MemorandumofUnderstandingHAINANAIRLINESHOLDINGGROUPCOMPANYLTDANDSCHREINERAVIATIONTRAININGBVMOU:JVHNA&SATDraftlastupdate:15June2001ThisMemorandumofUnderstanding(MOU)ismadebetween:HainanAirlinesHoldingGroupCompanyLtd.HaiHangDevelopmentBuilding#29HaixiuRoadHaikou570206PeoplesRepublicofChina(hereinafteralsoreferredtoasHNA)andSchreinerAviationTrainingB.V.Diamantlaan32132WVHoofddorpTheNetherlands(hereinafteralsoreferredtoasSchreiner)Whereas:HNA,acompanyactiveinvariousfieldsoftheairlinebusiness,islookingforpossibilitiestoextenditsactivitiesintothefieldofsimulatoroperationandflightcrewtrainingandSchreiner,acompanyactiveinvariousfieldsofaviationtrainingamongwhichsimulatoroperationandflightcrewtraining,islookingforpossibilitiestofurtherexpanditsactivitiesbothcompaniesareinterestedinexploringthepossibilityofalongtermco-operationwiththeestablishmentofaflightcrewtrainingcenteronHainanIsland.Nowthereforeitisagreedbetweenpartiesasfollows:VALIDITYHNAandSchreinerintenttoenterintoalongtermrelationshipbymeansoftheestablishmentofaJointVenture(hereinafterJV),partiesagreetofinalizeaJVagreementtosuchextendnolaterthan6(six)monthaftersignatureofthisMemorandumofUnderstanding.ThisLetterofIntentshallremainvaliduntilconclusionofsuchJVagreement,howevernolongerthanoneyearaftersignature.PLANNINGIntheprocessofthematerializationofaforementionedJVagreementHNAandSAThaveidentifiedthefollowingmilestones:Page1of8(HNA)(Schreiner)…………..…………..MOU:JVHNA&SATDraftlastupdate:15June20011.Businessplan:HNAwillprovideSATwithallrequiredinformation.UponreceiptofsuchinformationSATwillprovideHNAawithdraftbusinessplanfortheestablishmentoftheJVwithintwoweeks.Thebusinessplanshallberealisticandverifiedthroughthoroughmarketinganalyses.PartieswillnotallowtheJVtohaveanyloses.2.Furtherinvestigation:HNAandSATaretoinvestigate,discussandagreeuponthefollowingsubjects,befortheJVwillbeestablished:Buildingdesignandlay-outCompositionofthe“simulatorfleet”LegalentityoftheJV,heightoftheregisteredcapitalandownershipofrequiredassets,i.e.buildingtrainingequipmentetc.ShareofrevenuesandexportofforeigncurrencyHourlyratestobepaidbyHainanAirlinesOrganizationandstaffingApplicabletaxregulationsandtheireffectontheSatorganizationPossibilitiesofgovernmentfundingandsubsidiesMarketingeffortPaymentguarantees3.JVagreement:OnthebasisontheconditionsagreeduponinthisMOUandthefeedbackreceivedfromHNAontheBusinessplanandtheoutcomeofaforementioneddiscussion,SATwilldraftanagreementfortheestablishmentofaJV.4.TrainingandServicesAgreement:TheJVandHainanAirlineswillconcludeaTrainingandServicesAgreementspecifyingthetermsandconditionsunderwhichHainanAirlineswillmakeuseoftheTrainingandServicesprovidedbytheJV.5.Consultancyagreement:SATwillprovidetheJVwithconsultancyservices,i.e.ex-patpersonnel,trainingoflocalpersonnel,assistanceinthedesignandbuildingofthetrainingcenter,assistanceinobtainingallrequiredregulatoryapprovals,etc.HNAandSATwillconcludeaagreementdefiningthetermsandconditionsunderwhichtheseserviceswillbeprovided.6.Leasecontract:HNA,SATandtheJVwillconcludeleasecontractsfortheleaseofallassetsacquiredonbehalfoftheJV.SAThaspreparedandwillmaintainamasterschedulefortheestablishmentoftheJV,asattachedinAnnexA.NAMEANDLOGOTheJVwillexercisealogoandnameagreeduponbybothparties.TothisextendHNAwillprovideSATwithaproposal.DIVISIONOFSHARESThebasisofthedi...