1019-00001 · Haber Reinhardt Schlosser Partners · Engagement

engagement-letter-wal.docx DOCUMENT M&A / Corporate

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CALDERWOOD & HARKNESS LLP Counselors at Law

600 Lexington Avenue New York, New York 10022

Telephone: (212) 554-7000 Facsimile: (212) 554-7001 www.calderwoodharkness.com

November 2, 2022

VIA ELECTRONIC MAIL AND HAND DELIVERY

Dana Prescott, Esq. Vice President & General Counsel Whitmore Aerospace LLC 4200 Wilson Boulevard, Suite 1100 Arlington, Virginia 22203

Re: Engagement of Calderwood & Harkness LLP — Defense of Whitmore Aerospace LLC in ICC Arbitration, Case No. 27914/MHM (Kestrel Dynamics GmbH v. Whitmore Aerospace LLC)

Engagement Number: 1019-00001

Dear Ms. Prescott:

Thank you for selecting Calderwood & Harkness LLP to represent Whitmore Aerospace LLC in this important matter. We value the confidence you have placed in our Firm, and we look forward to providing vigorous and effective representation. This letter sets forth the terms and conditions of our engagement, including the scope of our representation, the attorneys who will be principally responsible for the matter, our fee arrangement, and other matters pertinent to the attorney-client relationship. We ask that you review this letter carefully and, if the terms are acceptable, execute and return the enclosed copy to confirm your agreement.

1. Purpose and Background

Calderwood & Harkness LLP ("C&H" or the "Firm") is pleased to confirm its engagement by Whitmore Aerospace LLC ("WAL" or the "Client"), a Delaware limited liability company headquartered in Arlington, Virginia, in connection with the defense of WAL as Respondent in the arbitration proceeding commenced by Kestrel Dynamics GmbH ("Kestrel" or "Claimant"), a German Gesellschaft mit beschränkter Haftung registered in Stuttgart, Germany (German Trade Register No. HRB 745621, Amtsgericht Stuttgart).

As you are aware, Kestrel filed a Request for Arbitration with the International Chamber of Commerce ("ICC") on November 7, 2022, and the matter has been assigned ICC Case No. 27914/MHM (the "Arbitration"). The ICC Secretariat has confirmed receipt of the Request and has transmitted a copy to WAL in accordance with Article 4 of the ICC Rules of Arbitration (2021 edition).

The Arbitration arises from Kestrel's allegations of material breach of the Master Supply Agreement for Titanium Alloy Turbine Housings dated June 15, 2018, between WAL and Kestrel (the "MSA," internal reference WAL-KDG-MSA-2018-0615), as amended by Amendment No. 1 dated February 10, 2020 and Amendment No. 2 dated September 3, 2021 (collectively, the "Agreement"). The MSA governs the manufacture, quality testing, acceptance, and delivery of Ti-6Al-4V ELI titanium alloy turbine housings for use in WAL's next-generation propulsion systems programs.

In its Request for Arbitration, Kestrel seeks approximately €47.3 million in damages, comprising several categories of alleged loss. Kestrel alleges, among other things, that WAL wrongfully rejected multiple production lots of Ti-6Al-4V ELI titanium alloy turbine housings delivered under the MSA, purportedly without adequate basis under the Agreement's acceptance and non-conformance provisions, and that WAL improperly terminated the MSA by issuing a Notice of Termination for Cause dated October 3, 2022, allegedly in violation of the cure-period and dispute-escalation provisions of the Agreement. Kestrel's claimed damages include, inter alia, lost profits over the remaining term and expected renewal terms of the MSA, unreimbursed rework and remanufacturing costs, costs associated with idle production capacity, and what Kestrel characterizes as reputational damages in the European aerospace supply market.

WAL categorically disputes these allegations. Based on our preliminary review of the matter, WAL's position is that the rejections were fully warranted by documented non-conformances identified through metallurgical inspection and that the termination for cause was exercised in compliance with the MSA's express terms. This engagement letter formalizes the Firm's retention to defend WAL's interests in the Arbitration and to pursue any meritorious counterclaims on WAL's behalf.

2. Scope of Engagement

C&H will represent WAL as Respondent in ICC Case No. 27914/MHM. The scope of our engagement encompasses the full range of activities necessary to defend WAL's interests in the Arbitration, including but not limited to the following:

(a) Defense against all claims asserted by Kestrel in the Arbitration, including Kestrel's claims of material breach of the MSA, claims for lost profits (both over the remaining initial term and any asserted renewal terms), claims for unreimbursed rework costs, claims for idle-capacity losses, and claims for reputational damages, as well as any additional or amended claims that Kestrel may assert during the course of the proceedings;

(b) Preparation and timely filing of WAL's Answer to the Request for Arbitration in accordance with Article 5 of the ICC Rules of Arbitration, together with all required accompanying documentation;

(c) Assessment and, where warranted, prosecution of any counterclaims that WAL may assert against Kestrel, including but not limited to claims for the costs incurred by WAL in sourcing replacement titanium alloy turbine housings from Valkyr Precision Components Inc. ("Valkyr") and any other direct or consequential damages sustained by WAL as a result of Kestrel's delivery of non-conforming goods and related breaches of the Agreement;

(d) Participation in the arbitrator selection process, including the nomination of WAL's party-appointed arbitrator, review of candidates for presiding arbitrator, evaluation of potential challenges, and all related correspondence with the ICC Court and the Secretariat;

(e) Attendance at and participation in all procedural conferences, case management conferences, and preliminary hearings convened by the Tribunal, including the preparation of procedural orders and Terms of Reference;

(f) Management and conduct of the document production process, including the preparation of WAL's document requests, the review and production of WAL's responsive documents, negotiations regarding the scope and methodology of production (including any application of the IBA Rules on the Taking of Evidence in International Arbitration, 2020 revision), and the handling of privilege and confidentiality issues arising during production;

(g) Retention and coordination of expert witnesses as necessary to support WAL's defense and any counterclaims, including damages experts, metallurgical and materials-science experts, forensic accounting experts, and any other technical experts whose testimony may be relevant to the disputed quality and conformance issues;

(h) Attendance at and conduct of evidentiary hearings before the Tribunal, including the direct examination and cross-examination of fact witnesses and expert witnesses, the preparation of witness statements, and all related logistical arrangements;

(i) Preparation and filing of all written submissions required or permitted by the Tribunal's procedural timetable, including statements of defense, statements of counterclaim, reply memorials, rejoinder memorials, expert reports, rebuttal expert reports, pre-hearing memorials, and post-hearing briefs;

(j) Advice and representation regarding any interim or conservatory measures that may be sought by either party, including applications to the ICC Emergency Arbitrator or to courts of competent jurisdiction;

(k) Advice regarding the enforcement, recognition, or challenge of any final or partial award rendered by the Tribunal, including under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) and the Federal Arbitration Act, 9 U.S.C. §§ 1–16; and

(l) Such other legal services as may be reasonably necessary in connection with the Arbitration, as agreed between the Firm and the Client.

The Arbitration is governed by the ICC Rules of Arbitration (2021 edition). Pursuant to Section 22.1 of the MSA, the seat of the arbitration is New York, New York, the language of the arbitration is English, and the substantive law governing the MSA is the law of the State of New York (without regard to its conflict-of-laws principles).

This engagement does not extend to matters unrelated to the ICC Arbitration unless separately agreed in writing between C&H and the Client. In the event that additional legal services are required in connection with related matters, or that the scope of this engagement needs to be expanded, we will discuss such matters with you and confirm any modification or expansion in a supplemental engagement letter or written amendment to this letter.

3. Responsible Attorneys

The following attorneys have been assigned to this matter and will be principally responsible for the conduct of the engagement:

Theodore Langston, Partner — Mr. Langston will serve as the Responsible Partner for this engagement. He will have overall supervisory responsibility for the matter, serve as the primary client contact for strategic and substantive matters, and take a leading role in advocacy before the Tribunal. Mr. Langston is a member of the Firm's International Arbitration and Litigation Practice Group and has extensive experience representing aerospace and defense-industry clients in complex international disputes.

Vivienne St. Claire, Partner — Ms. St. Claire will serve as the Billing Partner for this engagement. She will be responsible for billing, budgeting, financial reporting, and the administrative and financial aspects of the engagement. Ms. St. Claire is a member of the Firm's International Arbitration Practice Group and will also contribute substantively to the matter, particularly with respect to damages and quantum issues.

Simone Laroche, Senior Associate — Ms. Laroche will serve as the Lead Associate on this matter. She will be responsible for the day-to-day management of the engagement, including the drafting of substantive written submissions, coordination with expert witnesses, management of document production, and supervision of junior team members. Ms. Laroche has significant experience in ICC arbitration proceedings and supply-chain disputes.

Jeffrey Park, Associate — Mr. Park will serve as a Working Associate on the engagement, supporting the team with legal research, document review, analysis of technical and contractual issues, and drafting assistance.

Additional attorneys, paralegals, and other professional staff may be assigned to the matter as the needs of the engagement require. We will endeavor to staff the matter efficiently and to utilize timekeepers at appropriate levels of seniority for the tasks involved. The Client will be notified of any material changes to the staffing of the engagement, including the assignment of any additional partner-level attorneys.

4. Fee Arrangement

C&H will bill for this engagement on an hourly basis, in accordance with the Firm's standard billing practices. No contingency fee, success fee, or alternative fee arrangement applies to this engagement unless separately agreed in writing by the Firm and the Client. The Firm's professional fees will be calculated based on the number of hours expended by each timekeeper multiplied by that timekeeper's applicable hourly rate.

The current hourly rates for the attorneys principally assigned to this matter are as follows:

These rates are subject to periodic adjustment in accordance with the Firm's standard rate schedule, which is typically reviewed and updated on an annual basis, effective January 1 of each calendar year. The Client will be notified in writing of any changes to the applicable hourly rates prior to the effective date of such changes. In the event that the Client objects to any rate adjustment, the Client and the Firm will discuss the matter in good faith, and the Client's right to terminate the engagement as described in Section 10 below shall not be affected.

Hourly rates for other timekeepers who may be assigned to work on the matter from time to time — including additional partners, counsel, associates, paralegals, and other professional staff — will be communicated to the Client in advance of any substantial work being performed by such timekeepers. Current paralegal rates generally range from $350 to $475 per hour, depending on the seniority and experience of the individual.

Time is recorded in increments of one-tenth of an hour (six-minute increments). Each time entry will include a narrative description of the services performed sufficient to identify the nature and purpose of the work.

5. Billing Procedures

Invoices for professional fees and reimbursable costs will be rendered monthly, in arrears, and will be transmitted to the Client's designated billing contact. Each invoice will include a detailed description of the services performed during the billing period, the identity of the timekeeper responsible for each entry, the hours expended by each timekeeper, the applicable hourly rate, and a summary of costs and disbursements incurred during the period.

Payment of all invoices is due within thirty (30) days of the invoice date. Payments should be made by wire transfer to the Firm's designated client trust or operating account, as specified on the invoice, or by such other method as may be agreed between the Firm and the Client.

Any amounts not paid within thirty (30) days of the invoice date will accrue interest at the rate of 1.0% per month (12.0% per annum), or the maximum rate permitted by applicable law, whichever is lower, calculated from the date the payment was due until the date of actual receipt. The Firm reserves the right to suspend work on the matter in the event of a material delinquency in payment, subject to any obligations imposed by applicable professional responsibility rules.

C&H will provide the Client with periodic budget updates at reasonable intervals, and will endeavor to notify the Client in advance of any significant anticipated changes in projected costs. We understand the importance of predictability and transparency in legal spending, and we are committed to maintaining open communication with the Client regarding the financial aspects of this engagement. We will work with Ms. Prescott and her team to establish a mutually agreeable budget framework and reporting cadence, and we will promptly advise the Client if circumstances arise that are likely to result in a material deviation from any agreed-upon budget.

6. Costs and Disbursements

In addition to professional fees for attorney and staff time, the Client will be responsible for reimbursement of all reasonable out-of-pocket costs and disbursements incurred by the Firm in connection with the engagement. These costs and disbursements may include, but are not limited to, the following:

(a) Expert witness fees and expenses, including the fees and costs of damages and quantum experts, metallurgical and materials-science experts, forensic accounting experts, and any other technical or industry experts retained in connection with the Arbitration;

(b) ICC administrative fees and advances on arbitration costs, including the advance on costs required by Article 37 of the ICC Rules and any supplemental or additional advances requested by the ICC Court during the course of the proceedings;

(c) Travel, lodging, meals, and related transportation expenses incurred by Firm personnel in connection with hearings, conferences, witness preparation sessions, site inspections, and other activities directly related to the Arbitration;

(d) Court reporter fees, hearing-room rental costs, transcription costs, and interpreter or translation expenses;

(e) Document production, photocopying, printing, and electronic discovery costs, including fees for electronic discovery platforms, document hosting, processing of electronically stored information, and technology-assisted review tools;

(f) Filing fees, service fees, courier and delivery charges, long-distance telecommunications charges, and videoconferencing costs; and

(g) Such other costs and disbursements as may be reasonably and necessarily incurred in the performance of services under this engagement.

All costs and disbursements will be itemized separately on the Firm's monthly invoices, with sufficient detail to allow the Client to review and verify each charge. The Firm will seek the Client's prior approval before incurring any single disbursement in excess of $25,000, except in circumstances where delay in incurring the disbursement would materially prejudice the Client's interests.

The Firm may, from time to time, request advances from the Client to cover anticipated significant disbursements, such as ICC advances on costs, expert retainer fees, or other substantial third-party charges. Any such advance will be deposited into the Firm's client trust account and applied against the relevant costs as they are incurred. The Client will receive an accounting of the use of any advance funds on subsequent invoices.

7. Confidentiality

All information provided by the Client to C&H in connection with this engagement, including documents, data, communications, technical information, business strategies, financial records, and all other materials and information of whatever nature, will be treated as strictly confidential by the Firm and its personnel. Such information is and shall remain subject to all applicable attorney-client privilege protections, work product protections, and other applicable evidentiary privileges and immunities under the law of the State of New York, federal law, and any other applicable jurisdictions.

C&H will not disclose confidential client information to any third party except: (i) as expressly authorized by the Client in writing; (ii) as required by applicable law, court order, or order of the Tribunal; or (iii) as reasonably necessary for the performance of services under this engagement, including, by way of example, the provision of relevant factual or technical information to expert witnesses retained in connection with the Arbitration, provided that such experts are bound by appropriate confidentiality agreements or undertakings. The Firm will consult with the Client before making any disclosures under clauses (ii) or (iii) above to the extent practicable and not prohibited by applicable law.

The Firm's confidentiality obligations under this Section 7 shall survive the termination or conclusion of this engagement.

8. Conflicts of Interest

C&H has conducted a thorough conflicts check in accordance with the Firm's standard policies and procedures and in compliance with the New York Rules of Professional Conduct. Based on the information available to the Firm as of the date of this letter, the Firm confirms that it has identified no conflicts of interest that would preclude the representation of WAL in the Arbitration.

The Firm's conflicts check covered, among others, the following persons and entities: Kestrel Dynamics GmbH; its known officers and directors; Kestrel's counsel, Haber Reinhardt Schlosser Partnerschaft mbB (Hamburg); other known parties, entities, and individuals associated with the Arbitration; and any relevant affiliates and subsidiaries of the foregoing, to the extent such information was available to the Firm at the time of the check.

The Client acknowledges and agrees that C&H is a large, multi-practice law firm that represents numerous clients across a broad range of industries and matters. The Client agrees that C&H may continue to represent other clients in matters that are unrelated to this engagement, even if such other clients may have interests that are or could be adverse to WAL in those unrelated matters, provided that (a) no conflict of interest exists as defined by the applicable rules of professional conduct governing the Firm's attorneys, and (b) such other representations do not involve the same or a substantially related matter to the Arbitration. If the Firm becomes aware of any actual or potential conflict of interest during the course of this engagement, the Firm will promptly notify the Client and take appropriate steps in accordance with applicable professional responsibility rules.

9. Document Retention

C&H will maintain all files and records related to this engagement — including pleadings, correspondence, work product, research memoranda, notes, and other materials generated or received in connection with the Arbitration — in accordance with the Firm's standard document retention policies and procedures, and in compliance with all applicable professional responsibility obligations.

Upon conclusion of the engagement, whether by completion, termination, or otherwise, original documents and materials provided by the Client to the Firm will be returned to the Client upon the Client's written request. The Client should advise the Firm promptly after the conclusion of the engagement if it wishes to have such materials returned. The Firm's own internal work product, administrative records, and internal files will be retained for a period consistent with the Firm's document retention policy, which currently provides for retention of closed-matter files for a minimum period of ten (10) years following the conclusion of the matter, after which the Firm may destroy such files in its discretion upon reasonable notice to the Client.

The Client is responsible for maintaining its own copies of all documents and materials provided to the Firm during the course of this engagement.

10. Termination of Engagement

Either party may terminate this engagement at any time upon reasonable written notice to the other party. In the event of termination by the Client, C&H will promptly cease all work on the matter, subject to any obligations that the Firm may have under applicable professional responsibility rules or orders of the Tribunal to take reasonable steps to protect the Client's interests during the transition, including the filing of necessary notices, the protection of deadlines, and the orderly transfer of the Client's files and materials to successor counsel.

In the event of termination by the Firm, C&H will provide the Client with reasonable advance notice sufficient to allow the Client to retain successor counsel, and the Firm will cooperate in the transition of the matter, including the transfer of files, work product, and relevant information to successor counsel designated by the Client.

In all cases of termination, the Client remains responsible for payment of all professional fees for services rendered and all costs and disbursements incurred through the date of termination, in accordance with the terms of this letter. Termination of the engagement shall not affect the Firm's obligations under Sections 7 (Confidentiality) and 9 (Document Retention) of this letter, which shall survive termination.

11. Limitation of Scope

This engagement is limited to the defense of WAL as Respondent in ICC Case No. 27914/MHM and the related matters specifically described in Section 2 above. The Firm's duties, obligations, and responsibilities under this engagement letter are confined to the scope set forth herein.

For the avoidance of doubt, C&H has not been retained to provide legal advice on, and this engagement does not cover, any of the following matters:

(a) Any regulatory or governmental investigations, inquiries, or enforcement proceedings involving WAL, including but not limited to proceedings before the U.S. Department of Defense, the Defense Contract Audit Agency, the Federal Aviation Administration, or any other federal, state, or foreign governmental or regulatory body;

(b) Insurance coverage disputes or claims, including with respect to WAL's commercial general liability and professional liability coverage under policies issued by Pinnacle Continental Insurance Co. (Policy No. PCE-GL-2021-08854) or any other insurer, other than such notification to the insurer of the Arbitration as may be provided as a courtesy at the Client's request;

(c) WAL's revolving credit facility or term loan arrangements with Veltrano National Bank, N.A., or any related covenant compliance matters, financial reporting obligations, event-of-default analyses, or lender communications arising from or relating to the Arbitration or its potential financial implications;

(d) Any other litigation, arbitration, mediation, or contractual dispute involving WAL or its affiliates that is not described in this letter; and

(e) General corporate, tax, intellectual property, employment, regulatory, or transactional matters of any kind.

In the event that issues arise during the course of the Arbitration that implicate any of the foregoing excluded matters, we will advise the Client promptly so that the Client may engage appropriate counsel to address such issues. Any expansion of the scope of this engagement must be agreed in writing by both the Firm and the Client, and may be subject to additional conflict checks and terms.

12. Client Contacts

The primary client contact for this engagement shall be Dana Prescott, Vice President & General Counsel, Whitmore Aerospace LLC. All substantive communications regarding the Arbitration, including reports on case developments, strategic recommendations, and requests for instructions, will be directed to Ms. Prescott unless she instructs otherwise in writing. Ms. Prescott will serve as the Client's principal decision-maker with respect to the conduct of the engagement.

In addition to Ms. Prescott, the Firm may communicate with the following WAL personnel as reasonably necessary for the performance of services under this engagement:

• Marcus J. Whitmore III, Chief Executive Officer — for strategic and executive-level matters;

• Gerald Huang, Vice President, Global Supply Chain Operations — for factual matters relating to the MSA, lot rejection decisions, replacement sourcing, and supply-chain operations; and

• Dr. Ingrid Vollmer, Senior Vice President, Engineering & Manufacturing — for technical and engineering matters relating to turbine housing specifications, metallurgical testing, quality control, and manufacturing processes.

All privileged communications regarding legal strategy, settlement discussions, and litigation posture will be directed exclusively to Ms. Prescott unless she provides the Firm with written authorization to communicate such information to other designated individuals. The Client is responsible for ensuring that its personnel who participate in communications with the Firm understand the importance of maintaining the confidentiality of privileged communications.

13. Governing Law

This engagement letter, including all rights and obligations of the parties hereunder, shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law. Any dispute arising out of or relating to the terms of this engagement letter shall be resolved in the courts of the State of New York located in the County of New York, or in the United States District Court for the Southern District of New York, and each party hereby consents to the personal jurisdiction and venue of such courts for such purpose.

14. Acceptance

We are grateful for the opportunity to represent Whitmore Aerospace LLC in this matter and are confident in the strength of WAL's position. We look forward to working with you and your team throughout the course of these proceedings.

Please confirm your acceptance of the terms and conditions set forth in this engagement letter by signing where indicated below and returning a signed copy to my attention at the address set forth above or by electronic mail to tlangston@calderwoodharkness.com. This engagement letter, together with the enclosed C&H Standard Terms of Engagement (which are incorporated herein by reference), constitutes the entire agreement between C&H and the Client with respect to the subject matter hereof, and supersedes all prior or contemporaneous oral or written communications, proposals, or representations with respect to the engagement.

If you have any questions regarding this letter or any aspect of the engagement, please do not hesitate to contact me directly at (212) 554-7112.

With high regard,

CALDERWOOD & HARKNESS LLP

By: ________

Theodore Langston, Partner

Date: ________

ACCEPTED AND AGREED

By executing below, the Client confirms that it has read and understands the terms and conditions set forth in this engagement letter and the enclosed C&H Standard Terms of Engagement, and agrees to be bound thereby.

WHITMORE AEROSPACE LLC

By: ________

Name: Dana Prescott

Title: Vice President & General Counsel

Date: ________

Enclosures:

1. C&H Standard Terms of Engagement (incorporated by reference herein)

2. Engagement Number Reference Sheet (1019-00001)

cc: Vivienne St. Claire, Partner, Calderwood & Harkness LLP cc: Simone Laroche, Senior Associate, Calderwood & Harkness LLP cc: Jeffrey Park, Associate, Calderwood & Harkness LLP

Timekeeper	Position	Hourly Rate (USD)
Theodore Langston	Partner	$1,475
Vivienne St. Claire	Partner	$1,425
Simone Laroche	Senior Associate	$895
Jeffrey Park	Associate	$625

CALDERWOOD & HARKNESS LLP Counselors at Law
600 Lexington Avenue New York, New York 10022
Telephone: (212) 554-7000 Facsimile: (212) 554-7001 www.calderwoodharkness.com
November 2, 2022
VIA ELECTRONIC MAIL AND HAND DELIVERY
Dana Prescott, Esq. Vice President & General Counsel Whitmore Aerospace LLC 4200 Wilson Boulevard, Suite 1100 Arlington, Virginia 22203
Re: Engagement of Calderwood & Harkness LLP — Defense of Whitmore Aerospace LLC in ICC Arbitration, Case No. 27914/MHM (Kestrel Dynamics GmbH v. Whitmore Aerospace LLC)
Engagement Number: 1019-00001
Dear Ms. Prescott:
Thank you for selecting Calderwood & Harkness LLP to represent Whitmore Aerospace LLC in this important matter. We value the confidence you have placed in our Firm, and we look forward to providing vigorous and effective representation. This letter sets forth the terms and conditions of our engagement, including the scope of our representation, the attorneys who will be principally responsible for the matter, our fee arrangement, and other matters pertinent to the attorney-client relationship. We ask that you review this letter carefully and, if the terms are acceptable, execute and return the enclosed copy to confirm your agreement.
1. Purpose and Background
Calderwood & Harkness LLP ("C&H" or the "Firm") is pleased to confirm its engagement by Whitmore Aerospace LLC ("WAL" or the "Client"), a Delaware limited liability company headquartered in Arlington, Virginia, in connection with the defense of WAL as Respondent in the arbitration proceeding commenced by Kestrel Dynamics GmbH ("Kestrel" or "Claimant"), a German Gesellschaft mit beschränkter Haftung registered in Stuttgart, Germany (German Trade Register No. HRB 745621, Amtsgericht Stuttgart).
As you are aware, Kestrel filed a Request for Arbitration with the International Chamber of Commerce ("ICC") on November 7, 2022, and the matter has been assigned ICC Case No. 27914/MHM (the "Arbitration"). The ICC Secretariat has confirmed receipt of the Request and has transmitted a copy to WAL in accordance with Article 4 of the ICC Rules of Arbitration (2021 edition).
The Arbitration arises from Kestrel's allegations of material breach of the Master Supply Agreement for Titanium Alloy Turbine Housings dated June 15, 2018, between WAL and Kestrel (the "MSA," internal reference WAL-KDG-MSA-2018-0615), as amended by Amendment No. 1 dated February 10, 2020 and Amendment No. 2 dated September 3, 2021 (collectively, the "Agreement"). The MSA governs the manufacture, quality testing, acceptance, and delivery of Ti-6Al-4V ELI titanium alloy turbine housings for use in WAL's next-generation propulsion systems programs.
In its Request for Arbitration, Kestrel seeks approximately €47.3 million in damages, comprising several categories of alleged loss. Kestrel alleges, among other things, that WAL wrongfully rejected multiple production lots of Ti-6Al-4V ELI titanium alloy turbine housings delivered under the MSA, purportedly without adequate basis under the Agreement's acceptance and non-conformance provisions, and that WAL improperly terminated the MSA by issuing a Notice of Termination for Cause dated October 3, 2022, allegedly in violation of the cure-period and dispute-escalation provisions of the Agreement. Kestrel's claimed damages include, inter alia, lost profits over the remaining term and expected renewal terms of the MSA, unreimbursed rework and remanufacturing costs, costs associated with idle production capacity, and what Kestrel characterizes as reputational damages in the European aerospace supply market.
WAL categorically disputes these allegations. Based on our preliminary review of the matter, WAL's position is that the rejections were fully warranted by documented non-conformances identified through metallurgical inspection and that the termination for cause was exercised in compliance with the MSA's express terms. This engagement letter formalizes the Firm's retention to defend WAL's interests in the Arbitration and to pursue any meritorious counterclaims on WAL's behalf.
2. Scope of Engagement
C&H will represent WAL as Respondent in ICC Case No. 27914/MHM. The scope of our engagement encompasses the full range of activities necessary to defend WAL's interests in the Arbitration, including but not limited to the following:
(a) Defense against all claims asserted by Kestrel in the Arbitration, including Kestrel's claims of material breach of the MSA, claims for lost profits (both over the remaining initial term and any asserted renewal terms), claims for unreimbursed rework costs, claims for idle-capacity losses, and claims for reputational damages, as well as any additional or amended claims that Kestrel may assert during the course of the proceedings;
(b) Preparation and timely filing of WAL's Answer to the Request for Arbitration in accordance with Article 5 of the ICC Rules of Arbitration, together with all required accompanying documentation;
(c) Assessment and, where warranted, prosecution of any counterclaims that WAL may assert against Kestrel, including but not limited to claims for the costs incurred by WAL in sourcing replacement titanium alloy turbine housings from Valkyr Precision Components Inc. ("Valkyr") and any other direct or consequential damages sustained by WAL as a result of Kestrel's delivery of non-conforming goods and related breaches of the Agreement;
(d) Participation in the arbitrator selection process, including the nomination of WAL's party-appointed arbitrator, review of candidates for presiding arbitrator, evaluation of potential challenges, and all related correspondence with the ICC Court and the Secretariat;
(e) Attendance at and participation in all procedural conferences, case management conferences, and preliminary hearings convened by the Tribunal, including the preparation of procedural orders and Terms of Reference;
(f) Management and conduct of the document production process, including the preparation of WAL's document requests, the review and production of WAL's responsive documents, negotiations regarding the scope and methodology of production (including any application of the IBA Rules on the Taking of Evidence in International Arbitration, 2020 revision), and the handling of privilege and confidentiality issues arising during production;
(g) Retention and coordination of expert witnesses as necessary to support WAL's defense and any counterclaims, including damages experts, metallurgical and materials-science experts, forensic accounting experts, and any other technical experts whose testimony may be relevant to the disputed quality and conformance issues;
(h) Attendance at and conduct of evidentiary hearings before the Tribunal, including the direct examination and cross-examination of fact witnesses and expert witnesses, the preparation of witness statements, and all related logistical arrangements;
(i) Preparation and filing of all written submissions required or permitted by the Tribunal's procedural timetable, including statements of defense, statements of counterclaim, reply memorials, rejoinder memorials, expert reports, rebuttal expert reports, pre-hearing memorials, and post-hearing briefs;
(j) Advice and representation regarding any interim or conservatory measures that may be sought by either party, including applications to the ICC Emergency Arbitrator or to courts of competent jurisdiction;
(k) Advice regarding the enforcement, recognition, or challenge of any final or partial award rendered by the Tribunal, including under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) and the Federal Arbitration Act, 9 U.S.C. §§ 1–16; and
(l) Such other legal services as may be reasonably necessary in connection with the Arbitration, as agreed between the Firm and the Client.
The Arbitration is governed by the ICC Rules of Arbitration (2021 edition). Pursuant to Section 22.1 of the MSA, the seat of the arbitration is New York, New York, the language of the arbitration is English, and the substantive law governing the MSA is the law of the State of New York (without regard to its conflict-of-laws principles).
This engagement does not extend to matters unrelated to the ICC Arbitration unless separately agreed in writing between C&H and the Client. In the event that additional legal services are required in connection with related matters, or that the scope of this engagement needs to be expanded, we will discuss such matters with you and confirm any modification or expansion in a supplemental engagement letter or written amendment to this letter.
3. Responsible Attorneys
The following attorneys have been assigned to this matter and will be principally responsible for the conduct of the engagement:
Theodore Langston, Partner — Mr. Langston will serve as the Responsible Partner for this engagement. He will have overall supervisory responsibility for the matter, serve as the primary client contact for strategic and substantive matters, and take a leading role in advocacy before the Tribunal. Mr. Langston is a member of the Firm's International Arbitration and Litigation Practice Group and has extensive experience representing aerospace and defense-industry clients in complex international disputes.
Vivienne St. Claire, Partner — Ms. St. Claire will serve as the Billing Partner for this engagement. She will be responsible for billing, budgeting, financial reporting, and the administrative and financial aspects of the engagement. Ms. St. Claire is a member of the Firm's International Arbitration Practice Group and will also contribute substantively to the matter, particularly with respect to damages and quantum issues.
Simone Laroche, Senior Associate — Ms. Laroche will serve as the Lead Associate on this matter. She will be responsible for the day-to-day management of the engagement, including the drafting of substantive written submissions, coordination with expert witnesses, management of document production, and supervision of junior team members. Ms. Laroche has significant experience in ICC arbitration proceedings and supply-chain disputes.
Jeffrey Park, Associate — Mr. Park will serve as a Working Associate on the engagement, supporting the team with legal research, document review, analysis of technical and contractual issues, and drafting assistance.
Additional attorneys, paralegals, and other professional staff may be assigned to the matter as the needs of the engagement require. We will endeavor to staff the matter efficiently and to utilize timekeepers at appropriate levels of seniority for the tasks involved. The Client will be notified of any material changes to the staffing of the engagement, including the assignment of any additional partner-level attorneys.
4. Fee Arrangement
C&H will bill for this engagement on an hourly basis, in accordance with the Firm's standard billing practices. No contingency fee, success fee, or alternative fee arrangement applies to this engagement unless separately agreed in writing by the Firm and the Client. The Firm's professional fees will be calculated based on the number of hours expended by each timekeeper multiplied by that timekeeper's applicable hourly rate.
The current hourly rates for the attorneys principally assigned to this matter are as follows:
These rates are subject to periodic adjustment in accordance with the Firm's standard rate schedule, which is typically reviewed and updated on an annual basis, effective January 1 of each calendar year. The Client will be notified in writing of any changes to the applicable hourly rates prior to the effective date of such changes. In the event that the Client objects to any rate adjustment, the Client and the Firm will discuss the matter in good faith, and the Client's right to terminate the engagement as described in Section 10 below shall not be affected.
Hourly rates for other timekeepers who may be assigned to work on the matter from time to time — including additional partners, counsel, associates, paralegals, and other professional staff — will be communicated to the Client in advance of any substantial work being performed by such timekeepers. Current paralegal rates generally range from $350 to $475 per hour, depending on the seniority and experience of the individual.
Time is recorded in increments of one-tenth of an hour (six-minute increments). Each time entry will include a narrative description of the services performed sufficient to identify the nature and purpose of the work.
5. Billing Procedures
Invoices for professional fees and reimbursable costs will be rendered monthly, in arrears, and will be transmitted to the Client's designated billing contact. Each invoice will include a detailed description of the services performed during the billing period, the identity of the timekeeper responsible for each entry, the hours expended by each timekeeper, the applicable hourly rate, and a summary of costs and disbursements incurred during the period.
Payment of all invoices is due within thirty (30) days of the invoice date. Payments should be made by wire transfer to the Firm's designated client trust or operating account, as specified on the invoice, or by such other method as may be agreed between the Firm and the Client.
Any amounts not paid within thirty (30) days of the invoice date will accrue interest at the rate of 1.0% per month (12.0% per annum), or the maximum rate permitted by applicable law, whichever is lower, calculated from the date the payment was due until the date of actual receipt. The Firm reserves the right to suspend work on the matter in the event of a material delinquency in payment, subject to any obligations imposed by applicable professional responsibility rules.
C&H will provide the Client with periodic budget updates at reasonable intervals, and will endeavor to notify the Client in advance of any significant anticipated changes in projected costs. We understand the importance of predictability and transparency in legal spending, and we are committed to maintaining open communication with the Client regarding the financial aspects of this engagement. We will work with Ms. Prescott and her team to establish a mutually agreeable budget framework and reporting cadence, and we will promptly advise the Client if circumstances arise that are likely to result in a material deviation from any agreed-upon budget.
6. Costs and Disbursements
In addition to professional fees for attorney and staff time, the Client will be responsible for reimbursement of all reasonable out-of-pocket costs and disbursements incurred by the Firm in connection with the engagement. These costs and disbursements may include, but are not limited to, the following:
(a) Expert witness fees and expenses, including the fees and costs of damages and quantum experts, metallurgical and materials-science experts, forensic accounting experts, and any other technical or industry experts retained in connection with the Arbitration;
(b) ICC administrative fees and advances on arbitration costs, including the advance on costs required by Article 37 of the ICC Rules and any supplemental or additional advances requested by the ICC Court during the course of the proceedings;
(c) Travel, lodging, meals, and related transportation expenses incurred by Firm personnel in connection with hearings, conferences, witness preparation sessions, site inspections, and other activities directly related to the Arbitration;
(d) Court reporter fees, hearing-room rental costs, transcription costs, and interpreter or translation expenses;
(e) Document production, photocopying, printing, and electronic discovery costs, including fees for electronic discovery platforms, document hosting, processing of electronically stored information, and technology-assisted review tools;
(f) Filing fees, service fees, courier and delivery charges, long-distance telecommunications charges, and videoconferencing costs; and
(g) Such other costs and disbursements as may be reasonably and necessarily incurred in the performance of services under this engagement.
All costs and disbursements will be itemized separately on the Firm's monthly invoices, with sufficient detail to allow the Client to review and verify each charge. The Firm will seek the Client's prior approval before incurring any single disbursement in excess of $25,000, except in circumstances where delay in incurring the disbursement would materially prejudice the Client's interests.
The Firm may, from time to time, request advances from the Client to cover anticipated significant disbursements, such as ICC advances on costs, expert retainer fees, or other substantial third-party charges. Any such advance will be deposited into the Firm's client trust account and applied against the relevant costs as they are incurred. The Client will receive an accounting of the use of any advance funds on subsequent invoices.
7. Confidentiality
All information provided by the Client to C&H in connection with this engagement, including documents, data, communications, technical information, business strategies, financial records, and all other materials and information of whatever nature, will be treated as strictly confidential by the Firm and its personnel. Such information is and shall remain subject to all applicable attorney-client privilege protections, work product protections, and other applicable evidentiary privileges and immunities under the law of the State of New York, federal law, and any other applicable jurisdictions.
C&H will not disclose confidential client information to any third party except: (i) as expressly authorized by the Client in writing; (ii) as required by applicable law, court order, or order of the Tribunal; or (iii) as reasonably necessary for the performance of services under this engagement, including, by way of example, the provision of relevant factual or technical information to expert witnesses retained in connection with the Arbitration, provided that such experts are bound by appropriate confidentiality agreements or undertakings. The Firm will consult with the Client before making any disclosures under clauses (ii) or (iii) above to the extent practicable and not prohibited by applicable law.
The Firm's confidentiality obligations under this Section 7 shall survive the termination or conclusion of this engagement.
8. Conflicts of Interest
C&H has conducted a thorough conflicts check in accordance with the Firm's standard policies and procedures and in compliance with the New York Rules of Professional Conduct. Based on the information available to the Firm as of the date of this letter, the Firm confirms that it has identified no conflicts of interest that would preclude the representation of WAL in the Arbitration.
The Firm's conflicts check covered, among others, the following persons and entities: Kestrel Dynamics GmbH; its known officers and directors; Kestrel's counsel, Haber Reinhardt Schlosser Partnerschaft mbB (Hamburg); other known parties, entities, and individuals associated with the Arbitration; and any relevant affiliates and subsidiaries of the foregoing, to the extent such information was available to the Firm at the time of the check.
The Client acknowledges and agrees that C&H is a large, multi-practice law firm that represents numerous clients across a broad range of industries and matters. The Client agrees that C&H may continue to represent other clients in matters that are unrelated to this engagement, even if such other clients may have interests that are or could be adverse to WAL in those unrelated matters, provided that (a) no conflict of interest exists as defined by the applicable rules of professional conduct governing the Firm's attorneys, and (b) such other representations do not involve the same or a substantially related matter to the Arbitration. If the Firm becomes aware of any actual or potential conflict of interest during the course of this engagement, the Firm will promptly notify the Client and take appropriate steps in accordance with applicable professional responsibility rules.
9. Document Retention
C&H will maintain all files and records related to this engagement — including pleadings, correspondence, work product, research memoranda, notes, and other materials generated or received in connection with the Arbitration — in accordance with the Firm's standard document retention policies and procedures, and in compliance with all applicable professional responsibility obligations.
Upon conclusion of the engagement, whether by completion, termination, or otherwise, original documents and materials provided by the Client to the Firm will be returned to the Client upon the Client's written request. The Client should advise the Firm promptly after the conclusion of the engagement if it wishes to have such materials returned. The Firm's own internal work product, administrative records, and internal files will be retained for a period consistent with the Firm's document retention policy, which currently provides for retention of closed-matter files for a minimum period of ten (10) years following the conclusion of the matter, after which the Firm may destroy such files in its discretion upon reasonable notice to the Client.
The Client is responsible for maintaining its own copies of all documents and materials provided to the Firm during the course of this engagement.
10. Termination of Engagement
Either party may terminate this engagement at any time upon reasonable written notice to the other party. In the event of termination by the Client, C&H will promptly cease all work on the matter, subject to any obligations that the Firm may have under applicable professional responsibility rules or orders of the Tribunal to take reasonable steps to protect the Client's interests during the transition, including the filing of necessary notices, the protection of deadlines, and the orderly transfer of the Client's files and materials to successor counsel.
In the event of termination by the Firm, C&H will provide the Client with reasonable advance notice sufficient to allow the Client to retain successor counsel, and the Firm will cooperate in the transition of the matter, including the transfer of files, work product, and relevant information to successor counsel designated by the Client.
In all cases of termination, the Client remains responsible for payment of all professional fees for services rendered and all costs and disbursements incurred through the date of termination, in accordance with the terms of this letter. Termination of the engagement shall not affect the Firm's obligations under Sections 7 (Confidentiality) and 9 (Document Retention) of this letter, which shall survive termination.
11. Limitation of Scope
This engagement is limited to the defense of WAL as Respondent in ICC Case No. 27914/MHM and the related matters specifically described in Section 2 above. The Firm's duties, obligations, and responsibilities under this engagement letter are confined to the scope set forth herein.
For the avoidance of doubt, C&H has not been retained to provide legal advice on, and this engagement does not cover, any of the following matters:
(a) Any regulatory or governmental investigations, inquiries, or enforcement proceedings involving WAL, including but not limited to proceedings before the U.S. Department of Defense, the Defense Contract Audit Agency, the Federal Aviation Administration, or any other federal, state, or foreign governmental or regulatory body;
(b) Insurance coverage disputes or claims, including with respect to WAL's commercial general liability and professional liability coverage under policies issued by Pinnacle Continental Insurance Co. (Policy No. PCE-GL-2021-08854) or any other insurer, other than such notification to the insurer of the Arbitration as may be provided as a courtesy at the Client's request;
(c) WAL's revolving credit facility or term loan arrangements with Veltrano National Bank, N.A., or any related covenant compliance matters, financial reporting obligations, event-of-default analyses, or lender communications arising from or relating to the Arbitration or its potential financial implications;
(d) Any other litigation, arbitration, mediation, or contractual dispute involving WAL or its affiliates that is not described in this letter; and
(e) General corporate, tax, intellectual property, employment, regulatory, or transactional matters of any kind.
In the event that issues arise during the course of the Arbitration that implicate any of the foregoing excluded matters, we will advise the Client promptly so that the Client may engage appropriate counsel to address such issues. Any expansion of the scope of this engagement must be agreed in writing by both the Firm and the Client, and may be subject to additional conflict checks and terms.
12. Client Contacts
The primary client contact for this engagement shall be Dana Prescott, Vice President & General Counsel, Whitmore Aerospace LLC. All substantive communications regarding the Arbitration, including reports on case developments, strategic recommendations, and requests for instructions, will be directed to Ms. Prescott unless she instructs otherwise in writing. Ms. Prescott will serve as the Client's principal decision-maker with respect to the conduct of the engagement.
In addition to Ms. Prescott, the Firm may communicate with the following WAL personnel as reasonably necessary for the performance of services under this engagement:
•  Marcus J. Whitmore III, Chief Executive Officer — for strategic and executive-level matters;
•  Gerald Huang, Vice President, Global Supply Chain Operations — for factual matters relating to the MSA, lot rejection decisions, replacement sourcing, and supply-chain operations; and
•  Dr. Ingrid Vollmer, Senior Vice President, Engineering & Manufacturing — for technical and engineering matters relating to turbine housing specifications, metallurgical testing, quality control, and manufacturing processes.
All privileged communications regarding legal strategy, settlement discussions, and litigation posture will be directed exclusively to Ms. Prescott unless she provides the Firm with written authorization to communicate such information to other designated individuals. The Client is responsible for ensuring that its personnel who participate in communications with the Firm understand the importance of maintaining the confidentiality of privileged communications.
13. Governing Law
This engagement letter, including all rights and obligations of the parties hereunder, shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law. Any dispute arising out of or relating to the terms of this engagement letter shall be resolved in the courts of the State of New York located in the County of New York, or in the United States District Court for the Southern District of New York, and each party hereby consents to the personal jurisdiction and venue of such courts for such purpose.
14. Acceptance
We are grateful for the opportunity to represent Whitmore Aerospace LLC in this matter and are confident in the strength of WAL's position. We look forward to working with you and your team throughout the course of these proceedings.
Please confirm your acceptance of the terms and conditions set forth in this engagement letter by signing where indicated below and returning a signed copy to my attention at the address set forth above or by electronic mail to tlangston@calderwoodharkness.com. This engagement letter, together with the enclosed C&H Standard Terms of Engagement (which are incorporated herein by reference), constitutes the entire agreement between C&H and the Client with respect to the subject matter hereof, and supersedes all prior or contemporaneous oral or written communications, proposals, or representations with respect to the engagement.
If you have any questions regarding this letter or any aspect of the engagement, please do not hesitate to contact me directly at (212) 554-7112.
With high regard,
CALDERWOOD & HARKNESS LLP
By: ________
Theodore Langston, Partner
Date: ________
ACCEPTED AND AGREED
By executing below, the Client confirms that it has read and understands the terms and conditions set forth in this engagement letter and the enclosed C&H Standard Terms of Engagement, and agrees to be bound thereby.
WHITMORE AEROSPACE LLC
By: ________
Name: Dana Prescott
Title: Vice President & General Counsel
Date: ________
Enclosures:
1.  C&H Standard Terms of Engagement (incorporated by reference herein)
2.  Engagement Number Reference Sheet (1019-00001)
cc: Vivienne St. Claire, Partner, Calderwood & Harkness LLP cc: Simone Laroche, Senior Associate, Calderwood & Harkness LLP cc: Jeffrey Park, Associate, Calderwood & Harkness LLP
Timekeeper | Position | Hourly Rate (USD)
Theodore Langston | Partner | $1,475
Vivienne St. Claire | Partner | $1,425
Simone Laroche | Senior Associate | $895
Jeffrey Park | Associate | $625

CALDERWOOD & HARKNESS LLP Counselors at Law

VIA ELECTRONIC MAIL AND HAND DELIVERY

CALDERWOOD & HARKNESS LLP

ACCEPTED AND AGREED

WHITMORE AEROSPACE LLC

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