Document:

EX-10.16

 Exhibit 10.16 

 
 

 
 RATE PER FLIGHT HOUR AGREEMENT 

FOR 

CFM56-5B 

ENGINE SHOP MAINTENANCE SERVICES 
 BETWEEN 
 CFM INTERNATIONAL, INC. 

AND 

AVIANCATACA HOLDING S.A. 

Service Agreement Number: 1-2722979761 
 Dated:
February 6, 2013 
  

PROPRIETARY INFORMATION NOTICE 
 The information contained in this document is CFM International, Inc. (“CFM”) and AVIANCATACA HOLDING S.A. (“AVIANCATACA”) Proprietary Information and is disclosed in
confidence. It is the property of the Parties and will not be used, disclosed to others or reproduced without the express written consent of the Parties. If consent is given for reproduction in whole or in part, this notice and the notice set forth
on each page of this document will appear in any such reproduction. U.S. export control laws may also control the information contained in this document. Unauthorized export or re-export is prohibited. 

 TABLE OF CONTENTS 

 

							
	 1.
	 	 DEFINITIONS
	  	 	3	  
	 2.
	 	 SCOPE OF THE SERVICE AGREEMENT
	  	 	3	  
	 3.
	 	 TERM OF THE SERVICE AGREEMENT
	  	 	3	  
	 4.
	 	 ENGINES AND OPERATING PARAMETERS
	  	 	3	  
	 5.
	 	 CFM SERVICE PROGRAM
	  	 	3	  
	 6.
	 	 ENGINE SHOP VISIT
	  	 	5	  
	 7.
	 	 PRICES
	  	 	7	  
	 8.
	 	 INVOICING AND PAYMENT TERMS
	  	 	7	  
	 9.
	 	 WARRANTY AND LIMITATION OF LIABILITY
	  	 	7	  
	 10.
	 	 DELIVERY – REDELIVERY
	  	 	8	  
	 11.
	 	 TURN AROUND TIME
	  	 	9	  
	 12.
	 	 ADDITION TO/ REMOVAL FROM SERVICE AGREEMENT
	  	 	9	  
	 13.
	 	 COMMUNICATION
	  	 	10	  
	 14.
	 	 GENERAL TERMS AND CONDITIONS
	  	 	11	  

  
 CFM
PROPRIETARY INFORMATION – SUBJECT TO RESTRICTIONS ON THE FIRST PAGE 
  
 2 

 THIS RATE PER FLIGHT HOUR AGREEMENT FOR ENGINE SHOP MAINTENANCE SERVICES (“Service
Agreement”) is made this 6th day of February, 2013, by and between AviancaTaca Holding S.A., a company duly organized under the laws of Panama having a principal place of business at Centro Administrativo, Avenida El Dorado, Bogota,
Colombia (“AVIANCATACA”), and CFM International, Inc., having its principal place of business at 6440 Aviation Way, West Chester, Ohio 45069 USA (“CFM”), (each a “Party” and collectively
referred to herein as “Parties”). 
 WHEREAS, AVIANCATACA desires to enter into the Service Agreement
with CFM whereby CFM will perform or cause to be performed the maintenance, repair, and overhaul of certain CFM56-5B engines operated by AVIANCATACA (“MRO”). 
 WHEREAS, CFM agrees to provide or cause to be provided such MRO services. 

NOW THEREFORE, in consideration of the mutual covenants herein contained, the Parties agree as follows: 

 

	1.0	DEFINITIONS 

Capitalized terms used in this Service Agreement and not otherwise defined have the meanings set forth in Exhibit A. 

 

	2.0	SCOPE OF THE SERVICE AGREEMENT  

 This Service Agreement contains the terms and conditions applicable to the sale by CFM and the purchase by AVIANCATACA of the CFM Service Program. 

The Engines covered by this Service Agreement are described in Article 4. 

CFM will provide the Covered Services on the basis of a combination of a Popular Rate and a Restored Rate per Engine Flight Hour covering
each Engine for a period of fifteen (15) years from the date of each Engine delivery to AVIANCATACA. 
 [*] 

 

	3.0	TERM OF THE SERVICE AGREEMENT 

 This Service Agreement will commence on the date of execution of this Service Agreement, (the “Commencement Date”). Each Engine will be covered by this Service Agreement for the period
beginning on the delivery date of such Engine to AVIANCATACA and covered for a period of fifteen (15) years, as specified in Exhibit B. 
 This Service Agreement will continue, unless sooner terminated, for a period ending on the earlier to occur of the completion of the coverage period described above or [*] (the “Term”).

  

	4.0	ENGINES AND OPERATING PARAMETERS 

 The Engines covered by this Service Agreement and the base operating parameters are set forth on Exhibit B. 
  

	5.0	CFM SERVICE PROGRAM 

  

	5.1	Covered Services 

  

	5.1.1	[*] 

 [*] 

  
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	5.1.3	Engine Management Services and Diagnostic Services 

 CFM will provide the following diagnostics services: 
  

	 	a.	Engine condition data will be automatically processed by diagnostics software 24 hours a day, 7 days a week (“24x7”) when received at the designated
CFM facility. CFM will be responsible for operating and maintaining the diagnostics software and the necessary facilities. AVIANCATACA shall have access to the web-based tools for reviewing Engine condition data and assessing Engine health.

  

	 	b.	Customer Notification Reports (“CNR”) for Engine condition monitoring trend shift observation, including engineering review, analysis, and
recommendations will be provided to AVIANCATACA, as requested by AVIANCATACA, on a 24x7 basis. 

  

	 	c.	Monthly Engine thrust derate report. 

  

	 	d.	Access to diagnostics engineers for Engine diagnostic support and consultation as required. 

 

	 	e.	Periodic teleconference to review reports and program status. 

  

	 	f.	Weekly engine health trend summary and analysis reports. 

 AVIANCATACA acknowledges and agrees that any such information provided to AVIANCATACA by CFM for use in troubleshooting and managing operations is, for regulatory purposes, advisory only, that CFM is not
responsible for line maintenance or other actions or consequences resulting from such advice, and for purpose of compliance with AAA requirements, AVIANCATACA is solely responsible for identifying and resolving any aircraft or Engine faults or
adverse trends. 
  

	5.1.4	Lease Engine Coverage 

  

	 	A.	CFM shall use reasonable efforts to provide the following lease engine coverage 

 

	 	i.	If AVIANCATACA has an aircraft on ground (“AOG”) situation because the number of Engines in process at the CFM Designated Repair Station for Qualified
Shop Visits exceeds the required quantity of spare Engines, as set forth in Exhibit B, and none of AVIANCATACA’s spare Engines are available because they are either receiving a Qualified Shop Visit or installed on an aircraft operated by
AVIANCATACA and not by a third party, AVIANCATACA is eligible for the lease engine coverage described in this Article 5.1.4, 

  

	 	ii.	Within twenty-four (24) hours of being notified by AVIANCATACA that the above described AOG situation exists, CFM shall advise AVIANCATACA of the location of the
closest available lease engine, 

  

	 	iii.	CFM shall Deliver or cause to be Delivered, such lease engine to AVIANCATACA, Ex Works (Incoterms 2010), at a CFM housekeeping facility or other mutually agreed
location. CFM shall endeavor to provide this engine in a neutral QEC configuration. All transportation costs, including insurance will be AVIANCATACA’s responsibility, 

 

	 	iv.	CFM’s obligation to provide such lease engine will terminate when the AOG condition is corrected by the Redelivery of an Engine to AVIANCATACA and the passage of a
reasonable amount of time to install such Engine in replacement of the leased engine, subject to AVIANCATACA’s obligation to return the lease engine set forth below, 

 

	 	v.	AVIANCATACA shall pay then-current market rates (but not to exceed the EFH rate that would apply)for the hourly restoration charges and the LLP fees per flight cycle
payable under the lease in respect of the lease engine until the lease engine is removed from AVIANCATACA’s aircraft. CFM will waive the daily engine rental fees payable under the lease in respect of the lease engine. 

 

	 	B.	Lease Engine Condition: 

  

	 	  	CFM’s provision of such lease engine is predicated upon the following: 

 

	 	i.	The Parties have established a mutually agreed Removal Schedule. 

  
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	 	ii.	AVIANCATACA shall use best efforts to ship Engines for Qualified Shop Visits as soon as practicable, but no later than seven (7) Days following removal from the
aircraft if the Engine removal is a scheduled event or at an AVIANCATACA main hub (as specified in the operating parameters tables in Exhibit B). If the Engine removal is not a scheduled event and not at an AVIANCA main hub, then AVIANCTACA shall
use best efforts to ship the Engine as soon as practicable. 

  

	 	iii.	AVIANCATACA is in full compliance with the records requirements of Article 6.2. 

 

	 	  	AVIANCATACA and CFM shall negotiate and enter into an engine lease agreement based upon IATA Document No. 5016-00, MASTER SHORT-TERM ENGINE LEASE AGREEMENT, dated
December 1, 2002, as may be amended from time to time (the “IATA Master”) together with a lease agreement substantially in the form of Annex 2 thereto incorporating, subject to the terms and conditions contained in such lease
agreement, the terms of the IATA Master. 

  

	 	C.	Return of Lease Engines:  

  

	 	  	[*] 

  

	 	D.	Sole Remedy:  

  

	 	  	The foregoing provisions of this Paragraph 5.1.4 will constitute the sole remedy of AVIANCATACA and the sole liability of CFM for lease engine availability and
resolution of AOG conditions under this Service Agreement. 

  

	5.2	Additional Services 

  

	5.2.1	[*] 

  

	5.2.2	CFM Engineering Support Services 

 CFM will provide the following engineering support services: 
  

	 	a.	Notify AVIANCATACA of any deviations from the configuration specification of Engines Delivered for Service, and request resolution of same. 

 

	 	b.	Provide an Engine findings report (which may include photographs identifying damage detected and repairs) accomplished. 

 

	 	c.	Consultation on trend reports. 

  

	 	d.	Advice covering Engine enhancements. 

  

	 	e.	CFM will work with AVIANCATACA in inspection of records for used engines being considered by AVIANCATACA for acquisition and shop visit development for return of leased
engines, but AVIANCATACA shall be solely responsible for making the final determination as to the quality of the used engines. 

5.3 [*] 
  

	6.0	ENGINE SHOP VISIT 

  

	6.1	[*] 

  

	6.2	Procedure 

  

	 	a)	AVIANCATACA shall Deliver the Engine to the CFM Designated Repair Station. 

 

	 	b)	AVIANCATACA shall issue a purchase order to CFM and CFM shall accept the purchase order to the extent it complied with this Service Agreement, CFM shall process the
performance of the Services in accordance with the AVIANCATACA requirements specified in such purchase order, provided that, in any event, any conflicting terms and conditions of this Service Agreement shall take precedence over any terms and
conditions set forth on such purchase order or CFM acceptance document. 

  

	 	c)	AVIANCATACA shall provide all applicable Engine records, as required by the AAA or as reasonably requested by CFM, and the shop visit data listed in Exhibit C to the
extent that the data is not otherwise available to CFM. 

  
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	 	d)	Following Delivery of each Engine at the CFM Designated Repair Station, together with the documents described in Paragraphs (b), and (c) above, CFM shall
diligently perform or cause to be performed the Induction of the Engine and shall proceed with the Services requested by such purchase order in accordance with Paragraph (b) above. 

 

	 	e)	CFM will inform AVIANCATACA as to whether the shop visit meets the criteria for a Qualified Shop Visit within a commercially reasonable period of time, not to exceed
two (2) weeks after Induction of the Engine. 

  

	 	f)	Upon Induction, CFM will notify AVIANCATACA of any components or LRU’s missing from the Engine. CFM will replace such missing items at AVIANCATACA’s expense
as Supplemental Services, unless (i) AVIANCATACA notifies CFM in writing within forty eight (48) hours after receiving CFM’s notice that AVIANCATACA wishes to furnish such missing items; and (ii) AVIANCATACA delivers such missing
items to the CFM Designated Repair Station within three (3) weeks. 

  

	 	g)	CFM shall Redeliver a Serviceable Engine to AVIANCATACA. 

  

	 	h)	CFM will prepare and package the Serviceable Engine in shipping stands or containers provided by AVIANCATACA at the time of Delivery in accordance with CFM’s
standard commercial practices. 

  

	 	i)	CFM shall provide AVIANCATACA with copies of all work records required by AAA as agreed to in writing by CFM and AVIANCATACA. 

 

	 	j)	CFM shall use only CFM approved parts, materials and published repairs; CFM may not use any non-OEM repairs without AVIANCA/TACA’s prior approval, which may be
withheld for any reason. Any deviations from this requirement will require AVIANCATACA’s approval in advance of fitment to the Engine. For parts that are typically time tracked during the course of an overhaul, no replacement part may have a
TSN which exceeds the TSN of the Engine in which it is to be installed or of the part which it is replacing. Any replacement part must have a modification and SB status at least as high as that of the part which it is replacing.

  

	6.3	[*] 

  

	6.4	Title and Risk of Loss to Parts or Material  

 CFM furnished parts and material incorporated into an Engine will be deemed to have been sold to AVIANCATACA and title to such parts and material will pass to AVIANCATACA or the owner of the Engine with
good title to Parts free and clear upon incorporation into such Engine. Risk of loss or damage to such parts and material will pass to AVIANCATACA upon Redelivery of the Engine. 

Title to and risk of loss of any parts (including Repairable and LLP parts) removed from the Engine that are replaced by other parts will
pass to CFM free and clear upon incorporation of replacement parts into the Engine. 
 For removed parts, AVIANCATACA shall
provide the associated records, including BTB trace, non-incident statement and CFM-approved parts and repairs certification, to the extent not already available to CFM, as reasonably requested by CFM. 

 

	6.5	Engine Configuration  

 AVIANCATACA shall Deliver the Engine to the CFM Designated Repair Station in a basic engine configuration, equipped with the LRUs listed in Exhibit F. CFM shall Redeliver the Engine in the same basic
engine configuration. 
 In the event an Engine is Delivered with parts or components or QEC equipment in addition to the basic
configuration, such Engine shall be Redelivered in the same configuration as Delivered, unless otherwise mutually agreed by the Parties. Any work performed to return such parts or components or QEC equipment in a Serviceable condition will be
charged to AVIANCATACA as Supplemental Services. 
 The Engine Redelivered to AVIANCATACA will have incorporated Airworthiness
Directives and CFM Service Bulletins as specified in Article 5.1.1. 

  
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 To the extent allowed under Article 6.2, CFM may elect to use used Rotable Parts, and/or
repaired parts in Serviceable condition in Engines Redelivered to AVIANCATACA, and such Rotable Parts, and/or repaired parts will be a CFM part of similar configuration as the parts in the Engine Delivered to CFM. 

 

	6.6	Sales and Leasing Transactions.  

 Upon conducting a sale/lease back, leasing or Engine sale transaction, AVIANCATACA will promptly provide CFM with the relevant details, including the other party(ies) involved, lease term, return
conditions and any other information reasonably requested by CFM. 
 For Engines subject to a sale/lease back, leasing or Engine
sale transaction, the Parties will, to the extent permitted by the terms of such lease or sale, mutually agree to modify the Workscope and/or the LLP Minimum Build to minimize their investments in accordance with the amount of time the Engine will
be covered under the Agreement and the lease return conditions. In the event the terms of such lease or sale require another party’s consent to provide the requested information, AVIANCATACA will undertake all reasonable efforts to obtain the
required consent. 
  

	7.0	PRICES 

 *[Four
pages have been removed pursuant to a request for confidential treatment] 
  

	8.0	[*] 

  

	9.0	WARRANTY AND LIMITATION OF LIABILITY 

 For this Article 9, the term “CFM” shall be deemed to include CFM, GE and Snecma, the CFM Designated Repair Station and CFM’s subsidiaries, assigns, subcontractors, suppliers,
Services providers, and their respective directors, officers, employees, and agents. 
  

	9.1	Workmanship Warranties 

  

	9.1.1	[*] 

  

	9.1.2	Conditions and Limitation of Liability  

 This Services Warranty is applicable only if: the Engine, following Redelivery, (a) has been transported, stored, installed, operated, handled, maintained and repaired in accordance with
AVIANCATACA’s AAA approved maintenance program and applicable manuals and regulatory requirements, as well as the then-current CFM recommendations as stated in AMM or CFM manual, Airworthiness Directives, Service Bulletins or other relevant
written instructions; and (b) has not been subjected to accident, misuse, abuse or neglect. 
 Notwithstanding the
provisions of Article 9.4, any warranty for Engines or parts, LRU’s, components and material thereof, including the design, material or engineering defects of a manufacturer, will be the warranty, if any, of the manufacturer of such Engines or
parts, LRU’s, components or material thereof. 
 The foregoing will constitute the sole remedy of AVIANCATACA and the sole
liability of CFM for defective workmanship relative to the Engines. The liability of CFM connected with or resulting from the Services warranty shall not in any event exceed the cost of correcting the defect as provided above, and, upon the
expiration of the shortest period described therein, all such liability will terminate. In no event shall CFM be liable for any special, expectation, consequential, incidental, resultant, indirect, punitive or exemplary damages (including loss of
use, loss of profit or loss of revenue in connection with the Engines). 

  
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 THE SERVICES WARRANTY SET FORTH HEREIN IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES
AND GUARANTEES WHETHER WRITTEN, STATUTORY, ORAL OR IMPLIED (INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTY ARISING FROM COURSE OF DEALING, COURSE OF PERFORMANCE, OR USAGE OF
TRADE). 
  

	9.2	Assignment of Warranties 

 AVIANCATACA may not assign the Services warranty without CFM’s prior written consent. However, CFM will consent to a Services warranty assignment to AVIANCATACA’s lessor or operating
subsidiaries and affiliates upon written request, concurrent with the sale or return off lease of an Engine for which the warranty period has not expired, subject to the terms and conditions of a mutually agreed warranty assignment letter.

  

	9.3	Pre-existing Warranties. 

 AVIANCATACA will assure that any requested repair of an Engine, accessory or component that is covered under a third party warranty that is not assigned to CFM will be performed directly by that third
party at no expense to CFM. Notwithstanding the above, CFM may accept a purchase order for the time and material repair of a warranted item from AVIANCATACA or the third party giving the warranty. 

 

	9.4	Superseding Warranties.  

 During the Term of this Service Agreement, AVIANCATACA acknowledges that the obligations undertaken by CFM hereunder, except with respect to the provision of Supplemental Services hereunder, supersede the
following Warranties set forth in the GTA, and the following Special Guarantees set forth in Letter Agreement No. 1 to the GTA 
 Extended New Engine and Module Guarantee 
 Extended New Parts Guarantee 

Extended Ultimate Life Guarantee 
 Campaign Change Guarantee 
 Extended Ultimate Life Rotating Parts Guarantee

 AOG Guarantee 
 Any other Engine program considerations undertaken by CFM in any other agreement 

for these Engines, relating to shop visits. Upon termination of this Service Agreement, any such warranties or commercial obligations with
remaining life will be restored to AVIANCATACA. 
  

	10.0	DELIVERY – REDELIVERY 

  

	10.1	Delivery 

 All
Engines to be Serviced will be Delivered by AVIANCATACA to the CFM Designated Repair Station. Such Engines will be shipped within five (5) days following removal from the aircraft. AVIANCATACA will not Deliver piece parts or components for
repair separate from AVIANCATACA’s Engine without CFM’s written consent. 
  

	10.2	Packaging 

AVIANCATACA is responsible for all packaging, labeling and associated documentation of the Engine at Delivery, in accordance with the
International Civil Aviation Organizations (ICAO) Technical Instructions for the Safe Transport of Dangerous Goods by Air, and if the Engine is to be transported over the United States of America, the US Department of Transport Regulations 48 CFR
171-180. If required by applicable law or regulations, AVIANCATACA will further provide a material safety data sheet to CFM at Delivery of the Engine indicating any substances contained within the Engine to be consigned. AVIANCATACA will indemnify,
defend and hold harmless CFM from all or any claims, liabilities, damages, judgments, costs, penalties, fines and/or any punitive damages imposed, alleged, or assessed by any third party against CFM and caused by and to the extent of
AVIANCATACA’s non-compliance with this Article 10.2. 

  
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	10.3	Shipping Stands 

AVIANCATACA will provide and maintain all shipping stands, shipping containers, mounting adapters, inlet plugs and covers, required to
package the Engine for Delivery and Redelivery. 
  

	10.4	Redelivery 

 After
completion of Services, CFM will prepare and package the Engine for Redelivery to AVIANCATACA and provide a Services records package that complies with AAA regulations. 
 Redelivery dates are based upon receipt by CFM of all information necessary to permit CFM to proceed with the Services immediately and without interruption. 

In the event Redelivery of an Engine cannot occur due to any act or failure to act by AVIANCATACA, CFM may place such Engine into storage.
In such event, CFM will notify AVIANCATACA and CFM’s Redelivery obligations will be deemed fulfilled and all risk of loss or damage to the Engine shall pass to AVIANCATACA on the date of such storage. Any amounts payable to CFM upon Redelivery
will be payable thirty (30) days after the date of CFM’s invoice. Promptly upon receipt of CFM’s invoice, AVIANCATACA will reimburse CFM for all expenses incurred by CFM, including, but not limited to, preparation for and placement
into storage, handling, inspections, preservation and insurance of the Engine. Upon payment of all amounts due hereunder, CFM will assist and cooperate with AVIANCATACA in the removal of Engine that has been placed in storage. 

AVIANCATACA will indemnify, defend and hold harmless CFM from all or any claims, liabilities, damages, judgments, costs, penalties, fines
and/or any punitive damages imposed, alleged, or assessed by any third party against CFM and caused by and to the extent of AVIANCATACA’s non-compliance with this Article 10.4. 

 

	11.0	TURN AROUND TIME 

  

	11.1	[*] 

 [*] 

[*] 
  

	12.0	ADDITION TO/ REMOVAL FROM SERVICE AGREEMENT 

  

	12.1	Addition of Engines  

 AVIANCATACA and CFM may agree to amend Exhibit B to add Engines to the Service Agreement after the Commencement Date. For each added Engine, AVIANCATACA will provide the Engine serial number, aircraft
tail number, previous operator, current owner, operating time and flight cycles since new and, if applicable, the operating time and flight cycles since the last shop visit, shop visit reports, historic thrust and derate information and applicable
thrust rating. CFM will evaluate the effect on the Rate Per Flight Hour pricing, and Service Credit amounts and distribution schedule, taking into consideration effects on the fleet size, age and condition of the Engines and other commercial
considerations and may adjust the Rate Per Flight Hour pricing accordingly. 
  

	12.2	Removal of Engines 

AVIANCATACA may remove an Engine from this Service Agreement upon advance written notice, only if AVIANCATACA is no longer operating the
Engine and is no longer responsible for maintenance of the Engine for the following reasons: 
  

	 	a.	Bona fide sale or other bona fide transfer to an unaffiliated third party; 

 

	 	b.	An unplanned return to the lessor; or 

  

	 	c.	If the Engine has been reasonably determined to be BER. 

  
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 In all cases of Engine removal, provided that AVIANCATACA is in compliance with Article 6.6,
AVIANCATACA may select which Engine will be removed, provided that the engine(s) being removed is representative of a fleet average engine, unless AVIANCATACA’s lessor dictates otherwise.

Any Engine removal will be subject to the reconciliation provisions set forth below. 

 

	12.2.1	Reconciliation. The following applies to Engines removed as a result of a removal per Paragraph (a), (b) or (c) above: 

 

	 	a.	If a removed Engine has not undergone a Qualified Shop Visit for Covered Services, no penalties nor reconciliation will apply. CFM will retain the Popular Rate billings
through the date of removal. 

  

	 	b.	If a removed Engine has undergone at least one (1) Performance Restoration Shop Visit for Covered Services, no penalties nor reconciliation will apply. CFM will
retain the Popular Rate billings through the date of removal. 

  

	 	c.	If a removed Engine has undergone at least one Qualified Shop Visit for Covered Services, but not a Performance Restoration Shop Visit, CFM will calculate the total
cumulative charges for all Covered Services provided for such removed Engine as if such Services were provided on a Supplemental Services basis and the Supplemental Services pricing had applied (“Supplemental Charges”). CFM will
then compare such Supplemental Charges to the total cumulative Restored Rate Covered Services payments received from AVIANCATACA for such removed Engine. If the Supplemental Charges are greater than the total cumulative Restored Rate Covered
Services payments received from AVIANCATACA, CFM will invoice AVIANCATACA for the difference, together with a detailed explanation of the calculations reflected in such invoice. AVIANCATACA will pay such invoice within thirty (30) Days of
receipt. If the Supplemental Charges are less than the total cumulative Restored Rate Covered Services payments received from AVIANCATACA, CFM will credit to AVIANCATACA within thirty (30) Days the difference between the total cumulative
Restored Rate Covered Services payments received from AVIANCATACA and the Supplemental Charges. CFM will retain the Popular Rate billings through the date of removal. 

 

	12.2.2	Impact of Removals. CFM will evaluate the effect of the removal from the Service Agreement of more than forty percent (40%) of the Engines from the
AVIANCATACA fleet on the Rate Per Flight Hour pricing, taking into consideration effects on the fleet size, age and condition of the Engines. CFM may adjust the Rate Per Flight Hour pricing accordingly if the number of Engines covered by the Service
Agreement decreases to less than sixty percent (60%) of the total fleet of Engines operated by AVIANCATACA, without taking into account any engines that are added to the program in accordance with Article 12.1. In such event, the adjusted Rate
Per Flight Hour pricing will be mutually agreed and the Service Agreement will be amended accordingly. AVIANCATACA will pay the adjusted Rate Per Flight Hour pricing for all EFH incurred by all Engines that remain covered by the Service Agreement
from the date of the Engine removal that triggered the rate adjustment. 

 In the event the Parties do not agree on
the adjusted Rate Per Flight Hour pricing within ninety (90) Days from the date of the Engine removal that triggered the rate adjustment, CFM may terminate this Service Agreement upon written notice to AVIANCATACA. 

 

	13.0	COMMUNICATION 

 CFM
will assign a program manager who will be the point of contact for AVIANCATACA with respect to implementation of the CFM Service Program (“CFM Program Manager”). 

  
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 AVIANCATACA will also designate a point of contact to communicate with the CFM Program
Manager. 
 The CFM Program Manager will: 
  

	 	a.	Draft a Procedures Manual and submit it to AVIANCATACA for mutual approval; 

 

	 	b.	Work with the AVIANCATACA, on a monthly basis, to develop a Removal Schedule which will identify by serial number the Engine(s) to be removed during the following six
(6) month period, the anticipated reason for removal of each, and the schedule for Delivery. 

  

	14.0	GENERAL TERMS AND CONDITIONS 

 General terms and conditions provided in Exhibit I are an integral part of this Service Agreement. 
 Counterparts: This Service Agreement may be signed by the Parties in separate counterparts, and any single counterpart or set of counterparts, when signed and delivered to the other Parties shall
together constitute one and the same document and be an original Service Agreement for all purposes. 

  
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 IN WITNESS WHEREOF, the Parties hereto have executed this Service Agreement as of the day and the
year first above written. 
  

													
	CFM INTERNATIONAL, INC.	  		  	AVIANCATACA HOLDING S.A.
					
	BY:	 	 	  		  	BY:	 	 
							
	 	 	 	 	 	  		  	 	 	 	 	 
					
	PRINTED NAME:	 	 	  		  	PRINTED NAME:	 	 
							
	 	 	 	 	 	  		  	 	 	 	 	 
					
	TITLE:	 	 	  		  	TITLE:	 	 
							
	 	 	 	 	 	  		  	 	 	 	 	 

  
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 EXHIBITS 

 

			
	EXHIBIT A:	  	DEFINITIONS
		
	EXHIBIT B:	  	ENGINES COVERED AND OPERATIONAL PARAMETERS
		
	EXHIBIT C:	  	SHOP VISIT DATA
		
	EXHIBIT D:	  	PRICE ADJUSTMENT MATRIX
		
	EXHIBIT E:	  	ESCALATION
		
	EXHIBIT F:	  	LRU
		
	EXHIBIT G:	  	SUPPLEMENTAL SERVICES PRICING
		
	EXHIBIT H:	  	CFM DESIGNATED REPAIR STATIONS
		
	EXHIBIT I:	  	GENERAL TERMS AND CONDITIONS
		
	EXHIBIT J:	  	ON-SITE SUPPORT
		
	EXHIBIT K:	  	FLIGHTLINE LRU SUPPORT

  
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 EXHIBIT A: DEFINITIONS 

Capitalized terms used herein but not otherwise defined have the following meanings: 
 “Act of God”—An event that directly and exclusively results from the occurrence of natural causes beyond the reasonable control of the Parties. 

“Additional Services”—The Services described in Article 5.2. 
 “Aircraft Accident”—An occurrence caused by the operation of an aircraft in which any person suffers a fatal injury or serious injury as a result of being in or upon the aircraft or
by direct contact with the aircraft or anything attached to the aircraft, or in which the aircraft receives damage or a third party’s property is damaged in any way. 
 “Aircraft Incident”—An occurrence, other than an Aircraft Accident, caused by the operation of an aircraft that affects or could affect the safety of operations and that is
investigated and reported. 
 “Airworthiness Directive” or “AD”—A document issued by the AAA having
jurisdiction over the Engines, identifying an unsafe condition relating to such Engines and, as appropriate, prescribing inspections and the conditions and limitations, if any, under which the Engines may continue to operate. 

“AMM”—Aircraft Maintenance Manual. 
 “Approved Aviation Authority” or “AAA”—As applicable, the FAA, EASA, the Aeronáutica Civil of Colombia, Dirección General de Aviación Civil of
Ecuador, Autoridad de Aviacion Civil of El Salvador, Directorate General of Civil Aviation of Costa Rica or Dirección General de Aeronáutica Civil del Peru. 
 “Beyond Economic Repair” or “BER”—When the cost, calculated on a Supplemental Services basis, to restore an Engine to the requirements of the Repair
Specification exceeds sixty five percent (65%) of the fair market value of a comparable Serviceable engine. 
 “CFM
Designated Repair Station” or “CFM DRS” or “DRS”—The repair facilities designated by CFM, which are certified by the AAA to perform the Services hereunder and where Services are performed on Engines.

 “CFM Program Manager”—Has the meaning provided in Article 13. 
 “CFM Service Program”—All off-wing work required on an Engine to restore the Engine to Serviceable condition in accordance with the Repair Specification, the Workscope and the terms
of this Service Agreement, including Supplemental Services. 
 “CLP”—The manufacturer’s Current catalog or
manufacturer’s Current list price pertaining to a new Engine or part thereof. 
 “Commencement Date”—Has the meaning
provided in Article 3. 
 “Contracted Months”—Has the meaning provided in Article 7.3. 

“Covered Services”—The Services described in Article 5.1. 
 “Current”—As of the time of the applicable Service or determination. 

“Day”—Calendar day unless expressly stated otherwise in writing. If performance is due on a public holiday recognized by the CFM
DRS, performance will be postponed until the next business day (Monday through Friday). 

  
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 “Delivery”—The arrival of an Engine together with all applicable records and required
data Delivery Duty Paid (“DDP”), International Chamber of Commerce, Incoterms 2010, at the CFM Designated Repair Station, whereby AVIANCATACA fulfills the obligations of seller and CFM fulfills the obligations of buyer.
“Deliver” will mean the act by which AVIANCATACA accomplishes Delivery. 
 “Delivery Point”—in the case
of Flightline LRU Support, means the CFM facility located in Villaroche, France. 
 “Dollars” or “U.S.
$”—The lawful currency of the United States of America. 
 “EASA”—the European Aviation Safety Authority,

 “Engine”—Each bare engine assembly or, as applicable, Engine module, which is covered by this Service Agreement and
identified in Exhibit B, including its essential components as described in Exhibit F. 
 “Engine Flight Hour” or
“EFH”—Engine flight hour expressed in hourly increments of aircraft flight from wheels up to wheels down. 

“Entry Into Service”—The date when the Engine is delivered to AVIANCATACA by the airframer or by CFM, as a New Engine. 

“FAA”—Federal Aviation Administration of the United States 
 “FIM”—Fault Isolation Manual. 
 “Foreign Object Damage” or
“FOD”—Damage to any portion of the Engine caused by impact with or ingestion of a non-Engine object such as birds, stones, hail, ice, vehicles, tools or debris. FOD may be further classified as a “Major FOD,”
which means FOD that causes an out of limit condition per the Aircraft Maintenance Manual, and which, either immediately or over time, requires the Engine to be removed from service or prevents the reinstallation of the Engine. 

“GTA”—the General Terms Agreement between CFM and AVIANCATACA, No.CFM-1-2887169891, dated February 6, 2013. 

“IATA Master” – Has the meaning provided in Article 5.1.4. 
 “Induction”—The date work commences on the Engine at the CFM Designated Repair Station when all of the following have taken place: (i) CFM’s receipt of the Engine and
required data, (ii) Parties’ approval of the preliminary Workscope, (iii) CFM’s receipt of an acceptable purchase order, (iv) Parties’ agreement on use of the AVIANCATACA furnished equipment; and (v) receiving
inspection (including pre-testing if needed). 
 “Life Limited Part” or “LLP”—A part with a limitation on
use established by CFM or the AAA, stated in cumulative EFH or cycles. 
 “LLP Minimum Build”—The minimum quantity of
cycles and/or hours that every LLP must have at the completion of a Performance Restoration Shop Visit. The LLP Minimum Build shall be the threshold used to determine which LLP are replaced at a Performance Restoration Shop Visit. 

“Line Replaceable Unit” or “LRU”—A major control or accessory that is mounted on the external portion of an
Engine, as listed in Exhibit F. 
 “MRO” shall have the meaning provided in the recitals. 

“New Engine”—An Engine which has not undergone a shop visit, which has less than one hundred (100) EFH since new and
which contains only CFM approved parts and CFM approved repairs.  
 “On-Site Support” or
“OSS”—Has the meaning provided in Article 5.2.1. 

  
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 “Part”—A part originally sold by CFM. 

“Performance Restoration Shop Visit”—The Services, performed during a shop visit in which, at a minimum, the following modules are
exposed, disassembled and subsequently refurbished: the high-pressure turbine, combustor and the high pressure compressor, if required to retain the performance of the high-pressure compressor. If the LLP core stack is replaced, it is considered a
Performance Restoration Shop Visit. 
 “Pool”—means the collective reference to Serviceable LRU necessary for Standard
Exchange as listed in Exhibit J. 
 “Popular Rate” or “Popular Rate per Engine Flight Hour”—The Popular
Rate per Engine Flight Hour provided in Article 5.1 and priced in accordance with Article 7.1. 
 “Primary Hub”—The main
airport where AVIANCATACA performs the majority of its engine removal off wing. 
 “Procedures Manual”—A separate
document, not part of this Service Agreement, which provides detailed procedures and guidance for the administration of the Service Agreement. In case of conflict between the Procedures Manual and the Service Agreement, the Service Agreement will
prevail. 
 “Qualified Shop Visit”—Has the meaning provided in Article 5.1.1. 

“QEC”—Quick Engine Change. 
 “Rate” or “Rate Per Engine Flight Hour”—The rate for Covered Services or Additional Services as set forth in Article 7. 

“Redelivery”—The shipment of a Serviceable Engine with legally required certifications, Ex Works, International Chamber of
Commerce, Incoterms 2010, at the CFM Designated Repair Station, whereby AVIANCATACA fulfills the obligations of buyer and CFM fulfills the obligations of seller. “Redeliver” will mean the act by which CFM completes Redelivery.

 “Removal Schedule”—The schedule jointly developed by CFM and AVIANCATACA for Engine removal off wing for Services or
Engine removal from operation. 
 “Repair” – In the case of Flightline LRU Support, means the disassembly, inspection,
repair, reassembly and test when applicable, of an LRU in accordance with the applicable CFM shop manual and/or documents (such as vendor’s CMM) approved and authorized by the EASA or FAA, as applicable. 

“Repair Specification”—The AVIANCATACA repair specification which establishes the minimum baseline to which an Engine or part
thereof will be inspected, repaired, modified, reassembled and tested to make and Engine Serviceable. Such Repair Specification will meet or exceed the recommendations of CFM’s operational specifications, applicable CFM maintenance or overhaul
manuals and AVIANCATACA’s maintenance plan that has been approved by the AAA. 
 “Repairable”—Capable of being made
Serviceable. 
 “Restored Rate per Engine Flight Hour” or “Restored Rate”—Services provided pursuant to
Article 5.1 and priced in accordance with Article 7.1. 
 “Rotable Part”—A new or used Serviceable Part drawn from a
common pool of Parts used to support one or more customers. A Rotable Part replaces a similar Part removed from an Engine when such removed Part requires repair. 
 “Service(s)”—With respect to an Engine or part thereof, all or any part of those maintenance, repair and overhaul services provided under this Service Agreement as either
Covered Services or Supplemental Services. “Serviced” will be construed accordingly.  

  
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 “Service Agreement”—This Service Agreement, as the same may be amended or supplemented
from time to time, including all its Exhibits. 
 “Service Bulletin” or “SB”—The document as issued by
CFM to notify the operator of modifications, substitution of parts, special inspections, special checks, or conversion of an Engine from one model to another. 
 “Service Credit” —Credits that may be applied towards payment for Services, as described in Article 7.3. 
 “Serviceable”—Meeting all CFM and AAA specified standards for airworthiness. 

“Standard Exchange”—In the case of Flightline LRU Support, means any exchange of Unserviceable equipment with a Serviceable one
which is available and fully interchangeable with such Unserviceable equipment. 
 “Supplemental Charges”—Has the meaning
provided in Article 7.2. 
 “Supplemental Services”—Those Services provided pursuant to Article 5.3. 

“Term”—Has the meaning provided in Article 3. 
 “TSM”—Trouble Shooting Manual. 
 “TSN”—Time since new

 “Turn Around Time”—The number of Days from Induction until the Engine is ready for Redelivery (as evidenced solely by
placement of the Serviceable tag or equivalent governing agency compliance tag, on such Engine) exclusive of any Excusable Delays as defined in Exhibit I, Article 4. 
 “Unserviceable”—Not meeting all CFM and AAA specified standards for airworthiness. 
 “Used Engine”—An Engine which has undergone a shop visit or which has more than one hundred (100) EFH since new.  

“Workscope”—Has the meaning provided in Article 6.3. 
 “Workscope Planning Guide”—The document published by CFM which describes the “on condition” maintenance concept for the Engines. This document communicates
the timing and extent of work required to enable operators to achieve reliability, performance, and maintenance cost goals. 

  
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 EXHIBIT B: ENGINES COVERED AND OPERATIONAL PARAMETERS 

*[Eleven pages have been removed pursuant to a request for confidential treatment]. 

  
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 EXHIBIT I: GENERAL TERMS AND CONDITIONS 

Table of Contents 
  

					
	ARTICLE 1	  	-	  	LIMITATION OF LIABILITY AND INDEMNIFICATION
			
	ARTICLE 2	  	-	  	TERMINATION
			
	ARTICLE 3	  	-	  	TAXES
			
	ARTICLE 4	  	-	  	EXCUSABLE DELAY
			
	ARTICLE 5	  	-	  	PATENTS
			
	ARTICLE 6	  	-	  	INFORMATION AND DATA
			
	ARTICLE 7	  	-	  	GOVERNMENTAL AUTHORIZATION & EXPORT SHIPMENT
			
	ARTICLE 5	  	-	  	WAIVER OF IMMUNITY
			
	ARTICLE 9	  	-	  	NOTICES
			
	ARTICLE 10	  	-	  	LIENS
			
	ARTICLE 11	  	-	  	APPLICABLE LAW – DISPUTE RESOLUTION
			
	ARTICLE 12	  	-	  	MISCELLANEOUS

 ARTICLE 1 – LIMITATION OF LIABILITY AND INDEMNIFICATION 

 

	A.	Total Liability. The total liability of CFM for any and all claims, whether in contract, warranty, tort (including negligence but excluding willful misconduct),
product liability, patent infringement or otherwise, for any damages arising out of, connected with or resulting from the Service Agreement or the performance or non-performance of any Service or from the manufacture, sale, Redelivery, resale,
repair, overhaul, replacement or use of the Engine or any item or part thereof, will not exceed: (i) the price allocable to the repaired or overhauled item, part or Service which gives rise to the claim; or (ii) the value of the Engine
which gives rise to the claim, whichever is greater. Notwithstanding the foregoing, in no event will CFM or AVIANCATACA have any liability hereunder, whether as a result of breach of contract, warranty, tort (including negligence but excluding
willful misconduct), product liability, patent infringement or otherwise, for any special, consequential, incidental, resultant or indirect damages, (including, without limitation, loss of: use, profit, revenue or goodwill) or punitive or exemplary
damages. 

 In no event will CFM have any liability hereunder, whether as a result of breach of contract, warranty,
tort (including negligence but excluding willful misconduct), product liability, patent liability, or otherwise, for the design, material, workmanship, engineering defects or product liability and any damages whatsoever, including damages to
personal property and for personal injury or death, caused in any way by the manufacturer of the parts, LRU’s, components or material, thereof, or related thereto, provided that this in no way limits the liability of CFM for third party claims
or under any General Terms Agreement or Letter Agreement to which CFM and AVIANCATACA are parties. 
 In the event AVIANCATACA
uses non-CFM parts or non-CFM approved LRU’s, parts or repairs in an Engine and such LRU’s, parts or repairs cause personal injury, death or property damage to third parties, AVIANCATACA shall indemnify and hold harmless CFM from all
claims and liabilities associated therewith. The preceding indemnity shall apply whether or not CFM was provided a right under this Service Agreement to remove such LRU’s, parts or repairs, and irrespective of the exercise by CFM of such right

  
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	B.	Definition. For the purpose of this Article 1, the term “CFM” is deemed to include CFM and its parent and affiliated companies, the subcontractors and
suppliers of any Services furnished hereunder, and the directors, officers, employees, agents and representatives of each. 

ARTICLE 2 – TERMINATION  
  

	A.	Termination Events. The Service Agreement may be terminated as follows: 

 Late Payment. In the event that AVIANCATACA fails to make payments to CFM within the time periods specified herein, CFM may terminate all or any portion of this Service Agreement upon thirty
(30) days written notice to AVIANCATACA, unless AVIANCATACA cures such failure within such period following receipt of this notice. 
 Insolvency. Either Party may terminate or suspend performance of all or any portion of this Service Agreement if the other Party: (A) makes any agreement with creditors due to its inability to
make timely payments of its debts; (B) enters into bankruptcy or liquidation, whether compulsory or voluntary; (C) becomes insolvent; or (D) becomes subject to the appointment of a receiver of the whole or material part of its assets.
If such termination should occur, the defaulting Party will not be relieved of its obligations hereunder. 
 Material
Breach. Either Party may terminate this Service Agreement upon ninety (90) Days written notice to the other for failure to comply with any material provision of this Service Agreement unless the failure has been cured prior to such ninety
(90) Days (except for late payment, as described in Paragraph A.1 above). 
  

	B.	Activity After Termination. In the event the Service Agreement is terminated, the following shall cumulatively apply, in addition to any other right or remedy
allowable under this Service Agreement or applicable law: 

 Payment for Services Performed. In the event of
termination of this Service Agreement for any reason, AVIANCATACA will pay CFM for all Services or work performed by or caused to be performed by CFM up to the time of such termination under the applicable terms and prices of this Service Agreement
including all costs, fees, and charges incurred by CFM in providing support and material under this Service Agreement, including lease engines. 
 Reconciliation. In addition to the above, the terms of the reconciliation under the removal of Engines provisions of Article 12 of the Service Agreement will apply. 

Work in Process, Redelivery of AVIANCATACA’s Engines. Upon the termination or expiration of this Service Agreement, CFM will
complete all work in process in a diligent manner and Redeliver all Engines, parts and related documentation, provided that AVIANCATACA (a) has paid in full all charges for all such Services and material, plus all costs, fees and penalties,
incurred by CFM in providing support, including any lease engines, and (b) has returned all lease engines provided under this Service Agreement. 
 ARTICLE 3 – TAXES 
  

	A.	Taxes, Duties, or Charges. In addition to the price for the Services, AVIANCATACA agrees to pay, upon demand, all taxes (including, without limitation, sales,
use, excise, turnover or value added taxes), duties, fees, charges or assessments of any nature (but excluding any income taxes) (hereinafter “Taxes”) assessed or levied in connection with performance of this Service Agreement.

  
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	B.	Reimbursement/Refund. If payment of any such Taxes is made by CFM (or the applicable affiliated company), AVIANCATACA will reimburse CFM (or the applicable
affiliated company) upon demand, such reimbursement excluding, inter alia, penalties and interests which could have been levied against CFM (or the applicable affiliated company). AVIANCATACA will use all reasonable efforts to obtain a refund
thereof. If all or any part of any such Taxes is refunded to CFM, CFM (or the applicable affiliated company) will repay to AVIANCATACA such part thereof as CFM (or the applicable affiliated company) refunded. 

 

	C.	Withholdings. All payments by AVIANCATACA to CFM (or the applicable affiliated company) under this Service Agreement will be free of all withholdings of any
nature whatsoever, except to the extent otherwise required by law, and if any such withholding is so required, AVIANCATACA will pay an additional amount such that after the deduction of all amounts required to be withheld, the net amount received by
CFM (or the applicable affiliated company) will equal the amount that CFM (or the applicable affiliated company) would have received if such withholding had not been required. If the aforementioned mechanism contradicts the law of country United
States of America, the Parties shall amend this Service Agreement in order to increase the respective prices and amounts provided for by this Service Agreement so that the initial prices and amounts are preserved. 

ARTICLE 4 – EXCUSABLE DELAY 
  

	A.	Excusable Delay. Either Party will be excused from, and will not be liable for, any delay in performance or failure to perform hereunder (except for the
obligation to pay money or credit or debit an account which will not be excused hereunder), and will not be deemed to be in default for any delay in or failure of performance hereunder due to causes beyond its reasonable control. Such causes will be
conclusively deemed to include, but not be limited to acts of God, fire, terrorism, war (declared or undeclared), severe weather conditions, earthquakes, epidemics, material shortages not caused by any CFM act or failure to act, insurrection, acts
or omissions of the other Party, any act or omission by any governmental authority, strikes, labor disputes, acts or threats of vandalism or terrorism (including disruption of technology resources), or transportation shortages (each an
“Excusable Delay”). The time of performance shall be extended for a period equal to the time lost by reason of delay, including time to overcome the effect of the delay, without discriminating against the non-delayed Party.

  

	B.	Continuing Obligations. Article 4.A will not, however, relieve either Party from using its commercially reasonable efforts to avoid or remove such causes of
delay and continue performance with reasonable dispatch when such causes are removed. During the period of an Excusable Delay, CFM will have the right to invoice AVIANCATACA for Services actually performed. 

 

	C.	Extended Delay Termination. If delay resulting from any of the foregoing causes extends for more than six (6) months and the Parties have not agreed upon a
revised basis for continuing the Services, including any adjustment of the price, then either Party, upon thirty (30) Days written notice to the other, may terminate the purchase order that covers the delayed Services. 

ARTICLE 5 – PATENTS 
  

	A.	Claims. CFM shall defend, indemnify and hold harmless AVIANCATACA and its affiliates, officers, agents and employees against and handle all claims and defend any
suit or proceeding brought against AVIANCATACA or its affiliates, officers, agents and employees insofar as based on a claim that, without further combination, any Service provided or to be provided hereunder or any material or process used in the
repair of any items furnished under this Service Agreement constitutes an infringement of any patent or copyright of any country. 

  
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	B.	Liability. AVIANCATACA shall promptly notify CFM in writing and give CFM exclusive authority, information and assistance (at CFM’s expense) for the
handling, defense or settlement of any claim, suit or proceeding. In case such material or process is held in such claim, suit or proceeding to constitute infringement and the use of said Service or material or process is enjoined, CFM shall, at its
own expense either (1) settle or defend such claim or suit or proceeding arising therefrom, or (2) procure for AVIANCATACA the right to continue using said Service or material or process in the item repaired under the Service Agreement, or
(3) replace same with an item satisfactory to AVIANCATACA and incorporating non-infringing Service, material or process, or (4) modify same so it becomes satisfactory and non-infringing, or (5) refund the repair price applicable to
such material or process with the option to be selected by CFM. CFM shall not be responsible to AVIANCATACA for incidental or consequential damages, including, but not limited to, costs, expenses, liabilities and/or loss of profits resulting from
loss of use under this Article 5. 

  

	C.	Indemnification. The preceding Paragraph B shall not apply: (1) to any material or process or part thereof of AVIANCATACA design or specification, or used
at AVIANCATACA’s direction in any repair under the Service Agreement, or (2) to the use of any material or process furnished under the Service Agreement in conjunction with any other apparatus, article, material or process. As to any
material or process or use described in the preceding sentence, CFM assumes no liability whatsoever for patent or copyright infringement, and AVIANCATACA shall, in the same manner as CFM is obligated to AVIANCATACA above, indemnify, defend and hold
CFM harmless from and against any claim or liability, including costs and expense in defending any such claim or liability in respect thereto. 

  

	D.	Remedy. THE FOREGOING SHALL CONSTITUTE THE SOLE AND EXCLUSIVE REMEDY OF AVIANCATACA AND THE SOLE LIABILITY OF CFM FOR PATENT OR COPYRIGHT INFRINGEMENT BY ANY
MATERIAL OR PROCESS AND IS SUBJECT TO THE LIMITATION OF LIABILITY SET FORTH IN ARTICLE 1, “LIMITATION OF LIABILITY AND INDEMNIFICATION.”. THE PATENT WARRANTY OBLIGATIONS RECITED ABOVE ARE IN LIEU OF ALL OTHER PATENT WARRANTIES WHATSOEVER,
WHETHER ORAL, WRITTEN, EXPRESSED, IMPLIED OR STATUTORY (INCLUDING ANY WARRANTY OF MERCHANTABILITY AND FITNESS FOR PARTICULAR PURPOSE OR ANY IMPLIED WARRANTY ARISING FROM COURSE OF DEALING, COURSE OF PERFORMANCE, OR USAGE OF TRADE), EXCEPT AS ARISING
UNDER ANY GENERALTERMS AGREEMENT OR LETTER AGREEMENT BETWEEN THE PARTIES. 

 ARTICLE 6 – NON DISCLOSURE

  

	A.	Non-Disclosure. Unless the Parties otherwise agree herein or further in writing, any of the terms of the Service Agreement or any knowledge, information or data
which the Parties have or may disclose to each other shall be held in confidence and may not be either disclosed or used for any purpose, except: 

  

	 	1.	To the extent required by government agencies and courts for official purposes, disclosure may be made to such agencies and courts. In such event, a suitable
restrictive legend limiting further disclosure shall be applied. 

  

	 	2.	The existence of the Service Agreement and its general purpose only may be stated to others by either of the Parties without approval from the other.

  

	 	3.	CFM may disclose the same to its parents, affiliates, subsidiaries, joint venture participants, engineering service provider, or consultants as needed to perform the
Services provided under this Service Agreement. 

 The preceding clause will not apply to information which
(1) is or becomes part of the general public knowledge or literature otherwise than as a result of breach of any confidentiality obligation, or (2) was, as shown by written records, known to the receiving Party prior to receipt from the
disclosing Party. 

  
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	B.	Intellectual Property. Nothing contained in this Service Agreement will convey to either Party the right to use the trademarks of the other, or convey or grant
to either Party any license under any patent owned or controlled by the other Party. 

  

	C,	Press Releases. In addition, neither Party will issue any press nor other media release or make any public statement with respect to this Service Agreement
without the prior written approval of the other Party, as to the fact and the content of any such media release or public statement. 

 ARTICLE 7 – GOVERNMENTAL AUTHORIZATION & EXPORT SHIPMENT 
 AVIANCATACA
shall be the importer and/or exporter of record and shall be responsible for the timely application for, obtaining and maintaining any required authorization, such as export license, import license, exchange permit or any other required governmental
authorization relating to the Engine, and shall be responsible for complying with all U.S., French and other foreign government licensing and reporting requirements. At AVIANCATACA’s request and expense, CFM will assist AVIANCATACA in its
application for any required U.S. or French export licenses. CFM will not be liable if any authorization is not renewed or is delayed, denied, revoked or restricted, and AVIANCATACA will not thereby be relieved of its obligation to pay for Services
performed by CFM. All transported Engines will be subject to the U.S. Export Administration Regulations and/or International Traffic in Arms Regulations and (ii) the French export control regulations. AVIANCATACA agrees not to dispose of U.S.
or French origin items provided by CFM other than in and to the country of ultimate destination and/or as identified in an approved government license or authorization, except as said laws and regulations may permit. 

ARTICLE 8 – WAIVER OF IMMUNITY 
 To the extent that AVIANCATACA or any of its property is or becomes entitled at any time to any immunity on the grounds of sovereignty or otherwise from any legal action, suit or proceeding, from set-off
or counterclaim, from the jurisdiction of any competent court, from service of process, from attachment prior to judgment, from attachment in aid of execution, or from execution prior to judgment, or other legal process in any jurisdiction,
AVIANCATACA hereby irrevocably waives the application of such immunity and particularly, the U.S. Foreign Sovereign Immunities Act, 28 U.S.C. 1602, et. seq., and agrees not to plead or claim, any such immunity with respect to its obligations,
liabilities or any other matter under or arising out of or in connection with this Service Agreement or the subject matter hereof. Such agreement shall be irrevocable and not subject to withdrawal in any and all jurisdictions. 

ARTICLE 9 – NOTICES 
  

	A.	Acknowledgement. Any notices under this Service Agreement shall be in writing and be delivered or sent by mail, express/shipping service or electronic
transmission to the respective Parties at the following addresses, which may be changed by written notice: 

 TO: 

 

							
	AVIANCATACA Holding S.A.	  		  	CFM INTERNATIONAL Inc.
				
		  	Av Calle 26 No. 59-15, Piso 10	  		  	6440 Aviation Way
		  	Bogotá, Colombia	  		  	West Chester, Ohio 45069 USA
				
	Attn:	  	Secretary	  		  	Attn. : CFM Services General Manager
		  	Facsimile Number: (57)1423-5500 ext 2522	  		  	
		  	Telephone Number: (57)15877700 ext 2522	  		  	
				
	and	  		  		  	
				
		  	 Centro Administrativo, Avenida El Dorado,
 Bogota, Colombia
	  		  	 6440 Aviation Way,
 West
Chester, Ohio 45069 USA

				
	Attn. :	  	Engineering Director and Power Plan Manager	  		  	Att. : CFM Services General Manager

  
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	B.	Effect of Notices. Notices will be effective and will be deemed to have been given to (or “received by”) the recipient: (A) upon delivery, if sent
by courier, express mail, or delivered personally; (B) on the next business day following receipt, if sent by facsimile with a receipt of confirmation; or (C) on the fifth (5th) business day after posting (or on actual receipt, if
earlier) in the case of a letter sent prepaid first class mail. Whenever the words “notice” or “notify” or similar words are used herein, they mean the provision of formal notice as described in this Article 9. Whenever words
such as “advise”. “inform” or similar words are used, they mean the use of informal information provided to lower-level operating managers. 

 ARTICLE 10 – LIENS 
  

	A.	Other Liens. AVIANCATACA: (i) acknowledges that CFM has the legal right to assert mechanic’s liens or other statutory or common law liens under
applicable law (foreign or domestic) against Engines following performance of Services under this Service Agreement, and (ii) agrees to supply such information, including name and address of the owner of each Engine, as reasonably requested by
CFM to facilitate filing of such liens in New York or any other jurisdiction where Services may be performed. CFM may, at its option, notify the owners of the existence of this Service Agreement and CFM’s lien rights arising from performance of
Services. 

  

	B.	Enforcement. If AVIANCATACA fails to tender any payment owing under this Service Agreement and CFM initiates foreclosure with respect to any Engine pursuant to a
mechanic’s lien, then AVIANCATACA agrees to supply to CFM all records, log books and other documentation pertaining to the maintenance condition of the Engine reasonably available to it, and a certificate either (i) certifying that the
Engine has not been involved in any Aircraft Accident or Incident or (ii) specifying the date and facts surrounding any Accident or Incident in which the Engine has been involved and the nature and extent of the damage sustained (such records,
log books, certificate and other documentation referred to hereinafter as the “Engine Documents”). The Parties recognize that the failure by AVIANCATACA to deliver the Engine Documents may have a material, adverse effect on the
value of any Engine with respect to which foreclosure has been initiated by CFM and the ability of CFM to sell or lease the Engine, and that the damages CFM may sustain as a result are not readily calculable. 

ARTICLE 11 – APPLICABLE LAW – DISPUTE RESOLUTION 
  

	A.	Applicable Law. This Service Agreement shall be construed, interpreted and applied, and the legal relations between the Parties determined, in accordance with
the laws of the State of New York (U.S.A.). The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Service Agreement 

 

	B.	 Dispute Resolution. If any dispute arises relating to this Service Agreement, the Parties will endeavor to resolve the dispute amicably,
including by designating senior managers who will meet and use commercially reasonable efforts to resolve any such dispute. If the Parties’ senior managers do not resolve the dispute within sixty (60) days of first written request, either
Party may request that the dispute be settled and fully and finally determined by binding arbitration, in accordance with the International Chamber of Commerce pursuant to its rules of Conciliation and Arbitration, by one or more arbitrators
appointed in accordance with said rules. The place of arbitration and hearings shall be Miami, Florida, USA. The arbitration shall be in English and the opinion shall be rendered in English. The arbitration award shall be final and binding by any
Party in any court of competent 

  
 CFM AND
AVIANCATACA PROPRIETARY INFORMATION – SUBJECT TO RESTRICTIONS ON THE FIRST PAGE 
  
 24 

	 	
jurisdiction, and shall waive any claim appeal whatsoever against it. The arbitrators will have no authority to award punitive damages or any other damages not measured by the prevailing
Party’s actual damages, and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of the Service Agreement. All statements made or materials produced in connection with this dispute
resolution process and arbitration are confidential and will not be disclosed to any third party except as required by law or subpoena. The Parties intend that the dispute resolution process set forth in this Article 11 will be their exclusive
remedy for any dispute arising under or relating to this Service Agreement or its subject matter. 

  

	C.	Exception. Either Party may at any time, without inconsistency with this Article, seek from a court of competent jurisdiction any equitable, interim or
provisional relief to avoid irreparable damage. This Article will not apply to and will not bar litigation regarding claims related to a Party’s proprietary or intellectual property rights, nor will this Article be construed to modify or
displace the ability of the Parties to effectuate any termination contemplated in Article 2. 

 ARTICLE 12 –
MISCELLANEOUS 
  

	A.	Assignment of Agreement. This Service Agreement, any related purchase order or any rights or obligations hereunder may not be assigned, in whole or in part,
without the prior written consent of the other Party, except that AVIANCATACA’s consent will not be required for an assignment by CFM to one of CFM’s parent companies. In the event of any such assignment, AVIANCATACA will be so advised in
writing. Any assignment in contradiction of this clause will be considered null and void. 

  

	B.	Beneficiaries. Except as otherwise expressly provided to the contrary, the rights herein granted and this Service Agreement are for the benefit of the Parties
hereto and are not for the benefit of any third person, firm or corporation, except as expressly provided herein with respect to GE and Snecma. 

  

	C.	Survival Of Certain Clauses. The rights and obligations of the Parties under the following Articles of this Service Agreement as amended and related Exhibits
shall survive the expiration, termination or completion of this Service Agreement: 

  

	 	•	 	 Warranty and Limitation of Liability 

  

	 	•	 	 Limitation of Liability and Indemnification 

  

	 	•	 	 Taxes 

  

	 	•	 	 Patents 

  

	 	•	 	 Non Disclosure 

  

	 	•	 	 Governmental Authorization & Export Shipment 

 

	 	•	 	 Waiver of Immunity 

  

	 	•	 	 Applicable Law – Dispute Resolution 

  

	 	•	 	 Miscellaneous 

  

	D.	General Rules of Contract Interpretation. Article and paragraph headings contained in this Service Agreement are inserted for convenience of reference only and
do not limit, affect or restrict in any way the meaning and the interpretation of this Service Agreement. Words used in the singular shall have a comparable meaning when used in the plural and vice versa, unless the contrary intention appears. Words
such as “hereunder”, “hereof” and “herein” and other words beginning with “here” refer to the whole of this Service Agreement, including amendments. References to Articles, Sections, Paragraphs or Exhibits
will refer to the specified Article, Section, Paragraph or Exhibit of this Service Agreement unless otherwise specified. 

  

	E.	Language. The English language will be used in the interpretation and performance of this Service Agreement. All correspondence and documentation arising out of
or connected with this Service Agreement and any related purchase order(s), including Engine records and Engine logs, will be in the English language. 

  
 CFM AND
AVIANCATACA PROPRIETARY INFORMATION – SUBJECT TO RESTRICTIONS ON THE FIRST PAGE 
  
 25 

	F.	Severability. The invalidity or unenforceability of any part or provision of this Service Agreement, or the invalidity of its application to a specific situation
or circumstance, shall not affect the validity legality and enforceability of the remainder of this Service Agreement, or its application to other situations or circumstances. In addition, if a part of this Service Agreement becomes invalid, the
Parties will endeavor in good faith to reach agreement on a replacement provision that will reflect, as nearly as possible, the intent of the original provision. 

 

	G.	Non-Waiver.Any failure or delay in the exercise of rights or remedies hereunder will not operate to waive or impair such rights or remedies. Any waiver given
will not be construed to require future or further waivers. 

  

	H.	Currency Judgment. This is an international transaction in which the specification of United States Dollars is of the essence. No payments required to be made
under this Service Agreement will be discharged by payments in any currency other than United States Dollars, whether pursuant to a judgment, arbitration award or otherwise. 

 

	I.	No Agency Fees. Each Party represents and warrants to the other that no officer, employee, representative or agent of it has been or will be paid a fee or
otherwise has received or will receive any personal compensation or consideration by or from the other Party in connection with the obtaining, arranging or negotiation of this Service Agreement or other documents entered into or executed in
connection herewith. 

  

	J.	No Agency. Nothing in this Service Agreement will be interpreted or construed to create a partnership, agency or joint venture between CFM and AVIANCATACA.

  

	K.	Titles/Subtitles. The titles and subtitles given to the sections of the Service Agreement are for convenience. They do not limit or restrict the context of the
article or section to which they relate. 

  

	L.	Entire Agreement ; Modification. This Service Agreement, together with its Exhibits and any amendment (or Letter Agreement relating hereto, if any),
contains and constitutes the entire understanding and agreement between the Parties respecting the subject matter hereof, and supersedes and cancels all previous negotiations, pre-existing agreements, commitments and writing in connection herewith.
This Service Agreement may not be released, discharged, abandoned, supplemented, modified or waived, in whole or in part, in any manner, orally or otherwise, except by a writing of concurrent or subsequent date signed and delivered by a duly
authorized officer or representative of each of the Parties hereto making specific reference to this Service Agreement and the provisions hereof being released, discharged, abandoned, supplemented, modified or waived. 

 

	M.	Counterparts. This Service Agreement may be executed in one or more counterparts, all of which counterparts will be treated as the same binding agreement, which
will be effective as of the date set forth on the first page hereof, upon execution by both Parties and delivery by each Party hereto to the other Party of one or more such counterparts. Delivery of an executed counterpart of a signature page to
this Service Agreement by telecopy or electronic mail shall be as effective as delivery of a manually executed counterpart. 

*[Three pages have been removed pursuant to a request for confidential treatment]. 

  
 CFM AND
AVIANCATACA PROPRIETARY INFORMATION – SUBJECT TO RESTRICTIONS ON THE FIRST PAGE 
  
 26EX-10.19.1

 Exhibit 10.19.1 

IAE PROPRIETARY INFORMATION 
  

 
 400 Main Street 
 East Hartford, CT 06108 USA 
 December 17, 2010 

Atlantic Aircraft Holding Ltd. 
 Bolam House

 King & George Streets 
 P.
O. Box CB 13.253 
 Nassau, Bahamas 
  

	Subject:	Amendment No. 1 to the Amended and Restated V2500 General Terms of Sale between IAE International Aero Engines AG and Atlantic Aircraft Holding Ltd. dated
December 18, 2008 

 Gentlemen: 
 We refer to the Amended and Restated V2500 General Terms of Sale dated December 18, 2008 between IAE International Aero Engines AG (“IAE”) and Atlantic Aircraft Holding Ltd.
(“AAH”), such contract, as amended or supplemented from time to time, being hereinafter referred to as the “Contract.” Unless expressly stated to the contrary, and to the extent possible, terms used in this Amendment No. 1
shall have the same meaning given to them in the Contract. 
 WHEREAS, the Parties agree to amend the Contract by revising the delivery
schedules for Firm Aircraft and Firm Spare Engines and by adding a new escalation formula applicable to Firm Aircraft deliveries after the date of this Amendment No. 1. 
 NOW, THEREFORE, the Parties hereto hereby agree to amend the Contract as follows: 
  

	1.	Exhibit B-1 shall be deleted in its entirety and replaced with the Exhibit B-1 attached as Appendix A hereto. 

 

	2.	Exhibit B-2 shall be deleted in its entirety and replaced with the Exhibit B-2 attached as Appendix B hereto. 

 

	3.	The attached Appendix C hereto shall be added to the Contract as Exhibit B-4. 

 Except as expressly amended by this Amendment No. 1, all provisions of the Contract remain in full force and effect without modification. 

 

					
	Agreed to and accepted on behalf of	  		  	Agreed to and accepted on behalf of
	IAE International Aero Engines AG	  		  	Atlantic Aircraft Holding Ltd.
			
	  
 Name
	  		  	  
 Name

			
	  
 Title
	  		  	  
 Title

			
	  
 Date
	  		  	  
 Date

  
 Page 1 of 6

 IAE PROPRIETARY INFORMATION 

 

 Appendix A 

EXHIBIT B-1 (Revised and Updated) 
 Aircraft Delivery Schedule (as of December 2010) 
 Glossary Notes: 

 

	 	•	 	 Delivered Aircraft are indicated by italics typeface 

 

							
	 Firm Aircraft
	  	Delivery Date	 	Aircraft Type	 	Applicable Escalation
	 Aircraft 1
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 2
	  	[*]	 	[*]	 	Exhibit B-3
				
	 Aircraft 3
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 4
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 5
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 6
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 7
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 8
	  	[*]	 	[*]	 	Exhibit B-3
				
	 Aircraft 9
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 10
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 11
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 12
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 13
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 14
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 15
	  	[*]	 	[*]	 	Exhibit B-3
				
	 Aircraft 16
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 17
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 18
	  	[*]	 	[*]	 	Exhibit B-3
				
	 Aircraft 19
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 20
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 21
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 22
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 23
	  	[*]	 	[*]	 	Exhibit B-3
				
	 Aircraft 24
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 25
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 26
	  	[*]	 	[*]	 	Exhibit B-3
				
	 Aircraft 27
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 28
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 29
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 30
	  	[*]	 	[*]	 	Exhibit B-3
				
	 Aircraft 31
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 32
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 33
	  	[*]	 	[*]	 	Exhibit B-3
	 Aircraft 34
	  	[*]	 	[*]	 	Exhibit B-3

  
 Page 2 of 6

 IAE PROPRIETARY INFORMATION 

 

									
	 Aircraft 35
	  	 	[	*] 	 	[*]	 	Exhibit B-3
	 Aircraft 36
	  	 	[	*] 	 	[*]	 	Exhibit B-3
				
	 Aircraft 37
	  	 	[	*] 	 	[*]	 	Exhibit B-3
	 Aircraft 38
	  	 	[	*] 	 	[*]	 	Exhibit B-3
	 Aircraft 39
	  	 	[	*] 	 	[*]	 	Exhibit B-3
	 Aircraft 40
	  	 	[	*] 	 	[*]	 	Exhibit B-3
	 Aircraft 41
	  	 	[	*] 	 	[*]	 	Exhibit B-3
	 Aircraft 42
	  	 	[	*] 	 	[*]	 	Exhibit B-3
				
	 Aircraft 43
	  	 	[	*] 	 	[*]	 	Exhibit B-3
	 Aircraft 44
	  	 	[	*] 	 	[*]	 	Exhibit B-3
	 Aircraft 45
	  	 	[	*] 	 	[*]	 	Exhibit B-3
	 Aircraft 46
	  	 	[	*] 	 	[*]	 	Exhibit B-3
	 Aircraft 47
	  	 	[	*] 	 	[*]	 	Exhibit B-3
	 Aircraft 48
	  	 	[	*] 	 	[*]	 	Exhibit B-3
				
	 Aircraft 49
	  	 	[	*] 	 	[*]	 	Exhibit B-3
				
	 Aircraft 50
	  	 	[	*] 	 	[*]	 	Exhibit B-3
	 Aircraft 51
	  	 	[	*] 	 	[*]	 	Exhibit B-3
	 Aircraft 52
	  	 	[	*] 	 	[*]	 	Exhibit B-3
				
	 Aircraft 53
	  	 	[	*] 	 	[*]	 	Exhibit B-4
				
	 Aircraft 54
	  	 	[	*] 	 	[*]	 	Exhibit B-4
	 Aircraft 55
	  	 	[	*] 	 	[*]	 	Exhibit B-4
	 Aircraft 56
	  	 	[	*] 	 	[*]	 	Exhibit B-4
	 Aircraft 57
	  	 	[	*] 	 	[*]	 	Exhibit B-4
	 Aircraft 58
	  	 	[	*] 	 	[*]	 	Exhibit B-4
	 Aircraft 59
	  	 	[	*] 	 	[*]	 	Exhibit B-4
	 Aircraft 60
	  	 	[	*] 	 	[*]	 	Exhibit B-4
				
	 Aircraft 61
	  	 	[	*] 	 	[*]	 	Exhibit B-4
	 Aircraft 62
	  	 	[	*] 	 	[*]	 	Exhibit B-4
	 Aircraft 63
	  	 	[	*] 	 	[*]	 	Exhibit B-4
	 Aircraft 64
	  	 	[	*] 	 	[*]	 	Exhibit B-4
	 Aircraft 65
	  	 	[	*] 	 	[*]	 	Exhibit B-4
				
	 Aircraft 66
	  	 	[	*] 	 	[*]	 	Exhibit B-4
	 Aircraft 67
	  	 	[	*] 	 	[*]	 	Exhibit B-4

  

	*	AAH has represented to IAE that the re-scheduled delivery dates for these Firm Aircraft positions have not yet been agreed between AAH and the Aircraft Manufacturer. In
any event, AAH agrees to provide IAE notice of the re-scheduled delivery dates for these Firm Aircraft at least [*] prior to the re-scheduled delivery date and in all events AAH must take delivery of these Firm Aircraft on or before [*].

  
 Page 3 of 6

 IAE PROPRIETARY INFORMATION 

 

 Appendix B 

EXHIBIT B-2 (Revised and Updated) 
 Firm Spare Engine Delivery Schedule (as of December 2010) 
 [*] 

  
 Page 4 of 6

 IAE PROPRIETARY INFORMATION 

 

 Appendix C 
 EXHIBIT B-4 
 IAE ESCALATION FORMULA 

 

	1.	Any unit base price or other sum expressed to be subject to escalation from the Base Month (as defined below) to month of delivery or other date of determination in
accordance with the IAE Escalation Formula will be subject to escalation in accordance with the following formula: 

  

	 	Pi	=     [*] where: 

  

	 	Pi	=     the invoiced purchase price or escalated sum rounded to the nearest U.S. Dollar 

 

	 	Pb	=     unit base price or other sum 

  

	 	F	=     [*]), rounded to the nearest U.S. Dollar 

  

	 	N	=     The calendar year of scheduled engine delivery or other date of determination, minus the base year 

 

	 	CPI	=     [*] 

  

	 	L	=     Labor Ratio defined below 

  

	 	M	=     Material Ratio defined below 

 “Base Month” shall mean the base month specified for engine prices and related credits in the Contract. 
 The IAE Composite Price Index is the sum of 65 percent of the Labor Ratio and 35 percent of the Material Ratio, with the sum rounded to the nearest ten thousandth. The quarterly value published for the
Employment Cost Index will be deemed to apply to each month of the quarter. 
 The Labor Ratio is the “Employment Cost Index
(ECI) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I” as published quarterly by the Bureau of Labor Statistics, U.S. Department of Labor for the arithmetic average of the fifth, sixth and seventh months
(rounded to the nearest tenth) preceding the month of scheduled delivery for each engine/equipment; divided by the value of “Employment Cost Index (ECI) Wages and Salaries for Aircraft Manufacturing (NAICS Code 336411), CIU2023211000000I”
for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the Base Month. To be clear the quarterly value of CIU2023211000000I will apply to each month of a given quarter. 

The Material Ratio is the “Producer Price Index, Industrial Commodities, WPU03thru15”, as published monthly by the Bureau of
Labor Statistics, U.S. Department of Labor, for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the month of scheduled delivery for each engine/equipment; divided by the value for Industrial
Commodities for the arithmetic average of the fifth, sixth and seventh months (rounded to the nearest tenth) preceding the Base Month. 
 The value of the factors 0.65(L) and 0.35(M) shall be determined to the nearest fourth decimal place. Thus if the fifth decimal place is five or more, the fourth decimal place shall be raised to the next
higher number. 
 For a given month, the escalation shall be computed by using the applicable Index value, which the Bureau has
published as the time of delivery or other date of determination. 

  
 Page 5 of 6

 IAE PROPRIETARY INFORMATION 

 

	2.	If the U.S. Department of Labor changes the base year for determination of the Index values as defined above, such rebased values will be incorporated in the escalation
calculation. 

  

	3.	If the U.S. Department of Labor ceases to publish or replaces an index or revises the methodology used for the determination of the index values to be used to determine
the CPI or, for any reason, has not released values needed to determine the CPI, IAE, in its sole discretion, shall select a substitute for such index or values from data published by the Bureau of Labor Statistics or otherwise make revisions to the
escalation formula such that the escalation will as closely as possible approximate the result that would have been attained by continuing the use of the original escalation formula and index values as they may have fluctuated during the applicable
time period. 

  

	4.	The invoiced purchase price or final escalated sum, which in no event shall be less than the unit base price, shall be the final price or escalated sum.

  
 Page 6 of 6

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