Exhibit 10.4

Lease Agreement

This Lease Agreement is made as of September 29, 2017 between Contrail Aviation
Support, LLC, domiciled at 435 Investment Court Verona (Lessor”) and MTU
Maintenance Lease Services B.V., domiciled at Strawinskylaan 1639, 1077XX
Amsterdam, The Netherlands (“Lessee”). It refers to and incorporates the terms
of Document No 5016-01 (Master Short-Term Engine Lease Agreement, 2012) (“Master
Agreement”).

This Lease Agreement modifies the Master Agreement, and, as so modified,
constitutes a single contract applicable to the leasing of the Engine (defined
below), as contemplated by 2.1.2 of the Master Agreement.

Part I – Referenced Provisions

For purposes of the Master Agreement (“N/A” denotes non-applicability):

 

1. Engine (clause 2.3.1(i); annex 1, definition)

 

CFM56-7 spare engine bearing Engine Serial Number 874357

 

Serviceability Tag:

Latest EASA Form 1 and FAA Form 8130-3 release certificate or alternatively one
EASA Form 1 with FAA dual release or FAA form 8130-3 with EASA dual release.

 

  

2A+B. Engine Flight Hours (2A) and Engine Flight Cycles (2B) /Since Last
Overhaul (clause 2.3.1(ii); Annex 1, Definitions)

 

Engine Flight Hours since new:

as per technical documentation

Engine Flight Cycles since new:

as per technical documentation

 

3A+B. Additional Conditions Precedent to Lessee’s Obligations (clause
2.3.1(iii)) (3A) and to Lessor’s Obligations (clause 2.3.3) (3B)

3A Lessee’s Obligations

Engine to be in the agreed condition

 

3B Lessor’s Obligations

Lessor’s confirmation of receipt of the Lessee’s first payment of Rent on or
prior to the Commencement Date.

 

  

4. Conditions Precedent Time Period (clause 2.3.2)

 

From the date of this Lease Agreement to the Commencement Date.

5. Commencement Date (clause 2.4.1; annex 1, definition)

Upon Delivery of the Engine to Lessee FCA (Free Carrier on Board) Incoterms 2010
at Air Salvage International, Hangars H1 and H2, Cotswold Airport,
Cirecestershire, Gloucestershire GL7 6BA, United Kingdom

(“Delivery Location”).

 

This is estimated to be on or about 29th of September 2017 as shall be evidenced
by the date of the Acceptance Certificate.

  

6. Acceptance Certificate (clause 2.4.2; annex 1, definition)

An Acceptance Certificate is required (form attached as Appendix A).

 

1

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7. Deposit and/or Letter of Credit (clause 3.1)

*          

  

8. Rent (clause 3.2; annex 1, definition) US$ *                  per day, paid
in advance for the following month.

9. Rent Payment Date (clause 3.2; annex 1, definition)

 

On the Commencement Date and on the equivalent date of each subsequent calendar
month during the Term upon receipt of a corresponding invoice.

 

Invoices shall be sent by Lessor per email to

(1) the respective lease manager and to

(2) invoice@mtu-lease-services.com

  

10. Default Rate (clause 3.5; annex 1, definition)

 

*                                                                       

11. Agreed Currency (clause 3.7.2; annex 1, definition)

 

United States Dollars ($).

  

12. Payment Account (clause 3.7.2; annex 1, definition)

 

Bank: Old National Bank

1 Main Street

Evansville, IN 47708

ABA#:                                 

Account#:                             

SWIFT Code:                                 

Beneficiary: Contrail Aviation Support, LLC

435 Investment Court

Verona, WI 53593

13. Engine Documentation (clause 4.2.1(i))

 

- Latest EASA Form 1 and FAA Form 8130-3

   release certificate or alternatively one

   EASA Form 1 with FAA dual release or

   FAA form 8130-3 with EASA dual release

- serviceable removal tag (as applicable)

- LLP status

- latest FAA & EASA AD status

- latest SB status

- last operator NIS

- result of last Maximum Power Assurance run (MPA)

- last test cell run report

- latest BSI report

- BSI DVD

- last 3 months Cruise & Take-off ECM data

- latest zero letter (MPD) check – MPD task compliance status

- accessory and QEC status

- missing parts list

- shipping stand details

- ship loose & bypack parts (as applicable)

- preservation data (tag, work cards)

- engine removal/installation history

- carry-forward sheet

- oil consumption report

- used oil type

  

14. Engine Reports—Other Information (clause 4.2.4(ii))

 

By the 10th day of each month, Lessee shall provide a monthly utilization report
to Lessor, substantially in the form of Appendix B, for the preceding month that
includes:

 

a. the total number of flight hours and flight cycles the Engine was operated
the preceding month; and

 

b. engine configuration during preceding month; and

 

c. maintenance performed during preceding month; and

 

d. the average cruise and take-off EGT margins for the preceding month; and

 

e. if Lessor does not receive the flight hours and cycles by the 10th day of
each month, Lessor may invoice Lessee for an estimated number of flight hours
and flight cycles for the preceding month and reconcile the differences within
thirty (30) days after receipt of the applicable monthly utilization report.

- last SV report (as applicable)

- engine pictures

  

 

*

The confidential portion has been omitted pursuant to a request for confidential
treatment filed by Air T, Inc. with the Securities Exchange Commission and filed
separately with the Commission.

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15. Engine Installation/Removal Notification Requirements (clause 4.2.6)

 

Within 10 days of each installation or removal of the Engine, Lessee shall
report the following in writing:

a. operated thrust rating; and

b. aircraft serial number and engine position and shall also provide Lessor with
off-on LLP disk sheets, all printed on the operator’s letterhead and signed by
operator’s quality control department.

  

16. Certain Lessee Obligations Concerning Indemnitees (clause 4.4.6)

 

If Lessee is not the owner of the aircraft on which the Engine shall be attached
to, Lessee shall, at its expense, at the request of Lessor, provide a document
signed by the owner of and/or any secured party with respect to the aircraft
recognizing the rights of the Engine owner, in form and substance acceptable to
Lessor.

17. Consequences of Partial Loss (clause 7.2.1(ii))

 

The Engine will continue to be leased as set out in clause 7.2.1(ii)(a).

  

18. Stipulated Amount (clause 7.3.1; annex 1, definition)

 

USD *                 

19. Reinsurance (clause 8.1)

 

In the event where the Permitted Sub-Lessee is not insured by an insurance
company recognized by the London/New York markets, Permitted Sub-Lessee shall
provide reinsurances, issued by a re-insurance company recognized by the
London/New York markets.

  

20. Redelivery Location (clause 11.1(i); annex 1, definition)

 

DDP (Delivered Duty Paid) Incoterms 2010 (provided Lessee shall be responsible
for unloading the Engine) at MTU Maintenance Hannover or any other delivery
location as mutually agreed by the parties.

 

21. Redelivery—additional requirement (clause 11.1(ii))

 

*                                                              
                                           

                                                              
                           

                                                                         

                                                      

 

  

22. Final Inspection – other tests (clause 11.3.1(ii))

 

All inspections, tasks and reports specified in Appendix C.

*                                                              
                           

                                                              
                             

                                                              
                             

                                                              
                             

                                                              
                             

                                                              
                             

  

 

3

 

*

The confidential portion has been omitted pursuant to a request for confidential
treatment filed by Air T, Inc. with the Securities Exchange Commission and filed
separately with the Commission.

--------------------------------------------------------------------------------

*                    

23. Redelivery – Additional Documentation (clause 11.4(viii))

 

 

*                                                                              
                                            

                                                              
                                                              

                                                                                
                                            

                                                              
                                                              

                                                                                
                                            

                                                              
                                                              

                                                                                
                                            

                                                              
                                                              

                                                                                
                                            

                                                              
                                                              

                   

 

  

24. Transportation – supplemental requirements (clause 11.5)

 

Manufacturer’s published engine transportation manual,
specifications/recommendations, including proper equipment tie-down and use of
air-ride or air cushion suspension vehicles. On any given shipment, such truck
will be dedicated solely to the Engine belonging to Lessor; except that
additional items may be transported on such truck, provided that (a) the Engine
can and will be off-loaded by Lessor at the Redelivery Location without
disturbing any of the additional items and (b) Lessee or its shipper will not
handle or reposition any of the additional items on such truck either while the
Engine is in transit or when it arrives at the Redelivery Location. Lessor will
invoice and Lessee agrees to pay for the cost of inspections and repairs to the
Engine and/or transportation stand resulting from the improper movement or
transportation of the Engine and/or transportation stand.

25. Additional Amounts – Term Extension (clause 11.6.2)

 

If (1) Lessee retains the Engine beyond the Scheduled Final Date set forth in
Section 35; (2) the Engine has not been returned to Lessor in the conditions
required by Sections 21, 22, and 23; and (3) does not execute a written lease
extension with Lessor, Lessor may at its sole discretion, (a) remedy such
defects and deficiencies and recover any costs so incurred from Lessee; and/or
(b). continue the Lease and Lessee will pay Lessor *                  times Rent
for each day after the Scheduled Final Date until Lessee either returns the
Engine to the Redelivery Location and satisfies all return conditions or
executes a written lease extension. All obligations of Lessee under the Lease
Agreement shall remain in full force and effect until the return of the Engine
in the condition required by the Lease Agreement. This will not be considered a
renewal of the Lease Agreement or extension of the Lease Term or waiver of any
right of Lessor under the Lease Agreement.

  

26. Differing Period (clause 14.1(i))

 

N/A.

 

*

The confidential portion has been omitted pursuant to a request for confidential
treatment filed by Air T, Inc. with the Securities Exchange Commission and filed
separately with the Commission.

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27. Notices (clause 17.5)    28. Contracting by Fax/Electronic Writing (clause
17.6)

Notices shall be sent by post or fax to the respective parties at the address or
fax numbers set out below or as otherwise advised by one party to the other in
compliance with clause 16.5:

 

Lessor

 

Address:  Contrail Aviation Support, LLC

435 Investment Court Verona

WI 53593

USA

 

Attn:       President

Fax:        +1 608 848 8101

 

Lessee

 

Address:    Strawinskylaan 1639

                  1077XX Amsterdam

                  The Netherlands

Attn:          Managing Director

Fax:           +31 (0) 20 705 49 08

 

  

 

Notices by fax are acceptable as per box 27 or electronic media is permitted.

29. Governing Law (clause 17.7)

 

Laws of the State of New York.

  

30. Non-exclusive Jurisdiction (clause 17.8.1(i))

Courts of the State of New York and the United States District Court located in
the Borough of Manhattan, New York City, New York, United States of America.

31. Additional Indemnitees (annex 1, definition) (for use, inter alia, in
definition of “Indemnitees”)

 

Lessor; any person from time to time notified by Lessor to Lessee as providing
financing to Lessor or the owner of the Engine for the acquisition, ownership or
leasing thereof; together with each of their respective successors and assigns,
shareholders, subsidiaries, affiliates, partners, contractors, directors,
officers, servants, agents and employees.

  

32. Business Day (annex 1, definition)

 

Evansville, Indiana, United States of America Amsterdam, The Netherlands

 

5

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33. Use Fee Amount (Cycle) (annex 1, definition) (for use in definition of “Use
Fees (Cycle)”

 

US$ *                 

This Use Fee Amount (Cycle) shall be adjusted annually, effective January 1 of
each year, based on the OEM published annual escalation rate or escalation
percentage for a set of CFM56-7B life limited parts.

 

  

34. Use Fee Amount (Flight Hour) (annex 1 definition) (for use in definition of
“Use Fees (Flight Hours)”)

 

as per Appendix D

 

Lessee shall not lease the Engine to any operator with its principal place of
business in any of the ‘Harsh Environment Countries’ listed in Appendix E.

35. Scheduled Final Date (annex 1, definition (for use in definition of “Final
Date”)

 

12 months – date by which Lessee shall have completed all redelivery conditions,
including but not limited to the items specified in Sections 20-23, and returned
Engine to the Redelivery Location.

 

Lessee may extend the Term by a period of 12 months by giving written notice to
Lessor at least 4 weeks prior to the Scheduled Expiry Date.

 

  

36. Principal Taxation Jurisdictions (annex 1, definition) (for use in
definition of “Lessor Tax”)

 

USA

37. Calculation Discount Rate (annex 1, definition (for use in definition of
Termination Damage Amount))

*                                                                       

*                                                    

 

  

38. Threshold Amount (annex 1, definition)

 

An Engine repair in the amount of US$ *                  , either estimated or
actual, above which Lessee requires Lessor’s permission before proceeding with
the repair.

 

39. Required Liability Amount (annex 4, clause 4)

 

*                 

  

40. Deductibles (annex 4, clause 8)

 

Hull All Insurance—US$ *                 

Spares Insurance—US$    *              

 

*

The confidential portion has been omitted pursuant to a request for confidential
treatment filed by Air T, Inc. with the Securities Exchange Commission and filed
separately with the Commission.

--------------------------------------------------------------------------------

Part II – Modifications Applicable Where Lessee Is Not an Airline or Other
Operator of Engines

Pursuant to 2.1.4 of the Master Agreement, the Master Agreement is modified as
follows (“N/A” denotes non-applicability):

The following wording shall be added to Annex 1 – Definitions and Rules of
Interpretation:

“Permitted Sub-Lessee” shall mean a licensed airline operator of good standing
acceptable to Lessor, acting reasonably;”

Lessee will not operate the Engine, but will be entitled to sub-lease the Engine
to sub-lessees;

PROVIDED THAT:

 

(a)

no Event of Default has occurred and is continuing

 

(b)

any such sub-lease agreement:

 

  (i)

shall be subject and subordinate in all respects to this Agreement

 

  (ii)

shall not be capable of extending beyond the end of the Lease Period;

 

(c)

the relevant Permitted Sub-Lessee covenants directly to the Lessor not to do
anything which would prejudice the Lessor’s interests, rights and benefits in
the Engine and/or the Insurances and/or under this Agreement or any other lessee
document and/or the interests, rights and benefits of the relevant parties in
the Engine and/or the Insurances and/or this Agreement under the relevant
documents, and agrees directly with the Lessor that such Permitted Sub-Lessee’s
rights under such sub-lease shall be subject and subordinate in all respects to
the rights of the Lessor under this Agreement; and

 

(d)

the terms of the relevant sub-lease, shall provide that the leasing, chartering
or hiring of the Engine to such Permitted Sub-Lessee and that the right of the
Permitted Sub-Lessee to the use, possession and enjoyment of the Engine shall
terminate simultaneously with the giving by the Lessor of any notice pursuant to
this Agreement; and

 

(e)

notwithstanding the foregoing provisions of this clause, no relevant sub-lease
permitted under this clause shall involve any transfer of title to or interest
in the Engine or any part thereof, nor shall it in any way discharge or diminish
any of the Lessee’s obligations to the Lessor under this Agreement or under any
other document.

Part III – Other Modification to Master Agreement

As regards this Lease Agreement, the Master Agreement is further modified as
follows (“N/A” denotes non-applicability):

 

1.

For purposes of this Agreement, all references to the JAA also include the
European Aviation Safety Agency as successor to the JAA (“EASA”). If Part I,
point 1 of this Lease Agreement indicates the Engine will be supplied to Lessee
with both FAA and JAA serviceability tags, then

 

  (a)

Section 4.7.1 of the Master Agreement is modified by, in subparagraph (ii),
deleting the words “FAA or JAA” and replacing them with the words “FAA and JAA;”

 

  (b)

Section 11.2.1 of the Master Agreement is restated as follows: “The redelivered
Engine shall have valid serviceability tags issued by the FAA and JAA,
respectively.

 

7

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2.

The following new definitions are inserted in the correct alphabetical position
in annex 1:

“EASA means the European Aviation Safety Agency or any other authority to which
its responsibilities have been transferred or reallocated and includes, where
the context so requires, a reference to the European Joint Airworthiness
Authority.”

“LIBOR means the British Bankers Interest Settlement Rate for the Agreed
Currency and period displayed on the relevant Reuters screen or, if that page is
unavailable, another page displaying the appropriate rate or if no page is
available the arithmetic mean (rounded upward to 4 decimal places) of the rates
quoted by the British Banking Association to leading banks in the London
interbank market as of 11.00 am on the relevant date for such period as Lessor
determines.”

“Operator Exceedance” means any repairs required to the Engine that are
attributable to FOD, misuse, mishandling, neglect, negligence or improper
operation outside of the specification or procedures laid down in the
Manufacturer’s maintenance manual, the AFM and any other operating manuals after
Delivery and during the term of the Lease Agreement.

 

3.

A new clause 2.4.3 is added as follows:

“Delivery by Lessee to Lessor of the Acceptance Certificate will be conclusive
proof as between Lessor and Lessee that Lessee has examined and investigated the
Engine Package, that the Engine Package is satisfactory to Lessee and that
Lessee has irrevocably and unconditionally accepted the Engine Package for lease
without any reservations whatsoever (except for any discrepancies which may be
noted in the Acceptance Certificate). Notwithstanding the foregoing, Lessee may
conduct a visual (including borescope) inspection of the Engine to determine
whether the Engine is serviceable and in the condition described in the Lease
Agreement. Such inspection must take place within four (4) days of receipt of
the Engine and may take place either at the Delivery Location or any other
location the Engine is being shipped to. If, following such inspection of the
Engine, Lessee acting in good faith reasonably determines that the Engine is
unserviceable and provides to Lessor a written report as to why Lessee has
determined that the Engine is unserviceable and provided that (1) such
unserviceability has not resulted from or occurred during the transportation of
the Engine to the inspection location, if the inspection has taken place at any
other location than the Delivery Location; and (2) Lessor has been given an
opportunity to remedy the defect or fault which has rendered the Engine
unserviceable having due regard to Lessee’s requirements for the Engine, Lessee
will, in the event that the inspection took place at any other location than the
Delivery Location, hold the Engine pending shipping instructions from Lessor, at
which time Lessee will ship the Engine to Lessor’s designated location at
Lessor’s sole expense. Upon receipt of the Engine by Lessor (in the same
condition and with the same Parts as on the Delivery Date in respect of such
Engine) the Lease Agreement will terminate, all funds previously received by
Lessor from Lessee pursuant to this Lease Agreement will be returned to Lessee.”

 

4.

Section 4.6.1 of the Master Agreement is modified by adding the following to the
end of the first sentence:

“so as to keep the Engine Package in a serviceable state of repair and in a
fully operational and airworthy condition, and otherwise in as good operating
and physical condition as at the time of delivery to Lessee, normal wear and
tear due to the accumulation of flight hours and flight cycles from ordinary
operation excepted, and except that Lessee will not be responsible for replacing
life limited parts which are due for replacement solely as the result of life
expiration but Lessee shall be responsible for replacing or repair of any LRUs
that become unserviceable.”

 

5.

Section 4.6.2 of the Master Agreement is modified by:

 

  (a)

replacing subparagraph (iii) thereof with the following:

“(iii) the operation of the Engine beyond the limits outlined in the Applicable
Engine Standards,”

and

--------------------------------------------------------------------------------

  (b)

adding the following new subparagraph (v) at the end thereof:

“or (v) any cause whatsoever, so that the Engine Package is kept in a
serviceable state of repair and in a fully operational and airworthy condition,
and otherwise in as good operating and physical condition as at the time of
delivery to Lessee, reasonable wear and tear from ordinary use excepted;
provided, however, that notwithstanding the foregoing, each Engine Package must
be redelivered to Lessor in serviceable condition at the end of its Term and in
accordance with Section 11 of the Master Agreement, except that Lessee will not
be responsible for replacing life limited parts which are due for replacement
solely as the result of life expiration but Lessee will be responsible for
replacing or repair of any LRUs that become unserviceable.”.

 

6.

Section 8.1 of the Master Agreement is modified by adding the following to the
end thereof:

“The parties agree that the insurances described in Annex 4 are as in effect on
the date of each Lease Agreement without amendment.”

 

7.

Section 11.4 of the Master Agreement is modified by deleting subparagraph
(vii) and replacing it with the following:

“a certificate stating that, during the Term, the Engine was not (a) involved in
an accident, incident, fire or a major failure, (b) exposed to stress or heat
beyond limits, (c) immersed in salt water or exposed to corrosive agents outside
normal operation or (d) operated by a Government Entity; and”

 

8.

Section 17.16 of the Master Agreement is modified by deleting subparagraph
(i)(a) and replacing it with the following:

“to an affiliate of Lessor or”

 

9.

Section 17.7 of the Master Agreement shall be deleted entirely and the following
shall be added in lieu thereof:

“17.7.1 This Agreement will be governed by and construed in accordance with the
Laws of the State of New York, as specified in Part I, point 29 of the Lease
Agreement, without application of conflict of laws rules which refer to other
Laws.

17.7.2. Lessor may enforce any term of any Section of this Agreement that grants
any rights to Lessor.

17.7.3. Lessee may enforce any term of any Section of this Agreement that grants
any rights to Lessee.

17.7.4. Any Indemnitee may enforce the terms of Section 10.4 and Sections 10.1
to 10.3 inclusive in accordance with the provisions of this Agreement and the
Rights of Third Parties Act.

17.7.5. The parties to this Agreement shall not require the consent of any third
party to amend, vary or revoke any clause of this Agreement, including this
Section 17.7.”

 

10.

Annex 1 of the Master Agreement is modified by:

 

  (a)

deleting the definition of “Applicable Engine Standards” and replacing it with
the following:

“Applicable Engine Standards means the original Engine manufacturer’s operating
procedures and the original aircraft manufacturer’s operating procedures.”

 

9

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  (b)

adding the following to the end of the definition of “Aviation Authority”:

“and the FAA, and if Part I, point 1 of this Lease Agreement indicates the
Engine will be supplied to Lessee with (i) an FAA or JAA serviceability tag,
then at least the FAA or JAA, as applicable and dual serviceability tags if
possible and (ii) both FAA and JAA dual serviceability tags, then the FAA and
JAA dual serviceability tags.”

 

  (c)

adding the following to the end of the definition of “Law”:

“and including the Export Administration Regulations and/or International
Traffic-In-Arms Regulations of the United States of America.”

 

11.

Annex 4 of the Master Agreement is modified by adding the following to the end
of point 9;

“The Product Liability Insurance shall name each Indemnitee as additional
assured, warranted, as to it, no operational interest.”

 

12.

Clause 6 of Annex 4 is modified by inserting before the final sentence the
following:

“If the Engine is installed on an aircraft, the agreed value of such aircraft
shall automatically be increased by the agreed value of the Engine for the
period it is installed.”

As used in this Lease Agreement, the term “this Agreement” refers to the Master
Agreement as modified by this Lease Agreement.

Part IV – Appendices

Appendix A: Acceptance Certificate

Appendix B: Monthly Engine Utilization And Status Report

Appendix C: Redelivery Requirements

Appendix D: Use Fee Amount (Flight Hours)

Appendix E: Harsh Environment Countries

Appendix F: Non-Incident Statement

Appendix G hereto is the form of Certification and Representation Regarding
Items Subject to Export Contrail Requirements. Lessee agrees that by its
signature of this Lease Agreement below, that Lessee certifies that to the best
of its knowledge, the information set forth on the attached Appendix G is
accurate, current and complete as of the date of this signing and that the
signatory to this Agreement is duly authorized by Lessee to provide this
certification and representation.

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IN WITNESS whereof, the Parties have executed this Lease Agreement on the
respective dates specified below.

 

Contrail Aviation Support, LLC BY:   /s/ Joseph G. Kuhn NAME:   Joseph G. Kuhn
TITLE:   CEO DATE:   9/30/17

 

MTU Maintenance Lease Services B.V.

BY:  

/s/ Martin Friis Petersen

NAME:  

Martin Friis Petersen

TITLE:  

Managing Director

DATE:

 

   

 

BY:     NAME:     TITLE:     DATE:    

 

11

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Acceptance Certificate

Contrail Aviation Support, LLC

435 Investment Court Verona

Wl 53593

USA

 

Re:

Acceptance of Engine Package

Dear Sir/Madam,

Reference is made to the Lease Agreement between you (“Lessor”) and us
(“Lessee”) dated September 29, 2017 (“Engine Lease Agreement”) regarding the
leasing by Lessee of CFM56-7 bearing manufacturer’s serial number 874357
(“Engine”) Terms used herein without definition

have the meanings assigned in the Engine Lease Agreement.

Lessee hereby confirms to Lessor that:

 

(i)

on October 03 at Air Salvage International Ltd at Cotswold Airport in Gloucester
UK, Lessee accepted delivery of the Engine, as described in Part I, point 1 of
the Engine Lease Agreement and the Engine Documentation as described in Part I,
point 13 of the Engine Lease Agreement;

 

(ii)

annex 1 hereto lists all Parts and annex 2 lists all Engine Documentation so
received by Lessee; and

 

(iii)

the Engine Documentation confirms the Engine Flight Hours and Engine Flight
Cycle information and data summarized on annex 3 hereto.

 

  MTU Maintenance Services B.V.   By:   /s/ Xavier Schmid   Date:   03/10/2017  
  Xavier Schmid     CFO-Director Finance    

 

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Appendix B – Monthly Engine Utilization And Status Report

MONTHLY LEASE ENGINE UTILIZATION AND STATUS REPORT

UTILIZATION DATA IS DUE NO LATER THAN THE 10TH DAY OF EACH MONTH

 

To: Contrail Aviation Support, LLC    From: Attention:    Name: E-Mail:     
E-Mail   

MONTH and YEAR OF REPORTED UTILIZATION:                                    

 

1)    Engine Type:                                         2)    Engine Serial
No.:                                      3)    Total Time Since New:
                                       Total Cycles Since New:
                                     4)   

Hours Flown During the Preceding Month:

(Rounded to nearest whole hour)

   5)    Cycles Flown During the Preceding Month:    Hours:
                                            Total Cycles:
                                     6)    Aircraft:    7)    Thrust Categories
Operated Throughout Lease:    A/C Model:
                                                  Registration:
                                               Rating:
                                         Cycles:    Position:
                                               Rating:
                                         Cycles:          Rating:
                         Cycles: 8)    Date Installed:
                                     or    9)    Reason for Removal:    Date
Removed:                                                10)    The average
Take-off EGT margin for the month:    11)    The number of hours or percentage
of flight hours the Engine was operated in or over the continental United
States.    EGT Margin:                                Hours:
                                

 

13

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Appendix C - Redelivery Requirements

1.    Date of Redelivery. Lessee will return the Engine installed on the same
engine transportation stand (or as otherwise agreed) as delivered to Lessee at
Delivery, to Lessor on the Final Date or on the date of other valid termination
of the Lease Agreement in the condition required by the Lease Agreement. The
costs for shipping of the Engine to any other location than the designated
Redelivery Location will be borne by the Lessor.

2.    Redelivery Inspection. Lessee will perform or cause to be performed at its
own cost on the Engine immediately prior to its return to Lessor:

a.    a power assurance test run (test 05) at the thrust rating that the Engine
will make power (“MPA”) according to the applicable aircraft maintenance manual
requirements, followed by

b.    a full end of lease (“EOL”) inspection as required by the end of lease
inspection requirements detailed in Schedule 1 to Appendix C, including an
acceptable full video borescope inspection, with written report, of all
accessible sections of the Engine within maintenance manual limitations, for
continued time/reduced inspections (except in the case of FOD, misuse, neglect,
negligence or improper operation). Such borescope inspection shall be performed
by Lessor’s representative with consideration or exception given for (i) the
findings with respect to the borescope inspection of the Engine provided by
Lessor at Delivery and (ii) normal wear and tear during the Lease Term due to
the accumulation of flight hours and flight cycles from ordinary operation, and
except that Lessee will not be responsible for replacing life limited parts
which are due for replacement solely as the result of life expiration but Lessee
will be responsible for replacing or repair of LRUs that become unserviceable.

The corresponding MPA and EOL inspection protocols shall be redelivered with the
Engine. Lessee will provide Lessor with at least fourteen (14) Business Days
advance written notice of such scheduled Engine inspection and test, so that
Lessor may have the opportunity to witness same. Should Lessee not inform Lessor
in advance of the impending MPA and EOL inspection with at least fourteen
(14) days’ notice, and the Lessee elects to perform the scheduled MPA and EOL
inspections without Lessor present, Lessor may at its sole discretion disregard
the MPA and EOL inspection performed by Lessee and perform a test cell run and
corresponding EOL inspection at Lessor’s MRO facility at the cost and risk of
Lessee. In the event that the borescope inspection or the MPA or test cell run
identifies any defect in the Engine or any item not being within the
manufacturer’s limits as stated in the relevant aircraft maintenance manual
(“AMM”) or engine maintenance manual (“EMM”), such defect shall be repaired at
Lessee’s sole cost and expense provided such defect is not resulting from normal
wear and tear due to the accumulation of flight hours and flight cycles from
ordinary operation, and except that Lessee will not be responsible for replacing
life limited parts which are due for replacement solely as the result of life
expiration but Lessee will be responsible for replacing or repair of LRUs that
become unserviceable.

3.    Return Conditions. In addition to any other requirements of this Lease,
upon return of the Engine to Lessor, Lessee will ensure that:

a.    the Engine is free and clear of all Liens (except Permitted Liens) and
shall have installed thereon the Parts installed at Delivery or replacements
thereof installed in accordance with the provisions of the Lease Agreement,
provided that the title thereto is vested in Lessor;

b.    the Engine is either (i) serviceable or (ii) unserviceable based on
(x) being fully time expired or (y) borescope findings beyond maintenance manual
limits due to normal wear and tear due to the accumulation of flight hours and
flight cycles from ordinary operation, and except that Lessee will not be
responsible for replacing life limited parts which are due for replacement
solely as the result of life expiration but Lessee will be responsible for
replacing or repair of LRUs that become unserviceable, with no evidence of FOD,
misuse, abuse or Lessee induced or other Operator Exceedance damage; it is
specifically recorded that any reduced inspection interval (not related to FOD,
misuse or abuse or Lessee induced or other Operator Exceedance damage) per CFM
or maintenance manual shall not be considered a cause to deem the Engine to be
unserviceable;

--------------------------------------------------------------------------------

c.    in the event the Engine cannot sustain *             pounds of thrust, has
damage beyond continued time limitation (not related to FOD, misuse or abuse or
Lessee induced or other Operator Exceedance damage) the Lessor shall accept the
Engine and repair or dispose of it as Lessor deems fit (in this case the Engine
shall be deemed unserviceable and all clauses relating to a serviceable engine
shall not apply, however, Lessee shall comply with the MPA (only if it is safe
to do so) and EOL inspections referred to in Section 2;

d.    the Engine shall have installed thereon all Parts installed thereon on the
Delivery Date or permitted replacements thereof in accordance with the Lease
Agreement and the Engine will be configured and licensed by CFM International,
Inc. as a CFM56-7B26 engine and in an as good condition as at Delivery, normal
wear and tear due to the accumulation of flight hours and flight cycles from
ordinary operation excepted, and except that Lessee will not be responsible for
replacing life limited parts which are due for replacement solely as the result
of life expiration but Lessee will be responsible for replacing or repair of
LRUs that become unserviceable and changes and normal rate of performance
deterioration excepted;

e.    the Engine and each of its Parts and components, is free of all deferred
or carryover maintenance items, including pilot log book reports and defects
requiring repetitive inspections and will not be “on watch” or have any reduced
interval inspections;

f.    the Engine has affixed a current, valid and effective EASA Form 1 and FAA
81303 Form with full return-to-service statement, if serviceable, at
*             pounds of thrust;

g.    with reference to the MPA and EOL inspection referred to in Section 2 and
together with the Engine’s historical and technical data and condition trend
monitoring data for the Engine, Lessor is satisfied:

i.    with the Engine’s status and that there is no indication of an adverse
deterioration in the performance of the Engine which is higher than normal based
upon Lessee’s maintenance experience in operating engines of the same type and;

h.    prior to returning the Engine to Lessor, Lessee will prepare the Engine
for shipment by:

i.    capping and plugging all openings of the Engine;

ii.    preserving the Engine for three hundred sixty-five (365) days storage,
according to the engine preservation procedure of the AMM or the relevant EMM;
and

iii.    completely covering the Engine with heat shrink wrap and the tarpaulin
cover or bag (if provided) at Delivery.

4.    Non-Incident Statement. Upon redelivery, Lessee shall issue a Non-Incident
Statement in the form set out in Appendix F.

5.    Redelivery Reports. Upon redelivery of the Engine in accordance with the
terms of the Lease Agreement, Lessee will (i) perform the redelivery checks,
tasks and inspections specified in Clause A of Schedule 1 to Appendix C,
(ii) deliver to Lessor the redelivery documents specified in Clause B of
Schedule 1 to Appendix C and (iii) prepare, execute and deliver to Lessor the
Engine operational report and a redelivery checks and inspection report in the
respective forms of Schedule 1 and Schedule 2 to Appendix C.

 

15

 

*

The confidential portion has been omitted pursuant to a request for confidential
treatment filed by Air T, Inc. with the Securities Exchange Commission and filed
separately with the Commission.

--------------------------------------------------------------------------------

6.    Indemnities and Insurance. The indemnities and insurance requirements set
forth in Sections 8 and 10 of the Master Agreement, respectively, will apply to
Indemnitees and Lessor’s representatives during the return of the Engine,
including the redelivery inspection.

--------------------------------------------------------------------------------

SCHEDULE 1 TO APPENDIX C

ENGINE REDELIVERY TASK AND DOCUMENTS

 

1.1

A Full Performance Test cell run (“TCR”) according to the respective Engine type
manual requirements including Engine Water Wash.

or alternatively, only if the TCR is waived in accordance with the provisions of
the Lease Agreement:

 

1.2

An On Wing Performance Test in the form of a Maximum Power Assurance run or
similar test as further described in Exhibit E.5 with calculated EGTM result
including Engine Water Wash to be performed immediately prior to Engine removal.

 

1.3

The Engine Fuel and Oil System shall be preserved long term (365 days) per AMM
immediately prior to return of the Engine in accordance with the Lease
Agreement.

 

1.4

A full End of Lease Inspection as required by the end of lease inspection
requirements detailed in Exhibit E.5 of the Lease Agreement. Or respectively the
inspection checks recommended by the OEM comprising all of the tasks listed in
the current revision of the applicable aircraft manufacturer’s MPD and
applicable to the Engine. The inspection check can be carried out in accordance
with Lessee’s Maintenance Program.

 

1.5

A Full Engine Video/DVD Borescope Inspection (cold and hot section) post test
cell/ground run is required in accordance with the AMM including leading edge
and trailing edge.

 

1.6

Completely covering the Engine with the tarpaulin cover provided at Delivery.

 

1.7

Engine shipment in accordance with the manufacturer’s
specifications/recommendations. Any trucks used for shipment of the Engine will
be equipped with air ride or air cushion suspension system.

The engine has to be returned on the following SHIPPING STAND:

Base P/N                                         , S/N
                                        

Cradle P/N                                         , S/N
                                        

 

17

--------------------------------------------------------------------------------

2.     End of Lease Documentation

On redelivery of the Engine, Lessee shall provide the following documentation to
Lessor:

 

2.1

Operator certified NON-INCIDENT STATEMENT shall be issued upon redelivery,
substantially in the form set out in the attached template printed on Airline
headed paper and signed by authorized representative of Operator. (Exhibit E.2
of the Lease agreement).

 

2.2

Operator certified ETOPS CERTIFICATION at Engine removal. The ETOPS
Certification needs to be on Airline letterhead signed by authorized
representative of Operator. (Exhibit E.3 of the Lease agreement).

 

2.3

Complete operator certified ENGINE OPERATIONAL REPORT (Exhibit E.4 of the Lease
agreement) printed on Airline headed paper, signed by authorized representative
of Operator.

 

2.4

Operator certified FAA & EASA and Local Air Authority Airworthiness Directive
(AD) STATUS current to redelivery date on Airline headed paper. It shall include
all applicable AD’s, the Means of compliance for all accomplished AD’s and
include the repetitive inspection compliance supporting data (if applicable).

 

2.5

If any AD’s or SB’s have been performed during the lease period, copies of
accomplishment records/documents (job cards, work cards, etc) are required.

 

2.6

Operator certified LLP DISK SHEET at each Engine Removal. The LLP Sheet needs to
be on Airline letterhead signed and dated.

 

2.7

Operator SERVICEABLE TAG issued in accordance with operator local aviation
authority (if applicable). The copy should remain with the Engine. It should
state that the Engine was removed in Serviceable Condition and removal reason.
It should also state the Total Engine Time and Total Engine Cycles /TET and TEC)
and removal date and removal location.

 

2.8.

ENGINE TEST CELL REPORT, which shows Engine parameters at Hot Day Take-off.

 

2.9

Results of an On Wing Performance Test in the form of a Maximum Power Assurance
run (MPA) or similar test (if applicable) with all recorded parameters with
calculated and documented EGTM.

 

2.10

A written and certified BORESCOPE REPORT per each stage, LE and TE, based on the
Full Engine Video Borescope Inspection performed after the Test Cell run (or MPA
run) and compiled by an approved Air Regulatory Source including two copies of
the VIDEO BORESCOPE (DVD or CD-Rom).

 

2.11

ENGINE TREND MONITORING DATA, including take-off and cruise performance data,
cruise mechanical data for the duration of the Engine’s operation throughout the
Lease Term.

--------------------------------------------------------------------------------

2.12

END OF LEASE (EOL) INSPECTION check list (refer to attached Inspection Check
List Exhibit E.5) completely signed by mechanic/technician and inspector or
responsible person within a maintenance organization performing the inspection.
Or respectively the inspection checks recommended by the OEM comprising all of
the tasks listed in the current revision of the applicable aircraft
manufacturer’s MPD and applicable to the Engine. The inspection check can be
carried out in accordance with operator’s maintenance program.

 

2.13

ENGINE ACCESSORY and QEC LIST at Engine redelivery. Engine should be returned
with the same inventory as provided at Delivery. Lessee has to send an updated
Engine Accessory and QEC List in accordance with the list dated [●] provided
with the Engine at Delivery. Any component changes must be supported with
adequate records. At minimum date of installation, engine TSN/CSN at component
installation. All such replacement parts must be certified with FAA dual or EASA
dual release certificate, with back to birth traceability on all LLP’s. In
addition, full traceability (TSO/TSR) is required for any significant rotable
component. Lessor is entitled to reject a replacement component if it is not in
same or higher modification status as original part or satisfied with the
standard of the components or the quality of its associated records.

 

2.14

Engine FAA 8130-3 and EASA FORM ONE RELEASE CERTIFICATE or alternative a EASA
DUAL RELEASE CERTIFICATE or FAA 8130-3 DUAL RELEASE CERTIFICATE. The copy should
remain with the Engine. It should state the Total Engine Time and Total Engine
Cycles /TET and TEC), removal date and that the Engine was removed in
Serviceable Condition, reason for removal and mention all inspection/work
accomplished. (MPA run or test cell run, preservation and preservation date ,
BSI, “EOL Inspection Checks”, etc).

 

2.15

PRESERVATION TAG with date of expiration confirming that the Engine oil system
and fuel system was long term preserved for 365 days. All openings of the Engine
have to be capped and plugged.

 

2.16

A copy of signed/stamped Task Card covering Engine long term preservation.

 

2.17

A copy of operator Aircraft Tech Log Sheet showing Engine installation/removal
from wing.

 

2.18

A copy of signed/stamped Task Card showing Engine installation/removal from
wing.

 

2.19

A copy of maintenance records showing Engine conversion at engine
installation/removal from wing (if applicable).

 

2.20

TECHNICAL LOG PAGES and PILOT REPORTS related to the Engine that occurred
throughout the Lease Term including the respective corrective actions.

 

2.21

UNSCHEDULED MAINTENANCE EVENTS and INSPECTION REPORTS.

 

2.22

SCHEDULED MAINTENANCE and INSPECTIONS accomplished in accordance with operator
APPROVED MAINTENANCE PROGRAM

 

2.23

OPEN/DEFERRED/CARRY FORWARD items, documentation covering any Open items,
Deferred Defects or Carry Forward items.

 

19

--------------------------------------------------------------------------------

2.24

DIGITAL PHOTOS of the Engine accessories including Engine data plate prior to
covering, and photos of the Engine in bagged condition (Refer to MTU EOL check
list Exhibit E.5).

 

--------------------------------------------------------------------------------

2.25

  MTU Maintenance Lease Services   CFM56-7B20 ESN   -874357     ETSN: 41855  
ECSN: 31806   ACCESSORY INVENTORY   March 06 / 2017

 

DESCRIPTION

  

REF EIPC

  

QTY

  

PART NUMBER

MW0325 HARNESS FIRE    26-11-00-01 350D    1    325-027-303-0 MW0315 HARNESS
FIRE    26-11-00-01 010A    1    325-027-566-0 MW0316 HARNESS FIRE   
26-11-00-01 260A    1    325-024-603-0 MW0326 HARNESS FIRE    26-11-00-01 450B
   1    325-027-404-0 MW0304 HARNESS / J4    71-51-00-01 010A    1   
325-035-201-0 MW0303 HARNESS / J3    71-51-00-01 020    1    325-015-001-0
MW0301 HARNESS / J1    71-51-00-01 030    1    325-035-503-0 MW0302 HARNESS / J2
   71-51-00-01 040    1    325-029-902-0 MW0313 HARNESS    71-51-00-01 050    1
   NOT VISIBLE MW0311 HARNESS (FFCCV)    71-51-00-01 060A    1    NOT VISIBLE
MW0312 HARNESS    71-51-00-01 320    1    NOT VISIBLE CORE HARNESS J9   
72-00-00-10 020A    1    325-043-401-0 CORE HARNESS J10    72-00-00-10 040E    1
   325-043-501-0 FAN HARNESS J6    72-00-00-10 190A    1    325-035-003-0 FAN
HARNESS J5    72-00-00-10 200A    1    325-034-902-0 FAN HARNESS J7   
72-00-00-10 240    1    325-025-702-0 FAN HARNESS J8    72-00-00-10 250    1   
325-025-803-0 HARNESS CJ9    72-00-00-10 550    1    325-045-201-0 HARNESS CJ10
   72-00-00-10 800    1    325-025-401-0 IDENTIFICATION DATA ENTRY PLUG   
72-00-00-97 140    1    390-660-101-0 TRANSFER GEARBOX    72-62-00-01 001A    1
   340-050-705-0 ACCESSORY GEARBOX    72-63-00-01 002    1    340-046-602-0 MAIN
FUEL PUMP    73-11-10-01 010C    1    340-402-105-0 FUEL FILTER ELEMENT   
73-11-10-01 185C    1    NOT VISIBLE FUEL NOZZLE    73-11-40-01 010A    1   
1317M47G18 FUEL NOZZLE    73-11-40-01 010A    1    1317M47G18 FUEL NOZZLE   
73-11-40-01 010A    1    1317M47G18 FUEL NOZZLE    73-11-40-01 010A    1   
1317M47G18 FUEL NOZZLE    73-11-40-01 010A    1    1317M47G18 FUEL NOZZLE   
73-11-40-01 010A    1    1317M47G18 FUEL NOZZLE    73-11-40-01 010A    1   
1317M47G16 FUEL NOZZLE    73-11-40-01 010A    1    1317M47G16 FUEL NOZZLE   
73-11-40-01 010A    1    1317M47G18 FUEL NOZZLE    73-11-40-01 010A    1   
1317M47G18 FUEL NOZZLE    73-11-40-01 010A    1    1317M47G18

 

--------------------------------------------------------------------------------

FUEL NOZZLE   73-11-40-01 010A   1   1317M47G18 FUEL NOZZLE   73-11-40-01 010A  
1   1317M47G18 FUEL NOZZLE   73-11-40-01 010A   1   1317M47G16 FUEL NOZZLE  
73-11-40-01 010A   1   1317M47G16 FUEL NOZZLE   73-11-40-01 010A   1  
1317M47G18 FUEL NOZZLE   73-11-40-01 020   1   I317M47G18 FUEL NOZZLE  
73-11-40-01 020   1   1317M47G18 FUEL NOZZLE   73-11-40-01 020   1   1317M47G18
FUEL NOZZLE   73-11-40-01 020   1   1317M47G18 FUEL FILTER NOZZLE   73-11-45-01
010A   1   340-403-004-0 IDG OIL COOLER   73-11-60-01 010   1   340-403-102-0
BURNER STAGING VALVE   73-11-70-05 010   0   N/R HYDROMECHANICAL UNIT  
73-21-10-01 010G   1   442652 PT25 TEMP SENSOR (CIT)   73-21-20-01 010   1   NOT
VISIBLE ALTERNATOR STATOR   73-21-30-01 010   1   510846-1 ALTERNATOR ROTOR  
73-21-30-01 050   1   NOT VISIBLE T12 TEMPERATURE SENSOR   73-21-40-01 010   0  
N/R ECU SOFTWARE   73-21-60-01 262D   1   1853M78P37 ELECTRONIC CONTROL UNIT  
73-21-60-01 012D   1   1853M33P06 HPTCC THERMOCOUPLE   73-21-70-01 010   0   N/R
FUEL FLOW TRANSMITTER   73-31-10-01 010   1   1853M48P02 FUEL DIFF PRESSURE
SWITCH   73-34-10-01 010B   1   304-402-706-0 IGNITION EXCITER UPPER  
74-00-00-01 010   1   9238M66P11 IGNITION EXCITER LOWER   74-00-00-01 010   1  
9238M66P11 SPARK IGNITER MAIN (LOWER)   74-00-00-01 300E   1   NOT VISIBLE SPARK
IGNITER MAIN (UPPER)   74-00-00-01 300E   1   NOT VISIBLE IGNITION LEAD LH  
74-00-00-01 320   1   1853M13P01 IGNITION LEAD RH   74-00-00-01 320   1  
1853M13P01 ECU HOSE TUBE (COOLING)   75-00-00-01 630   1   NOT VISIBLE AIR
TRANSIENT BLEED VALVE   75-21-10-01 010A   1   1821M60P04
HPT CLEARANCE CONTROL VALVE   75-22-10-01 010   1   3291186-6
LPT CLEARANCE CONTROL VALVE   75-23-10-01 010   1   340-402-003-0 VSV ACTUATOR
LH   75-32-10-01 010A   1   1324M12P10 VSV ACTUATOR RH   75-32-10-01 010A   1  
1324M12P10 VBV BALLSCREW ACTUATOR LH   75-32-20-01 010A   1  
340-402-653-0/7074-300 VBV BALLSCREW ACTUATOR RH   75-32-20-01 010A   1  
340-402-653-0/7074-300 N2 SPEED SENSOR   77-11-10-01 010B   1   320-549-004-0 N1
SPEED SENSOR   77-12-10-01 010   1   320-862-401-0 T/C PROBE T49.5 (UPPER LH)  
77-21-10-01 010   1   TC296-02

 

22

 

  

--------------------------------------------------------------------------------

T/C PROBE T49.5 (LOWER LH)   77-21-10-01 010   1   TC296-04 T/C PROBE T49.5
(LOWER RH)   77-21-10-01 010   1   TC296-02 T/C PROBE T49.5 (UPPER RH)  
77-21-10-01 010   1   TC296-02 T5 SENSOR   77-22-10-01 010A   0   N/R T3 SENSOR
- COMP.DISCHARGE TEMP   77-23-10-01 010   1   2124M19P01 VIBRATION SENSOR BRG #1
  77-31-30-01 010   1   340-031-802-0 VIBRATION FFCC SENSOR   77-31-40-01 010A  
1   NOT VISIBLE OIL TANK   79-11-20-01 010   1   41F5102 LUBRICATION UNIT  
79-21-10-01 010   1   340-400-005-0 OIL/FUEL MAIN HEAT EXCHANGER   79-21-20-01
010   1   11-841193-4 SERVO FUEL HEATER   79-21-20-01 050   1   45-731-1382 OIL
SCAVENGE FILTER   79-21-40-01 010A   1   NOT VISIBLE OIL CLOGGING TRANSMITTER  
79-21-40-05 010   1   340-402-801-0 OIL ANTI LEAK VALVE   79-21-40-10 010   1  
340-400-203-0 DMS JUNCTION BOX   79-21-50-15 020   0   N/R
OIL QUANTITY TRANSMITTER   79-31-00- 01 010   1   340-402-801-0 OIL TEMPERATURE
SENSOR   79-31-40-01 010   1   340-402-902-0 OIL PRESSURE TRANSMITTER  
79-32-10-01 010   1   FA006310 STARTER AIR TURBINE   80-11-10-01 010H   1  
1851M36P10

WHEN P/N OF MISSING / NOT PROVIDED PART COULD NOT BE IDENITIFIED. HIGHEST
APPLICABLE P/N IS USED.

 

MTU Maintenance Lease Services CFM56-7B20 ESN     -874357 ETSN: 41855   ECSN:
31806 ACCESSORY INVENTORY March 06 / 2017

 

DESCRIPTION

 

REF PPBUM

 

QTY

 

PART NUMBER

FWD MOUNT SUB-ASSY   2-1 ITEM 15   1   310A2028-11 HANGAR FITTING ASSY   2 1
ITEM 50   1   NOT VISIBLE AFT MOUNT ASSY   3-1 ITEM 5   1   310A2031-25 BRACKET
ASSY   4-1 ITEM 950   1   332A2930-61 BRACKET ASSY   6-1 ITEM 225   1  
332A2930-62 BRACKET ASSY   6-1 ITEM 350   1   332A2930-90 TUEL SUPPLY HOSE ASSY
  12-1 ITEM 10   1   AE713733-1 12 O’CLOCK STRUT ASSY   13-1 ITEM 5   1  
332A2371-1 DUCT ASSY CTAI   13-1 ITEM 10   1   332A2390-45 ROD ASSY   13-1 ITEM
72   1   315A2080-1 TAI TEMPERATURE SOLENOID VALVE   14-1 ITEM 5   1   3205548-2
PRE-COOLER CONTROL VALVE   14-1 ITEM 75   1   3289562-6 COUPLING, PRE-COOLER
CONTROL VALVE   14-1 ITEM 120   1   AS1895-4-400

 

--------------------------------------------------------------------------------

HIGH STAGE REGULATOR   14-1 ITEM 150   1   107484-7 BLEED AIR REGULATOR   14-1
ITEM 250   1   107492-6 HIGH STAGE REGULATOR TUBE ASSY   15-1 ITEM 5   1  
332A2350-9 HIGH STAGE REGULATOR TUBE ASSY   15-1 ITEM 55   1   332A2350-11 HIGH
STAGE REGULATOR TUBE ASSY   15-1 ITEM 100   1   332A2350-4 HIGH STAGE REGULATOR
HOSE ASSY   15-1 ITEM 175   1   16135-84 LINK ASSY (FOR BLEED DUCT)   16-1 ITEM
10   1   332A2341-4 LINK ASSY (FOR BLEED DUCT)   16-1 ITEM 45   1   332A2341-5
BLEED DUCT ASSY 5TH AND 9TH STAGE   16-1 ITEM 105   1   332A2323-10 HIGH STAGE
VALVE   16-1 ITEM 150   1   3214446-4 COUPLING, HIGH STAGE VALVE   16-1 ITEM 180
  1   AS1895-1-350 DUCT ASSY 5TH, 9TH STAGE BLEED   16-1 ITEM 200   1  
332A2321-10 COUPLING 5TH, 9TH STAGE BLEED   16-1 ITEM 210   1   AS1895-1-350
CHECK VALVE   16-1 ITEM 250   1   3202222-1 COUPLING, CHECK VALVE   16-1 ITEM
260   1   AS1895-4-350 DUCT ASSY, INTERSECTION MANIFOLD   16-1 ITEM 300   1  
332A2322-54

COUPLING, INTERSECTION MANIFOLD

(2EA)

  16-1 ITEM310   2   AS1895-4-350 COUPLING INTERSECTION MANIFOLD   16-1 ITEM 320
  1   AS1895-4-175 TUBE ASSY, BLEED CONTROL   17-1 ITEM 5   1   332A2350-5 HOSE
ASSY, BLEED CONTROL   17-1 ITEM 50   1   16135-80 HOSE ASSY, BLEED CONTROL  
17-1 ITEM 75   1   16135-83 TUBE ASSY, BLEED CONTROL   17-1 ITEM 100   1  
332A2350-7 HOSE ASSY, BLEED CONTROL   17-1 ITEM 125   1   16135-81 TUBE ASSY,
BLEED CONTROL   17-1 ITEM 150   1   332A2350-14 TUBE ASSY, BLEED CONTROL   17-1
ITEM 200   1   332A2350-12 TUBE ASSY, BLEED CONTROL   17-1 ITEM 225   1  
332A2350-13 HOSE ASSY, BLEED CONTROL   17-1 ITEM 275   1   16135-80 PRESS REG
SHUTOFF VALVE   18-1 ITEM 5   1   3214552-5 COUPLING, PRSOV   18-1 ITEM 55   1  
AS1895-1-350 DUCT ASSY, UPPER 5TH 9TH STAGE   18-1 ITEM 100   1   332A2326-45
COUPLING, UPPER 5TH 9TH STAGE DUCT   18-1 ITEM 110   1   AS1895-1-350 COUPLING,
UPPER 5TH 9TH STAGE DUCT   18-1 ITEM 155   0   N/R HYDRAULIC PUMP ASSY (VICKERS)
  20-1 ITEM 15   1   849589 FITTING QUICK RELEASE   20-1 ITEM 20   1  
155012-73-20 HYDRAULIC PUMP ADAPTER PLATE   20-1 ITEM 105   1   387999 HYDRAULIC
PUMP CLAMP RING   20-1 ITEM 150   1   974219 HYDRAULIC FILTER   21-1 ITEM 5   1
  7579078 HOSE ASSY, HYDRAULIC CASE DRAIN   2,-1 ITEM 75   1   155006-06-18 HOSE
ASSY, HYDRAULIC CASE DRAIN   21-1 ITEM 200   1   155006 06-16

 

24

 

  

--------------------------------------------------------------------------------

HOSE ASSY, HYDRAULIC PRESSURE   21-1 ITEM 225   1   155012-12-2014 HOSE ASSY,
HYDRAULIC SUPPLY   21-1 ITEM 300   1   155016-20-11 LANYARD ASSY, IDG   22-1
ITEM 5   l   332A2600-4 LANYARD ASSY, IDG   22-1 ITEM 10   1   332A2600-5
LANYARD ASSY, IDG   22-1 ITEM 15   1   332A2600-6 IDG   22-1 ITEM 50   1  
761574B QAD ADAPTER KIT, IDG   22-1 ITEM 75   1   762246 IDG AIR/OIL COOLER  
23-1 ITEM 5   1   5332A260-1 IDG HOSE / TUBE ASSY   24 1 ITEM 100   1   115096-3
IDG HOSE / TUBE ASSY   24-1 ITEM 200   1   115096-2 LINK ASSY (2EA)   25-1 ITEM
10   2   322U2338-2 LINK ASSY (2EA)   25-1 ITEM 55   2   322U2338-2 LOWER
STARTER DUCT ASSY   25-1 ITEM 100   1   332A2313-1 COUPLING, STARTER   25-1 ITEM
110   1   AS1895-4-325 STARTER VALVE ASSY   25-1 ITEM 175   1   3289630-2
COUPLING, LOWER STARTER DUCT   25-1 ITEM 105   1   AS1895-7-300 UPPER STARTER
DUCT ASSY   25-1 ITEM 250   1   332A2310-1 COUPLING STARTER VALVE   25-1 ITEM
260   1   30645-300 COUPLING, UPPER STARTER DUCT   25-1 ITEM 305   0   N/R
ANTI-ICE PRESSURE SWITCH   27-1 ITEM 60   1   NOT VISIBLE TAI DUCT ASSY, FWD  
27-1 ITEM 100   1   332A2390-48 TAI TUBE ASSY   27-1 ITEM 145   1   332A2350-1
TAI LINK ASSY   27-1 ITEM 180   1   332A2341-3 TAI LINK ASSY   27-1 ITEM 185   1
  332A2341-2 ANTI-ICE VALVE ASSY   27-1 ITEM 225   1   3215618-4 COUPLING, TAI
VALVE   27-1 ITEM 235   1   AS 1895-4-200 TAI DUCT ASSY, AFT   27-1 ITEM 250   1
  332A2390-12 COUPLING, AFT TAI DUCT   27-1 ITEM 260   1   AS1895-4-175
COUPLING, TAI VALVE   27-1 ITEM 305   1   AS1895-4-200 COUPLING, FWD TAI DUCT  
27-1 ITEM 380   1   AS1895-4 200 FIRE DETECTOR, FAN UPPER   28-1 ITEM 5   1  
S332T100-44 FIRE DETECTOR, FAN LOWER   28-1 ITEM 10   l   S332T100-30 FIRE
DETECTOR, LEFT CORE   28-1 ITEM 15   1   S332T100-43 FIRE DETECTOR, RIGHT CORE  
28-1 ITEM 20   1   S332T100-38 W1062 WIRE BUNDLE ASSY   29-1 ITEM 5   1  
286A1062-002 ALUMINIUM FOIL MARKER, OIL TANK   30-1 ITEM 5   1   BAC27DAP33
ALUMINIUM FOIL MARKER, OIL TANK   30-1 ITEM 15   1   BAC27DPP466 ALUMINIUM FOIL
MARKER, IDG   30-1 ITEM 35   1   BAC27DAP33 THRUST LINK ASSY, LEFT   31-1 ITEM 5
  1   310A2041-9 THRUST LINK ASSY, RIGHT   31-1 ITEM 10   1   310A2041-10
PRIMARY PLUG ASSY, LONG   32-1 ITEM 5   1   314A2620 -1 PRIMARY NOZZLE ASSY,
LONG   32-1 ITEM 100   1   314A2610-1 GSE BRACKET RH SIDE   32-2 ITEM 130   1  
340-180-601-0

 

--------------------------------------------------------------------------------

GSE BRACKET, LH SIDE   32-2 ITEM 180   2   340-180-401-0

WHEN P/N OF MISSING / NOT PROVIDED PART COULD NOT BE IDENTIFIED. HIGHEST
APPLICABLE P/N IS USED

 

26

 

  

--------------------------------------------------------------------------------

SCHEDULE 2 TO APPENDIX C

 

END

OF

LEASE

REQUIREMENTS

TASK #

  

TASK DESCRIPTION

  

BOEING MPD &

AMM REFERENCE

  

REMARKS

  

INSPECTOR

Date/Signature/Stamp

1    ENGINE DOCUMENTATION CHECK 1.1    CHECK MAINTENANCE LOG BOOKS AND PROVIDE
PAPERWORK FOR ANY ENGINE RELATED MAINTENANCE REPORTS, PILOT REPORTS AND DEFERRED
DEFECTS REPORTED.    N/A   

OPERATOR

TASK

      NOTE: Not applicable in Shop.          1.2   

CHECK AD NOTE STATUS. CHECK FOR

REQUIRED FAA-EASA AD AND SB OEM CAT

1, 2 INCORPORATION.

   N/A           

NOTE: When Engine in MTU Shop - SB

check per MTU lease group advice.

               1.3   

CHECK AIRCRAFT DATA FOR ATA CHAPTER

70-80 CLASS 3 FAULTS.

   N/A   

OPERATOR

TASK

      NOTE: Not applicable in Shop.          2    ENGINE GENERAL INSPECTION 2.1
  

CLEAN THE ENGINE GAS-PATH WITH PURE

WATER.

 

NOTE: Before On-Wing or Test Cell run.

  

AMM 72-00-00-100-803

EM 72-00-00-100-002 Clean 002

      2.2   

PERFORM FULL PERFORMANCE TEST CELL

RUN TEST 003 AND 009 OR FOLLOWING GROUND TESTS: NO. 3A, 5, 7, 8, 13 AND PROVIDE
WRITTEN REPORTS.

  

AMM 71-00-00-700 (ON-WING-TEST)

EM 72-00-00-760 (TEST CELL)

         NOTE: Refer to applicable lease agreement for required Tests (On-Wing
or Test Cell).         

 

27

 

--------------------------------------------------------------------------------

2.3   

PRESERVATION OF AN ENGINE FROM ONE

MONTH TO ONE YEAR.

ATTACH PRESERVATION INFORMATION

LABEL ON ENGINE OIL TANK THAT ENGINE

HAS BEEN PRESERVED.

 

NOTE: On-Wing or Test Cell.

  

AMM 71-00-03-6008-11

(ON WING)

ESM 72-00-00-500-001

(TEST CELL)

  

                        

  

                    

2.4    PERFORM RECEIVING PHOTO DOCUMENTATION OF ENGINE BUILD CONFIGURATION.
(FOLLOWING VIEWS: FRONT, RH FAN MODUL, BOTTOM FAN MODULE, LH FAN MODULE, UPPER
FAN MODULE, RH CORE MODULE, BOTTOM CORE MODULE, LH CORE MODULE, UPPER CORE
MODULE, REAR, ENGINE DATA PLATE, ENGINE OWNER PLATE, RH SHIPPING STAND GENERAL
VIEW, LH SHIPPING STAND GENERAL VIEW, SHIPPING STANDS WHEEL, SHIPPING STAND
IDENTIFICATION PLATES, SHIPPING STAND TOWING BARS, SHIPPING STAND BASE AND
CRADLE IDENTIFICATION PLATE). NOTE: After Engine removal.    N/A       2.5   

VERIFY CURRENT EEC SOFTWARE VERSION ON INSTALLED EEC.

NOTE: Pay attention to information on software modification label below EEC
identification plate.

  

EEC P/N:

                                         

                                     

        

EEC S/N:

                                         

                                     

        

Software Version:

                                         

                                     

      2.6   

CREATE AND COMPLETE ENGINE INVENTORY LIST.

NOTE: Based on MTU lease group delivered listing.

   N/A       2.7   

CREATE AND COMPLETE MISSING PARTS LIST AGAINST EIPC AND PPBUM.

 

NOTE: Applicable when engine delivered with Missing parts list.

NOTE: When Engine in MTU Shop -

Missing part check per MTU lease group advice.

   N/A       2.8   

EXTERNAL GENERAL VISUAL INSPECTION OF ENGINE FOR ANY OBVIOUS DAMAGE THAT MAY
HAVE OCCURRED DURING TRANSPORTATION.

 

NOTE: Task should be performed after Engine transportation from removal location
to locatin where visual inspections are carried-out.

   N/A      

 

--------------------------------------------------------------------------------

2.9   

GENERAL VISUAL INSPECTION OF ENGINE

DRAIN LINES.

   AMM 71-71-00-200-802       2.10   

OPERATIONALLY CHECK LEFT/RIGHT

ENGINE ALL DRAIN LINES.

 

For info only: every 6 years

   MPD 71-040-01/02 AMM 71-71-00-700-801       3    ENGINE STAND AND COVER
INSPECTION          3.1   

PERFORM GENERAL VISUAL INSPECTION OF

ENGINE SHIPPING STAND (BASE AND

CRADLE) INCLUDING WHEELS, TOW BARS,

RIGHT GUARDS FOR ANY DAMAGES AND

MISSING PARTS.

REPORT TO MTU LEASE GROUP ANY

FINDINGS OR MISSING PARTS.

   N/A       3.2   

INSPECT ENGINE COVER FOR DAMAGES

SUCH AS TEARS AND HOLES.

   N/A       4    ENGINE OIL SYSTEM INSPECTION          4.1   

DETAILED INSPECTION OF THE LEFT/RIGHT ENGINE FWD SUMP, AFT SUMP, AGB/TGB
MAGNETIC CHIP DETECTORS FOR PARTICLES (FOR ENGINES WITH MCD) OR INTERROGATE DMS
FOR CHIP DETECTOR STATUS.

NOTE: FOR ENGINES WITH DEBRIS

MONITORING SYSTEM.

 

For info only: Inspection Threshold 500 FH,

Repeat 500 FH.

  

MPD 72-320-01/02 AMM 79-00-00-200-804

AMM 79-00-00-710-801

  

CONTAMINATION FOUND:

YES

NO

Note: circle as approprIate.

                4.2   

REMOVE, INSPECT, AND REPLACE THE LEFT/RIGHT ENGINE OIL SUPPLY FILTER ELEMENT.

INSPECT FOR CONTAMINATION AND

IDENTIFY AS NECESSARY. REPLACE WITH

NEW FILTER AND CONSUMABLES.

 

For info only: Inspection Threshold 7500

FH, Repeat 7500 FH.

  

MPD 79-010-01/02 AMM 79-21-03-000-802

AMM 79-21-03-400-801

  

CONTAMINATION FOUND:

YES

NO

Note: circle as appropriate.

  

 

 

29

 

--------------------------------------------------------------------------------

4.3  

DETAILED INSPECTION OF THE LEFT/RIGHT

ENGINE OIL SUPPLY FILTER POP-OUT

INDICATOR.

   AMM 79-00-00-200-805                                4.4  

REMOVE, INSPECT, AND REPLACE THE

LEFT/RIGHT ENGINE OIL SCAVENGE FILTER ELEMENT.

INSPECT FOR CONTAMINATION AND

IDENTIFY IF NECESSARY. REPLACE WITH

NEW FILTER AND CONSUMABLES.

 

For info only: Inspection Threshold 7500

FH, Repeat 7500 FH.

  

MPD 79-040-01/02 AMM 79-21-06-000-801

AMM 79-21-06-400-801

  

CONTAMINATION

FOUND:

YES

NO

Note: circle as appropriate.

   4.5  

DETAILED INSPECTION OF THE LEFT/RIGHT

ENGINE STARTER MAGNETIC CHIP

DETECTOR FOR METAL CHIPS.

 

For info only: Inspection Threshold 1600

FC, Repeat 1600 FC

   MPD 80-010-01/02 AMM 80-11-01-200-801   

CONTAMINATION

FOUND:

YES

NO Note: circle as

appropriate.

   4.6  

EXTERNAL OIL SYSTEM INSPECTION

NOTE: applicable to engine areas only.

   AMM 79-00-00-200-802       5   ENGINE FUEL SYSTEM INSPECTION    5.1  

REMOVE AND REPLACE THE LEFT/RIGHT

ENGINE FUEL FILTER .

REPLACE WITH NEW FILTER AND

CONSUMABLES.

 

NOTE: Do not install Fuel Filters listed in

AD 2006-26-01!

Record part number of newly installed Fuel Filter.

 

For info only: Inspection Threshold 6000

FH, Repeat 6000 FH

  

MPD 73-010-01/02 AMM 73-11-02-000-801

AMM 73-11-02-400-801

FAA AD Note 2006-26-01

  

CONTAMINATION

FOUND:

YES

NO

Note: circle as

appropriate.

New P/N installed:             

                            

            

  

--------------------------------------------------------------------------------

5.2   IF ENGINE FUEL FILTER IS CONTAMINATED: CHECK FUEL NOZZLE FILTER FOR
CONTAMINATION AND REPLACE WITH NEW FILTER ELEMENT.   

AMM 73-11-03-000

AMM 73-11-03-400

  

CONTAMINATION

FOUND:

YES

NO

  

                

       

Note: circle

as appropriate.

   5.3   FUEL MANIFOLDS INSPECTION/CHECK.   

AMM 73-11-05--700-801

CFMI SB 72-0876

                       6   FAN/INTERMEDIATE CASE INSPECTION          6.1  

DETAILED INSPECTION OF LEFT/RIGHT ENGINE INLET AND FAN BLADES.

 

For info only: Inspection Threshold 2500 FH, Repeat 2500 FH.

  

MPD 72-020-01/02

AMM 72-21-00-220-801

      6.2  

RELUBRICATE LEFT/RIGHT ENGINE FAN BLADES DOVETAIL. (FAN BLADES REMOVED) VISUALLY
INSPECT REMOVED COMPONENTS AND EXPOSED AREAS (SPINNER CONE, RETAINING RING,
PLATFORMS, SPACERS, FAN BLADES, SHIMS, FAN DISK, ETC..).

PAY SPECIAL ATTENTION FOR EVIDENCE OF BIRD STRIKE AND/OR FOD DAMAGE.

NOTE: To be performed if required and based on last lubrication (MTU to advise).

  

MPD 72-025-01/02 AMM 72-21-00-640-801

CFMI CESM 005

AMM 72-21-01-200-801

AMM 72-21-02-200-801

CFMI SB 72-0884

        For Info only: Inspection Threshold 5000 FH or 3000 FC, Repeat 5000 FH
or 3000 FC (Whichever occurs first!) SB 72-0884 inspection once a year.         
6.3  

PREPARE ACTUAL FAN BLADE DISTRIBUTION LIST WHICH INCLUDE ENGINE SERIAL NUMBER,
ISSUE DATE, FAN BLADE POSITION, PART NUMBER, SERIAL NUMBER, MOMENT WEIGHT AND
TECHNICIAN OR INSPECTOR NAME WITH SIGNATURE. CHECK EFFECTIVITY OF SB 72-0797 FOR
EACH FAN BLADE AND RECORD COMPLIANCE.

NOTE: Applicable only if Fan Blades are removed.

   CFMI SB 72-0797       7   HPC FRONT STATOR/COMBUSTION CASE INSPECTION      
  

 

 

31

 

--------------------------------------------------------------------------------

7.1   HPC FRONT STATOR INSPECTION.    AMM 72-32-00-200-801       7.2  
COMBUSTION CASE INSPECTION.    AMM 72-41-00-200-801                        8  
LPT MODULE INSPECTION    8.1  

VISUAL CHECK OF THE LEFT/RIGHT

ENGINE AFT MOUNTS CLEVIS FOR

STRUCTURAL

INTERGRITY FAILURE.

  

MPD 72-300-01/02

AMM 72-56-00-200-802

       

For info only: Inspection Threshold 7500

FH, Repeat 7500 FH.

         8.2   LOW PRESSURE TURBINE CASE INSPECTION.    AMM 72-54-00-200-801   
   9   ENGINE EXHAUST SYSTEM INSPECTION                           9.1  

DETAILED INSPECTION OF THE LEFT/RIGHT

ENGINE EXHAUST PLUG DRAIN PAN AND

TUBE FOR CONDITION AND SECURITY.

   MPD 78-011-01/02
AMM 78-11-00-210-803        

NOTE: Applicable to Engine with Exhaust

Plug equipped with Drain Pad and tube system installed.

ACCESS NOTE: Engine Exhaust Plug removal required.

For info only: Inspection interval every engine change.

         9.2  

PRIMARY NOZZLE ASSEMBLY AND PRIMARY

PLUG ASSEMBLY INSPECTION.

   AMM 78-11-00-210-802       9.3  

VISUALLY INSPECT PRIMARY EXHAUST

NOZZLE LABYRINTH SEALS.

   AMM 78-11-00-210-801       10   ACCESSORY GEARBOX MODULE INSPECTION         
10.1  

VISUAL CHECK OF THE LEFT/RIGHT ENGINE ACCESSORY GEARBOX/TRANSFER GEARBOX MOUNT
FLANGES AND FAN CASE AND FAN

FRAME ATTACHMENT MOUNTS.

 

For info only: Inspection Threshold 15000

FH, Repeat 15000 FH.

  

MPD 72-070-01/02
AMM 72-20-00-210-801

AMM 72-60-00-200-801

AMM 72-63-00-200-801

      11   FRONT MOUNT, AFT MOUNT, THRUST MOUNTS AND THRUST LINKS INSPECTION   

--------------------------------------------------------------------------------

11.1   

GENERAL VISUAL INSPECT FORWARD ENGINE MOUNT ASSEMBLY INCLUDING FAN CASE FITTING,
SIDE LINKS, HANGER AND LINK PINS.

 

For info only: Inspection Threshold 6 YRS, Repeat 18000 FC whichever comes
first.

  

MPD 54-010-01/02 AMM 51-05-01-210

AMM 54-05-03-210

                          

                                             

11.2   

GENERAL VISUAL INSPECT LEFT STRUT ATTACH BOLTS AT FORWARD ENGINE MOUNT.

 

For info only: Inspection Threshold 9 YRS, Repeat 18000 FC whichever comes
first.

  

MPD 54-015-01/02 AMM 51-05-01-210

AMM 54-05-03-210

      11.3   

GENERAL VISUAL INSPECTION OF FORWARD AND AFT ENGINE MOUNT TO STRUT SHEAR PINS.

 

NOTE: Engine off-wing.

 

For info only: Inspection intervall at engine removal.

  

MPD 54-020-01/02 AMM 51-05-01-210

AMM 54-05-03-210

      11.4   

GENERAL VISUAL INSPECTION OF AFT ENGINE MOUNT ASSEMBLY INCLUDING THRUST LINKS
AND THRUST LINK PINS; MOUNT TO ENGINE LEFT, CENTER AND RIGHT LINKS, INCLUDING
LINK PINS; HANGAR AND EVENER BAR; ATTACH BOLTS.

 

For info only: Inspection Threshold 6 YRS, Repeat 18000 FC.

  

MPD 54-030-01/02 AMM 51-05-01-210

AMM 54-05-03-210

      11.5   

VISUAL CHECK OF THE LEFT/RIGHT ENGINE ATTACHMENT BOLTS FOR THE THRUST MOUNT
FITTINGS.

 

For info only: Inspection Threshold 10000

FC, Repeat 10000 FC.

   MPD 72-100-01/02 AMM 72-23-04-200-802       11.6    VISUAL CHECK OF THE
LEFT/RIGHT ENGINE THRUST MOUNT FITTINGS. For info only: Inspection Threshold
15000 FH, Repeat 15000 FH.    MPD 72-110-01/02AMM 72-2304-200-801       11.7   
THRUST LINKS VISUAL INSPECTION.    AMM 71-21-02-210-802      

 

 

33

 

--------------------------------------------------------------------------------

11.8   

AFT ENGINE MOUNT VISUAL INSPECTION.

 

NOTE: Engine off-wing.

 

NOTE: Ensure Aft Mount and Center Link has correct marking IAW BOEING alert SB
737-71A1462 and that the Center Link is correctly installed on Aft Mount. Please
advise to MTU leasegroup if Center Link was incorrectly installed or if markings
are missing from Aft Mount Assy.

  

AMM 71-21-00-200-805

FAA AD Note 201-118-10

BOEING SB 737-

71A1462 REV.3

                                           12    HYDRAULIC SYSTEM COMPONENTS
INSPECTION    12.1   

REPLACE EDP CASE DRAIN FILTER ELEMENT.

REPLACE WITH NEW FILTER ELEMENT AND

CONSUMABLES.

 

NOTE: If you find a large quantity of small metal particles, large metal
particles that are not of equal dimensions, or a large quantity of steel
particles, then replace the hydraulic pump. Write down the results of the filter
inspection and give them to the pump overhaul facility.

 

For info only: Inspection Threshold 2400 FH, Repeat 2400 FH.

  

MPD 29-050-01/02 AMM 29-11-51-000-801

AMM 29-11-51-400-801

  

CONTAMINATION

FOUND:

 

YES

NO

 

Note: circle

as

appropriate.

   13    GENERAL INSPECTION OF IDG (IF INSTALLED) 13.1   

CHANGE IDG OIL.

 

For info only: Threshold 1800 FH, Repeat 1800 FH

   MPD 24-010-01/02 AMM 12-13-21-600-802       13.2   

DETAILED INSPECTION OF IDG DELTA P

INDICATOR.

 

NOTE: When the DPI is in the up position and if the DPI resets decal (if
installed) shows it is the 4th DPI extension, the IDG must be replaced.

 

For info only: Threshold 800 FH, Repeat 800 FH.

   MPD 24-020-01/02 AMM 12-13-21-200-802       13.3   

DETAILED INSPECTION OF IDG OIL

LEVEL.

 

For info only: Inspection Threshold 800 FH, Repeat 800 FH.

   MPD 24-030- 01/02 AMM 12-13-21-200-801      

 

--------------------------------------------------------------------------------

13.4    REPLACE IDG CHARGE AND SCAVENGE OIL FILTER INSPECT FOR CONTAMINATION AND
IDENTIFY IF NECESSARY. REPLACE WITH NEW FILTER AND CONSUMABLES.   

MPD 24-040-01/02 AMM 24-11-41-000-801

AMM 24-11-41-200-801

AMM 24-11-41-400-801

   CONTAMINATION FOUND:   

                             

   Note: If the scavenge filter and the IDG oil condition are not satisfactory,
or the DPI Resets decal (if installed) shows it is the 4th extension, the IDG
must be replaced.      

YES

NO

      For info only: Inspection Threshold 1800 FH, Repeat 1800 FH.      

Note: circle

as appropriate.

   13.5    TORQUE CHECK OF IDG QUICK ATTACH/DETACH (QAD) COUPLING.    MPD
24-050-01/02 AMM 24-11-61-200-801          For info only: Inspection Threshold
3600 FH, Repeat 3600 FH.          13.6    INSPECT (GVI) THE ENGINE IDG SURFACE
AIR COOLED OIL COOLER    MPD 24-060-01/02 AMM 24-11-21-200-801          For info
only: Inspection Threshold 7560 FH, Repeat 7560 FH.          14    INSPECTION OF
ELECTRICAL HARNESSES, CABLES    14.1    STANDARD ENGINE WIRING AND EQUIPMENT
CHECK.   

AMM 70-70-01 -200-801

(without retension test)

         NOTE: The retention test for the connector sockets is not required.   
      14.2    IGNITION EXCITER INSPECTION.    AMM 74-11-01-200-801       14.3   
DETAILED INSPECTION OF BOTH IGNITION PLUGS.   

AMM 74-21-02-200-801

CESM 006

  

IGNITION

PLUGS

REPLACED:

      Plug Replacement interval 1000 cycle or 2000hr (whichever comes first)   
  

YES

NO

                 

NOTE: circle

as

appropriate

     14.4    DETAILED INSPECTION OF BOTH ENGINE IGNITION LEADS.    MPD
74-020-01/02 AMM 74-21-01-200-801          For info only: Inspection Threshold
4000 FC, Repeat 4000 FC.         

 

 

35

 

--------------------------------------------------------------------------------

14.5   

DETAILED INSPECTION OF CONNECTORS

FOR TIGHTNESS (ALL CONNECTORS ON HARNESS J5, J6, J7, J8, J9, CJ9, J10, CJ10,
MW0301, MW0302, MW0303 AND MW0304).

For info only: Inspection Threshold 15000 FH, Repeat 15000 FH.

   MPD 20-120- 01/02
AMM 05-55-10-220-801                           
                                              14.6   

INSPECT (DETAILED) THE IDG POWER

FEEDER WIRING AND CONNECTED EWIS-ENGINE #1/#2 (EZAP).

 

For info only: Inspection Threshold 5500 FC or 30 MO, Repeat 5500 FC or 30 MO
(whichever comes first)

  

MPD 20-470/480-00

AMM 05-42-04-211-801/802

AMM 20-60-03-100-801

      15    VIDEO BORESCOPE INSPECTION (TO BE PERFORMED POST GROUND RUN OR POST
TEST CELL RUN) 15.1    BORESCOPE INSPECTION PREPARATION.    AMM 72-00-00-200-802
      15.2   

PERFORM VIDEO BORESCOPE INSPECTION

OF BOOSTER STG. 2 THROUGH STG.4

BLADES.

   AMM 72-00-00-200-803          NOTE: Following areas have to be inspected - LE
of STG.2 Blades through the inlet to the primary gas path or the booster inlet,
TE of STG. 3 Blades through the borescope port S0, LE of STG.4 Blades through
the borescope port S0.          15.3    PERFORM VIDEO BORESCOPE INSPECTION OF
HPC ROTOR BLADES STG. 1 TROUGH STG.9.    AMM 72-00-00-200-804          NOTE:
Inspect all blades Leading Edge (LE) and Trailing Edge (TE).          15.4   

PERFORM VIDEO BORESCOPE INSPECTION

OF COMBUSTOR.

   AMM 72-00-00-200-805            NOTE: Do a “complete inspection” (Dome Assy,
Inner & Outer Liner, Fuel Nozzles tips, Swirlers)
using main igniter plugs and all available
combustor borescope plugs. Use fiberscope to
view all inspection areas.                15.5   

PERFORM VIDEO BORESCOPE INSPECTION

OF HPT NOZZLE GUIDE VANES.

 

NOTE: Perform complete 360° fiberscope inspection of LE (concave side) and TE
(convex side).

  

AMM 72-00-00-200-806

(SAC & DAC engines)
AMM 72-00-00-200-818

(TI & BE engines)

     

--------------------------------------------------------------------------------

15.6   

PERFORM VIDEO BORESCOPE INSPECTION

OF HPT BLADES.

 

NOTE: Perform inspection of LE & TE and Tips of the HPT Blades.

   AMM 72-00-00-200-807                           
                                     15.7    PERFORM VIDEO BORESCOPE INSPECTION
OF HPT SHROUDS. NOTE: Perform complete 360° fiberscope inspection of HPT Shrouds
from forward side and aft side.    AMM 72-00-00-200-815       15.8   

PERFORM VIDEO BORESCOPE INSPECTION OF LPT NOZZLE STG. 1.

 

NOTE: Perform complete 360° fiberscope inspection of LE and TE.

   AMM 72-00-00-200-811       15.9   

PERFORM VIDEO BORESCOPE INSPECTION OF LPT STG. 1 THROUGH 3 BLADES.

 

NOTE: Perform inspection of LE & TE.

   AMM 72-00-00-200-808       15.10   

PERFORM VIDEO BORESCOPE INSPECTION OF LPT STG. 4 BLADES.

 

NOTE: Perform inspection of LE & TE.

  

AMM 72-00-00-200-809

      16    POST BSI TASKS       16.1    REINSTALL ALL BSI PLUGS AND REMOVED
‘ACCESS’ HARDWARE.    AMM 72-00-00-200       16.2    HANDCRANKING DRIVE COVER
INSTALLATION.    AMM 72-63-01-400-801       16.3   

INDENPENDENT INSPECTION OF CORRECT INSTALLATION OF THE HAND-CRANKING COVER.

 

NOTE: Applicable for PRE SB 72-0564 or PRE SB 72-0879 engine.

  

AMM 72-63-01-400-801

EASA AD 2012-0209

FAA AD Note 2013-26-01

CFMI SB 72-0564, 72-0879

      17    ENGINE PREPARATION FOR STORAGE AND SHIPMENT         

 

 

37

 

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17.1   

PERFORM OUTGOING PHOTO DOCUMENTATION OF ENGINE BUILD CONFIGURATION. (FOLLOWING
VIEWS: FRONT, RH FAN MODUL, BOTTOM FAN MODULE, LH FAN MODULE, UPPER FAN MODULE,
RH CORE MODULE, BOTTOM CORE MODULE, LH CORE MODULE, UPPER CORE MODULE, REAR,
ENGINE DATA PLATE, ENGINE OWNER PLATE, RH SHIPPING STAND GENERAL VIEW, LH
SHIPPING STAND GENERAL VIEW, SHIPPING STANDS WHEEL, SHIPPING STAND
IDENTIFICATION PLATES, SHIPPING STAND TOWING BARS, SHIPPING STAND BASE AND
CRADLE IDENTIFICATION PLATE).

 

NOTE: After engine (ground run) or test cell run.

   N/A                                                                 17.2   
DRAIN ENGINE FUEL AND OIL SYSTEM FOR AIR TRANSPORTATION AS APPLICABLE. ATTACH
INFORMATION LABEL ON ENGINE OIL TANK THAT ENGINE SYSTEMS HAVE BEEN DRAINED.   

AMM 12-13-11-600-803

AMM 71-00-03-600

      17.3    ENSURE ALL ENGINE OPENINGS ARE SEALED, INCLUDING STRUTS, PIPING
AND ACCESSORY OPENINGS WITH CAPS OR PLUGS AND PLASTIC FILM.   

AMM 71-00-03-600-811

(ON WING)

ESM 72-00-00-500-001

(TEST CELL)

      17.4   

INSTALL DESICCANT AND ENGINE COVER. CLOSE THE COVER.

 

NOTE: Do not let desiccant touch the engine hardware.

  

AMM 71-00-03-600-811

(ON WING)

ESM 72-00-00-500-001

(TEST CELL)

      17.5    PERFORM PHOTO DOCUMENTATION OF COVERED ENGINE INCLUDING SHIPPING
STAND. (FOLLOWING OVERALL VIEWS: FRONT, RH SIDE, LH SIDE, REAR)    N/A      
17.6    PERFORM EASA FORM ONE WITH FAA DUAL RELEASE OR FAA FORM 8130-3 WITH EASA
DUAL RELEASE FOR THE REALIZED END OF LEASE INSPECTION.    N/A      

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Appendix D – Use Fee Amount (Flight Hour)

 

Flight Hour to

Cycle Ratio

   Up to . 87      87 – 1.12      1.12 – 1.37      1.37 – 1.62      1.62 – 1.87
     1.87 – 2.12      2.12 – 2.37      2.37 – 2.62      2.62 – 2.87     
2.87 – 3.12      More
than
3.12  

U.S. Dollars ($) per Flight Hour

     *               *               *               *               *         
     *               *               *               *               *         
     *         

NOTE: These amounts are subject to annual escalation at the rate of *        per
annum commencing on January 1, 2018 (monthly derate above 12%).

 

39

 

*

The confidential portion has been omitted pursuant to a request for confidential
treatment filed by Air T, Inc. with the Securities Exchange Commission and filed
separately with the Commission.

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Appendix E – Harsh Environment Countries

 

Harsh Environment Countries Afghanistan Algeria Armenia Azerbaijan Bahrain
Burkina Faso Chad Djibouti Egypt Eritrea Ethiopia Gambia Georgia Guinea
Guinea-Bissau Iran Iraq Israel Jordan Kazakhstan Kuwait Kyrgyzstan Lebanon Libya
Mali Mauritania Mongolia Morocco Niger Oman Pakistan Palestinian Territories
Qatar Saudi Arabia Senegal Sierra Leone Somalia Sudan Syria Tajikistan Tunisia
Turkmenistan United Arab Emirates Uzbekistan Yemen

 

40

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Appendix F – Non-Incident Statement

(Lessee shall submit the following statement on Sub-Lessee’s Letterhead to
Lessor upon return of the Engine.)

NON-INCIDENT STATEMENT

Dated:                     

                     (“Operator”) warrants and represents that to the best of
its knowledge and belief based upon a reasonable due diligence of the Engine (as
herein defined), at the time of the delivery of such engine and/or engine
part(s) more particularly described as one CFM International, Inc. model:
CFM56-7 aircraft engine, bearing engine serial number: 874357 (collectively, the
“Engine”), together with the respective records and documentation, to Contrail
Aviation Support, LLC (“Lessor”), as of the above referenced date:

 

Engine first operated by Operator on:    Total Hours as received:    Total
Cycles as received: Engine last operated by Operator on:    Total Hours at
return:    Total Cycles at return: Operated at Thrust Level:   

During the period of time Operator operated and maintained the Engine, including
the components, parts or materials installed therein or thereon:

 

1.

such Engine was not obtained from any military or government source; and

 

2.

such Engine, was not (i) involved in an accident, incident, fire or a major
failure, (ii) exposed to extreme environmental conditions, severe stress or heat
beyond limits, (iii) immersed in salt water or exposed to corrosive agents
outside normal operation, unless, in each case, the Engine, and/or such
components, parts, or materials have been restored to a serviceable condition in
accordance with the original engine manufacturer’s approved technical data.

This statement, including the warranty and representations described herein, may
be disclosed to customers of Lessor or any other third party recipient of such
Engine.

 

By:                     

Typed Name:                     

Title:                     

Note: An authorized officer or designee of Operator shall sign this statement. A
mechanically applied signature is not acceptable.

 

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Appendix G – Form of Certification and Representation Regarding Items Subject to
Export

Control Requirements

Certification and Representation

Regarding Items Subject to Export Control Requirements

The information provided on this certification shall be used by Contrail
Aviation Support, LLC (“Contrail”), for the purpose of ensuring compliance with
U.S. laws and regulations regarding export controls and economic sanctions. All
information provided on this form shall be treated as proprietary and shall not
be provided to a third party, other than upon the request of the U.S.
Government, without prior authorization from MTU Maintenance Services B.V
(“MTU”). MTU understands that items, technical data, and/or services to be
provided by Contrail are subject to U.S. Government export control requirements
and certifies and represents that MTU:

 

(1)

Intends that the items, technical data, and/or services provided by Contrail are
solely for civil end-use and will not be used for any other purpose or end-use
connected with weapons proliferation, satellite usage, military applications,
chemical biological or nuclear weapons, or items capable of delivering such
weapons unless prior authorization is sought and obtained from the relevant U.S.
Government agencies pursuant to the Export Administration Regulations, the
International Traffic in Arms Regulations or the relevant sanctions regimes
maintained by the U.S. Department of the Treasury’s Office of Foreign Assets
Controls;

 

(2)

Understands that the items, technical data and/or services will not be used for
any purpose related to a military end-use by the People’s Republic of China;

 

(3)

Understands that the items may not be exported or re-exported for the use of a
foreign vessel or aircraft unless, under the EAR, a license exception exists or
no license is required to ship the items to: (a) the country in which the vessel
or aircraft is located; (b) the country in which the vessel or aircraft is
registered (or will be registered if under construction); and (c) the country
(or foreign national) which controls, leases, or charters the vessel or
aircraft;

 

(4)

Will not transfer, export or re-export items, technical data, and/or services
provided by Contrail to destinations subject to a U.S. or U.N. arms embargo, to
a destination subject to anti- terrorism export controls, or in a manner
otherwise contrary to U.S. law, including, but not limited to Iran, Sudan, North
Korea, Syria and Cuba;

 

(5)

Is not debarred, suspended, prohibited or impaired from exporting, re-exporting,
receiving, purchasing, procuring, or otherwise obtaining any product, commodity
of technical data regulated by any agency of the U.S. Government; and

 

(6)

Will use the item(s), technical data and/or service provided by Contrail for:
subleased spare engine for commercial use only.

 

(7)

If other than MTU or an operator in the United States of America, please
identify the ultimate end user(s) and country(ies) of ultimate destination of
the item(s), technical data and/or services (Attach a separate sheet if
necessary)

Name:

Address:

Ultimate Destination:

 

(8)

In the event there are additions or changes to the information provided above,
MTU shall provide the new information to Contrail, in writing, as soon as it
becomes available.

 

42

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MTU further certifies and represents that item(s), technical data, and/or
services to be provided by Contrail, either directly or indirectly:

 

(9)

Will not be transferred to any department, branch, or agency of, or controlled
by, the Chinese military;

 

(10)

Will not be used for any purpose related to a military end-use by the People’s
Republic of China;

 

(11)

Will not be incorporated into a military item;

 

(12)

Will not be used to operate, install, maintain, repair, overhaul, or refurbish a
military item;

 

(13)

Will not be used in the design (including design research, analyses, concepts,
configuration design, integration design), pilot production schemes, assembly
and testing of prototypes, or layouts related to a military item;

 

(14)

Will not be used in the production of a military item, including product
engineering, manufacturing, integration assembly, mounting, testing, assembly,
inspection, and quality assurance;

 

(15)

Will not be deployed as a military item, including placed in battle formation or
appropriate strategic position; and

 

(16)

In the event there are additions or changes to the information provided above,
MTU shall provide the new information to Contrail, in writing, with the order
that will be thereby affected.

 

43