- WARRANTY PROGRAM ROLLS-ROYCE M250® ENGINE, MODULE AND COMPONENT AND HONEYWELL ACCESSORY SERVICES A. Purpose. KEYSTONE TURBINE SERVICES (“KTS”) issues, for the warranty periods specified below, that all customer engines, modules, components and accessories overhauled and/or repaired by KTS will be free of defects in material and workmanship for the time periods described.. B. Scope. This warranty program addresses the following engine product lines: a. Rolls-Royce M250 b. Honeywell M250 and LTS-101 Series C. Outline. This warranty document was prepared per the following outline: a. b. c. d. e. Rolls-Royce M250. Honeywell Accessories. How to obtain repairs. Additional terms and conditions. Definitions ROLLS-ROYCE MODEL 250 SERIES The following addresses the three levels of coverage afforded to all customers concerning Rolls-Royce M250 parts and services. A. NEW PARTS. 1. Embodied Warranty. Anyone who purchases a new M250 part in which KTS embodies said part is entitled to coverage under this limited warranty. KTS will submit a warranty claim (on behalf of the customer) for any new Rolls-Royce part that has not exceeded one of the published RollsRoyce new part warranty criteria described below: i. 24 months from date of shipment of the item by KTS (or any other approved FIRST network facility), or ii. 1,000 hours of operation (whichever occurs first) iii. Military-surplus or third party (PMA) parts are not covered under this warranty policy 2. Non-Embodied or “Over-The-Counter” Warranty. Anyone who purchases a new M250 part from KTS as an Over-The-Counter (or non-KTS embodied) spare part is entitled to coverage under this limited warranty. KTS will submit a warranty claim (on behalf of the customer) for any new Rolls-Royce part that has not exceeded one of the following warranty criteria described below: FAA Repair Station #8MHR895P 885 Fox Chase, Suite 111, Coatesville, PA 19320 Page 1 of 6 Effective: February 17, 2012 i. 24 months from date of shipment of the item by the customer (through KTS or any other approved FIRST network facility or Aviall), or ii. 1,000 hours of operation (whichever occurs first). iii. Military-surplus or third party (PMA) parts are not covered under this warranty policy B. JOINT OVERHAUL WARRANTY. 1. Description. The Joint Overhaul Warranty is a shared warranty program between KTS and Rolls-Royce wherein KTS is responsible to cover appropriate labor costs and Rolls-Royce will cover new part(s) replacement costs for an item which failed and was overhauled by KTS. 2. A request for Joint Overhaul Warranty will only be accepted if the cause is a result of an inherent failure of either a new part or a repaired part installed at last overhaul and the overhaul-inspected part which failed was previously inspected IAW current overhaul inspection criteria. 3. Parts coverage is limited to the replacement of the primary failed item and secondary damaged parts only and does not cover service bulletin or A.D. compliance and/or additional work requested by the customer. 4. The standard period for this warranty is 9 months or 500 hours of operation for overhaul inspected parts and workmanship, whichever occurs first. C. KTS WORKMANSHIP. 1. In addition to warranties provided in paragraph’s A and B (above), the customer is also entitled to our comprehensive workmanship warranty program. All KTS workmanship is intended to conform to the requirements of the manufacturer and the applicable provisions of Federal Aviation Regulations. Engines, modules and accessories overhauled and/or repaired by KTS are warranted to be free of defects in workmanship performed by KTS for the period of time from the date of shipment of the engine, module or accessory through to the remaining manufacturer’s recommended calendar life (or TBO), not to exceed a total of three (3) years (whichever occurs first - see Figure #1). Category of Engine Work Engine/Module Overhaul (With Test) Engine/Module Repair (With Test) Engine/Module Repair (No Test) Operating Hours Time after Delivery Next TBO (prorated after 1,000 hrs) 3 years 500 hours 1 year 250 hours 6 months FAA Repair Station #8MHR895P 885 Fox Chase, Suite 111, Coatesville, PA 19320 Page 2 of 6 Effective: February 17, 2012 COVERAGE (%) 100 90 80 70 60 50 40 30 20 10 0 500 1 YR 1,000 2 YR 3 YR 4 YR 5 YR HOURS/TIME Figure #1: KTS Workmanship Warranty Program HONEYWELL M250 & LTS-101 SERIES ACCESSORIES The following addresses coverage afforded to customers concerning Rolls-Royce M250 and Honeywell LTS-101 accessories process by KTS. A. NEW PARTS. 1. Embodied Warranty. Anyone who purchases a new Honeywell accessory or part from KTS is entitled to coverage under this limited warranty. KTS will submit a warranty claim (on behalf of the customer) for any new Honeywell accessory or part that has not exceeded 12 months from date of shipment of the new item from KTS. B. KTS WORKMANSHIP. 1. All KTS workmanship is intended to conform to the requirements of the manufacturer and the applicable provisions of the Federal Aviation Regulations. Accessories overhauled and/or repaired by KTS are warranted to be free of defects in workmanship performed by KTS for the period of time as described below: i. Overhaul: 1,000 hours of operation or two years from date of shipment, whichever occurs first. ii. Repair: 500 hours of operation or 6 months from date of shipment, whichever occurs first. FAA Repair Station #8MHR895P 885 Fox Chase, Suite 111, Coatesville, PA 19320 Page 3 of 6 Effective: February 17, 2012 HOW TO OBTAIN REPAIRS A. To obtain repairs, the customer must send written notification to KTS of any proposed warranty claim within 30 days after the alleged defect or nonconformity is discovered or in the exercise of ordinary diligence should have been discovered. Notification can either be electronic or sent to the following address: Keystone Turbine Services ATTN: Warranty Program 885 Fox Chase, Suite 111 Coatesville, PA 19320 (USA) Phone: 610-268-6200 B. The Customer will then be contacted with shipping instructions and points of contact for processing of the warranty claim. The customer should not disassemble the item without prior approval from KTS. C. KTS must receive the removed the item within 60 days after notification was sent to KTS. D. KTS will receive and conduct an investigation and render sole decision as to whether there is a valid defect in material or workmanship after receipt of the item. The customer has the option to be present during conduct of the investigation. E. In the event a warranty claim is denied, the Customer has the option to submit additional information or agree to pay KTS for the required repairs. If the Customer chooses to not proceed with repairs, the Customer is responsible for any charges incurred to-date (including rental usage and recertification fees) as well as coordinating the return of their item. ADDITIONAL TERMS AND CONDITONS A. All warranties resulting from the installation of parts or materials in engines, modules, accessories, as well as engine components will be administered in accordance with the applicable original equipment manufacture’s published warranty policy in force at the time/date the claim is submitted to KTS. B. KTS does not warrant any parts, materials or services supplied by companies other than Rolls-Royce, Honeywell or its approved facilities. KTS may act on behalf of its Customers in the processing of any claims or adjustments arising out of, and because of, defective parts, materials, and workmanship in accordance with approved Rolls-Royce/Honeywell suppliers and their subcontractor’s warranties. C. KTS’s liability is limited to the repair and/or replacement, at its option, of the defective parts or accessories previously overhauled or repaired by KTS. KTS will determine, at its sole discretion, whether the defect is due to faulty workmanship caused by KTS. In no event shall any warranty allowances exceed the fair market value to replace the defective item. FAA Repair Station #8MHR895P 885 Fox Chase, Suite 111, Coatesville, PA 19320 Page 4 of 6 Effective: February 17, 2012 D. Defects in workmanship must be discovered before the manufacturer’s recommended time between overhaul has expired and/or the calendar life has elapsed. KTS must be given prompt notice in writing wherever possible. E. The engine, module, accessory and/or component must have been installed, preserved, maintained, and operated in accordance with Rolls-Royce, Honeywell and the airframe manufacturer’s directions and instructions. The item must not have been altered or repaired by anyone outside of the control of KTS and the item must not have been subjected to, but not limited to, the following items: 1. 2. Misuse, accident or abuse Operator influenced damage (i.e., FOD, inlet blockage, over temperature, operation, over torque and over speed events) 3. Operator workmanship flaws 4. Environmental damage such as erosion, corrosion, sulfidation, etc. 5. Operators engine, module or component removal and installation labor costs 6. Transportation costs 7. Rental engine charges 8. Unusual product improvements 9. Repairs not directly associated with the warranted cause for removal 10. Normal wear and tear 11. Normal maintenance activity labor or parts required. 12. Damage from improper storage or preservation 13. Failure of, or primary/secondary damage as a result of, the installation/use of Third Party parts. 14. Acts of God 15. Terrorism or armed conflict (military or paramilitary) 16. Loss of income and/or profit 17. KTS does not warrant services performed by companies other than KTS. F. After a notice of a failure has been provided, the engine, module, accessory or component must be returned to KTS’s facility. KTS must be offered the opportunity to perform corrective work at their facility, unless such work was otherwise previously authorized in writing by KTS. G. This warranty is extended to the Customer at the time of shipment and may not be assigned without KTS’s prior written consent. F. Except as otherwise set forth herein, it is expressly agreed and understood that there are no other warranties, whether expressed, implied or statutory, including warranties of merchantability or fitness, nor are there any affirmations of fact, guarantees, representations, commitments or promises by KTS with reference to the workmanship performed and materials provided by KTS. G. In no event shall KTS be liable, whether in contract, tort, or otherwise for: (a) special, consequential, incidental or indirect damages arising out of the workmanship performed or material supplied by KTS in the overhaul or repair, (b) loss of revenues, (c) loss of use of Customer’s property or of any equipment to which Customer’s property may be installed, and/or (d) loss of use or damages due to late delivery. No agreement or understanding varying or extending the terms of this warranty shall be binding upon KTS unless approved and signed by a duly authorized representative of KTS. FAA Repair Station #8MHR895P 885 Fox Chase, Suite 111, Coatesville, PA 19320 Page 5 of 6 Effective: February 17, 2012 DEFINITIONS 1. Accessory. A major functional component part or assembly of the engine systems (fuel, lubrication, ignition, electrical or air systems) as designated by the engine configuration. 2. Component. A part or module 3. Major Repair. A component repair of a candidate part whereby the repair process alone, or in conjunctions with the candidate parts characteristics, requires a high level of technical capability and engineering control to ensure reliability and/or safety. Also, a major repair exists when process-related aspects are beyond normal industry standards in the area of capability, technology, cost or quality assurance. 4. Minor Repair. A component repair of a candidate part whereby the repair process is usually within the normal capabilities of the industry operating within the Service, Repair or Overhaul business area. 5. Overhaul. The work necessary to return an item to the highest standard(s) within the relevant controlling document(s) or manual(s) as issued Authorized approval and/or bailed by the OEM 6. Serviceable. The classification of a module or part, whether new, used or repaired, which in its current condition meets OEM specifications and may be used in a maintenance services function. 7. Third Party Part. A part or module developed and/or manufactured by a third party and not approved by, under contract to, or affiliated with an OEM, pursuant to a Parts Manufacturing Approval (PMA) issued by the U.S. Federal Aviation Administration. 8. Workmanship. The art or skill of a workman (or workwoman), the quality or mode of execution, (as of a thing made) and the result of such labor and skill. FAA Repair Station #8MHR895P 885 Fox Chase, Suite 111, Coatesville, PA 19320 Page 6 of 6 Effective: February 17, 2012