Exhibit 10.1

Loan Agreement

By and among

Worthington Acquisition, LLC, Worthington MRO, LLC and Worthington Aviation, LLC, as the “Borrowers”

and

Minnesota Bank & Trust, as the “Lender”

dated as of

May __, 2018

TABLE OF CONTENTS

Page

Loan Agreement

This Loan Agreement (this “ Agreement ”), dated as of May __, 2018, is entered into by and among Worthington Acquisition, LLC , a North Carolina limited liability company (together with its successors and assigns, “ Acquisition ”), Worthington Aviation, LLC , a North Carolina limited liability company (together with its successors and assigns, “ Aviation ”), Worthington MRO, LLC , a North Carolina limited liability company (together with its successors and assigns, “ MRO ”; and together with Acquisition and Aviation being sometimes collectively referred to herein as, the “ Borrowers ” and individually as, a “ Borrower ”), and Minnesota Bank & Trust , a Minnesota state banking corporation (together with its successors and assigns, the “ Lender ”).

RECITALS

The Lender has agreed to make available to the Borrowers a revolving credit facility upon the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I
Definitions and Interpretation

Section 1.01     Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:

“ Acquisition ” has the meaning set forth in the preamble.

“ Affiliate ” as to any Person, means any other Person that, directly or indirectly through one or more intermediaries, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person, or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

“ Air T ” means Air T, Inc., a Delaware corporation.

“ Air T Credit Agreement ” means that certain Credit Agreement dated as of December 21, 2017, by and between Air T and the Lender , as amended to date and as the same may be amended, amended and restated, supplemented or otherwise modified from time to time.

“ Anti-terrorism Law ” means any Requirement of Law related to money laundering or financing terrorism including the PATRIOT Act, The Currency and Foreign Transactions Reporting Act (31 U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959) (also known as the “ Bank Secrecy Act ”), the Trading With the Enemy Act (50 U.S.C. § 1 et seq.) and Executive Order 13224 (effective September 24, 2001).

“ Asset Purchase Agreement ” means, that certain Asset Purchase Agreement dated as of April 6, 2018, as amended by that certain Amendment No. to Asset Purchase Agreement dated as of April 27, 2018, by and among Air T, Aviation, Worthington Aviation Parts, Inc., a Minnesota corporation (“Seller”) and Churchill Industries, Inc., a Minnesota corporation.

“ Aviation ” has the meaning set forth in the preamble.

“ Banking Services ” means each and any of the following bank services provided to Borrowers by Lender or any of Lender’s Affiliates: (a) commercial credit cards, (b) stored value cards, and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).

“ Banking Services Liabilities ” means any and all obligations of the Borrowers, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

“ Bankruptcy Code ” means Title 11 of the United States Code, as amended from time to time, or any similar federal or state law for the relief of debtors.

“ Blocked Person ” means any Person that (a) is publicly identified on the most current list of “Specially Designated Nationals and Blocked Persons” published by the Office of Foreign Assets Control of the US Department of the Treasury (“ OFAC ”) or resides, is organized or chartered, or has a place of business in a country or territory subject to OFAC sanctions or embargo programs, or (b) is publicly identified as prohibited from doing business with the United States under the International Emergency Economic Powers Act, the Trading With the Enemy Act, or any other Requirement of Law.

“ Board ” means the Board of Governors of the Federal Reserve System of the United States (or any successor thereto).

“ Borrower(s) ” has the meaning set forth in the preamble.

“ Borrowing Base ” means, at any date of determination, the sum of: (a) 75% of Eligible Accounts; plus (b) 50% of Eligible Inventory; plus (c) the Guaranty Amount; minus (d) the aggregate amount of accounts payable owing by Borrower under consignment agreements; provided , however, that the Lender reserves the right, in its sole discretion, to adjust such borrowing base percentages and components based on its periodic evaluation of the Collateral. The amount of the Borrowing Base shall be determined periodically from the most recent Borrowing Base Certificate and supporting reports delivered to the Lender.

“ Borrowing Date ” means any Business Day specified by the Borrowers in a Borrowing Notice as a date on which the Borrowers request the Lender to make a Loan hereunder.

“ Borrowing Notice ” means any request for a borrowing of Loans hereunder by Borrowers, which may be submitted in writing or in electronic form.

“ Business Day ” means, a day other than a Saturday, Sunday or other day on which commercial banks in Minneapolis, Minnesota are authorized or required by law to close.

“ Capital Expenditures ” with respect to any Person, means the aggregate of all expenditures by such Person for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets, software or additions to Equipment (including replacements, capitalized repairs and improvements) which are required to be capitalized under GAAP on the balance sheet of such Person.

“ Capital Lease Obligations ” with respect to any Person, means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases under GAAP on the balance sheet of such Person and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“ Cash Equivalents ” as to any Person, means (a) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one year from the date of acquisition by such Person, (b) time deposits and certificates of deposit of any commercial bank having, or which is the principal banking subsidiary of a bank holding company organized under the laws of the United States or any State thereof, having maturities of not more than one year from the date of acquisition by such Person, (c) repurchase obligations with a term of not more than 90 days for underlying securities of the types described in clause (a) above entered into with any bank meeting the qualifications specified in clause (b) above, (d) commercial paper issued by any issuer rated at least A-1 by Standard & Poor’s Ratings Services, or at least P-1 by Moody’s Investors Service, Inc. (or carrying an equivalent rating by a nationally recognized rating agency if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally), and in each case maturing not more than one year after the date of acquisition by such Person or (e) investments in money market funds substantially all of whose assets are comprised of securities of the types described in clauses (a) through (d) above.

“ Change in Law ” means the occurrence after the date of this Agreement of (a) the adoption or effectiveness of any law, rule, regulation, judicial ruling, judgment or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application by any Governmental Authority of any law, rule, regulation or treaty, or (c) the making or issuance by any Governmental Authority of any request, rule, guideline or directive, whether or not having the force of law; provided that , notwithstanding anything herein to the contrary (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives concerning capital adequacy promulgated by the Lender for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities shall, in each case, be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.

“ Change of Control ” means (a) any Person or group of persons within the meaning of §13(d)(3) of the Securities Exchange Act of 1934 (other than one or more Continuing Directors or Affiliates of Continuing Directors) becomes the beneficial owner, directly or indirectly, of 50% or more of the outstanding Equity Interests of the Borrower, or (b) individuals who constitute the Continuing Directors cease for any reason to constitute at least a majority of the board of directors of the Borrower.

“ Closing Date ” means the date on which the conditions precedent set forth in Section 4.01 are satisfied or waived.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Collateral ” has the meaning for such term set forth in the Security Agreement.

“ Collateral Assignment ” means that certain Collateral Assignment of Purchase Agreement dated as of the Closing Date and executed by Air T and Aviation in favor of the Lender.

“ Commitment ” means the Revolving Credit Commitment.

“ Consigned Inventory Eligibility Requirements ”: As set forth on Exhibit D to this Agreement.

“ Continuing Directors ” means the directors of Air T on the Closing Date, and each other director, if in each case, such other director’s nomination for election to the board of directors of Air T is recommended by at least a 66 2/3%/a majority of the Continuing Directors.

“ Contractual Obligation ” of any Person, means any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound, other than the Obligations.

“ Debt ” of any Person at any date, without duplication, means (a) all indebtedness of such Person for borrowed money; (b) all obligations of such Person for the deferred purchase price of property or services (other than (i) trade payables and accrued expenses incurred in the ordinary course of business and not past due for more than 61 days after the date on which each such trade payable or account payable was created and (ii) any earn-out, purchase price adjustment or similar obligation until such obligation appears in the liabilities section of the balance sheet of such Person; (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments; (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property); (e) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interests in such Person or any other Person or any warrants, rights or options to acquire such Equity Interests, valued, in the case of redeemable preferred interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; (f) all obligations of such Person, contingent or otherwise, as an account party or applicant under acceptance, letter of credit or similar facilities in respect of obligations of the kind referred to in subsections (a) through (e) of this definition; (g) all Guaranty Obligations of such Person in respect of obligations of the kind referred to in subsections (a) through (f) above; and (h) all obligations of the kind referred to in subsections (a) through (g) above secured by (or which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation.

“ Debtor Relief Law ” means the Bankruptcy Code and all other liquidation, bankruptcy, assignment for the benefit of creditors, conservatorship, moratorium, receivership, insolvency, rearrangement, reorganization or similar debtor relief laws of the US or other applicable jurisdictions in effect from time to time.

“ Default ” means any of the events specified in Section 8.01 which constitutes an Event of Default or which, upon the giving of notice, the lapse of time, or both pursuant to Section 8.01 would, unless cured or waived, become an Event of Default.

“ Disposition ” or “ Dispose ” means the sale, transfer, license, lease or other disposition (whether in one transaction or in a series of transactions, and including any sale and leaseback transaction) of any property (including, without limitation, any Equity Interests) by any Person (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

“ Dollars ” means the lawful currency of the United States.

“ Eligible Accounts ” means, at any date of determination, the United States dollar value (net of deposits, finance charges and/or service charges) of only such accounts of the Borrowers arising from the rendering of services in the ordinary course of business in which the Lender holds a first priority security interest and as to which the Lender, in its reasonable business judgment, shall from time to time determine to be collectible in a timely manner in the ordinary course of business without dispute or set-off. Without limiting the Lender’s right, in its reasonable business judgment, to consider any account not to be an Eligible Account, and by way of example only of types of accounts that the Lender will consider not to be Eligible Accounts, the Lender, notwithstanding any earlier classification of eligibility, may consider any account not to be an Eligible Account if:

(a)     any warranty is breached as to the account or the account debtor disputes liability or makes any claim with respect to the account;

(b)     the account is not paid by the account debtor within 120 days after the date of the original invoice relating thereto; or (ii) the account is owed by any account debtor who has not paid 10% or more of such account debtor’s accounts within the relevant time period specified in subsection (b)(i) above;

(c)     a petition in bankruptcy or other application for relief under any insolvency law is filed with respect to the account debtor owing the account, or the account debtor owing the account assigns for the benefit of creditors, becomes insolvent, fails, suspends, or goes out of business, or the Lender, in its reasonable business judgment, shall become dissatisfied with the creditworthiness of an account debtor owing an account;

(d)     the account arises from a sale to an account debtor that is outside the United States unless payment thereof is either (i) secured by a valid and irrevocable transferable letter of credit issued by a lender reasonably acceptable to Lender for the full amount thereof or (ii) secured by an insurance policy on terms, and issued by EXIM Bank or another insurer, reasonably satisfactory to Lender (which in any event shall insure not less than ninety percent (90%) of the face amount of such account and shall be subject to such deductions as are acceptable to Lender), and in each case which has been assigned or transferred to Lender in a manner reasonably acceptable to Lender;

(e)     the account debtor is an Affiliate, supplier or creditor of a Loan Party;

(f)     the account debtor with respect thereto is the United States of America or any department, agency or instrumentality thereof (a “Federal Governmental Authority”), or any state, county or local governmental authority, or any department, agency or instrumentality thereof, unless the relevant Loan Party has assigned its right to payment of such account to the Lender pursuant to the Assignment of Claims Act of 1940 as amended in the case of the a Federal Governmental Authority, or pursuant to applicable state law, if any, in all other instances, and such assignment has been accepted and acknowledged by the appropriate government officers;

(g)     if the Lender, in its reasonable business judgment, has established a credit limit for the account debtor with respect thereto, the aggregate dollar amount of accounts due from such account debtor, including such account, exceeds such credit limit;

(h)     such Account is evidenced by chattel paper or instruments unless the original of such chattel paper or instruments is delivered to the Lender;

(i)     such account arises from a transaction for which surety or performance bonds are posted; or

(j)     any account for a customer deposit.

The amount of Eligible Accounts shall be computed on a monthly basis from the Borrowing Base Certificate and other information required to be delivered by the Borrowers to the Lender pursuant to Section 6.02.

“ Eligible Assignee ” has the meaning set forth in Section 9.04.

“ Eligible Inventory ” shall mean the book United States dollar value of the Borrowers’ raw materials and finished goods inventory, in which only the Lender holds a first priority security interest and as to which the Lender, in its reasonable business judgment, shall elect from time to time to constitute Eligible Inventory. Without limiting the Lender’s right, in its reasonable business judgment, to consider any inventory not to be Eligible Inventory, and by way of example only of types of inventory that the Lender will consider not to be Eligible Inventory, the Lender, notwithstanding any earlier classification of eligibility, may consider any inventory not to be Eligible Inventory if: (a) such inventory is discontinued inventory; (b) such inventory is not (i) located on premises owned by one or more of the Borrowers, (ii) located on premises leased or rented by one or more of the Borrowers, unless a fully-executed landlord waiver has been delivered to the Lender with regards to such premises in form reasonably satisfactory to the Lender; or (iii) is stored with a bailee or warehouseman unless an fully-executed bailee letter has been received by the Lender with respect thereto in form reasonably satisfactory to the Lender, (c) such inventory is consigned to a Borrower, or (d) such inventory is consigned by a Borrower, unless such Borrower has complied with all of the Consigned Inventory Eligibility Requirements. The value of Eligible Inventory shall be the lower of the cost or market value of the Eligible Inventory computed in accordance with GAAP.

“ Environmental Action ” means any action, suit, demand, demand letter, claim, notice of violation or non-compliance, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement relating in any way to any Environmental Law, any permit issued under any Environmental Law, or any Hazardous Material, or arising from alleged injury or threat to health, safety or the environment including (a) by any Governmental Authority for enforcement, clean-up, removal, response, remedial or other actions or damages and (b) any Governmental Authority or third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief.

“ Environmental Law ” means any and all Federal, state, foreign, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirements of Law (including common law) as now or may at any time hereafter be in effect, and any binding judicial or administrative interpretation thereof, including any binding judicial or administrative order, consent decree or judgment, regulating, relating to or imposing liability or standards of conduct concerning protection of the environment or, to the extent relating to exposure to substances that are harmful or detrimental to the environment, or human health or safety.

“ Equipment ” has the meaning for such term set forth in the Security Agreement.

“ Equity Interests ” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership (or profit) interests in a Person (other than a corporation), securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person, and any and all warrants, rights or options to purchase any of the foregoing, whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized or otherwise existing on any date of determination.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ ERISA Affiliate ” means an entity, whether or not incorporated, that is under common control with any Borrower within the meaning of §4001 of ERISA or is part of a group that includes any Borrower and that is treated as a single employer under §414 of the Code.

“ Eurodollar Rate Loan ” means a Loan that accrues interest at the LIBOR Rate, as specified in the Note evidencing such Loan.

“ Excess Capital ” means, as of any date of determination, calculated on a consolidated basis for the Borrowers, the aggregate amount by which the Borrowers’ actual consolidated Tangible Assets exceeds the amount of Tangible Assets necessary to show proforma compliance with all financial covenants calculated as of such date, where the analysis supporting such proforma analysis is performed based on the consolidated balance sheet for the Borrowers then most-recently delivered to the Lender pursuant to Section 6.01(c).

“ Excess Capital Certificate ” means, a certificate in form and substance acceptable to the Lender and executed by a Responsible Officer of the Borrower, providing a detailed calculation of Excess Capital as of the date of a Restricted Payment pursuant to Section 7.07.

“ Event of Default ” has the meaning set forth in Section 8.01.

“ Excluded Taxes ” means any of the following Taxes, imposed on or with respect to the Lender (a) Taxes imposed on or measured by net income (however denominated), and franchise Taxes, (b) any branch profits Taxes imposed by the United States or any similar Tax imposed by any other jurisdiction.

“ GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“ Governmental Authority ” means the government of any nation or any political subdivision thereof, whether at the national, state, territorial, provincial, municipal or any other level, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of, or pertaining to, government.

“ Guarantor (s) ” means, Air T, Inc., together with each other Person who now or hereafter executes a guaranty of the Obligations in favor of the Lender.

“ Guaranty (ies) ” means, individually or collectively, as the case may be, the Limited Guaranty executed by Air T, in favor of the Lender, dated as of the Closing Date, and each other guaranty now or hereafter executed by a Guarantor, in each case as amended, amended and restated, supplemented or otherwise modified from time to time to the extent permitted under the Loan Documents.

“ Guaranty Amount ” means, (a) $3,000,000 during the period commencing on the Closing Date and ending on the Guaranty Amount Reduction Date, and (b) $1,500,000 on each subsequent date.

“ Guaranty Amount Reduction Date ” means the (a) first Business Day on which (i) there is no outstanding Default or Event of Default and (ii) the principal balance of the Term Loan and all accrued interest thereon has been paid in full; or (b) such earlier date on which the Lender, in its sole discretion, agrees to reduce the Guaranty Amount to $1,500,000.

“ Guaranty Obligation ” as to any Person, means any (a) obligation, contingent or otherwise, of such Person guaranteeing or having the effect of guaranteeing any Debt or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Debt or other obligation of the payment or performance of such Debt or other obligation, (iii) to maintain working capital, equity capital, net worth or solvency or liquidity or any level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Debt or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Debt or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) Lien on any assets of such Person securing any Debt or other obligation of any other Person, whether or not such Debt or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Debt to obtain any such Lien). The amount of any Guaranty Obligation shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guaranty Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.

“ Hazardous Materials ” means (a) any gasoline, petroleum or petroleum products or by-products, radioactive materials, friable asbestos or asbestos-containing materials, urea-formaldehyde insulation, polychlorinated biphenyls and radon gas, and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.

“ Heartland ” means Heartland Financial USA, Inc., a Delaware corporation.

“ Indemnified Taxes ” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by any Loan Party under any Loan Document, and (b) to the extent not otherwise described in (a), Other Taxes.

“ Insolvency ” with respect to any Multiemployer Plan, means such Plan is insolvent within the meaning of §4245 of ERISA.

“ Intangible Assets ” means, at any date of determination, the sum, calculated on a consolidated basis in accordance with GAAP for the Borrowers, of (i) goodwill, organizational expenses, research and development expenses, trademarks, trade names, copyrights, patents, patent applications, licenses and rights in any thereof, covenants not to compete, training costs and other similar intangibles; (ii) deferred charges or unamortized debt discount and expense other than deferred income taxes; (iii) Investments which are not readily marketable; (iv) any write-up in the book value of any assets resulting from a reevaluation thereof subsequent to the Closing Date; (v) accounts receivable, notes receivable or other receivables or amounts owed by officers, shareholders or Affiliates of one or more Loan Parties; and (vii) any asset acquired subsequent to the date of this Agreement which the Lender, in its reasonable business judgment, determines to be an intangible asset.

“ Intellectual Property ” means any and all intellectual property, including copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, technology, know-how and processes, all rights therein, and all rights to sue at law or in equity for any past, present, or future infringement, violation, misuse, misappropriation or other impairment thereof, whether arising under United States, multinational or foreign laws or otherwise, including the right to receive injunctive relief and all proceeds and damages therefrom.

“ Investment(s) ” has the meaning set forth in Section 7.04.

“ Lender ” has the meaning set forth in the preamble.

“ Lien ” means any mortgage, pledge, hypothecation, assignment (as security), deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest, or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever having substantially the same economic effect as any of the foregoing (including any conditional sale or other title retention agreement and any capital lease).

“ Loan ” means any Revolving Credit Loan or the Term Loan, as the context may require, and “ Loans ” means either Revolving Credit Loans or the Term Loan, as the context may require.

“ Loan Documents ” means, collectively, this Agreement, the Security Agreement, the Collateral Assignment, the Guaranty, the Pledge Agreement, the Revolving Credit Note, the Term Note and all other agreements, documents, certificates and instruments executed and delivered to the Lender by any Loan Party in connection therewith.

“ Loan Parties ” means the Borrowers, the Guarantor and the Pledgor.

“ Loan Year ” means the 12-month period commencing on the date of this Agreement (or the anniversary date thereof in any subsequent year) and ending on the day preceding the immediately following anniversary date of this Agreement.

“ Margin Stock ” has the meaning specified in Regulation U of the Board as in effect from time to time.

“ Material Adverse Effect ” means a material adverse effect on (a) the business, assets, properties, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of any Borrower, individually, or of the Borrowers taken as a whole, (b) the validity or enforceability of any Loan Document, (c) the perfection or priority of any Lien purported to be created by any Loan Document, (d) the rights or remedies of the Lender under any Loan Document or (e) the ability of any Loan Party to perform any of its payment obligations under any Loan Document to which it is a party.

“ Material Contracts ” with respect to any Person, means each contract to which such Person is a party involving aggregate consideration payable by or to such Person equal to at least $100,000 annually or otherwise material to the business, condition (financial or otherwise), operations, performance, properties or prospects of such Person.

“ Maturity Date ”: The earlier of: (a) the date on which the Loans become due and payable under Section 8.02 upon the occurrence of an Event of Default; or (b) (i) the Revolving Credit Termination Date for the Revolving Credit Loans; (ii) November 30, 2019 for the Term Loan.

“ Measurement Date ” means the last day of each fiscal year of the Borrowers, commencing with the fiscal year ending March 31, 2019.

“ Multiemployer Plan ” means a Plan which is a multiemployer plan as defined in § 4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate makes or is obligated to make contributions.

“ Note(s) ” means, individually or collectively, as the case may be, the Revolving Credit Note, the Term Note and each other promissory note now or hereafter made by the Borrowers payable to the order of the Lender.

“ Obligations ” means all Loans, advances, debts, liabilities, obligations, Banking Services Liabilities, covenants and duties, owing by one or more of the Borrowers to the Lender or any Affiliate of Lender of any kind or nature, present or future, which arise under this Agreement, any other Loan Document or by operation of law, whether or not evidenced by any note, guaranty or other instrument, whether or not for the payment of money, whether arising by reason of an extension of credit, opening, guarantying or confirming of a letter of credit, guaranty, indemnification or in any other manner, whether joint, several, or joint and several, direct or indirect (including those acquired by assignment or purchases), absolute or contingent, due or to become due, and however acquired. The term includes, without limitation, all amounts owed by one or more of the Borrowers to the Lender at such date as a result of draws on letters of credit paid by the Lender for which the Borrowers have not reimbursed the Lender, all principal, interest, fees, charges, expenses, attorneys’ fees, and any other sum chargeable to any Loan Party under this Agreement or any other Loan Document.

“ Other Investments ”: As defined in Section 7.04.

“ Other Taxes ” means any and all present or future stamp, court, recording, filing, intangible, documentary or similar Taxes or any other excise or property Taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement or registration of, or performance under, or from the receipt or perfection of a security interest under or otherwise with respect to this Agreement or any other Loan Document (other than Excluded Taxes imposed with respect to an assignment).

“ Participant ” has the meaning set forth in Section 9.04(c).

“ Participant Register ” has the meaning set forth in Section 9.04(c).

“ PATRIOT Act ” has the meaning set forth in Section 9.13.

“ PBGC ” means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor thereto).

“ Person ” means any individual, corporation, limited liability company, trust, joint venture, association, company, limited or general partnership, unincorporated organization, Governmental Authority or other entity.

“ Plan ” at any one time, means any “employee benefit plan” that is covered by ERISA and in respect of which any Borrower or an ERISA Affiliate is (or, if such plan were terminated at such time, would under §4062 or §4069 of ERISA be deemed to be) an “employer” as defined in §3(5) of ERISA.

“ Pledge Agreement ” means that certain Pledge Agreement dated as of even date herewith, executed by the Pledgor in favor of the Lender, as amended, amended and restated, supplemented or otherwise modified from time to time to the extent permitted under the Loan Documents.

“Pledgor” means, Stratus Aero Partners, LLC, a Delaware limited liability company.

“ Projections ” has the meaning set forth in Section 6.02.

“ Properties ” has the meaning set forth in Section 5.09(a).

“ Recovery Event ” means any settlement of or payment to any Loan Party in respect of any property or casualty insurance claim or any condemnation proceeding relating to any asset of any Loan Party.

“ Related Parties ” with respect to any Person, means such Person’s Affiliates and the directors, officers, employees, partners, agents, trustees, administrators, managers, advisors and representatives of it and its Affiliates.

“ Reorganization ” with respect to any Multiemployer Plan, means that such plan is in reorganization within the meaning of §4241 of ERISA.

“ Reportable Event ” means any of the events set forth in §4043© of ERISA, other than those events as to which the thirty day notice period is waived.

“ Requirement of Law ” as to any Person, means the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law (including common law), statute, ordinance, treaty, rule, regulation, order, decree, judgment, writ, injunction, settlement agreement, requirement or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“ Responsible Officer ” with respect to any Person, means the chief executive officer, president or chief financial officer of such Person, except that with respect to financial matters, the Responsible Officer shall be the chief financial officer or treasurer of such Person.

“ Restricted Payments ” has the meaning set forth in Section 7.07.

“ Revolving Credit Commitment ” means the obligation of the Lender to make Revolving Credit Loans in an aggregate principal amount not to exceed $1,500,000, as the same may be changed from time to time pursuant to the terms hereof.

“ Revolving Credit Commitment Period ”  means the period from and including the Closing Date to the Revolving Credit Termination Date.

“ Revolving Credit Loans ” means any revolving credit loan made by the Lender under Section 2.04.

“ Revolving Credit Note ” means the promissory note of the Borrowers described in Section 2.06(a), substantially in the form of Exhibit A -1 , as such promissory note may be amended, modified or supplemented from time to time, and such term shall include any substitutions for, or renewals of, such promissory note.

“ Revolving Credit Termination Date ” means the earliest to occur of (a) November 30, 2019, (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.

“ SEC ” means the Securities and Exchange Commission (or successors thereto or an analogous Governmental Authority).

“ Securities Act ” means, the Securities Act of 1933, as amended, or any successor Federal statute, and the rules and regulations thereunder which shall be in effect at the time.

“ Security Agreement ” means the Security Agreement executed by the Borrowers in favor of the Lender, dated as of the Closing Date, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time to the extent permitted under the Loan Documents.

“ Single Employer Plan ” means any Plan that is covered by Title IV of ERISA, other than a Multiemployer Plan.

“ Solvent ” with respect to any Person as of any date of determination, means that on such date (a) the present fair salable value of the property and assets of such Person exceeds the debts and liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the property and assets of such Person is greater than the amount that will be required to pay the probable liability of such Person on its debts and other liabilities, including contingent liabilities, as such debts and other liabilities become absolute and matured, (c) such Person does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts and liabilities, including contingent liabilities, beyond its ability to pay such debts and liabilities as they become absolute and matured, and (d) such Person does not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“ Subordination Agreement ” means each subordination agreement now or hereafter executed by a creditor of one or more Borrowers in favor of the Lender.

“ Subordinated Debt ” means, all Debt of the Borrowers which is contractually subordinated in right of payment to the Obligations pursuant to a Subordination Agreement on a form acceptable to the Lender in its reasonable discretion.

“ Subsidiary ” as to any Person, means any corporation, partnership, limited liability company, joint venture, trust or estate of or in which more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class of such corporation may have voting power upon the happening of a contingency), (b) the interest in the capital or profits of such partnership, limited liability company, or joint venture or (c) the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.

“ Tangible Assets ” means, at any date of determination, the sum, calculated on a consolidated basis in accordance with GAAP for the Borrowers, of (a) Total Assets minus (b) Intangible Assets.

“ Taxes ” means any and all present or future income, stamp or other taxes, levies, imposts, duties, deductions, charges, fees or withholdings imposed, levied, withheld or assessed by any Governmental Authority, together with any interest, additions to tax or penalties imposed thereon and with respect thereto.

“ Term Loan ”: means the Loan described in Section 2.01.

“ Term Loan Commitment ”: $3,400,000.00, and as the context may require, the agreement of the Lender to make the Term Loan to the Borrowers up to the amount of the Term Loan Commitment subject to the terms and conditions of this Agreement.

“ Term Note ”: means the promissory note of the Borrowers, substantially in the form of Exhibit A-2 , as such promissory note may be amended, modified or supplemented from time to time, and such term shall include any substitutions for, or renewals of, such promissory note.

“ Total Assets ” means, at any date of determination, the aggregate amount of assets appearing on the consolidated balance sheet of the Borrowers at such date prepared in accordance with GAAP.

“ Transactions ” means, the following series of transactions: (a) Acquisitions’ purchase of substantially all of the assets and its assumption of certain of the liabilities of the Seller pursuant to the Asset Purchase Agreement (the “Worthington Acquisition”); (b) the incurrence of the Obligations; (c) the contribution by Acquisition of the assets of Seller’s Worthington Aviation Parts division to Aviation in return for all of the membership interest of Aviation; (d) the contribution by Acquisition of the assets of Seller’s Worthington MRO Center division to Aviation in return for all of the membership interest of Aviation; and (d) the consummation of the other transactions contemplated by the Transaction Documents.

“ Transaction Documents ” means, the documents listed on Schedule A attached hereto.

“ Uniform Commercial Code ” means the Uniform Commercial Code as in effect in the state of Minnesota from time to time.

Section 1.02     Interpretation With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

(a)     The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

(b)     In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

(c)     Any reference herein or in any other Loan Document to the satisfaction, repayment, or payment in full of the Obligations shall mean the repayment in Dollars in full in cash or immediately available funds (and in the case of any other contingent Obligations, providing cash collateral or other collateral as may be requested by the Lender) of all of the Obligations other than unasserted contingent indemnification Obligations.

(d)     All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP as in effect from time to time, and applied on a consistent basis in a manner consistent with that used in preparing the Guarantor’s audited financial statements, except as otherwise specifically prescribed herein.

ARTICLE II
The Commitments and Loans

Section 2.01     Term Loan Commitment .

Subject to the terms and conditions hereof and in reliance upon the warranties of the Borrowers herein, the Lender agrees to make a loan (the “ Term Loan ”) in the amount of the Term Loan Commitment to the Borrowers at the Lender’s principal office in Edina, Minnesota in immediately available funds on the Closing Date. Amounts borrowed under this Section 2.01 and repaid or prepaid may not be reborrowed.

Section 2.02     Procedure for Term Loan Borrowing .

Unless the Lender determines that any applicable condition specified in Article IV has not been satisfied (in which case the Lender will promptly notify the Borrowers in writing of such determination), the Lender will make the amount of the Term Loan available to the Borrowers at the Lender’s principal office in Edina, Minnesota in immediately available funds on the Closing Date

Section 2.03     Revolving Credit Commitment.

(a)     Subject to the terms and conditions of this Agreement, the Lender agrees to make Revolving Credit Loans to the Borrowers during the Revolving Credit Commitment Period in an aggregate principal amount at any one time outstanding not exceeding the lesser of (i) the amount of the Revolving Credit Commitment or (ii) the Borrowing Base. During the Revolving Credit Commitment Period the Borrowers may use the Revolving Credit Commitment by borrowing, prepaying the Revolving Credit Loans in whole or in part, and re-borrowing, all in accordance with the terms and conditions hereof.

(b)     The Borrowers shall jointly and severally repay all outstanding Revolving Credit Loans on the Revolving Credit Termination Date.

Section 2.04     Procedures for Revolving Credit Borrowing. The Borrowers shall either (a) submit a draw request to the Lender in writing or telephonically; or (b) use the Lender’s electronic banking systems to request each proposed borrowing in accordance with the requirements of such systems as may be in effect from time to time. Each such notice shall be effective upon receipt by the Lender, shall be irrevocable, and shall specify the date and amount of borrowing requested. At the request of the Lender, a telephonic request must be confirmed in writing by the Borrowers within three (3) Business Days after such request So long as (a) all conditions precedent set forth in Article IV with respect to such borrowing have been satisfied, and (b) with respect to a request for a Revolving Credit Loan, the aggregate principal amount outstanding of all Revolving Credit Loans at such time does not exceed the lesser of (i) the amount of the Revolving Credit Commitment or (ii) the Borrowing Base, in each case after giving effect to such Revolving Credit Loan, the Lender shall provide immediately available funds to the Borrowers in the amount of such requested borrowing on the requested borrowing date by depositing such funds into depository account number 161011127, maintained by the Borrowers with the Lender. Each borrowing shall be on a Business Day

Section 2.05     Termination or Reduction of Revolving Credit Commitment.

(a)     Upon not less than three Business Days’ notice to the Lender, the Borrowers shall have the right to terminate the Revolving Credit Commitment or, from time to time, to reduce the aggregate amount of the Revolving Credit Commitment; provided, that no such termination or reduction of Revolving Credit Commitment shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Credit Loans made on the effective date thereof, the aggregate principal amount then outstanding of all Revolving Credit Loans would exceed the Revolving Credit Commitment. Any such partial reduction shall be in an amount equal to $100,000, or a whole multiple thereof, and shall reduce permanently the Revolving Credit Commitment then in effect.

Section 2.06     Repayment of Loans; Evidence of Debt.

(a)      Revolving Note . The Revolving Credit Loans made by the Lender shall be evidenced by a Revolving Credit Note in the initial amount of the Revolving Credit Commitment. The Revolving Credit Loans and the Revolving Credit Note shall mature and be payable at Maturity of the Revolving Credit Loans. The Lender shall enter in its records the amount of each of its Revolving Credit Loans, the rate of interest borne on such Revolving Credit Loans, and the payments of the Revolving Credit Loans received by the Lender, and such records shall be conclusive evidence of the subject matter thereof, absent manifest error.

(b)      Term Note A . The Term Loan made by the Lender shall be evidenced by the Term Note in the amount of Term Loan when made. Term Loan shall mature and be payable in accordance with the provisions of the Term Note. The Lender shall enter in its records the amount of Term Loan, the rate of interest borne on the Term Loan and the payments of Term Loan received by the Lender, and such records shall be conclusive evidence of the subject matter thereof, absent manifest error.

(c)     The Borrowers hereby jointly and severally unconditionally promise to pay to the Lender in full in cash, to the extent not previously paid, then-unpaid principal amount of each Loan on its Maturity Date.

(d)     The Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Borrowers to the Lender resulting from each Loan, including the amounts of principal and interest payable and paid to the Lender from time to time under this Agreement.

Section 2.07     Optional Prepayments.

(a)     Voluntary .

(i)      Revolving Credit Loans . The Borrowers shall have the right, by giving written notice to the Lender by not later than 3:00 p.m. (Minneapolis time) on the Business Day of such payment, to voluntarily prepay the Revolving Credit Loans in whole or in part at any time without premium or penalty.

(ii)    Term Loan . The Borrowers shall have the right, by giving written notice to the Lender by not later than 3:00 p.m. (Minneapolis time) on the Business Day of such payment, to voluntarily prepay the Term Loan in whole or in part at any time, subject to the contemporaneous payment of any premium or fees set forth in the Term Note.

Section 2.08     Mandatory Prepayments .

(a)      Revolving Credit Loans . If, at any time, the aggregate principal amount then outstanding of all Revolving Credit Loans exceeds the lesser of the Revolving Credit Commitment or the Borrowing Base, then the Borrowers, upon demand, shall jointly and severally prepay the amount of such excess together with interest on the amount prepaid.

(b)      Term Loan . Upon the sale or other disposition (including, without limitation the loss or destruction of any asset due to accident, fire or other cause) of any item of the Borrowers assets (excluding sales of Inventory in the ordinary course of Borrowers’ business), the Borrowers shall jointly and severally make mandatory prepayments of the Term Loan to the extent of any cash proceeds received from such sale or disposition.

Section 2.09     Application of Prepayments .

Any partial prepayment of the Term Loan shall be applied to installments due on the Term Loan in the inverse order of their maturities.

Section 2.10     Interest.     

(a)      Term Loans . The Borrowers jointly and severally agree to pay interest on the outstanding principal amount of the Term Loan from the date of the Term Loan until the Term Loan is paid at the rates and at the times specified in the Term Note.

(b)      Revolving Credit Loans . The Borrowers jointly and severally agree to pay interest on the outstanding principal amount of the Revolving Credit Loans at the rates and at the times specified in the Revolving Credit Note.

ARTICLE III
Taxes, Etc.

Section 3.01     Taxes.

(a)     Any and all payments by or on account of any obligation of the Borrowers hereunder or under any other Loan Document shall be made free and clear of and without deduction or withholding for any Taxes except as required by applicable law. If the Borrowers are required by applicable law to deduct or withhold any Taxes from such payments, then:

(i)     if such Tax is an Indemnified Tax, the amount payable by the Borrowers shall be increased so that after all such required deductions or withholdings are made (including deductions or withholdings applicable to additional amounts payable under this Section), the Lender receives an amount equal to the amount it would have received had no such deduction or withholding been made, and

(ii)     the Borrowers shall make such deductions or withholdings and timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law.

(b)     Without limiting the provisions of Section 3.01(a) above, the Borrowers shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c)     The Borrowers shall jointly and severally indemnify the Lender, within ten days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed on or attributable to amounts payable under this Section) paid or payable by the Lender, on or with respect to an amount payable by the Borrowers under or in respect of this Agreement or under any other Loan Document, together with any reasonable expenses arising in connection therewith and with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate from the Lender as to the amount of such payment or liability delivered to the Borrowers shall be conclusive absent manifest error.

(d)     As soon as practicable after any payment of Taxes by the Borrowers to a Governmental Authority pursuant to this Section 3.01, the Borrowers shall deliver to the Lender the original or certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the relevant return reporting such payment or other evidence of such payment reasonably satisfactory to the Lender.

(e)     If the Lender determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified by the Borrowers or with respect to which the Borrowers have paid additional amounts pursuant to this Section, it shall pay over such refund (or the amount of any credit in lieu of refund) to the Borrowers (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrowers under this Section with respect to the Taxes giving rise to such refund or credit in lieu of refund), net of all out-of-pocket expenses of the Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund or credit in lieu of refund); provided that , the Borrowers, upon the request of the Lender, jointly and severally agree to repay the amount paid over to the Borrowers (plus any interest, penalties or other charges imposed by the relevant Governmental Authority) to the Lender in the event the Lender is required to repay such refund or credit in lieu of refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (e), in no event will the Lender be required to pay any amount to the Borrowers pursuant to this paragraph if the payment of such amount would place the Lender in a less favorable net after-Tax position than it would have been in if the Tax subject to indemnification had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. Nothing in this paragraph (e) shall be construed to require the Lender to make available its tax returns or any other information relating to its taxes that it deems confidential to the Borrowers or any other Person.

Section 3.02     Increased Costs; Capital Adequacy Requirements.

(a)     If any Change in Law shall:

(i)     impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, the Lender;

(ii)     subject the Lender to any Taxes (other than Indemnified Taxes) on its loans, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

(iii)     impose on the Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Eurodollar Rate Loans made by the Lender;

and the result of any of the foregoing shall be to increase the cost to the Lender of making, converting to, continuing or maintaining any Eurodollar Rate Loan or of maintaining its obligation to make any such Loan, or to reduce the amount of any sum received or receivable by the Lender hereunder (whether of principal, interest or any other amount) then, upon request of the Lender, the Borrowers will jointly and severally pay to the Lender such additional amount or amounts as will compensate the Lender for such additional costs incurred or reduction suffered.

(b)     If the Lender determines that any Change in Law affecting the Lender, or Heartland (if any), regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on the Lender’s capital or on the capital of Heartland, if any, as a consequence of this Agreement, the Revolving Credit Commitment, the Term Loan Commitment or the Loans, to a level below that which the Lender or Heartland could have achieved but for such Change in Law (taking into consideration the Lender’s policies and the policies of Heartland with respect to capital adequacy), then from time to time the Borrowers will jointly and severally pay to the Lender such additional amount or amounts as will compensate the Lender or Heartland for any such reduction suffered.

(c)     A certificate from the Lender setting forth the amount or amounts necessary to compensate it or its holding company, as specified in paragraph (a) or (b) of this Section and delivered to the Borrowers, shall be conclusive absent manifest error. The Borrowers shall jointly and severally pay the Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

(d)     Failure or delay on the part of the Lender to demand compensation pursuant to this Section shall not constitute a waiver of the Lender’s right to demand such compensation; provided that , the Borrowers shall not be required to compensate the Lender pursuant to this Section for any increased costs incurred or reductions suffered more than 270 days prior to the date that the Lender notifies the Borrowers of the Change in Law giving rise to such increased costs or reductions and of the Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270 day period referred to above shall be extended to include the period of such retroactive effect).

Article IV
Conditions Precedent

Section 4.01     Conditions Precedent to Initial Loans. The obligation of the Lender to make the initial Revolving Credit Loans and the Term Loan is subject to the satisfaction or the waiver by the Lender of the following conditions precedent:

(a)     The Lender shall have received:

(i)     this Agreement, duly executed and delivered by Responsible Officer of each Borrower;

(ii)     the Revolving Credit Note, the Term Note, the Security Agreement, the Pledge Agreement, the Collateral Assignment and the Guaranty, in each case executed and delivered by the Loan Parties party thereto;

(iii)     results of a recent lien searches in each of the jurisdictions where each Borrower is organized and its assets are located, and such searches reveal no Liens on any of the assets of the Borrowers, except for Liens permitted under this Agreement or discharged on or prior to the Closing Date pursuant to documentation satisfactory to the Lender;

(iv)     a payoff letter, in form and substance acceptable to the Lender in its sole and absolute discretion, executed by BMO Harris Bank N.A.; and

(v)     fully-executed copies of each the Transaction Documents, each in form and substance satisfactory to the Lender and certified as a true and correct copy by the Secretary of Aviation;

(vi)     payment, in immediately available funds of a non-refundable origination fee in the amount of $24,500, together with reimbursement for all expenses for which invoices have been presented (including the fees and expenses of Lender’s legal counsel), on or before the Closing Date;

(vii)     an opinion of counsel to the Loan Parties, in form and substance acceptable to the Lender;

(viii)     evidence satisfactory to the Lender that: (i) all conditions precedent to the consummation of the Transactions have been satisfied or waived; (ii) all necessary regulatory approvals to the consummation of the Transactions have been obtained; (iii) no litigation exists relating to the Transactions; and (iv) contemporaneously with the Borrowers’ receipt of the proceeds of the initial Revolving Credit Loans, the Transactions will be consummated in full in accordance with the terms of the Transaction Documents;

(ix)     evidence that each document (including any Uniform Commercial Code financing statement and appropriate filings with the United States Patent and Trademark Office or United States Copyright Office) required by the Loan Documents or any Requirement of Law or reasonably requested by the Lender to be filed, registered or recorded in order to create in favor of the Lender a perfected first priority Lien on the Collateral described therein, prior and superior in right to any other Person shall have been properly filed (or provided to the Lender) or executed and delivered in each jurisdiction;

(x)     a Borrowing Base Certificate as of a date satisfactory to the Lender certified by a Responsible Officer of each Borrower;

(xi)     a pro forma balance sheet for the Borrowers prepared on a consolidated basis, satisfactory to the Lender, taking into account the consummation of the Transactions and the receipt of the proceeds of the initial Revolving Credit Loans, describing all significant assumptions employed in connection therewith and certifying that all accounting entries necessary to account for the Transactions are reflected therein;

(xii)     evidence of insurance coverage in form, scope and substance satisfactory to the Lender and otherwise in compliance with the terms of Section 5.10 and Section 6.06 of this Agreement; and

(xiii)     an appraisal of the assets being purchased pursuant to the Asset Purchase Agreement, prepared by an independent appraisal professional selected by the Lender, satisfactory in form and substance to the Lender;

(xiv)     a certificate of each Loan Party, each in form and substance satisfactory to the Lender and certified by a secretary or assistant secretary of such Loan Party, dated the Closing Date, including:

(A)     a certificate of incorporation, of each Loan Party that is a corporation, certified by the Secretary of State of the state of its incorporation;

(B)     by-laws for each Loan Party that is a corporation as in effect on the date on which the resolutions referred to below were adopted;

(C)     a certification of formation, of each Loan Party that is a limited liability company, certified by the Secretary of State of the state of its organization;

(D)     limited liability agreement for each Loan Party that is a limited liability company as in effect on the date on which the resolutions referred to below were adopted;

(E)     resolutions of the board of directors or, as the case may be, sole member, of each Loan Party approving the transactions contemplated by this Agreement and each Loan Document to which it is or is to be a party;

(F)     a certification that the names and signatures of the officers of each Loan Party authorized to sign each Loan Document to which it is or is to be a party and other documents to be delivered hereunder and thereunder are true and correct;

(G)     evidence of good standing for each Loan Party from the State of its organization and each other state where it is qualified to do business; and

(xv)     Such other approvals, opinions or documents as the Lender may reasonably request;

(b)     The Lender or its agent shall have completed its survey of the business, operations and assets of the Seller and of the Borrowers, and such survey shall provide the Lender with results and information which, in the Lender’s determination, are satisfactory to the Lender.

(c)     There shall have occurred no Material Adverse Effect.

Section 4.02     Conditions Precedent to Each Loan. The obligation of the Lender to make each Loan hereunder (including, without limitation, its initial extension of credit), is subject to the satisfaction or the waiver by the Lender of the following conditions precedent:

(a)     Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct on and as of such date as if made on and as of such date.

(b)     No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Loans requested to be made on such date.

Each borrowing by the Borrowers hereunder shall constitute a joint and several representation and warranty by the Borrowers, as of the date such Loan is made, that the conditions contained in Article IV have been satisfied.

Article V
Representations and Warranties

To induce the Lender to enter into this Agreement and to make the Loans , the Borrowers hereby jointly and severally represent and warrant to the Lender that:

Section 5.01     Existence; Compliance With Laws. Each Loan Party (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, (b) is duly qualified as a foreign corporation or other organization and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification except to the extent that the failure to qualify in such jurisdiction could not reasonably be expected to have a Material Adverse Effect, and (c) is in compliance with all Requirements of Law except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 5.02     Power; Authorization; Enforceability.

(a)     Each Loan Party has the power and authority, and the legal right, to own or lease and operate its property, and to carry on its business as now conducted and as proposed to be conducted, and to execute, deliver and perform the Loan Documents and the Transaction Documents to which it is a party and, in the case of the Borrowers, to obtain Loans hereunder. Each Loan Party has taken all necessary organizational action to authorize the execution, delivery and performance of the Loan Documents and the Transaction Documents to which it is a party and, in the case of the Borrowers, to authorize the borrowing of Loans on the terms and conditions contained herein. No consent or authorization of, filing with (except as required under the Securities Act), notice to or other act by, or in respect of, any Governmental Authority or any other Person is required in connection with the extensions of credit hereunder or with the execution, delivery, performance, validity or enforceability of this Agreement or any of the Loan Documents or any of the Transaction Documents, which consents, authorizations, filings and notices have been obtained or made and are in full force and effect, and (ii) the filings referred to in Error! Reference source not found. . Each Loan Document and each Transaction Documents has been duly executed and delivered by each Loan Party that is a party thereto.

(b)     This Agreement constitutes, and each other Loan Document when delivered hereunder will constitute, a legal, valid and binding obligation of each Loan Party party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

Section 5.03     No Contravention. The execution, delivery and performance of the Transaction Documents, this Agreement and the other Loan Documents, the borrowing of Loans hereunder and the use of the proceeds thereof will not violate any Requirement of Law or any Contractual Obligation of any Loan Party and will not result in, or require, the creation or imposition of any Lien on any of their respective properties or assets pursuant to any Requirement of Law or any such Contractual Obligation (other than the Liens created by the Loan Documents). No Requirement of Law or Contractual Obligation applicable to any Loan Party could reasonably be expected to have a Material Adverse Effect.

Section 5.04     Financial Statements.

(a)     The pro forma unaudited balance sheet of the Borrowers delivered to the Lender pursuant to Section 4.01(a)(xi)has been prepared on a basis in conformity with GAAP (except for the omission of footnotes and prior period comparative data required by GAAP and for variations from GAAP which in the aggregate are not material and for reallocations of values with respect to categories of assets acquired in connection with, and adjustment for actual fees, expenses and transaction costs incurred in connection with, the Transactions) and presents fairly the financial condition of the Borrowers, assuming consummation of the Transactions.

Section 5.05     No Material Adverse Effect. Since March 31, 2018, no development or event has occurred that has had or could reasonably be expected to have a Material Adverse Effect.

Section 5.06     No Litigation. Other than as disclosed on Schedule 5.06, no action, suit, litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or threatened by or against any Loan Party or against any of its property or assets (a) with respect to any of the Loan Documents or any of the transactions contemplated hereby or thereby, or (b) that could reasonably be expected to have a Material Adverse Effect.

Section 5.07     No Default. No Default or Event of Default has occurred and is continuing and no default has occurred and is continuing under or with respect to any Contractual Obligation of any Borrower or any of its Subsidiaries that could reasonably be expected to have a Material Adverse Effect.

Section 5.08     Ownership of Property; Liens.

(a)     Upon the consummation of the Transactions on the Closing Date in accordance with the Transaction Documents, each Borrower shall have a valid leasehold interest in, all its real property, and good title to, or a valid leasehold interest in, all its other property, and none of such property is subject to any Lien except as permitted by Section 7.02.

(b)     None of the Borrowers owns any real property.

(c)     Schedule 5.08 sets forth a complete and accurate list as of the date hereof of all leases of real property under which each Borrower is the lessee, showing as of the date hereof, the street address, county or other relevant jurisdiction, state, lessor, lessee, expiration date and annual rental cost thereof.

Section 5.09     Environmental Matters. Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect:

(a)     none of the facilities or properties currently or formerly owned, leased or operated by Borrowers (the “ Properties ”) contain or previously contained, any Hazardous Materials in amounts or concentrations or under circumstances that constitute or constituted a violation of, or could result in liability under, any Environmental Law;

(b)     No Borrower has received any notice of actual or alleged violation, non-compliance or liability regarding compliance with Environmental Laws or other environmental matters or with respect to any of the Properties or the business operated by the Borrowers, nor is there any reason to believe that any such notice will be received or is being threatened;

(c)     the Properties and all operations at the Properties are and formerly have been in compliance with all applicable Environmental Laws, and there is no contamination at, under or about the Properties or violation of any Environmental Law with respect to the Properties or the business operated by Borrower;

(d)     Hazardous Materials have not been transported or disposed of from the Properties in violation of, or in a manner or to a location that could result in liability to any Loan Party under, any Environmental Law; no Hazardous Materials have been generated, treated, stored or disposed of at, on or under any of the Properties in violation of, or in a manner that could result in liability under, any applicable Environmental Law; and there has been no release or threat of release of Hazardous Materials at or from the Properties, or arising from or related to the operations of any Loan Party in connection with the Properties or the business operated by Borrower, in violation of or in amounts or in a manner that could result in liability under Environmental Laws;

(e)     no administrative or governmental action or judicial proceeding is pending or, to the knowledge of the Borrowers, threatened, under any Environmental Law to which any Borrower is or will be a party with respect to the Properties or the business operated by any Borrower, nor are there any decrees or orders or other administrative or judicial requirements outstanding under any Environmental Law with respect to the Properties or the business operated by any Borrower; and

(f)     No Borrower has assumed any liability of any other Person under Environmental Laws.

Section 5.10     Insurance. The properties of the Borrowers are insured with financially sound and reputable insurance companies which are not Affiliates of the Borrowers, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrowers operate. Schedule 5.10 sets forth a description of all insurance maintained by or on behalf of the Borrowers as of the Closing Date. Each insurance policy listed on Schedule 5.10 is in full force and effect and all premiums in respect thereof that are due and payable have been paid.

Section 5.11     Material Contracts. Schedule 5.11 sets forth all Material Contracts to which any Borrower is a party or is bound as of the Closing Date. The Borrowers have delivered true, correct and complete copies of such Material Contracts to the Lender on or before the Closing Date. No Borrower is in breach or in default in any material respect of or under any Material Contract and no Borrower has received any notice of the intention of any other party thereto to terminate any Material Contract.

Section 5.12     Intellectual Property. The Borrowers owns, or are licensed to use, all Intellectual Property necessary for the conduct of their respective businesses as currently conducted or proposed to be conducted. No material claim has been asserted and is pending by any Person challenging the use, validity or effectiveness of any of Borrowers’ Intellectual Property, nor is any Borrower aware of any valid basis for any such claim. The use of Intellectual Property by Borrowers does not materially infringe on the rights of any Person. Schedule 5.12 attached hereto is a complete list of all intellectual property that is owned by, or licensed to, Borrowers.

Section 5.13     Taxes. Borrowers have filed all Federal, state and other tax returns that are required to be filed and have paid all taxes shown thereon to be due, together with applicable interest and penalties, and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (except those that are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the Borrowers). No tax Lien has been filed, and, to the knowledge of the Borrowers, no claim is being asserted, with respect to any such tax, fee or other charge. No Borrower is a party to any tax sharing agreement.

Section 5.14     ERISA. Each Plan is in compliance with ERISA, the Code and any Requirement of Law; neither a Reportable Event nor an “accumulated funding deficiency” (within the meaning of §412 or §430 of the Code or §302 of ERISA) has occurred (or is reasonably likely to occur) with respect to any Plan. No Single Employer Plan has terminated, and no Lien has been incurred in favor of the PBGC or a Plan. Based on the assumptions used to fund each Single Employer Plan, the present value of all accrued benefits under each such Plan did not materially exceed the value of the assets of such Plan allocable to such accrued benefit as of the last annual valuation date prior to the date on which this representation is made. Neither any Loan Party nor any ERISA Affiliate has incurred or is reasonably expected to incur any Withdrawal Liability that could reasonably be expected to result in a material liability under ERISA, in connection with any Multiemployer Plan. No such Multiemployer Plan is (or is reasonably expected to be) terminated, in Reorganization, or insolvent (within the meaning of §4245 of ERISA).

Section 5.15     Margin Regulations. No Borrower is engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Loan will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock.

Section 5.16     Investment Company Act. No Loan Party is or is required to be registered as an “investment company” under the Investment Company Act of 1940, as amended.

Section 5.17     Subsidiaries; Equity Interests.

(a)     Aviation and MRO are the only Subsidiaries of Acquisition

(b)     Aviation and MRO do not have any Subsidiaries.

Section 5.18     Labor Matters. Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect (a) there are no strikes, lockouts or other labor disputes pending or, to the knowledge of the Borrowers, threatened against any Loan Party, (b) hours worked by and wages paid to employees of each Loan Party have not violated the Fair Labor Standards Act or any other applicable Requirement of Law, and (c) all payments due in respect of employee health and welfare insurance from any Loan Party have been paid or properly accrued on the books of the relevant Loan Party.

Section 5.19     Accuracy of Information, Etc. The Borrowers have disclosed to the Lender all agreements, instruments and corporate or other restrictions to which any Borrwer is subject, and all other matters known to the Borrowers, that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. No statement or information contained in this Agreement, any other Loan Document, or any other document, certificate or statement furnished by or on behalf of the Borrowers to the Lender, for use in connection with the transactions contemplated by this Agreement or the other Loan Documents, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statement contained herein or therein not misleading. The Projections included in such materials are based upon good faith estimates and assumptions believed by the Borrowers to be reasonable at the time made; it being recognized by the Lender that such Projections as to future events are not to be viewed as fact and that actual results during the period or periods covered by the Projections may differ from such projected results and such differences may be material.

Section 5.20     Security Documents.

(a)     The Security Agreement creates in favor of the Lender a legal, valid, continuing and enforceable security interest in the Collateral, the enforceability of which is subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. The financing statements, releases and other filings are in appropriate form and have been or will be filed in the offices of the Secretary of State in which each Borrower is organized. Upon such filings and/or the obtaining of “control” (as defined in the Uniform Commercial Code), the Lender will have a perfected Lien on, and security interest in, to and under all right, title and interest of the grantors thereunder in all Collateral that may be perfected by filing, recording or registering a financing statement or analogous document (including without limitation the proceeds of such Collateral subject to the limitations relating to such proceeds in the Uniform Commercial Code) or by obtaining control, under the Uniform Commercial Code (in effect on the date this representation is made) in each case prior and superior in right to any other Person, except for Liens permitted under Section 7.02.

Section 5.21     Solvency. Each of the Loan Parties is, and after giving effect to the consummation of the Transaction and the incurrence of all Debt and obligations incurred in connection herewith will be, Solvent.

Section 5.22     PATRIOT Act; OFAC and Other Regulations.

(a)     No Loan Party, any of its Subsidiaries or any of the Affiliates or respective officers, directors, brokers or agents of such Loan Party, Subsidiary or Affiliate:

(i)     has violated any Anti-terrorism Laws; or

(ii)     has engaged in any transaction, investment, undertaking or activity that conceals the identity, source or destination of the proceeds from any category of prohibited offenses designated by the Organization for Economic Co-operation and Development’s Financial Action Task Force on Money Laundering.

(b)      No Loan Party, any of its Subsidiaries or any of the Affiliates or respective officers, directors, brokers or agents of such Loan Party, Subsidiary or Affiliate that is acting or benefiting in any capacity in connection with the Loans is a Blocked Person.

(c)     No Loan Party, any of its Subsidiaries or any of the Affiliates or respective officers, directors, brokers or agents of such Loan Party, Subsidiary or Affiliate acting or benefiting in any capacity in connection with the Loans:

(i)     conducts any business or engages in making or receiving any contribution of goods, services or money to or for the benefit of any Blocked Person;

(ii)     deals in, or otherwise engages in any transaction related to, any property or interests in property blocked pursuant to any Anti-terrorism Law; or

(iii)     engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-terrorism Law.

Section 5.23      The Worthington Acquisition has been consummated substantially in accordance with the terms of the Transaction Documents as of the Closing Date. As of the Closing Date, the Transaction Documents have not been altered, amended or otherwise modified or supplemented in any material respect or any material condition thereof waived without the prior written consent of the Lender. All representations and warranties made by the Loan Parties in any of the Transaction Documents or in the certificates delivered in connection therewith are true and correct in all material respects as of the date hereof with the same force and effect as though made on and as of the date hereof, and such representations and warranties of the Loan Parties are hereby confirmed to the Lender and made representations and warranties hereunder as fully as if set forth herein. No Borrower has any knowledge that any of the representations and warranties made in the Transaction Documents by or on behalf of any party thereto other than the Loan Parties are untrue or incorrect.

Article VI
Affirmative Covenants

So long as the Lender has any Revolving Credit Commitment hereunder, or any Loans, or any other amounts payable to the Lender hereunder or under any other Loan Document have not been indefeasibly paid in full, each of the Borrowers shall, and shall cause each other Loan Party to furnish all applicable materials to the Lender:

Section 6.01     Financial Statements. Furnish to the Lender:

(a)     As soon as available, but in any event within 120 days after the end of each fiscal year of the Borrower, a copy of the annual audit report of Air T and its Subsidiaries for such year including a copy of the audited consolidated balance sheet of Air T and its Subsidiaries as at the end of such year and the related audited consolidated statements of income and of cash flows for such year, setting forth in each case in comparative form the figures for the previous year, together with an opinion as to such audit report of BDO USA, LLP or other independent certified public accountants of nationally recognized standing which does not contain a “going concern” or similar qualification or exception, or qualification arising out of the scope of the audit, together with related consolidating financial statements and a certificate of such accounting firm to the Lender stating that in the course of the regular audit of the business of Air T and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards; provided that , in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, the Borrowers shall also provide a reconciliation of such financial statements to GAAP,

(b)     As soon as available and in any event within 45 days after the end of each fiscal quarter of each fiscal year, a copy of the unaudited financial statements of Air T prepared in conformity with GAAP (except for the omission of footnotes and prior period comparative data required by GAAP and for variations from GAAP which in the aggregate are not material) consisting of a consolidated balance sheet as of the close of such fiscal quarter and related consolidated statements of operations and retained earnings and cash flow for such fiscal quarter and from the beginning of such fiscal year to the end of such fiscal quarter and comparative figures for the corresponding portion of the preceding fiscal year together with related consolidating financial statements, certified by a Responsible Officer of Air T; and

(c)     As soon as available and in any event within 30 days after the end of each fiscal month of each fiscal year, a copy of the unaudited financial statements of the Borrowers prepared in conformity with GAAP (except for the omission of footnotes and prior period comparative data required by GAAP and for variations from GAAP which in the aggregate are not material) consisting of a consolidated balance sheet as of the close of such fiscal month and related consolidated statements of operations and retained earnings and cash flow for such fiscal month and from the beginning of such fiscal year to the end of such fiscal month and comparative figures for the corresponding portion of the preceding fiscal year together with related consolidating financial statements, certified by a Responsible Officer of each Borrower.

All such financial statements shall be complete and correct and shall be prepared in reasonable detail and in accordance with GAAP applied (except as approved by such accountants or Responsible Officer, as the case may be, and disclosed in reasonable detail therein) consistently throughout the periods reflected therein and with prior periods.

Section 6.02     Certificates; Other Information. The Borrowers shall furnish the following to the Lender:

(a)     As soon as available, and in any event within 120 days after the end of each fiscal year of the Borrowers, a compliance certificate (the “ Compliance Certificate ”) in the form attached hereto as Exhibit B , signed by a Responsible Officer of each Borrower (i) containing all information and calculations necessary for determining compliance by the Loan Parties with the provisions of this Agreement as of the last day of such fiscal year of the Borrowers and (ii) stating that each Loan Party during such period has observed and performed all of the covenants and other agreements, and satisfied every condition contained in this Agreement and the other Loan Documents to which it is a party to be observed, performed or satisfied by it, and that such officer has not obtained any knowledge of any Default or Event of Default except as specified in such certificate; and

(b)     As soon as available, and in any event within 15 Business Days after the end of each month of each fiscal year, a borrowing base certificate (the “ Borrowing Base Certificate ”) in the form provided by the Lender attached hereto as Exhibit C showing the Borrowing Base as of the last Business Day of the previous month, accompanied by a detailed accounts receivable aging, a detailed inventory report (including an aging), a detailed accounts payable aging and other supporting reports as may be required by the Lender and the Borrowing Base Certificate and such supporting reports shall be in a form acceptable to the Lender and certified as accurate by a Responsible Officer of each Borrower;

(c)     Promptly, and in any event within 30 days thereafter, to the extent not previously disclosed to the Lender, a description of any change in the jurisdiction of organization of any Loan Party;

(d)     Promptly after the same are sent, copies of all proxy statements, financial statements and reports that any Loan Party sends to any of its securities holders, and copies of all reports and registration statements that any Loan Party files with the SEC or any national securities exchange;

(e)     Promptly upon receipt of the same, copies of all notices, requests and other documents received by any Loan Party under or pursuant to any Material Contract or instrument, indenture, loan agreement regarding or related to any breach or default by any party thereto or any other event that could materially impair the value of the interests or the rights of any Loan Party or otherwise have a Material Adverse Effect and copies of the foregoing and such information and reports regarding Material Contracts and such instruments, indentures, loan agreements as the Lender may reasonably request from time to time; and

(f)     Such other information respecting the business, condition (financial or otherwise), operations, performance, properties or prospects of any Loan Party as the Lender may from time to time request.

Section 6.03     Notices. Promptly and in any event within five days give notice to the Lender of:

(a)     The occurrence of any Default or Event of Default;

(b)     Any (i) default or event of default under any Material Contract of any Loan Party or (ii) litigation, investigation or proceeding that may exist at any time between any Loan Party and any Governmental Authority;

(c)     Any litigation or proceeding against any Loan Party (i) in which the amount involved is at least $500,000 and not covered in full by insurance, (ii) in which injunctive or similar relief is sought, or (iii) which relates to any Loan Document;

(d)     The following events, as soon as possible and in any event within five (5) days after any Borrower or any of the Borrowers’ ERISA Affiliates knows or has reason to know thereof:

(i)     the occurrence of any Reportable Event with respect to any Plan, a failure to make any required contribution to a Plan, the creation of any Lien in favor of the PBGC or any Multiemployer Plan; or

(ii)     the institution of proceedings or the taking of any other action by the PBGC or any Borrower or any ERISA Affiliate or any Multiemployer Plan with respect to the withdrawal from, or the termination, Reorganization or Insolvency of, any Plan;

(e)     The occurrence of any Environmental Action against or of any noncompliance by any Loan Party with any Environmental Law or relevant permit; and

(f)     Any development or event that has had or could reasonably be expected to have a Material Adverse Effect.

Each notice pursuant to this Section 6.03 shall be accompanied by a statement of a Responsible Officer of each Borrower setting forth details of the occurrence referred to therein and stating what action the relevant Loan Party proposes to take with respect thereto.

Section 6.04     Maintenance of Existence; Compliance.

(a)     (i) Preserve, renew and maintain in full force and effect its corporate or organizational existence and (ii) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, except, in each case, as otherwise permitted under this Agreement.

(b)     Comply with all Contractual Obligations and Requirements of Law except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 6.05     Performance of Material Contracts. Perform and observe all the terms and provisions of each Material Contract to be performed or observed by it, maintain each Material Contract in full force and effect, enforce each such Material Contract in accordance with its terms, take all such action to such end as may be from time to time requested by the Lender and, upon request of the Lender, make to each other party to each Material Contract such demands and requests for information and reports or for action as any Loan Party or any of its Subsidiaries is entitled to make under such Material Contract.

Section 6.06     Maintenance of Property; Insurance.

(a)     Maintain and preserve all of its property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted.

(b)     Maintain insurance with respect to its property and business (including without limitation, property, casualty and business interruption insurance) with financially sound and reputable insurance companies that are not Affiliates of a Borrower, in such amounts and covering such risks as are usually insured against by similar companies engaged in the same or a similar business. Each policy of liability insurance shall name the Lender as an additional insured and each policy of real property insurance shall name the Lender as mortgagee loss payee and each policy insuring any other Collateral shall name the Lender as lender loss payee.

Section 6.07     Inspection of Property; Books and Records; Discussions.

(a)     Keep proper books of records and accounts, in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions and assets in relation to its business and activities.

(b)     Permit the Lender and its representatives to (i) discuss Borrowers’ business operations, properties and financial and other condition with its officers and employees and its independent public accountants and (ii) upon reasonable notice to visit the Borrowers’ offices and inspect and make abstracts from any of its books and records including, without limitation, permitting the Lender to examine any Collateral securing the Loans and reimburse the Lender for all examination fees and expenses incurred in connection with such examinations at its then current rate for such services and for its out-of-pocket expenses incurred in connection therewith; provided , however that the Lender agrees that, so long as no Default or Event of Default has occurred and is continuing, the Borrowers’ obligations to reimburse the Lender for its examinations shall be limited to no more than one examination per any Loan Year plus its out-of-pocket expenses incurred in connection therewith.

Section 6.08     Environmental Laws.

(a)     Obtain, comply and maintain in all material respects, and ensure the same in all material respects by all tenants and subtenants, if any, with all applicable Environmental Laws, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws.

(b)     Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions necessary to remove and clean up all Hazardous Materials from any of its properties required under Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws.

Section 6.09     Use of Proceeds. Use the proceeds of the Loans (a) to finance the acquisition of assets by the Borrowers in the ordinary course of business, including the purchase of inventory and equipment, (b) to finance Capital Expenditures of the Borrowers, (c) to refinance Debt incurred by Air T from the Lender for the purpose of consummating the Transactions, and (d) for general corporate purposes of the Borrowers, in each case to the extent not prohibited under any Requirement of Law or the Loan Documents.

Section 6.10     Additional Collateral; etc.

(a)     With respect to any property acquired after the Closing Date by any Borrower that is intended to be subject to a Lien created by any Loan Document, other than any property subject to a Lien expressly permitted by this Agreement, as to which the Lender, does not have a perfected Lien, promptly, and in any event within 30 days of acquiring such property:

(i)     execute and deliver to the Lender such supplements or amendments to the Security Agreement or such other documents as the Lender deems necessary or advisable to grant to the Lender a security interest in such property; and

(ii)     take all actions necessary or advisable to grant to the Lender a perfected first priority security interest in such property, including the filing of UCC-1 financing statements in such jurisdictions as may be required by the Security Agreement or by law or as may be requested by the Lender; and

(iii)     execute and deliver to the Lender such supplements or amendments to any Loan Document as the Lender deems necessary or advisable to grant to the Lender a perfected first priority security interest in the Equity Interests of any new Subsidiary;

(iv)     deliver to the Lender the certificates representing such Equity Interests, together with undated stock powers, in blank, executed by a duly authorized officer of the relevant Loan Party;

(v)     deliver to the Lender originals of any promissory notes evidencing intercompany loans provided by a Borrower to any Person that is not a Borrower, indorsed in blank by a duly authorized officer of the relevant Borrower; and

(vi)     cause such new Subsidiary of a Borrower to become a Loan Party (an “ Additional Loan Party ”) to: (A) execute and deliver a Guaranty and a joinder to the Security Agreement, each in the form provided by the Lender (B) take all actions necessary or desirable to grant to the Lender a perfected first priority security interest in the Collateral owned by such new Subsidiary, including the filing of UCC-1 financing statements in such jurisdictions as may be required by such security agreement or by law or as may be requested by the Lender; and (C) execute and deliver a secretary’s certificate of such new Loan Party, with charter documents, by-laws and appropriate resolutions attached.

Section 6.11     Further Assurances. Promptly upon the request of the Lender:

(a)     Correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgement, filing or recordation thereof; and

(b)     Do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, conveyances, pledge agreements, mortgages, deeds of trust, trust deeds, assignments, financing statements and continuations thereof, termination statements, notices of assignments, transfers, certificates, assurances and other instruments as the Lender, may require from time to time in order to:

(i)     carry out more effectively the purposes of the Loan Documents;

(ii)     to the fullest extent permitted by applicable law, subject any Loan Party’s properties, assets, rights or interests to the Liens now or hereafter intended to be covered by the Security Agreement and the other Loan Documents;

(iii)     perfect and maintain the validity, effectiveness and priority of the Liens intended to be created under the Security Agreement and the other Loan Documents;

(iv)     each Borrower and each Subsidiary of a Borrower will execute and deliver, or cause to be executed and delivered, to the Lender such documents, agreements and instruments (including, without limitation, account control agreements, landlord waivers and bailee agreements), and will take or cause to be taken such further actions (including the filing and recording of financing statements, fixture filings, and other documents and such other actions or deliveries, as applicable), which may be required by law or which the Lender may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority of the Liens created or intended to be created by the Security Agreement, all in form and substance reasonably satisfactory to the Lender and all at the expense of the Borrower; and

(v)     assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively to the Lender, the rights granted or now or hereafter intended to be granted to the Lender under any Loan Document or under any other instruments executed in connection with any Loan Document to which any Loan Party is or is to be a party.

Section 6.12       Deposit Accounts . In order to facilitate the Lender’s maintenance and monitoring of its security interests in the Collateral, each Borrower shall maintain, and shall cause each of their respective Subsidiaries to maintain, all of its operating accounts, deposit accounts and securities accounts with the Lender or an Affiliate of the Lender; provided, however, as a matter of convenience, each Loan Party may maintain up to $75,000 in deposits in demand deposit accounts at other commercial banking institutions in locales where the Lender or an Affiliate of Lender does not maintain a banking branch; provided further that the Borrowers shall use commercially reasonable best efforts to cause such other banking institutions to execute control agreements in favor of the Lender on forms acceptable to Lender with regards to such deposit accounts.

Article VII
Negative Covenants

So long as the Lender has any Revolving Credit Commitment hereunder, or any Loans or any other amounts payable to the Lender hereunder or under any other Loan Document have not been indefeasibly paid in full, the Borrowers shall not do any of the following without the prior written consent of the Lender:

Section 7.01     Limitation on Debt. Create, incur, assume, permit to exist or otherwise become liable with respect to any Debt, except:

(a)     Debt existing or arising under this Agreement and any other Loan Document;

(b)     Debt of:

(i)     a Borrower owed to any other Loan Party; and

(ii)     any Loan Party owed to a Borrower;

(c)     Debt incurred to finance the acquisition of fixed or capital assets (including Capital Lease Obligations) secured by a Lien permitted under Section 7.02(f); provided that , (i) such Debt is incurred simultaneously with such acquisition; (ii) such Debt when incurred shall not exceed the purchase price of the asset financed and (iii) the aggregate principal amount of Debt permitted by this Section 7.01(b), shall not exceed $50,000 in the aggregate at any time outstanding;

(d)     Subordinated Debt;

(e)     current liabilities (other than borrowed money) incurred in the ordinary course of business;

(f)     Debt in respect of taxes, assessments or government charges to the extent that payment thereof shall not at the time be required to be made under this Agreement; and

(g)     other unsecured Debt of the Borrowers in an aggregate principal amount not to exceed $50,000 at any time.

Section 7.02     Limitation on Liens. Create, incur, assume or permit to exist any Lien on any property or assets (including Equity Interests of any of its Subsidiaries) now owned or hereafter acquired by it or on any income or rights in respect of any thereof, except:

(a)     Liens created pursuant to or arising under any Loan Document;

(b)     Liens imposed by law for taxes, assessments or governmental charges not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted if adequate reserves with respect thereto are maintained in accordance with GAAP on the books of the applicable Person;

(c)     Carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other similar Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or that are being contested in good faith and by appropriate proceedings diligently conducted;

(d)     Pledges and deposits and other Liens (i) made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations, and (ii) securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to the Borrowers;

(e)     Liens (including deposits) to secure the performance of bids, tenders, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of like nature, in each case in the ordinary course of business;

(f)     Easements, zoning restrictions, rights-of-way, minor defects or irregularities in title and similar encumbrances on real property imposed by law or arising in the ordinary course of business which, in the aggregate, are not material in amount and which do not materially detract from the value of the affected property or interfere materially with the ordinary conduct of business of a Borrower or any of its Subsidiaries;

(g)     Liens on fixed or capital assets acquired by a Borrower after the date hereof; provided that (i) such security interests secure Debt permitted by Section 7.01(b), (ii) such Liens and the Debt secured thereby are incurred simultaneously with such acquisition, (iii) such Liens shall not apply to any other property or assets of the Borrowers, and (iv) the amount of Debt initially secured thereby is not more than 100% of the purchase price of such fixed or capital asset;

(h)     Liens on the personal property of any Borrower disclosed on Schedule 7.02 and

(i)     Judgment or other similar Liens in connection with legal proceedings in an aggregate principal amount net of amounts for which insurance providers have delivered written acknowledgements of coverage up to $500,000 in the aggregate, which, whether immediately or with the passage of time (i) do not give rise to an Event of Default under Section 8.01(g) and (ii) are being contested in good faith by appropriate proceedings diligently conducted.

Section 7.03     Mergers; Nature of Business.

(a)     Merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing, any Subsidiary of a Borrower that is a Loan Party may merge into such Borrower in a transaction in which such Borrower is the surviving corporation.

(b)     Engage in any business other than businesses of the type conducted by the Borrowers on the date hereof.

Section 7.04     Limitation on Investments. Make any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase, hold or acquire any Equity Interests, bonds, notes, debentures or other debt securities of, or any assets constituting a business unit of, or make any other investment in, any Person (all of the foregoing, “ Investments ”), except:

(a)     Investments in Cash Equivalents;

(b)     Loans and advances to officers, directors, or employees of a Borrower in the ordinary course of business (including for travel, entertainment and relocation expenses) in an aggregate amount not to exceed $50,000 at any time outstanding;

(c)     Intercompany Investments by any Borrower in another Borrower; and

(d)     Extensions of trade credit in the ordinary course of business (including any instrument evidencing the same and any instrument, security or other asset acquired through bona fide collection efforts with respect to the same).

Section 7.05     Limitation on Dispositions. Dispose of any of its property, whether now owned or hereafter acquired, or issue or sell any Equity Interests to any Person, except:

(a)     The sale or Disposition of machinery and equipment no longer used or useful in the business of a Borrower;

(b)     The Disposition of obsolete or worn-out property of a Borrower in the ordinary course of its business; and

(c)     The sale or lease of inventory for fair value in the ordinary course of business of a Borrower.

Section 7.06     Limitation on Sales and Leasebacks. Enter into any arrangement with any Person whereby such Borrower shall sell or otherwise transfer any property owned by such Borrower to (a) such Person and thereafter rent or lease such Property from such Person or (b) any other Person to whom funds have been or are to be advanced by such Person on the security of such Property or rental obligations of such Loan Party.

Section 7.07     Limitation on Restricted Payments; Transfers to non- Loan Parties .

(a)     Declare or pay any dividend on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any Equity Interests of a Borrower or any of its Subsidiaries, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of such Borrower or any of its Subsidiaries (collectively, “ Restricted Payments ”), provided , that:

(i)     a Subsidiary of a Borrower may make a Restricted Payment to such Borrower;

(ii)     A Borrower may declare and pay dividends and make other distributions and payments with respect to its Equity Interests if payable solely in its Equity Interests; and

(iii)     Only so long as no Default or Event of Default has occurred and is continuing either before or following the making thereof, a Borrower may make Restricted Payments that would not otherwise be permitted by this Section 7.07, provided that such Restricted Payments shall be limited to the amount of Excess Capital as calculated on a pro forma basis as set forth on an Excess Capital Certificate delivered to the Lender prior to the making of any such Restricted Payment.

(b)     Transfer any asset of a Borrower to an Affiliate that is not a Borrower.

Section 7.08     Limitation on Prepayments of Debt and Amendments of Debt Instruments.

(a)     Make or offer to make any optional or voluntary payment or prepayment on or redemption, defeasance or purchase of any (whether principal or interest) Subordinated Debt; or

(b)     Amend, modify, waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to any Subordinated Debt, other than any amendment, modification, waiver or other change which (i) would extend the maturity or reduce the amount of any payment of principal thereof or reduce the rate or extend any date for payment of interest thereon; and (ii) does not involve the payment of a consent fee.

Section 7.09     Limitation on Transactions With Affiliates. Enter into or be a party to any transaction including any purchase, sale, lease or exchange of property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate unless such transaction is:

(a)     Otherwise permitted by the terms of this Agreement; or

(b)     In the ordinary course of business of a Borrower, and on fair and reasonable terms no less favorable to such Borrower, than those that would have been obtained in a comparable transaction on an arm’s length basis from an unrelated Person.

Section 7.10     Fiscal Year. Change the end of the Borrowers’ fiscal year to a date other than March 31.

Section 7.11     Limitation on Restrictive Agreements. Enter into or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Subsidiary of a Borrower to:

(a)     Make Restricted Payments in respect of any Equity Interests of such Subsidiary held by, or pay any Debt owed to, such Borrower or any other Subsidiary of a Borrower;

(b)     Make loans or advances to, or Investments in, a Borrower or any other Subsidiary of a Borrower; and

(c)     Transfer any of its assets to a Borrower or any other Subsidiary of a Borrower, except for such encumbrances or restrictions (i) existing under the Loan Documents, and (ii) with respect to a Subsidiary imposed pursuant to an agreement that has been entered into in connection with the Disposition of all or substantially all of the Equity Interests or assets of such Subsidiary.

Section 7.12     Limitation on Amendments of Material Contracts. Amend, supplement or otherwise modify (pursuant to a waiver or otherwise):

(a)     Its articles of organization, certificate of designation, operating agreement, bylaws or other organizational document; or

(b)     The terms and conditions of any Material Contract;

in each case, in any respect materially adverse to the interests of the Lender, without the Lender’s prior written consent.

Section 7.13     Financial Covenants. [Intentionally deleted].

Section 7.14      Transaction Documents. Amend, modify, or supplement any provision of, or waive any other party’s compliance with any of the terms of, any Transaction Document in any manner which: (a) requires the Loan Parties to pay any additional consideration under such Transaction Document or otherwise imposes any financial obligation or burden on the Borrowers; (b) could have a Material Adverse Effect; or (c) is materially adverse to the rights and benefits of the Lender under the Loan Documents.

Article VIII
Events of Default and Remedies

Section 8.01     Events of Default. Each of the following events or conditions shall constitute an “ Event of Default ” (whether it shall be voluntary or involuntary or come about or be effected by any Requirement of Law or otherwise):

(a)     (i) the Borrowers fail to pay any principal of any Loan or any interest thereon when due, whether at stated maturity, by acceleration, by notice of voluntary prepayment, by mandatory prepayment or otherwise; or (ii) any fee or other amount payable hereunder or under any other Loan Document when due and such failure remains unremedied for a period of five (5) days of such due date;

(b)     any representation, warranty, certification or other statement of fact made or deemed made by or on behalf of any Loan Party herein or in any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder or in any certificate, document, report, financial statement or other document furnished by or on behalf of any Loan Party under or in connection with this Agreement or any other Loan Document, proves to have been false or misleading in any material respect on or as of the date made or deemed made;

(c)     any Loan Party fails to perform or observe any covenant, term, condition or agreement contained in Section 6.03, Section 6.04(a), Section 6.09, Section 6.11, or Article VII;

(d)     any Loan Party fails to perform or observe any other covenant, term, condition or agreement contained in this Agreement or any other Loan Document (other than as provided in subsections (a) through (c) of this Section 8.01, and such failure continues unremedied for a period of sixty (60) days after written notice to the Borrowers from the Lender;

(e)     Any Loan Party:

(i)     fails to pay any principal or interest in respect of any Debt in excess of $1,000,000 (including any Guaranty Obligation, but excluding any Debt outstanding under this Agreement) when due and such failure continues after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt;

(ii)     fails to perform or observe any other covenant, term, condition or agreement relating to any such Debt or contained in any instrument or agreement evidencing or relating thereto, or any other event occurs or condition exists, the effect of which failure or other event or condition is to cause, or to permit the holder or beneficiary of such Debt (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice, if required, such Debt to become due prior to its stated maturity (or, in the case of any such Debt constituting a Guaranty Obligation, to become payable); or any such Debt is declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption or as a mandatory prepayment), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof;

provided that , a default, event or condition described in clause (i) or (ii) of this subsection (e) shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described in clauses (i) and (ii) of this subsection (e) has occurred and is continuing with respect to Debt the outstanding principal amount of which exceeds in the aggregate $1,000,000.

(f)      

(i)     Any Loan Party: (x) commences any case, proceeding or other action under any existing or future Debtor Relief Law, seeking (A) to have an order for relief entered with respect to it, or (B) to adjudicate it as bankrupt or insolvent, or (C) reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (D) appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or (y) makes a general assignment for the benefit of its creditors;

(ii)     there is commenced against any Loan Party in a court of competent jurisdiction any case, proceeding or other action of a nature referred to in clause (i) above which (x) results in the entry of an order for relief or any such adjudication or appointment or (y) remains undismissed, undischarged, unstayed or unbonded for sixty (60) days;

(iii)     there is commenced against any Loan Party any case, proceeding or other action seeking issuance of a warrant of attachment, execution or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which has not been vacated, discharged, stayed or bonded pending appeal within (30) days from the entry thereof;

(iv)     any Loan Party is generally not, or is unable to, or admits in writing its inability to, pay its debts as they become due; or

(v)     any Loan Party takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii) or (iii) above.

(vi)     (A) any Person shall engage in any “prohibited transaction” (as defined in §406 of ERISA or §4975 of the Code) involving any Plan; (B) any failure to satisfy the minimum funding standard (within the meaning of Sections §412 or §430 of the Code or §302 of ERISA) shall exist with respect to any Plan, or any Lien in favor of the PBGC or a Plan shall arise on the assets of any Borrower or any ERISA Affiliate; (C) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of trustee is likely to result in the termination of such Plan for purposes of Title IV of ERISA; (D) any Single Employer Plan shall terminate for purposes of Title IV of ERISA; or (F) any Borrower or any ERISA Affiliate shall incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan.

(g)     one or more final and non-appealable judgments or decrees is entered against any Loan Party by a court of competent jurisdiction involving, in the aggregate, a liability (not paid or fully covered by insurance from an insurer that is rated at least “A” by A.M. Best Company as to which the relevant insurance company has been notified and has not denied coverage) in an amount in excess of $150,000 and all such judgments or decrees have not been vacated, discharged, stayed or bonded pending appeal within sixty (60) days from the entry thereof;

(h)     the Security Agreement ceases for any reason to be valid, binding and in full force and effect or any Lien created by the Security Agreement ceases to be enforceable and of the same effect and priority purported to be created thereby, other than as expressly permitted hereunder or thereunder;

(i)     any provision of any Loan Document ceases for any reason to be valid, binding and in full force and effect, other than as expressly permitted hereunder or thereunder;

(ii)     any Loan Party contests in any manner the validity or enforceability of any provision of any Loan Document;

(iii)     any Loan Party denies that it has any or further liability or obligation under any provision of any Loan Document (other than as a result of repayment in full of the Obligations and termination of the Revolving Credit Commitment and the Term Loan Commitment) or purports to revoke, terminate or rescind any provision of any Loan Document;

(i)     any Change of Control occurs;

(j)     the occurrence of any “Event of Default” or the “Revolving Credit Termination Date” under the Air T Credit Agreement (as such terms in quotation marks are therein defined); or

(k)     there occurs in, the reasonable judgment of the Lender, a Material Adverse Effect.

Section 8.02     Remedies Upon Event of Default. If any Event of Default occurs and is continuing, then:

(a)     if such event is an Event of Default specified in Section 8.01(f) above with respect to any Borrower, the Commitments shall automatically and immediately terminate and the Loans (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents shall immediately become due and payable;

(b)     if such event is an Event of Default (other than an Event of Default under Section 8.01(f)), any or all of the following actions may be taken:

(i)     the Lender may, by notice to the Borrowers, declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate;

(ii)     the Lender may, by notice to the Borrowers, declare the Loans (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents to be due and payable forthwith, whereupon the same shall immediately become due and payable; and

(iii)     the Lender may exercise all rights and remedies available to it under the Security Agreement, the Guaranties and each other Loan Document.

Article IX
Miscellaneous

Section 9.01     Notices .

(a)     Except in the case of notices and other communications expressly permitted to be given by telephone (or by e-mail as provided in paragraph (b) below), all notices and other communications provided for herein shall be made in writing and mailed by certified or registered mail, delivered by hand or overnight courier service, or sent by facsimile as follows:

(i)           If to the Borrowers or any other Loan Party, to it at:

Worthington Acquisition, LLC

Worthington MRO, LLC

Worthington Aviation, LLC

c/o Air T, Inc.

5930 Balsom Ridge Road

Denver, North Carolina 28037

Attention: Candice L. Otey

with a copy to (which shall not consititute notice or service of process):

Winthrop & Weinstine, P.A.

225 S. 6 ^th Street

Minneapolis, MN 55402

Attention: David E. Moran, Esq.

(ii)          If to the Lender, to it at

Minnesota Bank & Trust

7701 France Avenue South, Suite 110

Edina, MN 55435

Attention: Mr. Eric P. Gundersen, SVP

with a copy to (which shall not constitute notice or service of process):

Fabyanske, Westra, Hart & Thomson, P.A.

333 South Seventh Street, Suite 2600

Minneapolis, MN 55402

Attention: Frederick H. Ladner, Esq.

Fax Number: 612-359-7602

Notices mailed by certified or registered mail or sent by hand or overnight courier service shall be deemed to have been given when received. Notices sent by facsimile during the recipient’s normal business hours shall be deemed to have been given when sent (and if sent after normal business hours shall be deemed to have been given at the opening of the recipient’s business on the next Business Day).

(b)     Notices and other communications to the Lender hereunder may be delivered or furnished by electronic communications (including e-mail and internet or intranet websites) pursuant to procedures approved by the Lender. The Lender or the Borrowers may, in their discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that , approval of such procedures may be limited to particular notices or communications.

(c)     Unless the Lender specifies otherwise:

(i)     notices and other communications sent by e-mail shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgment), and

(ii)     notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor;

provided that , if such notice, e-mail or other communication is not sent during the recipient’s normal business hours, such notice, e-mail or communication shall be deemed to have been sent at the recipient’s opening of business on the next Business Day.

(d)     Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties.

Section 9.02     Amendments and Waivers.

(a)     No failure to exercise and no delay in exercising, on the part of the Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall comply with paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Lender may have had notice or knowledge of such Default at the time.

(b)     Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by any Borrower and the Lender, or (ii) in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Lender and the Loan Party or Loan Parties that are parties thereto.

Section 9.03     Expenses; Indemnity; Damage Waiver.

(a)     The Borrowers jointly and severally agree to pay:

(i)     all reasonable out-of-pocket expenses incurred by the Lender and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Lender, in connection with the preparation, negotiation, execution, delivery and administration of the Loan Documents and any amendments, waivers or other modifications of the provisions of any Loan Document (whether or not the transactions contemplated by the Loan Documents are consummated) and;

(ii)     all out-of-pocket expenses incurred by the Lender, including the fees, charges and disbursements of any counsel for the Lender, in connection with the enforcement or protection of its rights (i) in connection with the Loan Documents, including its rights under this Section 9.03, or (ii) in connection with the Loans issued under this Agreement, including all such out-of-pocket expenses incurred in connection with any restructuring, workout or negotiations in respect of the Loan Documents or such Loans.

(b)     The Borrowers jointly and severally agree to indemnify and hold harmless the Lender and each of its Related Parties (each, an “ Indemnified Party ”) from and against, any and all claims, damages, losses, liabilities and related expenses (including the reasonable fees, charges and expenses of any counsel for any Indemnified Party, incurred by any Indemnified Party or asserted against any Indemnified Party by any Person (including the Borrowers or any other Loan Party) other than such Indemnified Party and its Related Parties arising out of, in connection with, or by reason of:

(i)     the execution or delivery of any Loan Document or any agreement or instrument contemplated in any Loan Document, the performance by the parties thereto of their respective obligations under any Loan Document or the consummation of the transactions contemplated by the Loan Documents;

(ii)     any Loan or the actual or proposed use of the proceeds therefrom;

(iii)     any actual or alleged presence or release of Hazardous Materials on or from any property currently or formerly owned or operated by any Borrower or any of its Subsidiaries, or any Environmental Liability related to the Borrowers or any of their Subsidiaries in any way; or

(iv)     any actual or prospective claim, investigation, litigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by a Borrower or any other Loan Party, and regardless of whether any Indemnified Party is a party thereto; provided that , such indemnity shall not be available to any Indemnified Party to the extent that such claims, damages, losses, liabilities or related expenses (A) are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnified Party or (B) result from a claim brought by a Borrower or any other Loan Party against any Indemnified Party for breach in bad faith of such Indemnified Party’s obligations under any Loan Document, if a court of competent jurisdiction has rendered a final and non-appealable judgment in favor of such Borrower or such Loan Party on such claim. This Section 9.03 shall only apply to Taxes that represent losses, claims, damages or similar charges arising from a non-Tax claim.

(c)     The Borrowers jointly and severally agree, to the fullest extent permitted by applicable law, not to assert, and hereby waives, any claim against any Indemnified Party, on any theory of liability, for special, indirect, consequential or punitive damages (including, without limitation, any loss of profits or anticipated savings), as opposed to actual or direct damages, resulting from this Agreement or any other Loan Document or arising out of such Indemnified Party’s activities in connection herewith or therewith (whether before or after the Closing Date).

(d)     All amounts due under Section 9.03 shall be payable promptly after demand is made for payment by the Lender.

(e)     The Borrowers jointly and severally agree that no Borrower nor any of their respective Subsidiaries will settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding in respect of which indemnification or contribution could be sought under Section 9.03 (whether or not any Indemnified Party is an actual or potential party to such claim, action or proceeding) without the prior written consent of the applicable Indemnified Party, unless such settlement, compromise or consent includes an unconditional release of such Indemnified Party from all liability arising out of such claim, action or proceeding.

Section 9.04     Successors and Assigns.

(a)     The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Lender (and any attempted assignment or transfer by a Borrower without such consent shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Parties of the Lender) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)     The Lender may, at any time, without the consent of the Borrower, assign to one or more Eligible Assignees (as defined below) all or a portion of its rights and obligations under this Agreement (including all or a portion of the Commitments and the Loans at the time owing to it); provided, however, that Lender shall not, without any Borrower’s prior written consent (which consent shall not be unreasonably withheld or delayed), make any such assignment to a Person described in clauses (ii) or (iii) of the definition of “Eligible Assignee” at any time when there is no outstanding Default or Event of Default. For purposes of this Agreement, “ Eligible Assignee ” means any Person other than a natural Person that is (i) an Affiliate of the Lender (which term shall, in any event, include Heartland and Subsidiaries of Heartland), (ii) a commercial bank, insurance company, investment or mutual fund or other Person that is an “accredited investor” (as defined in Regulation D under the Securities Act) or (iii) a corporate entity that possesses financial sophistication and standing similar to that of the Lender. Subject to notification of an assignment, the assignee shall be a party hereto and, to the extent of the interest assigned, have the rights and obligations of the Lender under this Agreement, and the Lender shall, to the extent of the interest assigned, be released from its obligations under this Agreement (and, in the case of an assignment covering all of the Lender’s rights and obligations under this Agreement, the Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 3.01, Section 3.02 and Section 9.03. The Borrowers hereby jointly and severally agree to execute any amendment and/or any other document that may be necessary to effectuate such an assignment, including an amendment to this Agreement to provide for multiple lenders and an administrative agent to act on behalf of such lenders. Any assignment or transfer by the Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by the Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

(c)     The Lender may, at any time, without the consent of any Borrower, sell participations to one or more banks or other entities (each, a “ Participant ”) in all or a portion of the Lender’s rights and obligations under this Agreement (including all or a portion of the Commitments and the Loans owing to it); provided, that so long as no Default or Event of Default is outstanding at the time of any such sale, Lender agrees that it will not sell a participation to any Person that is not an Affiliate of Lender (which term shall, in any event, include Heartland and Subsidiaries of Heartland) without Borrowers’ prior written consent, which consent shall not be unreasonably withheld or delayed.

Section 9.05     Survival. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Lender may have notice or knowledge of any Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of, or any accrued interest on, any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Revolving Credit Commitment has not expired or terminated. The provisions of Section 3.01, Section 3.02 and Article IX shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof.

Section 9.06     Counterparts; Integration; Effectiveness.

(a)     This Agreement and any amendments, waivers, consents or supplements hereto may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Lender constitute the entire contract among the parties with respect to the subject matter hereof and supersede all previous agreements and understandings, oral or written, with respect to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Lender and when the Lender shall have received a counterpart hereof executed by the Borrowers. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or in electronic (“pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement. This Agreement and each other Loan Document has been reviewed by all parties hereto and incorporate the requirements of such parties. Each party waives the rule of construction that any ambiguities are to be resolved against the party drafting the same and agrees such rules will not be employed in the interpretation of this Agreement or any other Loan Document.

(b)     The words “execution,” “signed,” “signature,” and words of similar import in any Loan Document shall be deemed to include electronic or digital signatures or the keeping of records in electronic form, each of which shall be of the same effect, validity and enforceability as manually executed signatures or a paper-based recordkeeping system, as the case may be, to the extent and as provided for under applicable law, including the Electronic Signatures in Global and National Commerce Act of 2000 (15 USC § 7001 et seq.), the Electronic Signatures and Records Act of 1999 (NY State Technology Law §§ 301-309), or any other similar state laws based on the Uniform Electronic Transactions Act.

Section 9.07     Severability. If any term or provision of any Loan Document is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision thereof or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify the applicable Loan Document so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

Section 9.08     Right of Setoff. If an Event of Default shall have occurred and be continuing, the Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, and without prior notice to the Borrowers, any such notice being expressly waived by the Borrowers, to set off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by the Lender or Affiliate to or for the credit or the account of any Borrower or any Loan Party against any and all of the obligations of the Borrowers or such Loan Party now or hereafter existing under the Loan Documents to the Lender or its Affiliates, whether direct or indirect, absolute or contingent, matured or unmatured, and irrespective of whether or not the Lender or any Affiliate shall have made any demand under the Loan Documents and although such obligations of such Loan Party are owed to a branch, office or Affiliate of the Lender different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness. The Lender agrees to notify the Borrowers promptly after any such set off and appropriation and application; provided that the failure to give such notice shall not affect the validity of such set off and appropriation and application. Each Borrower hereby authorize the Lender to make a Revolving Credit Loan, in the Lender’s SOLE AND ABSOLUTE DISCRETION, to pay, on behalf of the Borrowers, any amount due to the Lender under any Loan Document without further action on the part of any Borrower and regardless of whether the Borrowers are able to comply with the terms, conditions and covenants of this Agreement at the time of such Revolving Credit Loan.

Section 9.09     Governing Law; Jurisdiction; Consent to Service of Process.

( a )     This Agreement and the other Loan Documents and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the laws of the State of Minnesota, without regard to conflicts of laws principles thereof.

(b)     AT THE OPTION OF THE LENDER, THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS TO WHICH ANY BORROWER IS A PARTY MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN MINNEAPOLIS OR ST. PAUL, MINNESOTA; AND EACH BORROWER CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT ANY BORROWER COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT, THE LENDER AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE DESCRIBED, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.

(c)     Each Loan Party irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any such court referred to in subsection (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)     Each Loan Party irrevocably consents to the service of process in the manner provided for notices in Section 9.01 and agrees that nothing herein will affect the right of any party hereto to serve process in any other manner permitted by applicable law.

Section 9.10     Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY. EACH PARTY HERETO (A) CERTIFIES THAT NO AGENT, ATTORNEY, REPRESENTATIVE OR ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF LITIGATION, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 9.11     Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

Section 9.12     Confidentiality.

(a)     The Lender agrees to maintain the confidentiality of all non-public information received from any Borrower or any other Loan Party relating to the Borrowers or their Subsidiaries or their respective businesses; provided that , in the case of information received from any Borrower or any Loan Party after the date hereof, such information is clearly identified at the time of delivery as being confidential information (the “ Information ”), except that Information may be disclosed:

(i)     to its Affiliates and its Related Parties in connection with the administration of this Agreement and the preservation, exercise or enforcement of the rights of the Lender under this Agreement, or to manage its and its Affiliates’ banking relationships with the Borrowers and their Subsidiaries (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential);

(ii)     to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority);

(iii)     to the extent required by any Requirement of Law or regulations or by any subpoena, court order or similar legal process;

(iv)     in connection with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of its rights hereunder or thereunder;

(v)     to (x) any actual or potential assignee, transferee or participant in connection with the assignment or transfer by the Lender of any Loans or any participations therein or (y) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to any Borrower or any other Loan Party or any Subsidiary or any of their respective obligations, this Agreement or payments hereunder;

(vi)     with the consent of the Borrowers; or

(vii)     to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) is available to the Lender on a non-confidential basis prior to disclosure by any Borrower or any of their Subsidiaries, or (z) becomes available to the Lender or any of its Affiliates on a non-confidential basis from a source other than any Borrower or any other Loan Party.

(b)     Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

Section 9.13     USA PATRIOT Act. The Lender hereby notifies each Loan Party that pursuant to the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the “ PATRIOT Act ”), it is required to obtain, verify, and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow the Lender to identify such Loan Party in accordance with the PATRIOT Act, and the Borrowers jointly and severally agree to provide, or cause the other Loan Parties to provide, such information from time to time to the Lender.

Section 9.14      

(a)     Each Borrower acknowledges and agrees that it is jointly and severally liable with the other Borrowers for all obligations, liabilities and indebtedness created or arising hereunder and the release or substitution of any of the other Borrowers shall not release or diminish its liability hereunder. Each Borrower agrees that all obligations, liabilities and indebtedness are joint and several and the primary obligations of each of them, enforceable against each Borrower separately or all Borrowers collectively, notwithstanding any right or power of any party to assert any claim or defense as to the invalidity or unenforceability of any such obligations, liabilities and indebtedness.

(b)     Each Borrower hereby waives any defense it may claim as a guarantor, surety or accommodation party. The Lender may, from time to time, without notice to any Borrower, (i) obtain or release any security interest in any property to secure any of such obligations, liabilities and indebtedness; (ii) obtain or release the primary or secondary liability of any party or parties with respect to any of such obligations, liabilities and indebtedness (including, without limitation, the liability of any of the Borrowers); (iii) extend or renew for any period, alter or exchange any of such obligations, liabilities and indebtedness or release or compromise any of such obligations, liabilities and indebtedness of any obligor with respect to any thereof; or (iv) resort to any Borrower for payment of any such obligations, liabilities and indebtedness whether or not the Lender shall have resorted to any Collateral or to any other Borrower or any other party primarily or secondarily liable with respect to any such obligations, liabilities and indebtedness.

(c)     Each Borrower expressly agrees that, to the extent permitted by applicable law, the liabilities and obligations of such Borrower under this Agreement shall not in any way be impaired or otherwise affected by the institution by or against any other Borrower or any other Person of any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or any other similar proceedings for relief under any bankruptcy law or similar law for the relief of debtors and that any discharge of any of the Obligations pursuant to any such bankruptcy or similar law or other law shall not diminish, discharge or otherwise affect in any way the obligations of that Borrower under this Agreement or any other Loan Document, and that upon the institution of any of the above actions, such obligations shall be enforceable against that Borrower.

(d)     As used in this Section 9.14(d): (a) the term “Applicable Insolvency Laws” means the laws of the United States of America or of any State, province, nation or other governmental unit relating to bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors, dissolution, insolvency, fraudulent transfers or conveyances or other similar laws (including, without limitation, 11 U. S. C. §547, §548, §550 and other “avoidance” provisions of Title 11 of the United Stated Code) as applicable in any proceeding in which the validity and/or enforceability of this Agreement against any Borrower, or any Specified Lien is in issue; and (b) “Specified Lien” means any security interest, mortgage, lien or encumbrance granted by any Borrower securing the Obligations, in whole or in part. Notwithstanding any other provision of this Agreement, if, in any proceeding, a court of competent jurisdiction determines that with respect to any Borrower, this Agreement or any Specified Lien would, but for the operation of this Section, be subject to avoidance and/or recovery or be unenforceable by reason of Applicable Insolvency Laws, this Agreement and each such Specified Lien shall be valid and enforceable against such Borrower, only to the maximum extent that would not cause this Agreement or such Specified Lien to be subject to avoidance, recovery or unenforceability. To the extent that any payment to, or realization by, the Lender on the Obligations exceeds the limitations of this Section and is otherwise subject to avoidance and recovery in any such proceeding, the amount subject to avoidance shall in all events be limited to the amount by which such actual payment or realization exceeds such limitation, and this Agreement as limited shall in all events remain in full force and effect and be fully enforceable against such Borrower. This Section is intended solely to reserve the rights of the Lender hereunder against each Borrower, in such proceeding to the maximum extent permitted by Applicable Insolvency Laws and neither the Borrowers, any guarantor of the Obligations nor any other Person shall have any right, claim or defense under this Section that would not otherwise be available under Applicable Insolvency Laws in such proceeding.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

[Loan Agreement Signature Page]

Exhibit 10.2

REVOLVING CREDIT NOTE

FOR VALUE RECEIVED, on the Revolving Credit Termination Date (as defined in the Credit Agreement hereinafter defined) the undersigned, Worthington Acquisition, LLC ( , a North Carolina limited liability company (together with its successors and assigns, “ Acquisition ”), Worthington Aviation, LLC , a North Carolina limited liability company (together with its successors and assigns, “ Aviation ”), Worthington MRO, LLC , a North Carolina limited liability company (together with its successors and assigns, “ MRO ”; and together with Acquisition and Aviation being sometimes collectively referred to herein as, the “ Borrowers ” and individually as, a “ Borrower ”), jointly and severally promise to pay to the order of Minnesota Bank & Trust, a Minnesota state banking corporation (the “ Lender ”), the principal sum of ONE MILLION FIVE HUNDRED THOUSAND AND NO/100THS DOLLARS (U.S. $1,500,000.00) or, if less, the aggregate unpaid principal amount of all Revolving Credit Loans (as hereinafter defined) made by the Lender to the Borrowers pursuant to the Credit Agreement.

Interest Rate.  

(a)     The Borrowers jointly and severally promise to pay interest on the unpaid principal amount hereof from the date hereof until such principal amount is paid in full at a fluctuating per annum rate of interest (the “Interest Rate”) that equals the sum of (a) the Index (as hereinafter defined), plus (b) 2.00% (the “Margin”).

(b)     The interest rate on this Note is subject to change from time to time based on changes in an independent index which is LIBOR (as hereafter defined) adjusted and determined, without notice to Borrower, as of the date of this Note and on the first day of each calendar month hereafter (the “Interest Rate Change Date”). “LIBOR” shall mean the London Interbank Offered Rate of interest for an interest period of 1 month which appears on Bloomberg, rounded to the nearest 1/10,000th of 1%, on the day that is two London Business Days preceding each Interest Rate Change Date (the “Reset Date”). If LIBOR as defined above is not available or is not published for any Reset Date, then Lender shall, at its sole discretion, choose a substitute source for LIBOR, which LIBOR plus the Margin, shall become effective on the next Interest Rate Change Date. “London Business Day” shall mean any day on which commercial banks in London, England are open for general business (collectively, the “Index”). The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term of the Loan, Lender may designate a substitute Index after notice to Borrower. Lender will tell Borrowers the current Index rate upon Borrowers’ request. The interest rate change will not occur more often than each month. Borrowers understand that Lender may make loans based on other rates as well. NOTICE: Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law.

REVOLVING CREDIT NOTE

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(c)     Interest accrued during each calendar month shall be due and payable on the first day of the following calendar month, with the first such interest payment due on June 1, 2018. Interest shall also be payable on the Revolving Credit Termination Date and interest accrued after the Revolving Credit Termination Date shall be payable on demand.

Change in Capital Adequacy Requirements . If Lender shall determine that the adoption after the date hereof (for purposes of this Agreement, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all guidelines and regulations adopted in connection therewith are deemed to have been adopted after the date hereof) of any applicable law, rule or regulation regarding capital adequacy, or any change in any existing law, rule or regulation regarding capital adequacy, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration of any such law, rule or regulation regarding capital adequacy, or compliance by Lender (or any of its branches) with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on Lender’s capital as a consequence of its obligations hereunder or for the credit which is the subject matter hereof to a level below that which Lender could have achieved but for such adoption, change or compliance (taking into consideration Lender’s policies with respect to liquidity and capital adequacy) by an amount deemed by Lender to be material, then from time to time, within fifteen (15) days after demand by Lender, Borrowers shall jointly and severally pay to Lender such additional amount or amounts reasonably determined by Lender as will compensate Lender for such reduction

Payments . Both principal and interest are payable in lawful money of the United States of America to the Lender at 7701 France Avenue South, Edina, MN 55435 (or other location specified by the Lender) in immediately available funds. By executing this Note, each Borrower authorizes the Lender to charge from time to time against any of such Borrower’s depository accounts maintained with the Lender any such payments when due and the Lender will use its reasonable efforts to notify such Borrower of such charges.

REVOLVING CREDIT NOTE

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Interest Calculation Method . Interest on this Note shall be calculated on the basis of a 360-day year and the actual number of days elapsed in any portion of a month in which interest is due. If any payment to be made by the Borrowers hereunder shall become due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

Prepayment; Minimum Interest Charge . In any event, even upon full prepayment of this Note, Borrowers understand that Lender is entitled to a minimum interest charge of $10.00. Other than Borrowers’ joint and several obligations to pay any minimum interest charge, Borrowers may pay without penalty all or a portion of the amount earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrowers of Borrowers’ obligation to continue to make payments of accrued unpaid interest. Rather, early payment will reduce the principal balance due. Borrowers agrees not to send Lender payments marked “paid in full”, “without recourse”, or similar language. If Borrowers send such a payment, Lender may accept it without losing any of Lender’s rights under this Note, and Borrowers will remain jointly and severally obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes “payment in full” of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: Minnesota Bank & Trust, 7701 France Avenue South, Edina, MN 55435.

Late Charge . If a payment due hereunder is not made within seven days after the date when due, Borrowers shall jointly and severally pay to Lender a late payment charge of 5% of the amount of the overdue payment to compensate Lender for a portion of the cost related to handling the overdue payment.

Interest After Default . Upon the occurrence of an Event of Default, including failure to pay upon final maturity, the interest rate on this Note shall be increased by adding an additional 3.000 percentage point margin (“ Default Rate Margin ”). The Default Rate Margin shall also apply to each succeeding interest rate change that would have applied had there been no default. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law.

REVOLVING CREDIT NOTE

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Credit Agreement . This Note is the Revolving Credit Note referred to in, and is entitled to the benefits of, the Loan Agreement dated as of May 11, 2018 (as amended, modified, supplemented or restated from time to time being the “ Credit Agreement ”; capitalized terms not otherwise defined herein being used herein as therein defined) by and among the Borrowers and the Lender. The Credit Agreement, among other things, (i) provides for the making of Revolving Credit Loans (the “ Revolving Credit Loans ”) by the Lender to the Borrowers from time to time in an aggregate amount not to exceed at any time outstanding the dollar amount first above mentioned, the indebtedness of the Borrowers resulting from each such Revolving Credit Loan being evidenced by this Note; (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events prior to the maturity hereof upon the terms and conditions therein specified; and (iii) contains provisions for the mandatory prepayment hereof upon certain conditions.

Security Agreement . This Note is secured by, among other things, that certain Security Agreement dated of even date herewith jointly and severally executed by the Borrowers in favor of the Lender.

Waiver of Presentment and Demand for Payment; Etc. Borrowers and any endorsers or guarantors hereof severally waive presentment and demand for payment, notice of intent to accelerate maturity, protest or notice of protest and non-payment, bringing of suit and diligence in taking any action to collect any sums owing hereunder or in proceeding against any of the rights and properties securing payment hereunder, and expressly agree that this Note, or any payment hereunder, may be extended from time to time, and consent to the acceptance of further security or the release of any security for this Note, all without in any way affecting the liability of Borrowers and any endorsers or guarantors hereof. No extension of time for the payment of this Note, or any installment thereof, made by agreement by Lender with any Person now or hereafter liable for the payment of this Note, shall affect the original liability under this Note of the undersigned, even if the undersigned is not a party to such agreement.

Event of Default. Any “Event of Default” (as defined in the Credit Agreement) shall constitute an Event of Default under this Note. Upon the occurrence of an Event of Default, in addition to any other rights or remedies Lender may have at law or in equity or under the Credit Agreement or under any other Loan Document, Lender may, at its option, without notice to Borrowers, declare immediately due and payable the entire unpaid principal sum hereof, together with all accrued and unpaid interest thereon plus any other sums owing at the time of such Event of Default pursuant to this Note, the Security Agreement or any other Loan Document. The failure to exercise the foregoing or any other options shall not constitute a waiver of the right to exercise the same or any other option at any subsequent time in respect of the same event or any other event. The acceptance by the holder of any payment hereunder which is less than payment in full of all amounts due and payable at the time of such payment shall not constitute a waiver of the right to exercise any of the foregoing options at that time or at any subsequent time.

REVOLVING CREDIT NOTE

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Expense Reimbursement. Borrowers jointly and severally agree to pay all expenses for the preparation of this Note, as set forth in the Credit Agreement, including exhibits, and any amendments to this Note as may from time to time hereafter be required, and the reasonable attorneys’ fees and legal expenses of counsel for Lender from time to time incurred in connection with the preparation and execution of this Note and any document relevant to this Note, any amendments hereto or thereto, and the consideration of legal questions relevant hereto and thereto. Borrowers jointly and severally agree to reimburse Lender upon demand for all reasonable out-of-pocket expenses (including attorneys’ fees and legal expenses) in connection with Lender’s enforcement of the obligations of the Borrowers hereunder or under the Security Agreement or any other Loan Document, whether or not suit is commenced including, without limitation, attorneys’ fees and legal expenses in connection with any appeal of a lower court’s order or judgment. The obligations of the Borrowers under this paragraph shall survive any termination of the Credit Agreement, this Note, the Security Agreement, and any other Loan Document.

Successors and Assigns . This Note shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns except that Borrowers may not assign or transfer their rights hereunder without the prior written consent of Lender, which consent may be withheld in Lender’s sole discretion. In connection with the actual or prospective sale by the Lender of any interest or participation in the loan obligation evidenced by this Note, Borrowers hereby jointly and severally authorize the Lender to furnish any information concerning the Borrowers or any of their affiliates, however acquired, to any Person or entity.

Usury . Borrowers and Lender agree that no payment of interest or other consideration made or agreed to be made by Borrowers to Lender pursuant to this Note shall, at any time, be in excess of the maximum rate of interest permissible by law. In the event such payments of interest or other consideration provided for in this Note shall result in an effective rate of interest which, for any period of time, is in excess of the limit of the usury or any other law applicable to the loan evidenced hereby, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice between or by any party hereto, be applied to the unpaid principal balance and not to the payment of interest; if a surplus remains after full payment of principal and lawful interest, the surplus shall be remitted by Lender to Borrowers, and Borrowers hereby agree to accept such remittance. This provision shall control every other obligation of the Borrowers and Lender relating to this Note.

REVOLVING CREDIT NOTE

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Business Purpose Loan . The Loan is a business loan. Borrowers hereby jointly and severally represent that this loan is for commercial use and not for personal, family or household purposes. The Borrowers jointly and severally agree that the Loan evidenced by this Note is an exempted transaction under the Truth In Lending Act, 15 U.S.C., §1601, et seq.

Governing Law . THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.

WAIVER OF DEFENSES . OTHER THAN CLAIMS BASED UPON THE FAILURE OF THE LENDER TO ACT IN A COMMERCIALLY REASONABLE MANNER, EACH BORROWER WAIVES EVERY PRESENT AND FUTURE DEFENSE (OTHER THAN THE DEFENSE OF PAYMENT IN FULL), CAUSE OF ACTION, COUNTERCLAIM OR SETOFF WHICH SUCH BORROWER MAY NOW HAVE OR HEREAFTER MAY HAVE TO ANY ACTION BY THE LENDER IN ENFORCING THIS NOTE OR ANY OF THE LOAN DOCUMENTS. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER GRANTING ANY FINANCIAL ACCOMMODATION TO THE BORROWERS.

Waiver of Right to Jury Trial; Venue . EACH BORROWER WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION RELATING TO OR ARISING FROM THIS NOTE. AT THE OPTION OF LENDER, THIS NOTE MAY BE ENFORCED IN ANY UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MINNESOTA OR THE STATE COURT SITTING IN HENNEPIN OR RAMSEY COUNTY, MINNESOTA. EACH BORROWER CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT PROPER OR CONVENIENT. IN THE EVENT AN ACTION IS COMMENCED IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS NOTE, LENDER, AT ITS OPTION, SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE DESCRIBED, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.

REVOLVING CREDIT NOTE

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IN WITNESS WHEREOF, the Borrowers have jointly and severally caused this Revolving Credit Note to be signed by their duly authorized officers in favor of Minnesota Bank & Trust and to be dated as of the date set forth above.

Exhibit 10.3

TERM NOTE

FOR VALUE RECEIVED, the undersigned, Worthington Acquisition, LLC ( , a North Carolina limited liability company (together with its successors and assigns, “ Acquisition ”), Worthington Aviation, LLC , a North Carolina limited liability company (together with its successors and assigns, “ Aviation ”), Worthington MRO, LLC , a North Carolina limited liability company (together with its successors and assigns, “ MRO ”; and together with Acquisition and Aviation being sometimes collectively referred to herein as, the “ Borrowers ” and individually as, a “ Borrower ”), jointly and severally promise to pay to the order of MINNESOTA BANK & TRUST , a national banking association (the “ Lender ”), the principal sum of THREE MILLION FOUR HUNDRED THOUSAND AND No/100 ^ths DOLLARS (U.S. $3,400,000.00) on or before November 30, 2019, or such earlier date as this promissory note (this “ Note ”) may be declared due and payable by Lender pursuant to the terms hereof and the terms of the Loan Agreement (the “ Maturity Date ”), together with interest on the principal amount thereof outstanding from time to time at the rate or rates described below, and any and all other amounts which may be due and payable hereunder or under any of the Loan Documents (as hereinafter defined) from time to time. This Note is made pursuant to the terms and conditions set forth in that certain Loan Agreement dated of even date herewith by and among Borrowers and Lender (as amended, modified, supplemented or restated from time to time being the “ Loan Agreement ”). The amount disbursed by the Lender to Borrowers, repayment of which is evidenced by this Note, is referred to as the “ Loan ”. All capitalized terms used and not expressly defined herein shall have the meanings given to such terms in the Loan Agreement.

Interest Prior to Default .

(a)           Interest Rate .

(i)     The Borrowers jointly and severally promises to pay interest on the unpaid principal amount hereof from the date hereof until such principal amount is paid in full at a fluctuating per annum rate of interest (the “ Interest Rate ”) that equals the sum of (a) the Index (as hereinafter defined), plus (b) 2.50% (the “ Margin ”).

(ii)     The interest rate on this Note is subject to change from time to time based on changes in an independent index which is LIBOR (as hereafter defined) adjusted and determined, without notice to Borrowers, as of the date of this Note and on the first day of each calendar month hereafter (the “Interest Rate Change Date”). “LIBOR” shall mean the London Interbank Offered Rate of interest for an interest period of 1 month which appears on Bloomberg, rounded to the nearest 1/10,000 ^th of 1%, on the day that is two London Business Days preceding each Interest Rate Change Date (the “Reset Date”). If LIBOR as defined above is not available or is not published for any Reset Date, then Lender shall, at its sole discretion, choose a substitute source for LIBOR, which LIBOR plus the Margin, shall become effective on the next Interest Rate Change Date. “London Business Day” shall mean any day on which commercial banks in London, England are open for general business (collectively, the “Index”). The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term of the Loan, Lender may designate a substitute Index after notice to Borrowers. Lender will tell Borrowers the current Index rate upon Borrowers’ request. The interest rate change will not occur more often than each month. Borrowers understand that Lender may make loans based on other rates as well. NOTICE: Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law.

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(b)      Change in Capital Adequacy Requirements . If Lender shall determine that the adoption after the date hereof (for purposes of this Agreement, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all guidelines and regulations adopted in connection therewith are deemed to have been adopted after the date hereof) of any applicable law, rule or regulation regarding capital adequacy, or any change in any existing law, rule or regulation regarding capital adequacy, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration of any such law, rule or regulation regarding capital adequacy, or compliance by Lender (or any of its branches) with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on Lender’s capital as a consequence of its obligations hereunder or for the credit which is the subject matter hereof to a level below that which Lender could have achieved but for such adoption, change or compliance (taking into consideration Lender’s policies with respect to liquidity and capital adequacy) by an amount deemed by Lender to be material, then from time to time, within fifteen (15) days after demand by Lender, Borrowers shall jointly and severally pay to Lender such additional amount or amounts reasonably determined by Lender as will compensate Lender for such reduction.

Interest After Default . Upon the occurrence of an Event of Default, including failure to pay upon final maturity, the interest rate on this Note shall be increased by adding an additional 3.000 percentage point margin (“ Default Rate Margin ”). The Default Rate Margin shall also apply to each succeeding interest rate change that would have applied had there been no default. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law.

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Payment Terms .

(a)      Principal and Interest . Payments of principal and interest due under this Note, if not sooner declared to be due in accordance with the provisions hereof, shall be made as follows (each such date when a payment is due and payable, a “ Payment Date ”):

(i)     On the first day of each month, commencing on June 1, 2018, through and including November 1, 2018, the Borrowers shall jointly and severally make a payment of accrued interest;

(ii)     On the first day of each subsequent month and continuing until the Maturity Date, the Borrowers shall jointly and severally shall make payments of principal in the amount of $147,536.70 plus accrued interest; and

(iii)     The Loan shall be due and payable, and Borrowers jointly and severally promise to pay the outstanding principal amount of the Loan to Lender, together with all accrued interest thereon then remaining unpaid and all other unpaid amounts, charges, fees and expenses outstanding under this Note or under any of the other Loan Documents, on the Maturity Date.

(b)      Method of Payments . Both principal and interest are payable in lawful money of the United States of America to the Lender at 7701 France Avenue South, Edina, MN 55435 (or other location specified by the Lender) in immediately available funds. By its execution of this Note, each Borrower authorizes the Lender to charge from time to time against any of such Borrower’s depository accounts maintained with the Lender any such payments when due and the Lender will use its reasonable efforts to notify such Borrower of such charges.

Interest Calculation Method . Interest on this Note shall be calculated on the basis of a 360-day year and the actual number of days elapsed in any portion of a month in which interest is due. If any payment to be made by the Borrowers hereunder shall become due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

Prepayment; Minimum Interest Charge . This Note may be prepaid in whole or in part at any time, so long as such prepayment is accompanied by a simultaneous payment of any applicable termination fees payable under any Hedge Agreement, plus accrued interest on the amount being prepaid through the date of prepayment. In any event, even upon full prepayment of this Note, Borrowers understand that Lender is entitled to a minimum interest charge of $10.00. Early payments will not, unless agreed to by Lender in writing, relieve Borrowers of Borrowers’ joint and several obligation to continue to make payments of accrued unpaid interest. Rather, early payment will reduce the principal balance due. Borrowers jointly and severally agree not to send Lender payments marked “paid in full”, “without recourse”, or similar language. If Borrowers sends such a payment, Lender may accept it without losing any of Lender’s rights under this Note, and Borrowers will remain jointly and severally obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes “payment in full” of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: Minnesota Bank & Trust, 7701 France Avenue South, Edina, MN 55435.

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Late Charge . If a payment due hereunder is not made within seven days after the date when due, Borrowers shall jointly and severally pay to Lender a late payment charge of 5% of the amount of the overdue payment to compensate Lender for a portion of the cost related to handling the overdue payment.

Interest After Default . Upon the occurrence of an Event of Default, including failure to pay upon final maturity, the interest rate on this Note shall be increased by adding an additional 3.000 percentage point margin (“ Default Rate Margin ”). The Default Rate Margin shall also apply to each succeeding interest rate change that would have applied had there been no default. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law.

Loan Agreement . This Note is the Term Note referred to in, and is entitled to the benefits of, the Loan Agreement. The Loan Agreement, among other things, (i) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events prior to the maturity hereof upon the terms and conditions therein specified; (ii) contains provisions for the mandatory prepayment hereof upon certain conditions; and (iii) contains provisions for the voluntary prepayment hereof, upon certain conditions.

Security Agreement . This Note is secured by, among other things, that certain Security Agreement dated of even date herewith executed by the Borrowers in favor of the Lender.

Waiver of Presentment and Demand for Payment; Etc. Borrowers and any endorsers or guarantors hereof severally waive presentment and demand for payment, notice of intent to accelerate maturity, protest or notice of protest and non-payment, bringing of suit and diligence in taking any action to collect any sums owing hereunder or in proceeding against any of the rights and properties securing payment hereunder, and expressly agree that this Note, or any payment hereunder, may be extended from time to time, and consent to the acceptance of further security or the release of any security for this Note, all without in any way affecting the liability of Borrowers and any endorsers or guarantors hereof. No extension of time for the payment of this Note, or any installment thereof, made by agreement by Lender with any person now or hereafter liable for the payment of this Note, shall affect the original liability under this Note of the undersigned, even if the undersigned is not a party to such agreement.

Event of Default. Any Event of Default (as defined in the Loan Agreement) shall constitute an Event of Default under this Note. Upon the occurrence of an Event of Default, in addition to any other rights or remedies Lender may have at law or in equity or under the Loan Agreement or under any other Loan Document, Lender may, at its option, without notice to Borrower, declare immediately due and payable the entire unpaid principal sum hereof, together with all accrued and unpaid interest thereon plus any other sums owing at the time of such Event of Default pursuant to this Note, the Security Agreement or any other Loan Document. The failure to exercise the foregoing or any other options shall not constitute a waiver of the right to exercise the same or any other option at any subsequent time in respect of the same event or any other event. The acceptance by the holder of any payment hereunder which is less than payment in full of all amounts due and payable at the time of such payment shall not constitute a waiver of the right to exercise any of the foregoing options at that time or at any subsequent time.

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Expense Reimbursement. Borrowers jointly and severally agree to pay all expenses for the preparation of this Note, as set forth in the Credit Agreement, including exhibits, and any amendments to this Note as may from time to time hereafter be required, and the reasonable attorneys’ fees and legal expenses of counsel for Lender from time to time incurred in connection with the preparation and execution of this Note and any document relevant to this Note, any amendments hereto or thereto, and the consideration of legal questions relevant hereto and thereto. Borrowers jointly and severally agree to reimburse Lender upon demand for all reasonable out-of-pocket expenses (including attorneys’ fees and legal expenses) in connection with Lender’s enforcement of the obligations of the Borrowers hereunder or under the Security Agreement or any other collateral document, whether or not suit is commenced including, without limitation, attorneys’ fees and legal expenses in connection with any appeal of a lower court’s order or judgment. The obligations of the Borrowers under this paragraph shall survive any termination of the Loan Agreement, this Note, the Security Agreement, and any other Loan Document.

Successors and Assigns . This Note shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns except that no Borrower may assign or transfer its rights hereunder without the prior written consent of Lender, which consent may be withheld in Lender’s sole discretion. In connection with the actual or prospective sale by the Lender of any interest or participation in the loan obligation evidenced by this Note, Borrowers hereby jointly and severally authorize the Lender to furnish any information concerning the Borrowers or any of their affiliates, however acquired, to any person or entity.

Usury . Borrowers and Lender agree that no payment of interest or other consideration made or agreed to be made by Borrowers to Lender pursuant to this Note shall, at any time, be in excess of the maximum rate of interest permissible by law. In the event such payments of interest or other consideration provided for in this Note shall result in an effective rate of interest which, for any period of time, is in excess of the limit of the usury or any other law applicable to the loan evidenced hereby, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice between or by any party hereto, be applied to the unpaid principal balance and not to the payment of interest; if a surplus remains after full payment of principal and lawful interest, the surplus shall be remitted by Lender to Borrowers, and Borrowers hereby jointly and severally agree to accept such remittance. This provision shall control every other obligation of the Borrowers and Lender relating to this Note.

Business Purpose Loan . The Loan is a business loan. Borrowers hereby jointly and severally represent that this loan is for commercial use and not for personal, family or household purposes. The Borrowers jointly and severally agree that the Loan evidenced by this Note is an exempted transaction under the Truth In Lending Act, 15 U.S.C., §1601, et seq.

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Governing Law . THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.

WAIVER OF DEFENSES . OTHER THAN CLAIMS BASED UPON THE FAILURE OF THE LENDER TO ACT IN A COMMERCIALLY REASONABLE MANNER, EACH BORROWER WAIVES EVERY PRESENT AND FUTURE DEFENSE (OTHER THAN THE DEFENSE OF PAYMENT IN FULL), CAUSE OF ACTION, COUNTERCLAIM OR SETOFF WHICH SUCH BORROWER MAY NOW HAVE OR HEREAFTER MAY HAVE TO ANY ACTION BY THE LENDER IN ENFORCING THIS NOTE OR ANY OF THE LOAN DOCUMENTS. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER GRANTING ANY FINANCIAL ACCOMMODATION TO THE BORROWERS.

Waiver of Right to Jury Trial; Venue . EACH BORROWER WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION RELATING TO OR ARISING FROM THIS NOTE. AT THE OPTION OF LENDER, THIS NOTE MAY BE ENFORCED IN ANY UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MINNESOTA OR THE STATE COURT SITTING IN HENNEPIN OR RAMSEY COUNTY, MINNESOTA. EACH BORROWER CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT PROPER OR CONVENIENT. IN THE EVENT AN ACTION IS COMMENCED IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS NOTE, LENDER, AT ITS OPTION, SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE DESCRIBED, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.

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IN WITNESS WHEREOF, the Borrowers have jointly and severally caused this Term Note to be signed by their duly authorized officers in favor of MINNESOTA BANK & TRUST and to be dated as of the date set forth above.

Exhibit 10.4

PLEDGE AGREEMENT

THIS PLEDGE AGREEMENT (the “ Pledge Agreement ”), dated as of May __, 2018, (the “ Effective Date ”), is entered into by and between Stratus Aero Partners , LLC , a Delaware limited liability company (the “Pledgor”), and MINNESOTA BANK & TRUST , a Minnesota state banking corporation company (the “ Lender ”). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Loan Agreement (hereinafter defined).

WHEREAS, Pledgor’s wholly-owned subsidiary, worthington acquisition , LLC , a Delaware limited liability company (the “ Company ”) and certain subsidiaries of the Company (together with the Company, the “ Borrower s”), have entered into that certain Loan Agreement dated as of May __, 2018 (the “ Loan Agreement ”), by and among the Borrowers and Lender, pursuant to which Lender has agreed, subject to the conditions set forth therein, to extend credit to the Borrowers;

WHEREAS, as set forth on Schedule I , as of the Effective Date, Pledgor owns one hundred percent (100%) of the issued limited liability company membership interests (collectively, the " Pledgor Interests "), in the Company;

WHEREAS, Lender has required, as a condition to entering into the Loan Agreement, that Pledgor execute and deliver this Pledge Agreement;

NOW, THEREFORE, for and in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Pledgor and Lender hereby agree as follows:

Section 1.      Pledge . Pledgor hereby pledges and grants to Lender a security interest in the collateral described in Sections 1.1 and 1.2 below (collectively, the “ Pledged Collateral ”):

1.1      Pledged Interest .

(a)     The Pledgor Interests (such membership interests being identified on Schedule I attached hereto and referred to as the “ Pledged Interests ”) of the Company, for which Pledgor shall deliver to Lender stock powers in the form of Exhibit A attached hereto and made a part hereof (the “ Powers ”) duly executed in blank, and all distributions, cash, instruments, investment property and other property from time to time received, receivable or otherwise distributed in respect of, or in exchange for, any or all of the Pledged Interests.

(b)     All additional membership interests of the Company described in Section 1.1(a) above from time to time acquired by Pledgor in any manner (any such additional membership interests shall constitute part of the Pledged Interests and Lender is irrevocably authorized to unilaterally amend Schedule I hereto to reflect such additional membership interests and Pledgor shall promptly deliver to Lender an executed Power with respect to the additional membership interests), and all purchase options, distributions, cash, instruments, investment property and other rights and options from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such membership interests.

1.2      Proceeds . All proceeds of the Pledged Collateral described in Section 1.1 above.

Section 2.      Security for Obligations . The Pledged Collateral secures the prompt payment and performance of all Obligations under the Loan Documents.

Section 3.      Pledged Collateral Adjustments . If, during the term of this Pledge Agreement:

(a)     Any distribution, reclassification, readjustment or other change is declared or made in the capital structure of the Company, or any option included within the Pledged Collateral is exercised, or both, or

(b)     Any rights or options shall be issued in connection with the Pledged Collateral, then One Hundred Percent (100%) of all new, substituted and additional, membership interests, rights, options, investment property or other securities, issued to Pledgor by reason of any of the foregoing, shall be immediately delivered to and held by Lender under the terms of this Pledge Agreement and shall constitute Pledged Collateral hereunder; provided , however , that nothing contained in this Section 3 shall be deemed to permit any distribution, or membership interests, rights or options, reclassification, readjustment or other change in the capital structure of the Company which is not expressly permitted by the Loan Agreement. Pledgor shall promptly deliver an executed Power to Lender with respect to any new membership interest obtained by Pledgor.

Section 4.    Subsequent Changes Affecting Pledged Collateral . Pledgor represents and warrants that it has made its own arrangements for keeping itself informed of changes or potential changes affecting the Pledged Collateral (including, but not limited to, rights to convert, rights to subscribe, payment of cash distributions or other distributions, reorganization or other exchanges, tender offers and voting rights), and Pledgor agrees that Lender shall not have any obligation to inform Pledgor of any such changes or potential changes or to take any action or omit to take any action with respect thereto. Lender may, during the continuance of an Event of Default, in connection with the exercise of its remedies hereunder, without notice and at its option, transfer or register the Pledged Collateral or any part thereof into its or its nominee’s name with or without any indication that such Pledged Collateral is subject to the security interest hereunder.

Section 5.      Representations and Warranties . Pledgor represents and warrants as follows as of the Effective Date and as of each date on which representations and warranties under the Loan Agreement shall be made:

(a)     Pledgor is the sole legal and beneficial owner of the membership interests of the Company, as set forth on Schedule I hereto, and the Pledged Interests comprise one hundred percent (100%) of the limited liability membership interests of the Company;

(b)     Pledgor has full limited liability company power and authority to enter into this Pledge Agreement;

(c)     There are no restrictions upon the voting rights associated with, or upon the transfer of, any of the Pledged Collateral;

(d)     Pledgor has the right to vote, pledge and grant a security interest in or otherwise transfer such Pledged Collateral free of any Liens, except for any Liens permitted hereunder or under the terms of the Loan Agreement, and the Liens created by this Pledge Agreement;

(e)     Pledgor owns the Pledged Collateral free and clear of any pledge, mortgage, hypothecation, lien, charge, encumbrance or any security interest therein, except for the pledge and security interest granted to Lender hereunder;

(f)     The pledge of the Pledged Collateral does not violate (1) the Articles of Organization or Limited Liability Agreement of the Company, or any indenture, mortgage, bank loan or credit agreement to which Pledgor or Company is a party or by which any of their respective properties or assets may be bound; or (2) any restriction on such transfer or encumbrance of such Pledged Collateral;

(g)     Pledgor hereby authorizes Lender to file financing statements pursuant to the UCC as Lender may request to perfect the security interest granted hereby;

(h)     No authorization, approval, or other action by, and no notice to or filing with, any governmental authority or regulatory body that has not been obtained is required either (i) for the pledge of the Pledged Collateral pursuant to this Pledge Agreement or for the execution, delivery or performance of this Pledge Agreement by Pledgor or (ii) for the exercise by Lender of the voting or other rights provided for in this Pledge Agreement or the remedies in respect of the Pledged Collateral pursuant to this Pledge Agreement (except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally or other applicable law);

(i)     Upon the taking of possession of the Pledged Collateral or the filing of the appropriate UCC filing statements, the pledge of the Pledged Collateral pursuant to this Pledge Agreement will create a valid and perfected first priority security interest in the Pledged Collateral, in favor of Lender for the benefit of Lender, securing the payment and performance of Pledgor’s obligations under the Loan Documents;

(j)     The Powers are duly executed and to Pledgor’s knowledge, give Lender the authority they purport to confer;

(k)     Pledgor has no obligation to make further capital contributions or make any other payments to the Company with respect to its interest therein other than as specifically set forth in the Company Formation Documents (as defined in the Loan Agreement);

(l)     The Pledged Interests have been validly issued, are fully paid and non-assessable;

(m)     Company owns all right, title and interest in and to the Collateral (as defined in the Security Agreement); and

(o)     The Acknowledgment and Consent (in the form attached hereto as Exhibit B) has been duly executed by Company.

Section 6.      Voting Rights . During the term of this Pledge Agreement, and except as provided in this Section 6 below, Pledgor shall have the right to vote the Pledged Interests on all governing questions in a manner not inconsistent with the terms of this Pledge Agreement, the Loan Agreement and any other agreement, instrument or document executed pursuant thereto or in connection therewith. During the continuation of an Event of Default, Lender or Lender’s nominee may, at Lender’s or such nominee’s option and following written notice from Lender to Pledgor, exercise all voting powers pertaining to the Pledged Collateral, including, if allowed by the terms of the Company Formation Documents, the right to take action by written consent, and as such (x) exercise, or direct Pledgor as to the exercise of all voting, consent, managerial, election and other rights to the applicable Pledged Collateral and (y) exercise, or direct Pledgor as to the exercise of any and all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to the applicable Pledged Collateral, as if Lender were the absolute owner thereof, all without liability except to account for property actually received by it, but Lender shall have no duty to exercise any of the aforesaid rights, privileges or options and shall not be responsible for any failure so to do or delay in so doing. Such authorization shall constitute an irrevocable voting proxy, coupled with an interest, from Pledgor to Lender or, at Lender’s option, to Lender’s nominee.

Section 7.      Distributions .

(a)     So long as no Event of Default shall have occurred and is continuing:

(i)     Pledgor shall be entitled to receive and retain any and all distributions and interest paid in respect of the Pledged Collateral to the extent such distributions are not prohibited by the Loan Agreement, provided , however , that any and all

(A) distributions and interest paid or payable other than in cash with respect to, and instruments and other property received, receivable or otherwise distributed with respect to, or in exchange for, any of the Pledged Collateral;

(B) distributions paid or payable in cash with respect to any of the Pledged Collateral on account of a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in surplus; and

(C) cash paid, payable or otherwise distributed with respect to principal of, or in redemption of, or in exchange for, any of the Pledged Collateral;

shall be Pledged Collateral, and shall be forthwith delivered to Lender to hold as Pledged Collateral and shall, if received by Pledgor, be received in trust for Lender, be segregated from the other property or funds of Pledgor, and be delivered immediately to Lender as Pledged Collateral in the same form as so received (with any necessary endorsement); and

(b)     Upon the occurrence and during the continuance of an Event of Default:

(i)     All rights of Pledgor to receive the distributions and interest payments which it would otherwise be authorized to receive and retain pursuant to Section 7(a)(i) hereof shall cease, and all such rights shall thereupon become vested in Lender, which shall thereupon have the sole right to receive and hold as Pledged Collateral such distributions and interest payments;

(ii)     All distributions and interest payments which are received by Pledgor contrary to the provisions of clause (i) of this Section 7(b) shall be received in trust for Lender, shall be segregated from other funds of Pledgor and shall be paid over immediately to Lender as Pledged Collateral in the same form as so received (with any necessary endorsements);

(iii)     Pledgor shall, upon the request of Lender, at Pledgor’s expense, execute and deliver all such instruments and documents, and do or cause to be done all such other acts and things, as may be necessary or, in the reasonable opinion of Lender, Pledgor or their respective counsel, advisable to register the applicable Pledged Collateral under the provisions of the Securities Act of 1933, as amended (the “ Securities Act ”) and to exercise its best efforts to cause the registration statement relating thereto to become effective and to remain effective for such period as prospectuses are required by law to be furnished, and to make all amendments and supplements thereto and to the related prospectus which, in the opinion of Lender, Pledgor or their respective counsel, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto;

(iv)     Pledgor shall, upon the request of Lender, at Pledgor’s expense, use its reasonable efforts to qualify the Pledged Collateral under state securities or “Blue Sky” laws and to obtain all necessary governmental approvals for the sale of the Pledged Collateral, as requested by Lender;

(v)     Pledgor shall, upon the request of Lender, at Pledgor’s expense, cause the Company to make available to the holders of its securities, as soon as practicable, earnings statements which will satisfy the provisions of Section 11(a) of the Securities Act to the extent such provisions are applicable to the Company; and

(vi)     Pledgor shall, upon the request of Lender, at Pledgor’s expense, do or cause to be done all such other reasonable acts and things as may be necessary to make such sale of the Pledged Collateral or any part thereof valid and binding and in compliance with applicable law.

Pledgor will reimburse Lender for all reasonable expenses incurred by Lender, including, without limitation, reasonable attorneys’ and accountants’ fees and expenses in connection with the foregoing. Upon or at any time after the occurrence of an Event of Default, if Lender determines that, prior to any public offering of any securities constituting part of the Pledged Collateral, such securities should be registered under the Securities Act and/or registered or qualified under any other federal or state law and such registration and/or qualification is not practicable, then Pledgor agrees that it will be commercially reasonable if a private sale, upon at least five (5) Business Days’ notice to Pledgor, is arranged so as to avoid a public offering, even though the sales price established and/or obtained at such private sale may be substantially less than prices which could have been obtained for such security on any market or exchange or in any other public sale. Pledgor hereby indemnifies Lender for any and all liabilities incurred by Lender as a result of becoming a member of the Company, except to the extent caused by Lender’s gross negligence or willful misconduct.

Section 8.      Transfers and Other Liens; Issuance . Pledgor agrees that it will not (i) sell or otherwise dispose of, or grant any option with respect to, any of the Pledged Collateral without the prior written consent of Lender, except as permitted under the Loan Agreement, (ii) create or permit to exist any Lien upon or with respect to any of the Pledged Collateral, except for the security interest under this Pledge Agreement, and except for any Permitted Lien, or (iii) issue or permit the issuance or grant of any membership interests not currently issued in the Company.

Section 9.      Remedies .

(a)     Lender shall have, in addition to any other rights given under this Pledge Agreement or by applicable law, all of the rights and remedies with respect to the Pledged Collateral of a secured party under the Uniform Commercial Code of the State of Minnesota. Lender (personally or through an agent) is hereby authorized and empowered to transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral for the purpose of exercise of rights and remedies available hereunder and under applicable law, to exercise all voting rights with respect thereto, to collect and receive all cash distributions and other distributions made thereon, and to otherwise act with respect to the Pledged Collateral as though Lender were the outright owner thereof, Pledgor hereby irrevocably constituting and appointing Lender as the proxy and attorney-in-fact of Pledgor, with full power of substitution to do so; provided , however , that Lender shall have no duty to exercise any such right or to preserve the same and shall not be liable for any failure to do so or for any delay in doing so; provided , further , however , that Lender agrees to exercise such proxy and other rights and remedies described in this sentence only so long as an Event of Default shall have occurred and is continuing and following written notice thereof to Pledgor. In addition, after the occurrence of an Event of Default and during the continuation thereof, Lender shall have such powers of sale and other powers as may be conferred by applicable law. With respect to the Pledged Collateral or any part thereof which shall then be in or shall thereafter come into the possession or custody of Lender or which Lender shall otherwise have the ability to transfer under this Pledge Agreement and applicable law, Lender may, in its sole discretion, without notice except as specified herein or by applicable law, upon the occurrence and during the continuation of an Event of Default, sell or cause the same to be sold in accordance with applicable law at any exchange, broker’s board or at public or private sale, in one or more sales or lots, at such price as Lender may deem best, for cash or on credit on commercially reasonable terms or for future delivery, without assumption of any credit risk, and the purchaser of any or all of the Pledged Collateral so sold shall thereafter own the same, absolutely free from any claim, encumbrance or right of any kind whatsoever. Lender may, in its own name, or in the name of a designee or nominee, buy the Pledged Collateral at any public sale and, if permitted by applicable law, buy the Pledged Collateral at any private sale. Pledgor will pay to Lender all reasonable expenses (including, without limitation, court costs and reasonable attorneys’ and paralegals’ fees and expenses) of, or incidental to, the enforcement of any of the provisions hereof. Lender agrees to distribute any proceeds of the sale of the Pledged Collateral in accordance with the Loan Agreement and applicable law and Pledgor shall remain liable for any deficiency and shall be entitled to any surplus following the sale of the Pledged Collateral.

(b)     Unless any of the Pledged Collateral threatens to decline speedily in value or is or becomes of a type sold on a recognized market, Lender will give Pledgor reasonable notice of the time and place of any public sale thereof, or of the time after which any private sale or other intended disposition is to be made. Any sale of the Pledged Collateral conducted in conformity with reasonable commercial practices of banks, commercial finance companies, insurance companies or other financial institutions disposing of property similar to the Pledged Collateral shall be deemed to be commercially reasonable. Notwithstanding any provision to the contrary contained herein, Pledgor agrees that any requirements of reasonable notice shall be met if such notice is received by Pledgor as provided in Section 19 below at least ten (10) Business Days before the time of the sale or disposition; provided , however , that Lender may give any shorter notice that is commercially reasonable under the circumstances. Any other requirement of notice, demand or advertisement for sale is waived, to the extent permitted by law.

(c)     In view of the fact that federal and state securities laws may impose certain restrictions on the method by which a sale of the Pledged Collateral may be effected after an Event of Default, Pledgor agrees that after the occurrence and during the continuation of an Event of Default, Lender may, from time to time, attempt to sell all or any part of the Pledged Collateral by means of a private placement restricting the bidders and prospective purchasers to those who are qualified and will represent and agree that they are purchasing for investment only and not for distribution. If it elects to sell the Pledged Collateral by means of a private placement, Lender shall offer to sell or solicit offers to buy, and shall sell and transfer, the Pledged Collateral, or any part of it, in accordance with applicable law including without limitation to a limited number of sophisticated investors qualified to purchase the Pledged Collateral. If Lender solicits such offers from not less than four (4) such investors, then the acceptance by Lender of the highest offer obtained therefrom shall be deemed to be a commercially reasonable method of disposing of such Pledged Collateral; provided , however , that this Section does not impose a requirement that Lender solicit offers from four or more investors in order for the sale to be commercially reasonable.

Section 10.      Lender Appointed Attorney-in-Fact .

(a)     Pledgor hereby appoints Lender its attorney-in-fact, coupled with an interest, with full authority, in the name of Pledgor or otherwise, from time to time in Lender’s sole discretion, to take any action and to execute any instrument which Lender may deem necessary or advisable to accomplish the purposes of this Pledge Agreement, including, without limitation, to receive, endorse and collect all instruments made payable to Pledgor representing any distribution, interest payment or other distribution in respect of the Pledged Collateral or any part thereof and to give full discharge for the same and to arrange for the transfer of all or any part of the Pledged Collateral on the books of the Company to the name of Lender or Lender’s nominee; provided , however, that Lender agrees to exercise such powers only so long as an Event of Default shall have occurred and is continuing.

(b)     Upon the indefeasible payment in full of all Obligations in cash and the termination of any commitment on the part of Lender to lend to the Borrowers, all Pledged Collateral (and all stock or other powers delivered in connection therewith) shall be returned to Pledgor and all rights with respect to the Pledged Collateral or the Company vested in Lender pursuant to this Pledged Agreement shall expire, terminate and be of no further effect whatsoever and Lender shall provide any release or other instruments required to effect such release or as reasonably requested by Pledgor to evidence such release.

Section 11.      Waivers .

(a)     Pledgor waives presentment and demand for payment of any of Pledgor’s obligations under the Loan Documents, protest and notice of dishonor or Event of Default with respect to any of Pledgor’s obligations under the Loan Documents and all other notices to which Pledgor might otherwise be entitled except as otherwise expressly provided herein or in the Loan Agreement except to the extent that applicable law shall prohibit such waiver, protest or notice.

(b)     Pledgor understands and agrees that its obligations and liabilities under this Pledge Agreement shall remain in full force and effect, notwithstanding foreclosure of any property securing all or any part of the Obligations under the Loan Documents by trustee sale or any other reason impairing the right of Pledgor or Lender to proceed against any of the Borrowers, any guarantor or any such Person’s property. Pledgor agrees that all of its obligations under this Pledge Agreement shall remain in full force and effect without defense, offset or counterclaim of any kind, notwithstanding that Pledgor’s rights against the Borrowers may be impaired, destroyed or otherwise affected by reason of any action or omission on the part of Lender other than actions or omissions that are determined to constitute gross negligence or willful misconduct on the part of Lender.

(c)     Pledgor hereby expressly waives the benefits of any law in any jurisdiction purporting to allow a guarantor or pledgor to revoke a continuing guaranty or pledge with respect to any transactions occurring after the date of the guaranty or pledge.

Section 12.      Term . This Pledge Agreement shall remain in full force and effect until all Obligations under the Loan Documents have been fully and indefeasibly paid in cash and any commitment on the part of Lender to provide credit has been terminated.

Section 13.      Definitions . The singular shall include the plural and vice versa and any gender shall include any other gender as the context may require.

Section 14.      Successors and Assigns . This Pledge Agreement shall be binding upon and inure to the benefit of Pledgor, Lender, and their respective successors and assigns. Pledgor’s successors and assigns shall include, without limitation, a receiver, trustee or debtor-in-possession of or for Pledgor.

Section 15.   GOVERNING LAW . ANY DISPUTE BETWEEN PLEDGOR AND LENDER OR ANY OTHER HOLDER OF SECURED OBLIGATIONS ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS PLEDGE AGREEMENT, OR ANY OF THE OTHER LOAN DOCUMENTS, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF MINNESOTA, WHERE APPLICABLE, (EXCEPT TO THE EXTENT THAT THE UCC PROVIDES FOR THE APPLICATION OF LAWS OF ANOTHER STATE). THE PARTIES TO THIS PLEDGE AGREEMENT HAVE VOLUNTARILY ELECTED THAT THIS PLEDGE AGREEMENT, THE OTHER LOAN DOCUMENTS AND ALL LOANS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MINNESOTA.

Section 16.      CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL .

(A) NON-EXCLUSIVE JURISDICTION . EXCEPT AS PROVIDED IN SUBSECTION (B) , EACH OF THE PARTIES HERETO AGREES AND ACCEPTS FOR ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS PLEDGE AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS THE NON-EXCLUSIVE JURISDICTION OF the courts of the State of MINNESOTA sitting in the County of HENNEPIN and of the United States District Court of the District of MINNESOTA, and any appellate court from any thereof. EACH OF THE PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.

(B) OTHER JURISDICTIONS . PLEDGOR AGREES THAT LENDER, OR ANY HOLDER OF SECURED OBLIGATIONS SHALL HAVE THE RIGHT TO PROCEED AGAINST PLEDGOR OR ITS RESPECTIVE PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER PLEDGOR OR (2) REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE SECURED OBLIGATIONS OR (3) IN ORDER TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. PLEDGOR AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING THAT IS SEPARATE FROM ANY PROCEEDING BROUGHT UNDER CLAUSE (A) ABOVE AND THAT IS BROUGHT BY SUCH PERSON SOLELY TO REALIZE ON ANY SECURITY FOR THE OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON. PLEDGOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B) .

(C) SERVICE OF PROCESS . NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF LENDER TO SERVE ANY WRITS, SERVICE OF PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING ISSUED BY ANY COURT REFERRED TO IN THIS SECTION 16 IN ANY MANNER PERMITTED BY APPLICABLE LAW.

(D) WAIVER OF JURY TRIAL . EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THIS PLEDGE AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS PLEDGE AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

Section 17.      Further Assurances . Pledgor agrees that it will cooperate with Lender and will execute and deliver, or cause to be executed and delivered, all such other stock powers, proxies, instruments and documents, and will take all such other actions, including, without limitation, the authorization and filing of financing statements, as Lender may reasonably request from time to time in order to carry out the provisions and purposes of this Pledge Agreement.

Section 18.      Lender’s Duty of Care . Lender shall not be liable for any acts, omissions, errors of judgment or mistakes of fact or law including, without limitation, acts, omissions, errors or mistakes with respect to the Pledged Collateral, except for those arising out of or in connection with Lender’s (i) gross negligence or willful misconduct, (ii) failure to use reasonable care with respect to the safe custody of the Pledged Collateral in Lender’s possession or (iii) breach of its express obligations under this Pledge Agreement. Without limiting the generality of the foregoing, Lender shall be under no obligation to take any steps necessary to preserve rights in the Pledged Collateral against any other parties but may do so at its option. All reasonable expenses incurred in connection therewith shall be for the sole account of Pledgor, and shall constitute part of Pledgor’s obligations under the Loan Documents secured hereby.

Section 19.      Notices . Any notices or demands required or contemplated hereunder shall be written and shall be effective two days after the placing thereof in the United States mails postage prepaid or with a nationally-recognized courier service such as Federal Express, addressed to the relevant party at its address set forth on the signature page below.

Section 20.      Amendments, Waivers and Consents . No amendment or waiver of any provision of this Pledge Agreement nor consent to any departure by Pledgor herefrom, shall in any event be effective unless the same shall be in writing and signed by Lender pursuant to the terms of the Loan Agreement, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

Section 21.      Section Headings . The section headings herein are for convenience of reference only, and shall not affect in any way the interpretation of any of the provisions hereof.

Section 22.      Execution in Counterparts . This Pledge Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall together constitute one and the same agreement.

Section 23.      Merger . This Pledge Agreement and the other Loan Documents embody the final and entire agreement and understanding among Pledgor and Lender and supersede all prior agreements and understandings among Pledgor and Lender relating to the subject matter thereof. This Pledge Agreement and the other Loan Documents may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties hereto.

Section 24.      Irrevocable Proxy . Solely with respect to Article 8 Matters, Pledgor hereby irrevocably grants and appoints Lender, from the date of this Agreement until the termination of this Agreement in accordance with its terms, as Pledgor’s true and lawful proxy, for and in Pledgor’s name, place and stead to vote the Pledged Interest in the Company by Pledgor, whether directly or indirectly, beneficially or of record, now owned or hereafter acquired, with respect to such Article 8 Matters. The proxy granted and appointed in this Section 24 shall include the right to sign Pledgor’s name (as a member of the Company) to any consent, certificate or other document relating to an Article 8 Matter and the Pledged Interests that applicable law may permit or require, to cause the Pledged Interest to be voted in accordance with the preceding sentence. Pledgor hereby represents and warrants that there are no other proxies and powers of attorney with respect to an Article 8 Matter and the Pledged Interest that Pledgor may have granted or appointed. Pledgor will not give a subsequent proxy or power of attorney or enter into any other voting agreement with respect to the Pledged Interest with respect to any Article 8 Matter and any attempt to do so with respect to an Article 8 Matter shall be void and of no effect.

As used herein, “Article 8 Matter” means any action, decision, determination or election by the Company or its members that their membership interests or other equity interests, or any of them, be, or cease to be, a “security” as defined in and governed by Article 8 of the Uniform Commercial Code, and all other matters related to any such action, decision, determination or election.

The proxies and powers granted by the Pledgor pursuant to this Agreement are coupled with an interest and are given to secure the performance of the Pledgor’s obligations.

(Signature Page Follows)

IN WITNESS WHEREOF, Pledgor and Lender have executed this Pledge Agreement as of the date set forth above.

With a copy to (which shall not constitute notice or service of process):

[ Signature page to Pledge Agreement ]

IN WITNESS WHEREOF, Pledgor and Lender have executed this Pledge Agreement as of the date set forth above.

Address for Notices:

With a copy to (which shall not constitute notice or service of process):

[ Signature page to Pledge Agreement ]

SCHEDULE I

to

PLEDGE AGREEMENT

dated as of May __, 2018

PLEDGED SUBSIDIARIES

Pledged Membership Interests

EXHIBIT A

to

PLEDGE AGREEMENT

STOCK POWER

FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer to _____________________________ one hundred percent (100%) of the limited liability company membership interests of WORTHINGTON ACQUISITION, LLC, a North Carolina limited liability company (the “ Membership Interests ”), standing in the name of the undersigned on the books of said limited liability company and does hereby irrevocably constitute and appoint ___________________________________ as the undersigned’s true and lawful attorney, for it and in its name and stead, to sell, assign and transfer all or any of the Membership Interests, and for that purpose to make and execute all necessary acts of assignment and transfer thereof; and to substitute one or more persons with like full power, hereby ratifying and confirming all that said attorney or substitute or substitutes shall lawfully do by virtue hereof.

Dated: _______________

EXHIBIT B

to

PLEDGE AGREEMENT

FORM OF ACKNOWLEDGEMENT AND CONSENT

The undersigned hereby acknowledges receipt of a copy of the Pledge Agreement dated as of May __, 2018, made by STRATUS AERO PARTNERS, LLC , a Delaware limited liability company (" Company ") for the benefit of MINNESOTA BANK & TRUST, a Minnesota state banking corporation company, as Lender (the “ Pledge Agreement ”). The undersigned agrees for the benefit of Lender that:

Exhibit 10.5

LIMITED GUARANTY

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and to induce Minnesota Bank & Trust, a Minnesota state banking corporation (the “Lender”), at its option at any time or from time to time to make loans or extend other accommodations to or for the account of Worthington Acquisition, LLC, a North Carolina limited liability company (together with its successors and assigns, “Acquisition”), Worthington Aviation, LLC, a North Carolina limited liability company (together with its successors and assigns, “Aviation”), Worthington MRO, LLC, a North Carolina limited liability company (together with its successors and assigns, “MRO”; and together with Acquisition and Aviation being sometimes collectively referred to herein as, the “Borrowers” and individually as, a “Borrower”), the undersigned hereby absolutely and unconditionally guarantees to the Lender the full and prompt payment and performance when due, whether at maturity or earlier by reason of acceleration or otherwise, of each and every debt, liability and obligation of every type which Borrowers may now or at any time hereafter owe to the Lender, whether such debt, liability or obligation now exists or is hereafter created or incurred, and whether it is or may be direct or indirect, due or to become due, absolute or contingent, primary or secondary, liquidated or unliquidated, or joint, several or joint and several (all such debts, liabilities and obligations are hereinafter collectively referred to as the “Indebtedness”).

The undersigned further acknowledges and agrees with the Lender that:

1.     No act or thing need occur to establish the liability of the undersigned hereunder and no act or thing except full payment and discharge of all Indebtedness shall in any way exonerate the undersigned or modify, reduce, limit or release the liability of the undersigned hereunder.

2.     This is an absolute, unconditional and continuing guaranty of payment of the Indebtedness and shall continue to be in force and be binding upon the undersigned, whether or not all Indebtedness is paid in full, until this guaranty is revoked as to future transactions by written notice actually received by the Lender. Such revocation shall not be effective as to Indebtedness existing or committed for at the time of actual receipt of such notice by the Lender, or as to any renewals, extensions and refinancings thereof. If there be more than one guarantor hereunder, such revocation shall be effective only as to the one so revoking. The dissolution or adjudication of bankruptcy of the undersigned shall not revoke this guaranty, except upon actual receipt of written notice thereof by the Lender and only prospectively, as to future transactions, as herein set forth.

3.     The undersigned represents and warrants to the Lender that: (a) the undersigned is a corporation duly organized and existing in good standing under the laws of the State of Delaware and has full power and authority to make and deliver this guaranty; (b) the execution, delivery and performance of this guaranty by the undersigned have been duly authorized by all necessary action of its directors and shareholders and do not and will not violate the provisions of, or constitute a default under, any presently applicable law or its articles of incorporation or bylaws or any agreement presently binding on it; (c) this guaranty has been duly executed and delivered by the authorized officers of the undersigned and constitutes its lawful, binding and legally enforceable obligation; (d) the authorization, execution, delivery and performance of this guaranty do not require notification to, registration with, or consent or approval by, any federal, state or local regulatory body or administrative agency; (e) each of the representations and warranties contained in that certain Loan Agreement dated as of the date hereof (such Loan Agreement as amended, modified, supplemented or restated from time to time being the “Loan Agreement;” capitalized terms not otherwise defined herein being used herein as therein defined) by and among the Borrowers and the Lender pertaining to the undersigned as “Guarantor”, or as a “Loan Party” are true and correct; and (f) (i) the Borrowers and the undersigned are members of a related organization of various entities constituting a single economic and business enterprise so that the Borrowers and the undersigned share an identity of interests such that any benefit received by either one of them benefits the other; (ii) the Borrowers and the undersigned render services for the benefit of the one another, purchase or sell and supplies goods to or from or for the benefit of one another, makes loans, advances and provides other financial accommodations to or for the benefit of one another; (iii) in some cases, the Borrowers and the undersigned have centralized accounting and legal service and common officers and directors; and (iv) while the Borrowers and the undersigned operate as a single economic enterprise, nothing contained in this Section 3(f) should be construed or imply that the Borrowers and the undersigned are not separate legal entities.

4.     Notwithstanding any term set forth herein to the contrary, the liability of the Guarantor hereunder shall be shall be limited to the sum of:

a.     the principal amount of the Indebtedness equal to the Guaranty Amount (as such term is defined in the Loan Agreement); plus

b.     interest on such Guaranty Amount of principal; plus

c.     all expenses, including attorneys’ fees and legal expenses, paid or incurred by the Lender in endeavoring to collect the Indebtedness, or any part thereof, and in enforcing this guaranty prior to Guarantor’s payment of this Guaranty in full, which attorneys’ fees and legal expenses shall include, but not be limited to, any attorneys’ fees and legal expenses incurred in connection with any appeal of a lower court’s judgment or order;

provided , however, that no payment on the Indebtedness shall reduce the Guarantor’s liability under this Guaranty unless such payment is made by Guarantor and is accompanied by an advice received by the Lender advising the Lender that such payment is made under this guaranty.

5.     The undersigned hereby waives any right of contribution, reimbursement, recourse or subrogation available to the undersigned against each Borrower, any other person liable to payment of the Indebtedness, or as to any collateral security therefor, until the Indebtedness has been paid in full in cash.

6.     The undersigned will pay or reimburse the Lender for all reasonable costs and expenses (including reasonable attorneys' fees and legal expenses) incurred by the Lender in connection with the protection, defense or enforcement of this guaranty, whether or not suit is commenced, which attorneys' fees and legal expenses shall include, but not be limited to, any attorneys' fees and legal expenses incurred in connection with any appeal of a lower court's judgment or order.

7.     Whether or not any existing relationship between the undersigned and Borrowers has been changed or ended and whether or not this guaranty has been revoked, the Lender may, but shall not be obligated to, enter into transactions resulting in the creation or continuance of Indebtedness, without any consent or approval by the undersigned and without any notice to the undersigned. The liability of the undersigned shall not be affected or impaired by any of the following acts or things: (i) any acceptance of collateral security, guarantors, accommodation parties or sureties for any or all Indebtedness; (ii) any one or more extensions or renewals of Indebtedness (whether or not for longer than the original period) or any modification of the interest rates, maturities or other contractual terms applicable to any Indebtedness; (iii) any waiver or forbearance granted to Borrowers, any delay or lack of diligence in the enforcement of Indebtedness, or any failure to institute proceedings, file a claim, give any required notices or otherwise protect any Indebtedness; (iv) any full or partial release of, settlement with, or agreement not to sue, Borrowers or any other guarantor or other person liable in respect of any Indebtedness; (v) any discharge of any evidence of Indebtedness or the acceptance of any instrument in renewal thereof or substitution therefor; (vi) any failure to obtain collateral security (including rights of setoff) for Indebtedness, or to see to the proper or sufficient creation and perfection thereof, or to establish the priority thereof, or to protect, insure, or enforce any collateral security; or any modification, substitution, discharge, impairment, or loss of any collateral security; (vii) any foreclosure or enforcement of any collateral security; (viii) any transfer of any Indebtedness or any evidence thereof; (ix) any order of application of any payments or credits upon Indebtedness; (x) any election by the Lender under § 1111(b)(2) of the United States Bankruptcy Code.

8.     The undersigned waives any and all defenses and claims of Borrowers, or any other obligor pertaining to Indebtedness, except the defense of discharge by payment in full. Without limiting the generality of the foregoing, the undersigned will not assert, plead or enforce against the Lender any defense of waiver, release, discharge in bankruptcy, statute of limitations, res judicata, statute of frauds, anti-deficiency statute, fraud, incapacity, minority, usury, illegality or unenforceability which may be available to Borrowers or to any other person liable for any Indebtedness. The undersigned expressly agrees that the undersigned shall be and remain liable for any deficiency remaining after foreclosure of any mortgage or security interest securing Indebtedness, whether or not the liability of Borrowers or any other obligor for such deficiency is discharged pursuant to statute or judicial decision.

9.     The undersigned waives presentment, demand for payment, notice of dishonor or nonpayment and protest of any instrument evidencing Indebtedness. The Lender shall not be required first to resort for payment of the Indebtedness to Borrowers or other persons or their properties or first to enforce, realize upon or exhaust any collateral security for indebtedness, before enforcing the guaranty.

10.     If any payment applied by the Lender to Indebtedness is thereafter set aside. recovered, rescinded or required to be returned for any reason (including, without limitation, the bankruptcy, insolvency or reorganization of any Borrower or any other obligor), the Indebtedness to which such payment was applied shall for the purposes of this guaranty be deemed to have continued in existence, notwithstanding such application, and this guaranty shall be enforceable as to such Indebtedness as fully as if such application had never been made.

11.     The undersigned acknowledges and agrees that the Lender (a) has not made any representations or warranties with respect to, (b) does not assume any responsibility to the undersigned for, and (c) has no duty to provide information to the undersigned regarding, the enforceability of any of the Indebtedness or the financial condition of the Borrowers or any guarantor. The undersigned has independently determined the creditworthiness of the Borrowers and the enforceability of the Indebtedness and until the Indebtedness is paid in full will independently and without reliance on the Lender continue to make such determinations.

12.     The liability of the undersigned under this guaranty is in addition to and shall be cumulative with all other liabilities of the undersigned to the Lender as guarantor or otherwise, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.

13.     The undersigned agrees that any and all present and future debts and obligations of Borrowers to the undersigned are hereby subordinated to the claims of the Lender and are hereby assigned by such undersigned to Lender as security for the Indebtedness and the undersigned’s obligations under this Guaranty.

14.     If there be more than one guarantor of the Indebtedness, all agreements and promises herein shall be construed to be joint and several with all other guarantors of the Indebtedness, whether pursuant to this guaranty or separate guaranties and shall be fully binding upon and enforceable against any or all of the undersigned and the other guarantors. This guaranty shall be binding upon the undersigned and the successors and assigns of the undersigned and shall inure to the benefit of the Lender and its participants, successors and assigns. Any invalidity or unenforceability of any provision or application of this guaranty shall not affect other lawful provisions and application hereof, and to this end the provisions of this guaranty are declared to be severable. This guaranty may not be waived, modified, amended, terminated, released or otherwise changed except by a writing signed by the undersigned and the Lender. This guaranty shall be governed by the internal laws of the State of Minnesota, without giving effect to conflict of laws principles thereof. The undersigned waives notice of the Lender's acceptance hereof.

15.     AT THE OPTION OF THE LENDER, THIS GUARANTY AND EACH OTHER LOAN DOCUMENT TO WHICH THE UNDERSIGNED IS A PARTY MAY BE ENFORCED IN ANY FEDERAL OR MINNESOTA STATE COURT SITTING IN MINNEAPOLIS OR ST. PAUL, MINNESOTA; AND THE UNDERSIGNED CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE UNDERSIGNED COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS GUARANTY OR ANY OTHER LOAN DOCUMENT, THE LENDER, AT ITS OPTION, SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.

16.     Wherever possible, each provision of this guaranty shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this guaranty shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this guaranty. In any action or proceeding involving any state corporate law, or any state or federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of the undersigned hereunder would otherwise be held or determined to be void, invalid or unenforceable on account of the amount of the undersigned's liability under this guaranty, then, notwithstanding any other provision of this guaranty to the contrary, the amount of such liability shall, without any further action by the undersigned, the Lender or any other person, be automatically limited and reduced to the highest amount which is valid and enforceable as determined in such action or proceeding.

17.     THE UNDERSIGNED HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (a) UNDER THIS GUARANTY OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, OR (b) ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS GUARANTY, AND AGREEs THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, this guaranty has been duly executed by the undersigned to be effective as of May __, 2018.

Address for Guarantor:

5930 Balsom Ridge Road

Denver, NC 28037

[Signature page to Guaranty of Air T, Inc.]