Document:

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                                                                   EXHIBIT 10.47

                                                                  EXECUTION COPY

________________________________________________________________________________

                                LOAN AGREEMENT

                                    between

                           HAWKER PACIFIC AEROSPACE
                                As the Company

                                      and

                             LUFTHANSA TECHNIK AG
                                   As Lender

                           DATED SEPTEMBER 20, 2000

________________________________________________________________________________
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                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                     <C>
 1.  Definitions......................................  1
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 2.  Loan, Availability, Payments and Loan Documents..  1
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 3.  Warrant..........................................  1
 --  -------
 4.  Representations and Warranties of the Company....  1
 --  ---------------------------------------------
 5.  Covenants........................................  1
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 6.  Conditions Precedent.............................  1
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 7.  Events of Default................................  1
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 8.  Subordination....................................  1
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 9.  Arbitration......................................  1
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10.  Notices..........................................  1
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11.  Indemnification..................................  1
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12.  Miscellaneous....................................  1
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</TABLE>

Annex I - Definitions

Exhibits:

Exhibit A - Form of Promissory Note

Exhibit B - Warrant

Schedules:

Schedule 4.2 Capitalization

Schedule 4.3 Subsidiaries

Schedule 4.4 Concerts

Schedule 4.5 Litigation

Schedule 4.6 Liabilities

Schedule 4.8 Certain Change

Schedule 4.13 Employment Agreements

Schedule 4.15 Environmental

                                       i
<PAGE>

                                LOAN AGREEMENT

     THIS LOAN AGREEMENT (the "Agreement") is made this 20th day of September,
2000 by and between Lufthansa Technik AG, a company organized under the laws of
Germany ("Lender") and Hawker Pacific Aerospace, a California corporation (the
"Company").

     WHEREAS, the Company desires to borrow an amount equal to NINE MILLION
THREE HUNDRED THOUSAND U.S. DOLLARS (U.S.$9,300,000)  for a term of three (3)
years and the Lender desires to lend to the Company the such amount on the terms
and conditions set forth herein;

     WHEREAS, the Lender requires the Company enter into this Agreement and
issue the Warrant (as defined below) as an inducement for the Lender to
consummate the transaction contemplated in the Purchase Agreement (as defined
below); and

     WHEREAS, the Lender and Company among others have entered into as of the
date hereof that certain shareholders rights and voting agreement pursuant to
which the Company and other parties set forth therein have agreed to afford
Lender certain rights as a shareholder of the  Company (the "Shareholders Rights
and Voting Agreement");

     NOW, THEREFORE, in consideration of the promises and mutual covenants
herein, the Company and the Lender agree as follows:

1.   Definitions

     For purposes of this Agreement, and except as otherwise expressly provided
herein or unless the context otherwise requires, capitalized terms shall have
the meaning ascribed to them in Annex I or this Agreement.
                                -------

2.   Loan, Availability, Payments and Loan Documents

     2.1. Upon the terms and conditions in this Agreement, the Lender
          acknowledges and agrees to lend to the Company a principal amount of
          NINE MILLION THREE HUNDRED THOUSAND U.S. DOLLARS (U.S. $9,300,000)
          (the "Loan"). This Agreement shall be effective as of the date hereof
          (the "Effective Date").

     2.2. The Lender and the Company shall certify on the date hereof the Lender
          has paid to the Company the principal in the sum of NINE MILLION THREE
          HUNDRED THOUSAND U.S. DOLLARS (U.S.$9,300,000) to an account
          designated by the Company.

     2.3. The Loan shall have the terms and conditions and shall bear the
          interest at the rates for the corresponding periods set forth below:
<PAGE>

          2.3.1.  On or before June 30 and December 31 in each calendar year
                  during the term of the Loan, the Company shall pay an amount
                  of interest accruing to such date at the rate provided herein
                  on the outstanding principal balance under the Loan. The first
                  interest payment shall be due on September 19, 2001. The
                  annual interest rate shall be equal to the higher of (a) 10%
                  per annum or (b) 5% per annum plus USD LIBOR as published on
                  the Effective Date which shall be applicable for the first six
                  months and USD LIBOR as published each six month anniversary
                  thereafter for each subsequent six month period, to the extent
                  permitted by Applicable Law; provided, however, the interest
                  rate shall in no event exceed 11%.

          2.3.2.  The principal amount of the Loan shall be paid as follows: (a)
                  on the first anniversary of Effective Date, the Company shall
                  make a payment to Lender in the amount of $2,325,000 which
                  represents 25% of the principal; (b) on the second anniversary
                  of the Effective Date, the Company shall make a payment to
                  Lender in the amount of $2,325,000 which represents 25% of the
                  principal.

          2.3.3.  On the third anniversary of the Effective Date, the Loan shall
                  mature and $4,650,000 (which represents the remaining 50% of
                  the principal) together with any accrued but unpaid interest
                  hereunder, shall be due and payable in full by the Company.

     2.4. Subject to Section 2.10 and Section 2.14 with respect to exercise of
          the Warrants, all payments shall be made to the Lender in immediately
          available funds to Lender's account no. 40652003 with CITIBANK, New
          York, swift code: citi us 33/ABA 021000089 or to such other account
          notified to the Company not later than 7 days prior to the respective
          obligation falling due. Subject to Section 2.3.1, interest shall be
          calculated on a basis of the actual number of days elapsed and a 360
          day year.

     2.5. All amounts payable by the Company under this Agreement shall be paid
          in full without set-off or counterclaim or right of retention or other
          restrictions and free and clear of and save to the extent required by
          law, without any deduction or withholding for or on account of any
          taxes or charges or otherwise.

     2.6. If payments are not made on their due date, additional 1% per annum
          (one percent per annum), calculated from the due date to the actual
          date of payment, shall be due and payable to the Lender, to the extent
          permitted by Applicable Law.

     2.7. The Loan shall be evidenced by a duly executed promissory note of the
          Company (the "Note") substantially in the form attached hereto as
          Exhibit A and delivered to the Lender as of the date hereof. At the
          ---------
          Closing of that certain stock purchase agreement dated September 20,
          2000 by and between Lender and the shareholders listed therein (the
          "Purchase Agreement"), the Company shall deliver to the Lender (a) the
          Note and (b) any other documents reasonably requested by Lender and
          necessary to effectuate the Loan as described herein.

                                       2
<PAGE>

     2.8. The Company shall have the right at any time to prepay the Loan, in
          whole or in part, without penalty or premium. Any such prepayment
          shall be applied first to the accrued interest and then to the
          principal.

     2.9. Use of Proceeds. The proceeds of the loan shall be used for the
          ---------------
          following purposes:

          2.9.1.  to retire and pay in full all indebtedness, including
                  principal and accrued but unpaid interest, for borrowed money
                  owing by the Company to Unique Investment Corp.("Unique")
                  equal to TWO MILLION EIGHT HUNDRED AND NINE THOUSAND AND ONE
                  HUNDRED AND FORTY FIVE DOLLARS ($2,809,145) and all fees and
                  expenses owing to Unique Investment Corp. equal to TWO HUNDRED
                  AND EIGHTY THREE THOUSAND THREE HUNDRED AND THIRTY THREE
                  DOLLARS ($283,333) pursuant to certain Amended and Restated
                  Subordinated Promissory Note dated December 22, 1998 ("the UIC
                  Agreement") by and between the Company and Unique.

          2.9.2.  only after the payments have been made under Sections 2.9.1
                  and upon the prior written approval of Lender, to pay the
                  senior managers of the Company identified below the "change of
                  control" payments, as agreed to in writing between the Lender
                  and the Company from time to time, in an amount not to exceed
                  TWO HUNDRED AND FIFTY THOUSAND FOUR HUNDRED AND NINETY SIX
                  DOLLARS ($250,496) (the "Change of Control Payment") as set
                  forth below:

                  2.9.2.1.  The following senior managers shall be paid out of
                            the proceeds from the Loan their respective share of
                            the Change of Control Payment as follows: (i)
                            Michael Riley shall receive $72,959 in accordance
                            with the payment deferment agreement between Michael
                            Riley, the Lender and the Company and (ii) Brian
                            Carr shall receive $177,537 in accordance with the
                            employment agreement, as amended, between Brian Carr
                            and the Company.

                  2.9.2.2.  The Company and Lender acknowledge that the
                            following senior managers are entitled to the
                            following amounts for change of control payments
                            pursuant to their respective employment agreements;
                            provided, however that such payments shall be
                            payable in accordance with the respective Payment
                            Deferment Agreement and in no event payable on the
                            Effective Date (i) Dave Lokken shall receive
                            $344,877; (ii) Dennis Biety shall receive $368,178;
                            (iii) Michael Riley shall receive $72,959 and (iv)
                            Philip Panzera shall receive $202,537; provided
                            however, the Company shall not use the proceeds of
                            the Loan as the sole source of funds for these
                            change of control payments; provided, further, the
                            Company shall use funds other than the proceeds from
                            the Loan before using the proceeds from the Loan for
                            such payments.

                                       3
<PAGE>

                  2.9.2.3.  Unless otherwise agreed between the Company, the
                            Lender and the respective senior manager, for any
                            other amounts owed to such senior manager in
                            connection with the change of control provision in
                            their respective employment agreement which are not
                            paid on the Effective Date, the payment schedule
                            shall be as set forth in the respective payment
                            deferment agreement; provided however, such payments
                            shall not exceed in the aggregate the amount of the
                            Change of Control Payment.

                  2.9.2.4.  The Company represents and warrants to Lender that
                            no other change of control payments or similar
                            payments are owed to any other employee of the
                            Company.

          2.9.3.  to pay in part the indebtedness owed by the Company to Heller
                  Financial, Inc. under that certain Loan and Security Agreement
                  dated December 22, 1998 by and among Hawker Pacific Aerospace,
                  Hawker Pacific Aerospace Limited, and NMB-Heller Limited (the
                  "Heller Revolving Loan"), such payment to be in amount up to
                  approximately FIVE MILLION NINE HUNDRED AND FIFTY SEVEN
                  THOUSAND AND TWENTY SIX DOLLARS ($5,957,026) and to be made
                  available for working capital needs; provided, however, Lender
                  acknowledges that any sums paid in accordance with Section
                  12.10 may be paid out of such working capital.

    2.10. The Lender acknowledges and agrees that the Loan shall be considered
          paid in full by the Company upon the earlier of:

    (i)  the repayment to the Lender in full in immediately available funds in
U.S. Dollars by the Company of the principal and accrued and unpaid interest of
the Loan or

    (ii) the repayment to the Lender in the form of: X + Y

    where X = the number of Warrant Shares exercised by the Lender multiplied by
the Exercise Price and which shall constitute partial payment and partial
cancellation of the Loan; provided, however, the Lender may elect in its sole
discretion, at the time of the exercise of the Warrant, whether the payment is
towards (A) principal only or (B) principal plus any accrued and unpaid
interest.

    where Y = on the date of the issuance of the Warrant Shares, the payment to
Lender in immediately available funds in U.S. Dollars by the Company of an
amount equal to [the sum of the total balance of the principal plus any accrued
and unpaid interest as of the exercise date of the Warrant] minus [X]
("Remaining Balance");

provided, however, at Lender's sole discretion, the Remaining Balance shall
continue to be paid in accordance with the payment terms set forth in Section
2.3 above rather than paid in full upon the exercise of the Warrant; provided,
further that the amount represented by X shall be allocated first to the payment
of the outstanding principal amount as of the date of exercise of the Warrant.

                                       4
<PAGE>

    2.11. Upon the issuance of the Warrant Shares, in whole or in part pursuant
          to the exercise of the Warrant by Lender, as partial payment for the
          Loan, in accordance with either 2.10 or 2.14, if the Company does not
          pay the Remaining Balance on the date the Warrant Shares are so
          issued, the Company shall issue an amended promissory note in the form
          of Exhibit A hereto for an amount equal to the Remaining Balance and
             ---------
          such amended promissory note may be presented by Lender as payment for
          any remaining Warrant Shares in accordance with the terms of the
          Warrant.

    2.12. Taxes.

          2.12.1.  All payments to be made by the Company to the Lender under
                   this Agreement shall be made free and clear of, and without
                   any deduction or withholding for or on account of, any taxes,
                   charges or other deductions. If the Company is required to
                   make such payment subject to any deduction or withholding,
                   the sum payable by the Company in respect of which such
                   deduction or withholding is required to be made shall be
                   increased to the extent necessary to ensure that, after the
                   making of the required deduction or withholding, the Lender
                   receives and retains (free from any liability in respect of
                   any such deduction or withholding) a net sum equal to the sum
                   which it would have received and so retained had no such
                   deduction or withholding been made or required to be made.

          2.12.2.  Without prejudice to the provisions in Section 2.12.1, if the
                   Lender is required to make any payment on account of tax (not
                   being tax imposed on the net income of its principal office
                   by the jurisdiction in which it is organized or in which its
                   principal office is located) or otherwise on or in relation
                   to any sum received or receivable under this Agreement by the
                   Lender (including without limitation, any sum received or
                   receivable under this clause) or any liability in respect of
                   any such payment is asserted, imposed, levied or assessed
                   against the Lender, the Company shall, upon demand of the
                   Lender, promptly indemnify the Lender against such payment or
                   liability, together with any interest, penalties and expenses
                   payable or incurred in connection therewith.

          2.12.3.  Upon the reasonable request of the Company, the Lender agrees
                   to complete U.S. Internal Revenue Service forms (including
                   Form W-8) identified to it and provided by the Company that
                   are relevant to reducing or eliminating any withholding of
                   tax on payments made under this Agreement. The failure of
                   Lender to complete such forms for any reason shall not alter
                   any obligations of the Company under this Agreement.

    2.13. In the event that Lender finds a Person to refinance the Heller
          Refinancing and such refinancing provides sufficient funds to cover
          the principal and accrued but unpaid interest of this Loan, Lender may
          in its sole discretion request the Company repay Lender in full or in
          part amounts owed Lender under this Loan out of the proceeds of such
          refinancing.

                                       5
<PAGE>

    2.14. At Lender's election, the interest payments due in accordance with
          Section 2.3.1 shall be paid either (A) in immediately available funds
          in accordance with Section 2.4 or (B) upon the exercise of the number
          of Warrant Shares exercised by the Lender multiplied by the Exercise
          Price which shall equal the amount of interest accrued but unpaid as
          of exercise date.  Lender shall notify Company  of its election under
          this Section 2.14 no later than three (3) Business Days prior to the
          date on which interest payments are due.

3.  Warrant

    3.1.  As a condition to Lender's obligation herein the Company shall issue a
          Warrant as of the date hereof for two million five hundred thousand
          (2,500,000) shares of Common Stock of the Company at FOUR U.S. DOLLARS
          AND TWENTY-FIVE CENTS (U.S.$4.25) per share exercisable anytime
          between the date of the shareholders' approval of such issuance and
          the first anniversary of the Effective Date (the "Warrant")  attached
          hereto as Exhibit B.
                    ---------

    3.2.  At Lender's election, presentment of the Note shall be deemed payment
          in full of the Exercise Price for any shares acquired by Lender
          pursuant to the Warrant, whether the Lender exercises the Warrant in
          whole or in part. Upon presentment of the Note at the time of the
          exercise of the Warrant if the Company does not immediately pay the
          Remaining Balance as set forth in Section 2.10, or at Lender's request
          if Lender exercises the Warrant under Section 2.14, the Company shall
          issue an amended promissory note in accordance with Section 2.11
          hereof in the amount of the Remaining Balance. Such amended promissory
          note may be presented by Lender at any subsequent date as payment in
          full of the Exercise Price for any shares thereafter exercised by
          Lender in accordance with the Warrant.

    3.3.  The shares represented by the Warrant, upon Lender's exercise of the
          Warrant, in whole or in part, shall benefit in full from rights set
          forth in the Shareholders Rights and Voting Agreement.

4.  Representations and Warranties of the Company

    The Company represents and warrants to the Lender that:

    4.1.  Organization.  The Company (i) is a corporation duly organized,
          ------------
          validly existing and in good standing under the Applicable Laws of the
          State of California; (ii) has all requisite corporate power and
          authority to own, lease and operate its property and to conduct its
          business as it is now being conducted and currently proposes to be
          conducted; (iii) is in compliance with all Applicable Laws applicable
          to it or its business, including but not limited to Tax Laws, for
          which non-compliance could reasonably be expected to have a Material
          Adverse Effect on it or its business, and (iv) has obtained and
          maintained all material Licenses and Permits required to conduct its
          business as it is currently being conducted and presently proposes to
          be conducted. The Company is duly qualified, licensed or admitted to
          do business

                                       6
<PAGE>

          and is in good standing in all jurisdictions in which the ownership,
          use or leasing of its assets and properties, or the conduct or nature
          of its business, makes such qualification, licensing or admission
          necessary. The Company is not in violation of (i) its Organizational
          Documents (ii) any Contracts, except where breach of such Contract
          would not have a Material Adverse Affect on it or its business, or
          (iii) any Applicable Laws or Orders. The failure to elect a staggered
          board prior to the date hereof does not have a Material Adverse Effect
          on the Company or its business and does not adversely effect the
          validity of any actions taken by the Board of Directors of the Company
          on or before the date hereof.

     4.2. Capitalization.  The Company has issued and outstanding (i) as of
          --------------
          September 18, 2000, 6,083,431 shares of Common Stock representing
          96.2% of the total issued and outstanding capital stock of the Company
          on a fully diluted basis in accordance with GAAP and (ii) 300 shares
          of preferred stock.. Except as set forth on Schedule 4.2, there are no
                                                      ------------
          voting preemptive rights), options, warrants, subscriptions, calls,
          convertible securities, restrictions of any kind, nature or
          description, or other agreements, commitments or understandings,
          written or oral, pursuant to which the Company is or may become
          obligated to issue, transfer, sell, register, redeem, repurchase or
          otherwise acquire any shares of the capital stock of any Person or any
          securities or rights convertible into or exchangeable or exercisable
          for any such shares. Schedule 4.2 attached hereto sets forth a
                               ------------
          complete list of all outstanding shareholders, option holders and
          other security holders of the Company (A) with 5% or more ownership
          interest or (B) who are senior management or directors of the Company.
          The outstanding Common Stock of the Company is duly and validly
          issued, and such Common Stock, and all outstanding options and other
          securities of the Company, have been issued in full compliance with
          the registration and prospectus delivery requirements of the
          Securities Act of 1933, as amended (the "Securities Act"), and the
          registration and qualification requirements of all applicable state
          securities laws, or in compliance with applicable exemptions
          therefrom, and all other provisions of applicable federal and state
          securities laws, including, without limitation, anti-fraud provisions.

     4.3. Subsidiaries. Except as set forth on Schedule 4.3, the Company does
          ------------                         ------------
          not have any subsidiaries and does not presently own, of record or
          beneficially, or control, directly or indirectly, any capital stock,
          securities convertible into capital stock, or any other equity or
          similar interest, in any Person; nor is the Company, directly or
          indirectly, a participant in any joint venture, partnership or other
          noncorporate entity.

     4.4. No Conflict or Violation.  The execution, delivery and performance of
          ------------------------
          this Agreement and the Other Transaction Documents, the consummation
          of the transactions contemplated hereby, the compliance with any of
          the provisions hereof, and the conduct of their businesses as
          conducted and as proposed to be conducted will not: (i) conflict with,
          or result in a breach or violation of the Organizational Documents of
          the Company; (ii) except as set forth on Schedule 4.4, (A) conflict
                                                   ------------
          with, or result in a violation or breach of, or constitute (with or

                                       7
<PAGE>

          without due notice or lapse of time or both) a default (or give rise
          to any right of termination, cancellation, vesting, payment, exercise,
          acceleration, suspension, revocation or modification) under, any of
          the terms, conditions or provisions of any note, credit agreement,
          bond, mortgage, deed of trust, security instrument, indenture, lease,
          License, Contract, plan or other instrument or obligation to which the
          Company is a party or by which the Company or any of its properties or
          assets may be bound or affected ("Third Party Obligation"), (B) result
          in the creation or imposition of any Lien on any of the assets or
          properties of the Company or (C) require any filing or notification to
          any third party or Governmental Entity or consent or approval under
          any Third Party Obligation or from any Governmental Entity; or (iii)
          violate any Order or Applicable Law applicable to the Company or any
          of its properties or assets.

     4.5. Litigation.  Except as set forth on Schedule 4.5, there is no Order or
          ----------                          ------------
          arbitral award in effect or any claim, Action or Proceeding (whether
          at law or equity, before or by any Government Entity or before any
          arbitrator) pending or, to the Knowledge of the Company, threatened
          against or affecting the Company or any of its respective activities
          or assets or properties.  To the Company's Knowledge, there is no
          factual or legal basis for any Action or Proceeding that has, will or
          is reasonably likely to result in a Material Adverse Effect on the
          Company.

     4.6. Financial Statements.  Since December 31, 1997, the Company has filed
          --------------------
          all reports, registration statements and other filings, together with
          any amendments or supplements required to be made with respect
          thereto, that it has been required to file with the SEC under the
          Securities Act and the Exchange Act (the "SEC Filings"). The SEC
          Filings were prepared and filed in accordance with the rules and
          regulations of the SEC. As of their respective dates, the SEC Filings
          did not contain any untrue statement of a material fact or omit to
          state any material fact required to be stated therein or necessary to
          make the statements therein, in light of the circumstances under which
          they were made, not misleading. The financial statements of the
          Company (including any related notes or schedules) included in the SEC
          Filings were prepared in accordance with GAAP (except as otherwise
          noted in such financial statements) and present fairly in all material
          respects the consolidated financial condition, results of operations
          and cash flows of the Company as of the dates thereof and for the
          periods indicated, subject, in the case of interim financial
          statements, to normal year end audit adjustments. Except as set forth
          or reflected in the SEC Filings filed subsequent to May 1, 2000 or in
          Schedule 4.6, the Company does not have any liabilities or obligations
          ------------
          of any nature whatsoever (whether accrued, absolute, contingent, or
          otherwise) that individually or in the aggregate, could reasonably be
          expected to have a Material Adverse Effect.

     4.7. Insurance. The Company has obtained, and will maintain, general
          ---------
          commercial liability, fire and casualty insurance policies with
          extended coverage, sufficient in amount (subject to reasonable
          deductibles) to allow it to replace any of its properties that might
          be damaged or destroyed.

                                       8
<PAGE>

    4.8.  Absence of Certain Changes or Events.  Except as set forth on Schedule
          ------------------------------------                          --------
          4.8, since the June 30, 2000 (the "Balance Sheet Date"), the Company
          ---
          has conducted its business in the ordinary and regular course, and
          there has not been:

          4.8.1.  any Material Adverse Effect;

          4.8.2.  any material damage, destruction or casualty loss, not covered
                  by insurance, to any material asset or property of the
                  Company;

          4.8.3.  any sale, assignment, transfer or other disposition, lease,
                  Lien encumbrance of any assets of the Company except in the
                  ordinary course of business and consistent with past practice;

          4.8.4.  any borrowing of money by the Company, except in the ordinary
                  course of business;

          4.8.5.  any transaction with any officer, director or shareholder
                  (including any of their respective family members) of the
                  Company or any of its Affiliates;

          4.8.6.  any declaration or payment of any dividend or other
                  distribution on or with respect to, or any redemption or
                  purchase or other acquisition of, the shares of the Company;

          4.8.7.  any agreement, arrangement or understanding, whether oral or
                  written, to do any of the foregoing matters listed in clauses
                  (i) through (vi) inclusive; or

          4.8.8.  any other event or condition of which has (or will) materially
                  and adversely affected (or affect) the assets, properties,
                  financial condition, operating results or business of the
                  Company.

    4.9.  Absence of Undisclosed Liabilities.  Except (i) for as disclosed or
          ----------------------------------
          reserved against on the Financial Statements for the year ended
          December 31, 1999 or in the footnotes thereto or (ii) as incurred
          after December 31, 1999 in the ordinary course of business and that
          are not reasonably likely to have a Material Adverse Effect on the
          Company, the Company does not have any liabilities or obligations of
          any nature, absolute, accrued, contingent or otherwise and whether due
          or to become due, that, individually or in the aggregate, are or would
          have a Material Adverse Effect on the Company, its assets or
          properties.

    4.10. Guarantees.  The Company is not directly or indirectly, (i) liable
          ----------
          under any discount or repurchase agreement or in any other way to
          provide funds with respect to, or (ii) obligated to guarantee or
          assume, any debt, dividend or other obligation of any Person.

    4.11. Books and Records.  The minutes books and other similar records and
          -----------------
          any other information or documents of the Company as made available to
          the Buyer prior to the Closing Date contain a true, complete and
          correct record, in all material

                                       9
<PAGE>

          respects, of (i) all material actions taken at all meetings and by all
          written consents in lieu of meetings of the members the Board of
          Directors and shareholders of the Company up to and including the
          Closing Date and (ii) all material information, instruments,
          agreements or other documents relevant to the financial results,
          capitalization, or business operations of the Company.

    4.12. Title to Properties and Assets.  The Company has good and marketable
          ------------------------------
          title to its properties and assets held in each case subject to no
          mortgage, pledge, Lien, encumbrance, security interest or charge of
          any kind.  With respect to the property and assets it leases, the
          Company is in compliance with such leases and, the Company holds valid
          leasehold interests in such assets free of any liens, encumbrances,
          security interests or claims of any party other than the lessors of
          such property and assets.

    4.13. Employment Agreements.  The senior management agreements set forth on
          ----------------------
          Schedule 4.13 are the only agreements, oral or written, pursuant to
          -------------
          which there are any obligations to make an additional payment upon a
          change of control (as defined in such senior management agreements)
          and the amount of such payments are set forth on Schedule 4.13.
                                                           -------------

    4.14. ERISA.  No ERISA Event has occurred or is reasonably expected to occur
          -----
          that, when taken together with all other such ERISA Events for which
          liability is reasonably expected to occur, could reasonably be
          expected to result in a Material Adverse Effect.

    4.15. Environmental Matters.  Except as set forth on Schedule 4.15, (i) the
          ---------------------                          --------------
          Company has conducted and is conducting the Business in compliance in
          all material respects with all applicable Environmental Laws, (ii)
          there is no Order in effect or Action or Proceeding or investigation
          pending under any Environmental Laws, or to the Company's Knowledge,
          there is no threatened investigation or inquiry by any Government
          Entity, or alleging that it is subject to any investigatory or
          remedial obligations under any Environmental Laws, in each case with
          respect to any of the Real Property, and (iii) to the Company's
          Knowledge, no Hazardous Materials have been disposed of, released or
          transported in violation of, or as would result in liability under,
          any applicable Environmental Law to or from any of the Real Property.

    4.16. Valid Issuance.  The Company has taken all necessary corporate action
          --------------
          to authorize and reserve for issuance and to permit it to issue, upon
          the exercise of the Warrant, and at all times from the date hereof
          through the expiration of the Warrant will have reserved, 2,500,000
          authorized and unissued shares of Common Stock, such amount being
          subject to adjustment as provided in the Warrant, (and the Company
          will take all necessary corporate action to authorize and reserve for
          issuance all additional shares of Common Stock or other securities
          that may be issued pursuant to adjustment as provided in the Warrant).
          Upon delivery of the Warrant Shares in accordance with the terms of
          the Warrant, the Warrant Shares shall be duly authorized, validly
          issued and nonassessable and

                                       10
<PAGE>

               Lender shall acquire complete and absolute legal, marketable and
               equitable title to the Warrant Shares, free and clear of all
               claims, liens, pledges, options, preemptive rights, restrictions
               of any kind or nature, and Liens or encumbrances of any kind. The
               issuance of the Warrant Shares shall be exempt from registration
               under the Securities Act and, assuming, if required, the
               expiration of the applicable waiting period under the Hart-Scott-
               Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
               Act") prior to the exercise of the Warrant, does not otherwise
               violate Applicable Law.

        4.17.  Disclosure.  No representation or warranty by the Company in this
               ----------
               Agreement or any exhibit or schedule hereto or any Other
               Transaction Documents or any exhibit or schedule thereto, or any
               certificate furnished or to be furnished by the Company in
               connection with this Agreement, contains or will contain an
               untrue statement of material fact, or omits or will omit to state
               a material fact necessary to make the statements contained herein
               or therein, in light of the circumstances in which they were
               made, not misleading. The copies of the Organizational Documents,
               minute books, corporate records and other documents provided to
               Lender or its Representatives prior to the Effective Date are
               true, correct and complete copies of such documents and the
               minute books contain all minutes of any meetings, or actions
               taken without a meeting, of the Board of Directors or
               shareholders of the Company, except where the failure to maintain
               such minutes would not result in a Material Adverse Effect;
               provided, however, there was no action taken during any meetings
               that are not evidenced by minutes which action would constitute a
               Material Adverse Effect on the Company.

5.      Covenants.

        From the Effective Date until the Agreement has expired or been
terminated and the principal of and interest on the Loan payable hereunder shall
have been paid in full, the Company covenants and agrees with the Lender that:

        5.1.   Pay-Off Letters and Evidence.
               ----------------------------

               5.1.1.   Upon the consummation of the transaction described in
                        Section 2.9.1, the Company shall obtain and deliver to
                        Lender (i) a written acknowledgement from Unique of the
                        satisfaction and payment in full of any indebtedness
                        owed to it by the Company pursuant to that certain
                        Management Services Agreement by and between the Company
                        and Unique and the release in full of the Company of any
                        further obligations of the Company or claims Unique may
                        have against the Company and (ii) copies of all written
                        documentation evidencing the transaction described in
                        Section 2.9.1.

               5.1.2.   Upon the payment to each senior manager listed above in
                        Section 2.9.2, the Company shall obtain and deliver to
                        Lender (i) a written acknowledgement from each such
                        senior manager of the satisfaction and payment in full
                        of any payment owed to it by the Company on the

                                       11
<PAGE>

                        Effective Date pursuant to their respective employment
                        agreements and the release in full of the Company of any
                        further obligations of the Company with respect to that
                        portion of the change of control payments or claims such
                        senior manager may have against the Company with respect
                        to such payment and (ii) copies of all written
                        documentation evidencing the transactions described in
                        Section 2.9.2.

               5.1.3.   Upon the satisfaction of any amounts owed to First Union
                        Securities, Inc. ("FUSI"), such sum to be paid from
                        funds other than the Loan proceeds, the Company shall
                        deliver to Lender (i) a written acknowledgement from
                        FUSI of the satisfaction and payment in full of any fees
                        owed to it pursuant to that certain agreement dated
                        October 1, 1999 by and between Company and FUSI and the
                        release in full of the Company of any further
                        obligations of the Company under the agreement or claims
                        FUSI may have against the Company and (ii) copies of all
                        written documentation evidencing such payment; provided
                        however, in accordance with that certain Indemnification
                        Agreement by and between the Sellers (as that term is
                        defined in the Purchase Agreement) and the Company, the
                        Company shall in no event pay in excess of $250,000 to
                        FUSI, any amounts owed FUSI above $250,000 shall be the
                        sole liability of the Sellers.

               5.1.4.   Upon the consummation of the transaction described in
                        Section 2.9.3, the Company shall obtain and deliver to
                        Lender (i) a written acknowledgement from Heller
                        Financial, Inc. of the satisfaction and payment in part
                        of any indebtedness owed to it by the Company pursuant
                        to the Heller Revolving Loan of an amount up to
                        $6,382,277 and the release of the Company of any further
                        obligations with respect to that portion of the Heller
                        Revolving Loan and (ii) copies of all written
                        documentation evidencing the transaction described in
                        Section 2.9.3; provided, however, after such partial
                        payment, the Lender acknowledges that Company may seek
                        to borrow additional funds under the Heller Revolving
                        Loan or related instrument, subject to Section 5.10.

        5.2.   Financial Statements and Other Information.  The Company shall
               -------------------------------------------
               furnish, or cause to be furnished, to the Lender:

               5.2.1.  within 120 days after the end of each fiscal year of the
                       Company, its audited consolidated balance sheet and
                       related statements of operations, stockholders' equity
                       (or members' or partners' capital) and cash flows as of
                       the end of and for such year, setting forth in each case
                       in comparative form the figures for the previous fiscal
                       year, all reported on by independent public accountants
                       of recognized national standing (without a "going
                       concern" or like qualification or exception and without
                       any qualification or exception as to the scope of such
                       audit) to the effect that such consolidated financial
                       statements present fairly in all material respects the
                       financial condition and results of operations of the
                       Company

                                       12
<PAGE>

                       and its consolidated Subsidiaries on a consolidated basis
                       in accordance with GAAP consistently applied;

               5.2.2.  within 50 days after the end of each of the first three
                       fiscal quarters of each fiscal year of the Company, its
                       consolidated balance sheet and related statements of
                       operations, stockholders' equity (or members' or
                       partners' capital) and cash flows as of the end of and
                       for such fiscal quarter and the then elapsed portion of
                       the fiscal year, setting forth in each case in
                       comparative form the figures for the corresponding period
                       or periods of (or, in the case of the balance sheet, as
                       of the end of) the previous fiscal year, all certified by
                       one of its authorized officers as presenting fairly in
                       all material respects the financial condition and results
                       of operations of the Company and its consolidated
                       Subsidiaries on a consolidated basis in accordance with
                       GAAP consistently applied, subject to normal year-end
                       audit adjustments and the absence of footnotes;

               5.2.3.  concurrently with any delivery of financial statements
                       under clause 5.2.1 or 5.2.2 above, a certificate of an
                       authorized officer of the Company (i) certifying as to
                       whether an Event of Default has occurred and, if an Event
                       of Default has occurred, specifying the details thereof
                       and any action taken or proposed to be taken with respect
                       thereto, (ii) setting forth reasonably detailed
                       calculations demonstrating compliance with this Article
                       5, and (iii) stating whether any change in GAAP or in the
                       application thereof has occurred since the date of the
                       audited financial statements referred to in Section 4.6
                       and, if any such change has occurred, specifying the
                       effect of such change on the financial statements
                       accompanying such certificate;

               5.2.4.  concurrently with any delivery of financial statements
                       under clause 5.2.1 above, a certificate of the accounting
                       firm that reported on such financial statements stating
                       whether they obtained knowledge during the course of
                       their examination of such financial statements of any
                       Event of Default (which certificate may be limited to the
                       extent required by accounting rules or guidelines);

               5.2.5.  promptly after the same become publicly available, copies
                       of all periodic and other reports, proxy statements and
                       other materials filed by the Company or any Subsidiary
                       with the SEC or any Governmental Entity succeeding to any
                       or all of the functions of the SEC, or with any national
                       securities exchange or NASD, or distributed by the
                       Company to its shareholders generally, as the case may
                       be;

               5.2.6.  promptly following any request therefor, such other
                       information regarding the operations, business affairs
                       and financial condition of the Company or any Subsidiary
                       as such information reasonably applies to the enforcement
                       of this Agreement, or compliance with the terms of this
                       Agreement, as the Lender may reasonably request; and

                                       13
<PAGE>

               5.2.7.  promptly following their execution, approval, adoption or
                       filing with the SEC or NASD, copies of any and all
                       material amendments to the Organizational Documents.

        5.3.   Notices of Material Events.  The Company shall furnish to Lender
               ---------------------------
               prompt written notice of the following:

               5.3.1.  the occurrence of any Event of Default;

               5.3.2.  the filing or commencement of any investigation, action,
                       suit or proceeding by or before any arbitrator or
                       Governmental Entity against or affecting the Company or
                       any Affiliate thereof that, if adversely determined,
                       could reasonably be expected to result in a Material
                       Adverse Effect;

               5.3.3.  the occurrence of any ERISA Event that, alone or together
                       with any other ERISA Events that have occurred, could
                       reasonably be expected to result in liability of the
                       Borrower and its Subsidiaries in an aggregate amount
                       exceeding $1,000,000; and

               5.3.4.  any other development that results in, or could
                       reasonably be expected to result in, a Material Adverse
                       Effect.

Each notice delivered under this Section shall be accompanied by a statement of
an authorized officer of the Company  setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.

        5.4.   Existence; Conduct of Business.
               -------------------------------

               5.4.1.  The Company shall, and shall cause each of its
                       Subsidiaries to, do or cause to be done all things
                       necessary to preserve, renew and keep in full force and
                       effect its legal existence and the rights, registrations,
                       Licenses, permits, Contracts, privileges and franchises
                       material to the conduct of its business. The Company
                       shall conduct is business in the ordinary course of
                       business consistent with its past practices.

               5.4.2.  The Company shall keep in full force and effect its
                       Organizational Documents and all material Contracts and
                       Licenses and shall maintain its good standing in the
                       jurisdiction where it is incorporated and foreign
                       qualifications in all jurisdictions where it would have a
                       Material Adverse Effect on the Company to not be so
                       qualified. The Company shall not agree to any amendment
                       to any material Contract or License, if such amendment
                       could reasonably be expected to have a Material Adverse
                       Effect, without the consent of the Lender.

        5.5.   Payment Obligations. The Company shall, and shall cause each of
               --------------------
               its Subsidiaries to, pay its obligations, including Tax
               liabilities, that, if not paid, could result in a Material
               Adverse Effect before the same shall become delinquent or in
               default,

                                       14
<PAGE>

               except where (a) the validity or amount thereof is being
               contested in good faith by appropriate proceedings, (b) the
               Company or such Subsidiary has set aside on its books adequate
               reserves with respect thereto in accordance with GAAP and (c) the
               failure to make payment pending such contest could not reasonably
               be expected to result in a Material Adverse Effect.

        5.6.   Maintenance of Properties; Insurance; Business Relationships.
               -------------------------------------------------------------
               The Company shall, and shall cause each of its Subsidiaries to,
               (a) keep and maintain all property material to the conduct of its
               business in good working order and condition, ordinary wear and
               tear excepted, (b) maintain, with financially sound and reputable
               insurance companies, insurance in such amounts and against such
               risks as are customarily maintained by companies engaged in the
               same or similar businesses operating in the same or similar
               locations, (c) not mortgage, pledge or otherwise encumber any of
               its properties or assets; and (d) use reasonable commercial
               efforts to preserve and maintain its business organizations,
               employees and advantageous business relationships with the effect
               of maintaining its goodwill.

        5.7.   Books and Records; Inspection Rights.  The Company shall, and
               -------------------------------------
               shall cause each of its Subsidiaries to, keep proper books of
               record and account in which full, true and correct entries are
               made of all dealings and transactions in relation to its business
               and activities. The Company shall, and shall cause each of its
               Subsidiaries to, permit any representatives designated by the
               Lender, upon reasonable prior notice, to visit and inspect its
               properties, to examine and make extracts from its books and
               records, and to discuss its affairs, finances and condition with
               its officers and independent accountants, all at such reasonable
               times and as often as reasonably requested, and, in each case,
               only to the extent necessary to enforce the provisions of this
               Agreement.

        5.8.   Compliance with Laws.  The Company shall, and shall cause each
               ---------------------
               of its Subsidiaries to, comply with all Applicable Laws, rules,
               regulations and orders of any Governmental Entity applicable to
               it or its business operations, property or assets, except where
               the failure to do so, individually or in the aggregate, could not
               reasonably be expected to result in a Material Adverse Effect.

        5.9.   Use of Proceeds.  The proceeds of the Loan shall be used solely
               ----------------
               for the purposes set forth in Section 2.9.

        5.10.  Indebtedness.  Without the prior written consent of Lender, the
               -------------
               Company shall not, and shall not permit any Subsidiary to,
               create, incur, assume or permit to exist any Indebtedness in
               excess of $75,000, except for (i) trade payables incurred in
               connection with the ordinary course of business and (ii)
               indebtedness that was incurred prior to the Effective Date and
               disclosed in the Financial Statements for the year ended December
               31, 1999 or otherwise disclosed in writing to the Lender prior to
               the Effective Date.

                                       15
<PAGE>

        5.11.  Liens.  The Company shall not, and shall not permit any
               ------
               Subsidiary to, create, incur, assume or permit to exist any Lien
               on any property or asset now owned or hereafter acquired by it,
               or assign or sell any income or revenues (including accounts
               receivable) or rights in respect of any thereof, except: (i)
               Permitted Encumbrances or (ii) with the prior consent of Lender.

        5.12.  Fundamental Changes.
               --------------------

               5.12.1.  The Company shall not, and shall not permit any
                        Subsidiary to, without the prior written notice to and
                        consent of the Lender, merge into or consolidate with
                        any other Person, or permit any other Person to merge
                        into or consolidate with it, or sell, transfer, lease or
                        otherwise dispose of (in one transaction or in a series
                        of transactions) all or substantially all of its assets,
                        or all or substantially all of the stock of any of its
                        Subsidiaries (in each case, whether now owned or
                        hereafter acquired), or liquidate or dissolve, except
                        that, if at the time thereof and immediately after
                        giving effect thereto no Event of Default shall have
                        occurred and be continuing (i) any Subsidiary or other
                        Person may merge into the Company in a transaction in
                        which the Company is the surviving corporation and which
                        does not result in any reclassification of, or change
                        in, the outstanding shares of Common Stock, (ii) any
                        Subsidiary or other Person may merge into any Subsidiary
                        in a transaction in which the surviving entity is a
                        Subsidiary and (iii) any Subsidiary may sell, transfer,
                        lease or otherwise dispose of its assets to the Company
                        or to another Subsidiary.

               5.12.2.  The Company shall not, and shall not permit any of its
                        Subsidiaries to, engage in any business other than
                        businesses of the type conducted by the Company and its
                        Subsidiaries on the date of execution of this Agreement,
                        without the prior written consent of Lender.

               5.12.3.  The Company shall not, and shall not permit any
                        Subsidiary to, take any action adverse to the Lender and
                        which is inconsistent with this Agreement or any of the
                        Other Transaction Documents to which the Company is a
                        party.

               5.12.4.  The Company shall not without prior notice to and
                        consent of the Lender, (i) take any action that would
                        have the effect of preventing the Lender from exercising
                        the Warrant or otherwise acquiring Common Stock of the
                        Company, (ii) issue any Common Stock or other securities
                        convertible into or exchangeable for Common Stock, (iii)
                        issue any stock dividend, (iv) subdivide the outstanding
                        Common Stock, (v) propose to dissolve, liquidate or
                        wind-up voluntarily, (vi) change the number of
                        authorized or outstanding Common Stock or issue any
                        Common Stock or any warrants, options, or other rights
                        to subscribe for or to purchase any Common Stock or
                        securities convertible into or exchangeable or
                        exercisable for any Common Stock of the Company, (vii)
                        enter into any capital reorganization or any
                        reclassification of its Common Stock, (viii) issue

                                       16
<PAGE>

                        any Common Stock distribution; (ix) issue, sell,
                        distribute or grant any rights to subscribe or purchase
                        any Common Stock, or any warrants or options to purchase
                        any Common Stock, except for any such option grants made
                        pursuant to the 1997 Stock Option Plan as approved by
                        the Board of Directors which is consistent with the
                        Company's past practice as of the Effective Date or (x)
                        amend or grant any waiver to the Rights Agreement to any
                        Person other than Lender or its Affiliates.

               5.12.5.  Investments, Loans, Advances, Guarantees and
                        --------------------------------------------
                        Acquisitions.  Except for shares owned as of the date
                        -------------
                        hereof or acquired hereafter by the Lender, without the
                        prior written consent of the Lender, the Company shall
                        not, and shall not permit any of its Subsidiaries to,
                        purchase, hold or acquire (including pursuant to any
                        merger with any Person that was not a wholly owned
                        Subsidiary prior to such merger) any capital stock,
                        evidences of indebtedness or other securities (including
                        any option, warrant or other right to acquire any of the
                        foregoing) of, make or permit to exist any loans or
                        advances to, Guarantee any obligations of, or make or
                        permit to exist any investment or any other interest in,
                        any other Person, or purchase or otherwise acquire (in
                        one transaction or a series of transactions) any assets
                        of any other Person constituting a business unit.

        5.13.  Transactions with Affiliates.  The Company shall not, and shall
               -----------------------------
               not permit any of its Subsidiaries to, sell, lease or otherwise
               transfer any property or assets to, or purchase, lease or
               otherwise acquire any property or assets from, or otherwise
               engage in any other transactions with or enter into any service,
               clearing agreements or other agreements with, any of its
               Affiliates, except in the ordinary course of business at prices
               and on terms and conditions not less favorable to the Company or
               such Subsidiary than could be obtained on an arm's-length basis
               from unrelated third parties.

        5.14.  Restrictive Agreements.  The Company shall not, and shall not
               -----------------------
               permit any of its Subsidiaries to, directly or indirectly, enter
               into, incur or permit to exist any agreement or other arrangement
               that prohibits, restricts or imposes any condition upon (a) the
               ability of the Company or any Subsidiary to create, incur or
               permit to exist any Lien upon any of its property or assets, or
               (b) the ability of any Subsidiary to pay dividends or other
               distributions with respect to any shares of its capital stock or
               to make or repay loans or advances to the Company or any other
               Subsidiary or to Guarantee Indebtedness of the Company or any
               other Subsidiary; provided that the foregoing shall not apply to
                                 --------
               restrictions and conditions imposed by Applicable Law or by this
               Agreement.

        5.15.  Change in Control.  The Company shall not permit a Change in
               -----------------
               Control to occur.

        5.16.  Tangible Net Worth.  The Company shall not permit its Tangible
               ------------------
               Net Worth to be less than 70% of its Tangible Net Worth as of the
               Effective Date.

                                       17
<PAGE>

        5.17.  Net Capital.  The Company shall not permit Net Capital to be
               -----------
               less than an amount equal to (i) between the Effective Date and
               the date the Lender exercises in full the Warrant, $7,500,000 or
               (ii) after the Lender exercises in full the Warrant, $18,125,000
               ((i) and (ii) respectively, the "Net Capital Threshold");
               provided however, if at any time Lender in reasonably determines
               the Company's Net Capital has materially increased, the Lender
               reserves the right to in its sole and reasonable discretion, upon
               written notice to the Company, to increase the Net Capital
               Threshold applicable to this Section 5.17; provided further, in
               no event shall the Net Capital Threshold, pursuant to such an
               adjustment by Lender, be equal to an amount greater than 75% of
               the Net Capital as disclosed in the preceding applicable SEC
               Filing of the Company.

        5.18.  Confidentiality.
               ---------------

               5.18.1. Disclosure of Terms.  The terms and conditions of this
                       -------------------
                       Agreement (the "Terms"), including its existence, shall
                                       ------
                       be considered confidential information and shall not be
                       disclosed by any party hereto to any third party except
                       in accordance with the provisions set forth below.

               5.18.2. Press Releases, Etc.  Within sixty (60) days of the
                       -------------------
                       date of the Stock Purchase Agreement, the Company may
                       issue a press release, only after Company receives the
                       prior written approval of Lender for any such press
                       release or form of press release, disclosing that the
                       Lender has purchased an interest in the Company and made
                       this debt investment. The Lender's name and the fact that
                       the Lender is an investor in the Company can be included
                       in a reusable press release boilerplate statement, so
                       long as the Lender has given the Company its initial
                       approval of such boilerplate statement and the
                       boilerplate statement is reproduced in exactly the form
                       in which it was approved. No other announcements
                       regarding the Lender in a press release, conference,
                       advertisement, announcement, professional or trade
                       publication, mass marketing materials or otherwise to the
                       general public may be made without Lender's prior written
                       consent, which consent could be withheld at the Lender's
                       sole discretion. The Company and Lender have and shall
                       make, or cause to be made, only limited public statements
                       or press releases consistent with the form of press
                       release to which Lender has approved in writing and that
                       any such public statements or press releases shall be
                       general in nature and remain within the limited scope
                       permitted by the Securities Act such that the exemption
                       from registration remains valid.

               5.18.3. Permitted Disclosures.  Notwithstanding the foregoing,
                       ---------------------
                       any party may disclose any of the Terms to its employees,
                       investment bankers, lenders, accountants and attorneys,
                       in each case only where such persons or entities are
                       under appropriate nondisclosure obligations.

               5.18.4. Legally Compelled Disclosure.  In the event that any
                       ----------------------------
                       party is requested or becomes legally compelled
                       (including without limitation, pursuant to

                                       18
<PAGE>

                       securities laws and regulations) to disclose the
                       existence of this Agreement, Other Transaction Documents
                       or any of the Terms hereof in contravention of the
                       provisions of this Section 5.18, such party (the
                       "Disclosing Party") shall provide the other parties (the
                        ----------------
                       "Non-Disclosing Party") with prompt written notice of
                        --------------------
                       that fact so that the appropriate party may seek (with
                       the cooperation and reasonable efforts of the other
                       parties) a protective order, confidential treatment or
                       other appropriate remedy. In such event, the Disclosing
                       Party shall furnish only that portion of the information
                       which is legally required or which has been previously
                       released in a public filing and shall exercise reasonable
                       efforts to obtain reliable assurance that confidential
                       treatment shall be accorded such information to the
                       extent reasonably requested by any Non-Disclosing Party.
                       Notwithstanding the preceding, each Party acknowledges
                       that the other Party shall be required to make certain
                       filings with SEC with respect to this Agreement or the
                       Other Transaction Documents; each Disclosing Party shall
                       provide the Non-Disclosing Party with prior notice of any
                       such filings, and no such filing shall be made without
                       the prior written approval of the Non-Disclosing Party to
                       the applicable disclosures.

        5.19.  Warrant Shares.  The Company shall propose and recommend to
               --------------
               Board of Directors that within 120 days of the Effective Date the
               Board of Directors approve and recommend to the shareholders of
               the Company and seek the approval of the shareholders of the
               Company for the issuance of the Exercise Amount (as defined in
               the Warrant) equal to 2,500,000 shares of Common Stock. The
               Company shall not take any action or omit to take any action
               which would hinder the above described actions by the Board of
               Directors or the shareholders of the Company. Company shall duly
               list any additional shares represented by shares exercised under
               the Warrant with the applicable national securities market. Upon
               shareholder approval of the 2,500,000 shares of Common Stock
               represented by the Exercise Amount until the first anniversary of
               the Effective Date, the Company shall keep reserved an aggregate
               of 2,500,000 shares of Common Stock of the Company authorized and
               unissued shares of Common Stock, such amount being subject to
               adjustment as provided in the Warrant, (and the Company will take
               all necessary corporate action to authorize and reserve for
               issuance all additional shares of Common Stock or other
               securities that may be issued pursuant to adjustment as provided
               in the Warrant).

        5.20.  Board Seats.
               -----------

               5.20.1.  The Company shall recommend to the Board of Directors to
                        take such actions as are necessary at the Special
                        Meeting to:

               5.20.1.1.1.  increase the number of the Board of Directors from
                        seven (7) to nine (9) directors in accordance with the
                        Charter Documents.

               5.20.1.1.2.  elect and thereafter continue in office as directors
                        of the Company such individuals who may be nominated by
                        the Lender and the Lender shall have the exclusive right
                        to make two (2) nominations of

                                       19
<PAGE>

                        directorships for the newly created Board seats and each
                        director so designated shall sit in Class II which shall
                        be established at the Special Meeting and shall sit for
                        a term expiring at the second succeeding annual meeting
                        of the shareholders of the Company held following the
                        Special Meeting.

               5.20.1.1.3.  elect and establish a board which, pursuant to
                        Article IV of the Articles of Incorporation of the
                        Company, shall be classified into two classes. Upon the
                        increase of the board to 9 directors pursuant to Section
                        5.20.1.1.1, Class I shall be comprised of 5 directors
                        and Class II shall be comprised of 4 directors. At the
                        Special Meeting, the directors of Class I shall be
                        elected to hold office for a term expiring at the next
                        succeeding annual meeting of the shareholders following
                        the Special Meeting and the directors of Class II shall
                        be elected to hold office for a term expiring at the
                        second succeeding annual meeting of the shareholders
                        following the Special Meeting. At each subsequent annual
                        meeting of the shareholders of the Company, the
                        successors to the class of directors whose term shall
                        then expire shall be elected to hold office for a term
                        expiring at the second succeeding annual meeting of the
                        shareholders of the Company.

               5.20.1.1.4.  (a) two of the three directors nominated by Lender
                        and elected pursuant to Section 2.1.1 of the
                        Shareholders Rights and Voting Agreement shall be
                        elected and serve in Class II and the remaining one
                        director nominated by the Lender and elected pursuant to
                        Section 2.1.1 Shareholders Rights and Voting Agreement
                        shall be elected and serve in Class I, (b) the two
                        directors nominated by Lender pursuant to Section
                        5.20.1.1.2 and elected upon the increase of the board
                        size to 9 pursuant to Section 5.20.1.1.1, shall each be
                        elected and serve in Class II, and (c) the remaining
                        directors not nominated by the Investor shall be elected
                        and serve in Class I.

               5.20.1.1.5.  ratify the actions taken by the Board of the Company
                        since the 1999 annual meeting of the shareholders of the
                        Company.

               5.20.2.  The Company shall use its best efforts to ensure that
                        within 120 days of the date hereof all such actions are
                        taken and that any actions are proposed to the
                        shareholders of the Company for their approval, if
                        required, by the expiration of such 120 day period.

               5.20.3.  The Company hereby agrees to recommend to the Board of
                        Directors to take such actions as are necessary, and
                        take such other actions as are necessary, so that at the
                        next annual meeting of the shareholders of the Company
                        (a) those directors nominated by the Investor and
                        elected to Class I at the Special Meeting or such other
                        individuals nominated by Investor shall be nominated for
                        election at the next annual meeting of the shareholders
                        of the Company for a two year term expiring at the 2003
                        annual meeting of the shareholders of the Company and
                        (b) those directors nominated by the Investor and
                        elected to Class II at the Special Meeting or such other
                        individuals nominated by Investor shall be confirmed at
                        the

                                       20
<PAGE>

                        next annual meeting of the shareholders of the Company
                        for their then current term expiring at the 2002 annual
                        meeting of the shareholders of the Company.

               5.20.4.  If, at the end of the initial term of the directors
                        elected pursuant to Section 5.20.1.1.2 above, the Lender
                        beneficially owns (which ownership shall include shares
                        issuable under the Warrant) at least 40% of the total
                        issued and outstanding shares of Common Stock, such
                        individuals or such other individuals as Lender
                        designates shall be nominated for a two-year term and
                        the Company shall recommend such nomination to the Board
                        of Directors; provided; however, if the Company fails to
                        make such recommendation Lender, as a shareholder, may
                        nominate its designees in accordance with the Charter
                        Documents.

               5.20.5.  The Company hereby agrees to recommend to the Board of
                        Directors to take such actions as are necessary, for the
                        removal of any director upon the request of the party or
                        parties designating such director and for the election
                        to the Board of Directors of a substitute designated by
                        such party.

               5.20.6.  The Company hereby agrees to recommend to the Board of
                        Directors take such actions as are necessary or
                        appropriate to ensure that any vacancy on the Board of
                        Directors of the Company (occurring for any reason)
                        shall be filled by the election to the Board of
                        Directors of a replacement designated by the party or
                        parties who designated the director whose failure to
                        continue to serve causes the applicable vacancy.

        5.21.  Rights Agreement.  The Company shall recommend to the Board of
               ----------------
               Directors that it adopt an amendment to the Rights Agreement
               pursuant to which the effectiveness of the Rights Agreement is
               waived with respect to Lender.

        5.22.  Principal Amount.  Upon the request of the Lender, the Company
               ----------------
               and Lender agree to negotiate in good faith and enter into an
               amendment of this Agreement to increase the principal amount up
               to an amount equal to Nine Million Seven Hundred Thousand Dollars
               ($9,700,000), such amendment to be on terms and conditions
               substantially similar to those contained in this Agreement and
               mutually acceptable to the Parties. Upon the execution of any
               such amendment, the Company shall issue an amended Note to
               reflect the agreed upon revised principal amount.

6.      Conditions Precedent

        The obligations of the Lender to make the Loan hereunder shall not
become effective until each of the following conditions is satisfied:

        6.1.   Opinion of Counsel.  The Company shall deliver to Lender as of
               ------------------
               the Effective Date an opinion of counsel reasonably satisfactory
               to Lender.

                                       21
<PAGE>

        6.2.   Board Approval.  Company shall have received approval of its
               --------------
               Board of Directors for execution and delivery of and performance
               under this Agreement and the Other Transaction Documents. The
               Board of Directors of the Company shall have approved the
               reservation of 2,500,000 shares of authorized and unissued
               capital stock in connection for the Warrant Shares in accordance
               with Section 5.19.

        6.3.   Representations and Warranties and Events of Default.  The
               ----------------------------------------------------
               Company shall have delivered an officer's certificate certifying
               that (A) the representations and warranties contained herein are
               true and correct on and as of the Effective Date and (B) at the
               time of and immediately after giving effect to this Agreement, no
               Default or Event of Default has occurred and is continuing as of
               the Effective Date.

        6.4.   Performance.  The Company shall have delivered an officer's
               -----------
               certificate certifying that the Company has performed in all
               material respects all obligations and agreements, and complied in
               all material respects with all covenants and conditions contained
               in the Agreement or the Other Transaction Documents to be
               performed or complied with by it prior to or as of the Effective
               Date.

        6.5.   Company Organization and Authorization.  The Company shall
               --------------------------------------
               deliver to the Lender as of the Effective Date:

               6.5.1.  a certificate of incumbency for the officers executing
                       the documents on behalf of the Company;

               6.5.2.  a certified copy of the resolutions duly adopted by the
                       directors of the Company and signed by the Secretary or
                       Assistant Secretary (A) authorizing the transactions
                       contemplated by this Agreement and the Other Transaction
                       Documents to which the Company is a party (B) authorizing
                       the reservation of shares as set forth in Section 5.19
                       (C) electing Lender's nominees to the Board of Directors,
                       (D) electing a Secretary to replace such officer vacancy,
                       and (E) waiving the Rights Agreement with respect to
                       Lender;

               6.5.3.  a certificate of the Secretary or Assistant Secretary
                       certifying that the resolutions referred to in Section
                       6.5.2 have not been rescinded, modified or withdrawn and
                       that such resolutions are in full force and effect as of
                       the Closing Date;

               6.5.4.  a certified copy of the Organizational Documents and a
                       certified copy of a certificate of good standing of the
                       Company issued by the Secretary of State of California;

        6.6.           The delivery of an amendment to the Rights Agreement duly
               adopted by the Board of Directors pursuant to which the
               effectiveness of the Rights Agreement is waived with respect to
               Lender;

                                       22
<PAGE>

        6.7.   The delivery of the Note executed by the Company;

        6.8.   The delivery of the Warrant executed by the Company;

        6.9.   The delivery of the Shareholders Rights Agreement executed by the
               Company;

        6.10.  The delivery of the Registration Rights Agreement executed by the
               Company;

        6.11.  (a) The receipt of a written consent by Deephaven to the
               transactions contemplated herein and in the Warrant and (b) the
               consummation of the transactions contemplated in the Deephaven
               Purchase Agreement;

        6.12.  The consummation of the transactions contemplated in the Purchase
               Agreement;

        6.13.  The receipt of the consents required under Section 10(f) of the
               Purchase Agreement;

        6.14.  The receipt of a written waiver and consent by Morgan Stanley
               Dean Witter to the Shareholders Rights Agreement with respect to
               shares owned by the applicable Shareholders;

        6.15.  The receipt of fully executed copies of (i) each of the Payment
               Deferment Agreements and (ii) the Amendment to Management
               Incentive Program Agreement;

        6.16.  The receipt of a fully executed copy of the Indemnification
               Agreement;

        6.17.  such further certificates and documents evidencing the
               consummation by the Company of the transactions contemplated
               hereby as Lender shall reasonably request.

7.      Events of Default.

        7.1.   The occurrence of any of the following events shall constitute an
               Event of Default hereunder:

               7.1.1.  the Company shall fail to make any payment required under
                       this Agreement or the Note when due, or, shall fail to
                       perform any of its obligations in this Agreement and
                       Note, and such failure continues for a period of fifteen
                       (15) days after written notice thereof;

               7.1.2.  the Company shall (i) make an assignment or establish a
                       trust for the benefit of creditors, (ii) petition or
                       apply for appointment of a liquidator, receiver or the
                       like, (iii) commence or acquiesce to any proceeding under
                       any bankruptcy, insolvency or similar law, or (iv) become
                       unable to pay its debts as they mature;

                                       23
<PAGE>

               7.1.3.  proceedings shall have commenced against the Company
                       under any bankruptcy, insolvency or similar law, which
                       proceedings are not dismissed within sixty (60) days, or
                       an order for relief shall be entered in any bankruptcy
                       proceeding relating to the Company or its properties; or

               7.1.4.  the Company shall dissolve, liquidate, or terminate its
                       existence or business.

               7.1.5.  the Company shall have breached a material
                       representation, warranty, covenant or agreement under
                       either (A) the Shareholders Rights Agreement, (B) the
                       Warrant, (C) the Registration Rights Agreement or (D)
                       Article 4 and Article 5 of this Agreement.

               7.1.6.  the Company shall fail to receive an affirmative vote of
                       the requisite percentage of shareholders of the Company
                       in accordance with the Organizational Documents to
                       approve the Warrant within 120 days of the Effective
                       Date.

        7.2.   If an Event of Default occurs, and after the passing of any
               applicable grace period, at the option of the Lender, the entire
               unpaid principal of the Loan and all accrued and unpaid interests
               thereon shall become immediately due and payable in full. Such
               acceleration of the maturity of amounts due shall not affect any
               other rights of the Lender. If any Events of Default shall have
               occurred, the Lender may proceed to protect and enforce its
               rights by suit or any other appropriate proceeding.

8.      Subordination.

        8.1.   Upon reasonable request by the Company, Lender shall execute and
               deliver a subordination agreement relating to this arrangement in
               favor of a third party lender, provided that the terms and
               conditions of the agreement shall be satisfactory to the Lender
               in its sole discretion and approved in advance in writing by
               Lender.

        8.2.   The indebtedness evidenced hereby and all liens securing such
               indebtedness are subordinated in the manner and to the extent set
               forth in that certain Subordination Agreement (the "Subordination
               Agreement") dated as of September 20, 2000 among Lufthansa
               Technik AG, Hawker Pacific Aerospace, and Heller Financial, Inc.,
               to the Senior Debt (as defined in such Subordination Agreement),
               and each lender hereunder, by its acceptance hereof, shall be
               bound by the provisions of the Subordination Agreement.

9.      Arbitration

        9.1.   Disputes.  Within fifteen (15) days of the written request of
               --------
               either Party, the Parties shall meet to negotiate in good faith a
               resolution of any dispute, claim, controversy or claim arising
               out of or relating to this Agreement or the subject

                                       24
<PAGE>

               matter of this Agreement, or the breach, termination or
               invalidity thereof (a "Dispute").

        9.2.   Arbitration.  Any Dispute which cannot be resolved pursuant to
               -----------
               Section 9.1 above within twenty (20) days of the written request
               provided pursuant to Section 9.1, will be finally settled by
               arbitration before a sole arbitrator in accordance with the
               Commercial Rules of Arbitration of the American Arbitration
               Association in effect on the date of this Agreement. The
               arbitrator shall be appointed in accordance with the applicable
               rules of arbitration. The arbitrator shall be an individual with
               significant experience in the aircraft maintenance sector.

        9.3.   Timing and Location of Arbitration.  The Parties agree that any
               ----------------------------------
               arbitration process related to this Agreement shall be structured
               to the fullest extent possible in accordance with the applicable
               arbitration rules in such a way as to enable a decision to be
               rendered by the arbitrators within ninety (90) days of the date
               of the commencement of such arbitration. The place of arbitration
               will be Salt Lake City, Utah. By this agreement to arbitrate, the
               Parties waive their right to any form of appeal or recourse to a
               court of law or other judicial authority, to the fullest extent
               permitted by law, provided that any judgment upon an award
                                 --------
               rendered by the arbitrator may be entered in any court having
               jurisdiction therefore.

        9.4.   Confidentiality; Expenses.
               -------------------------

               9.4.1.  The parties shall keep the arbitration confidential and
                       shall not disclose to any Person, other than those
                       necessary to the proceedings, the existence of the
                       arbitration, any document submitted or exchanged in
                       connection with it, any oral submissions or testimony,
                       transcripts, or any award unless disclosure is required
                       by law or is necessary to challenge, recognize or enforce
                       an award. The arbitrators and any experts shall be
                       required to agree to comply with this confidentiality
                       provision accepting appointment.

               All expenses of the arbitration procedure and tribunal will be
               borne equally by the Parties, or as otherwise prescribed by the
               applicable arbitration rules. Each Party's expenses with respect
               to the conduct of the arbitration, including the fees of
               attorneys, accountants, or other experts used in connection with
               the arbitration, will be borne by the unsuccessful party in the
               arbitration, in whole or in part as determined by the arbitration
               tribunal.

10.     Notices.

        10.1.  All notices, requests, demands, and other communications provided
               in this Agreement shall be in writing and shall be deemed given
               if delivered personally, transmitted by facsimile (receipt
               confirmed), sent by internationally recognized overnight courier
               service, to the parties at the following addresses (or at such
               other address for a party as shall be specified by like notice,
               provided that notices of a change of address shall be effective
               only on receipt of such notice):

                                       25
<PAGE>

               10.1.1.  if to the Lender to:

                        Lufthansa Technik AG
                        Weg beim Jager 193
                        D-22335 Hamburg, GERMANY
                        Attention: HAM-TB/B
                        Fax: 011 49 40 5070 5366

                        with a copy to:
                        Wilmer, Cutler & Pickering
                        2445 M Street, N.W.
                        Washington, D.C. 20037
                        Attention: Stephen P. Doyle, Esq.
                        Fax: 202 663 6363

               10.1.2.  if to the Company to:

                        Hawker Pacific Aerospace
                        11240 Sherman Way
                        Sun Valley, California, 91352
                        Attention: Chief Financial Officer
                        Fax: 818 765 2416

All notices, requests, demands, and other communications shall be deemed to have
been given as of the date so delivered or telefaxed and, if given by any other
means, shall be deemed given only when actually received by the addressees.

11.     Indemnification

        11.1.  The Company shall indemnify the Lender, and each Affiliate or
               Representative of the Lender (each such Person being called an
               "Indemnitee") against, and hold each Indemnitee harmless from,
                ----------
               any and judgment upon an award all losses, claims, damages,
               liabilities ("Losses") and related expenses, including the fees,
               charges and disbursements of any counsel for any Indemnitee,
               incurred by or asserted against any Indemnitee arising out of, in
               connection with, or as a result of (i) a material breach of the
               Company's representations and warranties contained in Article 4;
               (ii) the performance by the parties hereto of their respective
               obligations hereunder or the consummation of the Transactions or
               any other transactions contemplated hereby, (iii) the proceeds
               from the Loan, or (iv) any actual or prospective claim,
               litigation, investigation or proceeding relating to any of the
               foregoing, whether based on contract, tort or any other theory
               and regardless of whether any Indemnitee is a party thereto;
               provided that such indemnity shall not, as to any Indemnitee, be
               --------
               available to the extent that such Losses or related expenses are
               determined by a court of competent jurisdiction by final and
               nonappealable judgment to have resulted from the gross negligence
               or willful misconduct of such Indemnitee. The Company shall not
               settle any claim without the prior consent of Indemnitee.

                                       26
<PAGE>

        11.2.  To the extent permitted by applicable law, the Company shall not
               assert, and hereby waives, any claim against any Indemnitee, on
               any theory of liability, for special, indirect, consequential or
               punitive damages (as opposed to direct or actual damages) arising
               out of, in connection with, or as a result of, this Agreement or
               any agreement or instrument contemplated hereby, the
               Transactions, the Loan or the use of the proceeds thereof.

12.     Miscellaneous.

        12.1.  Further Assurances.  Each party agrees to take all such other
               ------------------
               and further actions and to execute and deliver all such other and
               further documents and instruments as shall be reasonably
               requested by the other party to carry out the intent and purposes
               of this Agreement.

        12.2.  Cumulative Rights.  All of the Lender's rights and remedies
               -----------------
               hereunder shall be cumulative and in addition to its rights and
               remedies otherwise available under law. No delay or omission by
               the Lender in the exercise of any rights shall operate as a
               waiver. No waiver of a breach or default hereunder shall be
               considered valid unless in writing and signed by the party giving
               such waiver, and no such waiver shall be deemed a waiver of any
               subsequent breach or default of the same or similar nature.

        12.3.  Severability.  Nothing shall require the payment of any amount
               ------------
               if such payment would be unlawful. In any such event, this
               Agreement or the Note, as the case may be, shall automatically be
               deemed amended so that interests charges and all other payments
               required shall be equal to but not greater than the maximum
               permitted by law. If any portion if this Agreement shall be held
               invalid by any court of competent jurisdiction, the remaining
               portions shall continue in effect and shall not be affected
               thereby. Any provision of this Agreement which is invalid or
               unenforceable shall be ineffective to the extent of such
               invalidity or unenforceability, provided, that such invalidity or
               unenforceability does not deny any party the material benefits of
               the transactions for which it has bargained and such invalidity
               or unenforceability shall not affect in any way the remaining
               provisions hereof.

        12.4.  Binding Effect.  This Agreement shall be binding upon and inure
               --------------
               to the benefit of the Lender, the Company, and their respective
               legal representatives, successors and assigns. The Lender may
               assign this Agreement without the prior consent of the Company.
               The Company may not assign this Agreement without the prior
               written consent of the Lender.

        12.5.  Amendment. No provision of this Agreement or the Note may be
               ---------
               amended, terminated, or waived except by written instrument
               signed by the Company and the Lender.

                                       27
<PAGE>

        12.6.  Counterparts.  This Agreement may be executed in any number of
               ------------
               counterparts, each of which, when so executed and delivered,
               shall be deemed an original and all of which together shall
               constitute one instrument.

        12.7.  Governing Law. This Agreement shall be governed by, and construed
               -------------
               and enforced in accordance with, the substantive laws of the
               State of California.

        12.8.  Entire Agreement. This Agreement, the Note and any other
               ----------------
               instruments or documents executed in connection herewith
               constitute the entire agreement of the Company and the Lender,
               concerning the subject matter hereof and supersede all prior
               commitment letters, agreements and understandings between them.

        12.9.  Captions; Interpretation.  The section and other headings
               ------------------------
               contained in this Agreement are for reference purposes only and
               shall not affect the meaning or interpretation of this Agreement.
               All references to sections, articles, Exhibits or Schedules shall
               mean the sections, articles, Exhibits or Schedules of this
               Agreement. Terms used with initial capital letters will have the
               meanings specified, applicable to both singular and plural forms,
               for all purposes of this Agreement. The words "include" and
               "exclude" and derivatives of those words are used in this
               Agreement in an illustrative sense rather than a limiting sense.

        12.10. Fees and Expenses.  Except as otherwise provided in this
               -----------------
               Agreement, the Company shall bear all costs, fees and other
               charges and expenses of any kind incurred by Lender in connection
               with the negotiation, execution and implementation of this
               Agreement up to an aggregate amount of $30,000; including any
               expenses incurred in the enforcement of any rights of Lender in
               connection with this Agreement. The Lender shall have the right
               to make the payments referred to in this Section 12.10 on behalf
               of the Company. The fees and expenses so paid by Lender shall be
               immediately reimbursed by the Company upon demand by the Lender.

        12.11. Specific Performance.  The Company hereby acknowledge and agree
               --------------------
               that the failure of it to perform its obligations under this
               Agreement and the Other Transaction Documents in accordance with
               their specific terms or to otherwise comply with such obligations
               will cause irreparable injury to Lender for which damages, even
               if available, will not be adequate remedy. Accordingly, the
               Company hereby consent to the issuance of injunctive relief to
               prevent breaches, and to the granting by any such court of the
               remedy of specific performance of the terms and provisions of
               this Agreement and the Other Transaction Documents.

        12.12. Waivers.  No waiver of a breach or default hereunder shall be
               -------
               considered valid unless in writing and signed by the party giving
               such waiver, and no such waiver shall be deemed a waiver of any
               subsequent breach or default of the same or similar nature.

        12.13. No Lender Affiliate Liability.  Each of the following is herein
               -----------------------------
               referred to as a "Lender Affiliate": (a) any direct or indirect
               holder of any equity interests or

                                       28
<PAGE>

               securities of the Lender (whether such holder is a limited or
               general partner, member, stockholder or otherwise), (b) any
               Affiliate of the Lender, or (c) any director, officer, employee,
               representative or agent of (i) Lender, (ii) any Affiliate of
               Lender, or (iii) any such holder of equity interests or
               securities referred to in clause (a) above. No :Lender Affiliate
               shall have any liability or obligation of any nature whatsoever
               in connection with or under this Agreement or any of the Other
               Transaction Documents or the transactions contemplated hereby or
               thereby (whether or not such Lender Affiliate has called or
               received capital for contribution to Buyer), and the Company
               hereby waive and release all claims related to any such liability
               or obligation.

                           [signature page follows]

                                       29
<PAGE>

     IN WITNESS WHEREOF, the Company and the Lender have caused this Agreement
to be duly executed by their respective authorized officers or representatives,
as of the date first above written.

                              COMPANY:

                              HAWKER PACIFIC AEROSPACE

                              By:     /s/  David L. Lokken

                              Name    David L. Lokken

                              Title:  CEO

                              LENDER:

                              LUFTHANSA TECHNIK AG

                              By:     /s/  Bernhard Langlotz

                              Name:   Bernhard Langlotz

                              Title:  General Counsel

                              By:     /s/  James C. Stoecker

                              Name:   James C. Stoecker

                              Title:  General Manager
<PAGE>

                                    Annex I

                                  Definitions

"Action or Proceeding" means any action, suit, claim, arbitration, proceeding or
Government Entity investigation or audit.

"Affiliate" shall mean, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such Person.  For the purposes of this definition, a Person shall
be deemed to control another Person if it possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of such
other Person, whether through ownership of voting securities, by contract or
otherwise, or the power to elect at least 50% of the directors, managers,
general partners, or persons exercising similar authority with respect to such
Person.

"Agreement" means this Loan Agreement.
 ---------

"Amendment to Management Incentive Program Agreement" shall mean the amendment
 ---------------------------------------------------
to Management Incentive Program Agreement by and between the Company and each of
the following respectively: Larry Kameen, Mary Hanley, Brian Carr, Brad
Mulvihill, and David Clark.

"Applicable Laws" means all laws, statutes, rules, regulations, ordinances and
 ---------------
other pronouncements having the effect of law in the United States of America,
Germany, or any state, province, county, municipality or other political
subdivision thereof, including without limitation all governmental permits,
licenses, franchises and authorizations required for any Person to conduct its
respective business as currently conducted.

"Balance Sheet Date" shall have the meaning given it in Section 4.8.
-------------------

"Books and Records" means all titles, documents, instruments, papers, books and
 -----------------
records relating to the business and operations of a Person, including financial
statements, tax returns and related workpapers and letters from accountants,
budgets, pricing guidelines, ledgers, journals, deeds, title policies, minute
books, stock certificates, and books, stock transfer ledgers, contracts,
licenses, customer lists, computer files and programs, retrieval programs,
operating data and plans and environmental studies and plans.

"Business" shall mean the Company and the businesses and operations of the
 --------
Company.

"Business Day" means a day other than (i) Saturday, (ii) Sunday, or (iii) any
 ------------
day on which banks located in New York, New York or Hamburg, Germany are
generally closed.
<PAGE>

"Change of Control" means the (i) sale, conveyance or other disposition of all
 -----------------
or substantially all of the Company's property or business, or merger into or
consolidation with any other corporation (other than a wholly-owned subsidiary),
or any transaction or series of related transactions in which at least 50% of
the voting power of the Company or 50% of the Company's assets are disposed of
or (ii) Lender holds fewer than 3 seats (or 40% of) on the Board of Directors of
the Company.

"Class I" shall mean the first class of directors to be established pursuant to
 -------
Article IV of the Articles of Incorporation of the Company.

"Class II" shall mean the second class of directors to established pursuant to
 --------
Article IV of the Articles of Incorporation of the Company.

"Code" means the Internal Revenue Code of 1986, as amended from time to time.
 ----

"Company" has the meaning given it in the introductory statements of this
 -------
Agreement.

"Common Stock" shall mean the common stock of the Company, par value $0.01 per
 ------------
share.

"Contract" means any contract, agreement, understanding or commitment.
 --------

"Deephaven Purchase Agreement" means that certain purchase agreement by and
 ----------------------------
between Lender and Deephaven Private Placement Trading Ltd ("Deephaven") for the
purchase of all of preferred stock beneficially owned by Deephaven.

"Default" means any event or condition which constitutes an Event of Default or
 -------
which upon notice, lapse of time or both would, unless cured or waived become an
Event of Default.

"Disclosing Party" shall have the meaning given it in Section 5.18.4.
 ----------------

"Dispute" shall have the meaning given it in Section 9.
 -------

"Effective Date" shall mean the date of this Agreement written in the
 --------------
introductory paragraph.

"Environmental Law" shall mean any federal, state, or local law or regulation
 -----------------
and any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree or judgment, relating to
pollution or protection of the environment (including without limitation air,
surface water, ground water, land surface and subsurface strata), health, safety
or natural resources, including without limitation, those relating to the use,
handling, transportation, treatment, storage, disposal, release, threatened
release, discharge, investigation and cleanup of Hazardous Materials, or which
imposes requirements relating to Hazardous Materials in connection with a
transfer of stock or assets.

"ERISA Affiliate" means any trade or business (whether or not incorporated)
 ---------------
that, together with the Company, is treated as a single employer under Section
414(b) or (c) of the Code or, solely
<PAGE>

for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as
a single employer under Section 414 of the Code.

"ERISA Event" means (a) any "reportable event", as defined in Section 4043 of
 -----------
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Company or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Company or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

"Event of Default" shall mean those events set forth in Article 7.
 ----------------

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
 ------------

"Financial Statements" shall have the meaning given it in Section 4.6.
 --------------------

"GAAP" shall mean the generally accepted accounting principles of the United
 ----
States consistently applied.

"Government Entity" means any court or tribunal or administrative, governmental
 -----------------
or regulatory body, agency, commission, division, department, public body or
other authority.

"Guarantee" of or by the Company or any Subsidiary (the "guarantor") means any
 ---------                                               ---------
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
                   ---------------
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
                            --------
endorsements for collection or deposit in the ordinary course of business.
<PAGE>

"Hazardous Materials" shall mean (a) petroleum and petroleum products, by-
 -------------------
products or breakdown products, radioactive materials, asbestos-containing
materials and polychlorinated biphenyls and (b) any other chemicals, materials
or substances regulated as toxic or hazardous or as a pollutant, contaminant or
waste under any Environmental Law.

"Heller Refinancing"  shall mean the refinancing of the indebtedness owed to
 ------------------
Heller Financial, Inc. pursuant to the Junior Participation Agreement between
Heller Financial, Inc. and Lender.

"Indebtedness" means, with respect to any Person, all obligations of such Person
 ------------
(i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(iv) under lease agreements, including sale-lease back agreements, that are
required to be capitalized under GAAP consistently applied, (v) with respect to
Taxes relating to any period other than the current fiscal year of such Person
("Prior Period") (or to transactions effected in any such Prior Period),
  ------------
including Taxes that are deemed to be owing by such Person as a result of any
Government Entity claim, Action or Proceeding contesting the validity or amount
of such Taxes, and (vi) in the nature of guarantees of the obligations described
in clauses (i) through (v) above of any other Person.

"Indemnitee" shall have the meaning given it in Article 11.
 ----------

"Indemnification Agreement" shall mean that certain indemnification agreement by
 -------------------------
and among the Company and the Sellers (as that term is defined in the Purchase
Agreement) with respect to the settlement of amounts owed to First Union
Securities Inc.

"Knowledge" means, (i) with respect to any natural Person, the actual or
 ---------
constructive knowledge of such Person and (ii) with respect to any non-natural
Person, that each member of the board of directors and senior management of such
Person has or should have after reasonable inquiry.

"Liabilities" means all Indebtedness, obligations, and other liabilities of a
 -----------
Person (whether absolute, accrued, contingent, fixed or otherwise, or whether
due or to become due).

"Licenses" means all licenses, permits, certificates, approvals, registrations,
 --------
franchises and similar consents granted or issued by a Government Entity or any
other Person.

"Lien" means any mortgage, security interest, pledge, hypothecation, assignment,
 ----
deposit arrangement, encumbrance, lien (statutory or otherwise), charge,
preference, priority or other security agreement, option, warrant, attachment,
right of first refusal, preemptive, conversion, put, call or other claim or
right, restriction on transfer (other than restrictions imposed by applicable
securities Laws), or preferential arrangement of any kind or nature whatsoever
(including any restriction on the transfer of any assets), any conditional sale
or other title retention agreement, any financing lease involving substantially
the same economic effect as any of the foregoing and the filing of any financing
statement with the pertinent public or private registry.
<PAGE>

"Losses" has the meaning given it in Article 11.
 ------

"Material Adverse Effect"  means, with respect to the Company, a material
 -----------------------
adverse effect on the business, prospects, assets, liabilities, revenues, costs
and expenses, income before provision for income taxes, operations or condition,
financial or otherwise, of the Company.  In determining whether any individual
event would result in a Material Adverse Effect, notwithstanding that such event
does not of itself have such effect, a Material Adverse Effect shall be deemed
to have occurred if the cumulative effect of such event and all other then
existing events could reasonably be expected to result in a Material Adverse
Effect.

"Multiemployer Plan" means a multiemployer plan as defined in Section 4001(a)(3)
 ------------------
of ERISA.

"NASD" means the National Association of Securities Dealers, Inc., or any other
 ----
self-regulatory organization that succeeds to the functions thereof.

"Net Capital" means total assets less total liabilities.
 -----------

"NYSE" means the New York Stock Exchange, Inc.
 ----

"Non-Disclosing Party" shall have the meaning given it in Section 18.4.
 --------------------

"Note" shall have the meaning given to it in Section 2.7.
 ----

"Order" means any writ, judgment, decree, injunction or similar order of any
 -----
Government Entity (in each case whether preliminary or final).

"Organizational Documents" means with respect to any Person, articles of
 ------------------------
incorporation, certificates of incorporation, by-laws, partnership agreement,
operating agreement, articles of association, joint venture or other agreement,
instrument or documents, individually or collectively, pursuant to which such
Person is established or organized, and that govern the internal affairs of such
Person or such documents as they may be amended from time to time.

"Other Transaction Documents" shall mean the Purchase Agreement, the Promissory
 ---------------------------
Note, the Warrant, the Shareholders Rights and Voting Agreement, and the
Registration Rights Agreement.

"PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in
 ----
ERISA and any successor entity performing similar functions.

"Parties" shall have the meaning given to it in the introductory statements of
 -------
this Agreement.

"Payment Deferment Agreement" shall mean that certain agreement by and between
 ---------------------------
the Company and the applicable senior manager with respect to deferment of
change of control payments.

"Permitted Encumbrances" means:
 ----------------------
<PAGE>

     (a)  Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.5;

     (b)  carriers', warehousemen's, mechanics', materialmen's, repairmen's and
other like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.5

     (c)  pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;

     (d)  deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;
and

     (e)  easements, zoning restrictions, rights-of-way and similar encumbrances
on real property imposed by law or arising in the ordinary course of business
that do not secure any monetary obligations and do not materially detract from
the value of the affected property or interfere with the ordinary conduct of
business of the Company or any Subsidiary;

provided that the term "Permitted Encumbrances" shall not include any Lien
--------
securing Indebtedness.

"Person" means and includes any individual, partnership, joint venture,
-------
corporation, trust, limited liability company, joint stock company, an
unincorporated organization, a Government Entity or any political subdivision or
agency thereof, or any other entity.

"Plan"  means any employee pension benefit plan (other than a Multiemployer
 ----
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

"Promissory Note" shall mean that promissory note issued by the Company in favor
 ---------------
of the Buyer in connection with this Agreement.

"Purchase Agreement"  shall have the meaning given to it in Section 2.7.
 ------------------

"Real Property" shall mean land, together with all Improvements located thereon,
 -------------
and all easements, rights-of-way, benefits, hereditaments, and appurtenances
thereto and covenants and restrictions thereon, whether owned or leased by the
Company.

"Registration Rights Agreement" shall mean that certain registration rights
 -----------------------------
agreement of even date herewith by and between the Company and Lender pursuant
to which Lender is granted certain rights to register its shares of Common Stock
of the Company upon the Lender's exercise of the Warrant.
<PAGE>

"Representatives" shall mean as to any natural person, such person's financial
 ---------------
advisors, attorneys, accountants, agents and Affiliates, and, as to any entity,
such entity's officers, directors, managers, partners, employees, financial
advisors, attorneys, accountants, agents and Affiliates.

"Rights Agreement"  means that rights plan dated as of March 10, 1999, as filed
 ----------------
with the Securities and Exchange Commission (the "SEC") on March 23, 1999, as
amended and filed with the SEC on April 7, 1999 and as amended on August 15,
2000.

"SEC Filings" shall have the meaning given it in Section 4.6.
 -----------

"Securities Act" shall have the meaning given it in Section 4.2.
 --------------

"Shareholders" shall mean the shareholders listed in the Shareholders Rights and
 ------------
Voting Agreement, namely: David Lokken, Brian Carr, Michael Riley and Dennis
Biety.

"Shareholders Rights and Voting Agreement" shall have the meaning given it in
 ----------------------------------------
the recitals.

"Special Meeting" shall mean that special meeting of the shareholders of the
 ---------------
Company to be held within 120 days of the Effective Date.

"Subsidiary" means, with respect to Company (the "parent") at any date, any
 ----------                                       ------
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.

"Tangible Net Worth" means, at any date of determination thereof, all amounts
 ------------------
that would, in accordance with GAAP, be included under shareholders' equity and
preferred stock capital on the balance sheet of the Company, at such date, less
all assets of the Company at such date that would be classified as intangible
assets in accordance with GAAP, including without limitation, trade or service
marks, franchises, trade names and goodwill.

"Taxes" means (a) any and all taxes, levies or other like assessments, charges
 -----
or fees (including estimated taxes, charges and fees), including, without
limitation, income, corporation, add-on minimum, ad valorem, advance
corporation, gross receipts, transfer, excise, property, sales, use, value-
added, License, payroll, employment, severance, pay as you earn, withholding on
amounts paid by or to the relevant party, social security and franchise or other
governmental taxes or charges, imposed by the United States of America, or any
state, province, county, local or foreign government or subdivision or agency
thereof; and such term shall include any interest
<PAGE>

(punitive or otherwise), penalties or additions to tax related or attributable
to such taxes; or (b) Liability for the payment of any amounts of the type
described in (a) as a result of any obligation to indemnify any other Person.

"Tax Return" means any report, return, statement or other written information
 ----------
required to be supplied to a taxing authority in connection with Taxes.

"Terms" shall have the meaning given it in Section 5.18.1.
 -----

"USD LIBOR"  means the rate per annum as calculated and published by the
 ---------
information vendor for the time being designated by the British Banker's
Association as the British banker's Association interest settlement rate for USD
for the relevant interest period or the nearest equivalent thereto (presently
appearing on Telerate pages 3740 and 3750) at or about 11:00 am (London time).

"Warrant" shall have the meaning given to it in Section 3.1 hereof.
 -------

"Withdrawal Liability" means liability to a Multiemployer Plan as a result of a
 --------------------
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

<PAGE>

                                   Exhibit A

                                    FORM OF
                                PROMISSORY NOTE
                                ---------------

[$9,300,000]                                               [September 20, 2000]

     Hawker Pacific Aerospace, a corporation organized under the laws of the
State of California and having its principal place of business at 11240 Sherman
Way, Sun Valley, California, 91352, (the "Company"), for value received,
promises to pay to Lufthansa Technik AG having its principal place of business
at Weg beim Jager 193D-22335 Hamburg, GERMANY or its assigns, in lawful money of
the United States, the principal sum of [NINE MILLION THREE HUNDRED THOUSAND
DOLLARS ($9,300,000)] and to pay interest on the unpaid principal balance
thereof at the rate set forth below, such principal and interest to be paid in
immediately available funds in U.S. Dollars within the term set forth below in
accordance with the Loan Agreement of even date herewith between the Company and
the Lender (the "Loan Agreement").  Capitalized terms used, but not otherwise
defined, herein shall have the respective meanings ascribed to such terms in the
Loan Agreement.

     The Company shall pay principal and interest at terms and the rates for the
corresponding periods as set forth below:

     (a)  On or before June 30 and December 31 in each calendar year during the
term of the Loan, the Company shall pay an amount of interest accruing to such
date at the rate provided herein on the outstanding principal balance under the
Loan.  The first interest payment shall be due on September 19, 2001.  The
annual interest rate shall be equal to the higher of (a) 10% per annum or (b) 5%
per annum plus USD LIBOR as published on the Effective Date which shall be
applicable for the first six months and USD LIBOR as published each six month
anniversary thereafter for each subsequent six month period, to the extent
permitted by Applicable Law; provided, however, the interest rate shall in no
event exceed 11%.

     (b)  The principal amount of the Loan shall be paid as follows: (a) on the
first anniversary of Effective Date, the Company shall make a payment to Lender
in the amount of $2,325,000 which represents 25% of the principal; (b) on the
second anniversary of the Effective Date, the Company shall make a payment to
Lender in the amount of $2,325,000 which represents 25% of the principal.

     (c)  On the third anniversary of the Effective Date, the Loan shall mature
and $4,650,000 (which represents the remaining 50% of the principal) together
with any accrued but unpaid interest hereunder, shall be due and payable in full
by the Company.

     Subject to Section 2.10 and Section 2.14 of the Loan with respect to
exercise of the Warrants, all payments shall be made to the Lender in
immediately available funds to Lender's account no. 40652003 with CITIBANK, New
York, swift code: citi us 33/ABA 021000089 or to such other account notified to
the Company not later than 7 days prior to the respective
<PAGE>

obligation falling due. Subject to Section (a) above, interest shall be
calculated on a basis of the actual number of days elapsed and a 360 day year.

     All amounts payable by the Company under this Agreement shall be paid in
full without set-off or counterclaim or right of retention or other restrictions
and free and clear of and save to the extent required by law, without any
deduction or withholding for or on account of any taxes or charges or otherwise.

     If payments are not made on their due date, additional 1% per annum (one
percent per annum), calculated from the due date to the actual date of payment,
shall be due and payable to the Lender, to the extent permitted by Applicable
Law.

     This Note may be prepaid at any time in whole or in part, and from time to
time, without penalty or premium.

     This Note shall be subject to all terms and conditions of the Loan
Agreement between the parties, which Agreement is incorporated herein by
reference and made a part hereof.

     This Note shall be governed by and construed and enforced in accordance
with the laws of the State of California.

     The indebtedness evidenced hereby and all liens securing such indebtedness
are subordinated in the manner and to the extent set forth in that certain
Subordination Agreement (the "Subordination Agreement") dated as of September
20, 2000 among Lufthansa Technik AG, Hawker Pacific Aerospace, and Heller
Financial, Inc., to the Senior Debt (as defined in such Subordination
Agreement), and each lender hereunder, by its acceptance hereof, shall be bound
by the provisions of the Subordination Agreement.

     IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as
an instrument under seal by its duly authorized officer on the day and year
first above written.

                                      HAWKER PACIFIC AEROSPACE

                                      By: ______________________________________

                                      Name: ____________________________________

                                      Title: ___________________________________
<PAGE>

                                   EXHIBIT B

                                Form of Warrant

                                 See Attached

                                 See Attached
<PAGE>

                                 SCHEDULE 4.2

                                Capitalization

Royce & Associates, Inc.      395,100 shares             6.8%

Dimensional Fund Investors    367,200 shares             6.3%

Senior management
-----------------
David Lokken                  138,930 shares             72,105 options

Brian Carr                     28,706 shares             14,420 options

Michael Riley                  28,706 shares             14,420 options

Dennis Biety                                             28,841 options

Philip Panzera                                           43,261 options

Directors
---------

Mellon Baird                    2,000 shares

Joel McIntyre                   2,000 shares

Daniel Toomey                   2,000 shares
<PAGE>

                                 SCHEDULE 4.3

                                 Subsidiaries

Hawker Pacific Aerospace, Ltd.

Unit 3 Dawley Park

Kestrel Way

Hayes, Middlesex UB3 1HP
<PAGE>

                                 SCHEDULE 4.4

                                   Consents

The following contracts have a right of termination upon Change of Control:

Customer contracts
------------------

American Airlines landing gear exchange and overhaul contract dated September 9,
1997

British Airways landing gear overhaul services agreement dated February 4, 1998

Federal Express bailment and services agreement dated September 1, 1997

Leases
------

Industrial Centers Corp. lease agreements dated September 1, 1994

Loan and Security agreements
----------------------------

Heller Financial loan agreement dated December 22, 1998

Vendor
------

Messier

The following contracts automatically terminate upon Change of Control:

Insurance
---------

American International Companies - Directors, Officers and Corporate Liability
 Policy dated January 29, 1998

Reliance Insurance Company of Illinois - Employment Practices Liability Policy
 dated January 29, 2000
<PAGE>

                                 SCHEDULE 4.5

                                  Litigation

On October 1, 1999 the Company entered into an agreement with First Union
Securities, Inc. to provide the Company with professional services. Final
payments under this agreement are in dispute and have the potential for future
litigation or arbitration.
<PAGE>

                                 SCHEDULE 4.6

                                  Liabilities

On October 1, 1999 the Company entered into an agreement with First Union
Securities, Inc. to provide the Company with professional services. Final
payments under this agreement are in dispute and have the potential for future
litigation or arbitration.
<PAGE>

                                 SCHEDULE 4.8

                                Certain Changes

4.8.5  Deferred Payment Agreements.  The Company and four of its officers (David
       ----------------------------
Lokken, Phil Panzera, Dennis Biety and Michael Riley) will execute Deferred
Payment Agreements on September 1, 2000 to defer change of control payments
pursuant to such officers' respective employment agreements, as amended.

4.8.5. UIC Termination Fee.  In August 2000 the Board of Directors of the
       -------------------
Company authorized a $150,000 termination fee to Unique Investment Corporation
in connection with the termination of management services performed by UIC for
the Company.

4.8.6  Dividends.  The Company continues to accrue cumulative dividends on its
       ---------
Series C preferred stock.

4.8.8  Cash Shortage.  The Company's results of operations have been adversely
       -------------
affected during the last several months as heavy capital expenditure
requirements for the UK facility have decreased the level of working capital
available.

4.8.8  Senior Lender Charges.  The Company's senior lender, Heller Financial
       ---------------------
Inc., has charged the Company material fees in accordance with Amendment 4 of
the Loan Agreement between Heller and the Company, dated April 5, 2000.
<PAGE>

                                 SCHEDULE 4.13

                             Employment Agreements

Dennis Biety:

     Employment Agreement dated September 9, 1998, as amended. Management
     Incentive Program Agreement dated February 4, 2000, as amended. Change of
     Control payment: $368,178.

Philip Panzera:

     Employment Agreement dated October 1, 1998, as amended.  Management
     Incentive Program Agreement dated February 4, 2000, as amended. Change of
     Control payment: $202.537.

Michael Riley:

     Employment Agreement dated November 11, 1996, as amended.  Management
     Incentive Program Agreement dated February 4, 2000, as amended. Change of
     Control payment: $145,918.

Brian Carr:

     Employment Agreement dated November 1, 1996, as amended. Management
     Incentive Program Agreement dated February 4, 2000, as amended. Change of
     Control payment: $177,537.

David Lokken:

     Employment Agreement dated November 1, 1996, as amended.  Management
     Incentive Program Agreement dated February 4, 2000, as amended. Change of
     Control payment: $344,877.
<PAGE>

                                 SCHEDULE 4.15

                                 Environmental

None.<PAGE>

                                                                   Exhibit 10.48

                        VOTING AND INDEMNITY AGREEMENT

     In connection with the closing of that certain Loan Agreement between
Hawker Pacific Aerospace ("Hawker") and Lufthansa Technik AG ("LHT") dated
September 20, 2000 (the "Loan Agreement"), Hawker and LHT hereby agree as
follows (capitalized terms not otherwise defined herein shall have the meaning
ascribed to them in the Loan Agreement):

     1.   At the next meeting of shareholders of Hawker (the "Shareholders'
Meeting"), LHT shall vote all of the Hawker securities owned by LHT as of the
record date for such Shareholders' Meeting ("LHT HPAC Shares") in favor of
approving the issuance and grant of the warrant ("Warrant") for 2,500,000 shares
of Common Stock of Hawker to LHT.

     2.   Hawker will indemnify and hold harmless LHT and its Affiliates and
Representatives from any and all losses, claims, damages, liabilities ("Losses")
and related costs and expenses, including the reasonable fees, and the charges
and disbursements of, any counsel for LHT, arising out of, in connection with,
or as a result of any of the following: (i) LHT's voting the LHT HPAC Shares in
favor of the issuance and grant of the Warrant, (ii) the Warrant not being duly
authorized and approved by the Shareholders at the Shareholders' Meeting due to
LHT's voting in favor of the issuance and grant of the Warrant, or (iii) due to
a majority of the shareholders other than LHT voting against such transaction.

     IN WITNESS WHEREOF, the undersigned have executed this Voting and Indemnity
Agreement effective as of September 20, 2000.

                              HAWKER PACIFIC AEROSPACE

                              By:    /s/ Daniel J. Lubeck
                              Name:  Daniel J. Lubeck
                              Title: Chairman of the Board

                              LUFTHANSA TECHNIK AG

                              By:    /s/  Bernhard Langlotz
                              Name:  Bernhard Langlotz
                              Title: General Counsel

                              By:    /s/  James C. Stoecker
                              Name:  James C. Stoecker
                              Title: General Manager

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