___________________________________________________________________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
___________________________________________________________________________________________________________________________________________
FORM 8-K
___________________________________________________________________________________________________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 25, 2020
___________________________________________________________________________________________________________________________________________
Air T, Inc.
(Exact Name of Registrant as Specified in Charter)
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Delaware
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001-35476
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52-1206400
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(State or Other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.)
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5930 Balsom Ridge Road
____________Denver, North Carolina 28037_________
(Address of Principal Executive Offices, and Zip Code)
________________(828) 464-8741__________________
Registrant’s Telephone Number, Including Area Code
____________________Not applicable________________________
(Former Name or Former Address, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock
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AIRT
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NASDAQ Global Market
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Alpha Income Preferred Securities (also referred to as 8% Cumulative Capital Securities) (“AIP”)
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AIRTP
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NASDAQ Global Market
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Warrant to purchase AIP
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AIRTW
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NASDAQ Global Market
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 1.01 Entry into a Material Definitive Agreement
To the extent responsive, the information included in Item 2.03 is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
On February 25, 2020, Air T, Inc., a Delaware corporation (the “Company”) and Minnesota Bank & Trust, a Minnesota state banking corporation (“MBT”), entered into that certain Amendment No. 3 to Amended and Restated Credit Agreement (the “Third Amendment”). The Third Amendment extends the termination date for the revolving credit commitment and the supplemental revolving credit commitment to the earlier of August 31, 2021, the date the Company reduces the respective commitment to zero or termination due to an event of default. Twelve of the Company’s subsidiaries continue to, jointly and severally, guaranty the full and prompt payment and performance of all debts and obligations of the Company to MBT and continue to grant a first priority security interest in each subsidiary’s assets to MBT as collateral for such obligations.
On February 25, 2020, AirCo 1, LLC, a wholly-owned subsidiary of AirCo, LLC, a wholly-owned subsidiary of Stratus Aero Partners LLC, a wholly-owned subsidiary of the Company (“AirCo 1”), entered into that certain Amendment No. 1 to Loan Agreement with MBT (the “First Amendment”). The First Amendment extends the stated termination date of the revolving facility to August 31, 2021. The Subordination Agreement, dated April 3, 2019 between the Company and MBT is not affected by the First Amendment.
The foregoing summary of the terms of the financing documents does not purport to be complete and is qualified in its entirety by reference to the documents which are filed as Exhibits 10.1, 10.2, 10.3, and 10.4 respectively hereto and are incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits
10.2 Form of Acknowledgement and Agreement of AirCo, LLC; CSA Air, LLC; Global Ground Support, Inc.; Jet Yard, LLC; Mountain Air Cargo, Inc.; Stratus Aero Partners, LLC; Air T Global Leasing, LLC; AirCo Services, LLC; Space Age Insurance Company; Worthington Acquisition, LLC; Worthington Aviation, LLC; and Worthington MRO, LLC, dated February 25, 2020 in favor of Minnesota Bank & Trust.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: February 28, 2020
AIR T, INC.
By: /s/ Brian Ochocki
Brian Ochocki, Chief Financial Officer
AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT dated as of February 25, 2020 (the “Amendment”), between Air T, Inc., a Delaware corporation (the “Borrower”), and Minnesota Bank & Trust, a Minnesota state banking corporation (the “Lender”).
RECITALS:
A. The Borrower and the Lender are parties to that certain Amended and Restated Credit Agreement dated as of March 28, 2019, as amended by that certain Amendment No. 1 to Amended and Restated Credit Agreement dated as of September 24, 2019, and by that certain Amendment No. 2 to Amended and Restated Credit Agreement dated as of December 31, 2019 (as so amended, the “Original Agreement”).
B. The Borrower has requested that the Lender amend certain terms of the Original Agreement.
C. Subject to the terms and conditions of this Amendment, the Lender will agree to the foregoing request of the Borrower.
NOW, THEREFORE, the parties agree as follows:
1.Defined Terms. All capitalized terms used in this Amendment shall, except where the context otherwise requires, have the meanings set forth in the Original Agreement as amended hereby.
2.Amendments. The Original Agreement is hereby amended as follows:
(a)The definitions of the terms “Revolving Credit Commitment Termination Date” and “Supplemental Revolving Credit Commitment Termination Date” appearing in Section 1.01 of the Original Agreement are hereby amended in their respective entireties to read as follows:
“ ‘Revolving Credit Termination Date’ means the earliest to occur of (a) August 31, 2021, (b) the date the Revolving Credit Commitment is reduced to zero pursuant to Section 2.05, and (c) the termination of the Revolving Credit Commitment pursuant to Section 8.02.
‘Supplemental Revolving Credit Termination Date’ means the earliest to occur of (a) August 31, 2021, (b) the date the Supplemental Revolving Credit Commitment is reduced to zero pursuant to Section 2.05A, and (c) the termination of the Supplemental Revolving Credit Commitment pursuant to Section 8.02.’
3.Conditions to Effectiveness. This Amendment shall become effective on the date (the “Effective Date”) when, and only when, the Lender shall have received:
(a)this Amendment, duly executed by a Responsible Officer of Borrower;
(b)a certificate of the secretary of Borrower in the form provided by the Bank, appropriately completed and duly executed by Borrower’s secretary;
(c)an Acknowledgment and Agreement, in the form provided by the Lender, duly executed by each Guarantor; and
(d)such other documents as the Lender may reasonably request.
4.Representations and Warranties. To induce the Lender to enter into this Amendment, the Borrower represents and warrants to the Lender as follows:
(a)The execution, delivery and performance by the Borrower of this Amendment and any other Loan Document to which the Borrower is a party have been duly authorized by all necessary corporate action, do not require any approval or consent of, or any registration, qualification or filing with, any government agency or authority or any approval or consent of any other person (including, without limitation, any shareholder), do not and will not conflict with, result in any violation of or constitute any default under, any provision of the Borrower’s articles of incorporation or bylaws, any agreement binding on or applicable to the Borrower or any of its property, or any law or governmental regulation or court decree or order, binding upon or applicable to the Borrower or of any of its property and will not result in the creation or imposition of any security interest or other lien or encumbrance in or on any of its property pursuant to the provisions of any agreement applicable to the Borrower or any of its property;
(b)The representations and warranties contained in the Original Agreement are true and correct as of the date hereof as though made on that date except: (i) to the extent that such representations and warranties relate solely to an earlier date; and (ii) that the representations and warranties set forth in Section 5.04 of the Original Agreement to the audited annual financial statements and internally-prepared interim financial statements of the Borrower shall be deemed to be a reference to the audited financial statements and interim financial statements, as the case may be, of the Borrower most recently delivered to the Lender pursuant to Section 6.01(a) or 6.01(b) of the Original Agreement;
(c)No events have taken place and no circumstances exist at the date hereof which would give the Borrower the right to assert a defense, offset or counterclaim to any claim by the Lender for payment of the Obligations;
(d)The Original Agreement, as amended by this Amendment, and each other Loan Document to which the Borrower is a party are the legal, valid and binding
obligations of the Borrower and are enforceable in accordance with their respective terms, subject only to bankruptcy, insolvency, reorganization, moratorium or similar laws, rulings or decisions at the time in effect affecting the enforceability of rights of creditors generally and to general equitable principles which may limit the right to obtain equitable remedies; and
(e)Before and after giving effect to this Amendment, there does not exist any Default or Event of Default.
5.Release. The Borrower hereby releases and forever discharges the Lender and its successors, assigns, directors, officers, agents, employees and participants from any and all actions, causes of action, suits, proceedings, debts, sums of money, covenants, contracts, controversies, claims and demands, at law or in equity, which the Borrower ever had or now has against the Lender or its successors, assigns, directors, officers, agents, employees or participants by virtue of the Lender’s relationship to the Borrower in connection with the Loan Documents and the transactions related thereto
6.Reference to and Effect on the Loan Documents.
(a)From and after the date of this Amendment, each reference in the Original Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import referring to the Original Agreement, and each reference to the “Credit Agreement”, the “Credit Agreement”, “thereunder”, “thereof”, “therein” or words of like import referring to the Original Agreement in any other Loan Document shall mean and be a reference to the Original Agreement as amended hereby; and except as specifically set forth above, the Original Agreement remains in full force and effect and is hereby ratified and confirmed.
(b)The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lender under the Agreement or any other Loan Document, nor constitute a waiver of any provision of the Agreement or any such other Loan Document.
7.Costs, Expenses and Taxes. The Borrower agrees to pay on demand all costs and expenses of the Lender in connection with the preparation, reproduction, execution and delivery of this Amendment and the other documents to be delivered hereunder or thereunder, including their reasonable attorneys’ fees and legal expenses. In addition, the Borrower shall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution and delivery, filing or recording of this Amendment and the other instruments and documents to be delivered hereunder and agrees to save the Lender harmless from and against any and all liabilities with respect to, or resulting from, any delay in the Borrower’s paying or omission to pay, such taxes or fees.
8.Governing Law. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS AMENDMENT SHALL BE GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
9.Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.
10.Counterparts. This Amendment may be executed in counterparts and by separate parties in separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same document. Receipt by telecopy, pdf file or other electronic means of any executed signature page to this Amendment shall constitute effective delivery of such signature page.
11.Recitals. The Recitals hereto are incorporated herein by reference and constitute a part of this Amendment.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above.
AIR T, INC.
By: _________________________________
Name: Brian Ochocki
Its: Chief Financial Officer
Minnesota Bank & Trust
By:_________________________________
Name: Eric P. Gundersen
Title: Senior Vice President
[signature page Amendment No. 3 to Amended and Restated Credit Agreement]
18777913v1
ACKNOWLEDGMENT AND AGREEMENT
Dated: February 25, 2020
Each of the undersigned has (a) guaranteed the payment and performance of all obligations of AIR T, INC., a Delaware corporation (the “Borrower”), to MINNESOTA BANK & TRUST, a Minnesota state banking corporation (the “Lender”), pursuant to the terms of an Amended and Restated Guaranty dated as of March 28, 2019 (the “Guaranty”) jointly and severally made by the undersigned in favor of the Lender, which obligations include, without limitation, all “Obligations” (as defined in the Original Agreement described below) of the Borrower to the Lender pursuant to that certain Amended and Restated Credit Agreement dated as of March 28, 2019 (such Credit Agreement, as amended to date, being the “Original Agreement”), between the Borrower and the Lender, and (b) granted a first priority security interest in its assets to the Lender as collateral for such Obligations pursuant to the terms of that certain Amended and Restated Security Agreement dated as of March 28, 2019 (the “Security Agreement”)
Each of the undersigned acknowledges that it has received a copy of the proposed Amendment No. 3 to Amended and Restated Credit Agreement dated to be effective as of February 25, 2020 (the “Amendment”) amending the Original Agreement. Each of the undersigned (a) confirms that each of the Guaranty and the Security Agreement remains in full force and effect, (b) agrees and acknowledges that the Amendment shall not in any way impair or limit the rights of the Lender under the Guaranty or under the Security Agreement, and (c) hereby acknowledges and agrees that (i) pursuant to the Guaranty, the Guarantors jointly and severally guaranty the payment and performance of all Obligations of the Borrower to the Lender, including, without limitation, all Loans (including, without limitation, the Supplemental Revolving Credit Loans) now or hereafter made by the Lender under the Original Agreement as amended by the Credit Agreement, and (ii) pursuant to the Security Agreement each of the undersigned continues to grant a security interest to the Lender in the “Collateral” covered thereby to secure all Obligations of the Borrower to the Lender, including, without limitation, all Loans now or hereafter made by the Lender under the Original Agreement as amended by the Credit Agreement..
Each of the undersigned agrees that each reference to the “Credit Agreement”, the “Loan Agreement”, “therein”, “thereof”, “thereby” or words of similar effect referring to the Credit Agreement in any Loan Document to which such undersigned is a party shall mean and be a reference to the Original Agreement, as amended by the Amendment.
Each of the undersigned: (a) represents and warrants to the Lender that no events have taken place and no circumstances exist at the date hereof which would give such undersigned the right to assert a defense, offset or counterclaim to any claim by the Lender for payment of the obligations guaranteed by such undersigned or for the enforcement of the Guaranty; and (b) hereby releases and forever discharges the Lender and its successors, assigns, directors, officers, agents, employees and participants from any and all actions, causes of action, suits, proceedings, debts, sums of money, covenants, contracts, controversies, claims and demands, at law or in
equity, which such undersigned ever had or now has against the Lender or its successors, assigns, directors, officers, agents, employees or participants by virtue of their relationship to Borrower or any of the undersigned in connection with the Loan Documents and the transactions related thereto.
Nothing in this Acknowledgment and Agreement requires the Lender to obtain the consent of any of the undersigned to any future amendment, modification or waiver to the Original Agreement, as amended by the Amendment, or any other Loan Document to which such undersigned is a party except as expressly required by the terms of the Loan Documents to which such undersigned is a party.
This Acknowledgment and Agreement may be executed in counterparts and by separate parties in separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same document. The delivery of a facsimile, pdf or other digital copy of an executed counterpart of this Amendment and Agreement shall be deemed to be valid execution and delivery of this Amendment and Agreement.
[SIGNATURE PAGES FOLLOW]
Each of the undersigned has executed this Acknowledgment and Agreement to be effective as of the first date set forth above.
AIRCO, LLC
By:_________________________________
Name: Nicholas J. Swenson
Title: Director
CSA AIR, INC.
By:_________________________________
Name: Nicholas J. Swenson
Title: Director
GLOBAL GROUND SUPPORT, INC.
By:_________________________________
Name: Nicholas J. Swenson
Title: Director
JET YARD, LLC
By: Stratus Aero Partners, LLC
Its: Sole Member
By:_________________________________
Name: Nicholas J. Swenson
Title: Director
[Guarantor Acknowledgment and Agreement Signature Page]
MOUNTAIN AIR CARGO, INC.
By:_________________________________
Name: Nicholas J. Swenson
Title: Director
STRATUS AERO PARTNERS, LLC
By:_________________________________
Name: Nicholas J. Swenson
Title: Director
AIR T GLOBAL LEASING, LLC
By:_________________________________
Name: Nicholas J. Swenson
Title: Director
AIRCO SERVICES, LLC
By:_________________________________
Name: Nicholas J. Swenson
Title: Director
SPACE AGE INSURANCE COMPANY
By:_________________________________
Name: Nicholas J. Swenson
Title: Director
[Guarantor Acknowledgment and Agreement Signature Page]
Worthington acquisition, LLC, a North Carolina limited liability company
By:_________________________________
Name: Nicholas J. Swenson
Title: Director
Worthington aviation, LLC, a North Carolina limited liability company
By:_________________________________
Name: Nicholas J. Swenson
Title: Director
Worthington MRO, LLC, a North Carolina limited liability company
By_________________________________
Name: Nicholas J. Swenson
Title: Director
[Guarantor Acknowledgment and Agreement Signature Page]
AMENDMENT NO. 1 TO LOAN AGREEMENT
This AMENDMENT NO. 1 TO LOAN AGREEMENT dated as of February 25, 2020 (the “Amendment”), between AirCo 1, LLC, a Delaware limited liability company (the “Borrower”), and Minnesota Bank & Trust, a Minnesota state banking corporation (the “Lender”).
RECITALS:
A. The Borrower and the Lender are parties to that certain Loan Agreement dated as of April 3, 2019, as amended by that certain Change in Terms Agreement dated November 8, 2019 (as so amended, the “Original Agreement”).
B. The Borrower has requested that the Lender amend the Original Agreement.
C. Subject to the terms and conditions of this Amendment, the Lender will agree to the foregoing request of the Borrower.
NOW, THEREFORE, the parties agree as follows:
1.Defined Terms. All capitalized terms used in this Amendment shall, except where the context otherwise requires, have the meanings set forth in the Original Agreement as amended hereby.
2.Amendment. The term “Stated Termination Date” defined in Section 2(a) (1) Original Agreement is hereby extended to August 31, 2021.
3.Conditions to Effectiveness. This Amendment shall become effective on the date (the “Effective Date”) when, and only when, the Lender shall have received:
(a)this Amendment, duly executed by the Borrower;
(b)an Acknowledgment and Agreement, in the form provided by the Lender, duly executed by Air T, Inc.; and
(c)such other documents as the Lender may reasonably request.
4.Representations and Warranties. To induce the Lender to enter into this Amendment, the Borrower represents and warrants to the Lender as follows:
(a)The execution, delivery and performance by the Borrower of this Amendment and any other Loan Document to which the Borrower is a party have been duly authorized by all necessary corporate action, do not require any approval or consent of, or any registration, qualification or filing with, any government agency or authority or any approval or consent of any other person (including, without limitation, any shareholder), do not and will not conflict with, result in any violation of or constitute any
default under, any provision of the Borrower’s articles of incorporation or bylaws, any agreement binding on or applicable to the Borrower or any of its property, or any law or governmental regulation or court decree or order, binding upon or applicable to the Borrower or of any of its property and will not result in the creation or imposition of any security interest or other lien or encumbrance in or on any of its property pursuant to the provisions of any agreement applicable to the Borrower or any of its property;
(b)The representations and warranties contained in the Original Agreement are true and correct as of the date hereof as though made on that date except: (i) to the extent that such representations and warranties relate solely to an earlier date; and (ii) that the representations and warranties set forth in Section 6(i) of the Original Agreement to the internally-prepared financial statements of the Borrower shall be deemed to be a reference to the financial statements of the Borrower most recently delivered to the Lender pursuant to Section 7(a)(ii) of the Original Agreement;
(c)No events have taken place and no circumstances exist at the date hereof which would give the Borrower the right to assert a defense, offset or counterclaim to any claim by the Lender for payment of the Obligations;
(d)The Original Agreement, as amended by this Amendment and each other Loan Document to which the Borrower is a party are the legal, valid and binding obligations of the Borrower and are enforceable in accordance with their respective terms, subject only to bankruptcy, insolvency, reorganization, moratorium or similar laws, rulings or decisions at the time in effect affecting the enforceability of rights of creditors generally and to general equitable principles which may limit the right to obtain equitable remedies; and
(e)Before and after giving effect to this Amendment, there does not exist any Default or Event of Default.
5.Release. The Borrower hereby releases and forever discharges the Lender and its successors, assigns, directors, officers, agents, employees and participants from any and all actions, causes of action, suits, proceedings, debts, sums of money, covenants, contracts, controversies, claims and demands, at law or in equity, which the Borrower ever had or now has against the Lender or its successors, assigns, directors, officers, agents, employees or participants by virtue of the Lender’s relationship to the Borrower in connection with the Loan Documents and the transactions related thereto
6.Reference to and Effect on the Loan Documents.
(a)From and after the date of this Amendment, each reference in the Original Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import referring to the Original Agreement, and each reference to the “Loan Agreement”, the “Loan Agreement”, “thereunder”, “thereof”, “therein” or words of like import referring to the Original Agreement in any other Loan Document shall mean and be a reference to the
Original Agreement as amended hereby; and except as specifically set forth above, the Original Agreement remains in full force and effect and is hereby ratified and confirmed.
(b)The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lender under the Agreement or any other Loan Document, nor constitute a waiver of any provision of the Agreement or any such other Loan Document.
7.Costs, Expenses and Taxes. The Borrower agrees to pay on demand all costs and expenses of the Lender in connection with the preparation, reproduction, execution and delivery of this Amendment and the other documents to be delivered hereunder or thereunder, including their reasonable attorneys’ fees and legal expenses. In addition, the Borrower shall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution and delivery, filing or recording of this Amendment and the other instruments and documents to be delivered hereunder and agrees to save the Lender harmless from and against any and all liabilities with respect to, or resulting from, any delay in the Borrower’s paying or omission to pay, such taxes or fees.
8.Governing Law. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS AMENDMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
9.Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.
10.Counterparts. This Amendment may be executed in counterparts and by separate parties in separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same document. Receipt by telecopy, pdf file or other electronic means of any executed signature page to this Amendment shall constitute effective delivery of such signature page.
11.Recitals. The Recitals hereto are incorporated herein by reference and constitute a part of this Amendment.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above.
AIRCO 1, LLC
By: ________________________________
Name: ________________________________
Its: ________________________________
Minnesota Bank & Trust
By:_________________________________
Name: Eric P. Gundersen
Title: Senior Vice President
[signature page Amendment No. 1 to Loan Agreement]
18778475v1
ACKNOWLEDGMENT AND AGREEMENT
Date: February 25, 2020
Air T, Inc., a Delaware corporation (the “Subordinated Creditor”) has subordinated the payment of the “Junior Liabilities” described in that certain Subordination Agreement, dated as of April 3, 2019 (the “Subordination Agreement”), executed by the Subordinated Creditor in favor of MINNESOTA BANK & TRUST(the “Bank”), to the payment of the “Senior Liabilities” described therein, which Senior Liabilities include, without limitation, all Obligations of Airco 1, LLC, a Minnesota limited liability company (“Borrower”), to the Bank under that certain Loan Agreement dated as of April 3, 2019 (as amended to date, the “Original Agreement;” capitalized terms not otherwise defined herein being used herein as defined in the Original Agreement, as amended by the “Amendment” hereinafter described).
The Subordinated Creditor hereby acknowledges receipt of and consents to the Borrower’s execution and delivery of that certain Amendment No. 1 to Loan Agreement (the “Amendment”) to the Original Agreement, to be dated on or about February 25, 2020.
The Subordinated Creditor acknowledges and agrees that the Amendment shall in no way impair or limit the rights of the Bank under the Subordination Agreement. The Subordinated Creditor ratifies and confirms that by the Subordination Agreement, the Subordinated Creditor continues to subordinate the payment of the Junior Liabilities to the payment of the Senior Liabilities, including, without limitation, all Loans now or hereafter made by the Bank under the Original Agreement as amended by the Amendment.
The Subordinated Creditor agrees that each reference to “Original Agreement,” “Loan Agreement,” “therein,” “thereof,” “thereby” or words of similar effect referring to the Original Agreement in the Subordination Agreement shall mean and be a reference to the Loan Agreement as amended by the Amendment.
The Subordinated Creditor hereby: (a) represents and warrants to the Bank that: (i) the outstanding principal balance of the Borrower’s Indebtedness to the Subordinated Creditor on the date hereof is $620,033.94; and (ii) no events have taken place and no circumstances exist at the date hereof which would give the Subordinated Creditor the right to assert a defense, offset or counterclaim to any claim by the Bank for payment of the obligations now or hereafter arising under the Subordination Agreement or any other Loan Document to which the Subordinated Creditor is a party; and (b) releases and forever discharges the Bank and its successors, assigns, directors, officers, agents, employees and participants from any and all actions, causes of action, suits, proceedings, debts, sums of money, covenants, contracts, controversies, claims and demands, at law or in equity, which the Subordinated Creditor ever had or now has against the Bank or its successors, assigns, directors, officers, agents, employees or participants by virtue of their relationship to the Borrower or the Subordinated Creditor in connection with the Loan Documents and the transactions related thereto.
Nothing in this Acknowledgment requires or shall be deemed to require the Bank to obtain the consent of the Subordinated Creditor to any future amendment, modification or waiver to the Original Agreement or any other Loan Document.
The undersigned has executed this Acknowledgment to be effective as of the date first set forth above.
AIR T, INC., a Delaware corporation
By: ________________________________
Name: ________________________________
Its: ________________________________
18778658v1