Contract analysis

I. Introduction and Purpose Calderwood & Harkness LLP is pleased to provide this detailed analysis of the Partial Award (the "Award" or "Partial Award") issued on March 22, 2024, by the Arbitral Tribunal (the "Tribunal") constituted in ICC Case No. 27914/MHM, captioned Kestrel Dynamics GmbH ("Kestrel" or "Claimant") v. Whitmore Aerospace LLC ("WAL" or "Respondent"). This letter is intended to provide WAL's senior lea

II. Summary of the Tribunal's Key Findings The Partial Award spans 187 pages and addresses each of the Tribunal's findings in considerable detail. For ease of reference, we have organized our summary of the key findings into four principal categories, each of which is discussed below. A. No Material Breach by WAL The central issue in this arbitration was whether WAL committed a material breach of the MSA by rejecting

III. Costs Allocation The Tribunal's costs allocation further reflects the overwhelmingly favorable nature of the outcome for WAL. The allocation addressed two categories of costs: (1) ICC administrative costs and arbitrators' fees, and (2) legal cost reimbursement. A. ICC Administrative Costs and Arbitrators' Fees The total ICC administrative costs and arbitrators' fees for the proceeding amounted to $1.24 million.

IV. Net Financial Outcome for WAL The following table summarizes WAL's aggregate financial position as a result of the Partial Award: When combining the avoided exposure from the complete dismissal of Kestrel's €47.3 million claims with the affirmative recoveries on the counterclaim and costs, the net value preserved and recovered for WAL is approximately €51.1 million (using a USD/EUR conversion rate of approximatel

V. Enforcement Considerations While we are optimistic that Kestrel will comply with the monetary obligations imposed by the Partial Award in a timely manner, prudent practice requires that we address the enforcement options available to WAL in the event that voluntary compliance is not forthcoming. A. Voluntary Compliance The Partial Award is final and binding on Kestrel Dynamics GmbH with respect to the matters deci

VI. Reserved Jurisdiction — Post-Award Interest and Final Award The Partial Award expressly reserved the Tribunal's jurisdiction over certain matters that were not finally resolved in the Award. Specifically, the Tribunal retained jurisdiction over the following: (a) The calculation and determination of post-award interest on the €3.82 million counterclaim award from the date of the Award until the date of payment, i

VII. Insurance Notification Update For completeness, we wish to provide an update on the status of the insurance notification that was made at the commencement of this matter. Pinnacle Continental Insurance Co. ("Pinnacle") was notified of the arbitration on November 14, 2022, under WAL's commercial general liability policy, Policy No. PCE-GL-2021-08854, with an effective period of July 1, 2021 through June 30, 2022,

VIII. Recommended Next Steps Based on our analysis of the Partial Award and the considerations discussed above, we recommend the following next steps:

1. Monitor the 30-Day Voluntary Compliance Window. Allow Kestrel until approximately April 21, 2024, to comply voluntarily with the monetary obligations imposed by the Partial Award, including payment of the €3.82 million counterclaim award, $930,000 in allocated ICC costs (net of amounts already advanced), and $1.85 million in legal cost reimbursement. During this period, we will transmit a formal written communicat

2. Initiate Enforcement Proceedings if Necessary. If Kestrel does not comply with the monetary obligations within the voluntary compliance period, we will promptly initiate enforcement proceedings in the appropriate jurisdiction. The choice of forum — Germany (Landgericht Stuttgart) or the United States (S.D.N.Y.) — will be determined based on the location of Kestrel's readily attachable assets and the relative effic

3. Coordinate Internally Regarding Post-Award Interest. WAL should consider whether it wishes to petition the Tribunal for a Final Award addressing post-award interest on the counterclaim and cost-reimbursement amounts. If Kestrel pays promptly, this issue may be of limited financial significance. However, if Kestrel delays or resists payment, the accrual of post-award interest at the applicable rate could be materia

4. Close Out Engagement Records and Finalize Document Retention. With the issuance of the Partial Award and the anticipated conclusion of the proceedings, we recommend that WAL and Calderwood & Harkness LLP coordinate to close out the engagement records for this matter and finalize document-retention protocols. The litigation hold that was issued on November 8, 2022, in connection with the commencement of the arbitra

5. Final Invoice. Our final invoice for professional services and disbursements incurred through the date of issuance of the Partial Award will be transmitted to WAL under separate cover within the next ten (10) business days. The invoice will reflect all time and charges incurred since our most recent interim billing statement, including preparation of this analysis letter and the post-award communications reference

IX. Closing We are very pleased with the outcome of this arbitration, which represents a thorough vindication of WAL's position on every significant issue in dispute. The complete dismissal of €47.3 million in claims, coupled with the substantial recovery on WAL's counterclaim and the favorable costs allocation, constitutes an exceptionally strong result by any measure. We wish to acknowledge the invaluable contribut