Contracts Director-Defense North America

--------------------------------------------------------------------------------

Title

 

Title

01 Oct 03

--------------------------------------------------------------------------------

 

01 Oct 03

--------------------------------------------------------------------------------

Date

 

Date

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN PORTIONS
OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS
DOCUMENT WITH “***”.