Document:

EX-10.1

 Exhibit 10.1 

CONFIDENTIAL 
 VISTRA OPERATIONS
COMPANY LLC 
 $1,000,000,000 

5.500% Notes due 2026 
 Purchase
Agreement 
 August 7, 2018 
 Citigroup Global
Markets Inc. 
 As Representative of the Initial Purchasers 

c/o Citigroup Global Markets Inc. 
 388 Greenwich Street 

New York, New York 10013 
 Ladies and Gentlemen: 

Vistra Operations Company LLC, a limited liability company organized under the laws of the State of Delaware (the “Company”) and
wholly-owned indirect subsidiary of Vistra Energy Corp. (the “Parent”), proposes to issue and sell to the several parties named in Schedule I hereto (the “Initial Purchasers”), for whom you (the “Representative”)
are acting as representative, $1,000,000,000 principal amount of its 5.500% Senior Notes due 2026 (the “Securities”). The Securities are to be issued under an indenture (the “Indenture”), to be dated as of the Closing Date (as
defined below), between the Company and Wilmington Trust, National Association, as trustee (the “Trustee”). The Securities will be fully and unconditionally guaranteed (the “Guarantees”) by certain of the Company’s current
and future subsidiaries, including (i) its current and future wholly owned domestic subsidiaries and (ii) Vistra Preferred Inc. and its wholly-owned domestic subsidiaries (collectively, the “Guarantors”) that, in each case, from
time to time are guarantors under the Credit Agreement, dated October 3, 2016, various lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as successor administrative agent and successor collateral agent (as amended, the
“Credit Agreement”). The use of the neuter in this purchase agreement (this “Agreement”) shall include the feminine and masculine wherever appropriate. 

The sale of the Securities to the Initial Purchasers will be made without registration of the Securities under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder (the “Securities Act”) in reliance upon exemptions from the registration requirements of the Securities Act. 

In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum, dated August 7, 2018 (as amended or
supplemented at the date thereof, including any and all exhibits thereto and any information incorporated by reference therein, the “Preliminary Memorandum”), and a final offering memorandum, dated August 7,

 
2018 (as amended or supplemented at the Execution Time, including any and all exhibits thereto and any information incorporated by reference therein, the “Final Memorandum”). Each of
the Preliminary Memorandum and the Final Memorandum sets forth certain information concerning the Company and the Securities. The Company hereby confirms that it has authorized the use of the Disclosure Package, the Preliminary Memorandum and the
Final Memorandum, and any amendment or supplement thereto, in connection with the offer and sale of the Securities by the Initial Purchasers. Unless stated to the contrary, any references herein to the terms “amend”, “amendment”
or “supplement” with respect to the Disclosure Package, the Preliminary Memorandum and the Final Memorandum shall be deemed to refer to and include any information filed under the Exchange Act (as defined below) subsequent to the Execution
Time that is incorporated by reference therein. 
 As used in this Agreement, the “Disclosure Package” shall mean (i) the
Preliminary Memorandum, as amended or supplemented at the date and time that this Agreement is executed and delivered by the parties hereto (the “Execution Time”), (ii) the final term sheet prepared pursuant to Section 5(b) hereto and
in the form attached as Schedule II hereto and (iii) any writings in addition to the Preliminary Memorandum that the parties expressly agree in writing to treat as part of the Disclosure Package (“Issuer Written Information”). 

The net proceeds from the offering of the Securities will be used, together with cash on hand and the proceeds from the Company’s
accounts receivable securitization facility, to fund the purchase of up to an aggregate $1,700,000,000 principal amount of the Parent’s 7.375% Senior Notes due 2022, its 7.625% Senior Notes due 2024, its 8.034% Senior Notes due 2024, its 8.000%
Senior Notes due 2025 and its 8.125% Senior Notes due 2026 pursuant to a tender offer that is expected to close on or around the Closing Date and for general corporate purposes. 

1. Representations and Warranties. Each of the Company and each of the Guarantors, jointly and severally, represents and warrants to,
and agrees with, each Initial Purchaser as set forth below in this Section 1. 
 (a) The Preliminary Memorandum, at the date thereof,
did not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. At the Execution Time and on the
Closing Date, the Final Memorandum did not and will not (and any amendment or supplement thereto, at the date thereof and at the Closing Date will not) contain any untrue statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representation or warranty as to the information contained in or omitted from the
Preliminary Memorandum or the Final Memorandum, or any amendment or supplement thereto, in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of the Initial Purchasers through the Representative
specifically for inclusion therein, it being understood and agreed that the only such information furnished by or on behalf of any Initial Purchaser consists of the information described as such in Section 8(b) hereof. 

  
 2 

 (b) As of the Execution Time, neither (i) (1) the Disclosure Package and (2) each
electronic road show, when taken together as a whole with the Disclosure Package, nor (ii) any other General Solicitation (as defined below) by the Company, its Affiliates, or any person acting on its or their behalf, contains any untrue
statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in
or omissions from the Disclosure Package based upon and in conformity with written information furnished to the Company by any Initial Purchaser through the Representative specifically for use therein, it being understood and agreed that the only
such information furnished by or on behalf of any Initial Purchaser consists of the information described as such in Section 8(b) hereof. The term “Affiliates,” means affiliates, as such term is defined in Rule 501(b) of Regulation D
under the Securities Act (“Regulation D”), except that in reference to the Company, it excludes any person or entity that is an affiliate (as defined in Rule 501(b)) primarily or exclusively as a result of his, her or its ownership of
capital stock of the Parent). 
 (c) None of the Company, its Affiliates, or any person acting on its or their behalf has, directly or
indirectly, made offers or sales of any security, or solicited offers to buy, any security under circumstances that would require the registration of the Securities under the Securities Act. 

(d) None of the Company, its Affiliates, or any person acting on its or their behalf has: (i) engaged in any form of general solicitation
or general advertising (within the meaning of Regulation D) (each, a “General Solicitation”) in connection with any offer or sale of the Securities, other than any General Solicitation in respect of which the Representative has given
its prior written consent; provided that the prior written consent of the Representative shall be deemed to have been given in respect of the General Solicitation included in Schedule III hereto or (ii) engaged in any directed selling
efforts (within the meaning of Regulation S under the Securities Act (“Regulation S”)) with respect to the Securities; and each of the Company, its Affiliates and each person acting on its or their behalf has complied with the
offering restrictions requirement of Regulation S. 
 (e) The Securities satisfy the eligibility requirements of Rule 144A(d)(3) under
the Securities Act. 
 (f) The Parent is subject to and in full compliance with the reporting requirements of Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”). 

(g) No registration under the Securities Act of the Securities, and no qualification of the Indenture under the Trust Indenture Act of 1939, as
amended, is required for the offer and sale of the Securities to or by the Initial Purchasers in the manner contemplated herein, in the Disclosure Package and in the Final Memorandum. 

  
 3 

 (h) The Company is not, and after giving effect to the offering and sale of the Securities
and the application of the proceeds thereof as described in the Disclosure Package and the Final Memorandum will not be, an “investment company” as defined in the Investment Company Act of 1940, as amended, and the rules and regulations
promulgated thereunder. 
 (i) Neither the Company nor any of the Guarantors (or any other person acting on its or their behalf) has paid or
agreed to pay to any person any compensation for soliciting another to purchase any securities of the Company (except as contemplated in this Agreement). 

(j) Neither the Company nor any of the Guarantors (or any other person acting on its or their behalf) has taken, directly or indirectly, any
action designed to or that has constituted or that might reasonably be expected to cause or result, under the Exchange Act or otherwise, in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of
the Securities. 
 (k) Each of the Company and each Guarantor has been duly incorporated or formed, as applicable, and is validly existing as
a corporation or limited liability company in good standing under the laws of the jurisdiction in which it is incorporated, chartered, organized or formed with full corporate or limited liability company, as applicable, power and authority
necessary to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Disclosure Package and the Final Memorandum, and is duly qualified to do business as a foreign corporation or limited liability
company, as applicable, and is in good standing under the laws of each jurisdiction that requires such qualification. 
 (l) The Company has
the authorized capitalization set forth in the Disclosure Package and the Final Memorandum. 
 (m) All the outstanding shares of capital
stock or ownership interests of the Company and each of its subsidiaries have been duly authorized and validly issued and are fully paid and nonassessable, and, except (i) as otherwise set forth in the Disclosure Package and the Final
Memorandum and (ii) for Vistra Preferred Inc. and its subsidiaries, all outstanding shares of capital stock or ownership interests of the subsidiaries are owned by the Company either directly or through wholly owned subsidiaries free and clear
of any security interest, claim, lien or encumbrance. 
 (n) The statements in the Preliminary Memorandum and the Final Memorandum under the
headings “Certain U.S. Federal Income Tax Considerations”, “Certain ERISA Considerations”, “Description of the Notes” and “Description of Other Indebtedness” fairly summarize the matters therein described.

 (o) This Agreement has been duly authorized, executed and delivered by each of the Company and each Guarantor; the Indenture has been duly
authorized by each of the Company and each Guarantor and, assuming due authorization, execution and delivery thereof by the Trustee, when executed and delivered by each of the Company and each Guarantor, will constitute a legal, valid, binding
instrument enforceable against the Company and each 

  
 4 

 
Guarantor in accordance with its terms (subject, as to the enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights
generally from time to time in effect and to general principles of equity); and the Securities have been duly authorized, and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the
Initial Purchasers, will have been duly executed and delivered by the Company and will constitute the legal, valid and binding obligations of the Company entitled to the benefits of the Indenture (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally from time to time in effect and to general principles of equity). 

(p) The Guarantees have been duly authorized, and, when the Securities have been executed and delivered by the Company in accordance with the
provisions of the Indenture, will constitute the legal, valid and binding obligations of the Guarantors entitled to the benefits of the Indenture (subject, as to the enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors’ rights generally from time to time in effect and to general principles of equity). 
 (q)
No consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with the transactions contemplated herein or in the Indenture, except such as may be required under the blue sky laws of
any jurisdiction in which the Securities are offered and sold. 
 (r) None of the execution and delivery of this Agreement or the Indenture,
the issuance and sale of the Securities and the Guarantees, or the consummation of any other of the transactions herein or therein contemplated, or the fulfillment of the terms hereof or thereof will conflict with, result in a breach or violation
of, or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, (i) the charter or by-laws or comparable constituting documents of
the Company or any of its subsidiaries; (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Company or any of
its subsidiaries is a party or bound or to which its or their property is subject; or (iii) any statute, law, rule, regulation, judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or any of its subsidiaries or any of its or their properties, which conflict, breach, violation or imposition would, in the case of clauses (ii) and (iii) above, either individually or in the
aggregate with all other conflicts, breaches, violations and impositions referred to in this paragraph (r) (if any), have (x) a Material Adverse Effect (as defined below) or (y) a material adverse effect upon the transactions contemplated
herein. 
 (s) The consolidated historical financial statements and schedules of the Parent and Dynegy Inc. (“Dynegy”) and their
consolidated subsidiaries included or incorporated by reference in the Disclosure Package and the Final Memorandum present fairly the financial condition, results of operations and cash flows of the Parent and Dynegy, as applicable, as of the
dates and for the periods indicated, comply as to form with the applicable accounting 

  
 5 

 
requirements of Regulation S-X (as defined below) and have been prepared in conformity with generally accepted accounting principles in the United
States applied on a consistent basis throughout the periods involved (except as otherwise noted therein); the selected financial data set forth under the caption “Summary Historical Consolidated Financial Information” in the
Preliminary Memorandum and the Final Memorandum fairly present, on the basis stated in the Preliminary Memorandum and the Final Memorandum, the information included or incorporated by reference therein; the pro forma financial statements
included or incorporated by reference in the Disclosure Package and the Final Memorandum include assumptions that provide a reasonable basis for presenting the significant effects directly attributable to the transactions and events described
therein, the related pro forma adjustments give appropriate effect to those assumptions, the pro forma adjustments reflect the proper application of those adjustments to the historical financial statement amounts in the pro forma financial
statements included or incorporated by reference in the Disclosure Package and the Final Memorandum; the pro forma financial statements included or incorporated by reference in the Disclosure Package and the Final Memorandum comply as
to form with the applicable accounting requirements of Regulation S-X; and the pro forma adjustments have been properly applied to the historical amounts in the compilation of those statements. 

(t) No action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or
any of its subsidiaries or its or their property is pending or, to the best knowledge of the Company, threatened that (i) could reasonably be expected to have a material adverse effect on the performance by the Company or any of the Guarantors
of this Agreement, the Indenture or the consummation of any of the transactions contemplated hereby or thereby or (ii) could reasonably be expected to have a material adverse effect on the condition (financial or otherwise), prospects,
business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business (clauses (i) and (ii), a “Material Adverse Effect”), except as set forth in or
contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto). 
 (u) (i) Each of
the Company and its subsidiaries has good and marketable title to all the properties (real and personal) described in the Disclosure Package and the Final Memorandum as being owned by any of them, in each case, free and clear of any liens, equities,
claims and other defects (except as may exist under applicable law and as may be imposed by the Company’s credit facilities described in the Disclosure Package and the Final Memorandum or as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of such property by the Company and its subsidiaries); and (ii) all the property described in the Disclosure Package and the Final Memorandum as being held under lease by
the Company or its subsidiaries is held thereby under valid, subsisting and enforceable leases, except, in the case of clause (i) or (ii), as would not, individually or in the aggregate, have a Material Adverse Effect. 

  
 6 

 (v) Neither the Company nor any of its subsidiaries is in violation or default of
(i) any provision of its charter or bylaws or comparable constituting documents; (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant
or instrument to which it is a party or bound or to which its property is subject; or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to the Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or such subsidiary or any of its properties, as applicable, except, in the case of clauses (ii) and (iii), as would not, individually
or in the aggregate, have a Material Adverse Effect. 
 (w) Deloitte & Touche LLP, which has certified certain financial statements
of the Parent and its consolidated subsidiaries, and Ernst & Young LLP, which has certified certain financial statements of Dynegy and its consolidated subsidiaries, and which have each delivered its report with respect to the applicable
audited consolidated financial statements and schedules included or incorporated by reference in the Disclosure Package and the Final Memorandum, are independent public accountants with respect to the Parent and to Dynegy, respectively, in
accordance with local accounting rules and within the meaning of the Securities Act. 
 (x) There are no stamp or other issuance or
transfer taxes or duties or other similar fees or charges required to be paid in connection with the execution and delivery of this Agreement or the issuance or sale of the Securities. 

(y) The Company and each of its subsidiaries has filed all applicable tax returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not have a Material Adverse Effect and except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto))
and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently being
contested in good faith or as would not have a Material Adverse Effect and except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto). 

(z) No labor problem or dispute with the employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company, is
threatened or imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or its subsidiaries’ principal suppliers, contractors or customers, except as would not have a Material Adverse
Effect and except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto). 

(aa) Except pursuant to applicable law or the Credit Agreement, no subsidiary of the Company is currently prohibited, directly or indirectly,
from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such
subsidiary’s property or assets to the Company or any other subsidiary of the Company, except as described in or contemplated in the Disclosure Package or the Final Memorandum (in each case, exclusive of any amendment or supplement thereto).

  
 7 

 (bb) The Company and each of its subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; all policies of insurance and fidelity or surety bonds insuring the Company or any of its
subsidiaries or their respective businesses, assets, employees, officers and directors are in full force and effect; the Company and its subsidiaries are in compliance in all material respects with the terms of such policies and instruments; there
are no claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; neither the Company nor any of its subsidiaries has
been refused any insurance coverage sought or applied for; and neither the Company nor any of its subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any
amendment or supplement thereto). 
 (cc) The Company and its subsidiaries possess all licenses, certificates, permits and other
authorizations issued by all applicable authorities necessary to conduct their respective businesses, and neither the Company nor any of its subsidiaries has received any written notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect, except as set forth in or contemplated in the Disclosure Package and
the Final Memorandum (exclusive of any amendment or supplement thereto). 
 (dd) The Parent has established and maintains a system of
internal control over financial reporting (to the extent required by and as such term is defined in Rule 13a-15(f) under the Exchange Act) that complies with the requirements of the Exchange Act applicable to
the Parent and has been designed by the Parent’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles as applied in the United States; the Parent’s internal control over financial reporting is effective; and the Parent is not aware of any
material weaknesses in its internal control over financial reporting. 
 (ee) The Parent maintains disclosure controls and procedures (as
such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material
information relating to the Parent and its subsidiaries is made known to the Parent’s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective. 

  
 8 

 (ff) The Company and its subsidiaries (i) are in compliance with any and all applicable
laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”); (ii) have received and are in compliance with all
permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) have not received written notice of any actual or potential liability under any Environmental Law,
except with respect to (i) through (iii) above where such non-compliance with Environmental Laws, failure to receive or comply with required permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a Material Adverse Effect, except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto). Except as would not, individually or in
the aggregate, have a Material Adverse Effect, except as set forth in the Disclosure Package and the Final Memorandum, neither the Company nor any of its subsidiaries has been named as a “potentially responsible party” under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended. 
 (gg) In the ordinary course of its business,
the Company periodically reviews the effect of Environmental Laws on the business, operations and properties of the Company and its subsidiaries, in the course of which it identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws, or any environmental permit, license or approval, any related constraints
on operating activities and any potential environmental liabilities to third parties); on the basis of such review, the Company has reasonably concluded that such associated costs and liabilities would not, singly or in the aggregate, have a
Material Adverse Effect, except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto). 

(hh) The minimum funding standard under Section 302 of the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (“ERISA”), has been satisfied by each “pension plan” (as defined in Section 3(2) of ERISA) that has been established or maintained by the Company and/or one or more of its
subsidiaries, and the trust forming part of each such plan which is intended to be qualified under Section 401 of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder is so qualified; each of the Company and
its subsidiaries has fulfilled its obligations, if any, under Section 515 of ERISA; neither the Company nor any of its subsidiaries maintains or is required to contribute to a “welfare plan” (as defined in Section 3(1) of ERISA)
that provides retiree or other post-employment welfare benefits or insurance coverage (other than “continuation coverage” (as defined in Section 602 of ERISA)); each pension plan and welfare plan established or maintained by the
Company and/or one or more of its subsidiaries is in compliance in all material respects with the currently applicable provisions of ERISA; and neither the Company nor any of its subsidiaries has incurred or could reasonably be expected to incur any
withdrawal liability under Section 4201 of ERISA, any liability under Section 4062, 4063, or 4064 of ERISA, or any other liability under Title IV of ERISA. 

(ii) The subsidiaries listed on Annex A attached hereto are the only “significant subsidiaries” of the Company (as defined in Rule 1-02 of Regulation S-X under the Securities Act (“Regulation S-X”)). 

  
 9 

 (jj) The Company will not take, directly or indirectly, any action or omit to take any
action (such as issuing any press release relating to the Notes without an appropriate legend) that would result in the loss by the Initial Purchasers of the ability to rely on the stabilization safe harbor provided by (i) article 5 of the
Market Abuse Regulation (EU) No 596/2014 and Commission Delegated Regulation (EU) 2016/1052 or (ii) the UK Financial Conduct Authority under section 137Q of the Financial Services and Markets Act 2000. 

(kk) The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements and applicable money laundering statutes and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company, threatened. 
 (ll) Neither the Company nor any of its subsidiaries nor, to
the knowledge of the Company, any director, officer, agent, employee or Affiliate of the Company or any of its subsidiaries (i) is, or is controlled or 50% or more owned in the aggregate by or is acting on behalf of, one or more individuals or
entities that are currently the subject of any sanctions administered or enforced by the United States (including any administered or enforced by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of
State or the Bureau of Industry and Security of the U.S. Department of Commerce), the United Nations Security Council, the European Union, a member state of the European Union, the United Kingdom (including sanctions administered or enforced by Her
Majesty’s Treasury) or other relevant sanctions authority (collectively, “Sanctions” and such persons, “Sanctioned Persons” and each such person, a “Sanctioned Person”), (ii) is located, organized or resident in a
country or territory that is, or whose government is, the subject of Sanctions that broadly prohibit dealings with that country or territory (collectively, “Sanctioned Countries” and each, a “Sanctioned Country”) or
(iii) will, directly or indirectly, use the proceeds of this offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other individual or entity in any manner that would result in a
violation of any Sanctions by, or could result in the imposition of Sanctions against, any individual or entity (including any individual or entity participating in the offering, whether as underwriter, advisor, investor or otherwise). 

(mm) Neither the Company nor any of its subsidiaries has engaged in any dealings or transactions with or for the benefit of a Sanctioned
Person, or with or in a Sanctioned Country, in the three years preceding the date hereof, nor does the Company or any of its subsidiaries have any plans to engage in dealings or transactions with or for the benefit of a Sanctioned Person, or with or
in a Sanctioned Country.  
 (nn) There is and has been no failure on the part of the Parent or any of the Parent’s directors or
officers, in their respective capacities as such, to comply with any applicable provision of the Sarbanes-Oxley Act of 2002 and the applicable rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including
Section 402 relating to loans and Sections 302 and 906 relating to certifications. 

  
 10 

 (oo) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company,
any director, officer, agent, employee, Affiliate or other person acting on behalf of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that could result in a violation or a sanction for violation by
any such person or entity of the Foreign Corrupt Practices Act of 1977 or the U.K. Bribery Act 2010, each as may be amended, or similar applicable law of any other relevant jurisdiction, or the applicable rules or regulations thereunder; and the
Company and its subsidiaries have instituted and maintain policies and procedures to ensure compliance therewith. No part of the proceeds of the offering will be used, directly or indirectly, in violation of the Foreign Corrupt Practices Act of 1977
or the U.K. Bribery Act 2010, each as may be amended, or similar applicable law of any other relevant jurisdiction, or the applicable rules or regulations thereunder. 

(pp) Except as disclosed in the Preliminary Memorandum and the Final Memorandum, the Company (i) does not have any material lending or
other relationship with any Initial Purchaser or Affiliate of any Initial Purchaser and (ii) does not intend to use any of the proceeds from the sale of the Securities hereunder to repay any outstanding debt owed to any Affiliate of any Initial
Purchaser. 
 Any certificate signed by any officer of the Company and delivered to the Representative or counsel for the Initial Purchasers as required by
this Agreement or the Indenture in connection with the offering of the Securities contemplated hereby shall be deemed a representation and warranty by the Company, as to matters covered thereby, to each Initial Purchaser. 

2. Purchase and Sale. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees, severally and not jointly, to purchase from the Company, at a purchase price of 100.000% of the principal amount thereof, plus accrued interest, if any, from August
22, 2018 to the Closing Date, the principal amount of Securities set forth opposite such Initial Purchaser’s name in Schedule I hereto. 

3. Delivery and Payment. Delivery of and payment for the Securities shall be made at 10:00 A.M., New York City time, on August
22, 2018, or at such time on such later date not more than ten Business Days after the foregoing date as the Representative shall designate, which date and time may be postponed by agreement between the Representative and the Company or as provided
in Section 9 hereof (such date and time of delivery and payment for the Securities being herein called the “Closing Date”). As used herein, “Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday
or a day on which banking institutions or trust companies are authorized or obligated by law to close in The City of New York. Delivery of the Securities shall be made to the Representative for the respective accounts of the several Initial
Purchasers against payment by the several Initial Purchasers through the Representative of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to the
account specified by the Company. Delivery of the Securities shall be made through the facilities of The Depository Trust Company unless the Representative shall otherwise instruct. 

  
 11 

 4. Offering by Initial Purchasers. (a) Each Initial Purchaser acknowledges that
the Securities have not been and will not be registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons, except pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act. 
 (b) Solely in connection with the offering of the Securities, each
Initial Purchaser, severally and not jointly, represents and warrants to and agrees with the Company that: 
 (i) it has not
offered or sold, and will not offer or sell, any Securities within the United States or to, or for the account or benefit of, U.S. persons (x) as part of their distribution at any time or (y) otherwise until 40 days after the later of the
commencement of the offering and the date of the closing of the offering except: 
  

	 	(A)	 in the case of sales to those it reasonably believes to be “qualified institutional buyers” as
permitted by Rule 144A under the Securities Act; or 

  

	 	(B)	 in accordance with Rule 903 of Regulation S; 

(ii) neither it nor any person acting on its behalf has made or will make offers or sales of the Securities in the United
States by means of General Solicitation, other than any General Solicitation included in Schedule III hereto; 
 (iii) in
connection with each sale pursuant to Section 4(b)(i)(A), it has taken or will take reasonable steps to ensure that the purchaser of such Securities is aware that such sale may be made in reliance on Rule 144A; 

(iv) neither it, nor any of its Affiliates nor any person acting on its or their behalf has engaged or will engage in any
directed selling efforts (within the meaning of Regulation S) with respect to the Securities; 
 (v) it is an
“accredited investor” (as defined in Rule 501(a) of Regulation D); 
 (vi) it has complied and will comply with the
offering restrictions requirement of Regulation S; 
 (vii) at or prior to the confirmation of sale of Securities (other
than a sale of Securities pursuant to Section 4(b)(i)(A) of this Agreement), it shall have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases Securities from it during the
distribution compliance period (within the meaning of Regulation S) a confirmation or notice to substantially the following effect: 

  
 12 

 “The Securities covered hereby have not been registered under the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”) and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after the later of the commencement of the offering and the date of closing of the offering, except in either case in accordance with Regulation S or Rule 144A under the Securities Act.
Additional restrictions on the offer and sale of the Securities are described in the offering memorandum for the Securities. Terms used in this paragraph have the meanings given to them by Regulation S.”; 

(viii) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the “FSMA”)) received by it in connection with the issue or sale of any Securities, in
circumstances in which Section 21(1) of the FSMA does not apply to the Company; 
 (ix) it has complied and will comply
with all applicable provisions of the FSMA with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom; 

(x) it acknowledges that additional restrictions on the offer and sale of the Securities are described in the Disclosure
Package and the Final Memorandum; and 
 (xi) in relation to each Member State of the European Economic Area, it has not
offered, sold or otherwise made available and will not offer, sell or otherwise make available, any Securities to any retail investor in the European Economic Area. For the purposes of this provision the expression “retail investor” means
a person who is one (or more) of the following: 
  

	 	(A)	 a retail client as defined in point (11) of Article 4(1) of Directive 2014/5/EU (as amended, “MiFID
II”); or 

  

	 	(B)	 a customer within the meaning of Directive 2002/92/EC (as amended, the “Insurance Mediation
Directive”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or 

  

	 	(C)	 not a qualified investor as defined in Directive 2003/71/EC (as amended, the “Prospectus Directive”);
and the expression “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer and the notes to be offered so as to enable an investor to decide to purchase or subscribe for the
Notes. 

  
 13 

 5. Agreements. The Company and each of the Guarantors, jointly and severally, agree
with each Initial Purchaser that: 
 (a) The Company will furnish to each Initial Purchaser and to counsel for the Initial Purchasers,
without charge, during the period referred to in Section 5(c) below, as many copies of the materials contained in the Disclosure Package and the Final Memorandum and any amendments and supplements thereto as the Initial Purchasers may
reasonably request. 
 (b) The Company will prepare a final term sheet, containing solely a description of final terms of the Securities and
the offering thereof, in the form approved by you and attached as Schedule II hereto. 
 (c) The Company will not amend or supplement the
Disclosure Package or the Final Memorandum other than by the Parent filing documents under the Exchange Act that are incorporated by reference therein without the prior written consent of the Representative (such consent not to be unreasonably
withheld, conditioned or delayed); provided, however, that prior to the completion of the distribution of the Securities by the Initial Purchasers (as defined by the opinion of counsel (including internal counsel) to the Initial
Purchasers), the Company shall ensure that no document be filed under the Exchange Act that is incorporated by reference in the Disclosure Package or the Final Memorandum unless, prior to such proposed filing, the Company has provided the
Representative with a copy of such document for their review and the Representative has not reasonably objected to the filing of such document. The Company will promptly advise the Representative when any document filed under the Exchange Act that
is incorporated by reference in the Disclosure Package of the Final Memorandum shall have been filed with the Securities and Exchange Commission (the “Commission”). 

(d) If at any time prior to the completion of the sale of the Securities by the Initial Purchasers, any event occurs as a result of which the
Disclosure Package or the Final Memorandum, as then amended or supplemented, would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under
which they were made or the circumstances then prevailing, not misleading, or if it should be necessary to amend or supplement the Disclosure Package or the Final Memorandum to comply with applicable law, the Company will promptly (i) notify
the Representative of any such event; (ii) subject to the requirements of Section 5(c), prepare an amendment or supplement that will correct such statement or omission or effect such compliance; and (iii) supply any supplemented or
amended Disclosure Package or Final Memorandum to the several Initial Purchasers and counsel for the Initial Purchasers without charge in such quantities as they may reasonably request. 

  
 14 

 (e) Without the prior written consent of the Representative, the Company has not given and
will not give to any prospective purchaser of the Securities any written information concerning the offering of the Securities other than materials contained in the Disclosure Package, the Final Memorandum or any other offering materials prepared by
or with the prior written consent of the Representative. 
 (f) The Company will arrange, if necessary, for the qualification of the
Securities for sale by the Initial Purchasers under the laws of such jurisdictions as the Representative may designate (including certain provinces of Canada) and will maintain such qualifications in effect so long as required for the sale of the
Securities; provided that in no event shall the Company be obligated to (i) qualify to do business in any jurisdiction where it is not now so qualified, (ii) subject itself to taxation in any jurisdiction where it is not presently
so subject or (iii) take any action that would subject it to service of process in suits, other than those arising out of the offering or sale of the Securities, in any jurisdiction where it is not now so subject. The Company will promptly
advise the Representative of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. 

(g) The Company will not, and will not permit any of its Affiliates to, resell any Securities that have been acquired by any of them and that
constitute “restricted securities” under Rule 144 under the Securities Act. 
 (h) None of the Company, its Affiliates, or any
person acting on its or their behalf will, directly or indirectly, make offers or sales of any security, or solicit offers to buy any security, under circumstances that, as a result of the doctrine of “integration” referred to in Rule 502
under the Securities Act, would require the registration of the Securities under the Securities Act. 
 (i) None of the Company, its
Affiliates, or any person acting on its or their behalf will engage in any directed selling efforts (within the meaning of Regulation S) with respect to the Securities; and each of them will comply with the offering restrictions requirement of
Regulation S. 
 (j) None of the Company, its Affiliates, or any person acting on its or their behalf will engage in any General Solicitation
with respect to the offer or sale of the Securities, other than any General Solicitation in respect of which the Representative has given its prior written consent; provided that the prior written consent of the Representative shall be deemed
to have been given in respect of the General Solicitation included in Schedule III hereto. 
 (k) For so long as any of the Securities are
outstanding and are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Company, during any period in which it is not subject to and in compliance with Section 13 or 15(d) of the Exchange
Act, will provide to each holder of such restricted securities and to each prospective purchaser (as designated by such holder) of such restricted securities, upon the request of such holder or prospective purchaser, any information required to be
provided by Rule 144A(d)(4) under the Securities Act. This covenant is intended to be for the benefit of the holders, and the prospective purchasers designated by such holders, from time to time of such restricted securities. 

  
 15 

 (l) The Company will cooperate with the Representative and use its best efforts to permit
the Securities to be eligible for clearance and settlement through The Depository Trust Company. 
 (m) The Company will use the net proceeds
received from the sale of the Securities pursuant to this Agreement in the manner specified in the Disclosure Package and the Final Memorandum. 

(n) Each of the Securities will bear, to the extent applicable, the legend contained in “Notice to Investors” in the Preliminary
Memorandum and the Final Offering Memorandum for the time period and upon the other terms stated therein. 
 (o) The Company will not for a
period of 30 days following the Execution Time, without the prior written consent of Citigroup Global Markets Inc. (“Citigroup”) offer, sell, contract to sell, pledge, otherwise dispose of, or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company or any Affiliate of the Company or any person in privity with the
Company or any Affiliate of the Company), directly or indirectly, or announce the offering, of any debt securities issued or guaranteed by the Company (other than the Securities). 

(p) The Company will not take, directly or indirectly, any action designed to, or that has constituted or that might reasonably be expected to,
cause or result, under the Exchange Act or otherwise, in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities. 

(q) The Company will furnish to the Representative at any time when any Securities remain outstanding, copies of all materials required to be
delivered under the Indenture to holders of Securities, except to the extent such materials are filed by the Company with the Commission and are publicly available. 

(r) The Company shall ensure that the Parent complies with all applicable securities and other laws, rules and regulations, including, without
limitation, the Sarbanes-Oxley Act, and use its best efforts to cause the Parent’s directors and officers, in their respective capacities as such, to comply with such laws, rules and regulations, including, without limitation, the provisions of
the Sarbanes-Oxley Act. 
 (s) The Company and each of the Guarantors, jointly and severally, agree to pay the costs and expenses relating to
the following matters: (i) the preparation of the Indenture and the issuance of the Securities and the Guarantees and the fees of the Trustee; (ii) the preparation, printing or reproduction of the materials contained in the Disclosure
Package and the Final Memorandum and each amendment or supplement to either of them; (iii) the printing (or 

  
 16 

 
reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the materials contained in the Disclosure Package and the Final
Memorandum, and all amendments or supplements to either of them, as may, in each case, be reasonably requested for use in connection with the offering and sale of the Securities and the Guarantees; (iv) the preparation, printing,
authentication, issuance and delivery of the Securities; (v) any stamp or transfer taxes in connection with the original issuance and sale of the Securities; (vi) the printing (or reproduction) and delivery of this Agreement, any blue sky
memorandum and all other agreements or documents printed (or reproduced) and delivered in connection with the offering of the Securities and the Guarantees; (vii) any registration or qualification of the Securities and the Guarantees for offer
and sale under the securities or blue sky laws of the several states, the provinces of Canada and any other jurisdictions specified pursuant to Section 5(e) (including filing fees and the reasonable fees and expenses of counsel for the Initial
Purchasers relating to such registration and qualification); (viii) the transportation and other expenses incurred by or on behalf of Company representatives in connection with presentations to prospective purchasers of the Securities; (ix) the
fees and expenses of the Company’s accountants and the fees and expenses of counsel (including local and special counsel) for the Company; and (x) all other costs and expenses incident to the performance by the Company of its obligations
hereunder. 
 6. Conditions to the Obligations of the Initial Purchasers. The obligations of the Initial Purchasers to purchase the
Securities shall be subject to the accuracy of the representations and warranties of the Company and the Guarantors contained herein at the Execution Time and the Closing Date, to the accuracy of the statements of the Company and the Guarantors made
in any certificates delivered pursuant to the provisions hereof, to the performance by the Company and the Guarantors of their respective obligations hereunder and to the following additional conditions: 

(a) The Company shall have requested and caused (i) Sidley Austin LLP, counsel for the Company, to furnish to the Representative its
opinion and negative assurance letter, each dated the Closing Date and addressed to the Representative, substantially in the form of Exhibit A-1 hereto and (ii) Vinson & Elkins LLP, tax
counsel for the Company, to furnish to the Representative its opinion, dated as of the Closing Date and addressed to the Representative, substantially in the form of Exhibit A-2 hereto. 

(b) The Company shall have requested and caused the general counsel of the Company to furnish the Representative an opinion, dated the Closing
Date and addressed to the Representative, substantially in the form of Exhibit B hereto. 
 (c) The Company shall have requested and caused
local counsel for each applicable Guarantor to furnish the Representative their respective opinions, dated the Closing Date and addressed to the Representative, substantially in the form of Exhibit C-1 (for
subsidiaries incorporated or formed in Massachusetts and Pennsylvania), Exhibit C-2 (for subsidiaries incorporated or formed in Ohio) and Exhibit C-3 (for subsidiaries
incorporated or formed in Virginia) hereto. 

  
 17 

 (d) The Representative shall have received from Sullivan & Cromwell LLP, counsel
for the Initial Purchasers, such opinion or opinions, dated the Closing Date and addressed to the Representative, with respect to the issuance and sale of the Securities, the Indenture, the Disclosure Package, the Final Memorandum (as amended or
supplemented at the Closing Date) and other related matters as the Representative may reasonably require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.

 (e) The Company shall have furnished to the Representative a certificate of the Company, signed by (x) the chief executive officer of
the Company and (y) the principal financial or accounting officer of the Company, dated the Closing Date, to the effect that the signers of such certificate have carefully examined the Disclosure Package and the Final Memorandum and any
supplements or amendments thereto and this Agreement and that: 
 (i) the representations and warranties of the Company in
this Agreement are true and correct on and as of the Closing Date with the same effect as if made on the Closing Date, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date; and 
 (ii) since the date of the most recent financial statements included in the
Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto), there has been no material adverse change in the condition (financial or otherwise), prospects, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement
thereto). 
 (f) At the Execution Time and at the Closing Date, (i) the Company shall have requested and caused Deloitte &
Touche LLP and Ernst & Young LLP to furnish to the Representative customary comfort letters, dated respectively as of the Execution Time and as of the Closing Date, in form and substance reasonably satisfactory to the Representative and
confirming that they are independent accountants within the meaning of the Exchange Act and the applicable published rules and regulations thereunder and (ii) the Company shall have furnished to the Representative a certificate of its chief
financial officer, dated respectively as of the Execution Time and as of the Closing Date, in form and substance satisfactory to the Representative and providing “management comfort” with respect to certain financial information contained
in the Disclosure Package and the Final Memorandum. 
 (g) Subsequent to the Execution Time or, if earlier, the dates as of which information
is given in the Disclosure Package (exclusive of any amendment or supplement thereto) and the Final Memorandum (exclusive of any amendment or supplement thereto), there shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (f) of this Section 6; or (ii) any change, or any development involving a prospective 

  
 18 

 
change, in or affecting the condition (financial or otherwise), prospects, business or properties of the Company and its subsidiaries taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto), the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the sole judgment of the Representative, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated in the Disclosure Package and the Final Memorandum
(exclusive of any amendment or supplement thereto). 
 (h) The Securities shall be eligible for clearance and settlement through The
Depository Trust Company. 
 (i) Subsequent to the Execution Time, there shall not have been any decrease in the rating of any of the
Company’s or the Parent’s debt securities by any “nationally recognized statistical rating organization” (as defined for purposes of Rule 3(a)(62) under the Exchange Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating that does not indicate the direction of the possible change. 
 (j)
Prior to the Closing Date, the Company shall have furnished to the Representative such further information, certificates and documents as the Representative may reasonably request. 

If any of the conditions specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or if any of
the opinions and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Representative and counsel for the Initial Purchasers, this Agreement and all obligations of the Initial
Purchasers hereunder may be cancelled at, or at any time prior to, the Closing Date by the Representative. Notice of such cancellation shall be given to the Company in writing or by telephone or facsimile confirmed in writing. 

The documents required to be delivered by this Section 6 will be delivered at the office of counsel for the Initial Purchasers, at 1888
Century Park East, Suite 2100, Los Angeles, California 90067, on the Closing Date. 
 7. Reimbursement of Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the obligations of the Initial Purchasers set forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any agreement herein or comply with any provision hereof other than by reason of a default by any of the Initial Purchasers, the Company will reimburse the Initial Purchasers
severally through Citigroup on demand for all reasonable and documented expenses (including reasonable fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities. 

  
 19 

 8. Indemnification and Contribution. (a) The Company agrees to indemnify and
hold harmless each Initial Purchaser, the directors, officers, employees, Affiliates and agents of each Initial Purchaser and each person who controls any Initial Purchaser within the meaning of either the Securities Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other U.S. federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities or actions in respect thereof arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Memorandum, the Final Memorandum,
any Issuer Written Information, any General Solicitation, or any other written information used by or on behalf of the Company in connection with the offer or sale of the Securities, or in any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made in the Preliminary
Memorandum, the Final Memorandum, or in any amendment thereof or supplement thereto, in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Initial Purchaser through the Representative
specifically for inclusion therein. This indemnity agreement will be in addition to any liability that the Company may otherwise have. 
 (b)
Each Initial Purchaser severally, and not jointly, agrees to indemnify and hold harmless the Company, each of its directors and officers, and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act,
to the same extent as the foregoing indemnity to each Initial Purchaser, but only with reference to written information relating to such Initial Purchaser furnished to the Company by or on behalf of such Initial Purchaser through the Representative
specifically for inclusion in the Preliminary Memorandum or the Final Memorandum (or in any amendment or supplement thereto). This indemnity agreement will be in addition to any liability that any Initial Purchaser may otherwise have. The Company
acknowledges that (i) the statements set forth in the last paragraph of the cover page regarding delivery of the Securities and (ii) under the heading “Plan of Distribution”, the eighth and ninth paragraphs related
to covering and stabilizing transactions in the Preliminary Memorandum and the Final Memorandum constitute the only information furnished in writing by or on behalf of the Initial Purchasers for inclusion in the Preliminary Memorandum or the Final
Memorandum or in any amendment or supplement thereto. 
 (c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof; but
the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not 

  
 20 

 
otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel (including local counsel) of the
indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel, other than local counsel if not appointed by the indemnifying party, retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election to appoint counsel (including local counsel) to represent the indemnified party in an action, the indemnified party shall have the right to employ separate
counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded
upon the advice of counsel that there may be legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party; (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such
settlement, compromise or consent: (i) includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act, by or on behalf of any indemnified party. 
 (d) In the event that the indemnity provided in
paragraph (a) or (b) of this Section 8 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company and the Initial Purchasers severally agree to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending any loss, claim, damage, liability or action) (collectively “Losses”) to which the Company and one or more of the
Initial Purchasers may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and by the Initial Purchasers on the other from the offering of the Securities. If the allocation
provided by the immediately preceding sentence is unavailable for any reason, the Company and the Initial Purchasers severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Initial Purchasers on the other in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable 

  
 21 

 
considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received by it, and benefits received by the
Initial Purchasers shall be deemed to be equal to the total purchase discounts and commissions. Relative fault shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information provided by the Company on the one hand or the Initial Purchasers on the other, the intent of the parties and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the Initial Purchasers agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation that does not take
account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), in no event shall any Initial Purchaser be required to contribute any amount in excess of the amount by which the total purchase
discounts and commissions received by such Initial Purchaser with respect to the offering of the Securities exceeds the amount of any damages that such Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls an Initial Purchaser within the meaning of either the Securities Act or the Exchange Act and each director, officer, employee, Affiliate and agent of an Initial
Purchaser shall have the same rights to contribution as such Initial Purchaser, and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act and each officer and director of the Company shall have the
same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d). 
 9.
Default by an Initial Purchaser. If any one or more Initial Purchasers shall fail to purchase and pay for any of the Securities agreed to be purchased by such Initial Purchaser hereunder and such failure to purchase shall constitute a default
in the performance of its or their obligations under this Agreement, the remaining Initial Purchasers shall be obligated severally to take up and pay for (in the respective proportions which the principal amount of Securities set forth opposite
their names on Schedule I hereto bears to the aggregate principal amount of Securities set forth opposite the names of all the remaining Initial Purchasers on Schedule I hereto) the Securities which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase; provided, however, that in the event that the aggregate principal amount of Securities which the defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase shall exceed
10% of the aggregate principal amount of Securities set forth in Schedule I hereto, the remaining Initial Purchasers shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such
nondefaulting Initial Purchasers do not purchase all the Securities, this Agreement will terminate without liability to any nondefaulting Initial Purchaser or the Company. In the event of a default by any Initial Purchaser as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding five Business Days, as the Representative shall determine in order that the required changes in the Final Memorandum or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting Initial Purchaser of its liability, if any, to the Company or any nondefaulting Initial Purchaser for damages occasioned by its default hereunder. 

  
 22 

 10. Termination. This Agreement shall be subject to termination in the absolute
discretion of the Representative, by notice given to the Company prior to delivery of and payment for the Securities, if at any time prior to such time (i) trading in securities generally on the New York Stock Exchange shall have been suspended
or limited or minimum prices shall have been established on such exchange; (ii) a banking moratorium shall have been declared either by U.S. federal or New York State authorities; (iii) there shall have occurred a material disruption in
commercial banking or securities settlement or clearance services; or (iv) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war or other calamity or crisis,
in each case, the effect of which on financial markets is such as to make it, in the sole judgment of the Representative impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated in the Disclosure Package
and the Final Memorandum (exclusive of any amendment or supplement thereto). 
 11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the Initial Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of the Initial Purchasers or the Company or any of the indemnified persons referred to in Section 8 hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 7 and 8
hereof shall survive the termination or cancellation of this Agreement. 
 12. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the Representative, will be mailed, delivered or telefaxed to the Citigroup General Counsel (fax no.: (646) 291-1469) and confirmed to Citigroup at 388
Greenwich Street, New York, New York 10013, Attention: General Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to 972-556-6119 and confirmed
to it at 6555 Sierra Drive, Irving, Texas 75039, attention of the Legal Department. 
 13. Successors. This Agreement will inure to
the benefit of and be binding upon the parties hereto and their respective successors and the indemnified persons referred to in Section 8 hereof and their respective successors, and, except as expressly set forth in Section 5(k) hereof,
no other person will have any right or obligation hereunder. 
 14. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company and the Initial Purchasers, or any of them, with respect to the subject matter hereof. 

15. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York. 

  
 23 

 16. Waiver of Jury Trial. The Company hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. 

17. No Fiduciary Duty. The Company hereby acknowledges that (a) the purchase and sale of the Securities pursuant to this Agreement
is an arm’s-length commercial transaction between the Company, on the one hand, and the Initial Purchasers and any Affiliate through which it may be acting, on the other, (b) the Initial Purchasers
are acting as principal and not as an agent or fiduciary of the Company and (c) the Company’s engagement of the Initial Purchasers in connection with the offering and the process leading up to the offering is as independent contractors and
not in any other capacity. Furthermore, the Company agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether any of the Initial Purchasers has advised or is currently advising the
Company on related or other matters). The Company agrees that it will not claim that the Initial Purchasers have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in connection with such
transaction or the process leading thereto. 
 18. Waiver of Tax Confidentiality. Notwithstanding anything herein to the contrary,
purchasers of the Securities (and each employee, representative or other agent of a purchaser) may disclose to any and all persons, without limitation of any kind, the U.S. tax treatment and U.S. tax structure of any transaction contemplated herein
and all materials of any kind (including opinions or other tax analyses) that are provided to the purchasers of the Securities relating to such U.S. tax treatment and U.S tax structure, other than any information for which nondisclosure is
reasonably necessary in order to comply with applicable securities laws. 
 19. Counterparts. This Agreement may be signed in one or
more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement. 
 20.
Headings. The section headings used herein are for convenience only and shall not affect the construction hereof. 

  
 24 

 If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement between the Company and the several Initial Purchasers. 

 

			
	Very truly yours,
	
	Vistra Operations Company LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	ANP Bellingham Energy Company, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	ANP Blackstone Energy Company, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Big Brown Power Company LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Brighten Energy LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	Calumet Energy Team, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Casco Bay Energy Company, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Coffeen and Western Railroad Company
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Coleto Creek Power, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Comanche Peak Power Company LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer 

  
 [Signature Page to
Purchase Agreement] 

 
			
	Dallas Power & Light Company, Inc.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Dynegy Administrative Services Company
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Dynegy Associates Northeast LP, Inc.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Dynegy Coal Generation, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Dynegy Coal Holdco, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	Dynegy Coal Trading & Transportation, L.L.C.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Dynegy Commercial Asset Management, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Dynegy Conesville, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Dynegy Dicks Creek, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Dynegy Energy Services (East), LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	Dynegy Energy Services, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Dynegy Fayette II, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Dynegy Gas Imports, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Dynegy Hanging Rock II, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Dynegy Kendall Energy, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	Dynegy Killen, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Dynegy Marketing and Trade, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Dynegy Miami Fort, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Dynegy Midwest Generation, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Dynegy Morro Bay, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	Dynegy Moss Landing, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title:	 	Senior Vice President and Treasurer
	
	Dynegy Northeast Generation GP, Inc.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title:	 	Senior Vice President and Treasurer
	
	Dynegy Oakland, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title:	 	Senior Vice President and Treasurer
	
	Dynegy Operating Company
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title:	 	Senior Vice President and Treasurer
	
	Dynegy Power Generation, Inc.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title:	 	Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	Dynegy Power Marketing, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title:	 	Senior Vice President and Treasurer
	
	Dynegy Power, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title:	 	Senior Vice President and Treasurer
	
	Dynegy Resource II, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title:	 	Senior Vice President and Treasurer
	
	Dynegy Resources Generating Holdco, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title:	 	Senior Vice President and Treasurer
	
	Dynegy South Bay, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title:	 	Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	Dynegy Stuart, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	Dynegy Washington II, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	Dynegy Zimmer, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	Ennis Power Company, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	EquiPower Resources Corp.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	Forney Pipeline, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title:	 	Senior Vice President and Treasurer
	
	Generation SVC Company
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title:	 	Senior Vice President and Treasurer
	
	Havana Dock Enterprises, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title:	 	Senior Vice President and Treasurer
	
	Hays Energy, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title:	 	Senior Vice President and Treasurer
	
	Hopewell Power Generation, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title:	 	Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	Illinois Power Generating Company
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Illinois Power Marketing Company
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Illinois Power Resources Generating, LLC
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Illinois Power Resources, LLC
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Illinova Corporation
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	IPH, LLC
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Kincaid Generation, L.L.C.
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	La Frontera Holdings, LLC
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Lake Road Generating Company, LLC
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Liberty Electric Power, LLC
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	Lone Star Energy Company, Inc.
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Lone Star Pipeline Company, Inc.
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Luminant Energy Company LLC
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Luminant Energy Trading California Company
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Luminant ET Services Company LLC
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	Luminant Generation Company LLC
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Luminant Mining Company LLC
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Masspower, LLC
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Midlothian Energy, LLC
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Milford Power Company, LLC
		
	By:	 	   /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	NCA Resources Development Company LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	NEPCO Services Company
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	Northeastern Power Company
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	Oak Grove Management Company LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	Ontelaunee Power Operating Company, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	Pleasants Energy, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	Richland-Stryker Generation LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	Sandow Power Company LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	Sithe Energies, Inc.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	Sithe/Independence LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	Sithe/Independence Power Partners, L.P.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	Southwestern Electric Service Company, Inc.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	Texas Electric Service Company, Inc.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	Texas Energy Industries Company, Inc.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	Texas Power & Light Company, Inc.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	Texas Utilities Company, Inc.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	Texas Utilities Electric Company, Inc.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	T-Fuels, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	TXU Electric Company, Inc.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer
	
	TXU Energy Retail Company LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name:	 	Kristopher E. Moldovan
	Title: 	 	Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	TXU Retail Services Company
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Upton County Solar 2, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Value Based Brands LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Vistra Asset Company LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Vistra Corporate Services Company
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	Vistra EP Properties Company
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Vistra Finance Corp.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Vistra Preferred Inc.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Wharton County Generation, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer
	
	Wise County Power Company, LLC
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 
			
	Wise-Fuels Pipeline, Inc.
		
	By:	 	 /s/ Kristopher E. Moldovan

	Name: Kristopher E. Moldovan
	Title: Senior Vice President and Treasurer

  
 [Signature Page to
Purchase Agreement] 

 The foregoing Agreement is hereby 

confirmed and accepted as of the 
 date first above written. 

Citigroup Global Markets Inc. 
  

			
	By:	 	 /s/ Kirkwood Roland

		 	Name: Kirkwood Roland
		 	Title: Managing Director

 For itself and the other several Initial 

Purchasers named in Schedule I to the 
 foregoing Agreement.

  
 [Signature Page to
Purchase Agreement] 

 SCHEDULE I 

 

							
	 Initial Purchasers
	 	 Principal

Amount of
 Securities to be

Purchased
	 
	 Citigroup Global Markets Inc.
	 	U.S.$	  	 	250,000,000.00	 
	 J.P. Morgan Securities LLC
	 		  	 	75,000,000.00	 
	 Credit Suisse Securities (USA) LLC
	 		  	 	65,000,000.00	 
	 Barclays Capital Inc.
	 		  	 	55,500,000.00	 
	 BNP Paribas 
	 		  	 	55,500,000.00	 
	 Credit Agricole Securities (USA) LLC
	 		  	 	55,500,000.00	 
	 Deutsche Bank Securities Inc.
	 		  	 	55,500,000.00	 
	 Goldman Sachs & Co. LLC
	 		  	 	55,500,000.00	 
	 Mizuho Securities USA Inc.
	 		  	 	55,500,000.00	 
	 Morgan Stanley & Co. LLC
	 		  	 	55,500,000.00	 
	 Mitsubishi UFJ Securities (USA) Inc.
	 		  	 	55,500,000.00	 
	 Natixis Securities Americas LLC
	 		  	 	55,500,000.00	 
	 RBC Capital Markets, LLC
	 		  	 	55,500,000.00	 
	 SunTrust Robinson Humphrey, Inc.
	 		  	 	40,000,000.00	 
	 UBS Securities LLC
	 		  	 	15,000,000.00	 
		 		  	  
	  
	 
	 Total
	 	U.S.$	  	 	1,000,000,000	 

 SCHEDULE II 

Vistra Operations Company LLC 

$1,000,000,000 
 5.500%
Senior Notes Due 2026 
 The information in this term sheet supplements the Company’s preliminary offering memorandum dated August 7, 2018 (the
“Preliminary Memorandum”) and supersedes the information in the Preliminary Memorandum to the extent inconsistent with the information in the Preliminary Memorandum. This term sheet is qualified in its entirety by reference to the
Preliminary Memorandum. 
  

					
	Issuer	 	Vistra Operations Company LLC
		
	Notes Offered	 	5.500% Senior Notes due 2026 (the “Notes”)
		
	Maturity Date	 	September 1, 2026
		
	Principal Amount	 	$1,000,000,000
		
	Gross Proceeds	 	$1,000,000,000
		
	Distribution	 	144A/Reg S
		
	Expected Ratings*	 	Ba3/BB/BB (Moody’s/S&P/Fitch)
		
	Interest Rate	 	5.500%
		
	Price to Public	 	100.000%
		
	Yield to Maturity	 	5.500%
		
	Interest Payment Dates	 	Semi-annually in arrears on September 1 and March 1 of each year
		
	First Interest Payment Date	 	March 1, 2019
		
	Record Dates	 	August 15 and February 15
		
	Equity Clawback	 	40% at 105.500% until September 1, 2021
		
	Change of Control Triggering	 	
		
	Event	 	Investor put at 101%
		
	Optional Redemption	 	Except as set forth in the Preliminary Memorandum, the Company will not be entitled to redeem the Notes at any time prior to September 1, 2021. On and after such date, the Company may redeem the Notes, in whole or in
part, at the following redemption prices:

 
			
		
	Year	  	 Percentage

	 2021
	  	102.750
	 2022
	  	101.375
	 2023 and thereafter
	  	100.000%

			
	Make Whole	  	T + 50 bps
		
	Joint Bookrunners	  	Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Barclays Capital Inc., BNP Paribas Securities Corp., Credit Agricole Securities (USA) Inc., Deutsche ank Securities Inc., Goldman Sachs
& Co. LLC, Mizuho Securities USA LLC, Morgan Stanley & Co. LLC, MUFG Securities Americas Inc., Natixis Securities Americas LLC, RBC Capital Markets, LLC
		
	Co-Managers	  	SunTrust Robinson Humphrey, Inc., UBS Securities LLC
		
	Trade Date	  	August 7, 2018
		
	Settlement Date	  	August 22, 2018
		
	CUSIP	  	92840V AA0 (Rule 144A)
		
		  	U9226V AA5 (Regulation S)
		
	ISIN	  	US9280VAA08 (Rule 144A)
		
		  	USU9226VAA53 (Regulation S)

 This communication is confidential and is intended for the sole use of the person to whom it is provided by the sender. This
information does not purport to be a complete description of the Notes or the offering. Please refer to the Preliminary Memorandum for a complete description. 

This communication does not constitute an offer to sell or the solicitation of an offer to buy any Notes in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction. 
 These Notes have not been registered under the Securities Act of 1933, as amended (the
“Securities Act”), and the rules and regulations promulgated thereunder and may only be sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act and to persons outside the United States in compliance with
Regulation S under the Securities Act. 
 * A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or
withdrawal at any time. 
 ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH
DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM. 

 SCHEDULE III 

Schedule of Written General Solicitation Materials 

None 

 ANNEX A 

Significant Subsidiaries 
 Comanche Peak Power
Company LLC 
 Dynegy Commercial Asset Management, LLC 

Illinova Corp. 
 TXU Energy Retail Company LLC 

Vistra Preferred Inc. 
 Vistra Asset Company LLC 

 EXHIBIT A-1 

OPINION AND DISCLOSURE LETTER OF 

SIDLEY AUSTIN LLP 

 Based on and subject to the foregoing and the other limitations, qualifications, exceptions
and assumptions set forth herein, we are of the opinion that: 
 (i) The Company is a limited liability company validly
existing and in good standing under the laws of the State of Delaware. The Company has limited liability company power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the
Offering Memorandum and to execute, deliver and perform its obligations under the Purchase Agreement, the Indenture and the Notes. 

(ii) Each Corporate Guarantor is a corporation validly existing and in good standing under the laws of the state of its
incorporation. Each Corporate Guarantor has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Offering Memorandum and to execute, deliver and perform its
obligations under the Purchase Agreement, the Indenture and its Guarantee. 
 (iii) Each LLC Guarantor is a limited liability
company validly existing and in good standing under the laws of the state of its formation. Each LLC Guarantor has limited liability company power and authority to own, lease and operate its properties and to conduct its business as described in the
Disclosure Package and the Offering Memorandum and to execute, deliver and perform its obligations under the Purchase Agreement and the Indenture. 

(iv) The Purchase Agreement has been duly authorized, executed and delivered by the Company and each Covered Guarantor. 

(v) The Notes have been duly authorized by the Company. When the Notes are duly executed by authorized officers of the Company
and authenticated by the Trustee [and when the Company’s corporate seal is affixed thereto]1, all in accordance with the Indenture, and delivered to and paid for by the Initial
Purchasers in accordance with the Purchase Agreement, the Notes will be valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, and will be entitled to the benefits of the Indenture. 

 

	1 	 Note to Draft: Subject to review of indenture requirements. 

 (vi) The Guarantee by each Covered Guarantor has been duly authorized by
each Covered Guarantor. When the Notes are duly executed by authorized officers of the Company and authenticated by the Trustee [and when the Company’s corporate seal is affixed thereto], all in accordance with the Indenture, and
delivered to and paid for by the Initial Purchasers in accordance with the Purchase Agreement, the Guarantee by each Guarantor will be the valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its
terms. 
 (vii) No consent, approval, authorization or other order of any federal regulatory body, federal administrative
agency or other federal governmental body of the United States of America or any state regulatory body, state administrative agency or other state governmental body of the State of Illinois, the State of Texas or the State of New York is required
under Applicable Laws for the execution and delivery by the Company or any Covered Guarantor of the Purchase Agreement or the Indenture and the issuance and sale of the Securities to the Initial Purchasers as contemplated by the Purchase Agreement.

 (viii) The execution and delivery by the Company and each Covered Guarantor of the Purchase Agreement and the Indenture,
and the issuance and sale of the Securities to the Initial Purchasers pursuant to the Purchase Agreement, do not (a) violate the certificate of incorporation or by-laws of the Company or any
Corporate Guarantor or the certificate of formation or limited liability company agreement of any LLC Guarantor, (b) result in any breach of, or constitute a default under, any of the agreements or instruments listed on Schedule III
hereto or (c) result in a violation by the Company or any Covered Guarantor of any of the terms and provisions of any Applicable Laws. 

(ix) The statements in the Preliminary Offering Memorandum and the Offering Memorandum under the caption “Description of
Notes,” to the extent that such statements purport to describe certain provisions of the Indenture or the Securities, accurately describe such provisions in all material respects. 

(x) The Indenture has been duly authorized, executed and delivered by the Company and each Covered Guarantor and is a valid and
binding agreement of the Company and each Guarantor, enforceable against the Company and each such Guarantor in accordance with its terms. 

(xi) Assuming (A) the accuracy and performance of, and compliance with, the representations, warranties and agreements of the
Company, the Guarantors and the Initial Purchasers set forth in the Purchase Agreement and (B) the accuracy and performance of, and compliance with, the representations, warranties and agreements of each of the persons to whom the
Initial Purchasers initially offer, resell or otherwise transfer the Securities as set forth in the Offering Memorandum under the caption “Notice to Investors,” it is not necessary, in connection with the sale of the Securities to the
Initial Purchasers under the 

 
Purchase Agreement or in connection with the initial resale of the Securities by the Initial Purchasers, in each case in the manner contemplated by the Purchase Agreement and the Offering
Memorandum, to register the Securities under the 1933 Act or to qualify the Indenture under the 1939 Act, it being understood that we express no opinion as to any subsequent resale or other transfer of any Securities. 

(xii) The statements in the Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed by Vistra Energy
Corporation with the Securities and Exchange Commission on February 26, 2018 and amended and restated in the Current Report on Form 8-K, filed by Vistra Energy Corporation with the Securities and Exchange Commission on
June 15, 2018 under the caption “Environmental Regulations and Related Considerations,” to the extent that such statements purport to describe matters of United States federal environmental law, accurately describe such
matters in all material respects. 
 (xiii) The Company and each Covered Guarantor is not and, after giving effect to the
offering and sale of the Notes and the application of the proceeds thereof as described in the Offering Memorandum, will not be required to be registered as an “investment company” as defined in the 1940 Act. 

 EXHIBIT A-2 

OPINION OF 

VINSON & ELKINS LLP 

 Based on such facts and subject to the qualifications, assumptions and limitations set forth
herein and in the Preliminary Memorandum and Final Memorandum, we hereby confirm that the statements in the Preliminary Memorandum and Final Memorandum under the caption “Certain U.S. Federal Income Tax Considerations,” insofar as such
statements purport to constitute summaries of United States federal income tax law and regulations or legal conclusions with respect thereto, have been reviewed by us and are accurate in all material respects. 

 EXHIBIT B 

OPINION OF VISTRA OPERATIONS COMPANY LLC 

GENERAL COUNSEL 

 Based on and subject to the foregoing and the other limitations, qualifications, exceptions
and assumptions set forth herein, I am of the opinion that the Company has an authorized capitalization as set forth in the Preliminary Offering Memorandum and the Offering Memorandum under the heading “Capitalization” and all of the
outstanding shares of capital stock or other equity interests of each Guarantor have been duly and validly authorized and issued, and, in the case of capital stock, are fully paid and non-assessable. I am also
of the opinion that there is no pending or, to my knowledge, threatened action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries or its or their
property that is not adequately disclosed in the Preliminary Offering Memorandum and Offering Memorandum, except in each case for such proceedings that, if the subject of an unfavorable decision, ruling or finding would not singly or in the
aggregate, have a Material Adverse Effect as such term is defined in the Purchase Agreement. 

 EXHIBIT C-1 

OPINION FROM MASSACHUSETTS/PENNSYLVANIA COUNSEL 

 Based upon the foregoing, and subject to the assumptions, limitations and qualifications
stated herein, it is our opinion that: 
 1. Each of NEPCO and NPC is a corporation validly existing and, as of the date of the Subsistence
Certificate referenced on Schedule I hereto, subsisting under the laws of the Commonwealth of Pennsylvania. Each of NEPCO and NPC has the corporate power and authority to own, lease and operate its properties and to conduct its business as
described in the Disclosure Package and the Offering Memorandum and to execute, deliver and perform its obligations under the Purchase Agreement, the Indenture and its Guarantee. 

2. Masspower is a limited liability company validly existing and, as of the date of the Good Standing Certificate referenced on Schedule
I hereto, in good standing under the laws of the Commonwealth of Massachusetts. Masspower has the limited liability company power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure
Package and the Offering Memorandum and to execute, deliver and perform its obligations under the Purchase Agreement, the Indenture and its Guarantee. 

3. Each of the Indenture and the Purchase Agreement has been duly authorized, executed and delivered by each Specified Guarantor and is a valid
and binding agreement of each Specified Guarantor. 
 4. The Guarantee by each Specified Guarantor has been duly authorized, executed and
delivered by each Specified Guarantor. 
 5. No consent, approval, authorization or other order of any federal regulatory body, federal
administrative agency or other federal governmental body of the United States of America or any state regulatory body, state administrative agency or other state governmental body of the Commonwealth of Pennsylvania, is required for the execution
and delivery by the Pennsylvania Guarantors of the Purchase Agreement or the Indenture and the issuance and sale of the Guarantees by the Pennsylvania Guarantors to the Initial Purchasers as contemplated by the Purchase Agreement. 

 6. The execution and delivery by each Specified Guarantor of the Purchase Agreement and the
Indenture, and the issuance and sale of the Securities to the Initial Purchasers pursuant to the Purchase Agreement, do not (a) violate the certificate of incorporation or by-laws of either NEPCO or NPC
or the certificate of formation or limited liability company agreement of Masspower, (b) result in any breach of, or constitute a default under, any of the agreements or instruments listed on Schedule II hereto, or (c) result in a
violation by any Specified Guarantor of any Applicable Laws. 

 EXHIBIT C-2 

OPINION FROM OHIO COUNSEL 

 Based on and subject to the foregoing and the other limitations, qualifications, exceptions
and assumptions set forth herein, we are of the opinion that: 
 (i) The Ohio Guarantor is in full force and effect as a
limited liability company under the laws of the State of Ohio. The Ohio Guarantor has limited liability company power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the
Offering Memorandum and to execute, deliver and perform its obligations under the Purchase Agreement, the Indenture and its Guarantee. 

(ii) The Purchase Agreement has been duly authorized, executed and delivered by the Ohio Guarantor. 

(iii) The Guarantee by the Ohio Guarantor has been duly authorized, executed and delivered by the Ohio Guarantor. 

(iv) No consent, approval, authorization or other order of any federal regulatory body, federal administrative agency or other
federal governmental body of the United States of America or any state regulatory body, state administrative agency or other state governmental body of the State of Ohio is required under Applicable Laws for the execution and delivery by the Ohio
Guarantor of the Purchase Agreement or the Indenture. 
 (v) The execution and delivery by the Ohio Guarantor of the Purchase
Agreement and the Indenture, do not (a) violate the articles of organization or operating agreement of the Ohio Guarantor, in each case as currently in effect, or (b) result in a violation by the Ohio Guarantor of any of the terms and
provisions of any Applicable Laws. 

 EXHIBIT C-3 

OPINION FROM VIRGINIA COUNSEL 

 Based upon the foregoing and subject to the qualifications, assumptions, limitations and
exceptions set forth herein, we are of the opinion that: 
 1. The Virginia Guarantor is a limited liability company validly
existing under the laws of the Commonwealth of Virginia with limited liability company power and authority necessary to own, lease and operate its properties and conduct its business as described in each of the Disclosure Package and the Final
Memorandum. 
 2. The Virginia Guarantor has all requisite limited liability company power and authority to execute, deliver
and perform its obligations under the Purchase Agreement, the Indenture and the Guarantees. 
 3. The Purchase Agreement, the
Indenture and the Guarantees have been duly authorized, executed and delivered by the Virginia Guarantor. 

 4. None of the offering, issuance and sale of the Guarantees by the Virginia
Guarantor, the consummation of the transactions contemplated in the Purchase Agreement, the Indenture and the Guarantees by the Virginia Guarantor or the execution and delivery of the Purchase Agreement, the Indenture and the Guarantees by the
Virginia Guarantor will violate (a) the Articles of Organization or the Operating Agreement, (b) any applicable laws of the Commonwealth of Virginia, or (c) any order or decree, known to us to be applicable to the Virginia Guarantor,
of any court or any governmental agency or body of the Commonwealth of Virginia. 
 5. No consent, approval, authorization or
other action by, or filing with, any governmental agency or body of the Commonwealth of Virginia or, to our knowledge, any court thereof, is required under any applicable laws of the Commonwealth of Virginia to be obtained or made by the Virginia
Guarantor as of the date hereof for (a) the execution and delivery by the Virginia Guarantor of the Purchase Agreement, the Indenture or the Guarantees or (b) the consummation by the Virginia Guarantor of the transactions contemplated by
the Purchase Agreement, the Indenture or the Guarantees.Exhibit 10.1 L'Orange LTSA

		

			 

		

		
			Exhibit 10.1
		

		
			﻿
		

		
			Frame Development and Purchase Agreement
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			between
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			MTU Friedrichshafen GmbH
		

		
			Maybachplatz 1
		

		
			88045 Friedrichshafen, Germany
		

		
			﻿
		

		
			- hereinafter referred to as "MTU" -
		

		
			﻿
		

		
			﻿
		

		
			and
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			L'Orange GmbH
		

		
			Porschestr. 8, 70435 Stuttgart
		

		
			Germany
		

		
			﻿
		

		
			- hereinafter referred to as "L'Orange" -
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			- L'Orange and MTU hereinafter referred to individually 
as a "Party" or collectively as the "Parties" -
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			2

		

		
		

			
					
						﻿

					
					
						 

					
					
						 

				
	
					
						1.

					
					
						DEFINITIONS

					3 
				
	
					
						2.

					
					
						SCOPE OF THE AGREEMENT

					9 
				
	
					
						3.

					
					
						PRODUCT DEVELOPMENT AND MANUFACTURING

					9 
				
	
					
						4.

					
					
						PURCHASE AND SUPPLY OF PRODUCTS AND SERVICES

					14 
				
	
					
						5.

					
					
						CAPACITY, FORECAST, ORDER PROCESS

					17 
				
	
					
						6.

					
					
						CHANGE REQUEST FOR PRODUCTS

					19 
				
	
					
						7.

					
					
						TERMS OF DELIVERY

					20 
				
	
					
						8.

					
					
						PACKAGING REQUIREMENTS

					20 
				
	
					
						9.

					
					
						DELAY

					21 
				
	
					
						10.

					
					
						QUALITY OF PRODUCTS, CLAIMS FOR DEFECTS

					21 
				
	
					
						11.

					
					
						LIMITATION OF LIABILITY

					23 
				
	
					
						12.

					
					
						QUALITY ASSURANCE

					24 
				
	
					
						13.

					
					
						PRODUCT RECALL

					24 
				
	
					
						14.

					
					
						[***] AND COMPONENT SUPPLIES

					25 
				
	
					
						15.

					
					
						SPARE PARTS

					26 
				
	
					
						16.

					
					
						PRICES, INVOICES, PAYMENT AND ADJUSTMENTS

					27 
				
	
					
						17.

					
					
						OFFSET AGREEMENTS

					28 
				
	
					
						18.

					
					
						COMPLIANCE, ENVIRONMENTAL PROTECTION

					29 
				
	
					
						19.

					
					
						EXPORT CONTROL AND FOREIGN TRADE DATA REGULATIONS

					29 
				
	
					
						20.

					
					
						CODE OF CONDUCT

					30 
				
	
					
						21.

					
					
						ANTI-BRIBERY AND CORRUPTION

					30 
				
	
					
						22.

					
					
						INSURANCE

					31 
				
	
					
						23.

					
					
						AUDIT

					32 
				
	
					
						24.

					
					
						CONFIDENTIALITY AND PUBLICATIONS

					32 
				
	
					
						25.

					
					
						[***], FORCE MAJEURE

					34 
				
	
					
						26.

					
					
						TERM AND TERMINATION

					34 
				
	
					
						27.

					
					
						COMPETITOR CHANGE IN CONTROL

					36 
				
	
					
						28.

					
					
						DISPUTE RESOLUTION

					37 
				
	
					
						29.

					
					
						MISCELLANEOUS

					38 
				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			3

		

		
		

		
			Preamble
		

		
			(A)    MTU is one of the world’s leading manufacturers of large diesel and gas engines and complete propulsion systems. 
		

		
			(B)    L'Orange develops and manufactures fuel injection technology systems to be used in diesel and gas engines. 
		

		
			(C)    Pursuant to a share purchase agreement between, among others, MTU and Woodward Aken GmbH, notarial deed no. 223/2018 of the notary public Dr. Oliver Habighorst, Frankfurt am Main, dated 8 April 2018, MTU sold and Woodward Aken GmbH purchased all of the shares in L'Orange ("Transaction"). Notwithstanding closing of the Transaction, the Parties intend to continue their close and mutually beneficial business partnership whereby L’Orange develops, manufactures, sells and delivers to MTU systems, products and/or components in accordance with the terms of this Agreement. 
		

		
			(D)    MTU’s objectives of obtaining high quality products and services under this Agreement in a cost effective and timely manner are hereby acknowledged by L’Orange.
		

		
			(E)    L'Orange's objectives of obtaining long-term development and purchase commitments with respect to fuel injection technology systems to be used in diesel and gas engines by MTU and its Affiliates are hereby acknowledged by MTU.
		

		
			﻿
		

		
			Now therefore,  the Parties enter into this Frame Development and Purchase Agreement.
		

		
			1.    Definitions
		

		
			1.1    "ABC Legislation" shall mean:
		

		
			1.1.1    in respect to each Party, any legislation enacted in the country in which it is incorporated or carries out business, or in any other jurisdiction where the Agreement is performed, to enforce or implement either the United Nations Convention Against Corruption (being the subject of General Resolution 58/4 of 31 October 2003 of the General Assembly of the United Nations) or the OECD Convention on combating Bribery of Foreign Public Officials in International Business Transactions adopted on 21 November 1997; and 
		

		
			1.1.2    the United Kingdom Proceeds of Crime Act 2002, the United Kingdom Bribery Act 2010 and the United States Foreign Corrupt Practices Act 1977 (15 U.S.C. Section 78dd-1, et. Seq.) as amended, the German Money Laundering Act and 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			4

		

		
		

		
			any other legislation relating to anti-bribery, corruption and anti-money laundering matters applicable to this agreement.
		

		
			1.2    [***] shall have the meaning set out in Section 16.4.2;
		

		
			1.3    "Adjustment Period" shall have the meaning set out in Section 16.4.2;
		

		
			1.4    "Affiliate" shall mean, in relation to any Person, any other Person which, directly or indirectly, Controls, is Controlled by or is under common Control with, such Person, provided, however, that for the purpose of this Agreement, Bergen Engines AS, Hordvikneset 125, NO-5108 Hordvik, Norway, shall not be considered an Affiliate of MTU; for the avoidance of doubt, any joint venture of MTU or its Affiliates shall be considered an Affiliate within the meaning of this definition;
		

		
			1.5    "Aftermarket" shall mean the secondary market of the medium and high speed reciprocating fueled products industry, concerned with the installation, maintenance and support of equipment, as well as [***], after the sale of the MTU products by or on behalf of MTU and/or its Affiliate as the original equipment manufacturer (OEM) to its customers;
		

		
			1.6    [***];
		

		
			1.7    "Agreement" shall mean this Frame Development and Purchase Agreement;
		

		
			1.8    "Agreed Performance Standard" shall have the meaning as set out in Section 29.1.2;
		

		
			1.9    "Background IP" shall have the meaning as set out in Section 3.5.3;
		

		
			1.10    "Baseline Performance Standard"  shall have the meaning as set out in Section 29.1.2;
		

		
			1.11    "Breakthrough Foreground IP" shall mean Foreground IP that substantively contributes to a material improvement in one or more product attributes including injection volumes, multiple injection characteristics, injection pressures, injection quality control systems, and needle opening and closing, but not including cost attributes;
		

		
			1.12    "Bid Summary" shall have the meaning as set out in Section 3.1.3(iii);
		

		
			1.13    "Code of Conduct" shall have the meaning as set out in Section 20.1;
		

		
			1.14    "Competitor" shall mean any direct competitor of MTU, any Affiliate of such direct competitor and/or its or their joint ventures.
		

		
			1.15    "Competitor Change in Control" shall mean [***].
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			5

		

		
		

		
			For the avoidance of doubt, a Competitor Change in Control shall not include such changes listed above that relate to a change in control of Woodward, Inc.
		

		
			1.16    "Confidential Information" shall have the meaning as set out in Section 24.1;
		

		
			1.17    "Contractual Services" shall mean Product manufacturing, sale and delivery including Development Services;
		

		
			1.18    "Control" of a Person shall mean the power, directly or indirectly: 
		

		
			1.18.1    to vote 50% (fifty percent) or more of the securities having ordinary voting power of that Person;
		

		
			1.18.2    to appoint or remove 50% (fifty percent) or more of the directors (or persons performing similar functions) of such Person; or 
		

		
			1.18.3    to direct or cause the direction of the management and policies of such Person, in each case whether by contract or otherwise, 
		

		
			and "Controls" and "Controlled" shall be interpreted accordingly;
		

		
			1.19    "Current Exclusive Rights Products" shall mean any Products supplied, or as of the Effective Date intended to be supplied, by L'Orange to MTU or its Affiliates for application on any MTU Engine existing as of the Effective Date;
		

		
			1.20    "Disclosing Party" shall have the meaning as set out in Section 24.1;
		

		
			1.21    "Dispute" shall have the meaning as set out in Section 28.1;
		

		
			1.22    "Development Contract" shall have the meaning as set out in Section 4.1.2;
		

		
			1.23    "Development Order"  shall have the meaning as set out in Section 4.1.2;
		

		
			1.24    "Development Results" shall have the meaning as set out in Section 3.2.3;
		

		
			1.25    "Development Services" shall have the meaning as set out in Section 3.1.1;
		

		
			1.26    "Effective Date" shall have the meaning as set out in Section 26.1;
		

		
			1.27    "End Product" shall mean the product into which the MTU Engine is implemented into and that is sold to the end customer;
		

		
			1.28    [***];
		

		
			1.29    "Foreground IP" shall have the meaning as set out in Section 3.5.1;
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			6

		

		
		

		
			1.30    "Foreign Trade Regulations" shall have the meaning as set out in Section 19.1;
		

		
			1.31    "Future MTU Engines" shall have the meaning as set out in Section 3.1.1;
		

		
			1.32    [***];
		

		
			1.33    [***];
		

		
			1.34    "Government Authority" shall mean any (a) nation, region, state, city, town, village, district or other jurisdiction, (b) federal, state, local, municipal, foreign or other government, (c) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department or other entity and any court or other tribunal), (d) multinational organisation or (e) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature;
		

		
			1.35    "Government Official" shall mean any person who would constitute a:
		

		
			1.35.1    "foreign public official" as defined in the United Kingdom Bribery Act 2010; or
		

		
			1.35.2    "foreign official" as defined in the United States Foreign Corrupt Practices Act (15 U.S.C. Section 78dd-1, et. Seq.), as amended.
		

		
			1.36    "Guarantees" shall have the meaning as set out in Section 29.1;
		

		
			1.37    "Intellectual Property Rights" shall mean all rights in and to all patents, utility models inventions and improvements or discoveries, copyrights, trade secrets, design rights and Know-How;
		

		
			1.38    "KCDs" shall have the meaning as set out in Section 4.1.5;
		

		
			1.39    "Know-How" shall mean non-patented, practical information resulting from knowledge, experience or testing which is secret, not generally known or easily accessible, and substantial, including but not limited to information contained in drawings and associated technical information, plans, descriptions, process data, test reports, projects schedules and other technical information;
		

		
			1.40    "KPIs" shall have the meaning as set out in Section 4.2.2;
		

		
			1.41    "Liability Cap" shall have the meaning as set out in Section 11.1;
		

		
			1.42    "Losses" shall have the meaning as set out in Section 3.6;
		

		
			1.43    [***];
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			7

		

		
		

		
			1.44    "Management Board" shall have the meaning as set out in Section 28.2;
		

		
			1.45    "Minimum Term" shall have the meaning as set out in Section 26.2;
		

		
			1.46    "MRF" or "Monthly Rolling Forecast" shall have the meaning as set out in Section 5.1.1;
		

		
			1.47    "MTU Claim Basis" shall have the meaning as set out in Section 29.1;
		

		
			1.48    "MTU Engines" shall mean medium and high speed reciprocating diesel, gas and dual fueled engines by MTU or its Affiliates;
		

		
			1.49    "New Agreement" shall have the meaning as set out in Section 27.1.1(i);
		

		
			1.50    [***] shall mean:
		

		
			1.50.1    any New Products for any application on any Future MTU Engine that is or has come into development by MTU at any time prior to the [***] year anniversary following the Effective Date and is 
		

		
			(i)    [***];
		

		
			(ii)    [***]; or
		

		
			(iii)    [***]; and
		

		
			1.50.2    [***].
		

		
			1.51    "New Products” shall have the meaning as set out in Section 3.1.1;
		

		
			1.52    "Order" shall have the meaning as set out in Section 4.1.2;
		

		
			1.53    "Other New Products" shall mean all New Products that are not [***];
		

		
			1.54    "Person" shall mean an individual or an entity, including a company, corporation, limited liability company, limited liability partnership, general or limited partnership, consortium, joint venture, trust, association or other business or investment entity, or any Government Authority;
		

		
			1.55    "Plant" shall mean the plant operated by L'Orange at Rudolf-L'Orange-Straße 1, 72293 Glatten, Germany;
		

		
			1.56    "Product Prices" shall have the meaning as set out in Section 16.1.1;
		

		
			1.57    [***];
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			8

		

		
		

		
			1.58    "Product Specifications" shall have the meaning as set out in Section 4.1.1;
		

		
			1.59    "Products"  shall mean any gaseous and liquid fuel injection systems, injectors, pumps and other associated parts and components, as specified and defined through its respective fit, form and function, being Current Exclusive Rights Products and New Products that are supplied or to be supplied by L'Orange under this Agreement;
		

		
			1.60    "Purchase Contract" shall have the meaning as set out in Section 4.1.2;
		

		
			1.61    "Purchase Orders" shall have the meaning as set out in Section 4.1.2;
		

		
			1.62    "Receiving Party" shall have the meaning as set out in Section 24.1;
		

		
			1.63    "Release Schedule" shall have the meaning as set out in Section 3.2.2;
		

		
			1.64    [***];
		

		
			1.65    [***];
		

		
			1.66    [***];
		

		
			1.67    "Representative" shall in respect of a Person mean:
		

		
			1.67.1    the Affiliates of that Person; and
		

		
			1.67.2    the directors, officers, employees, temporarily contracted personnel, agents, contractors and subcontractors of that Person or of any Affiliate of that Person.
		

		
			1.68    "Revised Bid"  shall have the meaning as set out in Section 3.1.3(iii);
		

		
			1.69    "Series [***]"  shall mean the next generation (as may be renamed from time to time) of [***];
		

		
			1.70    "SPA" shall have the meaning as set out in Section 26.1;
		

		
			1.71    "Specified Product Issues" shall have the meaning as set out in the SPA;
		

		
			1.72    "Superior Proposal" shall have the meaning as set out in Section 3.1.3(iii);
		

		
			1.73    [***] shall have the meaning set out in Section 16.4.1;
		

		
			1.74    "Transaction" shall have the meaning as set out in the Preamble; 
		

		
			1.75    "TSA" shall mean the Transitional Services Agreement between, among others Rolls-Royce Power Systems AG, MTU and L'Orange dated 1 June 2018; and
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			9

		

		
		

		
			1.76    "Working Day" shall mean any day other than (i) Saturday, (ii) Sunday or (iii) a bank holiday at MTU's seat or at the Plant.
		

		
			2.    Scope of the Agreement
		

		
			This Agreement sets forth terms and conditions for the delivery of the Products by L'Orange to MTU and/or its Affiliates and for the associated exclusivity rights as well as for the development of New Products and for the associated tender and/or exclusivity rights. 
		

		
			3.    Product Development and Manufacturing
		

		
			3.1    Development of New Products
		

		
			3.1.1    From time to time, MTU will develop new MTU Engines ("Future MTU Engines") which will require, among other components, complementary fuel injection systems. In such circumstances, MTU shall invite L’Orange to – depending on the category of such new fuel injection product assigned to it by this Agreement – either submit an offer or participate in a tender process, as described below, for services relating to the development ("Development Services") of such fuel injection products to be introduced after the Effective Date and to be used in Future MTU Engines (all such fuel injection products for Future MTU Engines, "New Products"). For the avoidance of doubt, Future MTU Engines shall also include MTU Engines which are in development at the time of Effective Date.
		

		
			3.1.2    With regard to [***], MTU shall invite L’Orange to, and L'Orange shall, submit a qualified offer (qualifiziertes Angebot) for the Development Services. The Parties shall negotiate and agree in good faith on the terms (including the price) of the Development Services. If the Parties cannot agree on the price for such Development Services, L'Orange will determine the price based on its standard development pricing schedules and allocated resources and time, consistent with past practices. MTU shall be entitled to review the underlying basis for the price determination via an audit in accordance with Section 23. In the event the audit does not confirm a reasonable price determination by L'Orange, Section 28.6 shall apply.
		

		
			3.1.3    With regard to Other New Products, MTU shall invite L’Orange, and L'Orange shall be entitled, to participate in a tender process as set out below.
		

		
			(i)    Following an invitation to participate in a tender, L'Orange may submit a qualified offer (qualifiziertes Angebot) for the Development Services. 
		

		
			(ii)    Except as provided under Section 3.1.3(iii), MTU shall be free to award Development Services relating to Other New Products to the party that 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			10

		

		
		

		
			submitted the best bid. If MTU awards the tender to L'Orange, MTU shall source such Other New Product exclusively from L'Orange in accordance with Section 4.1.4, unless provided otherwise in this Agreement.
		

		
			(iii)    [***]. 
		

		
			3.1.4    The Development Services will be conducted in accordance with the specifications provided by MTU, be state of the art (Stand der Technik) and, unless otherwise specified in this Section 3, be in line with the provisions of the development terms and process set out by the Parties. The Parties will agree on the exact scope and time schedule for the Development Services separately. 
		

		
			3.2    Release and Acceptance of New Products
		

		
			3.2.1    Each New Product shall be released by L'Orange and accepted by MTU in accordance with the provisions herein. 
		

		
			3.2.2    The Parties shall agree in writing on a release schedule ("Release Schedule") for the release of each New Product containing milestones, necessary tests, inspections as well as other procedures to be conducted by the Parties in order to ensure that New Products conform with the agreed design specifications. The deliverables shall be specified for each milestone. 
		

		
			3.2.3    L'Orange will present MTU with the results of the Development Services ("Development Results") for final inspection and approval in due time so that the Release Schedule can be met. If the Development Results meet the agreed design specifications, MTU will notify L’Orange of the same in writing, in which case L’Orange shall declare the series release of the New Product. If MTU accepts the Development Results with reservations as to any reasonable determination that the agreed design specifications have not been met, MTU will notify L’Orange of the same in writing, following which L'Orange shall remedy the Development Results without undue delay and at its costs in order to reach the series release. MTU may not refuse acceptance of the Development Results in the case of non-material deviations from the agreed design specifications.
		

		
			3.3    Changes during Product Development 
		

		
			3.3.1    Any changes or modifications that L’Orange wishes to implement regarding the design specifications for New Products that become subject to this Agreement shall be approved by MTU in advance. Such approval shall not be unreasonably withheld, conditioned or delayed.
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			11

		

		
		

		
			3.3.2    MTU reserves the right to request changes to the New Products, which shall be accepted by L'Orange to the extent they are technically feasible (including design and production feasibility) and subject to the following cost mechanism. 
		

		
			(i)    MTU will submit such change request to L'Orange in writing following which L'Orange shall evaluate the change request and its impact on the New Products and respond to such request within a reasonable period of time, but in any event within three (3) weeks from receipt of such change request. Such response shall include a reasonable, good faith determination of the estimated development costs associated with such change request. Upon MTU’s request, L’Orange will provide further substantiation and support for such estimated development costs.
		

		
			(ii)    The Parties thereafter shall enter into good faith negotiations to reach agreement as to the development costs for such change request. In the event the Parties are unable to reach agreement, the development costs for such change request shall be based on L’Orange’s standard development pricing schedules (with appropriate allocated resources and time) consistent with L’Orange’s general practices. Notwithstanding the foregoing, in the event MTU continues to dispute or question the development costs associated with such change request, MTU shall be entitled to submit the matter to audit pursuant to Section 23. In the event the audit does not confirm a reasonable determination of the development cost by L'Orange, Section 28.6 shall apply. Following the decision of the neutral expert or auditor on the reimbursement of the increase in development costs for a change request, MTU shall be entitled to cancel its change request at its sole discretion (subject to reimbursement of any costs that have been reasonably incurred by L'Orange up to the cancellation date in connection with such change request).
		

		
			(iii)    [***].
		

		
			(iv)    If the Parties have already agreed on the purchase prices for such New Products prior to a change request by MTU and the change request would impact the recurring costs for such New Products, the corresponding purchase prices for such New Products will be, (i) in the case of Other New Products, adjusted based on an increase or decrease (as the case may be) in price by the same percentage as the respective increase or decrease in recurrent cost, consistent with past practice and subject to MTU’s audit rights pursuant to Section 23, and (ii) in the case of [***], adjusted in accordance with Section 16.1.2. In the event the Parties cannot reach an agreement on the amounts of such price increase within one (1) month after the evaluation of the respective impact by L'Orange was received by MTU, Section 28.6 shall apply.
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			12

		

		
		

		
			3.4    Warranty during the Release Period
		

		
			The release period shall serve the Parties to gain operational experience and to start the series production. The warranty rights applicable to New Products during the release period will be as provided in the co-development process with customers, unless otherwise specified and agreed to by the Parties in the respective Development Contract.
		

		
			3.5    Licenses to Foreground IP and Background IP
		

		
			3.5.1    For purposes of this Agreement,  "Foreground IP" shall consist of all Intellectual Property Rights that are created or conceived by a Party solely to the extent that such Intellectual Property Rights are created or conceived exclusively in the course and scope of that Party’s performance of this Agreement. Foreground IP shall be owned by the Party that created or conceived it, and each Party shall be free in using their respective Foreground IP for their own purpose without limitation, except for such limitations that are provided for explicitly in this Agreement. 
		

		
			3.5.2    L'Orange hereby grants to MTU and its ordering Affiliates and MTU hereby accepts (also on behalf of its ordering Affiliates), a non-exclusive, global, perpetual (and surviving this Agreement), irrevocable, non-transferable, sublicensable license to use any Foreground IP of L'Orange in connection with any OEM development activities, the integration or use of any Products in the MTU Engines and any Product support in connection with the MTU Engines, including but not limited to repair, maintenance or [***]; provided, however, such license shall be sublicensable by MTU or its ordering Affiliates solely to the extent it exclusively applies to Products sold by L'Orange. Nothing in the foregoing shall obligate L’Orange to provide or license any Know-How and Confidential Information of L'Orange, except where this is necessary for MTU, its ordering Affiliate or sublicensee to make full use of the Product sold by L'Orange, in which case it shall automatically be part of the license granted. The Parties agree that the license granted under this Section 3.5.2 is fully paid up, including for future known or unknown usage rights, by payment of the charges to L'Orange as set out in this Agreement. 
		

		
			3.5.3    In addition, each Party grants to the respective other Party, who accepts this, a non-exclusive, non-sub-licensable, non-transferrable, royalty-free license to use the Intellectual Property Rights, owned or controlled by that Party, in existence at the date of this Agreement ("Background IP"), for the term and the conduct of the performance owed under this Agreement to the extent it is required for the fulfillment of the obligations under this Agreement. L'Orange further grants to MTU and its ordering Affiliates and MTU hereby accepts (also on behalf of its ordering Affiliates) a non-exclusive, royalty-free, global, perpetual (and surviving this Agreement), irrevocable, 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			13

		

		
		

		
			non-transferable, sublicensable license in L'Orange's Background IP, solely to the extent this is required for purposes of using and exploiting the Development Results in connection with any OEM development activities, the integration or use of Products in the MTU Engines and any Product support in connection with the MTU Engines, including but not limited to repair, maintenance or [***]; provided, however, such license shall be sublicensable by MTU solely to the extent it exclusively applies to Products sold by L'Orange. Nothing in the foregoing shall obligate L’Orange to provide or license any Know-How and Confidential Information of L'Orange, except where this is necessary for MTU, its ordering Affiliate or sublicensee to make full use of the Product sold by L'Orange, in which case it shall automatically be part of the license granted.
		

		
			3.5.4    [***].
		

		
			3.5.5    Other than as provided in the preceding paragraph, L'Orange shall be free to use its Foreground IP, including any Breakthrough Foreground IP, for its own purposes, including but not limited to the development of products for its customers, other than MTU, provided that such products are not identical with or equivalent in all material aspects of form, fit and function to the Products supplied by L’Orange hereunder. For the avoidance of doubt, L’Orange shall be free to use any ideas, concepts and/or information in which at the time of use there are no Intellectual Property Rights; such ideas, concepts and/or information which are not subject to Intellectual Property Rights and that L'Orange shall thus be free to use may e.g. include information disclosed in any published patent (or patent application) owned by MTU or any of its Affiliates unless such idea, concept and/or information is covered by any of the patent claims in force at the time of such use. 
		

		
			3.5.6    By way of clarification, both Parties are free in using their respective Background IP for their own purpose without limitation.
		

		
			3.6    Indemnification
		

		
			3.6.1    L'Orange shall defend, indemnify and hold MTU and its Affiliates harmless from and against any damages, losses, charges, liabilities, proceedings, payments, judgments, settlements, assessments, deficiencies, taxes, interest, penalties and costs and expenses (including reasonable attorneys' fees and expenses) (collectively, "Losses"), arising from any claim or allegation by a third party against MTU or any of its Affiliates to the extent that claim or allegation alleges that the normal and specified use of a Product, as well as any Foreground IP developed or owned by L'Orange and licensed to MTU in accordance with the provisions of this Agreement, infringes, misappropriates, or otherwise violates the Intellectual Property Rights of a third party within the territories of the European Economic Area and/or the United States of 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			14

		

		
		

		
			America, irrespective of L'Orange's fault (Verschulden), provided that (a) MTU promptly notifies L’Orange in writing of such, (b) L’Orange is given complete control of the defense of such, including the right to defend, settle and make changes in the Products for the purpose of avoiding infringement and (c) MTU provides L’Orange with reasonable information and assistance and takes no action in conflict with or inconsistent with L'Orange's position in such matter, provided however that L'Orange may not admit any wrongdoing of MTU in any settlement or defense without the prior written consent of MTU; further, in addition to any remedies MTU may have against L'Orange under this Agreement, if the Products, or any portion thereof, become the subject of a claim or allegation or if in L’Orange's opinion such is likely to become the subject to such a claim or allegation, L’Orange may cease the delivery of such Products pending resolution thereof and if the Products or the use thereof is enjoined, or if in L’Orange’s opinion is likely to be enjoined, L’Orange may at its option and expense (a) procure for MTU the right to continue using the Products, or applicable portion thereof, (b) modify or replace such in whole or in part to make such non-infringing, or (c) if neither of the forgoing is practical, refund to MTU an equitable portion of the amount paid by MTU to L’Orange for the specific Products, or portions thereof, so affected. Section 29.1 below shall remain unaffected. 
		

		
			3.6.2    With regard to territories not covered by the aforementioned indemnification, L'Orange shall use its reasonable endeavors to ensure that the normal and specified use of a Product, as well as any Foreground IP developed or owned by L'Orange and licensed to MTU in accordance with the provisions of this Agreement, shall not infringe, misappropriate, or otherwise violate the Intellectual Property Rights of a third party.
		

		
			3.7    Joint Development
		

		
			The Parties may, from time to time, agree on pursuing jointly certain development projects. Such joint development projects shall be agreed on, in particular with respect to IP ownership and use or, to the extent not predetermined in this Agreement. pricing, between the Parties separately and shall not be subject to this Agreement.  For the avoidance of doubt, this Section 3.7 shall not limit or restrict L'Orange's rights including but not limited to exclusivity rights granted under this Agreement in respect of jointly developed Products.
		

		
			4.    Purchase and Supply of Products and Services
		

		
			4.1    Scope
		

		
			4.1.1    L'Orange shall provide to MTU and its Affiliates, as the case may be, Products to be supplied by L’Orange hereunder, which shall be reflected in Annex 1,  as may be amended from time to time as further described in this Section 4.1.  The supply of 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			15

		

		
		

		
			Products shall be in accordance with the agreed specifications ("Product Specifications"), as amended from time to time.  Any co-governing standards set out in Product Specifications and as mutually agreed on by the Parties from time to time may be accessed by L'Orange via MTU's webpage at http://www.mtu-online.com/mtu/einkauf/downloads/index.de.html. 
		

		
			4.1.2    The terms of this Agreement shall apply exclusively to any individual contract on the development of New Products ("Development Contract") or to any individual contract on the sale of Products ("Purchase Contract") based on individual orders by MTU as accepted by L'Orange ("Development Orders" or "Purchase Orders" as the case may be), whether or not this Agreement or its terms are expressly referenced in the Development Order or Purchase Order (together, "Order").
		

		
			4.1.3    Any deviating or additional terms, in particular the Parties' general terms and conditions, shall not apply, even if they have not been expressly rejected by the other Party or any Affiliate placing or accepting an Order under this Agreement and even if the other Party or any Affiliate placing or accepting an Order under this Agreement, having knowledge of such deviating or additional terms, performs its obligations under a Development Contract or Purchase Contract without reservation.
		

		
			4.1.4    Exclusivity Requirements During the Minimum Term.
		

		
			a)    During the first five (5) years of the Minimum Term, MTU shall (itself or through its Affiliates) procure 100% (one hundred percent) of its and its Affiliates' demand requirements for Current Exclusive Rights Products and [***] and, in each case, all associated services and related [***] process' demand, exclusively from L'Orange.
		

		
			b)    During the last ten (10) years of the Minimum Term, MTU shall (itself or through its Affiliates) procure no less than [***] of its and its Affiliates' demand requirements for each Current Exclusive Rights Product and [***] and, in each case, all associated services and related [***] process’ demand, exclusively from L’Orange. For the avoidance of doubt, the [***] minimum demand requirements under this Section 4.1.4b) shall apply individually (by part number) with respect to each Current Exclusive Rights Product and [***].
		

		
			4.1.5    With regard to New Products, in the event L’Orange fails to meet key development standards pertaining to development milestones, key customer deliverables (“KCDs”), targets and/or quality gates that have been agreed between the Parties with a specific reference to this Agreement as being of relevance for maintaining the exclusivity for the relevant New Products and continues to fail those, after being provided timely and adequate notice of such failure, to address such failure within a reasonable time, 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			16

		

		
		

		
			MTU’s exclusivity requirements of Section 4.1.4 shall cease to apply with respect to such New Products and MTU shall be entitled to award the development to a third party.  For the avoidance of doubt, nothing in this Section 4.1.5 shall in any manner affect any of L’Orange’s rights with respect to (i) any New Product not specifically being subject of such failure, or (ii) any of the provisions of Section 16.
		

		
			4.1.6    With regard to Other New Products, in the event L’Orange, fails to meet key performance standards pertaining to KPIs that have been agreed between the Parties with a specific reference to this Agreement as being of relevance for maintaining the exclusivity for the relevant Other New Products and continues to fail, after being provided timely and adequate notice of such failure, to address such failure within a reasonable time, MTU’s exclusivity requirements of Section 4.1.4 shall cease to apply with respect to such Other New Products and MTU shall be entitled to award the development to and/or source the Other New Product from a third party.  For the avoidance of doubt, nothing in this Section 4.1.6 shall in any manner affect any of L’Orange’s rights with respect to (i) any Other New Product not specifically being subject of such failure, and (ii) any of the provisions of Section 16. 
		

		
			4.1.7    Should MTU (itself or through its Affiliates) fail to purchase its and its Affiliates' demand pursuant to this Section 4.1, due to reasons not caused by L'Orange's inadequate performance or fault, L'Orange shall be entitled to a contractual penalty (Vertragsstrafe) in the amount of [***]% ([***] percent) of the respective value, which shall be paid in addition to any remedies L'Orange may have against MTU, such as specific performance (Erfüllungsanspruch) or damage claims. In accordance with Section 23, MTU shall maintain complete and accurate records to sufficiently reflect the purchases hereunder.
		

		
			4.2    Performance Standards
		

		
			Subject to Section 29.1.2:
		

		
			4.2.1    L'Orange shall provide the Contractual Services in a professional and workmanlike manner by using skill and care of a highly qualified provider of such services.  
		

		
			4.2.2    Annex 3 and Annex 5 set out certain current key performance indicators ("KPIs") by which the performance of L'Orange will be measured. The KPIs will be mutually agreed on by the Parties on an annual basis. 
		

		
			4.2.3    Subject to acceptable lead times and order volumes within the forecasts under this Agreement, L'Orange shall implement appropriate measures to ensure an average reliability level for adherence to agreed dates and quantities of at least 95 points for all deliveries to MTU measured on a monthly basis. If L'Orange falls short of this 95-percent point target in three (3) consecutive calendar months, it shall, together with 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			17

		

		
		

		
			MTU if necessary, determine the causes and initiate further measures in order to achieve the minimum target (improvement of supplier's logistical capabilities).
		

		
			4.2.4    Until such time as the agreed reliability targets are met, L'Orange shall establish a reasonable buffer with a defined range of coverage, without charging additional costs.
		

		
			4.2.5    L’Orange will endeavor to continuously improve its average reliability level for all deliveries to MTU. 
		

		
			4.3    Exclusivity
		

		
			L'Orange will deliver Products to be supplied by L’Orange hereunder and used for OEM sales to MTU on an exclusive basis. The Products to be provided for the Aftermarket sales, including spare parts, will be sold by L'Orange to MTU on a non-exclusive basis. For the avoidance of doubt, MTU or any of its Affiliates, for which MTU shall be responsible, shall not use, within the Aftermarket, any Products supplied by L’Orange hereunder and designated as being for OEM sales. MTU shall maintain complete and accurate records to sufficiently reflect the uses hereunder.
		

		
			4.4    MTU Affiliates
		

		
			The Affiliates of MTU are entitled to place Purchase Orders and conclude Purchase Contracts subject to the conditions of this Agreement. The conclusion of individual Purchase Contracts by the Affiliates of MTU shall leave MTU's obligations under this Agreement unaffected. MTU shall not be liable for obligations assumed by the Affiliate of MTU under individual Purchase Contracts.
		

		
			5.    Capacity, Forecast, Order Process
		

		
			5.1    Capacity
		

		
			Subject to Section 29.1.2:
		

		
			5.1.1    L'Orange shall hold available sufficient capacity for the provision of Products to be supplied hereunder. L'Orange shall at least be able to deliver the quantities of each specific Product forecasted by MTU for the next twelve (12) forecasted weeks in the monthly rolling forecast as defined in Section 5.2 (the "Monthly Rolling Forecast" or "MRF") plus a buffer of additional 15% (fifteen percent).
		

		
			5.1.2    In case L'Orange does not have sufficient capacity in any relevant plant to fulfil all of its customers' requirements and if L'Orange thus needs to allocate capacity in the Plant, it shall treat MTU no less favorably than any other customer of L'Orange and shall allocate capacity accordingly to fulfil MTU's requirements. For the avoidance of doubt, 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			18

		

		
		

		
			this shall not release L'Orange from any other obligation or liability it may have under this Agreement. 
		

		
			5.2    Forecast
		

		
			At the latest on the last Working Day of a calendar month, MTU will provide L'Orange with a non-binding Monthly Rolling Forecast for MTU's estimated demand of Products to be supplied hereunder for the twelve (12) months following the next calendar month. The MRF shall only contain Products that are needed by MTU on a regular basis. 
		

		
			L'Orange shall confirm in writing within seven (7) Working Days of receipt of a MRF the quantities of Products that L'Orange is able to deliver within the first twelve (12) forecasted weeks. If no such confirmation is received by MTU within the applicable period, the MRF shall be deemed to be accepted by L'Orange and the Product quantities concerned shall be assumed to be available to MTU taking into account the replenishment lead time. 
		

		
			5.3    Order Process
		

		
			5.3.1    If MTU requests L'Orange to provide Contractual Services other than Development Services, it will issue an Order via EDI or such other format as agreed in writing between the Parties. The Parties may enter into a separate EDI agreement to further specify the details. 
		

		
			5.3.2    The required Products indicated in the MRF for the first six (6) weeks of the MRF shall be deemed to have been ordered by way of a binding order and are subject to daily call-offs or Kanban orders as follows:
		

		
			(i)    The purpose of daily call-offs is to control on a day-to-day basis the dispatch of goods by L'Orange. The schedule line of daily call-offs within the defined horizon will not be subsequently changed. Daily call-offs do not need to be confirmed and will be deemed accepted unless rejected by L'Orange within one (1) Working Day.
		

		
			(ii)    Kanban orders may be used for selected materials that are continuously consumed. Kanban orders are placed daily at agreed times and contain specific order quantities for the following day based on actual consumption. Kanban orders are deemed accepted unless rejected by L'Orange within three (3) hours of receipt provided that such Kanban order has been received prior to 2 pm local time at the Plant. 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			19

		

		
		

		
			The same applies to the required Products indicated in the MRF for the weeks seven (7) through twelve (12) of the MRF, provided, however, that MTU may deviate from such forecasted amounts by +/- 10% (ten percent). 
		

		
			5.3.3    L'Orange may reject an Order (including daily call-offs and Kanban orders) only if such Order is not within the volumes set out in the MRF plus a flexibility range of 15%. Unless otherwise specified for certain kinds of Orders, L'Orange shall accept or reject an Order via EDI or such other format as agreed in writing between the Parties. Except for daily call-offs and Kanban orders, if L'Orange fails to notify MTU within three (3) Working Days after receipt of an Order, such Order shall be deemed to be accepted by L'Orange.
		

		
			6.    Change Request for Products
		

		
			MTU may from time to time after a product enters serial production request reasonable changes in the Products, which shall be accepted by L'Orange to the extent they are technically feasible (including design and production feasibility) and subject to the following cost mechanism.
		

		
			(i)    MTU will submit such change request to L'Orange in writing following which L'Orange shall evaluate the change request and its impact on the Products and respond to such request within a reasonable period of time, but in any event within three (3) weeks from receipt of such change request. Such response shall include a reasonable, good faith determination of any development costs and any impact on recurring pricing associated with such change request. Upon MTU’s request, L’Orange will provide further substantiation and support for such estimated costs. 
		

		
			(ii)    The Parties thereafter shall enter into good faith negotiations to reach agreement as to any development costs and recurring cost changes for such change request. In the event the Parties are unable to reach agreement, (A) the development costs for such change request shall be based on L’Orange’s standard development pricing schedules (with appropriate allocated resources and time) consistent with L’Orange’s general practices; and (B) the changes to recurring production costs shall be determined based on past practice, and in either case (A) or (B) subject to MTU’s audit rights pursuant to Section 23.  In the event the Parties cannot reach an agreement on the amounts of such increase in development costs and recurring cost changes within one (1) month after the evaluation of the respective impact by L'Orange was received by MTU, Section 28.6 shall apply.
		

		
			(iii)    [***].
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			20

		

		
		

		
			7.    Terms of Delivery
		

		
			7.1    Products shall be delivered FCA, L'Orange's Plant in Glatten (Incoterms 2010). L'Orange shall give timely notice to the forwarding companies commissioned by MTU and timely nominated by MTU that the Products are ready to be picked up. 
		

		
			7.2    Subject to Section 29.1.2, L'Orange shall supply the Products in the agreed quantity and quality on the date specified in the respective Purchase Contract (or Order, as the case may be), which shall take into account the applicable lead times. The agreed delivery dates specified in the individual Purchase Contract are binding and shall be understood as dates on which the Products shall be received by MTU according to the Incoterm agreed (i.e., in case of FCA to be picked up in Glatten by a forwarding company chosen by MTU). 
		

		
			7.3    The specific lead and delivery times for Products are set out in Annex 1. Further details on the delivery of Products are set out in Annex 4.  The delivery times set out in Annex 1 are standard delivery times calculated from the date of L'Orange's receipt of the Order until delivery of the Products to MTU or such other destination as specified in the Order, subject to the proviso that the Products have been cleared (released) for series production. 
		

		
			8.    Packaging Requirements
		

		
			8.1    Products shall be packed and labeled in a manner sufficient to ensure the safety and good condition of the Products in transit in accordance with all applicable laws, regulations and conventions. Standard delivery specifications are included in Annex 4.
		

		
			8.2    In addition to the standard delivery specifications, special packaging requirements must be observed for certain Products, which the Parties will agree to separately in individual Purchase Contracts. These special requirements usually relate to, among other things, the quantity and position of the Products per load carrier, particular packaging materials and preservation requirements.
		

		
			8.3    MTU will report any alleged non-compliance with the prescribed delivery conditions to L'Orange in the form of a logistics quality report, which will, in the case of actual non-compliance, be incorporated in L'Orange's supplier evaluation. 
		

		
			8.4    Where load carriers / containers are provided by MTU, L'Orange shall, if commercially reasonable, participate in MTU's container management system. MTU and L'Orange will enter into a separate agreement regarding the terms of L'Orange's participation in the container management system.
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			21

		

		
		

		
			8.5    Delivery notes, invoices and other paperwork shall include specific information (such as order number, part number, position and, for replacement orders pursuant to claims for defect, the inspection report number). The Products shall also be labeled for delivery and packaged in the agreed quantity. The binding address for delivery is indicated in the individual Purchase Contract (or Order).
		

		
			9.    Delay
		

		
			Subject to Section 29.1.2: 
		

		
			9.1    If L'Orange becomes aware of a possible delay in the provision of Products, including deliveries of Products, L'Orange shall immediately (unverzüglich) - at the latest three (3) Working Days after L'Orange has become aware of the possible delay - inform MTU thereof and shall notify MTU of the corresponding estimated delivery date in writing. For the avoidance of doubt, such note shall not release L'Orange from any claims MTU may have in case of delay.
		

		
			9.2    In case of delay with the delivery of Products due to the fault (Verschulden) of L'Orange, L'Orange shall pay to MTU a contractual penalty (Vertragsstrafe) [***]. The contractual penalty shall be accounted against any damage claims or other rights MTU may have in addition. Section 341 para. 3 BGB shall not apply; however, a claim of MTU to a contractual penalty under this Section 9.2 shall expire if it has not been asserted in writing within one month after delivery of the Products affected by the relevant delay. 
		

		
			10.    Quality of Products, Claims for Defects
		

		
			Subject to Section 29.1.2:
		

		
			10.1    The Products shall comply with the Product Specifications, otherwise the Products are deemed to be defective.
		

		
			10.2    Notwithstanding Section 10.1, a Product shall not be deemed to be defective if the Product fails due to normal wear and tear, the Product was modified or repaired by unauthorized Person, in case of non-compliance with storage, maintenance, inspection or operating instructions or in case of operation outside the intended use. 
		

		
			10.3    In case of defects to the Products MTU will be entitled to the claims for defects under statutory law unless otherwise provided in this Agreement; claims related to defects in title (Rechtsmangel) and/or violation of third party Intellectual Property Rights are restricted to the territory of the European Economic Area and the United States of America. However, the right to price reduction (Minderung) of the individual Purchase Contract shall be excluded.
		

		
			
		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			22

		

		
		

		
			10.4    The limitation period for claims for defects is [***].  
		

		
			10.5    In case of defects, L'Orange shall send to MTU a statement in the form of an 8D report on the immediate action taken in response to reported defects within 48 (forty-eight) hours after receiving the notice of defects. The report shall be sent by e-mail to Reklamation@mtu-online.com. L'Orange shall also advise MTU in the form of an 8D report of the cause of the defect or perpetrator identified by it and the action initiated to permanently cure the reported defects within fifteen (15) Working Days of receiving the notice of defects or the defective Product (whichever occurs first). The report shall be sent by e-mail to Reklamation@mtu-online.com. 
		

		
			10.6    To the extent technically and commercial feasible, L'Orange shall rectify material defects in Products which have been distributed to MTU's customers or end consumers, upon mutual agreement by the Parties, either at the location of the Product or the place of performance, and will do so without delay and free of charge by repair or replacement of defective parts. 
		

		
			10.7    [***].
		

		
			10.8    [***].
		

		
			10.9    In the event of defects in quality, L'Orange shall, at MTU's reasonable request, inspect the stock of Products at MTU's warehouse. If reasonably requested to do so, L'Orange will advise MTU within 48 (forty-eight) hours of who will conduct the stock inspection and at what time. In order to ensure the availability of the materials it requires for production and assembly, MTU may (at L'Orange's costs) engage a suitable third party to conduct the stock inspection if L'Orange or a third party engaged by L'Orange fails to commence the stock inspection within a reasonable time or at all. The stock inspection may also include other Products which could potentially be affected by the same defect in quality as the Product originally notified as defective.
		

		
			10.10    [***]
		

		
			10.11    Products which cannot be used by MTU because of defects will be returned to L'Orange only after consultation with L'Orange.
		

		
			10.12    If the use of the Products leads to a breach of Intellectual Property Rights of a third party, then as a general rule L'Orange shall, at its own expense, procure a right for MTU to continue using the Products, or modify the Products in a manner reasonable for MTU so that the Intellectual Property Rights are no longer breached, provided that such breach occurred after the Effective Date. If this is not possible on commercially reasonable conditions or within a reasonable period of time, MTU is, in addition to any 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			23

		

		
		

		
			remedies MTU may have against L'Orange in connection with this Agreement, entitled to withdraw from the individual Purchase Contract. 
		

		
			10.13    The Parties undertake to inform each other immediately of defects in title that become known and alleged rights violations, and to give each other the opportunity to take mutually agreed action against such claims. However, L'Orange may defend such claims at its sole reasonable discretion, in which case MTU shall provide reasonable support in defending such claims.
		

		
			10.14    MTU will reimburse L'Orange for the costs incurred by L'Orange as a result of unsubstantiated complaints.
		

		
			11.     Limitation of Liability
		

		
			11.1    L'Orange's annual liability for any claims by MTU under this Agreement is limited to a total amount of [***] ("Liability Cap"). 
		

		
			11.2    L'Orange's liability under this Agreement resulting from business interruption, loss of business, revenue, profit, goodwill, business opportunity, anticipated earnings or savings or unforeseeable or atypical damages, costs, expenses or losses shall be excluded unless and to the extent such damages are covered by the amounts, if any, actually paid to L'Orange under its insurance policies. In case such damages are, in fact, so covered, L'Orange shall be liable for such damages under this Agreement to the extent of the amounts actually paid to L'Orange under its insurance policies with respect to such damages. L'Orange shall be in this respect obliged to make commercially reasonable efforts to receive such actual payments under the respective insurance coverage. For the avoidance of doubt, nothing in this Section 11.2 shall in any way oblige L'Orange to obtain insurance coverage exceeding the coverage agreed on in Section 22.
		

		
			11.3    For the avoidance of doubt, the limitations of liability under Sections 11.1 and 11.2 shall not apply to any liability due to willful misconduct. 
		

		
			11.4    To the extent that L'Orange is not liable under this Agreement, MTU shall defend, and indemnify L'Orange from and against any third party claims and hold harmless L'Orange against MTU's and its Affiliates claims with regard to Losses. Subject to Section 11.5, the foregoing obligation to indemnity (not however, the obligation to hold harmless), shall only apply to the extent such damages are caused by MTU's and/or its Affiliates fault (Verschulden) and subject to the limitations on liability set out Sections 11.1 and 11.2.
		

		
			11.5    Indemnification in relation to [***].
		

		
			
		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			24

		

		
		

		
			12.    Quality Assurance
		

		
			Subject to Section 29.1.2:
		

		
			12.1    L'Orange shall have an adequate quality management system in place and act in line with it. L'Orange shall comply with the quality assurance requirements (quality assurance standard MTQ 5003 and standard production and assembly specification MMN 332) set out in Annex 5. In order to ensure L'Orange's long-term compliance with the quality management standards, the Parties intend to enter into a separate quality management agreement substantially in accordance with the template provided in Annex 5 within six (6) months from the Effective Date of this Agreement.
		

		
			12.2    L'Orange shall be responsible for the inspection of outgoing Products in accordance with Annex 5. The inspection duties of Section 377 of the German Commercial Code (HGB) shall apply only with respect to identity, quantity and any evident damages, or losses during transport. To the extent MTU - without acknowledgement of any legal obligation to conduct inspection beyond the scope defined in the foregoing sentence - becomes aware of any defects upon delivery of Products in accordance with Section 7.1, MTU will immediately (unverzüglich) notify the corresponding transport person and L'Orange of such defect, damage or loss.
		

		
			13.    Product recall 
		

		
			13.1    Where an authority or government agency with the power to order a recall of the Products has notified MTU or L'Orange in writing that, or where MTU or L'Orange has a reasonable reason to assume that the Products:
		

		
			(i)    pose a potential safety risk or could create or cause dangerous situations, including the risk of serious injury or death; or
		

		
			(ii)    have a material fault, material defect or are otherwise of material impaired quality; or 
		

		
			(iii)    do not comply with material statutory or other applicable requirements and standards; and
		

		
			(iv)    to the extent deemed reasonably advisable or necessary on these grounds, the Products concerned must be recalled and/or repaired;
		

		
			L'Orange and MTU will immediately inform one another of the situation and of the underlying facts and circumstances.
		

		
			13.2    Except in cases where a recall is unavoidable because it has been legally ordered by the competent authority or government agency or is time-critical due to the safety risk 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			25

		

		
		

		
			deriving from the defect, the Parties shall discuss in good faith and agree whether a recall of the Products concerned is appropriate.
		

		
			13.3    If a recall is required pursuant to statutory provisions, or where the Parties agree that a recall is appropriate, L'Orange will promptly develop a plan or plans for implementing corrective measures, which will include, among other things, reasonable measures that are necessary and required pursuant to the statutory provisions or other requirements and standards applicable in the specific case. L'Orange will present such plans for corrective measures to MTU for its review and approval prior to their implementation.
		

		
			13.4    MTU and L'Orange will work together and jointly ensure that the plans for corrective measures are reasonable and acceptable to both Parties before their implementation. To enable identification of the Products, L'Orange will provide MTU with usable delivery data and identifying features as and when reasonably requested.
		

		
			13.5    MTU may at any time itself take any corrective measures and, if either (i) legally ordered by the competent authority or government agency, or (ii) reasonably required, send information to the competent authorities and government agencies involved. In such cases, L'Orange shall reasonably cooperate with MTU accordingly and offer its reasonable support.
		

		
			13.6    Where it is established that the recall was caused by fault, material defect or other material quality impairment or material failure to comply with quality standards or statutory or other applicable requirements and provisions for which a Party is responsible, that Party will, at its own expense, and depending on the other Party's reasonable election, either carry out all of the repairs and adjustments necessary as part of the recall, or, provided that the recall was caused by fault (Verschulden), reasonably compensate the other Party for all reasonable costs incurred as a result of or in connection with the other Party carrying out the repairs and adjustments itself. The foregoing does not apply if a Party is not responsible for the cause for the recall.
		

		
			13.7    Each Party will consult the other before notifications relating to potential safety concerns associated with the relevant products are released to the public, the media or authorities and government agencies. However, there shall be no obligation to consult if prior consultation would prevent timely notification of safety concerns under the relevant statutory provisions.
		

		
			14.    [***] and Component Supplies
		

		
			14.1    [***]. 
		

		
			14.2    Prior to the Effective Date, L'Orange obtained supplies of certain components for its products, including without limitation [***], from MTU or its Affiliates. The Parties wish 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			26

		

		
		

		
			to continue such supply also in the future. The supply shall be based on individual orders placed by L'Orange, at the prices applicable between L'Orange and the respective supplier during the calendar year 2017 and, in other aspects, subject to German statutory laws. Deviating from the currently applicable terms or German statutory law, the supplies from MTU or its Affiliates to L'Orange shall be subject to the warranty limitation period applicable between the Parties under this Agreement at the time the order for such components is issued. Prices for such components shall be adjusted upwards or downwards by the same percentage as prices for the Products, for which such components are used, change after the Effective Date.
		

		
			15.    Spare Parts
		

		
			L'Orange will supply the spare parts for Products during the entire lifetime of the End Product series and for a period of [***] years after serial production of the particular End Product has been stopped. In the case of Products intended for military or rail use, L'Orange will supply the spare parts for Products during the entire lifetime of the End Product series and for a period of [***] years after serial production of the particular End Product has been stopped, provided that corresponding obligations exist in MTU's customers' contracts and MTU has informed L'Orange about the Products concerned at the end of the serial production.  
		

		
			All parts or Products delivered to and/or ordered by MTU's warehouse in Überlingen, including [***], shall be considered spare parts and thus being determined for the Aftermarket. No parts or Products that have not been ordered by or delivered to MTU's warehouse in Überlingen shall be used as spare parts. 
		

		
			The usual ratio of spare parts among Products ordered by MTU from L'Orange will be measured during a calendar year. MTU will report to L'Orange the ratio of spare parts among the Products ordered and delivered on an annual basis in January. Should L'Orange have any reasonable basis to so request (such reasonable basis shall include, by way of illustration only and without limitation, the ratio of spare parts among the Products ordered fall by more than [***]% ([***] percent) below the usual ratio), L'Orange will be entitled to request and receive detailed documentation confirming that no Products not determined in accordance with the foregoing paragraph as spare parts have been sold to the Aftermarket.  For the avoidance of doubt, this provision shall be without prejudice to, and in no way shall affect, either Party’s rights pursuant to Section 23.
		

		
			
		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			27

		

		
		

		
			16.    Prices, Invoices, Payment and Adjustments
		

		
			16.1    Product Prices 
		

		
			16.1.1    The current prices for Products, including but not limited to spare parts, are set out in Annex 1, as amended from time to time to include prices for Products as referred to in Section 3.1.4, as adjusted in accordance with this Section 16.1 (such prices for Products, "Product Prices").
		

		
			16.1.2    The Product Prices for (i) Current Exclusive Rights Products, to the extent the Product Prices are not set out in Annex 1 upon signing of this Agreement, and (ii) [***], shall be determined so as to achieve the gross margins ((sales - cost of goods sold) / sales) achieved by L’Orange during calendar year 2017 for similar Products sold by L’Orange to MTU for, as applicable, OEM and for Aftermarket [***]; provided, however, that if such Product has not substantially achieved mature volumes, gross margins shall be as planned at maturity.
		

		
			16.1.3    In the event pricing for Products to be sold hereunder as of the Effective Date is not reflected in Annex 1, the pricing established pursuant Section 16.1.2 shall be made applicable retroactively as of January 1st, 2018; provided that, in the case of Aftermarket sales, retroactive pricing from January 1, 2018 through the day prior to the Effective Date shall not take into consideration the [***].
		

		
			16.1.4    The Product Prices are exclusive of applicable VAT and shall be paid in Euro.
		

		
			16.1.5    The Product Prices for any Product that is or becomes subject to this Agreement, shall be subject to the following annual price adjustment for each calendar year beginning with calendar year 2019 based on the below [***] escalation formula; [***].
		

		
			16.1.6    L’Orange and MTU will work together toward continuous improvement (VA/VE) objectives on an ongoing basis to endeavor to offset labor and material inflation that face the relevant markets, supply base and industries. [***].
		

		
			16.2    Invoices
		

		
			16.2.1    Each invoice of L'Orange to MTU shall in all respects comply with the requirements of a proper invoice.
		

		
			16.2.2    L'Orange shall send each invoice to the address indicated in the corresponding Order or as otherwise notified by MTU.
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			28

		

		
		

		
			16.3    Payment Terms
		

		
			16.3.1    MTU shall pay invoices for Contractual Services within [***] after receipt of the corresponding invoice in accordance with Section 16.2 and after provision of the corresponding Contractual Services by L'Orange.
		

		
			16.3.2    Payment shall not be deemed an acceptance of Contractual Services, including Products, by MTU.
		

		
			16.4    Aftermarket [***]
		

		
			16.4.1    For purposes of this Section 16.4
		

		
			[***] shall mean [***].
		

		
			[***]
		

		
			[***] shall mean
		

		
			(i)    For FY2018, [***] 
		

		
			(ii)    For FY2019, [***]
		

		
			(iii)    For FY2020, [***]
		

		
			(iv)    For FY2021, [***]
		

		
			(v)    For FY2022, [***]
		

		
			(vi)    For FY2023, [***]. 
		

		
			16.4.2    [***].
		

		
			16.4.3    [***].
		

		
			16.4.4    [***].
		

		
			16.4.5    [***]
		

		
			17.    Offset Agreements 
		

		
			L'Orange agrees that the individual Purchase Contracts (Orders) are placed with respect to MTU's offset obligations worldwide. Therefore, the procurements and activities done based on such individual Purchase Contracts (Orders) may be reported as offset in each order country by MTU or MTU's customer. L'Orange will endeavor to assist MTU in connection with the recognition process reasonably necessary for MTU 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			29

		

		
		

		
			to fulfill the requirements of offset of the respective country and its current offset policy. MTU's offset management will inform L'Orange about the country and such country’s valid offset policy.
		

		
			18.    Compliance, Environmental Protection
		

		
			18.1    L'Orange shall comply with all applicable local and European statutory laws, regulations, directives (in particular but not limited to the EU "New Approach and Global Approach" Directives, REACH or Machinery Directive and its German implementation) and other official requirements, such as safety standards and guidelines of public authorities, trade associations and professional associations as well as any applicable safety, workers' protection and health and environmental regulations and to obtain all necessary permits required to fulfill its obligations under this Agreement.
		

		
			18.2    L'Orange shall ensure that all components and materials included in the Products comply at the time of their delivery with all applicable statutory and official requirements relating to constituent substances, chemical work and material safety and environmental protection within the European Economic Area and/or the United States of America. L'Orange shall ensure that the Products comply with the legal requirements that must be met so that the Products are legally allowed to be implemented into End Products and marketed to end customers within the territory of the European Economic Area and/or the United States of America. 
		

		
			18.3    L'Orange shall inform MTU without undue delay (unverzüglich) in the case L'Orange becomes aware that, following the Effective Date, any Product sold by L’Orange hereunder does no longer comply with the requirements set out in Section 18.2.
		

		
			18.4    L'Orange may retain performance towards MTU if it would violate such requirements set out in Section 16.1 for reasons not due to L'Orange's fault or responsibility.
		

		
			19.    Export Control and Foreign Trade Data Regulations
		

		
			19.1    L'Orange acknowledges and agrees that the Products and Contractual Services provided hereunder may be subject to the export control laws and regulations of the United States, EU and national legislation. This includes but is not limited to the Export Administration Regulations (EAR), German Global Trade Regulations (Aussenwirtschaftsgesetz / Verordnung), EU Dual-Use-Regulation and sanctions regimes of the U.S. Department of Treasury or Office of Foreign Asset Controls. For all Products to be delivered and Contractual Services to be provided L'Orange shall comply with all applicable export control, customs and foreign trade regulations ("Foreign Trade Regulations") and shall, at MTU's expense, obtain all necessary export licenses, unless MTU or any party other than L'Orange is required to apply for 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			30

		

		
		

		
			the export licenses pursuant to the applicable Foreign Trade Regulations. In any case, L'Orange shall, to a reasonable extent and at no cost to MTU, provide all necessary documents, specifications, certificates etc. that are required by law. MTU shall provide assistance in properly identifying this documentation.
		

		
			19.2    L'Orange shall advise MTU in writing (including fax and email) as early as possible but not later than five (5) weeks prior to the agreed delivery date of any information and data required by MTU to comply with all Foreign Trade Regulations for the Products and Contractual Services applicable in the countries of export and import as well as re-export in case of resale. MTU shall provide reasonable assistance in properly identifying this information and data required.
		

		
			19.3    MTU's and L'Orange' obligation to fulfill this Agreement and any individual order resulting therefrom is subject to the proviso that the fulfillment is not prevented by any impediments arising out of national and international foreign trade and customs requirements or any embargos or other sanctions.
		

		
			20.    Code of Conduct
		

		
			20.1    L'Orange shall implement procedures that demonstrate its commitment to the Rolls-Royce Supplier Code of Conduct as set out in Annex 6 ("Code of Conduct"). L'Orange shall use its commercially reasonable efforts to communicate these principles to its suppliers and encourage them to implement practices consistent with these principles. L'Orange will further endeavor to convey these principles in an appropriate manner to its employees.
		

		
			20.2    MTU reserves the right, upon reasonable written notice, to review the L’Orange ethics program, and L’Orange shall provide reasonable support to MTU in the conduct of any such review.
		

		
			21.    Anti-Bribery and Corruption
		

		
			21.1    Each Party makes the following warranties to the other Party on the date of this Agreement:
		

		
			21.1.1    that this Agreement, the relationship created hereby and its activities hereunder and including any services rendered on its behalf by any third party in relation to the activities undertaken pursuant to this Agreement, do not and will not violate applicable laws, including but not limited to the ABC Legislation, or put the other Party in violation of any such laws;
		

		
			21.1.2    that its Representatives and any other Person acting on its behalf have not, in respect of the subject matter of this Agreement authorised, offered, promised, paid or 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			31

		

		
		

		
			otherwise given anything of value, any benefit or any financial or other advantage to or for the use or benefit of:
		

		
			(i)    any Government Official;
		

		
			(ii)    any director, officer, employee, agent or representative of any commercial organisation or private individual; or
		

		
			(iii)    any other Person, entity or third party intermediary while knowing or having reason to know that all or any portion of such payment, thing of value or advantage would be offered, promised, paid or given to any of the Persons described in Section 21.1.2,
		

		
			for the purpose of improperly influencing any act, inaction or decision by such Person in order to obtain or retain business, direct business to any Person or secure any other advantage;
		

		
			21.1.3    that its Representatives and any other Person acting on its behalf have not, in respect of the subject matter of this Agreement engaged in any other conduct which would constitute an offence under the ABC Legislation; and
		

		
			21.1.4    that neither it nor any Person acting on its behalf, including without limitation any of its current or former directors, officers or employees, whether directly or indirectly, in connection with the subject matter of this Agreement, will carry out any of the acts described in Section 21.1.
		

		
			Each Party will procure compliance with the provisions of Section 21.1 by any Person acting on its behalf, including its Representatives, in relation to this Agreement.
		

		
			22.    Insurance
		

		
			22.1    L'Orange shall maintain at least the following insurances, each with an insurance coverage of [***] per occurrence and of [***] per aggregate:
		

		
			(i)    commercial general liability insurance inclusive of coverage for public liability and product liability; and
		

		
			(ii)    property insurance covering business interruption coverage. 
		

		
			22.2    L'Orange shall give immediate written notice to MTU in the event of a cancellation, material variation of terms, default or any other change to the insurance coverage L'Orange has to maintain according to this Section 22 that may affect MTU's interest.
		

		
			
		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			32

		

		
		

		
			23.    Audit
		

		
			23.1    Upon 15 (fifteen) Working Days prior notice, each Party or any accountant nominated by such Party shall have the right to audit any place where the other Party performs work in connection with this Agreement and has the right to audit, examine and inspect all or any portion of the other Party’s records and documents related to and relevant for this Agreement on the audited Party’s property as such auditing Party may reasonably require for the purpose of verifying the other Party’s compliance with its obligations under this Agreement. Such audit shall be made during the usual business hours.
		

		
			23.2    The audited Party shall provide competent personnel with sufficient knowledge of any books, documents and records and shall reasonably assist the auditing Party or the accountant during the audit.
		

		
			23.3    The audit shall generally be conducted at the auditing Party’s cost, except in cases where the audit reveals that the audited Party has been in breach of obligations under this Agreement to the disadvantage of the auditing Party; in such case the audited Party shall bear the respective costs for the audit. The audited Party shall also bear the costs of event-related audits in cases where the audit has been conducted due to repeated deliveries of defective Products, provided, however, that in such case the audited Party shall pay to the auditing Party a lump sum fee of EUR 2,000 per event-related audit.
		

		
			23.4    If the audit reveals that the audited Party is in breach of obligations under this Agreement, the audited party shall immediately take all actions reasonably necessary to remedy such breach and to be in compliance with the obligations under this Agreement. Further, if the audit reveals that the auditing Party can be held responsible for defects of Products due to faulty manufacturing, an 8D Report will be generated by the auditing Party, applied and provided to MTU.
		

		
			24.    Confidentiality and Publications
		

		
			24.1    The Parties shall keep confidential all documents, information, Know-How and data furnished by or on behalf of a Party ("Disclosing Party") to the other Party ("Receiving Party") and which the Disclosing Party orally or in writing marks or designates as or are of the nature such that they may be presumed to be 'confidential' and which are made available to them or of which they gain knowledge on the basis of the co-operation under this Agreement ("Confidential Information"). This also applies to the existence and the content of this Agreement, MTU Intellectual Property Rights (in this case MTU as Disclosing Party) and L'Orange Intellectual Property Rights (in this case L'Orange as Disclosing Party). The Parties shall treat the Confidential Information in the same way as its own confidential information, but at least with the 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			33

		

		
		

		
			due care of a prudent businessman. This obligation shall apply for 10 (ten) years after this Agreement has terminated.
		

		
			24.2    Any disclosure by a Receiving Party of the Disclosing Party's Confidential Information to third parties requires the Disclosing Party's prior written consent. Disclosure of Confidential Information to directors, officers, employees, temporarily contracted personnel, agents, contractors and subcontractors is permitted only within the scope required for the performance of the obligations incumbent on the Parties under this Agreement.
		

		
			24.3    Confidential Information shall not include and the foregoing obligations shall not apply to any information:
		

		
			(i)    which had been known to the Receiving Party before the latter received the same from the Disclosing Party;
		

		
			(ii)    which the Receiving Party developed itself independently without recourse to or use of the information of the Disclosing Party;
		

		
			(iii)    which the Receiving Party lawfully obtained from third parties who to the knowledge of the Receiving Party (a) were not subject to any confidentiality undertaking towards the Disclosing Party and (b) such third parties in turn did not acquire the information through the infringement of protective provisions in favor of the Disclosing Party;
		

		
			(iv)    which became known to the Receiving Party without violation of these provisions or any other regulations on the protection of business secrets of the Disclosing Party or are or were publicly known; or
		

		
			(v)    which the Receiving Party must disclose based on statutory, official or judicial order; in this case the Receiving Party shall inform the Disclosing Party prior to the disclosure and shall restrict as far as possible the scope of such disclosure.
		

		
			24.4    Upon the Disclosing Party's request or after termination of this Agreement, the Receiving Party shall promptly either return to the Disclosing Party all Confidential Information received by the Receiving Party or destroy such Confidential Information and confirm in writing to the Disclosing Party that the Confidential Information has been destroyed. For the sole purposes of (i) evidencing compliance with this Agreement in the case of disputes in connection with this Agreement and (ii) complying with legal obligations, the Receiving Party may maintain a secure file containing a single copy of the Confidential Information returned to the Disclosing Party.
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			34

		

		
		

		
			24.5    All publications in connection with the subject matter of this Agreement require the respective other Party's prior written consent.
		

		
			25.    [***], Force Majeure 
		

		
			25.1    [***].
		

		
			25.2    If L'Orange is hindered in its performance of its contractual obligations due to force majeure such as mobilisation, war, terrorism, unrest, fire, flood or other unforeseeable circumstances for which L'Orange is not responsible, such as strikes or lock-outs, disruptions in operations, shortage of transportation, difficulties in procuring raw materials or inadequate deliveries to L'Orange by its suppliers, the agreed delivery periods shall be extended in each case by the duration of the hindrance plus a reasonable start-up period, but by three months at the most. L'Orange shall not be responsible for the foregoing circumstances even where such circumstances occur during an already existing default. L'Orange shall notify MTU of the circumstances of the hindrance as well as the probable duration of the delay and take reasonable steps to mitigate the consequences of the force majeure event.
		

		
			If the hindrance lasts for two (2) months or longer, each Party may rescind the affected Order.
		

		
			26.    Term and Termination
		

		
			26.1    This Agreement shall commence on the closing date of the transaction contemplated by the Sale and Purchase Agreement in relation to the Transaction ("SPA") (such date, the "Effective Date"), subject to the condition precedent (aufschiebende Bedingung) that closing under the SPA took place.
		

		
			26.2    This Agreement shall have an indefinite term. It may be terminated by either Party by 18 (eighteen) months' prior notice, but in no event with effect prior to 31 December 2032 ("Minimum Term") (in which case the termination notice has to be served by 30 June 2031 the latest). In the event that the Minimum Term is not extended, the terms and conditions of this Agreement shall remain applicable to any performance of obligations under this Agreement. 
		

		
			26.3    The right to termination for good cause (Kündigung aus wichtigem Grund) shall not be affected. For MTU, such good cause exists only if:
		

		
			(i)    L'Orange repeatedly and continuously is in material non-compliance with Product Specifications; provided that in all cases L'Orange shall have the right to cure this breach within a reasonable period, which shall reflect commercially reasonable technical capacities and resources of L'Orange required to cure this 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			35

		

		
		

		
			breach; in particular, given the importance of the long-term development and purchase commitments by MTU and its Affiliates towards L'Orange under this Agreement, (a) the reasonable period to cure this breach shall be no less than twelve (12) months, (b) MTU shall provide all reasonable efforts in supporting L’Orange’s efforts to cure such breach, and (c) for so long as such breach remains uncured, on a quarterly basis the matter must be elevated to each Party’s respective highest principal officer. 
		

		
			(ii)    L'Orange finally ceases to provide Contractual Services to MTU;
		

		
			(iii)    a Party becomes insolvent, an application to initiate insolvency proceedings against a Party has been filed, any such application has been rejected due to lack of assets, any executions against a Party have been fruitless or any execution measures have been initiated against a Party which have not been cancelled within one (1) month (e.g. cancellation of seizure) (in this case, without prejudice to any other termination rights L'Orange may have, termination right also for L'Orange); or
		

		
			(iv)    a Competitor Change in Control in L'Orange occurs and MTU has a reasonable basis to believe in good faith that the competitor gaining Control in L'Orange will cause a material breach of this Agreement by L'Orange, in which case this subsection (iv) shall apply. Should such Competitor Change in Control occur during the Minimum Term, MTU shall be entitled to exercise its right to terminate this Agreement by serving a termination notice within six (6) months from such Competitor Change in Control becoming effective; such termination notice shall end this Agreement twelve (12) months after having been served. In such case, [***];
		

		
			(v)    a Competitor Change in Control in L'Orange occurs and MTU does not have a reasonable basis to believe in good faith that the competitor gaining Control in L'Orange will cause a material breach of this Agreement by L'Orange, in which case this subsection (v) shall apply. Should such Competitor Change in Control occur during the Minimum Term, MTU shall be entitled to exercise its right to terminate this Agreement by serving a termination notice within six (6) months from such Competitor Change in Control becoming effective; such termination notice shall end this Agreement twelve (12) months after having been served. In such case, MTU shall be obliged to compensate L'Orange for the fair market value of the future business lost by such termination. For this purpose, the fair market value of the future business lost shall be established by using valuation methodology and inputs (net present value of future cash flows, discount rates, EBITDA multiples, etc.) that are comparable to methodologies and inputs for 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			36

		

		
		

		
			the valuation that are reasonable for M&A transactions of a similar business within the applicable industry. In such case, [***].
		

		
			26.4    Termination notices have to be in writing.
		

		
			26.5    In case of termination of this Agreement by either Party, except for cases in which L'Orange terminated this Agreement due to good cause, L'Orange shall immediately provide reasonable assistance to enable MTU to continue the provision of Contractual Services within due time. L'Orange shall in particular allow MTU to place final purchase Orders and provide any documentation, technical assistance and training as well as license any L'Orange IP rights required for the provision of Contractual Services. Except for cases in which L'Orange terminated this Agreement due to good cause, L'Orange will after termination of this Agreement further deliver Products to MTU based either on individual purchase orders or on a separate transition agreement to be concluded, until MTU has found a new supplier, but in no event longer than 12 (twelve) months after this Agreement has terminated. Such deliveries shall in no event lead to an extension of this Agreement.    
		

		
			26.6    Upon termination, either Party shall without undue delay (unverzüglich) return to the other Party all Confidential Information, Know-How as well as Background IP, unless provided otherwise in this Agreement.
		

		
			26.7    The termination shall have no effect on already concluded individual Purchase Contracts. 
		

		
			27.    Competitor Change in Control
		

		
			27.1    In the event (and only in the event) of a Competitor Change in Control, the following shall automatically become effective immediately upon the Competitor Change in Control:
		

		
			27.1.1    [***]
		

		
			27.1.2    [***].
		

		
			27.1.3    [***]. 
		

		
			27.1.4    [***]. 
		

		
			27.1.5    [***].
		

		
			27.2    In deviation from Section 27.1, Section 27.1.5 shall apply immediately prior to Competitor Change in Control and L'Orange shall notify MTU about such upcoming 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			37

		

		
		

		
			Competitor Change in Control in writing reasonably prior to such Competitor Change in Control, to enable MTU to exercise its right under Section 27.1.5(iv).
		

		
			28.    Dispute Resolution
		

		
			28.1    Any dispute or controversy arising out of or in relation to this Agreement including its existence, validity or termination ("Dispute") shall be settled amicably by negotiation between the Parties within 30 (thirty) days from the date of written notice of either Party of the existence of such Dispute.  
		

		
			28.2    Failing such amicable settlement, all Disputes shall be escalated by either Party to the "Management Board" consisting of representatives of both Parties at least of vice president level. Such Dispute shall be settled amicably by negotiations between the members of the Management Board within 30 (thirty) days from the date of the written notice of escalation.
		

		
			28.3    Failing such amicable settlement by the Management Board, all Disputes shall be finally settled in accordance with the Arbitration Rules of the German Institution of Arbitration (Deutsche Institution für Schiedsgerichtbarkeit e.V. (DIS)) without recourse to the ordinary courts of law. Temporary relief (Einstweiliger Rechtsschutz) before the courts of the competent jurisdiction shall remain unaffected. If temporary relief is sought before the ordinary courts, the courts of Munich, Germany, shall have jurisdiction. 
		

		
			28.4    The place of arbitration is Munich, Germany. The arbitral tribunal consists of three arbitrators and the chairman shall be eligible for the office of a judge in Germany. The language of the arbitral proceedings is English. The arbitral tribunal shall also determine the costs of the arbitration proceeding, including reasonable attorney fees, and decide upon their allocation among the Parties.
		

		
			28.5    The Parties undertake to keep confidential (i) all awards obtained in the arbitration, (ii) all materials submitted or created for the purposes of the arbitration and (iii) all other documents produced by a Party, in each case of (i) to (iii) except and to the extent that information or documents are (x) already lawfully in the public domain, or (y) disclosure thereof may be required by a Party to comply with mandatory law or to protect or pursue a legal right or to enforce or challenge an award granted in legal proceedings before a court.
		

		
			28.6    Solely with respect to those instances in which this Agreement refers to this Section 28.6 and in the event in such instances the Parties could not otherwise reach an agreement on a reasonable price determination or reasonable cost determination or other value determination required in this Agreement, such reasonable determination of price, cost or other value in accordance with the principles agreed between the 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			38

		

		
		

		
			Parties for the relevant price, cost and/or other value shall be conducted by an independent and neutral expert or auditor (Sachverständiger oder Wirtschaftsprüfer) mutually agreed on by the Parties. Should the Parties not be able to agree on a neutral expert or auditor within ten (10) days, each Party shall have the right to refer the matter to the Chamber of Industry and Commerce Bodensee-Oberschwaben (IHK Bodensee-Oberschwaben) to determine the respective expert or auditor. The neutral expert or auditor shall make its decision in accordance with Section 317 of the German Civil Code (BGB) and the respective decision shall be binding and final unless it shows manifest errors. Any costs and expenses incurred by the neutral expert or auditor shall be borne equally by the Parties. 
		

		
			29.    Miscellaneous
		

		
			29.1    No Breach of Agreement
		

		
			29.1.1    Any claims of MTU or any of its Affiliates against L'Orange under this Agreement ("MTU Claim Basis") shall be excluded to the extent the facts relating to the MTU Claim Basis, (i) constitute a previous or continuing course of action that qualifies as a breach of the representations, warranties, guarantees, covenants or indemnification obligations (collectively, "Guarantees") provided by MTU pursuant to the SPA or this Agreement, or (ii) are caused by a breach of the TSA (during its term) by MTU or its Affiliates; in each case, such exclusions shall apply without regard to any applicable limitations in the SPA or the TSA that may preclude the enforcement of such Guarantees or corresponding claims under the TSA such as, without limitation, expiry of limitation period, de-minimis amount, threshold, caps, and disclosure schedules.
		

		
			29.1.2    To the extent (i) this Agreement imposes on L'Orange any performance obligations in connection with Sections 4.2, 5.1, 7.2, 9, 10 and 12 ("Agreed Performance Standard"), and (ii) L'Orange’s actual performance during the last 12 months prior to the Effective Date would have constituted a breach of such Agreed Performance Standard, L’Orange shall for the first six (6) month period following the Effective Date be held only to the standard of L’Orange’s actual performance during the 12 month period prior to the Effective Date ("Baseline Performance Standard"). L'Orange shall thereafter endeavor to achieve the Agreed Performance Standard as soon as reasonably practicable, at improvement rates consistent with past performance improvement rates that L'Orange has demonstrated, or such greater improvement rates as can be reasonably expected by MTU (e.g., such as those reflected on mutually agreed scorecards), until the Agreed Performance Standard is achieved. 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			39

		

		
		

		
			29.2    Entire Agreement
		

		
			This Agreement represents the entire provisions relating to the subject matter of this Agreement and replaces all previous provisions agreed between the Parties in respect of the subject matter of this Agreement, in particular the frame agreement between MTU und L'Orange (Rahmenvereinbarung) dated 30 July 2010 (document 20100205_Rahmenvereinbarung_L'O_MTU_12.doc). For the avoidance of doubt, any orders placed by MTU with L'Orange before the Effective Date and regarding the subject matter of this Agreement shall remain unaffected. Annexes form an integral part of this Agreement. No oral side agreements have been made.
		

		
			29.3    Written Form Requirement
		

		
			Amendments and modifications to or cancellation of this Agreement including its Annexes shall be made in writing in order to be valid. This shall also apply to the cancellation of this written-form requirement. For the avoidance of doubt, email and fax shall not be sufficient to comply with this written-form requirement.
		

		
			29.4    Severability
		

		
			Should any provision of this Agreement be or become, either in whole or in part, void, ineffective or unenforceable, then the validity, effectiveness and enforceability of the other provisions of this Agreement shall remain unaffected thereby. Any such invalid, ineffective or unenforceable provision shall, to the extent permitted by law, be deemed replaced by such valid, effective and enforceable provision as most closely reflects the economic intent and purpose of the invalid, ineffective or unenforceable provision regarding its subject-matter, scale, time, place and scope of application. The aforesaid rule shall apply mutatis mutandis to fill any gap that may be found to exist in this Agreement.
		

		
			29.5    Notices
		

		
			To the extent notifications or other declarations to the other Party have to be made in writing, email and fax shall be sufficient to comply with this written-form requirement.
		

		
			29.6    Assignment 
		

		
			Without the respective other Party's prior written consent, no Party shall, in part or in whole, assign its rights and obligations under this Agreement. However, each Party may assign its contractual position (i.e. its rights and obligations as a whole) under this Agreement to its Affiliates upon the other Party's prior written consent; such consent must not be unreasonably withheld or delayed.
		

		
			
		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			40

		

		
		

		
			29.7    Assignment of IP Rights 
		

		
			L'Orange may only assign any item of Foreground IP or Background IP to which a license is granted to MTU under this Agreement to any third party if such assignment does not affect the terms of the respective license granted to MTU, unless MTU agrees otherwise in writing. Any attempted assignment, directly or indirectly, made in breach of this Section 29.7 shall be null and void ab initio, and L'Orange shall indemnify and hold MTU harmless from and against any damage resulting therefrom.
		

		
			29.8    Subcontracting
		

		
			L'Orange shall not, without prior written consent of MTU, materially subcontract a substantial portion of the provision of any Contractual Service or parts thereof to third parties. Even if MTU consents to such subcontracting, L'Orange will remain fully responsible for the proper and timely provision of all Contractual Services. For the avoidance of doubt such consent must not unreasonably be withheld or delayed.
		

		
			29.9    Language
		

		
			This Agreement, its words and phrases are to be construed under German law paying regard to the use of English as language of convenience for both Parties. Terms in brackets shall have their meaning under German law without recourse to any other law.
		

		
			29.10    Governing Law
		

		
			Any and all legal relationships relating to this Agreement shall be governed exclusively by the laws of the Federal Republic of Germany, excluding the UN Convention on Contracts for the International Sale of Goods (CISG).
		

		
			29.11    Order of Precedence
		

		
			Except to the extent that any other provision of this Agreement provides to the contrary by express reference to the order of precedence of documents, if there is any inconsistency between this Agreement, any Order or any Annex, the documents will take the following order of precedence:
		

		
			(i)    the body of this Agreement;
		

		
			(ii)    the Annexes to this Agreement;
		

		
			(iii)    accepted Order.
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			41

		

		
		

		
			29.12    Annexes
		

		
			The following Annexes are part of this Agreement:
		

			
					
						﻿

					
					
						 

					
					
						 

				
	
					
						           

					
					
						Annex 1:

					
					
						Products, Product Prices (Table) Lead Times

				
	
					
						﻿

					
					
						Annex 2a:

					
					
						[***]

				
	
					
						﻿

					
					
						Annex 2b:

					
					
						[***]

				
	
					
						﻿

					
					
						Annex 3:

					
					
						[***]

				
	
					
						﻿

					
					
						Annex 4:

					
					
						MTU's General Specifications for Delivery

				
	
					
						﻿

					
					
						Annex 5:

					
					
						Quality Assurance Standards, Template of the Quality Management Agreement

				
	
					
						﻿

					
					
						Annex 6:

					
					
						Rolls-Royce Supplier Code of Conduct

				

		
			﻿
		

			
					
						﻿

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Signed for and on behalf of

					
					
						 

					
					
						Signed for and on behalf of

					
					
						 

				
	
					
						L'Orange GmbH

					
					
						 

					
					
						MTU Friedrichshafen GmbH

					
					
						 

				
	
					
						Place, Date:

					
					
						 

					
					
						Place, Date:

					
					
						 

				
	
					
						Hamburg, Germany

					
					
						 

					
					
						Hamburg, Germany

					
					
						 

				
	
					
						1 June 2018     

					
					
						 

					
					
						1 June 2018     

					
					
						 

				
	
					
						Name:

					
					
						 

					
					
						Name:

					
					
						 

				
	
					
						/s/ Katherine Minski

					
					
						 

					
					
						/s/ Daniel Weiss

					
					
						 

				
	
					
						(Print)

					
					
						 

					
					
						(Print)

					
					
						 

				
	
					
						Title:

					
					
						 

					
					
						Title:

					
					
						 

				
	
					
						Based on Power of Attorney

					
					
						 

					
					
						Based on Power of Attorney

					
					
						 

				
	
					
						﻿

					
					
						 

					
					
						 

					
					
						 

				

		
			﻿
		

		
			 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			 

		

		Annex 1 to the Frame Development and Purchase Agreement – Price List
		

		
			﻿
		

		
			﻿
		

		
			[***]
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			1

		

 

		

			 

		

		Annex 2a to the Frame Development and Purchase Agreement – [***]
		

		
			﻿
		

		
			﻿
		

		
			[***]
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			1

		

 

		

			 

		

		Annex 2b to the Frame Development and Purchase Agreement – [***]
		

		
			﻿
		

		
			﻿
		

		
			[***]
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			1

		

 

		

			 

		

		Annex 3 to the Frame Development and Purchase Agreement – [***]
		

		
			﻿
		

		
			﻿
		

		
			[***]
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			1

		

 

		

			 

		

		Annex 4 to the Frame Development and Purchase Agreement – MTU’s General Specifications for Delivery
		

		
			﻿
		

			
					
						﻿

					
					
						 

					
					
						 

				
	
					
						1.     Documentation

					
						1.1   Delivery note

					
						a)  The delivery note (Annex 1) should be issued in accordance with DIN 4991 and must contain the following data fields:

					
						    MTU order number(s)

					
						    MTU order item number (for multi-item orders only)

					
						    Delivery point (as specified in the order)

					
						    MTU material number(s)

					
						    Part name

					
						    Quantity being delivered

					
						    Type and quantity of individual load carriers / packages (euro-pallets, disposable cardboard boxes, etc.); if MTU load carriers are used: Material no. according to the MTU container management system (see Clause 4 d)

					
						    Total gross weight incl. unit of measure

					
						    Name and address of supplier, including point of contact for any queries

					
						    Delivery note number

					
						    Delivery note date

					
						    Shipping method (e.g. by truck)

					
						    Name of freight carrier / forwarder

					
						    Shipping terms (e.g. FCA)

					
						    special notes, e.g. reference to ESD Guidelines (in cases of electronic components), details as per order in cases of limited-life materials, uneven weight distribution, reference to special points of agreement or goods for consignment stock (where consignment stocking has been agreed), reference to any accompanying test certificate / initial sample test report (see Clause 3.3c)

					
					
						         

					
					
						b)  A separate delivery note must be issued for each delivery point.

					
						1.2   Bill of lading

					
						a)  The supplier must issue the forwarding agent one bill of lading per delivery point.

					
						If necessary, the online form available on the MTU Purchasing website (www.mtu-online.com) may be used.

					
						Attention must be drawn to any package peculiarities such as uneven weight distribution or non-stackables.

					
						b)  Delivery note numbers must be listed on the bills of lading to ensure traceability.

					
						c)  Where Europool load carriers are used, the bill of lading must contain details of type and quantity thereof.

					
						d)  Associated delivery notes must be appended to the bill of lading. Bills of lading complete with delivery notes must be issued separately to the carrier.

					
						e)  An additional weather-protected copy of the delivery note must be affixed firmly and visibly to the outside of the load carrier or package (for requirement see Clause 3.3 b).

					
						f)   Where deliveries are made by the supplier, a bill of lading, whereas not mandatory, is recommended in the interests of ensuring fast processing of incoming goods.

					
						1.3   Customs documents (non-EU consignments)

					
						In addition to the delivery note and bill of lading, import processing also requires (Street: CMR bill of lading, Air: AWB, Sea: bill of lading):

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			

		

		

			General Specifications for Deliveries

		

		
		

			
					
						﻿

					
					
						 

					
					
						 

				
	
					
						    Commercial invoice (or proforma invoice where consignment is free of charge)

					
						    Original preference documents (only where the goods are coming from a country which has a treaty with the EU), such as ATR, EUR.1, UZ Form A, etc.

					
						Five copies of the commercial invoice or proforma invoice must be issued (2 for the carrier, 1 attached to the package, 1 inside the package, 1 to the MTU Customs Office) and must incorporate the following features:

					
						    Title: Commercial invoice or proforma invoice

					
						    Invoice number and date

					
						    Correspondence addresses of seller, buyer and consignee

					
						    Carrier

					
						    Port of departure/arrival

					
						    Incoterms

					
						    Terms of payment

					
						    MTU order number

					
						    MTU material number and name

					
						    Goods number (HS code)

					
						    Indication of origin

					
						    Quantity

					
						    Unit price and total price or the comment “For customs clearance only. No payment required!”

					
						    Net and gross weights

					
						    Type and quantity of packages The copy for the MTU Customs Office must arrive before the goods.

					
						1.4   Documentation language

					
						Documents, markings and delivery papers intended to identify the consignment must be in German or English.

					
					
						          

					
					
						Where statutory requirements (e.g. customs regulations) stipulate a different language, a German or English translation must be included.

					
						2.     Component protection and packaging

					
						2.1   General protection for components

					
						All components must essentially be packaged in a manner which is suitable for the chosen mode of transport and which provides protection against:

					
						a)  Corrosion (as per process standard MTV5066; see Clause 6.2)

					
						b)  Soiling and contamination

					
						c)  Damage, in particular to functional or sealing surfaces

					
						d)  Electrostatic charging (where necessary)

					
						e)  Buckling or breakage Packaging should be selected to offer the smallest possible dimensions and the smallest possible amount of unfilled space therein.

					
						Packaging should also be chosen such that it enables packages to be stacked. Components should, for example, not be allowed to protrude over the top edge of the load carrier. Where they protrude laterally from the side of the carrier, collision guards must be attached.

					
						Where cardboard boxes or similar are used, these must be robust enough, even after removal of transit protection, to permit safe storage and removal of individual components.

					
						2.2   Specific protection for components

					
						Protective measures over and above the general packaging requirements are specified by MTU Friedrichshafen in the form of (material number specific) packing instructions,

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			2

		

 

		

			

		

		

			General Specifications for Deliveries

		

		
		

			
					
						﻿

					
					
						 

					
					
						 

				
	
					
						which are agreed in advance with the relevant suppliers.

					
						As a result, packing instructions do not replace these General Specifications for Deliveries, but simply augment them.

					
						A valid packing instruction is included on the order or in the scheduled delivery call-off.

					
						3.     Markings

					
						3.1   ID Marking of packages

					
						Packages must be marked with the following information in accordance with the example set out below (as per VDA Recommendation 4902):

					
						    MTU material number (where possible also in barcode form, EAN type 128)

					
						    Part name

					
						    Quantity per package (min. 12mm font size)

					
						    Delivery point (min. 12mm font size)

					
						    Delivery note number

					
						Non-stackables and goods with uneven weight distribution and/or other special requirements (e.g. lashing) must have a clearly visible marking as per ISO 780 on their packaging.

					
						Sample package label:

					
						

					
						3.2   Special points of note for unitary multi-package deliveries

					
						a)  Where deliveries are made using multi-item containers, the individual material numbers must be collated into sub-packages able to be handled individually.

					
					
						          

					
					
						b)  Multi-item containers must contain packages for a single delivery address only.

					
						3.3   Marking of sub-packages

					
						a)  The sub-package must be marked as follows:

					
						    MTU material number (where possible also in barcode form, EAN type 128)

					
						    Part name

					
						    Quantity per package (min. 12mm font size)

					
						    Expiry date where required on the order

					
						Sample label for sub-package / small load carrier:

					
						

					
						 

					
						b)  The marking must be attached to the side of the load carrier / sub-package and must be clearly legible:

					
						

					
						 

					
						c)  Where the consignment is accompanied by a test certificate and/or an initial sample inspection report, this must be affixed in a protective envelope to the outside of the package in a manner analogous to Clause 3.3 b).

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			3

		

 

		

			

		

		

			General Specifications for Deliveries

		

		
		

			
					
						﻿

					
					
						 

					
					
						 

				
	
					
						3.4   Miscellaneous

					
						a)  To prevent confusion, any old markings still present (or remains thereof) must be removed from load carriers.

					
						b)  Where a single material number is made up of more than one component, each type must be packaged together to form an individual set and must be labeled in such a way as to make it unambiguously clear which parts belong together. Where joint packaging is impracticable, the packages must be numbered clearly (min. 12mm font size) and contiguously using the following convention: “Package <x> of <y>“ (e.g. “Material no. 123, Package 2 of 5”). In this special instance, a packing list must be provided, showing the correct relationship of components to packages, with one “package level” packing list attached to each load carrier.

					
						c)  With MTU reusable load carriers, marking labels should be placed in suitable card pockets.

					
						Adhesive labels may not be used on MTU reusable load carriers.

					
						d)  Labels should be adhered to cardboard boxes in a manner analogous

					
						4.     Handling

					
						a)  The damage-free condition of EUR pallets (1200 x 800 mm) and EUR wire-mesh boxes must be ensured as per the exchange criteria set out by the European Pallet Association EPAL

					
						(Internet: www.epal-pallets.org).

					
						Other EPAL load carriers and EPAL accessories (e.g. collars) are treated by MTU as disposable packaging.

					
						EPAL load carriers are essentially exchanged via the freight carrier.

					
						b)  Print products (e.g. newspaper, etc.) are not permitted to be used as packaging material.

					
					
						          

					
					
						c)  MTU reusable transportation containers / load carriers (e.g. small load carriers, wire-mesh boxes, etc.) may only be used where expressly agreed in the packing specification for the relevant material number.

					
						d)  Composite consignments / unitary multi-package deliveries may not contain several different revision levels collated into a single package. Each material number must be packaged separately and be able to be transported individually.

					
						e)  Where materials with limited lifespans for use are involved, consignments made up of products with several different expiry dates and/or production dates may not be made.

					
						f)   Packages must be collated to form a single consignment unit able to withstand the rigors of transit and must be secured against sliding around during transit. Suitable means of securing the load must be provided (e.g. belt eyes, lashing points).

					
						g)  Load carriers and packages weighing over 25 kg must permit drive-in access underneath (min. 100 mm drive-in height). Sub-packages and small load carriers are subject to a maximum weight limit of 15 kg. Small load carriers and cardboard boxes lashed together are subject to a maximum height limit of 1 m and a maximum weight limit of 1.5 t (where component geometry permits).

					
						5.     Disposal of packaging

					
						a)  Where disposable packaging is used, this should be kept to a minimum in terms of both volume and weight.

					
						b)  Environmentally friendly and recyclable materials must be used for all packaging. 

					
						c)  Combinations of materials (e.g. iron clamps, nails in wood) must be kept to a minimum and must be able to be separated easily after use.

					
						 

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			4

		

 

		

			

		

		

			General Specifications for Deliveries

		

		
		

			
					
						﻿

					
					
						 

					
					
						 

				
	
					
						d)  Packaging labels must not be allowed to impair recyclability (no adhesive PVC labels on cardboard boxes).

					
						e)  Unless special agreement has been reached (e.g. loan containers listed in an MTU packing instruction) between MTU and the supplier, essentially no packaging will be sent back.

					
						6.     Miscellaneous

					
						6.1   Exceptions clause

					
						Deliveries which do not comply with these General Specifications for Deliveries must be approved in advance by MTU Friedrichshafen GmbH and must carry special reference to this fact on the delivery note and the package(s) involved.

					
						6.2   Other applicable regulations

					
						a)  These General Specifications for Deliveries do not release the supplier from currently applicable statutory requirements.

					
						b)  In the case of components required by specification to meet special standards of cleanliness, standards MTN5253-1 and/or MTN5253-2 must be observed.

					
						c)  For components at risk of corrosion, the requirements of process standard MTV 5066 must be met.

					
						d)  In cases of materials with limited lifespans for use, process standard MTV5005 applies.

					
						e)  Where timber packaging is used in cases of deliveries coming from non-EU countries, the requirements of the IPPC (“International Plant Protection Convention”) standard ISPM

					
					
						          

					
					
						(“International Standards for Phytosanitary Measures”) No. 15 must be observed.

					
						f)   Where the MTU packing instruction requires the use of reusable load carriers, the “General Regulations on Management of Containers” must be followed.

					
						g)  All applicable standards, guidelines and regulations are available for inspection on the MTU Purchasing website (www.mtu-online.com).

					
						Version date: February 2016

					
						MTU Friedrichshafen GmbH

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			5

		

 

		

			

		

		

			General Specifications for Deliveries

		

		
		

		
			Annex 1
		

		
			Bloggs & Sons
		

		
			Main St. 1 D-77777 Anytown
		

			
					
						﻿

					
					
						 

					
					
						 

				
	
					
						﻿Customer

					
					
						Delivery note

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						MTU Friedrichshafen GMBH

					
						P.O. Box

					
						88040 Freidrichshafen

					
					
						Delivery note no.

					
					
						Date

				
	
					
						 

					
					
						571 12392

					
					
						10.11.09

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Administrator/Contact

					
					
						 

				
	
					
						 

					
					
						Mr. Doe

					
					
						 

				
	
					
						Consignee/Delivery point

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Tel.

					
					
						Fax

				
	
					
						MTU

					
						Plant 2 – Bay 34

					
						DOMÄNENSTRASSE

					
						88047 FRIEDRICHSHAFEN

					
					
						07 11-777777

					
						 

					
						E-mail address

					
						blogs@sons.com

					
					
						07 11-777770

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Items dispatched

					
					
						 

				
	
					
						 

					
					
						Plant 0001      77777 Anytown

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Destination country

					
					
						 

				
	
					
						 

					
					
						Germany

					
					
						 

				

		
			﻿
		

			
					
						﻿

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Shipping method

					
					
						Truck haulage

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Carrier

					
					
						Bloggs

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Shipping terms

					
					
						FCA

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Consignment ref.

					
					
						Quantity

					
					
						Package

					
					
						Total gross weight

					
					
						Total net weight

				
	
					
						712392-001-002

					
					
						2

					
					
						KLT-6428

					
					
						28.300 kg

					
					
						19.500 kg

				

		
			﻿
		

			
					
						﻿

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Order no.

					
					
						 

					
					
						Order information

					
					
						 

					
					
						 

				
	
					
						Order item

					
					
						Material number

					
					
						Designation / Customer part number

					
					
						Quantity

					
					
						ME

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						177789131

					
					
						Order no. 155-1080311 dated Oct 15, 09

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						0010

					
					
						3931070220

					
					
						Oil separator

					
					
						50

					
					
						pcs.

				
	
					
						 

					
					
						 

					
					
						Net weight per item

					
					
						0.390

					
					
						kg

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						0020

					
					
						4891235410

					
					
						Bearing shell

					
					
						10

					
					
						pcs.

				
	
					
						 

					
					
						 

					
					
						Net weight per item

					
					
						0.580

					
					
						kg.

				

		
			﻿
		

		
			The delivery contains the following packaging:
		

		
			2KLT-6428
		

		
			1KLT-1234
		

		
			﻿
		

		
			 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			6

		

 

		

			 

		

		Annex 5 to the Frame Development and Purchase Agreement
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			Quality Assurance Agreement
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			between
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			MTU Friedrichshafen GmbH
		

		
			Maybachplatz 1
		

		
			88045 Friedrichshafen
		

		
			﻿
		

		
			– hereinafter referred to as 'Customer' –
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			and
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			Company
		

		
			Street address/Post Office box
		

		
			Town, zip/postal code
		

		
			﻿
		

		
			– hereinafter referred to as 'Supplier' –
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			Revision
		

		
			As at:
		

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			1

		

 

		

			 

		

		
		

		
			Table of Contents:
		

			
					
						﻿

					
					
						 

					
					
						 

				
	
					
						0.

					
					
						PREAMBLE

					3 
				
	
					
						1.

					
					
						OBJECT OF THE CONTRACT

					3 
				
	
					
						2.

					
					
						GENERAL QUALITY ASSURANCE PROVISIONS

					3 
				
	
					
						3.

					
					
						MAXIMUM DEFECT RATES

					3 
				
	
					
						4.

					
					
						CALCULATION OF DEFECT RATE

					4 
				
	
					
						5.

					
					
						CONSEQUENCES OF EXCEEDING THE AGREED DEFECT RATES

					5 
				
	
					
						6.

					
					
						RELATION TO FRAMEWORK AGREEMENT

					6 
				
	
					
						7.

					
					
						DEFINITION OF TARGETS FOR PPM AND NUMBER OF QL-REPORTS (LINECALLS P.A)

					6 
				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			2

		

 

		

			 

		

		
		

		
			0.    Preamble
		

		
			The Customer and the Supplier are parties to a framework agreement concluded in (hereinafter referred to as the 'framework agreement'), of which the subject is the delivery to the Customer by the Supplier of products individually named in the framework agreement.
		

		
			Among other things, this framework agreement makes provisions for certain quality management requirements whose purpose is to reduce the costs for defective products and to avoid materials defect liability and product liability claims being made by the Customer's customers.
		

		
			The aim of this Quality Assurance Agreement is to ensure supply quality on a long-term basis. Supply quality is to be assured through the consistent implementation of quality improvement measures. To this end, maximum defect rates are to be specified, as are the consequences that arise when such defect rates are exceeded.
		

		
			On the above basis, the parties conclude the following quality assurance agreement:
		

		
			﻿
		

		
			1.    Object of the contract
		

		
			1.1    The subject of this quality assurance agreement is the extension of existing quality management requirements regarding component quality and maximum defect rates on Supplier's products which are to be delivered to the Customer in the form of individual parts, engine components or project-specific systems components (so-called 'zero hours products'). It also stipulates the extended applicability of the framework agreement to further products and the legal consequences which arise when the products fail to meet the requirements with respect to the agreed component quality and maximum defect rate.
		

		
			This quality assurance agreement refers to products delivered against vendor number on the basis of initial sample or batch orders.
		

		
			All delivery items defined above are hereinafter referred to as 'products'.
		

		
			2.    General quality assurance provisions
		

		
			2.1    The Supplier undertakes to manufacture and inspect all products in accordance with the framework agreement specifications and quality assurance standard MTQ 5003 as attached hereto.
		

		
			Addendum: Since October 1, 2013, the two quality assurance standards MTQ5011 and MTQ5003 have been amalgamated into MTQ5003.
		

		
			3.    Maximum defect rates
		

		
			3.1    The maximum defect rates for given products as agreed in the following are calculated on the basis of ppm (parts per million). To take into account changes due to return deliveries, inspections, and investigations, the contract parties shall evaluate and determine the actual defect rates in review meetings that take place at suitable intervals.
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			3

		

 

		

			 

		

		
		

		
			3.2    Inasfar as no other agreement has been reached between the contract parties, and in the context of the Continuous Improvement Process and zero-defect target, all target values named under paragraph 7 of this agreement shall be automatically reduced by     % per year based on the given target value of the previous year on expiry of the specified period.
		

		
			4.    Calculation of defect rate
		

		
			4.1    The actual defect rate in ppm that has arisen for a specific product owed under the contract is calculated as follows:
		

		
			Number of acknowledged defects per calendar year x 1,000,000
Number of incoming units per calendar year
		

		
			4.2    The number of incoming units is defined as the total number of units supplied to the Customer in one calendar year of an individual product named in this agreement. Not to be included in this number are repeat deliveries effected in connection with QL-reports, or returned parts. To this extent, the Customer's LQA data bank provides the data basis. A comparison with Supplier data shall be effected monthly by the relevant technical departments.
		

		
			4.3    The number of defects is defined as the total number of a given product on which, in a calendar year, deviations from the contract specifications of the Customer – in particular, from drawings or applicable standards – are identified with respect to one or more of the contractually agreed quality characteristics. Other subsidiary agreements (in the sense of agreements that do not concern the required product properties or specifications) contained in order placement texts shall not be relevant to the determination of the number of acknowledged defects or number of incoming units within the context of this quality assurance agreement. To this extent the data basis shall be provided by the LQA data bank of the customer. A comparison with Supplier data shall be effected monthly by the relevant technical departments.
		

		
			4.4    Defects are considered to be acknowledged when the Supplier upon formal written notification of the specific defects by the Customer does not provide feedback within 2 weeks of receipt of the QL-report. In the event that no agreement can be reached regarding the acknowledgment of a defect on an individual product, a settlement shall be reached at the end of the year in a routine meeting between the parties or, if necessary, during the year.
		

		
			4.5    If products for which no defects have been reported by the Customer are recalled by the Supplier for inspection, whereby recall does not affect the production operations of the Customer, the said defects shall not be regarded as acknowledged. The SAP report shall be deleted on re-delivery of the products.
		

		
			4.6    Assessment of the Supplier's performance by the Customer shall therefore remain unaffected.
		

		
			4.7    If the Customer has a reasonable basis to believe not only an individual part to be defective, but also the Customer's further stocks of that part, the Customer shall be entitled to inspect the entire stock of the product in question himself or to have the inspection carried out by the Supplier or a third party. The Supplier shall reimburse the Customer with reasonable expenses in connection with such inspection.
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			4

		

 

		

			 

		

		
		

		
			In this case, the number of acknowledged defects is the actual number of defective products counted. If an inspection is carried out at the Supplier's site, whereby the number of defective parts is not known in advance, 100% of the defective products counted shall always be taken as the number of acknowledged defects, insofar as no other agreement is made
		

		
			5.    Consequences of exceeding the agreed defect rates
		

		
			5.1    The Supplier takes reasonable measures necessary to ensure that the zero defects target is consistently met.
		

		
			5.2    If the defect rates exceed the agreed defect rates in two consecutive months, or if a Linecall arises due to a deviation on a contractual product(a Linecall is a malfunction that leads to delays in or to shutdown of the production operations), the Supplier shall implement the measures described in more detail in subparagraphs 5.3 to 5.7. If the average defect rate in ppm or the number of QLreports in a calendar year exceeds the agreed target by more than 10%, the Supplier shall likewise implement the measures stipulated in subparagraphs 5.3- 5.7 at the beginning of the following year.
		

		
			5.3    A qualified 100% outgoing goods inspection shall be instated at the expense of the Supplier within 10 days after the end of the month. If a 100% outgoing goods inspection has already been instated, this shall be supplemented by a further inspection in accordance with the two-man rule.
		

		
			5.4    The type, method and location of the inspection(s) shall be based on the causal defect occurrence. If necessary, the inspection part spectrum can be limited to certain models, series or part families after joint inspection by the Supplier and Customer.
		

		
			5.5    Documentation of the inspection(s) shall be presented to MTU on demand.
		

		
			5.6    All defects which occur following introduction of the 100% outgoing goods inspection shall be analyzed in a risk assessment (e. g process FMEA) and corrective measures shall be defined. In this case, both the defect cause in the manufacturing process and the cause of the inspection slip are considered. A revision is effected if risk assessments already exist.
		

		
			5.7    The measures taken as a result of the risk assessment shall be presented to MTU on demand in a quality assurance meeting. Regardless of the exceeding of the agreed defect rate, the Customer is at any time entitled to schedule additional quality assurance meetings and/or visits to the Supplier.
		

		
			The measures set out in subparagraphs 5.3-5.7 shall continue to be conducted until the defect rate either meets or falls short of the agreed ppm target values for six months consecutively and until the Linecall target values are met with no Linecall registered for the specific defect. Furthermore, the causal weak points in the manufacturing and/or inspection process must be verifiably eliminated by implementing suitable measures, e.g. auditing of the manufacturing process and identification of the weak points.
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			5

		

 

		

			 

		

		
		

		
			6.    Relation to framework agreement
		

		
			6.1    This quality assurance agreement solely serves as a supplement for or more detailed specification of the terms of the framework agreement, the validity of which remains unaffected. In the event of deviations or discrepancies between this quality assurance agreement and the framework agreement the framework agreement shall prevail.
		

		
			6.2    If the existing quality assurance agreement affects products that were not previously the subject of the framework agreement, it is agreed that the framework agreement according to subparagraph 6.1 of the existing agreement shall also apply to these products.
		

		
			7.    [***]
		

		
			[***].
		

		
			﻿
		

			
					
						﻿

					
					
						 

					
					
						 

				
	
					
						L'Orange

					
					
						         

					
					
						MTU Friedrichshafen GmbH

				
	
					
						 

					
						 

					
					
						 

					
					
						 

				
	
					
						Place, Date

					
					
						 

					
					
						Place, Date

				
	
					
						 

					
						 

					
					
						 

					
					
						 

				
	
					
						(Stamp, Signature of Supplier)

					
					
						 

					
					
						(Stamp, Signature of Supplier)

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						L‘Orange

					
					
						 

					
					
						MTU Friedrichshafen GmbH

				
	
					
						 

					
						 

					
					
						 

					
					
						 

				
	
					
						Place, Date

					
					
						 

					
					
						Place, Date

				
	
					
						 

					
						 

					
					
						 

					
					
						 

				
	
					
						(Stamp, Signature of Customer)

					
					
						 

					
					
						(Stamp, Signature of Customer)

				

		
			﻿
		

		
			﻿
		

		
			 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			6

		

 

		

			 

		

		Evans – LTSA Annex 5 – Attachment to Annex 5 – QAA – MTQ5003-MUNLIB01
		

			
					
						﻿

					
					
						 

				
	
					
						QUALITATSSICHERUNGSNORM / QUALITY MANAGEMENT STANDARD

					
					
						März 2017

					
						March 2017

				
	
					
						Qualitätssicherungsnorm für Lieferanten von Produktionsmaterial 
und Projektsystemgeschäft (PSG) - Komponenten 
Quality Assurance Standard for Suppliers of Production Material and 
Project System Business (PSB) - Components

					
					
						MTQ5003

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Ersatz fȕr
Ausgabe 11.2014

					
					
						Replaces
Edition 11.2014

				
	
					
						 

					
					
						 

				
	
					
						The English version is a translation. In case of dispute the Ger-
men original will govern.

				
	
					
						 

					
					
						 

				

		
			﻿
		

		
			Vorwort
		

		
			﻿
		

		
			Diese Qualitätssicherungsnorm ist Bestandteil des Liefervertrags mit Rolls-Royce Powersys-tems (RRPS) und der Geschäftsbeziehung zwischen Auftragnehmer / Lieferant– nachfolgend AN genannt - und RRPS. Gegenstand der Qualitätssicherungsnorm sind alle vom AN gelieferten Produkte. Der AN sichert zu, alle erforderlichen personellen, organisatorischen, sachlichen und fi-nanziellen Ressourcen einzusetzen, um die Qualität seiner Produkte sicherzustellen. 
		

		
			Die Einhaltung der Regeln dieser Qualitätssicherungsnorm wird RRPS gemeinsam mit dem AN langfristig Vorteile auf dem Markt sichern und ist damit Garant für eine erfolgreiche Partner-schaft.
		

		
			﻿
		

		
			Preface
		

		
			﻿
		

		
			This quality assurance standard forms part of the supply contract concluded with RRPS and the business relationships between CONTRACTOR and RRPS.
		

		
			Subject of the quality assurance standard are all products supplied by the CONTRACTOR. The CONTRACTOR warrants to employ all the human, organizational, material and financial resources required to ensure the quality of the products.
		

		
			Compliance with the rules of this quality assurance standard will safeguard long-term advantages in the market for RRPS together with the CONTRACTOR and is therefore a guarantee for successful cooperation.
		

		
			﻿
		

			
					
						﻿

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Fortsetzung Seite 2 bis 20
Continued on pages 2 to 20

				
	
					
						Bearbeitet 
Compiled by:

					
					
						Geprüft Checked by:

					
					
						Freigegeben Approved by:

					
					
						Änderungsdienst TQZS Amendment Service TQZS

					
						 

					
					
						Ordnungs-Nr. Order No.

				
	
					
						gez./sign. Klischowski Müller

					
					
						gez./sign. Klischowski

					
					
						gez./sign. Gotterbarm

					
					
						1/2017

					
					
						F17

				
	
					
						

					
					
						MTU Friedrichshafen GmbHFür diese Werknorm behalten wir uns alle Rechte vor 
All rights reserved for this MTU Factory standard

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 2 von/of 20

		

		
		

		
			﻿
		

			
					
						﻿

					
					
						 

					
					
						 

				
	
					
						Inhalt / Contens

					
					
						Seite / Page

				
	
					
						1

					
					
						Begriffsdefinition

					4 
				
	
					
						1

					
					
						Definition of Terms

					4 
				
	
					
						1.1

					
					
						Qualifizierung

					4 
				
	
					
						1.1

					
					
						Qualification 

					4 
				
	
					
						1.2

					
					
						Produktkategorien

					4 
				
	
					
						1.2

					
					
						Product Categories 

					4 
				
	
					
						1.2.1

					
					
						Prototypen

					4 
				
	
					
						1.2.1

					
					
						Prototypes

					4 
				
	
					
						1.2.2

					
					
						Vormuster

					4 
				
	
					
						1.2.2

					
					
						Preliminary Samples

					4 
				
	
					
						1.2.3

					
					
						Erstmuster

					5 
				
	
					
						1.2.3

					
					
						Initial Samples

					5 
				
	
					
						1.2.4

					
					
						Projektsystemgeschäft (PSG)-Komponenten

					5 
				
	
					
						1.2.4

					
					
						Project System Business (PSB)- Components

					5 
				
	
					
						2

					
					
						Qualitätsmanagementsystem

					5 
				
	
					
						2

					
					
						Quality Management System

					5 
				
	
					
						2.1

					
					
						Qualitätsmanagementsytem des AN

					5 
				
	
					
						2.1

					
					
						Contractor’s Quality Management System

					5 
				
	
					
						2.2

					
					
						Qualitätsmanagementsystem des Unterauftragnehmers

					5 
				
	
					
						2.2

					
					
						Subcontractor’s Quality Management System

					5 
				
	
					
						2.3

					
					
						Audit

					6 
				
	
					
						2.3

					
					
						Audit

					6 
				
	
					
						2.4

					
					
						Information, Änderungsmanagement und Dokumentation

					6 
				
	
					
						2.4

					
					
						Information, Change Management and Documentation

					6 
				
	
					
						3

					
					
						Produktentstehungsprozess

					7 
				
	
					
						3

					
					
						Product Creation Process

					7 
				
	
					
						3.1

					
					
						Planung, Freigabe

					7 
				
	
					
						3.1

					
					
						Planning, Approval

					7 
				
	
					
						3.2

					
					
						Key Characteristics (KC)

					8 
				
	
					
						3.2

					
					
						Key Characteristics (KC)

					8 
				
	
					
						4

					
					
						Produktionsprozess- und Produktfreigabe

					8 
				
	
					
						4

					
					
						Production Process and Product Approval

					8 
				
	
					
						4.1

					
					
						Qualitätsprüfung und Dokumentation für Vor-/ Erstmuster und PSG-Komponenten

					8 
				
	
					
						4.1

					
					
						Quality Inspection and Documentation for Preliminary/Initial Samples and PSB Components 

					8 
				
	
					
						4.2

					
					
						Vor- und Erstmuster von Guss- und Schmiederohteilen 

					9 
				
	
					
						4.2

					
					
						Preliminary and Initial Samples of Raw Castings and Forgings

					9 
				
	
					
						4.3

					
					
						Gegenprüfungen durch RRPS

					10 
				
	
					
						4.3

					
					
						Verification Inspections by RRPS

					10 
				
	
					
						4.3.1

					
					
						Begriffsdefinition Prüfarten

					10 
				
	
					
						4.3.1

					
					
						Inspection Type Definitions

					10 
				
	
					
						4.3.2

					
					
						Freigabe durch RRPS

					11 
				
	
					
						4.3.2

					
					
						Approval by RRPS

					11 
				
	
					
						4.4

					
					
						Kennzeichnung

					11 
				
	
					
						4.4

					
					
						Marking

					11 
				
	
					
						4.5

					
					
						Anlieferung

					12 
				
	
					
						4.5

					
					
						Delivery

					12 
				
	
					
						4.6

					
					
						Aussetzen der Fertigung und reduzierte Bemusterung

					12 
				
	
					
						4.6

					
					
						Discontinuation of Production and Reduced Sampling

					12 
				
	
					
						4.7

					
					
						Vordrucke für Prüfbericht für Vor-/ Erstmuster und PSG-Komponenten

					12 
				
	
					
						4.7

					
					
						Templates for Inspection Reports for Preliminary/Initial Samples and PSB Components

					12 
				
	
					
						4.8

					
					
						Rückstellmuster

					13 
				
	
					
						4.8

					
					
						Reference Samples

					13 
				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 3 von/of 20

		

		
		

			
					
						5

					
					
						Serienbegleitende Qualitätsmaßnahmen

					13 
				
	
					
						5

					
					
						Series Related Quality Assurance Measures

					13 
				
	
					
						5.1

					
					
						Kennzeichnung

					13 
				
	
					
						5.1

					
					
						Marking

					13 
				
	
					
						5.2

					
					
						Rückverfolgbarkeit

					13 
				
	
					
						5.2

					
					
						Traceability

					13 
				
	
					
						5.3

					
					
						Prüfung im Wareneingang - Serie

					14 
				
	
					
						5.3

					
					
						Incoming Goods Inspection - Series

					14 
				
	
					
						5.4

					
					
						Sicherstellung der Serienqualität

					14 
				
	
					
						5.4

					
					
						Assurance of Series Quality

					14 
				
	
					
						5.4.1

					
					
						Requalifizierung - Serie

					14 
				
	
					
						5.4.1

					
					
						Requalification - Series

					14 
				
	
					
						6

					
					
						Qualitätsziele

					15 
				
	
					
						6

					
					
						Quality Objectives

					15 
				
	
					
						6.1

					
					
						Fehlerfreie Lieferung / AN-Entwicklung

					15 
				
	
					
						6.1

					
					
						Zero Defect Supply / Contractor Development

					15 
				
	
					
						7

					
					
						Änderungen / Abweichungen der Spezifikationen (Normen, Zeichnungen, Lastenheft usw.); Änderungen im Lieferumfang

					16 
				
	
					
						7

					
					
						Changes/Deviations of Specifications (standards, drawings, requirements specifications, etc.); Change to Scope of Supply

					16 
				
	
					
						7.1

					
					
						Antrag auf Abweichungslaubnis (AE)

					16 
				
	
					
						7.1

					
					
						Application for Deviation Approval

					16 
				
	
					
						7.2

					
					
						Änderungsantrag

					17 
				
	
					
						7.2

					
					
						Application for Change

					17 
				
	
					
						7.3

					
					
						Kosten

					17 
				
	
					
						7.3

					
					
						Costs

					17 
				
	
					
						7.3.1

					
					
						Qualifizierung

					17 
				
	
					
						7.3

					
					
						Qualification 

					17 
				
	
					
						7.3.2

					
					
						Antrag auf Abweicherlaubnis / Konstruktionsänderungsantrag / Änderungsantrag

					17 
				
	
					
						7.3.2

					
					
						Application for Deviation Approval / Application for Design Change / Applic. for Change 

					17 
				
	
					
						8

					
					
						Behandlung von Beanstandungen

					18 
				
	
					
						8

					
					
						Handling of Complaints

					18 
				
	
					
						8.1

					
					
						8-D-Report

					18 
				
	
					
						8.1

					
					
						8-D-Report

					18 
				
	
					
						8.2

					
					
						Annahme unter Vorbehalt

					18 
				
	
					
						8.2

					
					
						Conditional Acceptance

					18 
				
	
					
						8.3

					
					
						Rückversand

					18 
				
	
					
						8.3

					
					
						Return Shipments

					18 
				
	
					
						8.4

					
					
						Montageversorgung

					18 
				
	
					
						8.4

					
					
						Assembly Supply

					18 
				
	
					
						8.5

					
					
						Nachbesserung durch Dritte

					19 
				
	
					
						8.5

					
					
						Rectification by Third Parties

					19 
				
	
					
						9

					
					
						Versicherungspflicht des AN

					19 
				
	
					
						9

					
					
						Contractor’s Obligation to Take out Insurance

					19 
				
	
					
						10

					
					
						Lieferantenbewertung 

					19 
				
	
					
						10

					
					
						Contractor Assessment

					19 
				
	
					
						11

					
					
						Arbeitssicherheits- und Umweltschutzvorschriften

					20 
				
	
					
						11

					
					
						Health & Safety and Environmental Regulations

					20 
				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 4 von/of 20

		

		
		

		
			﻿
		

			
					
						﻿

					
					
						 

				
	
					
						1.    Begriffsdefinition

					
					
						1.    Definition of Terms

				
	
					
						1.1    Qualifizierung

					
					
						1.1    Qualification

				
	
					
						Die Qualifizierung von Produkten umfasst die Er-bringung von Nachweisen für die Eignung des Pro-duktionsprozesses und die Erfüllung aller verein-barten Produkteigenschaften. Der Abschluss des Qualifizierungsprozesses seitens des AN erfolgt durch die Produktionsprozess- und/ oder Produkt-freigabe.

					
					
						The qualification of products comprises providing proof of the suitability of the production process and compliance with all product properties agreed. Completion of the qualification process on the part of the contractor is performed by way of the production process and/or product approval procedure.

				
	
					
						1.2    Produktkategorien

					
					
						1.2    Product Categories

				
	
					
						Die nachstehend beschriebenen Produktkategorien werden in der jeweiligen Bestellung für das Ver-tragsprodukt ausgewiesen.

					
					
						The product categories described below are specified in each order for a contractual product.

				
	
					
						1.2.1    Prototypen

					
					
						1.2.1    Prototypes

				
	
					
						Prototypen sind Produkte, die nicht für die Qualifi-zierung verwendet werden. Die Herstellung erfolgt nicht zwingend mit den für die spätere Serienferti-gung vorgesehenen Betriebsmitteln, Verfahren und Bedingungen. Beispiele für Prototypen sind Produk-te, die im Rapid Prototyping-Verfahren hergestellt werden, Baumuster und Versuchsteile.

					
						Der Umfang von Nachweisen für die Freigabe von Prototypen ist fallbezogen zwischen RRPS und dem AN abzustimmen.

					
					
						Prototypes are products which are not used for the qualification process. They are not necessarily manufactured using the same production equipment, processes and conditions as those envisaged for later series production. Examples of prototypes are products manufactured with the rapid prototyping process, design samples and experimental samples.

					
						The scope of proofs to be provided for the approval of prototypes shall be agreed between RRPS and the contractor on a case-to-case basis.

				
	
					
						1.2.2    Vormuster

					
						Vormuster sind Produkte für die Qualifizierung, die noch nicht zwingend mit den für die spätere Serien-fertigung vorgesehenen Betriebsmitteln, Verfahren und Bedingungen hergestellt wurden. Ziel ist es, die Vormuster unter seriennahen Bedingungen herzu-stellen.

					
						Vormuster werden in der Regel beschafft, wenn die Produkteigenschaften lt. Spezifikation und/ oder der Produktionsprozess noch nicht final für die Serie definiert sind.

					
						Die vorläufige Produktionsprozess- und Produkt-freigabe erfolgt nach dem Freigabeprozess, der in Abschnitt 4 näher beschrieben wird.

					
						Die Vormusterfreigabe stellt keine Freigabe für die Serienlieferung dar.

					
					
						1.2.2    Preliminary Samples

					
						Preliminary samples are products intended for the qualification process that were not necessarily manufactured yet using the same production equipment, processes and conditions as those envisaged for later series production. It is the objective to manufacture the preliminary samples under conditions that are close to series production.

					
						Preliminary samples are usually obtained if the product properties defined in the specifications and/or the production process are not yet finally defined for series production.

					
						The preliminary production process and product approval follows the approval process described in more detail in section 4.

					
						Preliminary sample approval does not constitute approval for series product shipments.

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 5 von/of 20

		

		
		

			
					
						﻿

					
					
						 

				
	
					
						1.2.3    Erstmuster

					
					
						1.2.3    Initial Samples

				
	
					
						Erstmuster sind Produkte für die Qualifizierung, die vollständig mit serienmäßigen Betriebsmitteln und unter serienmäßigen Bedingungen hergestellt wur-den und, bei stabilem Produktionsprozess, der späteren Serienfertigung hinsichtlich Maßen, Werk-stoffen, Werkstoffeigenschaften und Funktionen entsprechen.

					
						Die Produktionsprozess- und Produktfreigabe er-folgt nach dem Freigabeprozess, der in Abschnitt 4 näher beschrieben wird. Eine Serienlieferung darf nur nach einer Erstmusterfreigabe durch RRPS erfolgen.

					
					
						Initial samples are products intended for the qualification process that are manufactured completely with series-production equipment and under series-production conditions and correspond to the later series products with regard to dimensions, materials, material properties and functions, produced in a stable production process.

					
						The production process and product approval follows the approval process described in more detail in section 4. A series product shipment shall not be made until initial sample approval by RRPS Frie-drichshafen is obtained

				
	
					
						1.2.4    Projektsystemgeschäft (PSG)- Komponenten

					
					
						1.2.4    Project System Business (PSB)- Components

				
	
					
						PSG-Komponenten sind Produkte, welche nicht unter Serienbedingungen hergestellt werden. Bei-spiele hierfür sind Einzelkomponenten oder Klein-stückzahlen mit spezifischen Projektanforderungen.

					
						Die Qualifizierung von PSG-Komponenten umfasst im Unterschied zu Vor- und Erstmustern nur die vereinbarten Produkteigenschaften und schließt mit der Produktfreigabe ab. Die generelle Freigabe der Produktionsprozesse incl. Fertigungs- und Prüfver-fahren erfolgt für PSG-Komponenten in der Regel im Rahmen der Auditierung des AN.

					
					
						Project system business (PSB) components are products which are not manufactured under series-production conditions. Examples are single components or small-volume orders involving specific project requirements.

					
						In contrast with preliminary and initial samples, the qualification of PSB components covers only the product properties agreed and is completed on product approval. The general approval of the production processes including manufacturing and inspection/test procedures for PSB components is usually performed within the scope of contractor auditing.

				
	
					
						2    Qualitätsmanagementsystem

					
					
						2    Quality Management System

				
	
					
						2.1    Qualitätsmanagementsytem des AN

					
					
						2.1    Contractor’s Quality Management System

				
	
					
						Um die einwandfreie Qualität ihrer Produkte und Dienstleistungen gewährleisten zu können, müssen die AN mindestens über ein zertifiziertes Qualitäts-managementsystem nach ISO 9001 in der jeweils aktuellen Ausgabe verfügen und danach verfahren. Verbunden damit ist die Verpflichtung des AN zur Null-Fehler-Zielsetzung und der kontinuierlichen Verbesserung seiner Leistungen.

					
						Im Projektsystemgeschäft kann in Einzelfällen nach entsprechender Prüfung durch die Qualitätsabtei-lung von dieser Forderung abgewichen werden.

					
					
						Contractors must have and use at least a certified quality management system based on the ISO 9001 standard in the current version at any one time in order to be able to ensure the required quality of their products and services. This involves the contractor’s obligation to aim for zero-defect production and continuous improvement of performance.

					
						In the context of Project Systems Business, this requirement may be waived in individual cases following appropriate investigation by the Quality department.

				
	
					
						2.2    Qualitätsmanagementsystem des Unterauftragnehmers

					
					
						2.2    Subcontractor’s Quality Management System

				
	
					
						Vergibt der AN Aufträge an Unterauftragnehmer, so hat er RRPS darüber rechtzeitig zu informieren und sicherzustellen, dass die Forderungen dieser Quali-tätssicherungsnorm ebenfalls durch den Unterauf-tragnehmer eingehalten werden. Bei nicht zertifi-zierten Unterauftragnehmern hat der AN die Quali-tät aufgrund seiner Systemverantwortung in geeig-neter Art und Weise sicherzustellen. Der Wechsel des Unterauftragnehmers ist RRPS rechtzeitig an-zuzeigen.

					
					
						If the contractor awards contracts to subcontractors, the contractor shall inform RRPS at the point of decision prior to implementation and make sure that the requirements of this quality management standard are also complied with by the subcontractor. If non-certified subcontractors are employed, the contractor shall take suitable measures to safeguard quality in view of contractor’s system responsibility. Any change of subcontractor shall be notified to RRPS at the point of decision prior to implementation.

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 6 von/of 20

		

		
		

			
					
						﻿

					
					
						 

				
	
					
						2.3    Audit

					
					
						2.3    Audit

				
	
					
						Der AN gestattet RRPS, durch Audits festzustellen, ob seine Qualitätssicherungsmaßnahmen die For-derungen von RRPS erfüllen. RRPS behält sich vor, AN sowie gegebenenfalls Unterauftragnehmer zu auditieren. Nach vorheriger Ankündigung wird der AN selbst kurzfristige Terminwünsche ermögli-chen. 

					
						Der AN gewährt RRPS und - soweit erforderlich - dessen Kunden Zutritt zu allen Betriebsstätten, Prüfstellen, Lagern und angrenzenden Bereichen sowie Einsicht in qualitätsrelevante Dokumente. Dabei werden notwendige und angemessene Ein-schränkungen des AN zur Sicherung seiner Be-triebsgeheimnisse akzeptiert.

					
						RRPS teilt dem AN das Ergebnis dieser Audits mit. Sind aus Sicht von RRPS Maßnahmen erforderlich, verpflichtet sich der AN, unverzüglich einen Maß-nahmenplan für sich zu erstellen, diesen fristge-recht umzusetzen und RRPS hierüber zu unterrich-ten.

					
					
						The contractor grants RRPS the right to conduct audits to verify that the quality assurance measures meet RRPS’s requirements. RRPS reserves the right to audit both the contractor and, if required, the sub-contractor. The contractor shall facilitate scheduling of audits even at very short notice.

					
						The contractor permits RRPS and - where necessary - its customers access to all operating facilities, test areas, stores and peripheral areas, as well as the inspection of quality-relevant documentation. In this respect, the necessary and reasonable restrictions to protect the contractor’s company secrets will be accepted.

					
						RRPS will inform the contractor about the results of such audits. If, from RRPS’s point of view, corrective actions should be required, the contractor is obliged to immediately establish an action plan and to implement this as scheduled and inform RRPS accordingly

				
	
					
						2.4    Information, Änderungsmanagement und Dokumentation

					
					
						2.4    Information, Change Management and Documentation

				
	
					
						Der AN erhält von RRPS den letztgültigen Stand der technischen Unterlagen im Änderungsdienst und muss sicherstellen, dass dieser von allen be-troffenen Stellen immer beachtet wird. Der AN muss prüfen, ob ihm alle benannten technischen Unterlagen zur Verfügung stehen. Entsprechend dieser Vorgehensweise hat der AN auch seine Unterauftragnehmer einzubeziehen.

					
						Wird erkennbar, dass getroffene Vereinbarungen wie z.B. Qualitätsmerkmale, Termine, Liefermen-gen nicht eingehalten werden können, informiert der AN RRPS hierüber unverzüglich. Der AN wird RRPS auch über alle nach Auslieferung erkannten Abweichungen unverzüglich in Kenntnis setzen. Im Interesse einer schnellen Lösung verpflichtet sich der AN zur Offenlegung aller benötigten Informatio-nen (siehe Abschnitt 7).

					
						Der AN verpflichtet sich, vor

					
					
						The contractor receives the latest revision of the technical documentation subject to amendments service from RRPS and must ensure that it is always adhered to by all departments involved. It is the contractor’s duty to verify that all technical documents referred to are available. The contractor must also involve any subcontractors accordingly in this procedure.

					
						If it becomes obvious that agreed elements such as quality characteristics, schedules or delivery quantities cannot be fulfilled, the contractor shall inform RRPS about this without delay. The contractor shall also inform RRPS immediately about all deviations recognized after delivery. With a view to achieving a quick solution, the contractor shall disclose all necessary information (see section 7).

					
						The contractor is obliged to obtain authorization from RRPS before

				
	
					
						a)  Wechsel des Unterauftragsnehmer

					
						b)  Verlagerung von Fertigungsstandorten

					
						c)  Änderung von Prüfverfahren/ -einrichtungen

					
						d)  Verlagerung von Fertigungseinrichtungen am Standort

					
						e)  Änderung von Fertigungsverfahren, - abläufen und –materialien (auch bei Unterlieferanten)

					
						f)   Änderungen der Verpackung 

					
						die Zustimmung von RRPS einzuholen und die in diesem Zusammenhang vereinbarten Qualitäts-nachweise für eine Prozess- und Produktfreigabe zu erbringen (siehe Abschnitt 3 und 7).

					
					
						a)  changing a subcontractor

					
						b)  relocating production sites

					
						c)  modifying test procedures or equipment

					
						d)  relocating production facilities within a site

					
						e)  modifying any production procedures, sequences and/or materials (also at sub-suppliers)

					
						f)  modifying packaging 

					
						and to provide the agreed quality-related evidence for process and product approval accordingly (see section 3 and 7).

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 7 von/of 20

		

		
		

			
					
						﻿

					
					
						 

				
	
					
						Bei PSG-Komponenten ist die Information und Zu-stimmung von RRPS zu den Punkten c), d) und e) nur notwendig, wenn das Risiko einer Veränderung von Form, Fit, Function besteht oder wenn zu den Punkten c), d) und e) seitens RRPS spezifische Anforderungen definiert wurden. Die Punkte a) und b) sind in jedem Fall der RRPS anzuzeigen. Der Qualifizierungsumfang für PSG-Komponenten ist in diesem Zusammenhang jeweils mit RRPS abzu-stimmen.

					
						Sämtliche Änderungen am Produkt und in der Pro-zesskette von erstmusterpflichtigen Bauteilen wer-den vom AN in einem Produktlebenslauf dokumen-tiert und RRPS auf Verlangen vorgezeigt.

					
						Die Bemusterungsunterlagen sind mindestens 12 Jahre aufzubewahren.

					
						Die Protokolle der Wareneingangsprüfungen (be-treffend Zulieferteile und sonstige Vorprodukte der Unterauftragsnehmer), der Funktions-, Zuverlässig-keits- und Lebensdauertests, der Ausgangsprüfun-gen sowie gegebenenfalls der Fehleranalysen wer-den beim AN über den gesamten Produktlebens-zyklus, mindestens aber 12 Jahre, aufbewahrt. Der AN gewährt RRPS auf Wunsch Einsicht in die Auf-zeichnungen. In Einzelfällen kann RRPS eine län-gere Aufbewahrungsfrist verlangen.

					
					
						For PSB components, providing information to and obtaining authorization from RRPS in relation to the items c), d) and e) is only required if there is a risk of changing form, fit, function or if specific requirements were defined by RRPS regarding items c), d) and e). RRPS must always be informed in any case about any change in relation to a) or b). The scope of qualification for PSB components must be agreed with RRPS accordingly.

					
						All changes to the product and process chain of parts that are subject to initial sampling shall be documented by the contractor in a product history which shall be submitted to RRPS on request.

					
						The sampling documentation shall be kept on file for at least 12 years.

					
						The records of incoming goods inspections (as regards bought-in parts and other pre-production items from subcontractors), the functional, reliability and durability tests, the final inspections and, if necessary, the failure analyses shall be filed and kept by the contractor for the complete product life cycle, however, at least 12 years. The contractor shall permit RRPS the inspection of these records on request. RRPS shall be entitled to demand a longer period of retention on a case-to-case basis.

				
	
					
						3    Produktentstehungsprozess

					
					
						3    Product Creation Process

				
	
					
						3.1    Planung, Freigabe

					
					
						3.1    Planning, Approval

				
	
					
						Im Zuge der Vertragsprüfung wird der AN nach Erhalt aller technischen Unterlagen wie Spezifikati-onen, Zeichnungen, Stücklisten, CAD-Daten die Realisierbarkeit sofern nicht anders vereinbart auf Basis einer Herstellbarkeitsanalyse prüfen. Dabei erkannte Mängel und Risiken sowie Verbesse-rungsmöglichkeiten teilt der AN RRPS unverzüglich mit. Wenn nicht anders vereinbart, ist die Herstell-barkeitsanalyse zusammen mit dem Angebot an den Einkauf zu senden. Entsprechende Formulare siehe unter: 

					
						http://www.mtu- online.com/mtu/einkauf/downloads/index.de.html

					
						Der AN führt eine Prozessplanung (Arbeitspläne, Prüfpläne, Betriebsmittel, Werkzeuge, Maschinen etc.) durch. Die Produktqualität interner und externer Erzeugnisse wird durch angemessene Maßnahmen bspw. Audits überwacht.

					
					
						In the course of contract review, the contractor shall check the feasibility on the basis of a feasibility study after receipt of all technical documents such as specifications, drawings, parts lists, CAD data. The contractor shall inform RRPS without delay of any defects or risks as well as possible improvements recognized in this process. Unless otherwise agreed, the feasibility study shall be sent to Purchasing together with the offer. For the appropriate form, refer to: 

					
						http://www.mtu- online.com/mtu/einkauf/downloads/index.de.html

					
						The contractor shall maintain a process plan (work plans, inspection plans, production equipment, tools, machines, etc.). The product quality of internal and external products shall be monitored by appropriate measures such as, for example, audit procedures.

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 8 von/of 20

		

		
		

		
			﻿
		

			
					
						﻿

					
					
						 

				
	
					
						3.2    Key Characteristics (KC)

					
					
						3.2    Key Characteristics (KC)

				
	
					
						Für KC muss grundsätzlich die Prozesssicherheit nachgewiesen werden (cpk ≥ 1,67). Alternativ ist eine 100%-Prüfung mit dokumentierten IST-Werten zulässig. In der Zeichnung sind KC durch das nach-folgende Symbol gekennzeichnet:

					
						

					
					
						As a matter of principle, the process reliability must be evidenced for all key characteristics (cpk ≥ 1.67). Alternatively, a 100% test with the documented “as is” values shall be admissible. The key characteristics are marked with the following symbol in the drawing:

					
						

				
	
					
						Alle Produkt- und Prozessmerkmale sind spezifika-tionsgerecht zu erfüllen. Funktionskritische Merk-male (KC) erfordern jedoch besondere Beachtung, da Abweichungen bei diesen Merkmalen zu Funkti-onsausfall des Motors oder sonstigen Komponen-ten führen können.

					
						Funktionskritische Merkmale für Teile ohne Design-verantwortung des AN werden von RRPS festge-legt. Für Teile mit Designverantwortung des AN erfolgt die Festlegung in gemeinsamer Abstim-mung. Der AN macht hierzu Vorschläge.

					
						KC-Merkmale sind auf AN eigene Zeichnungen, Arbeits- und Prüfpläne zu übertragen.

					
					
						All product and process characteristics shall be met as per specifications. However, those characteristics which are critical for function (KC, key characteristics) require special consideration since any associated deviations may result in failure of the engine or other components.

					
						Key characteristics for those parts for the design of which the contractor is not responsible will be defined by RRPS. For parts with design responsibility of the contractor, the definition shall be made by joint coordination. The contractor shall make suggestions for this.

					
						Key characteristics shall be incorporated in the contractor’s own drawings, work and test plans.

				
	
					
						4    Produktionsprozess- und Produktfreigabe

					
					
						4    Production Process and Product Approval

				
	
					
						4.1    Qualitätsprüfung und Dokumentation für Vor-/ Erstmuster und PSG-Komponenten

					
					
						4.1    Quality Inspection and Documentation for Preliminary/Initial Samples and PSB Components

				
	
					
						Grundsätzlich sind alle Merkmale nach Zeichnung/ Spezifikation und 3D-Modell (sofern 3D-Modell verfügbar) zu prüfen, die im Herstellprozess er-zeugt oder beeinflusst werden.

					
						Erfordert die Prüfung besondere Prüfeinrichtungen, über die der AN nicht verfügt, ist eine fremde Prüf-stelle zu beauftragen. Die Verantwortung für diese Prüfung trägt der AN. Gegebenenfalls ist ein ein-heitliches Prüfverfahren und/oder einheitliche Messstellen am Bauteil zwischen AN und RRPS abzustimmen. Prüfergebnisse sind in der Form von Prüfberichten zu dokumentieren (siehe 4.7 Vordru-cke).

					
						Vermessene Teile sind deutlich erkennbar durch-zunummerieren, um eine Zuordnung der Teile zu den Messergebnissen zu gewährleisten. Art und Weise der Kennzeichnung ist bei Bedarf mit RRPS abzustimmen.

					
						Alle Merkmale sind auf der Zeichnung zu numme-rieren und mit Nummer im Prüfbericht für Vor-/ Erstmuster und PSG-Komponenten (nachstehend Prüfbericht genannt) einzutragen. Die Ankreuz-Spalten i.O./n.i.O. (OK/not OK) sind ebenfalls aus-zufüllen.

					
					
						In all cases, all characteristics which are produced or influenced during the manufacturing process must be inspected to ensure compliance with drawing and 3D-model specifications (if 3D-models are available).

					
						If this inspection requires special inspection/test devices which the contractor does not have at his disposal, then a third-party testing/inspection body must be commissioned. The contractor bears responsibility for such inspection/testing. Where appropriate, standard inspection/test procedures and/or standard measuring points on the component must be agreed between the contractor and RRPS. The results of tests/inspections must be documented in the form of test/inspection reports (see 4.7 Templates).

					
						Components which have undergone measurement must be clearly and comprehensively marked with serial numbers in order to ensure that the results of measurements can be unmistakably allocated to individual components. If necessary, the type and method of ID-marking must be agreed with RRPS.

					
						All characteristics shall be numbered in the drawing and entered with the number in the inspection report for preliminary/initial samples and PSB components (referred to as inspection report below). The tick columns (i.O. = OK / n.i.O. = not OK) shall also be filled in.

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 9 von/of 20

		

		
		

		
			﻿
		

			
					
						﻿

					
					
						 

				
	
					
						Wenn nicht anders vereinbart, sind vom AN nach-folgende Unterlagen dem Produkt beizulegen bzw. bei Prüfungen im Hause des AN vorzulegen:

					
					
						Unless otherwise agreed, the contractor shall enclose the following documents with the product or submit them in case of inspections carried out on the contractor’s premises:-Inspection and test results 

				
	
					
						- Deckblatt 

					
						- Prüfergebnisse 

					
						- RRPS freigegebene Zeichnung (alle Merkmale nummeriert)

					
						- Werkstoff- und Wärmebehandlungsnachweise 

					
						- ggf. Fotodokumentation des Gussmodells Nur bei Erstmustern und PSG

					
						-Komponenten sind beizulegen:

					
						- ggf. Konstruktions- und Entwicklungsfreigaben 

					
						- Abnahmeprotokolle

					
					
						- Cover sheet 

					
						- Drawing approved by RRPS (all characteristics numbered)

					
						- Materials and heat treatment certificates 

					
						- Photographic documentation of the casting pattern, if applicable 

					
						The following documents are only required for initial samples and PSB components:

					
						- Design and development approval documents, if applicable 

					
						- Acceptance records

				
	
					
						Weitere auf der Zeichnung oder im Lastenheft spe-zifizierte Prüfanforderungen und -nachweise sind zu beachten und zu erbringen und auf dem Prüfbe-richt zu vermerken.

					
						Das Vorhandensein einer Risikoanalyse für Prozesse z.B. in Form einer Prozess-FMEA sowie eines Prozessablaufplanes ist auf dem Deckblatt zu bestätigen.

					
						Der Nachweis dazu wird z.B. im Rahmen eines Audits geführt. Sofern eine Design-FMEA erforder-lich ist, wird diese vertraglich gefordert.

					
						Bei ähnlichen Teilen ist eine übergeordnete Risiko-analyse für Prozesse oder der Teilefamilien ausrei-chend.

					
						Die geforderten Zulassungen bei den Klassifikati-onsgesellschaften sind nachzuweisen.

					
					
						Other inspection/test requirements and documents specified in the drawing or in the requirements specifications must be observed, provided and documented in the inspection report.

					
						The availability of a risk analysis for processes e.g. in the form of a process FMEA and a process flow schedule must be confirmed on the cover sheet. 

					
						Verification of this will take place within the context of (for example) an audit. If a design FMEA is required, this will be contractually stipulated.

					
						In the case of components which are similar, an overall risk analysis for processes or component families is adequate.

					
						Verification must be provided that the required classification society approvals are available

				
	
					
						4.2    Vor- und Erstmuster von Guss- und Schmiederohteilen

					
					
						4.2    Preliminary and Initial Samples of Raw Castings and Forgings

				
	
					
						Guss- und Schmiederohteile sind vor der Weiter-verarbeitung durch den AN separat zu bemustern Gussrohteile sind an kritischen Stellen zu schnei-den und die Wandstärke zu messen und zu doku-mentieren.

					
						Wenn Teile durch einen Unterauftragnehmer des AN hergestellt werden, müssen diese durch den AN freigegeben werden.

					
						Liegen 3D-Daten zur Rohgeometrie vor, sind alle Maße über ein 3D-Verfahren (z.B. taktiles Messen, Laserscannen oder photooptische Vermessung) zu erfassen, zu dokumentieren und diese mit den 3D-CAD-Fertigteil-Daten zu vergleichen. Die Auswer-tung ist nach MTP5028-1 durchzuführen.

					
					
						Raw castings and forgings must undergo separate sample inspections conducted by the contractor before further processing takes place. Raw castings must be cut at critical points and wall thickness must be measured and documented.

					
						Components manufactured by a sub-contractor of the contractor must be approved by the contractor. Where 3D data on the raw geometry are available, all dimensions must be registered and documented using a 3D procedure (e.g. tactile measurement, laser scanning or photo-optic measurement) and these data must be compared with the 3D-CAD data for the finished component. Evaluation must be conducted in accordance with MTP5028-1.

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 10 von/of 20

		

		
		

			
					
						﻿

					
					
						 

				
	
					
						4.3    Gegenprüfungen durch RRPS

					
					
						4.3    Verification Inspections by RRPS

				
	
					
						4.3.1    Begriffsdefinition Prüfarten

					
					
						4.3.1    Inspection Type Definitions

				
	
					
						Die nachfolgend beschriebenen Prüfarten definie-ren die Produktkategorie (siehe Abschnitt 1), den Prüfort und den Prüfumfang für eine Gegenprüfung durch RRPS. Die Prüfarten werden in der jeweili-gen Bestellung für das Vertragsprodukt ausgewie-sen. Die Prüfart ist durch den AN auf dem Deckblatt des Prüfberichts durch Ankreuzen zu vermerken.

					
					
						The inspection types described below define the product category (see section 1), the inspection location and the scope of inspection for a verification inspection by RRPS. The inspection types are specified in each order for a contractual product. The appropriate inspection type shall be ticked by the contractor on the cover sheet of the inspection report.

				
	
					
						Vormusterprüfung:

					
						RRPS führt nach Wareneingang bei RRPS eine Prüfung an der Vormusterlieferung durch.

					
					
						Preliminary sample inspection:

					
						RRPS will perform an inspection of the preliminary sample delivered after receipt of the delivery at RRPS.

				
	
					
						Erstmusterprüfung intern:

					
						RRPS führt nach Wareneingang bei RRPS eine Prüfung an der Erstmusterlieferung durch.

					
					
						Internal initial sample inspection:

					
						RRPS will perform an inspection of the initial sample delivered after receipt of the delivery at RRPS.

				
	
					
						Erstmusterprüfung extern:

					
						RRPS führt eine Prüfung am Erstmuster im Hause des AN durch.

					
					
						External initial sample inspection:

					
						RRPS will perform an inspection of the initial sample at the contractor’s premises.

				
	
					
						PSG-Neuteilprüfung intern:

					
						RRPS führt nach Wareneingang bei RRPS eine Prü-fung an der ersten Lieferung der PSG-Komponente durch.

					
					
						Internal PSB new part inspection:

					
						RRPS will perform an inspection of the first PSB component delivered after receipt of the delivery at RRPS.

				
	
					
						PSG-Neuteilprüfung extern:

					
						RRPS führt im Hause des AN eine Prüfung an der ersten Lieferung der PSG-Komponente durch bzw. begleitet diese.

					
					
						External PSB new part inspection:

					
						RRPS will perform or attend an inspection of the first PSB component to be delivered at the contractor’s premises.

				
	
					
						PSG-Vollprüfung intern

					
						RRPS führt nach Wareneingang bei RRPS eine Prü-fung an jeder Lieferung der PSG-Komponente durch.

					
					
						Internal PSB component full inspection

					
						RRPS will perform an inspection of every PSB component delivered after receipt of the delivery at RRPS.

				
	
					
						PSG-Vollprüfung extern

					
						RRPS führt im Hause des AN eine Prüfung an jeder Lieferung der PSG-Komponente durch bzw. begleitet diese.

					
					
						External PSB component full inspection

					
						RRPS will perform or attend an inspection of every PSB component to be delivered at the contractor’s premises.

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 11 von/of 20

		

		
		

			
					
						﻿

					
					
						 

				
	
					
						4.3.2    Freigabe durch RRPS

					
					
						4.3.2    Approval by RRPS

				
	
					
						Nach Erhalt des Vormusters/ Erstmusters oder der PSG-Komponente und des Prüfberichts führt RRPS nach Ermessen Prüfungen durch.

					
					
						RRPS will make inspections and tests according to its own discretion on receipt of the preliminary/initial sample or PSB component and initial sample inspection report.

				
	
					
						Aufgrund des Prüfberichts und der selbst durchge-führten Prüfungen trifft RRPS folgende Entschei-dung:

					
					
						RRPS will take one of the following decisions on the basis of the inspection report and its own inspections:

				
	
					
						a)  frei

					
					
						a)  Approved

				
	
					
						b)  mit Auflagen frei, Nachbemusterung bzw. erneu-te Vorstellung zur Prüfung erforderlich

					
					
						b)  Conditionally approved; re-sampling and/or resubmission for inspection required

				
	
					
						c)  abgelehnt, Nachbemusterung bzw. erneute Vorstellung zur Prüfung erforderlich 

					
					
						c)  Rejected; re-sampling and/or re-submission for inspection required 

				
	
					
						Die Entscheidung wird dem AN mit einer Kopie des Prüfberichts unverzüglich zugeleitet.

					
					
						The decision will be communicated to the contractor without delay along with a copy of the inspection report.

				
	
					
						Bei Entscheidung a) wird die Freigabe zur Serien-lieferung erteilt.

					
					
						In case of decision a), approval for series product shipments is issued.

				
	
					
						Bei Entscheidung b) müssen die Abweichungen abgestellt und zur Nachbemusterung bzw. zur er-neuten Prüfung vorgestellt werden.

					
					
						In case of decision b), the non-conformities found must be remedied and re-sampling and/or resubmission for inspection is required.

				
	
					
						Bei Entscheidung c) ist die Vorlage neuer Vormus-ter/ Erstmuster/ PSG-Komponenten einschließlich Prüfbericht erforderlich.

					
					
						In case of decision c), new preliminary samples / initial samples / PSB components must be submitted including inspection report.

				
	
					
						Ist zusätzlich eine weitere Qualifizierung oder Pro-bebearbeitung bei RRPS erforderlich, erfolgt die Freigabe nach der Qualifizierung.

					
					
						If the process should require additional qualification or sample processing/working at RRPS, approval will be issued after qualification.

				
	
					
						Die Prüfungen von RRPS sowie Freigaben und Zu-stimmungen nach dieser Norm entlasten den AN nicht von seiner Gewährleistung und Verantwortung für die Fehlerfreiheit seiner Produkte und Dienst-leistungen.

					
					
						Tests/inspections conducted by RRPS and approvals and agreements issued in accordance with this standard do not absolve the contractor of its warranty obligations or responsibility to ensure that its products and services are free of defects.

				
	
					
						Die RRPS ist berechtigt, an vom AN und seinen Unterauftragnehmer durchgeführten Prüfungen oder Befundungen teilzunehmen, derartige durch von RRPS autorisierte Personen beobachten zu lassen oder selbst derartige Prüfungen beim AN nach vorheriger Abstimmung mit diesem selbst durchzuführen.

					
					
						RRPS reserves the right to participate in tests / inspections and investigations conducted by the contractor and its sub-contractors or authorize observers to attend such events or conduct such tests, inspections or investigations itself at the con-tractor’s premises subject to prior agreement with the contractor.

				
	
					
						Bei einer Qualitätsprüfung beim AN sind die ver-traglich geschuldeten Anforderungen bzgl. Planung, Durchführung und Teilnehmerkreis (z. B. bei einer Güteprüfung durch Vertragspartner und/ oder End-kunden der RRPS) einzuhalten. Nach erfolgter Prüfung sind die Unterlagen vollständig dem Ab-nahmebeauftragten der RRPS zu übergeben.

					
					
						In case of a quality inspection at the contractor’s premises, the contractually agreed requirements regarding planning, implementation and participants (e.g. for a quality inspection by contractual partners and/or end customers of RRPS) must be complied with. On completion of inspection, the related documents must be handed over completely to the RRPS Acceptance Officer.

				
	
					
						4.4    Kennzeichnung

					
					
						4.4    Marking

				
	
					
						Um Verwechslungen auszuschließen muss die Kennzeichnung der Vormuster/ Erstmuster/ PSG-Neuteile am Teil selbst und außen am Packstück eindeutig und dauerhaft sein. Sie erfolgt durch An-hänger, Etiketten, Klebstreifen oder ähnliches und auf dem Lieferschein.

					
						Die Kennzeichnung besteht aus folgenden Daten, die ebenfalls im Erstmusterprüfbericht aufzuführen sind: Anzahl der Muster, Materialnummer, Bezeich-nung, Änderungsstand und Einkaufsbeleg. Etikettenvordrucke können unter http://www.mtu- online.com/mtu/einkauf/downloads/index.de.html  heruntergeladen werden.

					
					
						The marking on the preliminary/initial samples/PSB new parts and the packaging must be unique and durable in order to prevent any confusion. It must be made by means of tags, labels, adhesive strips or similar items and on the delivery note.

					
						The marking comprises the following data, which must also be included in the initial sample inspection report: Number of samples, material number, designation, revision status and purchasing voucher.

					
						Label templates (forms) can be downloaded from: http://www.mtu- online.com/mtu/einkauf/downloads/index.de.html

				

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 12 von/of 20

		

		
		

			
					
						4.5    Anlieferung

					
					
						4.5    Delivery

				
	
					
						Zur Vermeidung von Beschädigungen sind für die Anlieferung geeignete bzw. bestimmungsgemäße Transportbehälter zu verwenden.

					
						Eine gemeinsame Anlieferung der ersten Serienlie-ferung mit dem Erstmuster ist zulässig. PSG-Neuteile dürfen zusammen mit der ersten Folgelie-ferung angeliefert werden.

					
						Besteht die Lieferung aus mehreren Packungsein-heiten, so muss das Vormuster/ Erstmuster oder das PSG-Neuteil in der oberen Lage des Ladungs-trägers/Packstücks sein.

					
						Die Dokumentation ist spätestens zum Zeitpunkt der Vor-/Erstmuster- bzw. PSG-Teil-Lieferung mit folgender Betreffzeile an empb-doku@mtu-online.com zu senden:

					
						Materialnummer=Lieferantennummer=Lief.-Name

					
					
						Suitable transport containers matching the intended purpose must be used for shipment.

					
						Delivery of the first series products together with the initial sample is admissible. PSB new parts may be delivered together with the first follow-up shipment.

					
						If a shipment consists of several packaging units, the preliminary sample / initial sample or PSB new part must be in the top layer of the load carrier/package.

					
						The documentation is to be sent to empb-doku@mtu-online.com with the following reference line at the time of preliminary sample/initial sample and PSG part delivery at the latest:

					
						Material number=Supplier number=Supplier name

				
	
					
						4.6    Aussetzen der Fertigung und reduzierte Bemusterung

					
					
						4.6    Discontinuation of Production and Reduced Sampling

				
	
					
						Nach Aussetzen der Fertigung > 36 Monaten ist ein erneutes Erstmuster erforderlich.

					
						Zur Aufwandsreduzierung ist für diese Fälle eine reduzierte Bemusterung unter Verweis auf das freigegebene Erstmuster zulässig. Ebenfalls ist eine reduzierte Bemusterung z.B. bei Teilefamilien mit Tabellenzeichnungen erlaubt.

					
						Für das Formular für reduzierte Bemusterung siehe im Abschnitt 4.7 Vordrucke.

					
						Bei PSG-Komponenten ist nach Aussetzen der Fertigung > 36 Monaten immer eine erneute voll-ständige Qualifizierung erforderlich.

					
					
						After discontinuation of production for > 36 months, a new initial sample is required.

					
						In order to reduce the overhead, reduced sampling is acceptable in such cases, referring to the initial sample approved. Reduced sampling is also acceptable, for example, for part families involving tabular drawings.

					
						See section 4.7, Templates..., for a form provided for reduced sampling.

					
						 

					
						PSB components always require another full qualification process after discontinuation of production for > 36 months.

				
	
					
						4.7    Vordrucke für Prüfbericht für Vor-/ Erstmuster und PSG-Komponenten

					
					
						4.7    Templates for Inspection Reports for Preliminary/Initial Samples and PSB Components

				
	
					
						Vordrucke für den Prüfbericht sind unter http://www.mtu- online.com/mtu/einkauf/downloads/index.de.html  abrufbar.

					
						Der Prüfbericht besteht aus dem Blatt “Deckblatt” und beliebig vielen Blättern “Prüfergebnisse”

					
						Das Deckblatt enthält notwendige Kenndaten des Produkts, erforderliche Bestätigungen und das zusammengefasste Ergebnis der Entscheidungen. Wenn nicht anders vereinbart, sind die aktuellen RRPS-Formulare zu verwenden. Die Verwendung von Formularen, die nicht dem aktuellen Standard entsprechen, wird sofern nicht anders vereinbart beanstandet.

					
						Das Blatt “Prüfergebnisse” enthält, um die Zuord-nung zum Deckblatt zu gewährleisten, die Kennda-ten des Produkts und die detaillierten Prüfergebnis-se aller Merkmale, getrennt nach Maßprüfung, Werkstoffprüfung und Funktionsprüfung.

					
					
						Templates (forms) for the inspection report are available at: 
http://www.mtu- online.com/mtu/einkauf/downloads/index.de.html.

					
						The inspection report consists of the `Cover Sheet ́ and the required number of `Test Result ́ sheets. The cover sheet lists essential characteristics of the product, verifications required and the summarized result of decisions. Unless otherwise agreed, current RRPS templates must be used. The use of forms which do not meet current standards will not be accepted unless otherwise agreed.

					
						The inspection results sheet contains the identification data of the product as a cross-reference to the cover sheet and the detailed inspection results of all characteristics, broken down according to dimensional inspections/tests, material inspec-tions/tests and functional inspections/tests.

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 13 von/of 20

		

		
		

			
					
						4.8    Rückstellmuster

					
					
						4.8    Reference Samples

				
	
					
						Definition:

					
						Rückstellmuster sind unter Serienbedingungen hergestellte erstmusterpflichtige Bauteile, die dazu dienen, den erprobten Zustand zu Serienbeginn in Hardware zu konservieren.

					
						Zielsetzung:

					
						Ziel ist dabei, bei späteren Serienproblemen Pro-blemursachen und erforderliche Maßnahmen z.B. Rückrufaktionen schnell und zielgerichtet ermitteln zu können.

					
						Dem AN wird empfohlen, Rückstellmuster für eine Frist von 12 Jahren einzulagern. Zur Erstbemuste-rung von Gussteilen kann alternativ zum Rück-stellmuster das Bauteil gescannt und der 3D-Datensatz abgespeichert werden.

					
						Materialproben, Schliffbilder etc. sind 12 Jahre auf-zubewahren

					
					
						Definition:

					
						Reference samples are parts that are subject to initial sampling, produced under series production conditions and intended to serve as a hardware reference for the condition tested at the beginning of series production.

					
						Objective:

					
						The objective is to be able to determine root causes and necessary action, e.g. product recall, quickly and directly if any problems should arise later in series production.

					
						Contractors are recommended to retain reference samples in store for a period of 12 years. As an alternative to the retention of reference samples, in the case of the initial sampling of castings, the component may be scanned and the 3D data record retained.

					
						Material samples, micrographs, etc. must be retained for 12 years.

				
	
					
						5    Serienbegleitende Qualitätsmaß-nahmen

					
					
						5    Series Related Quality Assurance Measures

				
	
					
						5.1    Kennzeichnung

					
					
						5.1    Marking

				
	
					
						Bezüglich der Kennzeichnung von Produkten, Tei-len und der Verpackung sind die mit RRPS verein- barten allgemeinen Anliefervorschriften 
(http://www.mtu- online.com/mtu/einkauf/downloads/index.de.html) einzuhalten. Es ist sicherzustellen, dass die Kenn-zeichnung der verpackten Produkte auch während des Transportes und der Lagerung erkennbar ist. Abweichungen von bestehenden Kennzeichnungs-pflichten bedürfen einer schriftlichen Vereinbarung zwischen AN und RRPS.

					
					
						With regard to marking of products, parts and packaging, the General Specifications for Deliveries agreed with RRPS shall be complied with 
(http://www.mtu- online.com/mtu/einkauf/downloads/index.de.html). Measures shall be taken to ensure that the marking of the packaged products is also visible during transport and storage. Any deviation from the existing marking obligations is subject to a written agreement between the contractor and RRPS.

				
	
					
						5.2    Rückverfolgbarkeit

					
					
						5.2    Traceability

				
	
					
						Der AN verpflichtet sich, die Rückverfolgbarkeit der von ihm gelieferten Produkte sicherzustellen. Im Falle einer festgestellten Abweichung muss eine Rückverfolgbarkeit derart möglich sein, dass eine Eingrenzung zumindest auf die betroffenen Liefe-rungen durchgeführt werden kann. RRPS wird dem AN die bei RRPS verfügbaren, zur Rückverfolgbar-keit benötigten Daten mitteilen.

					
					
						The contractor commits to ensure the traceability of the products supplied as far as possible. If a deviation should be detected, the traceability must be ensured in such a way that a containment at least of the shipments affected can be made. RRPS will communicate to the contractor the data needed for traceability that are available from RRPS.

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 14 von/of 20

		

		
		

			
					
						5.3    Prüfung im Wareneingang - Serie

					
					
						5.3    Incoming Goods Inspection - Series

				
	
					
						RRPS prüft die vom AN bezogenen Produkte nach deren Erhalt auf die Einhaltung von Menge und Identität sowie auf äußerlich erkennbare Schäden. Im Übrigen wird RRPS von der Untersuchungs- und Rügepflicht befreit (§ 377 HGB).

					
						Mängel an einer Lieferung hat RRPS dem AN un-verzüglich anzuzeigen, sobald sie nach den Gege-benheiten eines ordnungsgemäßen Geschäftsab-laufes festgestellt wurden. Insoweit verzichtet der AN auf den Einwand der verspäteten Mängelrüge. 

					
						Der AN muss seine Qualitätssicherungsmaßnah-men auf diese reduzierte Wareneingangsprüfung ausrichten.

					
					
						RRPS will inspect the products procured from the contractor on receipt for compliance with quantity and identity as well as for any obvious damage. In all other respects, RRPS is exempt from the obligation of inspection and notification of defects (§ 377 HGB, German Commercial Code).

					
						RRPS shall notify any defects to the contractor without delay as soon as they are detected in the ordinary course of business procedures. In this respect, the contractor waivers the objection of delayed notification of defect.

					
						The contractor must adjust his quality assurance measures according to the reduced scope of the incoming goods inspection.

				
	
					
						5.4    Sicherstellung der Serienqualität

					
					
						5.4    Assurance of Series Quality

				
	
					
						Der AN ist nach ISO 9001 (Absatz 9.1 Überwa-chung, Messung, Analyse und Bewertung) ver-pflichtet eine angemessene Prozessdokumentation zu führen und ggf. RRPS auf Anfrage zur Verfü-gung zu stellen.

					
					
						Based on the ISO 9001 standard (section 9.1 Monitoring, Measurement, Analysis and Evaluation), the contractor is obliged to compile appropriate process documentation and if required to provide this to RRPS upon request.

				
	
					
						5.4.1    Requalifizierung - Serie

					
					
						5.4.1    Requalification - Series

				
	
					
						Über Monate/Jahre können sich schleichende Pro-zessänderungen ergeben, die über die vereinbarte reduzierte Wareneingangsprüfung seitens des AG ggf. nicht entdeckt werden können. Mit der Requali-fizierungsprüfung werden Serienbauteile systema-tisch und vollständig geprüft, ob Sie den Spezifika-tionen noch entsprechen. Eine Requalifizierungs-prüfung umfasst eine vollständige Maß- Werkstoff-und ggf. Funktionsprüfung. Die Prüfergebnisse werden in Form eines „Erstmusterprüfberichtes” dokumentiert.

					
						RRPS führt in regelmäßigen Abständen nach RRPS-Prüflogik Requalifizierungsprüfungen von Serienbauteilen in der Wareneingangsprüfung durch.

					
						Beim Auftreten von Spezifikationsabweichungen in der Requalifizierungsprüfung behält sich der AG abhängig von der Kritikalität der Bauteile und der Fehlerart vor, durch den AN serienbegleitende Re-qualifizierungsprüfungen zu Lasten des AN zu ver-anlassen. Dies kann auch für ähnliche Teile dersel-ben Teilefamilie gelten. Bis zur Wiederherstellung der erforderlichen Prozesssicherheit hat der AN verschärfte Qualitätsprüfungen zu installieren bis hin zu einem 100%-igen Warenausgangs-Qualitätstor

					
					
						Over months/years, changes can creep into the process which may not be covered by the reduced scope of the RRPS incoming goods inspection agreed upon. Using the requalification test, series components are systematically and fully checked for their compliance with specifications. A requalification test includes a full dimensions, material and if required function test. The results are documented in the form of an “Initial Sample Test Report”.

					
						RRPS regularly carries out requalification tests of series components during incoming goods inspection as per RRPS test logic.

					
						If deviations from specifications are determined during the requalification test, RRPS reserves the right to instruct the contractor to carry out a series production requalification test at his own cost depending on the criticality of the component and type of fault. This can also apply to similar parts of the same part family. The contractor shall implement tighter quality tests up to a 100% outgoing quality gate control until the required process safety is restored.

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 15 von/of 20

		

		
		

			
					
						﻿

					
					
						 

				
	
					
						6    Qualitätsziele

					
					
						6    Quality Objectives

				
	
					
						6.1    Fehlerfreie Lieferung / AN-Entwicklung

					
					
						6.1    Zero Defect Supply / Contractor De- velopment

				
	
					
						Im Rahmen des Qualitätsmanagements ist der AN zu fehlerfreien Lieferungen von Produkten und Leistungen verpflichtet.

					
						Der AN gewährleistet, dass alle von ihm zu liefern-den Produkte den jeweiligen Spezifikationen, den vereinbarten Bedingungen, einschließlich der Halt-barkeitseigenschaften entsprechen und der aktuelle Stand der Technik berücksichtigt ist.

					
						Sofern das Null-Fehler-Ziel nicht kurzfristig erreich-bar ist, wird der AN zeitlich befristete Obergrenzen für Fehlerraten (ppm-Quote) als Zwischenziele und Maßnahmen vorschlagen und mit RRPS abstim-men.

					
						Bei unzureichender Kaufteilequalität bzw. einer Häufung von Spezifikationsabweichungen fordert RRPS vom AN entsprechende Optimierungsmaß-nahmen. Dafür werden bei RRPS verschiedene AN-Entwicklungsstufen mit steigenden Eskalati-onsmaßnahmen wie beispielsweise Warenaus-gangsprüfung, Q-Offensive oder Sperre für Neuge-schäft eingesetzt. RRPS behält sich vor, den AN nach Absprache an den Kosten zu beteiligen.

					
						Die Haftung des AN für Mängel oder für Schaden-ersatzansprüche wegen fehlerhafter Lieferungen, nicht Einhaltung von Verträgen oder Absprachen bleibt unberührt.

					
					
						The contractor is obliged to deliver zero-defect products and services within the scope of the quality management.

					
						The contractor warrants that all products to be delivered comply with the applicable specifications, the agreed conditions including durability characteristics and that the current state of technology has been taken into account.

					
						If it should not be possible to attain the zero-defect target at short term, the contractor shall suggest upper limits for defect rates (ppm quota) limited in time as interim targets and suggest and coordinate actions with RRPS.

					
						If the quality of purchased parts should be insufficient or if frequent non-conformities in relation to the specifications should occur, RRPS will request the contractor to take appropriate action. In this regard, various contractor development stages with increasing escalation levels of actions are used at RRPS such as, for example, outgoing goods inspection, Q-campaign or freeze for new business. RRPS reserves the right to request the contractor to accept a share of the costs following prior consultation.

					
						The contractor’s liability for defects or damages because of defective deliveries or non-compliance with contracts or agreements shall remain unaffected.

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 16 von/of 20

		

		
		

		
			﻿
		

			
					
						﻿

					
					
						 

				
	
					
						7    Änderungen / Abweichungen der Spezifikationen (Normen, Zeichnungen, Lastenheft usw.); Änderungen im Lie- ferumfang

					
					
						7    Changes/Deviations of Specifications (standards, drawings, requirements specifications, etc.); Change to Scope of Supply

				
	
					
						7.1    Antrag auf Abweichungslaubnis (AE)

					
					
						7.1    Application for Deviation Approval

				
	
					
						Temporäre Abweichungen sind mit Antrag auf “Ab-weichungserlaubnis” anzuzeigen:

					
						Wird erkennbar, dass Spezifikationen bzw. Quali-tätsmerkmale nicht eingehalten werden können, informiert der AN RRPS hierüber mit dem Formular „Antrag auf Abweichungserlaubnis” (Formular unter http://www.mtu- online.com/mtu/einkauf/downloads/index.de.html) per Email an reklamation@mtu-online.com.

					
					
						Temporary deviations shall be notified by way of an application for deviation approval:

					
						If it should become obvious that specifica-tion/quality characteristics cannot be complied with, the contractor shall inform RRPS of this by sending the deviation approval application form (“Application for Deviation Allowance”, download from http://www.mtu- online.com/mtu/einkauf/downloads/index.de.html) via e-mail to reklamation@mtu-online.com.

				
	
					
						Die Erstellung einer AE wird nicht empfohlen bei:

					
					
						The preparation of a Deviation Approval is not recommended:

				
	
					
						-    Erstmusterteilen 

					
						-    Toleranzabweichung bei Schlüssel- bzw. Keymerkmalen.

					
						-    Toleranzabweichung größer 50% der Toleranz-breite und Nacharbeit ist unwirtschaftlich 

					
						-    Bauteilwert/Liefervolumen kleiner 200,- € und spezifikationsgerechte Bauteile stehen zur Ver-fügung bzw. sind termingerecht produzierbar.

					
						-    Bauteil mit mehr als 3 unterschiedlichen Fehlermerkmalen

					
					
						-    for initial sample parts 

					
						-    for tolerance deviations for key features 

					
						-    where tolerance deviation is greater than 50% of the tolerance width and rework is uneconomic 

					
						-    where component/supply volume value is less than €200 and specification-compliant components are available or can be produced on schedule 

					
						-    for components with more than 3 different defect characteristics The contractor shall also inform RRPS immediately about any deviation recognized after delivery.

				
	
					
						Der AN wird RRPS auch über alle nach Ausliefe-rung erkannten Abweichungen unverzüglich in Kenntnis setzen. Lieferungen mit Abweichungser-laubnis dürfen nur nach Information an den Einkauf mit einer separaten Bestellung - die Lieferung wird vom Einkäufer auf Prüfung gesetzt - für eine abge-stimmte Menge oder einen abgestimmten Zeitraum getätigt werden. Ist keine Menge/Zeitraum angege-ben gilt die AE 2 Jahre ab Entscheid.

					
						Jeder Sendung ist der freigegebene AE-Antrag beizulegen und sofern nicht anders festgelegt alle betroffenen Bauteile mit der AE-Nr. zu kennzeich-nen. Bei Nichtbeachtung wird nach Absprache der AN mit den ggf. entstehenden Folgekosten belas-tet.

					
					
						Deliveries under a deviation allowance shall only be permitted for an agreed quantity or an agreed period after informing the Purchasing department to this effect with a separate purchase order - the delivery is assigned inspection status by the purchaser. If a quantity/period is not specified, the deviation allowance shall be valid for 2 years from the decision.

					
						Each shipment must be accompanied by the approved application for deviation allowance and all parts affected shall be marked with the corresponding deviation allowance number unless otherwise specified. In the event of failure to comply with this stipulation, any consequential costs shall be charged to the contractor following prior consultation.

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 17 von/of 20

		

		
		

			
					
						﻿

					
					
						 

				
	
					
						7.2    Änderungsantrag

					
					
						7.2    Application for Change

				
	
					
						Ein Änderungsantrag ist zu stellen bei:

					
					
						An application for change is to be put in in case of:

				
	
					
						    dauerhaft verbleibenden Änderungen mit Än-derung der Bauteilspezifikation (Konstrukti-onsänderung)

					
						    dauerhaft verbleibenden Abweichungen, die bei Bedarf mittels AE bereits genehmigt sind mit Änderung der Bauteilspezifikation (Kon-struktionsänderung)

					
						    Änderungen, bei denen sich die Spezifikatio-nen nicht ändern (Fertigungsverfahren, Pro-duktionsverlagerung usw.)

					
					
						    Permanently remaining changes with change of the component specification (design change)

					
						    Permanently remaining deviations, which have already been approved in a deviation permit – if required – and with change of the component specification (design change)

					
						    Changes which do not cause the specification to change (manufacturing procedure, production shift etc.)

				
	
					
						Der Antrag ist vom AN mit allen für eine Entschei-dung/Änderung notwendigen Daten vollständig auszufüllen. Das Formular kann unter http://www.mtu- online.com/mtu/einkauf/downloads/index.de.html heruntergeladen werden.

					
						Der Antrag ist an die zentrale Emailadresse rekla-mation@mtu-online.com zu senden. Der Antrag-steller wird grundsätzlich durch die Organisations-einheit “Einkauf” über den RRPS-Entscheid infor-miert. Ohne RRPS-Entscheid ist eine Änderung nicht zulässig!

					
					
						The contractor is to completely fill in the application with all data required for a decision/change. The form can be downloaded under http://www.mtu- online.com/mtu/einkauf/downloads/index.de.html.

					
						The application is to be sent to the central email address: reklamation@mtu-online.com. The applicant will be informed of the RRPS decision by the Purchasing division in all cases. Without RRPS approval, changes are not permissible!

				
	
					
						7.3    Kosten

					
					
						7.3    Costs

				
	
					
						7.3.1    Qualifizierung

					
					
						7.3    Qualification

				
	
					
						Für die Qualifizierung incl. der Erfüllung aller Vor-gaben dieser Norm trägt der AN die bei ihm auftre-tenden Kosten. Im Falle einer Nachbemusterung oder erneuten Prüfung von PSG-Komponenten behält RRPS sich vor, die auftretenden Kosten nach Absprache zu belasten.

					
					
						The contractor shall bear his own costs incurred for the qualification process and for complying with all the requirements of this standard. In case of re-sampling or re-inspection of PSB components, RRPS reserves the right to charge the costs incurred to the contractor following prior consultation.

				
	
					
						7.3.2    Antrag auf Abweicherlaubnis / Kon- struktionsänderungsantrag / Ände-rungsantrag

					
					
						7.3.2    Application for Deviation Approval / Application for Design Change / Application for Change

				
	
					
						RRPS behält sich vor, den Mehraufwand durch die Bearbeitung der Anträge bei durch AN verursach-ten Anträgen in Rechnung zu stellen.

					
						Je nach Aufwand werden 150 € oder mehr berech-net.

					
					
						RRPS reserves the right to invoice extra costs incurred by processing the applications caused by the contractor.

					
						The charge is governed by the work involved, with a minimum of 150 €.

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 18 von/of 20

		

		
		

			
					
						﻿

					
					
						 

				
	
					
						8    Behandlung von Beanstandungen

					
					
						8    Handling of Complaints

				
	
					
						8.1    8-D-Report

					
					
						8.1    8-D-Report

				
	
					
						Werden von RRPS Mängel festgestellt, werden diese mit einer Mängelrüge dem AN angezeigt. Der AN erstellt unabhängig davon, ob die Beanstan-dung beim Wareneingang, bei einer Prüfung beim AN, bei der Weiterverarbeitung oder in der Phase der Nutzung festgestellt wurde, unverzüglich einen 8-D-Report (Formular unter http://www.mtu- online.com/mtu/einkauf/downloads/index.de.html) und informiert innerhalb eines Tages RRPS über die eingeleiteten Sofortmaßnahmen und nach Ab-schluss erneut per Email an reklamation@mtu-online.com.

					
						Ursachenermittlung und Maßnahmenfestlegung muss im Team erfolgen. Ggf. ist ein Ishikawa-Diagramm (Ursachen/Wirkungsdiagramm) anzu-wenden.

					
						Grundsätzlich sind dabei Poka Yoke Lösungen anzustreben. Mitarbeiterunterweisungen sind mit Inhalt, Teilnehmer, Datum und Unterschrift nach-zuweisen 

					
						Die erste Folgelieferung nach Reklamationen ist äußerlich am Packstück zu kennzeichnen, zudem müssen 100 % der Einzelteile geeignet gekenn-zeichnet werden.

					
						Die Kennzeichnung ist mit dem Ersteller der Re-klamation abzustimmen.

					
					
						If RRPS should discover any defects, these will be communicated to the contractor by means of a notification of defect. Regardless of whether the defect was found in the incoming goods department, during inspection at the contractor’s, during processing or in the utilization phase, the contractor shall immediately create an 8-D report (form avail- able at http://www.mtu-online.com/mtu/einkauf/downloads/index.de.html) and inform RRPS of the immediate action taken by sending an e-mail to reklamation@mtu-online.com  within one day and again after completion.

					
						Root causes shall be determined and actions defined in the team. It may be necessary to use an Ishikawa diagram (cause/effect diagram).

					
						As a matter of principle, Poka Yoke solutions shall be aimed for. Employee instruction shall be substantiated by contents, participants, date and signature.

					
						The first consignment delivered after a complaint must be marked as such on the outside of the packaging. In addition, 100 % of the individual components must be suitably marked.

					
						The type of marking shall be agreed with the sender of the complaint.

				
	
					
						8.2    Annahme unter Vorbehalt

					
					
						8.2    Conditional Acceptance

				
	
					
						RRPS behält sich vor, trotz vorhandener Mängel Bauteile anzunehmen, für Folgelieferungen jedoch auf Mängelfreiheit zu bestehen.

					
					
						RRPS reserves the right to accept parts in spite of existing defects but insist on zero-defect subsequent deliveries.

				
	
					
						8.3    Rückversand

					
					
						8.3    Return Shipments

				
	
					
						Teile, die RRPS aufgrund einer Mangelhaftigkeit nicht verwenden kann, werden mit Mängelrüge im vereinbarten Umfang zu Lasten des AN zurückge-schickt.

					
					
						Those parts which cannot be used by RRPS because of a defect will be returned at the contractor’s charge to the agreed extent, accompanied by a notification of defects.

				
	
					
						8.4    Montageversorgung

					
					
						8.4    Assembly Supply

				
	
					
						Drohen durch Anlieferung von nicht der Spezifikati-on entsprechenden Produkten Montagestillstände bei RRPS oder deren Kunden, muss der AN in Abstimmung mit RRPS durch geeignete von ihm zu tragende Sofortmaßnahmen für Abhilfe sorgen (Ersatzlieferungen, Sortier-, Nacharbeit, Sonder-schichten, Eiltransport, usw.).

					
					
						If the delivery of non-conforming products should cause the risk of impending assembly downtimes at RRPS or its customers, the contractor shall remedy the situation in coordination with RRPS by suitable immediate action at contractor’s charge (compensation delivery, sorting or rework, extra shifts, express transport, etc.).

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 19 von/of 20

		

		
		

			
					
						﻿

					
					
						 

				
	
					
						8.5    Nachbesserung durch Dritte

					
					
						8.5    Rectification by Third Parties

				
	
					
						Kann die Nachbesserung aus Kapazitätsgründen und/oder aufgrund der Terminsituation weder durch RRPS noch durch den AN durchgeführt werden, hat RRPS das Recht, nach Rücksprache, einen geeigneten Dritten, für den die Forderungen dieser QS-Norm ebenso gelten, mit der Nachbesserung zu beauftragen. Ist keine zeitnahe Absprache mit dem AN möglich, kann RRPS ohne Absprache einen Dritten beauftragen, um die Montageversor-gung zu sichern. Die Kosten für die Nachbesserung gehen nach Absprache zu Lasten des AN.

					
					
						If neither RRPS nor the contractor are able to carry out the rectification for reasons of capacity or deadlines, RRPS shall be entitled to have the rectification performed by a suitable third party with consultation of the contractor; the third party shall also be subject to the requirements of this quality standard. If an agreement with the contractor is not possible at short notice, RRPS shall also be entitled to engage a third party without consulting him in order to safeguard the provision of parts to assembly. The costs of such rectification shall be entirely for the contractor’s account.

				
	
					
						9    Versicherungspflicht des AN

					
					
						9    Contractor’s Obligation to Take out Insurance

				
	
					
						Dem AN wird empfohlen, eine Produkthaftpflicht-und Rückrufkostenhaftpflichtversicherung mit einer Deckungssumme für Personen-/Sach- und Vermö-gensschäden in Höhe von jeweils mindestens 2,5 Mio. Euro / Schadensfall abzuschließen.

					
						Je nach Forderung des jeweiligen Kunden von RRPS, der Leistungsfähigkeit des AN, der Ge-schäftsbeziehung und der Haftpflichtrisiken wird RRPS den AN auffordern, seinen Versicherungs-schutz sowohl dem Grunde als auch der Höhe nach zu erweitern. Der AN verpflichtet sich, diese Forde-rung zu prüfen und nach Möglichkeit zuzustimmen. Sollte ein Versicherungsfall eintreten, sind RRPS und der AN zur gegenseitigen Information über alle mit dem Versicherungsfall zusammenhängenden Umstände und Vorkommnisse verpflichtet.

					
						Der AN ist verpflichtet, seinen Haftpflichtversicherer über den Inhalt dieser Vereinbarung zu informieren.

					
					
						The contractor is recommended to take out a product liability and recall cost liability insurance policy with a minimum sum insured of 2.5 million Euros / damage event for personal injuries, material damage and financial loss.

					
						RRPS may request the contractor to extend the insurance coverage both with regard to the merits and sum insured, depending on the requirements imposed by a specific customer of RRPS, the capabilities of the contractor, the business relationships and the liability risks. The contractor undertakes to consider this request and accept it if possible.If a damage event should occur, RRPS and the contractor are committed to mutual information about all circumstances and incidents related with the damage event.

					
						The contractor is obliged to inform the liability insurance company about the contents of this agreement.

				
	
					
						10    Lieferantenbewertung

					
					
						10    Contractor Assessment

				
	
					
						RRPS führt bei Ziel-Lieferanten (Target Supplier) eine Lieferantenbewertung mit den Hauptkriterien Einkauf, Qualität, Logistik und Umwelt-/Arbeitsschutz durch.

					
						Es erfolgt eine Einteilung in A-, AB-, B- und C-Lieferanten.

					
						AB und B-Lieferanten sind aufgefordert noch be-stehende Defizite abzustellen. C-Lieferanten sind angehalten, intensive Maßnahmen zur Situations-verbesserung einzuführen. RRPS unterhält zu C-Lieferanten keine langfristigen Lieferbeziehungen.

					
						Ziel-Lieferanten werden regelmäßig über das Be-wertungsergebnis informiert. Hierzu wird empfoh-len, eine mitarbeiterneutrale Emailadresse z.B. Quality@lieferant.com einzurichten.

					
					
						RRPS conducts a contractor assessment process for target suppliers with the main criteria of purchasing, quality, logistics and environmental/occupational safety.

					
						Contractors are categorized according to the A, AB, B and C ratings.

					
						Contractors of category AB and B are requested to improve any existing deficiencies. Contractors of category C are urged to introduce intensive measures for improving the situation. RRPS will not maintain long-term supply relationships with category C contractors.

					
						Target suppliers will be regularly informed of the assessment results. For this purpose, it is recommended to create a workflow email address such as Quality@supplier.com.

				

		
			﻿
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			MTQ5003 Seite/Page 20 von/of 20

		

		
		

			
					
						﻿

					
					
						 

				
	
					
						11    Arbeitssicherheits- und Umwelt- schutzvorschriften

					
					
						11    Health & Safety and Environmental Regulations

				
	
					
						Die Einführung von Umwelt-, Gesundheits- und Sicherheitsmanagementsystemen (ISO 14001, OHSAS 18001) wird empfohlen. Die Umweltzertifi-zierung fließt positiv in die Lieferantenbewertung ein.

					
						Ergänzend zu den geltenden Gesetzen und Vor-schriften zum Schutz der Menschen und der Um-welt dürfen Teile und Materialien keine verbotenen Stoffe nach MTL5054 enthalten, bzw. sind deklara-tionspflichtige Stoffe nach MTL5054 über das an-gegebene Datenblatt zu deklarieren.

					
						Das Datenblatt kann unter http://www.mtu-online.com/mtu/einkauf/downloads/index.de.html  heruntergeladen werden.

					
					
						It is recommended to establish environmental, health and safety management systems (ISO 14001, OHSAS 18001). Environmental certification has a positive influence on the contractor assessment rating.

					
						In addition to compliance with the valid laws and regulations for the protection of human beings and the environment, all parts and materials must not contain any substances prohibited according to MTL5054 or, if applicable, substances subject to declaration pursuant to MTL5054 must be declared using the specified form.

					
						For the specified form, refer to http://www.mtu-online.com/mtu/einkauf/downloads/index.de.html

				
	
					
						Ergänzende Angaben 

					
						Literaturhinweise 

					
						ISO 9001    Qualitätsmanagementsysteme, Anforderungen 

					
						ISO 14001    Umweltmanagementsysteme, Anforderungen mit Anleitung zur Anwendung 

					
						MTL5054    Inhaltsstoffe in Bauteilen und Werkstoffen - Deklarationspflichtige Stoffe, Strahlenschutz 

					
						MTP5028-1    Vor-/Erstmusterprüfung mittels berührungsloser 3D-Datenerfassung – Standardteile 

					
						OHSAS 18001 Arbeits- und Gesundheitsschutz-Managementsysteme - Anforderungen 

					
						Frühere Ausgaben

					
						11.81, 11.84, 01.99, 06.2002, 10.2004, 03.2005, 06.2007,

					
						04.2010, 09.2011, 06.2013, 10.2013, 11.2014 

					
						Änderungen

					
						-Abschnitt 2.4, 3.1, 4.1, 4.7, 5.3, 6.1, 7.1, 7.2, 7.3.2, 10 überar- beitet 

					
						-  Norm redaktionell überarbeitet

					
					
						Supplementary information 

					
						References 

					
						ISO 9001    Quality Management Systems, Requirements 

					
						ISO 14001    Environmental Management Systems, Re- quirements with Guidance for Use 

					
						MTL5054    Substances in Components and Construction – Declarable Materials, Radiation Protection 

					
						MTP5028-1    Pro-/initial-sample testing by means of non- contact 3D data acquisition – Standard parts 

					
						OHSAS 18001 Occupational health and safety management systems - Requirements 

					
						Previous versions

					
						11.81, 11.84, 01.99, 06.2002, 10.2004, 03.2005, 06.2007, 04.2010, 09.2011, 06.2013, 10.2013, 11.2014 

					
						Changes 

					
						-  Section 2.4, 3.1, 4.1, 4.7, 5.3,6.1,7.1, 7.2, 7.3.2, 10 

					
						-  revised - Standard revised editorially

				

		
			﻿
		

		
			﻿
		

		
			 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

 

		

			 

		

		﻿
		

		
			
		

		
			﻿
		

		
			﻿
		

		
			Global Supplier Code of Conduct
		

		
			﻿
		

		
			 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			2

		

 

		

			 

		

		﻿
		

		
			
		

		
			Message from our Chief Executive Officer At Rolls-Royce our strategy focuses on customer, innovation and profitable growth to ensure a sustainable business. This includes being a good corporate citizen in our dealings with customers, suppliers, employees and wider society, wherever we do business around the world. High standards of corporate conduct, ethical behaviour and compliance are critical for Rolls-Royce and our suppliers – our mutual success depends upon it. The Rolls-Royce Board and I have made it clear that Rolls-Royce will not tolerate improper business conduct of any sort. Our zero tolerance approach applies to our own people, and to our suppliers. To ensure you are clear what is expected, we have revised our Global Supplier Code of Conduct. This document replaces our previous Code, issued in 2008. Our Global Supplier Code of Conduct sets out the behaviours, practices and standards we expect to see demonstrated and complied with, all of which are based on our own Rolls-Royce Global Code of Conduct, policies and standards. We expect our suppliers to be ethical, responsible and to fully comply with all applicable laws and regulations. At Rolls-Royce, we have a simple brand promise and set of values – we are ‘trusted to deliver excellence’. We need your support as our suppliers, and that of our broader supply chain, to ensure that together we are able to live up to that promise and continue to be successful. Thank you John Rishton Chief Executive Officer Contents Section 1 Introduction 4 1.1 Purpose 4 1.2 Content, scope and applicability 4 1.3 Asking questions and raising concerns 4 Section 2 Working together 5 2.1 Child and forced labour 5 2.2 Fair pay and benefits 5 2.3 Diversity and inclusion 5 2.4 Collective bargaining 5 Section 3 Running our company 6 3.1 Quality and continuous improvement 6 3.2 Proprietary information 6 Section 4 Conducting our business 7 4.1 Anti-bribery and corruption 7 4.2 Conflicts of interest 7 4.3 Export controls and import obligations 7 4.4 Competitive behaviour and antitrust 7 Section 5 Our place in the world 8 5.1 Health, safety and environment 8 5.2 Community involvement 9 5.3 Lobbying and political support 9 Section 6 Supplier commitment 10 6.1 Communication 10 6.2 Code adherence 10 6.3 Supplier ethical concerns 10 
		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			3

		

 

		

			 

		

		
		

		
			﻿
		

		
			
		

		
			﻿
		

		
			1 Introduction We set high standards for the way we do business. This helps our customers know that we can be ‘trusted to deliver excellence’. This Global Supplier Code of Conduct (the Code) sets out minimum standards of behaviour and practices we require from our suppliers. We expect our suppliers to adhere to this Code, in addition to the provisions of any commercial terms agreed between Rolls-Royce plc and the supplier. In the event that local law, regulation or rules impose stricter requirements than this Code, suppliers must comply with those requirements. 1.1 Purpose The Code specifies the minimum standards of behaviour Rolls-Royce requires of our suppliers. The requirements identified in the Code are based on the principles of the Rolls-Royce Global Code of Conduct and are mandated through the Rolls-Royce General Conditions of Purchase. The purpose of the Code is to formally communicate the Rolls-Royce requirements and expectations to the global supply chain; it is freely available to view and can be downloaded from the Rolls-Royce Global Supplier Portal: https://suppliers.rolls-royce.com Suppliers are required to adhere and comply with the principles set out in this document. For more information see section 6 – Supplier commitment. 1.2 Content, scope and applicability The Code is applicable to all suppliers and partners who supply product or services related to Rolls-Royce contracts or purchase orders. Suppliers are expected to cascade these principles to their own suppliers in order to ensure alignment across the supply chain. This may involve the establishment of supply chain management processes that integrate the requirements of this Code. 1.3 Asking questions and raising concerns If any employee of a supplier has an actual or potential ethical concern they are encouraged to make Rolls-Royce aware. For more information see section 6.3 – Supplier ethical concerns. 2 Working together At Rolls-Royce, our culture fosters innovation, collaboration and continuous improvement. We support our people in their development and create the right climate for success to make sure everyone can do their best and fulfil their potential. All suppliers must comply with applicable international and national laws and standards in relation to labour practises and human rights. 2.1 Child and forced labour Our principles: What this means for our suppliers: We do not accept child labour or any practice that inhibits the development of children. Suppliers must never use or support practices that inhibit the development of children.  Suppliers must not employ anyone under the age of 15 years or, where it is higher, the mandatory national school leaving age. We believe that all employment should be freely chosen. Suppliers must refrain from using any form of involuntary labour including forced, prison or debt-bonded labour. 2.2 Fair pay and benefits Our principles: What this means for our suppliers: We recognise the need to reward fairly for skill, contribution and performance. Suppliers must ensure that all wages meet local minimum wage requirements. Any overtime shall be voluntary and workers must receive adequate compensation for any overtime worked. Standard working hours must not exceed legal limits and over time must not exceed the maximum allowed by law. 2.3 Diversity and inclusion Our principles: What this means for our suppliers: We treat each other openly, honestly and courteously. Suppliers are expected to promote equal opportunities for all and value diversity. We do not tolerate bullying, harassment or unlawful discrimination of any kind. Harassment or discrimination towards employees, including all forms of physical, verbal or psychological abuse must not be tolerated. 2.4 Collective bargaining Our principles: What this means for our suppliers: The decision on whether to join a trade union or not is an individual choice. Suppliers are expected to respect this choice and the relevant processes and laws on collective representation and consultation where applicable. 
		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			4

		

 

		

			 

		

		
		

		
			﻿
		

		
			
		

		
			﻿
		

		
			3 Running our company Rolls-Royce engages in dialogue and partnerships to align our business needs with the requirements of our major stakeholders, including customers, governments and industry bodies. Suppliers are expected to behave ethically and appropriately in all dialogue, and to respect the proprietary information of Rolls-Royce and other parties. 3.1 Quality and continuous improvement Our principles: What this means for our suppliers: We make sure that quality is central to all we do. We are committed to continuous improvement by working together and complying with agreed processes across businesses, functions and geographies Suppliers must demonstrate a commitment to quality and, where applicable, comply with the requirements of our SABRe Supplier Management System Requirements (available on the Global Supplier Portal), as modified upon the structure of ISO 9001. Suppliers are encouraged to seek opportunities for continuous improvement throughout their operations. We encourage suppliers to work openly and collaboratively with us to ensure we are continually improving our operations. 3.2 Proprietary information Our principles: What this means for our suppliers: Rolls-Royce is committed to treating all other parties’ confidential, proprietary or trade secret information with integrity. We respect the confidentiality of commercially sensitive information provided to us and we only use it appropriately for legitimate business purposes. Suppliers must safeguard Rolls-Royce proprietary information. Suppliers must neither receive nor supply information unless either already legitimately in the public domain or given with permission. Appropriate non-disclosure or confidentiality agreements should be used to protect proprietary information. 4 Conducting our business High standards of ethical behaviour and compliance with laws and regulations are essential to protecting the reputation and long-term success of our business. We expect suppliers to behave ethically, to comply with legal and industry requirements and seek to implement best practice in their industries. 4.1 Anti-bribery and corruption Our principles: What this means for our suppliers: Rolls-Royce has a zero tolerance policy for bribery and corruption. Suppliers are expected to behave ethically in all business dealings. Suppliers must not offer, give or accept anything of value that may be viewed as, or has the effect of, improperly influencing business decisions. Suppliers must not offer or give gifts or hospitality to any employee that is intended as, or may be viewed as, an attempt to improperly influence business decisions. Suppliers must not make facilitation payments or permit them to be made on behalf of the supplier or Rolls-Royce. Suppliers must comply with all applicable anti-bribery and corruption laws and regulations of the countries in which they operate 4.2 Conflicts of interest Our principles: What this means for our suppliers: We seek to avoid conflicts of interest in our business dealings, but where they do occur we manage them. All suppliers must make Rolls-Royce aware of any potential conflicts of interest as soon as they are known. 4.3 Export controls and import obligations Our principles: What this means for our suppliers: We are committed to compliance with import and export laws, regulations and procedures that apply to our operations globally Suppliers must comply with all relevant export control legislations when exporting goods or technology, and shall plan for and obtain all necessary authorisations and permits to ensure timely and compliant delivery of their products. Where an authorisation or permit so requires, suppliers shall also have in place all the necessary processes to manage access to export controlled goods or technology only by staff or other entities authorised to have such access. Where applicable, this requirement shall be flowed down to any sub-tier suppliers. 4.4 Competitive behaviour and antitrust Our principles: What this means for our suppliers: We conduct our business in compliance with competition (antitrust) laws Suppliers must comply with competition (antitrust) laws in the countries where they operate or sell product or services. Suppliers must not co-ordinate market conduct with competitors or their own suppliers in a way that improperly restricts competition.
		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			5

		

 

		

			 

		

		
		

		
			﻿
		

		
			
		

		
			5 Our place in the world As a global company we seek to be a good corporate citizen in our dealings with customers, suppliers, employees and communities where we operate. All suppliers must make proper provision for the health, safety and welfare of their employees, contractors, visitors and those in the community who may be affected by their operations. We expect suppliers to comply with legal and industry requirements and seek to implement best practice in their industries. 5.1 Health, safety and environment (HS&E) Our principles: What this means for our suppliers: We have a strong approach to HS&E management, where our vision is to be known for the excellence of our HS&E performance in all our business activities and our products. Our HS&E goals are to: • Create a safe and healthy work environment with no injuries, no work related ill-health, and no environmental incidents, and • Prevent or minimise the negative impacts of our products and services We expect our suppliers to take personal and collective responsibility to help fulfil our HS&E goals. Suppliers must make proper provision for the health, safety and the welfare of their employees, contractors, visitors and those in the community who may be affected by their activities. The supplier shall care for the environment through a commitment to good environmental practices. We have a robust HS&E management system in place across our global operations Suppliers are expected to develop, implement and maintain a management system for managing health, safety and environmental risks. This system may be integrated into the supplier’s business management system and associated processes, or act as a standalone HS&E management system. As a minimum this management system shall include processes for: • Identifying, assessing and managing HS&E risks and opportunities • Planning improvements and establishing objectives and targets where applicable • Identifying and delivering learning relevant to identified risks • Monitoring performance • Assurance of the effective management of HS&E risks Suppliers are encouraged to have management systems in place that are equivalent to the requirements of OHSAS 18001  and ISO 14001. We do not mandate certification to these standards. Suppliers who carry out activities on our premises, in our facilities or under our direct control shall follow the requirements set out in the Rolls-Royce HS&E management system. We participate annually in the Carbon Disclosure Project (www.cdp.net) to measure, analyse and benchmark our environmental performance. Suppliers are encouraged to register as members of the Carbon Disclosure Project and participate in annual submissions 5.2 Community involvement Our principles: What this means for our suppliers: We are committed to building positive relationships with the communities in which we live and work Suppliers are encouraged to seek similar opportunities in their local communities. Suppliers are expected to listen carefully to requests or concerns from the community and address them appropriately. 5.3 Lobbying and political support Our principles: What this means for our suppliers: We are committed to undertaking any lobbying activities in compliance with all applicable laws, and to behaving ethically in all our interactions with governments, agencies and their representatives.. Suppliers must undertake any and all lobbying activities in compliance with all applicable laws. Suppliers are expected to behave ethically in all interactions with governments, their agencies and representatives. We expect suppliers to refrain from making any corporate contributions or donations to political parties, or any think-tanks, academic institutions or charities closely linked to political parties, intended as, or that may be viewed as, attempts to influence decision making.
		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			6

		

 

		

			 

		

		
		

		
			﻿
		

		
			
		

		
			6 Supplier commitment 6.1 Communication Suppliers must make the Rolls-Royce Global Supplier Code of Conduct available to employees in the business language of the company. Suppliers are encouraged to make their employees aware of the Rolls-Royce Ethics Line, as detailed in 6.3 below. 6.2 Code adherence Suppliers must conform to all aspects of the Rolls-Royce Global Supplier Code of Conduct, as mandated through the Rolls-Royce General Conditions of Purchase. Rolls-Royce reserves the right to audit against compliance to this Supplier Code of Conduct. Suppliers are expected to ensure that documentation is kept that demonstrates compliance with this Code; Rolls-Royce may request access to that documentation at any time. Rolls-Royce may also request access to supplier sites for audit purposes. Rolls-Royce reserves the right to terminate contracts in the event of material breach of the principles set out in the Code. Suppliers are encouraged to disseminate these expectations throughout their own supply chain and incorporate the principles set out in this document as part of routine sustainable business practices. 6.3 Supplier ethical concerns If any supplier has an actual or potential ethical concern related to the subject matter of the Code or any engagement or relationship with Rolls-Royce they are encouraged to make Rolls-Royce aware. This can be done through the Rolls-Royce Ethics Line, anonymously if required. Concerns may be raised either online or via telephone. The following website contains a full list of worldwide telephone numbers for reporting concerns, or alternatively you can use the online system also provided at:  EthicsPoint – Rolls-Royce www.rolls-royce.com/ethicsline  We encourage suppliers to provide a similar anonymous service for raising ethical concerns. © Rolls-Royce plc 2015 The information in this document is the property of Rolls-Royce plc and may not be copied, or communicated to a third party, or used, for any purpose other than that for which it is supplied without the express written consent of Rolls-Royce plc. While this information is given in good faith based upon the latest information available to Rolls-Royce plc, no warranty or representation is given concerning such information, which must not be taken as establishing any contractual or other commitment binding upon Rolls-Royce plc or any of its subsidiary or associated companies. CTA334   March 2015 Rolls-Royce plc 62 Buckingham Gate London SW1E 6AT United Kingdom rolls-royce.com
		

		
			﻿
		

		
			 
		

		

		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			7

		

 

		

			 

		

		﻿
		

		
			
		

		
			﻿
		

		 

		

			[***] Confidential treatment has been requested for the bracketed portions.  The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

		

		

			8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00286-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00286-of-00352.parquet"}]]