General Terms and Conditions

1. Scope of Performance
2. Customer's Working Equipment
3. Delivery Dates
4. Transport
5. Subcontracting
6. Warranty (Gewährleistungsrechte)
7. Payments
8. Retention of Title and Extended Right of Lien
9. Liability Conditions
10. Insurance
11. OEM Warranty Handling
12. General
13. Title to Exchanged Parts
14. Partial Invalidity
15. Exclusive Validity of these Terms and Conditions
16. Confidentiality

1. Scope of Performance

1.1 All and any offers and orders shall be governed solely by the following General Terms and Conditions of LTAA unless an individual written agreement signed by the duly authorized representatives of both parties is in place. Offers submitted by LTAA shall be without obligation. Customer should send a signed purchase order, with clear reference to the quotation number, to accept the offer. The Agreement is concluded once LTAA has submitted an order confirmation to Customer in writing (letter, fax or email).


1.2 Any additional performance which LTAA considers necessary during performance of the order may be executed without explicit consent and separately invoiced, including the cost of any consequently required overtime, if obtaining such consent would have led to interruption of the work and provided that the additional performance does not exceed 20% of the order value.


1.3 The work performed by LTAA shall be examined, inspected and accepted pursuant to the LTAA Maintenance Organization Exposition (MOE) which has been approved by the German Civil Aviation Authority.

1.4 Any entries in the engine/module technical log book of the maintenance object by LTAA do not constitute any indication with respect to the airworthiness of the engine/module as a whole. However, the signature does constitute a certificate of release to service with respect of the scope of the
maintenance service.


1.5 Unless the parties have agreed otherwise in writing, the prices specified in the LTAA price list as valid at the time of performance shall apply.


2. Customer's Working Equipment

2.1 The Customer shall supply LTAA with the Customer's working equipment and with any related documents (including without limitation all relevant instruction manuals and special documentation not at LTAA's disposal) and with all documents on the operation, maintenance and repair history of the
maintenance object necessary for completing the maintenance service.


2.2 If the Customer fails to supply LTAA with all documents as per Article 2.1 above or if such documents are incomprehensible or incomplete, LTAA is entitled to request that the Customer supply any such documents, and any relevant undocumented information, within a reasonable period of time.


2.3 For the purposes of this Article 2 "documents" include both:
paper documents and documents in all other format, including without limitation electronic formats.


2.4 If the Customer does not comply with the request according to Article 2.2 in due time, LTAA is entitled to terminate the Customer agreement immediately, effective as soon as it gives notice. In such circumstances, LTAA shall be entitled to payment for those parts of the maintenance service which it had already performed prior to giving such notice of termination.


2.5 Articles 2.1, 2.2 and 2.4 do not in any way limit LTAA's legal and contractual rights or claims.


3. Delivery Dates

3.1 In view of the complexity of the technical performance involved, any delivery periods and dates stipulated by LTAA shall be only approximate and without obligation, unless such periods and dates have been expressly specified by us in writing as binding. All and any dimensions, weights, illustrations and drawings and other documents provided by LTAA in connection with the offers shall be deemed approximate only, unless expressly stipulated as binding.

3.2 LTAA shall advise the Customer immediately of any substantial delays in delivery.

3.3 In the event the redelivery date has not been explicitly declared as binding, but such provisional and non-binding redelivery date has been exceeded, the Customer may request LTAA to perform the maintenance service within a fixed period. Provided such period is a reasonable time in all the circumstances.


4. Transport

4.1 Transport of ordered items to LTAA or to the plant where the work is to be performed shall be duties delivery unpaid (DDU, Incoterms 2000) at the risk of the Customer. Customer may request that LTAA supports Customer in arranging the redelivery-shipment of the maintenance object. Any shipments
made by LTAA shall be in the name and on behalf of Customer and shall be effected "free carrier" (FCA, Incoterms 2000) from the place of performance. The type of packaging, the choice of transport route and means of transport shall be at the discretion of LTAA, unless the parties have reached a written agreement to the contrary.


4.2 LTAA will notify Customer after the proper performance of the services or after termination of the contract and will request Customer to pick up the subject matter. If Customer fails to comply with that request within one week after having received that notice, the risk of storage shall pass to the Customer. Customer shall be charged for the storage costs at third parties
and storage costs at LTAA as from the 14th day following the date of notification of readiness for shipping; these charges shall be calculated as 1% of the invoice amount per month as standard damages, but a minimum of € 500.00 per month.


4.3 Liability for damage and/or loss shall be governed solely by Article 9 of these General Terms and Conditions.


5. Subcontracting

In order to find the most economical solution LTAA shall be entitled to subcontract maintenance in total or partially to any other EASA/FAA-approved maintenance facility. LTAA shall also be entitled to subcontract maintenance to other maintenance facilities provided that LTAA's quality assurance system is extended to such facility. In case of subcontracting an entire work scope, LTAA will obtain approval from the Customer prior to the work being subcontracted.


6. Warranty (Gewährleistungsrechte)

6.1 LTAA warrants that the work shall be performed pursuant to generally accepted airline standards. In response to legitimate notification of a defect during or after acceptance of the ordered item, the Customer shall be entitled to demand rectification. Respective demand shall be immediately and in writing.
In that case, the Customer's rights shall be restricted solely to LTAA's obligation to eliminate the defect on the worked parts free of charge after recognition of the complaint or to have the defect eliminated by a third party at no cost to the Customer. All repairs or rectification of defects shall be performed at Alzey/
Tulsa works unless the parties have reached a written agreement to the contrary. The warranty period on any such repaired or replaced item will be the unexpired portion of warranty on the initially repaired item. Should LTAA's attempts to rectify the defect fail on three successive occasions, the Customer shall be entitled to reduce the invoice amount in accordance with the proportion of the failed rectification.


6.2 LTAA shall accept no legal liability in any of the following cases:
6.2.1 LTAA does not warrant any defect in material or services provided by supplier or subcontractor. For such material or services not covered by this warranty any assignable rights to warranty granted to LTAA by its suppliers or subcontractors shall be assigned to the Customer. LTAA shall support the Customer in pursuing such warranty claim.


6.2.2 for defective parts on which any change, overhaul, or repair has been carried out in the meantime by other parties outside LTAA unless the Customer can demonstrate that the defect has been caused by LTAA;


6.2.3 for repairs provisionally carried out at the Customer's request unless the Customer can demonstrate that the defect is attributable to any defective product or service from LTAA;


6.2.4 for work in relation to which the warranty claim has not been raised within 9 months or 1,000 operating hours since final inspection and acceptance, whichever occurs first.


6.2.5 for work in relation to which the warranty claim has not been raised promptly upon discovery of the damage or defect and in no case later than two weeks thereafter in the form of a notification, and within four weeks after the damage occurred or defect was discovered in the form of a detailed written report (exclusion period);


6.2.6 for damaged parts that are not returned to LTAA within four weeks of notification (exclusion period);


6.2.7 for any circumstances whatever that lie outside the reasonable range of influence of LTAA (e.g. but not limited to FOD) or if the subject matter was damaged by the elements or similar external influence;


6.2.8 for parts or material that the Customer has stored, handled, or operated in any other way than in accordance with the manufacturer's recommendations.


6.3 The warranty set forth in this Article 6 shall be the exclusive and sole remedy for the Customer in case of any defect in workmanship or non-compliance with the LTAA quality management system. Article 9 and 10 shall remain unaffected.


6.4 Articles 6.2.4, 6.2.5 and 6.2.6 shall not apply if LTAA has concealed the defect maliciously or has given a written durability guarantee or warranted properties.

6.5 Article 6.3 shall not affect any other limitations of LTAA's liability, or restrictions of the Customer's rights and claims against LTAA in these Standard Terms and Conditions and/or under applicable law.


7. Payments

7.1 Customer will pay to LTAA fifty percent (50 %) of the price mentioned in the cost estimate before delivery and fifty percent (50 %) before the redelivery date.


7.2 A final invoice for Services shall be issued as soon as practicable, following Redelivery of Customer´s Equipment. The final invoice will reflect the total charges the Customer owes or any credits owed to Customer and will reflect any additional charges or credits to the cost estimate incurred. The final invoice will be reconciled with the cost estimate.


7.3 All costs of money transfer, especially fees charged by a bank, shall be paid by Customer. In the event that payment of any amount due has not been received by LTAA on the due date of the respective invoice, a late payment charge of one percent (1%) of the unpaid amount per month shall apply. Furthermore LTAA is entitled to charge Customer € 25, 00 for each reminder of payment for past-due invoices in addition to any other compensation for damage.


7.4 All prices are exclusive of any value added tax or similar tax on value or turnover payable in respect thereof, which tax, if any, will be payable by Customer in addition thereto and at the same time. Subject to this Article 7.4, all payments made by Customer under this agreement shall be made gross
without any tax deductions or withholdings of a similar nature.

7.5 Any complaints with regard to invoices must be filed in writing and submitted no later than within 30 days of receipt of invoice (preclusive period).


7.6 Unless the parties have agreed on a provision to the contrary, LTAA shall be entitled to demand security at any time in the form of an irrevocable documentary letter of credit for repair work which has already been performed and/or is to be performed after the order. If LTAA fails to receive the due and proper letter of credit within 10 days of issuing such a demand, LTAA shall be entitled to withdraw from the contract, to charge the Customer for all and any performance rendered up to that date and to demand compensation.


7.7 Customer shall make payment in the contractually agreed currency. Any payment made in any other than the contractually agreed currency shall be exchanged at the exchange rate on the date the payment is valued to LTAA´s
account. Customer remains liable for any shortfall to the amount owed resulting from such exchange.


7.8 The Customer shall not be entitled to offset against his own claims or to exercise a retaining lien unless his counterclaims are undisputed or have been declared final by a court of law.


7.9 In case payment has not been allocated by Customer to a specific Service, LTAA is entitled to balance the respective amount against any other outstanding amount owed by Customer to LTAA.


7.10 In the event that Customer is a member of the IATA, Customer hereby irrevocably authorizes LTAA to collect any amounts due under this Agreement through LTAA´s ultimate parent company Deutsche Lufthansa AG via IATA Clearing House.


8. Retention of Title and Extended Right of Lien

8.1 LTAA shall retain title to all equipment, accessories and spare parts supplied by LTAA until all invoices arising from the business relationship have been paid in full. The parties agree that even as a result of installation, the spare parts owned by LTAA shall not become integral parts of the aircraft or engine. At the request of Customer LTAA shall assign ownership rights to Customer also before that time if and as far as the value of the securities which LTAA will hold thereafter exceeds the total claim against Customer by more than 20 percent (20%).

8.2 LTAA shall have by virtue of its Services rendered a contractual right of retention and a contractual lien over the subject matter in its custody as well as the right to repossess any property of LTAA in Customer's possession. These rights as well as a set-off right may also be claimed for services rendered or material supplied previously. LTAA also has the right to immediately stop current services until payments due have been remitted.

8.3 The right of retention and the lien as well as a set-off-right may also be applied on account of claims from previously performed orders and/or on account of claims from business relationship with Deutsche Lufthansa AG and/or any of its affiliates.


9. Liability Conditions

9.1 Each party will be liable towards the other party for damage to or loss of property and for the injury to or death of any person caused by the gross negligence or the wilful misconduct of its directors, officers, employees or agents in connection with or as a result of the services provided hereunder.


9.2 LTAA's liability for damages in case of minor negligence (so-called "leichte Fahrlässigkeit") of LTAA, its statutory representatives, officers, employees and agents shall be excluded, provided the liability does not concern any constitutional contractual obligations (so called "Kardinalspflichten"), damages arising from injury to life, limb or health and as far as there are no claims under the Product Liability Act.


9.3 Customer will indemnify and hold harmless LTAA, its statutory representatives, officers, employees, agents and subcontractors from and against all claims of third parties related to damages, loss, injury or death unless such damage, loss, injury or death is caused by the gross negligence or the wilful misconduct of LTAA, its directors, officers, employees, agents or subcontractors.


9.4 The liability and indemnification include all necessary costs, expenses and fees incident thereto. To the extent LTAA is liable in accordance with Article 9.1, LTAA's liability shall be limited as follows: Except in case of damages arising from injury to life, limb or health, from violation of the Product Liability Act or wilful misconduct, under no circumstances the liability shall include any indirect, incidential or consequential damages, such as, but not limited to, loss of profit or loss of revenue. Furthermore, in these enumerated cases, LTAA shall not be liable for non-foreseeable damages which are not typical for Maintenance Services of the kind constituting the Maintenance Service under the relevant Customer Agreement.

9.5 The Parties agree that the liability and indemnification set forth in this Article 9 is exclusive and that each party explicitly waives any other rights to claim damages or indemnification it may have at law or otherwise.


10. Insurance

10.1 During the term and for a minimum period of four (4) years after the termination or expiration of this agreement Customer will effect and maintain and will provide LTAA with a certificate of insurance evidencing the following coverages:

10.1.1 Hull All Risks Insurance including war risks;

10.1.2 All Risks Property Insurance including war risks covering components whilst not installed on the aircraft;

10.1.3 Aviation General Legal Liability Insurance, including without limitation third, products, war, contractual and passenger risks in amount of not less than USD 750,000,000 (seven hundred and fifty million dollars) or in accordance with
Article 7 regulation (EC) Nr. 785/2004.


10.2 The insurances named in Article 10.1.1 and Article 10.1.2 and any other insurances of Customer by which Customer insures its property will contain a waiver of subrogation in favour of LTAA, its directors, officers, employees, agents and subcontractors. In case material is leased or loaned to Customer by LTAA Customer will additionally provide LTAA with a certificate of insurance with regard to the insurances named in Article 10.1.1 and Article 10.1.2 stating that LTAA will be the sole loss payee in case of damage or loss of the loaned or leased items whether or not such damage or loss is caused by the negligence of Customer.


10.3 LTAA, its directors, officers, employees, agents and subcontractors will be named as additional insureds with regard to the insurance named in Article10.1.3 above and such insurance will be primary and non-contributory to any insurance carried by LTAA and will contain a severability of interest clause.


10.4 All of the insurances will provide in favour of LTAA (i) that the outlined coverage is not invalidated by any act or omission or breach or violation by Customer of any of its obligations contained in any policy and (ii) a period of thirty (30) days (seven days for war risks) written notice of cancellation or
material change.

10.5 LTAA reserves the right to retain the performance of the services ordered until Customer has delivered proof of the before mentioned insurances.


10.6 In case any of the insurances are not provided or are revoked or canceled at any time for any reason, LTAA will have the right to terminate this agreement by giving the Customer a three (3) days written notice.


11. OEM Warranty Handling

11.1 All warranty claims of Customer against a manufacturer of parts will be assigned to LTAA.


11.2 For all shop and on-wing events performed by LTAA, possible warranties from the respective manufacturer or vendor will be claimed on behalf of Customer and expected warranties will be deducted from the invoice. In case the warranty claims assigned from Customer to LTAA are rejected by the OEM, Customer shall pay the related repair and/or parts cost.


12. General

12.1 The parties agree that all contractual and non-contractual disputes shall be settled before the courts of law which have sole national and international jurisdiction at Frankfurt/Main, Germany. In individual cases, however, LTAA shall be entitled to file an action at the purchaser's domicile or before other courts of law which have jurisdiction owing to domestic or foreign law.


12.2 Place of performance for this agreement shall be the plant of LTAA or the place at which performance is rendered.


12.3 This agreement shall be governed by and interpreted in accordance with the laws of the Federal Republic of Germany excluding Germany's conflict of laws rules; the Convention on the International Sale of Goods (CISG) shall not apply.


12.4 The Customer agrees that LTAA may assign its rights and obligations under this agreement in total or in part to a company directly or indirectly controlled by Deutsche Lufthansa AG. The Customer shall be informed about such assignment duly in advance. The assignee shall perform the Services under this agreement in the quality and standards and in accordance with the terms and conditions laid down in this agreement. Any other assignment of rights or obligations arising from this agreement shall require the prior written
approval of the other party.


13. Title to Exchanged Parts

LTAA shall become owner of parts which have been replaced by other parts in the course of performance.


14. Partial Invalidity

The parties agree that in the event that any of the foregoing provisions should prove null or void, the remaining provisions shall remain fully in force.


15. Exclusive Validity of these Terms and Conditions

These General Terms and Conditions are applicable to all purchase orders placed by the Customer unless an individual written agreement signed by the duly authorized representatives of both parties is in place. In case of any inconsistency or conflict between the terms of a purchase order and the provisions of these General Terms and Conditions, such deviating provision will prevail only if agreed between the parties in writing. These General Terms and Conditions in connection with the purchase order is the entire understanding between the parties. All and any addenda, amendments, changes and/or subsidiary agreements must be in writing in order to be valid. Any conflicting General Terms and Conditions of the Customer shall not be applicable.


16. Confidentiality

16.1 The parties will treat any offer and respective purchase order itself as well as individual provisions contained therein as strictly confidential.


16.2 The disclosure of any documents, data and other information in connection with this agreement will not be construed as a grant or transfer of any rights, in particular but not limited to intellectual and industrial property rights.

Current as of: October 2011