Offer to Purchase for Cash
All Outstanding Common Shares
(Including Common Shares Issuable Upon Exercise of Options)
of
HAWKER PACIFIC AEROSPACE
at
$3.25 Per Share
by
LHT ACQUISITION CORPORATION,
a wholly-owned subsidiary of
LHT TECHNIK AG
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME ON FRIDAY, APRIL 5, 2002,
UNLESS THE OFFER IS EXTENDED.
MARCH 11, 2002
To Our Clients:
Enclosed for your consideration are the offer to purchase, dated March 11,
2002 (the "Offer to Purchase"), and the related Letter of Transmittal (which,
as amended from time to time, together constitute the "Offer") in connection
with the Offer by LHT Acquisition Corporation, a Delaware corporation (the
"Purchaser") and a wholly-owned subsidiary of Lufthansa Technik AG, a
corporation organized under the laws of the Federal Republic of Germany
("Parent"), to purchase all issued and outstanding shares of common stock, no
par value, of Hawker Pacific Aerospace, a California corporation (the
"Company"), and common shares issuable upon the exercise of options to purchase
common shares (collectively, the "Shares") at a price of $3.25 per share, in
cash, without interest thereon, less any required withholding taxes, upon the
terms and subject to the conditions set forth in the Offer to Purchase. Holders
of options having exercise prices under the Company's stock option plan or
management stock option agreements of less than $3.25 per share (the "Option
Shares") will have the opportunity to exercise their options conditionally, so
that their exercise will only take effect if the Purchaser accepts their Option
Shares for payment. The Purchaser is offering to pay the holders of such
options $3.25 per share less the per share exercise price and any required
withholding taxes for each Option Share purchased in the Offer. Also enclosed
is the Company's Solicitation/Recommendation Statement on Schedule 14D-9.
Shareholders whose certificates evidencing common shares (the "Share
Certificates") are not immediately available or who cannot deliver their Share
Certificates and all other documents required by the Letter of Transmittal to
the U.S. Stock Transfer Corporation prior to the Expiration Date (as defined in
the Offer to Purchase unless the Offer is extended, as defined in Section 9 of
the Offer to Purchase) or who cannot complete the procedure for delivery by
book-entry transfer to the depositary's account at the Book-Entry Transfer
Facility (as defined in Section 10 of the Offer to Purchase) on a timely basis
and who wish to tender their common shares must do so pursuant to the
guaranteed delivery procedure described in Section 10 of the Offer to Purchase.
See Instruction 2 of the Letter of Transmittal. Delivery of documents to the
Book-Entry Transfer Facility in accordance with the Book-Entry Transfer
Facility's procedures does not constitute delivery to the depositary.
This material is being sent to you as the beneficial owner of common shares
held by us for your account but not registered in your name. We are the
registered holder of common shares held by us for your account. A tender of
such common shares can be made only by us as the registered holder and pursuant
to your instructions. The Letter of Transmittal is being furnished to you for
your information only and cannot be used by you to tender shares held by us for
your account.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the common shares held by us for your account upon the
terms and subject to the conditions set forth in the Offer to Purchase.
Your attention is directed to the following:
1. The offer price is $3.25 per share, in cash, without interest thereon,
less any applicable withholding taxes.
2. The board of directors of the Company (with one member not in
attendance), based in part upon the recommendation of a special
committee of independent directors of the board, has unanimously (with
the two Parent-designated directors in attendance abstaining) approved
the Offer, the Merger Agreement (as defined below) and the Merger (as
defined below), and has unanimously (with the two Parent-designated
directors in attendance abstaining) determined that the Offer, the
Merger Agreement (as defined below) and the Merger (as defined below)
are advisable and fair from a financial point of view to, and in the
best interests of, the unaffiliated shareholders of the Company and
recommends that the unaffiliated shareholders of the Company accept the
Offer and tender their Shares pursuant to the Offer.
3. The Offer and withdrawal rights expire at 12:00 midnight, New York City
Time, Friday, April 5, 2002, unless the Offer is extended.
4. The Offer is being made for all outstanding Shares.
5. The Offer is being made pursuant to the Agreement and Plan of Merger,
dated as of March 7, 2002 (the "Merger Agreement"), among the Purchaser,
Parent and the Company, pursuant to which, following the consummation of
the Offer and subject to the satisfaction or waiver of certain
conditions, the Purchaser intends to merge with and into the Company
under California law.
The purpose of the Offer is to acquire the entire equity interest in
the Company. The Offer is being made pursuant to the Merger Agreement.
The Merger Agreement provides, among other things, for the making of the
Offer by the Purchaser and further provides that, following the
consummation of the Offer, upon the terms and subject to the conditions
of the Merger Agreement and California General Corporation Law (the
"CGCL"), the Purchaser shall act to merge the Company and the Purchaser
in a "short-form" merger (the "Merger"). Upon consummation of the
Merger, the Company will continue as the surviving entity under the CGCL
(the "Surviving Company") and will be a privately held company,
wholly-owned by Parent. At the time the Merger becomes effective, each
then outstanding common share (other than common shares (a) owned by the
Parent or the Purchaser, which Shares, by virtue of the Merger, will be
cancelled and retired and will cease to exist with no payment being made
with respect thereto, and (b) held by holders who properly exercise
their appraisal rights in accordance with the CGCL) will, by virtue of
the Merger and without any action on the part of the holders of the
Shares, be cancelled and without any action on the part of the holder
thereof, be converted into the right to receive in cash an amount per
common share equal to the Offer Price, without interest, less any
required withholding tax upon the surrender of the certificate(s)
representing such common shares. See Sections 4 and 18 of the Offer to
Purchase. The consummation of the Merger is subject to the satisfaction
or waiver, where permissible, of certain conditions. See Section 19 of
the Offer to Purchase.
Under the CGCL, the Merger may not be accomplished for cash paid to
the Company's shareholders if the Purchaser owns directly or indirectly
more than 50% but less than 90% of the then outstanding Shares, unless
either all the shareholders consent or the Commissioner of Corporations
of the State of California approves the terms and conditions of the
Merger and the fairness thereof after a hearing. In addition, under the
CGCL, the Merger may not be accomplished without the delivery of a
fairness opinion to the Company. That opinion has been delivered by
Houlihan Lokey Howard & Zukin Financial Advisors, Inc., the financial
advisor to the special committee of the Company's Board of Directors.
6. The Offer is conditioned upon there being validly tendered and not
properly withdrawn prior to the expiration of the initial offering
period and any extensions thereof for the Offer that number of common
shares which, together with any common shares then beneficially owned by
the Purchaser or Parent, represents at least 90% of the total number of
outstanding common shares on a fully diluted basis on the date of
purchase. See Section 19 of the Offer to Purchase.
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Tendering shareholders whose common shares are registered in their own name
and who tender their common shares directly to the depositary will not be
obligated to pay brokerage fees or commissions on the purchase of common shares
by the Purchaser pursuant to the Offer. Tendering shareholders who hold common
shares through a broker or bank will need to check with such institution as to
whether they will be charged any service fee. Except as set forth in
Instruction 6 of the Letter of Transmittal, the Purchaser will pay stock
transfer taxes, stamp duty or other such taxes incident to the transfer to it
of validly tendered common shares.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal, and any supplements or amendments thereto, and is being made to
all holders of Shares. The Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Shares in any jurisdiction in which
the making of the Offer or the acceptance thereof would not be in compliance
with the securities laws, blue sky laws or any other laws of such jurisdiction.
Neither the Purchaser nor Parent is aware of any jurisdiction in which the
making of the Offer or the acceptance thereof would not be in compliance with
the laws of such jurisdiction.
If you wish to have us tender any or all of your common shares, please so
instruct us by completing, executing and returning to us the instruction form
contained in this letter. An envelope in which to return your instructions to
us is enclosed. If you authorize the tender of your common shares, all such
common shares will be tendered unless otherwise specified on the instruction
form contained in this letter. Your instructions should be forwarded to us in
ample time to permit us to submit a tender on your behalf prior to the
expiration of the Offer.
In all cases, payment for common shares accepted for payment pursuant to the
Offer will be made only after timely receipt by the depositary of (1)
certificates for, or a timely Book-Entry Confirmation (as defined in Section 10
of the Offer to Purchase) with respect to, such common shares, (2) a Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees, or, in the case of a book-entry
transfer effected pursuant to the procedures described in Section 10 of the
Offer to Purchase, an Agent's Message (as defined in Section 10 of the Offer to
Purchase), and (3) any other documents required by the Letter of Transmittal.
Accordingly, tendering shareholders may be paid at different times depending
upon when certificates for common shares or Book-Entry Confirmations with
respect to common shares are actually received by the depositary. The Purchaser
will not have any obligation to pay interest on the purchase price for tendered
common shares, whether or not the Purchaser exercises its right to extend the
Offer.
If holders of common shares wish to tender common shares, but it is
impracticable for them to forward their Share Certificates or other required
documents to the depositary prior to the Expiration Date or to comply with the
procedures for book-entry transfer on a timely basis, a tender may be effected
by following the guaranteed delivery procedures specified under Section 10 of
the Offer to Purchase.
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Instructions With Respect to the Offer to Purchase for Cash
All Outstanding Common Shares
(Including Common Shares Issuable Upon Exercise of Options)
of
HAWKER PACIFIC AEROSPACE
at
$3.25 Per Share
by
LHT ACQUISITION CORPORATION,
a wholly-owned subsidiary of
LUFTHANSA TECHNIK AG
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated March 11, 2002, and the related Letter of Transmittal
(which, as amended from time to time, together constitute the "Offer") in
connection with the Offer by LHT Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly-owned subsidiary of Lufthansa
Technik AG, a corporation organized under the laws of the Federal Republic of
Germany ("Parent"), to purchase all of issued and outstanding shares of common
stock, no par value, of Hawker Pacific Aerospace, a California corporation (the
"Company"), and common shares issuable upon the exercise of options to purchase
common shares, at a price equal to $3.25 per common share, in cash, without
interest thereon, less any required withholding taxes. Holders of options
having exercise prices under the Company's stock option plan or management
stock option agreements of less than $3.25 per share (the "Option Shares") will
have the opportunity to exercise their options conditionally, so that their
exercise will only take effect if the Purchaser accepts their Option Shares for
payment. The Purchaser is offering to pay the holders of such options $3.25 per
share less the per share exercise price and any required withholding taxes for
each Option Share purchased in the Offer.
This will instruct you to tender to the Purchaser the number of common
shares indicated below (or, if no number is indicated below, all common shares)
held by you for the account of the undersigned, upon the terms and subject to
the conditions set forth in the Offer to Purchase.
Number of common shares to be tendered:*__________________________
SIGN HERE:
Signature(s): __________________________________________________________________
Account
Number: ______________________________________________________________
Please type or print
name(s): _____________________________________________________
Please type or print address(es)
here: _______________________________________________
Area Code and Telephone
Number: ________________________________________________
Taxpayer Identification or Social Security
Number(s): _________________________________
Dated: __________________, 2002
Unless otherwise indicated, it will be assumed that all common shares held by
us for your account are to be tendered.
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