Exhibit 10.1

Loan Agreement

Dated as of January 18, 2019

BETWEEN

AIRCO 1, LLC ,

as the Borrower

AND

MINNESOTA BANK & TRUST AND PARK STATE BANK

as the “Lenders”

TABLE OF CONTENTS

Page

LOAN AGREEMENT

This LOAN AGREEMENT dated as of January 18, 2019 (this “ Agreement ”), is entered into by and between AIRCO 1, LLC, a Delaware limited liability company (the “ Borrower ”), PARK STATE BANK, a Minnesota state banking corporation (“ PSB ”), MINNESOTA BANK & TRUST, a Minnesota state banking corporation (“ MBT ”; and together with PSB and their respective successors and assigns being sometimes collectively referred herein as the “ Lenders ” and individually as a “ Lender ”).

RECITALS

A.     MBT has previously extended a line of credit to Borrower (the “ MBT Line of Credit ”) pursuant to which MBT, has agreed to make term loans (the “ MBT Airframe Acquisition Loan(s) ”) for the purpose of acquiring used airframes to be disassembled and sold as parts by the Borrower pursuant to the terms and conditions of that certain Second Loan Agreement dated as of February 22, 2018, by and between the Borrower and MBT (the “ MBT Loan Agreement ”).

B.     Borrower now desires to obtain a term loan in the amount of $2,500,000 (the “ Loan ”) from Lenders the proceeds of which will be used to finance the purchase of a decommissioned Boeing 737 airframe to be disassembled and sold as parts by the Borrower.

C.     Lenders are willing, upon the terms and conditions contained in this Agreement and related loan documents, to severally make the Loan to the Borrower.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1.      Documents; etc .

The Borrower has delivered, or will deliver, to the Lenders before the Loan is made, the following documents (this Agreement together with each of the following defined documents and each other instrument, document, guaranty, mortgage, deed of trust, chattel mortgage, pledge, consent, assignment, contract, security agreement, lease, financing statement, patent, trademark or copyright registration, subordination agreement, trust account agreement, hedge agreement, or other agreement executed and delivered by Borrower with respect to this Agreement or to create or perfect any Lien in any collateral securing the payment of the Loans (collectively the “ Collateral ”) (in each case as originally executed and as amended, modified or supplemented from time to time) being sometimes hereinafter referred to collectively as the “ Loan Documents ” and individually as a “ Loan Document ”) and other items, all containing or to contain provisions acceptable to the Lenders and their respective counsel:

(a)     (i) a promissory note dated as of even date herewith in the original principal amount of up to TWO MILLION ONE HUNDRED THOUSAND AND NO/100THS DOLLARS ($2,100,000) (such promissory note together with each renewal, replacement or substitute note therefor being the “ PSB Note ”) in the form attached hereto as Exhibit A-1, duly executed by the Borrower; and (ii) a promissory note dated as of even date herewith in the original principal amount of up to FOUR HUNDRED THOUSAND AND NO/100THS DOLLARS ($400,000) (such promissory note together with each renewal, replacement or substitute note therefor being the “ MBT Note ”; and together with the PSB Note being sometimes collectively referred to herein as the “ Notes ” and individually as a “ Note ”) in the form provided by the Lender, duly executed by the Borrower;

(b)     a security agreement (as amended, modified, replaced or restated from time to time, the “ Security Agreement ”) in the form provided by the Collateral Agent and duly executed by the Borrower granting to the Collateral Agent for the benefit of itself and for the ratable benefit of the Lenders a Lien in the Collateral described therein to secure repayment of the Loan and all other Obligations together with Uniform Commercial Code Standard Form UCC Financing Statements and all such other documents as may be deemed necessary by Collateral Agent to perfect the Collateral Agent’s Liens in such Collateral, and UCC and other searches from the filing offices in all states and the International Registry as may be required by the Collateral Agent which reflect that no other Person holds a prior Lien in any such Collateral except as permitted by Section 8(a);

(c)     a certificate by an officer of the Borrower certifying the names of the officers of the Borrower authorized to sign the Loan Documents to which the Borrower is a party on behalf of the Borrower together with: (i) a sample of the true signatures of such officers; (ii) resolutions of the sole member of the Borrower authorizing the execution, delivery and performance of the Loan Documents to which the Borrower is a party; and (iii) copies of the Borrower’s Certificate of Formation, together with all amendments thereto, certified by the appropriate governmental official of the jurisdiction of its organization as of a date acceptable to the Lender, and the limited liability company agreement of the Borrower together with all amendments thereto;

(d)     evidence of Good Standing for the Borrower of recent date issued by the Secretaries of State of (i) the State of Delaware; and (ii) the State of Arizona;

(e)     evidence of insurance required by any Loan Document;

(f)     a non-refundable fee in the amount of $31,500, payable to PSB in immediately available funds

(g)     a non-refundable fee in the amount of $6,000, payable to MBT in immediately available funds;

(h)     evidence of insurance required by any Loan Document;

(i)     a closing certificate, in the form provided by Lender, duly executed by a manager or officer of the Borrower;

(j)     a true, correct and complete copy of the Airframe Sale and Purchase Agreement, dated on or about January 18, 2019, by and between Borrower and Contrail, together with true, correct and complete copies of each of the other documents described on Schedule 1(j) attached hereto and incorporated herein by reference (the “ Airframe Purchase Agreement ”), together with the other documents listed on Schedule 1(j) being sometimes hereinafter referred to as an “ Airframe Transaction Document ” and collectively as the “ Airframe Transaction Documents ”) pursuant to which the Borrower is acquiring (the “ Airframe Acquisition ”) from Contrail a used Boeing 737-700 Airframe bearing MSN 30741 and related parts and documents (collectively, the “ Acquired Assets ”);

(k)     a Collateral Assignment of Purchase Agreement document pursuant to which Borrower collaterally assigns its right, title and interest to the Airframe Purchase Agreement and the other Airframe Transaction Documents to the Collateral Agent, in the form provided by the Lender, duly executed by Borrower;

(l)     a true, correct and complete copy of the Aircraft Disassembly Agreement, dated on or about January 2, 2019, by and between Borrower and Jet Yard (the “ Disassembly Agreement ”), pursuant to which Jet Yard agrees to disassemble the Airframe into parts and prepare the constituent parts for sale;

(m)     a true, correct and complete copy of that certain Consignment Agreement dated on or about January 18, 2019 by and between Borrower and Airco (the “ Consignment Agreement ”), pursuant to which Airco agrees to sell the disassembled Airframe parts on behalf of Borrower;

(n)     separate Bailee Agreement documents, each in the form provided by Collateral Agent, duly executed by Jet Yard and Airco, regarding Collateral that may from time to time be located at each such Persons’ facilities;

(o)     a statement summarizing the flow of funds required to consummate the Airframe Acquisition, acceptable to Lenders, in their sole discretion;

(p)     evidence satisfactory to the Lenders that: (i) all conditions precedent to the consummation of the Airframe Acquisition have been satisfied or waived, including, without limitation, evidence that all necessary regulatory approvals to the consummation of the Airframe Acquisition have been obtained; (iii) no litigation exists relating to the Airframe Acquisition; (iv) all of the

(q)     confirmation that all of such Acquired Assets have been delivered in acceptable condition to Jet Yard’s facility in Marana, Arizona; and (v) contemporaneously with the Borrower’s receipt of the proceeds of the Loan, the Airframe Acquisition will be consummated in full in accordance with the terms of the Airframe Transaction Documents;

(r)     a final inspection report of the Acquired Assets, in form and substance acceptable to the Lenders, confirming that all parts included in the descriptive materials previously provided by the Borrower to the Lenders are actually present on the Airframe;

(s)     a Collateral Agency Agreement (such Collateral Agency Agreement, as it may be amended, modified, supplemented, restated or replaced from time to time, being the “Collateral Agency Agreement”), by and among the Lenders and MBT, in its capacity as collateral agent (in such capacity, the “ Collateral Agent ”); and

such other approvals, inspection reports, appraisals, certificates, opinions or documents as the Lenders may reasonably request, including, without limitation, a Borrowing Base Certificate, together with a detailed inventory report as of a recent date. In addition, the Lenders or their agent(s) shall have completed their inspection of the business, operations and assets of the Borrower, and such survey shall provide the Lenders with results and information which, in the Lenders’ determination, are satisfactory to the Lenders.

2.      Loan .

(a)      Disbursement . The Lenders shall severally disburse the proceeds of the Loan to the Borrower, on the Closing Date, following satisfaction of all of the conditions set forth in Section 5.

(b)      Notes . The Loan shall be evidenced by, and be payable in accordance with the terms of, the Notes. Each Lender shall maintain records of the amount of all payments on such Lender’s Note. The outstanding amount of the Notes set forth on the records of the Lenders shall be rebuttable presumptive evidence of the principal amount owing and unpaid on the Notes.

(c)      Interest on the Loan . The Borrower agrees to pay interest on the outstanding principal amount of the Loan from the date hereof until the Loan is paid in full at the rates and at the times specified in the Notes.

(d)     Prepayment.

(i)       Voluntary . The Borrower may prepay the Loan in whole or in part at any time; provided , that, each such prepayment shall be accompanied by any prepayment premium set forth in the respective Notes and all such payments shall be made on a pro rata basis to the Lenders in accordance with their Percentages.

(ii)      Mandatory . The Loan shall be subject to mandatory prepayment as follows, with each such prepayment being paid to the Lenders for application to their respective Notes in accordance with their respective Percentages:

(A)     Contemporaneously with the Borrower’s receipt of any Net Proceeds from the sale of any Acquired Asset, the Borrower shall prepay the Loan in an aggregate amount equal to sixty percent (60%) of such Net Proceeds.

(B)     Contemporaneously with the Borrower’s receipt of any Net Proceeds from the sale of (whether in parts or in whole) that certain Boeing 737-700 Airframe bearing MSN 30742 (“ Airframe 30742 ”), the Borrower shall prepay the Loan in an aggregate amount equal to eighty percent (80%) of such Net Proceeds; provided , that , if Airframe 30742 is not sold on or prior to April 15, 2019, the Borrower shall make a Loan prepayment in the aggregate amount of $600,000 on such date.

(C)     If the outstanding principal balance of the Loan exceeds $1,200,000 on October 15, 2019, then the Borrower shall make a prepayment in the amount of such excess on such date.

(D)     If the outstanding principal balance of the Loan exceeds $250,000 on April 12, 2020, then the Borrower shall make a prepayment in the amount of such excess on such date.

(E)     If, at any time, the outstanding principal balance of the Loan exceeds the Borrowing Base, then the Borrower shall immediately prepay the amount of such excess.

3.      Payments .

Any other provision of this Agreement to the contrary notwithstanding, the Borrower shall make all payments of interest on and principal of the Loans and all payments to the Lenders with respect to payment of other fees, costs and expenses payable under any Loan Document in immediately available funds to the Lenders at their respective addresses for notices hereunder without setoff or counterclaim. The Borrower authorizes MBT to charge from time to time against the Borrower’s deposit account number 161010111 maintained with MBT or any other depository account maintained by Borrower with a Lender any such payments when due and the Lenders will use the reasonable efforts to notify the Borrower of such charges. The Borrower hereby authorizes the Lenders to make an additional Loan advance, at the Lenders’ sole and absolute discretion, to pay, on behalf of the Borrower, of any amount due to either or both Lenders or the Collateral Agent under any Loan Document without further action on the part of the Borrower and regardless of whether the Borrower is able to comply with the terms, conditions and covenants of this Agreement at the time of such Loan advance. Each payment received by the Lenders may be applied to the Borrower’ obligations to the Lenders under this Agreement or any other Loan Document in such order of application as the Lenders, in their sole and absolute discretion, may elect; provided, that all payments of principal and interest shall be applied by Lenders to their respective Notes on a pro rata basis in accordance with their respective Percentages.

4.      Set-off, Etc.

Upon the occurrence and during the continuance of an Event of Default, each Lender and each of their respective affiliates may offset any and all balances, credits, deposits (general or special, time or demand, provisional or final), accounts or monies of the Borrower then or thereafter with such Lender or such affiliate, or any obligations of a Lender or such affiliate to the Borrower, against the obligations of the Borrower arising under this Agreement or any other Loan Document. The Borrower hereby grants to the Lenders and each of their respective affiliates a Lien in all such balances, credits, deposits, accounts or monies.

5.      Conditions Precedent to All Credit Extensions.

The obligation of the Lenders to extend any credit to the Borrower shall be subject to the satisfaction of each of the following conditions, unless waived in writing by both Lenders:

(a)     The representations and warranties set forth in Section 6 shall be true and correct on the date of the requested credit extension and after giving effect thereto except to the extent that such representations and warranties expressly relate to an earlier date; and

(b)     No Event of Default or event which, with notice and/or lapse of time, would constitute an Event of Default (such event being a “ Default ”) shall have occurred and be continuing on the date of the requested credit extension or after giving effect thereto.

6.      Representations and Warranties .

To induce the Lenders to extend credit hereunder, the Borrower represents and warrants to the Lenders that:

(a)     the Borrower is a limited liability company duly organized and, validly existing and in good standing under the laws of the jurisdiction of its formation, and (b) is duly qualified as a foreign limited liability company 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 on Borrower’s financial condition, business, properties or assets;

(b)     the Borrower has full power and authority to enter into and to perform its obligations under the Loan Documents to which it is a party;

(c)     the Loan Documents constitute the legal, valid, and binding obligations of Borrower and are enforceable against Borrower in accordance with their respective terms subject only to bankruptcy, insolvency, reorganization, moratorium or similar laws at the time in effect affecting the enforceability of rights of creditors generally and by general equitable principles which may limit the right to obtain equitable remedies;

(d)     the Borrower’s execution, delivery and performance of the Loan Documents to which the Borrower is a party have been duly authorized by all necessary corporate or company action, do not require the consent or approval of any Person which has not been obtained, and do not conflict with any agreement binding upon the Borrower or any of the Borrower’s property;

(e)     there is no litigation, bankruptcy proceeding, arbitration or governmental proceeding pending against Borrower or affecting the business, property or operations of Borrower which, if determined adversely to Borrower, could reasonably be expected to constitute a Material Adverse Occurrence;

(f)     neither the Borrower nor any member of a group which is under common control with the Borrower (within the meaning of Section 414 of the IRC or Section 4001(a)(14) or 4001(b) of ERISA) (the Borrower’s “ ERISA Affiliates ”) has maintained, established, sponsored or contributed to any employee benefit plan which is a defined benefit plan (“ Plan ”) covered by Title IV of the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations thereunder (“ ERISA ”);

(g)     the proceeds of the Loan will be used finance a portion of the cost of acquisition of the Acquired Assets; and (ii); no part of the proceeds of the Loan will be used for any purpose which violates, or which is inconsistent with, any regulations promulgated by the Board of Governors of the Federal Reserve System;

(h)     (i) the Borrower is in compliance in all material respects with all federal, state and local laws, rules and regulations applicable to it including, without limitation, all pollution control and environmental regulations in each jurisdiction where the Borrower is doing business; and (ii) no Loan Party has any material liability for the release or threatened release of any toxic or hazardous waste, substance or constituent into the environment;

(i)     the Borrower’s internally prepared financial statements for the fiscal quarter that ended on September 30, 2018, copies of which have been furnished to the Lender, have been prepared in accordance with GAAP (except for the absence of footnotes and subject to customary year-end adjustments) and present fairly the financial condition of the Borrower as of such date and the result of its operation for the periods then ended;

(j)     since the date on which the financial statements described in Section 6(i) were prepared, there has not been any material adverse change in the business, operations, prospects, assets, results of operations or condition (financial or other) of the Borrower that has not been otherwise reported via applicable regulatory filings, copies of which have been provided to the Lender;

(k)     the Borrower has filed all Federal and State income tax and other tax returns which are required to be filed, and has paid all taxes as shown on said returns and all assessments received by the Borrower to the extent that such taxes have become due, except to the extent that the Borrower is disputing such taxes in good faith and has established adequate reserves on its books;

(l)     the Borrower possesses adequate licenses, permits, franchises, patents, copyrights, trademarks and trade names, or rights thereto, to conduct its business substantially as now conducted and as presently proposed to be conducted;

(m)     no Loan Party is in default of a material provision under any material agreement, instrument, decree or order to which it is a party or by which it or its property is bound or affected and assuming that this Agreement had been previously executed and delivered no Default or Event of Default has occurred and is continuing hereunder;

(n)     the Borrower has good title to all of its properties and assets, including, without limitation, the Collateral, free and clear of all mortgages, security interests, Liens and encumbrances, except as permitted by Section 8(a);

(o)     Airco owns all of the outstanding membership of the Borrower, free and clear of all Liens other than a Lien in favor of MBT;

(p)     the Borrower is Solvent after giving effect to the making of the Loan hereunder and the granting of Liens pursuant to the Loan Documents;

(q)     (i) the Borrower is not a party to any labor dispute; and (ii) there are no strikes or walkouts relating to any labor contracts to which the Borrower is subject;

(r)     the Borrower is not an “investment company” and is not “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended;

(s)     the Borrower is not a partner (limited or general) or joint venturer in any partnerships or joint ventures;

(t)     the Borrower is not a “holding company” or a “subsidiary company” of a holding company or an “affiliate” of a holding company or of a subsidiary company of a holding company within the meaning of the Public Utility Holding Company Act of 1935, as amended;

(u)     the Borrower is not subject to or in violation of any law or regulation, or listed on any list of any government agency including, without limitation, the U.S. Office of Foreign Asset Control list, Executive Order 13224 or the USA PATRIOT Act (Title III of Pub. L. 107-56, signed into law October 26, 2001, as amended) (the “ Patriot Act ”) that prohibits or limits the conduct of business with or receiving of funds, goods or services to or for the benefit of certain Persons specified therein or that prohibits or limits Lenders from making the Loan or any other extension of credit to Borrower or from otherwise conducting business with Borrower;

(v)     (i) neither the execution of this Agreement nor the use of the proceeds of the Loan violates the Trading with the Enemy Act of 1917, as amended, nor any of the foreign assets control regulations promulgated thereunder or under the International Emergency Economic Powers Act or the U.N. Participation Act of 1945; and (ii) neither the Borrower nor any Person who owns a controlling interest in or otherwise controls the Borrower is listed on the Specially Designated Nationals and Blocked Person List or other similar lists maintained by the Office of Foreign Assets Control, the Department of the Treasury or included in Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001;

(w)     the Borrower does not have any Subsidiaries; and

(x)     Schedule attached hereto is a true and correct listing of all of the Acquired Assets.

All representations and warranties contained in this Section 6 shall survive the delivery of the Loan Documents, and the making of the Loan, and no investigation at any time made by or on behalf of Lender shall diminish its rights to rely thereon.

7.      Affirmative Covenants .

The Borrower covenants and agrees with the Lenders that, for so long as any Loan remains unpaid, the Borrower shall:

(a)     furnish to the Lenders:

(i)     as soon as available and in any event within fifteen (15) days after the end of each of fiscal quarter of the Borrower’s fiscal year, a copy of the Borrower’s internally prepared financial statements consisting of a balance sheet as of the close of such fiscal quarter and related income statement and cash flow statement for such fiscal quarter and from the beginning of such fiscal year to the end of such fiscal quarter;

(ii)     as soon as available and in any event within fifteen (15) days after the end of each fiscal month of the Borrower’s fiscal year, a borrowing base certificate, in the form of Exhibit B attached hereto (the “ Borrowing Base Certificate ”), showing the relevant information for the Borrower as of the end of business on the last business day of the then most recently-ended month of the Borrower’s fiscal year; each Borrowing Base Certificate shall be accompanied by a detailed inventory report by part serial number, an accounts receivable aging, a purchase order report, and other supporting reports such as may be required by the Lenders or the Collateral Agent and the Borrowing Base Certificate and such supporting reports shall be in a form acceptable to the Lenders and the Collateral Agent and certified as accurate by the Borrower’s chief financial officer, treasurer or controller;

(iii)     as soon as available and in any event within fifteen (15) days after the end of each fiscal month of the Borrower’s fiscal year, a report, in form and detail acceptable to the Lenders in its sole discretion, showing sales made during such month and a timeline of anticipated sales of the remaining Acquired Assets;

(iv)     by not later than five (5) business days after becoming aware of any Default or Event of Default, a notice describing the nature thereof and what action the Borrower proposes to take with respect thereto;

(v)     copies of the federal income tax returns (with all supporting schedules) of Borrower due during the term of the Loan, within thirty (30) days after the deadline for filing the same;

(vi)     by not later than five (5) business days after becoming aware of the institution of any litigation, arbitration or governmental proceeding against Borrower which, if determined adversely to Borrower, could reasonably be expected to be a Material Adverse Occurrence, or the rendering of a judgment or decision in such litigation or proceeding which could reasonably be expected to constitute a Material Adverse Occurrence, and the steps being taken by the Borrower with respect thereto; and

(vii)     such other financial or other information or certification as the Lenders may reasonably request;

(b)     maintain and preserve its existence as a limited liability company organized and in good standing under the laws of the State of its organization and in each other jurisdiction in which the character of the properties owned, leased or operated by it or the business conducted by it makes such qualification necessary and where the failure to qualify could constitute a Material Adverse Occurrence;

(c)     maintain insurance of such types and in such amounts as are maintained by companies of similar size engaged in the same or similar businesses and as may be required by any Loan Document; provided , that , each policy insuring any Collateral securing the Loans shall name the Collateral Agent as lender loss payee and each policy of the liability insurance shall name the Lenders as additional insureds;

(d)     file all federal and state income tax and other tax returns (including, without limitation, withholding tax returns) which are required and make payments as required of such taxes; provided, however, that: (i) the Borrower shall not be required to pay any such tax so long as the validity thereof is being contested in good faith by appropriate proceedings, the Borrower’s title to its property is not materially adversely affected, its use of such property in the ordinary course of its business is not materially interfered with and adequate reserves with respect thereto have been set aside on the Borrower’s books in accordance with GAAP; and (ii) in all events, the Borrower shall pay, or cause to be paid, all such taxes forthwith upon the commencement of foreclosure of any Lien which may have attached as security therefor;

(e)     reimburse the Lenders and the Collateral Agent for reasonable expenses, fees and disbursements (including, without limitation, reasonable attorneys’ fees and legal expenses), incurred in connection with the preparation or administration of this Agreement or any other Loan Document or the Lenders’ and the Collateral Agent’s enforcement of the obligations of the Borrower under any Loan Document, 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;

(f)     permit the Lenders, the Collateral Agent and their respective representatives at reasonable times and intervals and upon reasonable notice to visit the Borrower’s offices and the offices and locations of each other Person storing any Collateral and inspect their respective books and records including, without limitation, permitting the Lenders and the Collateral Agent to examine any Collateral securing the Loans and reimburse the Lenders and the Collateral Agent 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;

(g)     maintain in full force and effect all of the Borrower’s material rights, licenses, certifications, franchises and comply with all applicable laws and regulations necessary to enable it to conduct its business;

(h)     promptly, upon request by the Lenders or the Collateral Agent: (i) correct any defect or error that may be discovered in any Loan Document or in the execution, acknowledgment or recordation thereof; (ii) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register, any and all deeds, conveyances, mortgages, deeds of trust, trust deeds, assignments, estoppel certificates, financing statements and continuations thereof, notices of assignment, transfers, certificates, assurances and other instruments as the Lenders or the Collateral Agent may reasonably require from time to time in order: (A) to carry out more effectively the purposes of the Loan Documents; (B) to perfect and maintain the validity, effectiveness and priority of any Liens intended to be created by the Loan Documents; and (C) to better assure, convey, grant, assign, transfer, preserve, protect and confirm unto the Collateral Agent the rights granted now or hereafter intended to be granted to the Collateral Agent under any Loan Document or under any other instrument executed in connection with any Loan Document or that the Borrower may be or become bound to convey, mortgage or assign to the Collateral Agent in order to carry out the intention or facilitate the performance of the provisions of any Loan Document; and (iii) cause each other Loan Party to do all of the foregoing;

(i)     Borrower shall pay in a timely manner all applicable duties, freight, charges and like fees and charges of shippers, freight forwarders, carriers and warehousemen;

(j)     Deliver a copy of the FAA decommissioning certificate for each Airframe to the Lenders by not later than two months after the date such Airframe is acquired by the Borrower; and

(k)     maintain the Borrower’s primary depository accounts with MBT.

8.      Negative Covenants .

The Borrower hereby agrees with the Lenders that, for so long as any Loan remains unpaid, the Borrower shall not:

(a)     create, incur or suffer to exist any Liens encumbering any of its assets, including without limitation any real or personal property owned by the Borrower, except: (i) Liens in favor of the Collateral Agent; or (ii) Permitted Liens;

(b)     create, incur, assume or suffer to exist any Indebtedness except: (i) the Indebtedness under this Agreement or any other Loan Document; (ii) current liabilities (other than borrowed money) incurred in the ordinary course of business; (iii) Indebtedness in respect of hedge agreements, including Hedge Agreements, entered into in the ordinary course of business to hedge or mitigate risks to which Borrower is exposed in the conduct of its business or the management of its liabilities and not for speculative purposes; (iv) Indebtedness 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; (v) Indebtedness owing to MBT; or (vi) Subordinated Debt;

(c)     lease, sell or otherwise convey all or any substantial portion of its property and business to any other entity or entities, whether in one transaction or a series of related transactions, except for sales of Inventory in the ordinary course of Borrower’s business;

(d)     consolidate with or merge into or with any other entity or entities or liquidate, wind up or dissolve itself or suffer any liquidation or dissolution;

(e)     declare or pay any cash dividends, purchase, redeem, retire or otherwise acquire for value any of the Borrower’s membership interest (or any warrant or option to purchase any such membership interest) now or hereafter outstanding, or return any capital to its members;

(f)     acquire, make or hold any Investment in any other Person except:

(i)     loans or advances to officers and employees of the Borrower to finance travel, entertainment and relocation expenses and other ordinary business purposes in the ordinary course of business as presently conducted; provided, however, that the aggregate outstanding principal amount of all loans and advances permitted pursuant to this clause shall not exceed $50,000 at any one time;

(ii)     Extensions of credit in the nature of accounts or notes receivable arising from the sale of goods and services in the ordinary course of business;

(iii)     Shares of stock, obligations or other securities received in settlement of claims arising in the ordinary course of business; and

(iv)     investments in Hedge Agreements and other hedging agreements permitted by Section 8(b)(iii);

(g)     (i) assume, guarantee, endorse or otherwise become liable upon the obligation of any Person, firm or corporation except pursuant to the Loan Documents or by endorsement of negotiable instruments for deposit or collection in the ordinary course of business, nor (ii) sell any notes or accounts receivable with or without recourse;

(h)     engage in any business other than the business engaged in by the Borrower on the date of this Agreement, or make any material change in the nature of the business of the Borrower as carried on the date of this Agreement;

(i)     maintain, establish, sponsor or contribute to any Plan which is a defined benefit plan and shall not permit any of its ERISA Affiliates to do so;

(j)     either: (i) form or acquire any corporation or company which would thereby become a Subsidiary; or (ii) form or enter into any partnership as a limited or general partner or form or enter into any joint venture;

(k)     materially change its selling terms of payment on accounts receivable as in effect on the Closing Date;

(l)     either: (i) permit the direct or indirect transfer, distribution or payment of any of its funds, assets or property to any Affiliate, except that the Borrower may pay: (A) bona fide employee compensation (including benefits) to Affiliates for services actually rendered to the Borrower; (B) expenses incurred by an employee in the ordinary course of business; (C) expenses or rents for services or property or the use thereof allocated to the Borrower; provided , however , that all such payments pursuant to subsections (i)(A), (B) and (C) shall not exceed the amount which would be payable in a comparable arm’s length transaction with a third party who is not an Affiliate; (ii) except as otherwise permitted by Sections 8(f)(i) of this Agreement, lend or advance money, credit or property to any Affiliate; (iii) invest in (by capital contribution or otherwise) or purchase or repurchase any stock or Indebtedness, or any assets or properties, of any Affiliate; or (iv) guarantee, assume, endorse or otherwise become responsible for, or enter into any agreement or instrument for the purpose of discharging or assuming (directly or indirectly, through the purchase of goods, supplies or services or otherwise) the Indebtedness, performance, capability, obligations, dividends or agreement for the furnishing of funds of any Affiliate or any officer, director or employee;

(m)     make any loan to, or otherwise extend any credit to, Borrower’s officers, directors, shareholders, partners, members, managers or Affiliates or to any member of any such Person’s immediate family, except for loans expressly permitted by Section 8(f)(i);

(n)     materially change its selling terms of payment on Accounts as in effect on the date of this Agreement or provide dating terms except on a basis consistent with past business practices of the Borrower;

(o)     except as permitted by the Subordination Agreement pertaining to an item of Subordinated Debt: (i) make any payment of, or purchase, redeem, or acquire, any Subordinated Debt; (ii) give security for all or any part of any Subordinated Debt; (iii) take or omit to take any action whereby the subordination of any Subordinated Debt or any part thereof to the Obligations might be terminated, impaired or adversely affected; (iv) settle, compromise, discharge or otherwise reduce the outstanding principal amount of any Subordinated Debt or exercise any right to convert the Subordinated Debt to equity; or (v) omit to give the Lenders prompt written notice of any default or event which, with the giving of notice or lapse of time, would constitute a default under any other agreement or instrument relating to any Subordinated Creditor;

(p)     use any proceeds of the Loan for any purpose other than to finance a portion of the purchase of the Acquired Assets or the refurbishment of Acquired Assets in preparation for the sale thereof; or

(q)     change the Borrower’s fiscal year end to a date other than March 31.

9.      Event s of Default .

The occurrence of any one or more of the following shall constitute an Event of Default (“ Event of Default ”) hereunder:

(a)     the Borrower shall default (i) in the due and punctual payment of any installment of interest or principal on the Loan on the date when due, or (ii) in the due and punctual payment of any other amount which is due and payable to either or both Lenders or the Collateral Agent under any Loan Document within five days of the date when due;

(b)     the Borrower shall default in the due performance or observance of any covenant set forth in Sections 2(d)(ii), 7(b), 7(c), 7(i), 7(h) or in Section 8;

(c)     Borrower shall default (other than those defaults covered by other subsections of this Section 9) in the due performance or observance of any term, covenant, agreement or warranty contained in any Loan Document on its part to be performed, and such default shall continue for a period of thirty (30) days after the earliest of: (i) the date the Borrower gives notice of such default to the Lenders; (ii) the date the Borrower should have given notice of such default to the Lenders pursuant to Section 7(a)(ii); or (iii) the date the Lenders gives notice of such default to the Borrower;

(d)     Borrower shall default and fail to cure such default in the time provided therein, under the terms of any other agreement, indenture, deed of trust, mortgage, promissory note or security agreement governing the borrowing of sums money in excess of $10,000; and either (i) the maturity of any amount owed under such document or instrument is accelerated; or (ii) such default shall continue unremedied or unwaived for a period of time to permit such acceleration;

(e)     Borrower shall become insolvent or generally fail to pay, or admit in writing Borrower’s inability to pay its debts as they become due; or Borrower shall apply for, consent to, or acquiesce in, the appointment of a trustee, receiver or other custodian for Borrower or for Borrower’s property, or make a general assignment for the benefit of creditors; or, in the absence of such application, consent or acquiescence, a trustee, receiver or other custodian shall be appointed for Borrower or for a substantial part of Borrower’s property and not be discharged within sixty (60) days; or any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding shall be commenced by or against Borrower and if commenced against Borrower, be consented to or acquiesced in by Borrower or remain for sixty (60) days undismissed; or Borrower shall take any action to authorize any of the foregoing;

(f)     any judgments, writs, warrants of attachment, executions or similar process (not covered by insurance) shall be issued against Borrower or any of Borrower’s assets where the aggregate amount of such judgments, writs, warrants of attachment, executions or similar process exceed $50,000.00 and are not released, vacated, suspended, stayed, abated or fully bonded prior to any sale and in any event within thirty (30) days after its issue or levy;

(g)     Airco shall cease to own, directly or indirectly, all of the Borrower’s issued and outstanding membership interest or shall cease to have the power to elect a majority of the Borrower’s directors or shall cease to direct the Borrower’s management policies;

(h)     the occurrence of any default by Borrower under any Consignment Agreement or Disassembly Agreement or the termination of any such agreement;

(i)     the Lender, in its sole discretion, shall determine in good faith that there has been a Material Adverse Occurrence;

(j)     any representation or warranty set forth in this Agreement or any other Loan Document shall be untrue in any material respect on the date as of which the facts set forth are stated or certified;

(k)     there is instituted against Borrower or any executive officer of Borrower any criminal proceeding for which forfeiture of any material asset is a potential penalty, or the Borrower is enjoined, restrained or in any way prevented by order of any governmental authority from conducting any material part of its business affairs and such order is not completely stayed, to the satisfaction of the Lender, or dissolved within two business days from the effective date of such order;

(l)     the occurrence of any “Event of Default” under the MBT Loan Agreement (as such term in quotation marks is therein defined);

(m)    the occurrence of any “Event of Default” under the Air T Loan Agreement (as such term in quotation marks is therein defined); or

(n)     the Borrower shall seek to revoke, repudiate or disavow the enforceability of any Loan Document.

Upon: (1) the occurrence of any Event of Default described in Section 9(e), the full unpaid principal amount of the Notes and all other obligations of the Borrower to the Lenders shall automatically be due and payable without any declaration, notice, presentment, protest or demand of any kind (all of which are hereby waived); or (2) the occurrence of any other Event of Default, the Lenders, upon written notice, may declare the outstanding principal amount of the Notes and all other obligations of the Borrower to the Lenders to be due and payable without other notice, presentment, protest or demand of any kind, whereupon the full unpaid amount of the Notes and any and all other obligations, which shall be so declared due and payable, shall be and become immediately due and payable. In addition, the Lenders may exercise any right or remedy available to it pursuant to any Loan Document, at law or in equity.

10.      Accounting Terms and Calculations .

Except as may be expressly provided to the contrary herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with GAAP consistently applied for the Borrower as used in the preparation of the Borrower’s financial statements described in Section 7(a)(i).

11.     Definitions.

For purposes of this Agreement, the following terms shall have the following meanings:

“ Acquired Assets ”: As defined in Section 1 of this Agreement.

“ Acquisition ”: Any transaction or series of transactions by which the Borrower acquires, either directly or through a Subsidiary or otherwise, (a) any or all of the stock or other securities of any class of any Person if, after giving effect to such transaction, such Person would be an Affiliate of the Borrower; or (b) a substantial portion of the assets or a division, or line of business of any Person.

“ Affiliate ”: Shall mean, with respect to the Borrower, any Person which directly or indirectly controls, is controlled by, or is under common control with, the Borrower. One Person shall be deemed to control another Person if the controlling Person owns directly or indirectly 10% or more of any class of voting stock of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the controlled Person, whether through ownership of stock, by contract or otherwise.

“ Airco ”: Airco, LLC, a North Carolina corporation.

“ Air T Loan Agreement ”: Shall mean that certain Credit Agreement dated as of December 21, 2017, by and between MBT and Air T, as it may be amended, modified, supplemented, restated or replaced from time to time.

“ Airframe ”: The mechanical structure of an aircraft, including, without limitation, its fuselage, wings and undercarriage, but excluding its jet engines.

“ Airframe Acquisition ”: Shall have the meaning given such term in Section 1(j) of this Agreement.

Airframe Purchase Agreement ”: Shall have the meaning given such term in Section 1(j) of this Agreement.

“ Airframe Transaction Documents ”: Shall have the meaning given such term in Section 1(j) of this Agreement.

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

“ Audit ”: As defined in Section 12 of this Agreement.

“ Bailee Agreement(s) ”: The Jet Yard Bailee Agreement, the Airco Bailee Agreement and each other bailee agreement executed by the owner of a facility where Collateral is located from time to time.

“ Banking Services ”: Each and any of the following bank services provided to Borrower by a Lender or any of its 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 ”: Any and all obligations of the Borrower, whether absolute or contingent and howsoever and whenever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

“ Borrowing Base . At any date of determination, the sum of: (a) 60% of Eligible Inventory; plus (b) 80% of Eligible Accounts Receivable; provided , however, that the Lenders reserve the right, in their discretion, to and to establish reserves as they deems appropriate and to adjust such borrowing base percentages based on their periodic evaluation of the Collateral. The amount of the Borrowing Base shall be determined periodically by the Lenders.

“ Borrowing Base Certificate ”: As defined in Section 7(a)(ii) of this Agreement.

“ Cape Town Convention ”: The English language text of the Convention on International Interests in Mobile Equipment, adopted on November 16, 2001 at a diplomatic conference held in Cape Town, South Africa, as implemented and modified by the Protocol to the Convention on Matters Specific to Aircraft Equipment as adopted by the United States of America, and as the same may be further amended or modified from time to time.

“ Capitalized Lease ”: Any lease which, in accordance with GAAP, is capitalized on the books of the lessee.

“ Closing Date ”: The date on which the Loan is made after the Lenders have received all of the Loan Documents in accordance with Section 1 and all conditions precedent specified in Section 5 have been satisfied.

“ Code ”: As defined in Section 8(e) of this Agreement.

“ Collateral ”: As defined in Section 1 of this Agreement.

“ Collateral Agent ”: As defined in Section 1(s) of this Agreement.

“ Collateral Agency Agreement ”: As defined in Section 1(s) of this Agreement.

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

“ Consignment Agreement ”: As defined in Section 1 of this Agreement.

“ Contrail ”: Contrail Aviation Support, LLC, a Wisconsin limited liability company.

“ Contingent Obligation ”: With respect to any Person at the time of any determination, without duplication, any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person (the “primary obligor”) in any manner, whether directly or otherwise, or entered into for the purpose of assuring in any manner the owner of such Indebtedness of the payment of such Indebtedness or to protect the owner against loss in respect thereof.

“ Default ”: As defined in Section 5(b) of this Agreement.

“ Disassembly Agreement ”: As defined in Section 1(l) of this Agreement.

“ Eligible Accounts ”: 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 Borrower arising from the rendering of sale of goods in the ordinary course of Borrower’s business in which the Collateral Agent holds a perfected first priority Lien for the benefit of itself and for the ratable benefit of the Lenders and as to which the Lenders, in their 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 Lenders’ right, in their 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 Lenders will consider not to be Eligible Accounts, the Lenders, 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) (i) the account is not paid by the account debtor within 90 days after its invoice date; 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 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 Lenders, in their 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 outside the United States, unless the sale is on letter of credit, acceptance or other terms acceptable to the Lenders; (e) the account debtor is an employee, or Affiliate of the Borrower, or an entity which has common officers, managers or directors with the Borrower; (f) the account debtor is the United States of America or any agency or department thereof and the account is subject to the Assignment of Claims Act; (g) the account is a bonded account; (h) the account balance includes the amount of any counterclaims or offsets which have been or may be asserted against the Borrower by the account debtor (including offsets for any "contra accounts" owed by the Borrower to the account debtor for goods purchased by the Borrower or for services performed for the Borrower); (i) the account debtor is a state, county, city, town or municipality; or (k) any account for a customer deposit.

“ Eligible Inventory ”: Shall mean the aggregate United States dollar Fair Market Value of the Borrower’s aircraft parts Inventory, in which only the Collateral Agent holds a perfected first priority Lien for the benefit of itself and for the ratable benefit of the Lenders and as to which the Lenders, in their reasonable business judgment, shall elect from time to time to constitute Eligible Inventory. Without limiting the Lenders’ right, in their reasonable business judgment, to consider any inventory not to be Eligible Inventory, and by way of example only of types of inventory that the Lenders will consider not to be Eligible Inventory, the Lenders, notwithstanding any earlier classification of eligibility, may consider any inventory not to be Eligible Inventory if: (a) such inventory is not located at (or in transit to or from) a facility owned and operated by either Jet Yard or Airco that is located in the domestic United States; and (b) in the case of Inventory that is consigned by Borrower to a consignee, the Borrower has not complied with any 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 on a first-in, first-out basis

“ Event of Default ”: As defined in the introductory paragraph of Section 9 of this Agreement.

“ Fair Market Value ”: The price a willing non-affiliated buyer would pay a willing seller for an item of Inventory (neither being under any compulsion to buy or sell), whether or not such item of Inventory has been physically removed from the Airframe. The Fair Market Value of an item of Inventory included in Eligible Inventory shall be determined based on the most recent invoice price of a similar item of Inventory actually sold by the Borrower or by an Affiliate of Borrower to a non-affiliated buyer, or other supporting documentation provided by Borrower to Lender that is acceptable to Lender in its sole discretion; provided, however, that the Lenders reserve the right to assign a lower Fair Market Value for any such item based on an Appraisal of the Inventory commissioned by Lenders or by the Collateral Agent. At Lenders’ or Collateral Agent’s request, Borrower shall promptly provide Lenders with copies of invoices and other relevant materials to support its determination of Fair Market Value of any item(s) Inventory.

“ Hedge Agreement ”: Any agreement between Borrower and a Lender or any affiliate of a Lender (a “Hedge Provider”) now existing or hereafter entered into, which provides for and interest rate swap, cap, floor, collar, or any similar transaction or any combination of, or option with respect to, these or similar transactions, for the purpose of hedging Borrower’s exposure to fluctuations in interest rates.

“ Hedge Obligations ”: The liabilities, Indebtedness, and obligations of the Borrower, if any, to the Hedge Provider under any Hedge Agreement.

“ Indebtedness ”: Without duplication, all obligations, contingent or otherwise, which in accordance with GAAP should be classified upon the obligor’s balance sheet as liabilities, but in any event including the following (whether or not they should be classified as liabilities upon such balance sheet): (a) obligations secured by any mortgage, pledge, security interest, or other Lien, charge or other encumbrance existing on property owned or acquired subject thereto, whether or not the obligation secured thereby shall have been assumed and whether or not the obligation secured is the obligation of the owner or another party, in an amount equal to the lesser of (i) such liabilities and (ii) the greater of the purchase price or the fair market value of such property in such obligations have not been assumed; (b) any obligation on account of deposits or advances; (c) any obligation for the deferred purchase price of any property or services, except Trade Accounts Payable; (d) any obligation as lessee under any Capitalized Lease; (e) all guaranties, endorsements and other contingent obligations in respect to Indebtedness of others; (f) undertakings or agreements to reimburse or indemnify issuers of letters of credit or in connection with bankers’ acceptances; and (g) all Hedge Obligations. For all purposes of this Agreement, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture as to which such Person is or may become personally liable.

“ Inventory ”: Shall have the meaning given such term in the Security Agreement.

“ International Registry ”: Shall mean the International Registry of Mobile Assets located in Dublin, Ireland and established pursuant to the Cape Town Convention, along with any successor registry.

“ Investment ”: The acquisition, purchase, making or holding of any stock or other security, any loan, advance, contribution to capital, extension of credit (except for trade and customer accounts receivable for inventory sold or services rendered in the ordinary course of business and payable in accordance with customary trade terms), any acquisitions of real or personal property (other than real and personal property acquired in the ordinary course of business) and any purchase or commitment or option to purchase stock or other debt or equity securities of, or any interest in, another Person or any integral part of any business or the assets comprising such business or part thereof.

“ Jet Yard ”: Jet Yard, LLC, an Arizona limited liability company.

“ Lender(s) ”: As defined in the Preamble to this Agreement.

“ Liabilities ”: At any date of determination, the aggregate amount of liabilities appearing on the Borrower’s consolidated balance sheet at such date prepared in accordance with GAAP.

“ Lien(s) ”: Any security interest, mortgage, pledge, lien, hypothecation, judgment lien or similar legal process, charge, encumbrance, title retention agreement or analogous instrument or device (including, without limitation, the interest of the lessors under Capitalized Leases and the interest of a vendor under any conditional sale or other title retention agreement), including without limitation, any registrations on the International Registry without regard to whether such registrations are valid.

“ Loan(s) ”: The Loan, together with each other loan or extension of credit now or hereafter provided by Lenders to Borrower pursuant to this Agreement.

“ Loan Document(s) ”: As defined in Section 1 of this Agreement.

“ Loan Party(ies) ”: Individually, or collectively, the Borrower and each Person who executes a guaranty of the Obligations in favor of the Lender. On the Effective Date, the Borrower is the sole Loan Party.

“ Material Adverse Occurrence ”: Any occurrence of whatsoever nature (including, without limitation, any adverse determination in any litigation, arbitration, or governmental investigation or proceeding) which could reasonably be expected to materially and adversely affect: (a) the financial condition or operations of Borrower; (b) the ability of Borrower to perform its obligations under the Loan Documents; (c) the validity or enforceability of the material obligations of Borrower under the Loan Documents; (d) the rights and remedies of the Lenders against Borrower; or (e) the timely payment of the principal of and interest on the Loan or other amounts payable by the Borrower hereunder or under any other Loan Document.

“ MBT ”: As defined in the Preamble to this Agreement.

“ MBT Loan Agreement ”: As defined in Recital A to this Agreement.

“ Net Proceeds ”: With respect to any sale of Inventory, the cash proceeds received by the Borrower from such transaction after deducting the ten percent (10%) commission payable to Airco pursuant to the Consignment Agreement.

“ Note(s) : As defined in Section 1(a) of this Agreement.

“ Obligations ”: All Loans, advances, debts, liabilities, obligations, Banking Services Liabilities, covenants and duties, owing by Borrower to the Lenders of any kind or nature, present or future, which arise under this Agreement, any other Loan Document or any permitted Hedge Agreement 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 principal, interest, fees, charges, expenses, attorneys’ fees, and any other sum chargeable to Borrower under this Agreement or any other Loan Document or any permitted Hedge Agreement.

“ Patriot Act ”: As defined in Section 6(t) of this Agreement.

“ Percentage ”. The term “Percentage” means, with respect to either Lender, and with respect to any amount to be funded or paid to the Lenders, such Lender’s pro rata share of such amount, determined by the ratio that the amount of the Obligations consisting of principal and interest owing such Lender bears to the aggregate amount of all of the Obligations consisting of principal and interest on the applicable date of determination.

“ Permitted Liens ”:

(a)     Liens in favor of MBT securing other obligations of Borrower to MBT;

(b)     Deposits or pledges to secure payment of workers’ compensation, unemployment insurance, old age pensions or other social security obligations, in the ordinary course of business of the Borrower; and

(c)     Liens for taxes, fees, assessments and governmental charges not delinquent or to the extent that payments therefor shall not at the time be required to be made in accordance with the provisions of Section 7(d) ;

“ Person ”: Any natural person, corporation, partnership, joint venture, firm, association, trust, unincorporated organization, government or governmental agency or political subdivision, or any other entity, whether acting in an individual, fiduciary or other capacity.

“ PSB ”: As defined in the Preamble to this Agreement.

“ Regulatory Change ”: As to either or both Lenders, any change (including any scheduled change) applicable to a class of banks which includes either or both Lenders in any:

(a)     federal or state law or foreign law; or

(b)     regulation, interpretation, directive or request (whether or not having the force of law) of any court or governmental authority charged with the interpretation or administration of any law referred to in clause (a) of this definition or of any fiscal, monetary or other authority having jurisdiction over such class of banks;

or the adoption after the date hereof of any new or final law, regulation, interpretation, directive or request applicable to a class of banks which includes either or both Lenders.

“ Security Agreement ”: As defined in Section 1(b).

“ Solvent ”: Shall mean, with respect to any Person on any date of determination, that on such date:

(a) the fair value of such Person’s tangible and intangible assets as a going concern is in excess of the total amount of such Person’s liabilities including, without limitation, Contingent Obligations;

 (b) such Person is then able to pay its debts as they mature; and

 (c) such Person has capital sufficient to carry on its business.

“ Subordination Agreement(s) ”: Each subordination agreement now or hereafter executed by a creditor of the Borrower in favor of the Lender.

“ Subordinated Creditor ”: Each holder of Subordinated Debt.

“ Subordinated Debt ”: At any date of determination, the outstanding principal amount of any Indebtedness of the Borrower which has been subordinated to the payment of the Obligations pursuant to a Subordination Agreement acceptable to the Lenders in their sole discretion.

“ Subsidiary ”: Any Person of which or in which the Borrower and its other Subsidiaries own directly or indirectly 50% or more of: (a) the combined voting power of all classes of stock having general voting power under ordinary circumstances to elect a majority of the board of directors of such Person, if it is a corporation, (b) the capital interest or profit interest of such Person, if it is a partnership, joint venture or similar entity, or (c) the beneficial interest of such Person, if it is a trust, association or other unincorporated organization.

“ Taxes ” All present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein with respect to such payments.

“ Trade Accounts Payable ”: The trade accounts payable of any Person with a maturity of not greater than 90 days incurred in the ordinary course of such Person’s business.

12.      Collateral Audit ; Appraisals .

Borrower acknowledges and agrees that, while the Loan or any portion thereof remains outstanding, Lenders have the right at any time to obtain an audit (“ Audit ”) of the Collateral (or any portion thereof) performed by employees of the Collateral Agent or by an appraiser, consultant or auditor engaged by the Collateral Agent. If any of the Collateral or related books or records are in the possession of a third party, the Borrower authorizes that third party to permit the Collateral Agent or its agents to have access to perform inspections or audits and to respond to the Collateral Agent’s (or Collateral Agent’s agent’s) requests for information concerning such Collateral and records. The Borrower further agrees to promptly reimburse the Collateral Agent for all expenses, charges, costs and fees of any such Audit and Collateral Agent’s internal review of such Audit that is commissioned by Lender (a) following the occurrence of an Event of Default, or (b) if, at any time after October 15, 2019, the outstanding principal balance of the Loan is greater than $1,000,000.

13.      Miscellaneous .

(a)      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 or upon transmission by telecopy to the relevant party at the telecopy number set forth on the signature page below and a confirmation is received or at any other address or telecopy number as may be designated by the party in a notice to the other parties provided , however , that any notice to a Lender shall not be deemed given until actually received by such Lender.

(b)      Counterparts . This Agreement may be executed in counterparts and by separate parties in separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same document. Receipt by telecopy, pdf file or other electronic means of any executed signature page to this Agreement shall constitute effective delivery of such signature page.

(c)      Governing L aw . This Agreement, the Notes and each other Loan Document shall be governed by, interpreted and construed in accordance with the internal laws, but not the law of conflicts, of the State of Minnesota .

(d)      General Indemnity . In addition to the payment of expenses pursuant to Section 7(f), whether or not the transactions contemplated hereby shall be consummated, the Borrower hereby indemnifies, and agrees to pay and hold the Lenders, the Collateral Agent, their respective affiliates and any holder of any Note, and their respective officers, directors, employees, agents, successors and assigns (collectively called the “ Indemnitees ”) harmless from and against, any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including, without limitation, the reasonable fees and disbursements of counsel for any of such Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not any of such Indemnitees shall be designated a party thereto), that may be imposed on, incurred by, or asserted against the Indemnitees (or any of them), in any manner relating to or arising out of the Loan Documents, the statements contained in any proposal letters or other similar correspondence delivered by either or both Lenders or the Collateral Agent (whether in person, by mail, courier or any electronic means), the Lenders’ agreement to make the Loan to the Borrower, or the use or intended use of the proceeds of the Loan (the “ Indemnified Liabilities ”); provided , however , that the Borrower shall have no obligation to an Indemnitee hereunder with respect to Indemnified Liabilities arising from the gross negligence or willful misconduct of an Indemnitee. To the extent that the undertaking to indemnify, pay and hold harmless set forth in the preceding sentence may be unenforceable because it violates any law or public policy, the Borrower shall contribute the maximum portion that it is permitted to pay and satisfy under applicable law, to the payment and satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any of them. The obligations of the Borrower under this Section 13(d) and under Section 7(f) shall survive any termination of this Agreement.

(e)     All payments made by the Borrower hereunder or under any Note will be made free and clear of, and without deduction or withholding for, any Taxes. If the Borrower shall be required to deduct any Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 13(e) such Lender or other recipient receives an amount equal to the sum it would have received had no such deduction been made; (ii) the Borrower shall make such deduction; and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable Law.

(f)      Regulatory Change . If, as a result of any Regulatory Change:

(i)     any tax, duty or other charge with respect to any Loan, the Notes, or any commitment to lend is imposed, modified or deemed applicable, or the basis of taxation of payments to the Lenders of interest or principal of the Loans is changed;

(ii)     any reserve, special deposit, special assessment or similar requirement against assets of, deposits with or for the account of, or credit extended by, the Lenders is imposed, modified or deemed applicable;

(iii)     any increase in the amount of capital required or expected to be maintained by either or both Lenders or any Person controlling either or both Lenders is imposed, modified or deemed applicable;

(iv)     any other condition affecting this Agreement or any commitment to lend is imposed on either or both Lenders or the relevant funding markets;

(v)     and either or both Lenders determines that, by reason thereof, the cost to either or both Lenders of making or maintaining the Loan or any commitment to lend is increased, or the amount of any sum receivable by the Lenders hereunder or under the Notes is reduced, then, the Borrower shall pay to such Lender or Lenders upon demand such additional amount or amounts as will compensate such Lender or Lenders (or the controlling Person in the instance of (c) above) on an after-tax basis for such additional costs or reduction. Determinations by the Lenders for purposes of this Section 13(f) of the additional amounts required to compensate the Lenders shall be conclusive in the absence of manifest error. The Lenders’ demand for payment of any amount pursuant to this Section 13(f) shall show the calculation of the amount demanded in reasonable detail. In determining such amounts, the Lenders may use any reasonable averaging, attribution and allocation methods.

(g)      Participation . Either or both Lenders may in their sole and exclusive discretion at any time issue participations in the Loan and in any or all or a portion of its obligations to make the Loan to one or more participants in the Loan. Each Lender may divulge all information received by it from Borrower or any other source, including but not limited to information relating to the Loan and to the Borrower, to any such participant(s) or other lenders, and Borrower shall cooperate with Lenders in satisfying the reasonable requirements of any such participant(s) or other lenders for consummating such a purchase, participation or assignment.

(h)      Successors and Assigns . This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns, except that the Borrower may not assign or transfer its rights hereunder without the prior written consent of both Lenders.

(i)      Waivers, Amendments; etc . The provisions of this Agreement, or any other Loan Document, may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by the Borrower and both Lenders.

(j)      Inconsistencies, etc . In the event of any conflict or inconsistency between or among the provisions of this Agreement and any other Loan Document, it is intended that the provisions of this Agreement and such other Loan Document be enforceable except to the extent that the enforcement of such provisions is irreconcilable and, in that event, the provisions of the Loan Document most favorable to the Lenders shall be controlling.

(k)      WAIVER OF TRIAL BY JURY . THE BORROWER AND EACH LENDER SEVERALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (i) UNDER THE LOAN DOCUMENTS OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION THEREWITH OR (ii) ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

(l)      Limitation of Liability . Neither of the Lenders, the Collateral Agent or any affiliate of the Lenders or the Collateral Agent shall have any liability with respect to, and the Borrower hereby waives, releases and agrees not to sue upon, any claim for any special, indirect or consequential damages suffered by the Borrower in connection with, arising out of, or in any way related to, this Agreement, the Notes or any other Loan Document, or the transactions contemplated and the relationship established hereby or thereby, or any act, omission or event occurring in connection herewith or therewith.

(m)      Customer Identification - USA PATRIOT Act Notice . The Lenders hereby notify the Borrower that pursuant to the requirements of the Patriot Act, and the Lenders’ policies and practices, the Lenders are required to obtain, verify and record certain information and documentation that identifies the Borrower, which information includes the name and address of the Borrower and such other information that will allow the Lenders to identify the Borrower in accordance with the Patriot Act.

(n)      Venue . AT THE OPTION OF THE LENDERS, THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT TO WHICH THE BORROWER IS A PARTY MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN MINNEAPOLIS OR ST. PAUL, MINNESOTA; AND THE 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 THE 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 OR ANY OTHER LOAN DOCUMENT, THE LENDERS AT THEIR 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.

(o)      Entire Agreement; Document Construction . This Agreement, the Notes and the other Loan Documents embody the entire agreement and understanding between the Borrower and the Lenders with respect to the subject matter hereof and thereof. This Agreement supersedes all prior agreements and understandings relating to the subject matter hereof. This Agreement, the Notes 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, the Notes or any other Loan Document. The words “hereof,” “herein,” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. References to Sections, Exhibits, Schedules and like references are to this Agreement unless otherwise expressly provided. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” Unless the context in which used herein otherwise clearly requires, “or” has the inclusive meaning represented by the phrase “and/or.”

(p)      Document Imaging, Electronic Transactions and the UETA . Without notice to or consent of Borrower, Lenders may create electronic images of this Agreement and the other Loan Documents and destroy paper originals of any such imaged documents. Provided that such images are maintained by or on behalf of Lenders as part of Lenders’ normal business processes, Borrower agrees that such images have the same legal force and effect as the paper originals and are enforceable against Borrower. Furthermore, Borrower agrees that Lenders may convert any Loan Document into a “transferrable record” as such term is defined under, and to the extent permitted by, the UETA, with the image of such instrument in Lenders’ possession constituting an “authoritative copy” under the UETA.

(q)      Single Purpose Entity . Borrower’s sole business purpose shall be to own and sell decommissioned Airframes. Borrower (i) shall conduct business only in its own name, (ii) shall not engage in any business or have any assets unrelated to decommissioned Airframes, (iii) shall not have any indebtedness other than as permitted by this Agreement and other than trade payables incurred in the ordinary course of Borrower’s business, (iv) shall have its own separate books, records, and accounts (with no commingling of assets), (v) shall hold itself out as being an entity separate and apart from any other person or entity, (vi) shall not change its name or identity unless Borrower shall have obtained the prior written consent of Lenders to such change, and shall have taken all actions necessary or requested by Lenders or the Collateral Agent to file or amend any financing statement or continuation statement to assure perfection and continuation of perfection of security interests under the Loan Documents, and (vii) shall not amend its limited liability company agreement in any way that would have a material adverse effect on its ability to own or sell the Acquired Assets or to perform its obligations under the Loan Documents unless Borrower shall have obtained the prior written consent of both Lenders to such change.

(r)      Divisibility and Replacement of Notes . Any instrument representing the Loan may be divided into multiple notes or certificates in such denominations as the Lenders may request upon surrender of such instrument at the principal office of the Borrower. In case any instrument evidencing the Loan issued to the Lenders hereunder shall be mutilated, lost, stolen, or destroyed, the Borrower shall issue and deliver in exchange and substitution for, and upon cancellation of the mutilated instrument or in lieu of and substitution for the instrument lost, stolen or destroyed, a new note or other document of like tenor and representing an equivalent right or interest, but only upon receipt of evidence satisfactory to the Borrower of such loss, theft or destruction; the affidavit of the holder, without bond but with promise of indemnity, shall be satisfactory.

(s)      Headings; D ocument Construction . The headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement. This Agreement, the Note 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, the Notes or any other Loan Document.

[signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first set forth above.

Exhibit 10.2

TERM NOTE

FOR VALUE RECEIVED, AIRCO 1, LLC, a Delaware limited liability company (“Borrower”) promises to pay to the order of PARK STATE BANK, a Minnesota state banking corporation (“Lender”) or its assigns, at Lender’s offices located at 1108 Nicollet Mall #210, Minneapolis, MN 55403, or such other place as may be designated from time to time by the holder hereof, in lawful money of the United States of America, the principal sum of TWO MILLION ONE HUNDRED THOUSAND AND NO/100THS DOLLARS ($2,100,000), together with interest thereon as hereinafter provided.

1.      Interest . Interest shall accrue on the principal balance hereof at a fixed rate of 8.50% per annum.

2.      Payment . Borrower shall pay the principal of this Note and interest thereon as follows:

(a)     On the first day of each month, commencing on February 1, 2019, to and including June 1, 2020, there shall be due and Borrower shall pay monthly installments of accrued interest hereon; and

(b)     On June 17, 2020 (the “Maturity Date”), the entire remaining principal balance of this Note, together with any accrued, unpaid interest thereon, shall be due and payable in full.

3.      Prepayment . Borrower may voluntarily prepay the loan evidenced by this Note in whole or in part at any time; without premium or penalty.

4.      Computation of Interest . Interest charges will be calculated on amounts advanced hereunder on the actual number of days said amounts are outstanding. Such interest shall be computed on the basis of a year comprised of 360 days, but charged for the actual number of days elapsed (including the first day but excluding the last day) occurring in the period for which interest is payable. Payments under this Note shall be applied initially against accrued interest and escrow charges, if any, and thereafter in reduction of principal.

5.      Loan Agreement . This Note is one of the Notes referred to in, and is entitled to the benefits of, the Loan Agreement dated as of January 18, 2019 (the 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 between the Borrower, the Lender and Minnesota Bank & Trust. The Loan Agreement, among other things, (i) provides for the making of the Loan evidenced by the Notes; (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.

TERM NOTE

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6.      Security . This Note is secured, inter alia , by that certain Security Agreement dated of even date herewith executed by the Borrower in favor of the Collateral Agent for the benefit of itself and for the ratable benefit of the Lenders.

7.      Default Rate, etc . Borrower acknowledges that if any payment required under this Note is not paid within ten (10) days after the same becomes due and payable, Lender will incur extra administrative expenses ( i.e. , in addition to expenses incident to receipt of timely payment) in connection with the delinquency in payment. Because, from the nature of the case, the actual damages suffered by Lender in incurring such extra administrative expenses would be impracticable or extremely difficult to ascertain, it is agreed that five percent (5%) of the amount of the delinquency payment shall be the amount of damages to which the Lender is entitled, upon such breach, in compensation for such extra administrative expenses. Therefore, Borrower shall, in such event, without further notice, pay to Lender liquidated damages in the amount of five percent (5%) of the amount of such delinquent payments. The provisions of this paragraph are intended to govern only the determination of the above-described damages in the event of a breach in performance of the obligation of Borrower to make timely payments hereunder. Nothing in this Note shall be construed as an express or implied agreement by Lender to forbear in the collection of any delinquent payment, or be construed as in any way giving the undersigned the right, express or implied, to fail to make timely payment hereunder, whether upon payment of such damages or otherwise. The right of Lender to receive payment of such liquidated damages, and receipt thereof, are without prejudice to the right of Lender to collect such delinquent payments and any other amounts required to be paid hereunder or under any security for this Note or to declare a default hereunder or under any security for this Note. In addition to the foregoing, upon the occurrence of a Default or Event of Default (as defined in the Loan Agreement) or if the principal balance and all interest accrued thereon have not been repaid on or before the Maturity Date, then in addition to any remedies available to Lender, hereunder, under the Loan Agreement, under any other Loan Document, at law or in equity, interest payable hereunder shall be computed thereon from and after that date at a rate of ten percent (10%) per annum in excess of the interest rate then payable pursuant to Paragraph 1 of this Note, as such rate changes from time to time, or at the maximum lawful rate of interest which may be charged thereon by Lender, if any, whichever is less (hereinafter called “Default Rate”), until the Default is cured or the principal balance and all accrued, unpaid interest thereon, together with any other amounts payable by Borrower to Lender hereunder, under the Loan Agreement or under any other Loan Document are paid in full.

8.      Waivers . Borrower 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 Borrower 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.

TERM NOTE

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9.      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.

10.      Fees and Costs . Borrower agrees to pay all reasonable expenses for the preparation of this Note, as set forth in the Loan 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. Borrower agrees 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 Borrower 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 Borrower under this paragraph shall survive any termination of the Loan Agreement, this Note, the Security Agreement, and any other Loan Document.

11.      Binding Effect . This Note shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns except that Borrower may not 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, Borrower hereby authorizes the Lender to furnish any information concerning the Borrower or any of its affiliates, however acquired, to any person or entity.

TERM NOTE

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12.      Waiver of Jury Trial; Consent to Jurisdiction . 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. 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.

13.      Choice of Laws . 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.

14.      Severability . The invalidity or unenforceability in particular circumstances of any provision of this Note shall not extend beyond such provision or such circumstances and no other provision of this instrument shall be affected thereby.

15.      Usury . Borrower and Lender agree that no payment of interest or other consideration made or agreed to be made by Borrower 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 Borrower, and Borrower hereby agrees to accept such remittance. This provision shall control every other obligation of the Borrower and Lender relating to this Note.

TERM NOTE

IN WITNESS WHEREOF, Borrower has executed and delivered this Term Note as of the date first written above.

[Term Note Signature Page]

Exhibit 10.3

TERM NOTE

FOR VALUE RECEIVED, AIRCO 1, LLC, a Delaware limited liability company (“Borrower”) promises to pay to the order of MINNESOTA BANK & TRUST, a Minnesota state banking corporation (“Lender”) or its assigns, at Lender’s offices located at 9800 Bren Road East, Suite 200, Minnetonka, MN 554343, or such other place as may be designated from time to time by the holder hereof, in lawful money of the United States of America, the principal sum of FOUR HUNDRED THOUSAND AND NO/100THS DOLLARS ($400,000), together with interest thereon as hereinafter provided.

1.      Interest . Interest shall accrue on the principal balance hereof at a fixed rate of 7.25% per annum.

2.      Payment . Borrower shall pay the principal of this Note and interest thereon as follows:

(a)     On the first day of each month, commencing on February 1, 2019, to and including June 1, 2020, there shall be due and Borrower shall pay monthly installments of accrued interest hereon; and

(b)     On June 17, 2020 (the “Maturity Date”), the entire remaining principal balance of this Note, together with any accrued, unpaid interest thereon, shall be due and payable in full.

3.      Prepayment . Borrower may voluntarily prepay the loan evidenced by this Note in whole or in part at any time; without premium or penalty.

4.      Computation of Interest . Interest charges will be calculated on amounts advanced hereunder on the actual number of days said amounts are outstanding. Such interest shall be computed on the basis of a year comprised of 360 days, but charged for the actual number of days elapsed (including the first day but excluding the last day) occurring in the period for which interest is payable. Payments under this Note shall be applied initially against accrued interest and escrow charges, if any, and thereafter in reduction of principal.

5.      Loan Agreement . This Note is one of the Notes referred to in, and is entitled to the benefits of, the Loan Agreement dated as of January 18, 2019 (the 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 between the Borrower, the Lender and Park State Bank. The Loan Agreement, among other things, (i) provides for the making of the Loan evidenced by the Notes; (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.

TERM NOTE

Page 2

6.      Security . This Note is secured, inter alia , by that certain Security Agreement dated of even date herewith executed by the Borrower in favor of the Collateral Agent for the benefit of itself and for the ratable benefit of the Lenders.

7.      Default Rate, etc . Borrower acknowledges that if any payment required under this Note is not paid within ten (10) days after the same becomes due and payable, Lender will incur extra administrative expenses ( i.e. , in addition to expenses incident to receipt of timely payment) in connection with the delinquency in payment. Because, from the nature of the case, the actual damages suffered by Lender in incurring such extra administrative expenses would be impracticable or extremely difficult to ascertain, it is agreed that five percent (5%) of the amount of the delinquency payment shall be the amount of damages to which the Lender is entitled, upon such breach, in compensation for such extra administrative expenses. Therefore, Borrower shall, in such event, without further notice, pay to Lender liquidated damages in the amount of five percent (5%) of the amount of such delinquent payments. The provisions of this paragraph are intended to govern only the determination of the above-described damages in the event of a breach in performance of the obligation of Borrower to make timely payments hereunder. Nothing in this Note shall be construed as an express or implied agreement by Lender to forbear in the collection of any delinquent payment, or be construed as in any way giving the undersigned the right, express or implied, to fail to make timely payment hereunder, whether upon payment of such damages or otherwise. The right of Lender to receive payment of such liquidated damages, and receipt thereof, are without prejudice to the right of Lender to collect such delinquent payments and any other amounts required to be paid hereunder or under any security for this Note or to declare a default hereunder or under any security for this Note. In addition to the foregoing, upon the occurrence of a Default or Event of Default (as defined in the Loan Agreement) or if the principal balance and all interest accrued thereon have not been repaid on or before the Maturity Date, then in addition to any remedies available to Lender, hereunder, under the Loan Agreement, under any other Loan Document, at law or in equity, interest payable hereunder shall be computed thereon from and after that date at a rate of four percent (4%) per annum in excess of the interest rate then payable pursuant to Paragraph 1 of this Note, as such rate changes from time to time, or at the maximum lawful rate of interest which may be charged thereon by Lender, if any, whichever is less (hereinafter called “Default Rate”), until the Default is cured or the principal balance and all accrued, unpaid interest thereon, together with any other amounts payable by Borrower to Lender hereunder, under the Loan Agreement or under any other Loan Document are paid in full.

TERM NOTE

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8.      Waivers . Borrower 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 Borrower 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.

9.      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.

10.      Fees and Costs . Borrower agrees to pay all reasonable expenses for the preparation of this Note, as set forth in the Loan 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. Borrower agrees 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 Borrower 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 Borrower under this paragraph shall survive any termination of the Loan Agreement, this Note, the Security Agreement, and any other Loan Document.

11.      Binding Effect . This Note shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns except that Borrower may not 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, Borrower hereby authorizes the Lender to furnish any information concerning the Borrower or any of its affiliates, however acquired, to any person or entity.

TERM NOTE

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12.      Waiver of Jury Trial; Consent to Jurisdiction . 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. 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.

13.      Choice of Laws . 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.

14.      Severability . The invalidity or unenforceability in particular circumstances of any provision of this Note shall not extend beyond such provision or such circumstances and no other provision of this instrument shall be affected thereby.

15.      Usury . Borrower and Lender agree that no payment of interest or other consideration made or agreed to be made by Borrower 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 Borrower, and Borrower hereby agrees to accept such remittance. This provision shall control every other obligation of the Borrower and Lender relating to this Note.

TERM NOTE

IN WITNESS WHEREOF, Borrower has executed and delivered this Term Note as of the date first written above.

[Term Note Signature Page]

Exhibit 10.4

SECURITY AGREEMENT

(Grantor)

This SECURITY AGREEMENT is made as of January 18, 2019 (the “ Agreement ”), by AIRCO 1, LLC, a Delaware limited liability company, with its chief executive office at 5930 Balsom Ridge Road, Denver, NC 28037 (“ Grantor ”), in favor of MINNESOTA BANK & TRUST, a Minnesota state banking corporation, with an office at 9800 Bren Road East, Suite 200, Minnetonka, MN 554343, in its capacity as collateral agent (in such capacity the “ Collateral Agent ”) for the benefit of itself and for the ratable benefit of the “ Lenders ” as hereinafter defined.

RECITALS:

A.     Grantor has requested extensions of credit from PARK STATE BANK, a Minnesota state banking corporation (“ PSB ”), MINNESOTA BANK & TRUST, a Minnesota state banking corporation (“ MBT ”; and together with PSB and their respective successors and assigns being sometimes collectively referred herein as the “ Lenders ” and individually as a “ Lender ”) pursuant to the terms of that certain Loan Agreement dated of even date herewith (as it may be amended, modified, supplemented, increased or restated from time to time being the “ Loan Agreement ”) between Grantor and Lenders.

B.     As a condition to the effectiveness of the Loan Agreement and such extensions of credit, the Lenders require that Grantor grant a security interest in its assets in accordance with this Agreement.

C.     Grantor has determined that the execution, delivery and performance of this Agreement are in its best business and pecuniary interest.

NOW, THEREFORE, for good and valuable consideration the receipt and adequacy of which are hereby acknowledged by each of the parties hereto, it is agreed as follows:

ARTICLE I

DEFINITIONS

As used herein, the following terms shall have the meanings set forth in this Section:

“ Accounts ” shall have the meaning provided in the UCC.

“ Chattel Paper ” shall have the meaning provided in the UCC and shall include, without limitation, all Electronic Chattel Paper and Tangible Chattel Paper.

“ Collateral ” shall mean all property in which a security interest is granted hereunder.

“ Collateral Agent ” shall have the meaning provided in the preamble.

“ Commercial Tort Claim ” shall have the meaning provided in the UCC.

“ Controlled Property ” shall mean property of every kind and description in which Grantor has or may acquire any interest, now or hereafter at any time in the possession or control of Collateral Agent for any reason and all dividends and distributions on or other rights in connection with such property.

“ Data Processing Records and Systems ” shall mean all of Grantor’s now existing or hereafter acquired electronic data processing and computer records, software (including, without limitation, all “Software” as defined in the UCC), systems, manuals, procedures, disks, tapes and all other storage media and memory.

“ Default ” shall have the meaning provided in the Loan Agreement.

“ Deposit Accounts ” shall have the meaning provided in the UCC and shall include, without limitation, any demand, time, savings, passbook or similar account maintained with a bank.

“ Depository Bank ” Minnesota Bank & Trust.

“ Document ” shall have the meaning provided in the UCC.

“ Electronic Chattel Paper ” shall have the meaning provided in the UCC.

“ Equipment ” shall have the meaning provided in the UCC.

“ Event of Default ” shall have the meaning specified in Article VI hereof.

“ Fixtures ” shall have the meaning provided in the UCC.

“ General Intangibles ” shall have the meaning provided in the UCC and shall include, without limitation, all Payment Intangibles.

“ Goods ” shall have the meaning provided in the UCC and shall include, without limitation, embedded “Software” to the extent included in “Goods” as defined in the UCC.

“ Grantor ” shall have the meaning provided in the preamble hereto.

“ Instruments ” shall have the meaning provided in the UCC.

“ Insurance Proceeds ” shall mean all proceeds of any and all insurance policies payable to Grantor with respect to any Collateral, or on behalf of any Collateral, whether or not such policies are issued to or owned by Grantor.

“ Inventory ” shall have the meaning provided in the UCC.

“ Investment Property ” shall have the meaning provided in the UCC.

“ Lender(s) ” shall have the meaning provided in the recitals hereto.

“ Letter-of-Credit Rights ” shall have the meaning provided in the UCC.

“ Loan Agreement ” shall have the meaning provided in the recitals hereto.

“ MBT ” shall have the meaning provided in the recitals hereto.

“ MBT Security Agreement ” shall mean that certain Security Agreement dated October 27, 2017, executed by the Grantor in favor of MBT, as the same may be amended, modified, replaced or restated from time to time.

“ Motor Vehicles ” shall mean all vehicles (including, without limitation all tractors and trailers) for which the title to such vehicle is governed by a certificate of title or ownership.

“ Payment Intangibles ” shall have the meaning provided in the UCC.

“ Proceeds ” shall have the meaning provided in the UCC.

“ Products ” shall mean any goods now or hereafter manufactured, processed or assembled with any of the Collateral.

“ PSB ” shall have the meaning provided in the recitals hereto.

“ Supporting Obligations ” shall have the meaning provided in the UCC.

“ Tangible Chattel Paper ” shall have the meaning provided in the UCC.

“ UCC ” shall mean the Uniform Commercial Code as enacted in the State of Minnesota, as amended from time to time; provided , however , that: (a) to the extent that the UCC is used to define any term herein, and such term is defined differently in different Articles of the UCC, the definition of such term contained in Article 9 shall govern; and (b) if, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, the Collateral Agent’s security interest in any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of Minnesota, the term “UCC” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection or priority of, or remedies with respect to, the Collateral Agent’s security interest and for purposes of definitions related to such provisions.

Other terms defined herein shall have the meanings ascribed to them herein. All capitalized terms used herein, not specifically defined herein, shall have the meaning ascribed to them in the Loan Agreement.

ARTICLE II

SECURITY INTERESTS

As security for the payment of all Obligations, Grantor hereby grants to Collateral Agent, for the benefit of itself and for the ratable benefit of the Lenders, a security interest in all of Grantor’s right, title and interest in and to the following, whether now owned or existing or hereafter acquired or arising:

Accounts;

Chattel Paper;

Commercial Tort Claims, if any, described on Exhibit B attached hereto and incorporated herein by reference;

Controlled Property;

Deposit Accounts;

Documents;

Equipment and Fixtures;

General Intangibles;

Goods;

Instruments;

Inventory;

Investment Property;

Letter-of-Credit Rights;

Proceeds (whether cash or non-cash Proceeds, including Insurance Proceeds and non-cash Proceeds of all types);

Products of all the foregoing; and

Supporting Obligations;

provided, however, that the Collateral Agent’s security interest in all of the foregoing, other than in the Acquired Assets and in identifiable Proceeds of Acquired Assets, shall be subordinate to MBT’s separate security interest in such assets granted to MBT pursuant to the MBT Security Agreement.

ARTICLE III

REPRESENTATIONS AND COVENANTS OF GRANTOR

 Grantor represents, warrants and covenants that:

3.1       Authorization . The execution and performance of this Agreement have been duly authorized by all necessary action and do not and will not: (a) require any consent or approval of the members or stockholders of any entity, or the consent of any governmental entity, which in each case has not been obtained; or (b) violate any provision of any indenture, contract, agreement or instrument to which it is a party or by which it is bound.

3.2       Title to Collateral . Grantor has good and marketable title to all of the Collateral and none of the Collateral is subject to any security interest except for the security interest created pursuant to this Agreement or other Permitted Liens.

3.3       Disposition or Encumbrance of Collateral . Grantor will not encumber, sell or otherwise transfer or dispose of the Collateral without the prior written consent of Collateral Agent except as provided in this Section or for Permitted Liens. Until a Default or Event of Default has occurred and is continuing, Grantor may sell Collateral consisting of: (a) Inventory in the ordinary course of business provided that Grantor receives as consideration for such sale an amount not less than the fair market value of the Inventory at the time of such sale; and (b) Equipment and Fixtures which in the judgment of Grantor have become obsolete or unusable in the ordinary course of business, provided that all net Proceeds of such sales of Equipment and Fixtures are (i) used to acquire replacement Equipment or Fixtures or (ii) delivered directly to Collateral Agent for application to the Obligations in such order as the Collateral Agent may elect.

3.4       Validity of Accounts . Grantor warrants that all Collateral consisting of Accounts, Chattel Paper and Instruments included in Grantor’s schedules, financial statements or books and records are bona fide existing obligations created by the sale and actual delivery of Inventory or the rendition of services to customers in the ordinary course of business, which Grantor then owns free and clear of any security interest other than the security interest created by this Agreement or other Permitted Liens, and which are then unconditionally owing to Grantor without defenses, offset or counterclaim except those arising in the ordinary course of business that are immaterial in the aggregate and that the unpaid principal amount of any such Chattel Paper or Instrument and any security therefor is and will be as represented to Collateral Agent on the date of the delivery thereof to Collateral Agent.

3.5       Maintenance of Tangible Collateral . Grantor will maintain the tangible Collateral in good condition and repair (reasonable wear and tear excepted). At the time of attachment and perfection of the security interest granted pursuant hereto and thereafter, all tangible Collateral will be located and will be maintained only at the locations set forth on Exhibit A hereto. Except as otherwise permitted by Section 3.3, Grantor will not remove such Collateral from such locations unless, prior to any such removal, Grantor has given written notice to Collateral Agent of the location or locations to which Grantor desires to remove the Collateral, Collateral Agent has given its written consent to such removal, and Grantor has delivered to Collateral Agent acknowledgment copies of financing statements filed where appropriate to continue the perfection of Collateral Agent’s security interest as a priority security interest on such Collateral that is junior only to the security interest of MBT pursuant to the MBT Security Agreement in all of Grantor’s assets other than the Acquired Assets and identifiable Proceeds of Acquired Assets. Collateral Agent’s security interest attaches to all of the Collateral wherever located and Grantor’s failure to inform Collateral Agent of the location of any item or items of Collateral shall not impair Collateral Agent’s security interest thereon.

3.6       Notation on Chattel Paper . For purposes of the security interest granted pursuant to this Agreement, Collateral Agent has been granted a direct security interest in all Chattel Paper constituting part of the Collateral, and such Chattel Paper is not claimed merely as Proceeds of Inventory. Upon Collateral Agent’s request, Grantor will deliver to Collateral Agent the original of all Chattel Paper. Grantor will not execute any copies of such Chattel Paper constituting part of the Collateral other than those which are clearly marked as a copy. Collateral Agent may stamp any such Chattel Paper with a legend reflecting Collateral Agent’s security interest therein.

3.7       Instruments as Proceeds; Deposit Accounts . Notwithstanding any other provision in this Agreement concerning Instruments, Grantor covenants that Instruments constituting cash Proceeds (for example, money and checks) shall be deposited in Deposit Accounts with the Collateral Agent. Grantor has granted to the Collateral Agent a direct security interest in all Deposit Accounts constituting part of the Collateral and such Deposit Accounts are not claimed merely as Proceeds of other Collateral.

3.8       Protection of Collateral . All expenses of protecting, storing, warehousing, insuring, handling and shipping of the Collateral, all costs of keeping the Collateral free of any liens, encumbrances and security interests prohibited by this Agreement and of removing the same if they should arise, and any and all excise, property, sales and use taxes imposed by any state, federal or local authority on any of the Collateral or in respect of the sale thereof, shall be borne and paid by Grantor and if Grantor fails to promptly pay any thereof when due, Collateral Agent may, at its option, but shall not be required to pay the same whereupon the same shall constitute Obligations and shall bear interest at the Default Rate specified in the Notes and shall be secured by the security interest granted hereunder.

3.9       Insurance . Grantor will procure and maintain, or cause to be procured and maintained, insurance issued by responsible insurance companies insuring the Collateral against damage and loss by theft, fire, collision (in the case of Motor Vehicles), and such other risks as are usually carried by owners of similar properties or as may be requested by Collateral Agent in an amount equal to the replacement value thereof, and, in any event, in an amount sufficient to avoid the application of any co-insurance provisions and payable, in the case of any loss in excess of $50,000.00, to Grantor and Collateral Agent jointly. All such insurance shall contain an agreement by the insurer to endeavor to provide Collateral Agent with 30 days’ prior notice of cancellation and an agreement that the interest of Collateral Agent shall not be impaired or invalidated by any act or neglect of Grantor nor by the occupation of the premises wherein such Collateral is located for purposes more hazardous than are permitted by said policy. Grantor will maintain, with financially sound and reputable insurers, insurance with respect to its properties and business against such casualties and contingencies of such types (which may include, without limitation, public and product liability, larceny, embezzlement, business interruption or other criminal misappropriation insurance) and in such amounts as may from time to time be required by Collateral Agent. Grantor will deliver evidence of such insurance and the policies of insurance or copies thereof to Collateral Agent upon request.

3.10       Compliance with Law . Grantor will not use the Collateral, or knowingly permit the Collateral to be used, for any unlawful purpose or in violation of any federal, state or municipal law.

3.11       Books and Records; Access .

(a)      Grantor will permit Collateral Agent and its representatives to examine Grantor’s books and records (including Data Processing Records and Systems) with respect to the Collateral and make extracts therefrom and copies thereof at any time and from time to time, and Grantor will furnish such information and reports to Collateral Agent and its representatives regarding the Collateral as Collateral Agent and its representatives may from time to time request. Grantor will also permit Collateral Agent and its representatives to inspect the Collateral at any time and from time to time as Collateral Agent and its representatives may request.

(b)      Collateral Agent shall have authority, at any time, to place, or require Grantor to place, upon Grantor’s books and records relating to Accounts, Chattel Paper and other rights to payment covered by the security interest granted hereby a notation or legend stating that such Accounts, Chattel Paper and other rights to payment are subject to Collateral Agent’s security interest.

3.12       Notice of Default . Immediately upon any officer of Grantor becoming aware of the existence of any Default or Event of Default, Grantor will give notice to Collateral Agent that such Default or Event of Default exists, stating the nature thereof, the period of existence thereof, and what action Grantor proposes to take with respect thereto.

3.13       Additional Documentation . Grantor will execute, from time to time, and authorizes Collateral Agent to execute from time to time as Grantor’s attorney-in-fact and/or file, such financing statements, assignments, and other documents covering the Collateral, including Proceeds, as Collateral Agent may request in order to create, evidence, perfect, maintain or continue its security interest in the Collateral (including additional Collateral acquired by Grantor after the date hereof), and Grantor will pay the cost of filing the same in all public offices in which Collateral Agent may deem filing to be appropriate and will notify Collateral Agent promptly upon acquiring any additional Collateral that may require an additional filing. Upon request, Grantor will deliver to Collateral Agent all Grantor’s Documents, Chattel Paper and Instruments constituting part of the Collateral.

3.14       Chief Executive Office; State of Organization . The location of the chief executive office of Grantor is located in the State set forth in the preamble hereto and will not be changed from such state without 30 days’ prior written notice to Collateral Agent. Grantor warrants that its books and records concerning Accounts and Chattel Paper constituting part of the Collateral are located at its chief executive office. Grantor’s State of organization is the State set forth in the preamble hereto, and such State has been its State of organization since the date of Grantor’s organization. Grantor will not change its State of organization from such State without 30 days’ prior written notice to Collateral Agent, and without Collateral Agent’s written consent to such change, and without delivering to Collateral Agent acknowledgment copies of financing statements filed where appropriate to continue the perfection of Collateral Agent’s security interest as a first priority security interest therein.

3.15       Name of Grantor . Grantor’s exact legal name and type of legal entity is as set forth in the preamble hereto. Grantor will not further change its legal name without 30 days’ prior written notice to the Collateral Agent, and without Collateral Agent’s written consent to such change, and without delivering to the Collateral Agent acknowledgment copies of financing statements filed where appropriate to continue the perfection of the Collateral Agent’s security interest as a first priority security interest in the Collateral. Grantor has not used any other name within the past five years except those described on Exhibit A attached hereto. Neither Grantor nor, to Grantor’s knowledge, any predecessor in title to any of the Collateral has executed any financing statements or security agreements presently effective as to the Collateral except those described on Exhibit A attached hereto.

3.16       Disputes, Etc . Grantor shall advise Collateral Agent promptly of Inventory in excess of $50,000.00 for any one customer in any fiscal year or in excess of $100,000.00 in the aggregate for all customers in any fiscal year which are returned by a customer(s) or otherwise recovered from such customer(s) and unless instructed to deliver such Inventory to Collateral Agent, Grantor shall resell such Inventory for Collateral Agent and assign or deliver to Collateral Agent the resulting Accounts or other Proceeds. Grantor shall also advise Collateral Agent promptly of all disputes and claims in excess of $50,000.00 for any one obligor on the Collateral in any fiscal year or in excess of $100,000.00 in the aggregate for all obligors in any fiscal year and settle or adjust them at no expense to Collateral Agent. After the occurrence and during the continuance of an Event of Default, Collateral Agent may at all times settle or adjust such disputes and claims directly with the customers for amounts and upon terms which Collateral Agent considers commercially reasonable. No discount, credit, allowance, adjustment or return shall be granted by Grantor to any customer without Collateral Agent’s written consent other than discounts, credits, allowances, adjustments and returns made or granted by Grantor in the ordinary course of business prior to the occurrence and during the continuance of an Event of Default.

3.17       Power of Attorney . Grantor appoints Collateral Agent or any other person whom Collateral Agent may from time to time designate, as Grantor’s attorney in fact, with power to: (a) endorse Grantor’s name on any checks, notes, acceptances, drafts or other forms of payment or security evidencing or relating to any Collateral that may come into Collateral Agent’s possession; (b) sign Grantor’s name on any invoice or bill of lading relating to any Collateral, on drafts against customers, on schedules and confirmatory assignments of Accounts, Chattel Paper, Documents or other Collateral, on notices of assignment, financing statements under the UCC and other public records, on verifications of accounts and on notices to customers; (c) notify the post office authorities to change the address for delivery of Grantor’s mail to an address designated by Collateral Agent; (d) receive and open all mail addressed to Grantor; (e) send requests for verification of Accounts, Chattel Paper, Instruments or other Collateral to customers; and (f) do all things necessary to carry out this Agreement; provided , however , that so long as no Event of Default has occurred and is continuing, Lender: (x) shall not exercise the powers granted pursuant to Section 3.17(c) or (d); (y) shall exercise the power granted by Section 3.17(e) through Collateral Agent’s trade accounting firm name and not in any name identifying the verifying party as a bank, lender or other financial institution; and (z) shall exercise the powers granted by Section 3.17(f) only upon Grantor’s failure to take action requested by Collateral Agent within five (5) Business Days after the Lender has requested that Borrower take the requested action. Grantor ratifies and approves all acts of the attorney taken within the scope of the authority granted. Neither Collateral Agent nor the attorney will be liable for any acts of commission or omission, or for any error in judgment or mistake of fact or law. This power, being coupled with an interest, is irrevocable so long as any Obligation remains unpaid. Grantor waives presentment and protest of all instruments and notice thereof, notice of default and dishonor and all other notices to which Grantor may otherwise be entitled.

3.18       Patents and Trademarks, Etc . Grantor agrees with Collateral Agent that, until the security interest granted by this Agreement has been terminated in accordance with the terms hereof:

(a)      Grantor will perform all acts and execute all documents including, without limitation, grants of security interest, in form suitable for filing with the United States Patent and Trademark Office, reasonably requested by Collateral Agent at any time to evidence, perfect, maintain, record and enforce Collateral Agent’s interest in the Collateral comprised of patents (collectively the “Patents”), patent applications (collectively the “Patent Applications”), trademarks or service marks (collectively the “Trademarks”) or of any applications therefor (collectively the “Trademark Applications”) or otherwise in furtherance of the provisions of this Agreement;

(b)      Except to the extent that Collateral Agent shall consent in writing, Grantor (either itself or through licensees) will, unless Grantor shall reasonably determine that a Trademark (or the use of a Trademark in connection with a particular class of goods or products) is not of material economic value to Grantor: (i) continue to use each Trademark on each and every trademark class of goods in order to maintain each Trademark in full force free from any claim of abandonment for non-use; (ii) maintain as in the past the quality of products and services offered under each Trademark; (iii) employ each Trademark with the appropriate notice of application or registration to the extent required by applicable law to maintain such Trademark; (iv) not use any Trademark except for the uses for which registration or application for registration of such Trademark has been made, unless such use is otherwise lawful; and (v) not (and not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby any Trademark may become invalidated;

(c)      Except to the extent that Collateral Agent shall consent in writing, Grantor will not, unless Grantor shall reasonably determine that a Patent is not of material economic value to Grantor, do any act, or not to do any act, whereby any Patent may become abandoned or dedicated;

(d)      Unless Grantor shall reasonably determine that a Patent, Patent Application, Trademark or Trademark Application is not of material economic value to Grantor, Grantor shall notify Collateral Agent immediately if it knows, or has reason to know, of any reason that any Patent, Patent Application, Trademark or Trademark Application may become abandoned or dedicated, or of any adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office or any court) regarding Grantor’s ownership of any Patent or Trademark, its rights to register the same, or to keep and maintain the same;

(e)      If Grantor, either itself or through any agent, employee, licensee or designee, shall file a Patent Application or Trademark Application for the registration of any Trademark with the United States Patent and Trademark Office, or any similar office or agency in any other country or any political subdivision thereof, Grantor shall promptly inform Collateral Agent, and, upon request of Collateral Agent, shall promptly execute and deliver any and all agreements, instruments, documents and papers as Collateral Agent may reasonably request to evidence Collateral Agent’s security interest in such Patent or Trademark and the goodwill and general intangibles of Grantor relating thereto or represented thereby;

(f)      Unless Grantor shall reasonably determine that a Patent Application or Trademark Application is not of material economic value to Grantor, Grantor will take all necessary steps, including, without limitation, in any proceeding before the United States Patent and Trademark Office, or any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue each Patent Application and Trademark Application (and to obtain the relevant registration) and to maintain each registration of the Patents and Trademarks, including, without limitation, filing of applications for renewal and affidavits of use;

(g)      Unless Grantor shall reasonably determine that a Patent or Trademark is not of material economic value to Grantor, Grantor shall promptly notify Collateral Agent if any Patent or Trademark is infringed, misappropriated or diluted by a third party and either shall promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, or take such other actions as Grantor shall reasonably deem appropriate under the circumstances to protect such Patent or Trademark; and

(h)      Grantor agrees that it will not enter into any agreement (for example, a license agreement) which is inconsistent with Grantor’s obligations under this Agreement.

3.19       Copyrights . Grantor agrees with Collateral Agent that, until the security interest granted by this Agreement has been terminated in accordance with the terms hereof:

(a)      Grantor will perform all acts and execute all documents including, without limitation, grants of security interest, in form suitable for filing with the United States Copyright Office, reasonably requested by Collateral Agent at any time to evidence, perfect, maintain, record and enforce Collateral Agent’s interest in the Collateral comprised of copyrights or copyright applications (collectively the “Copyrights”) or otherwise in furtherance of the provisions of this Agreement;

(b)      Except to the extent that the Collateral Agent shall consent in writing, Grantor (either itself or through licensees) will, unless Grantor shall reasonably determine that a Copyright is not of material economic value to Grantor, publish the materials for which a Copyright has been obtained (the “Works”) with any notice of copyright registration required by applicable law to preserve the Copyright;

(c)      Unless Grantor shall reasonably determine that a Copyright is not of material economic value to Grantor, Grantor shall notify the Collateral Agent immediately if it knows, or has reason to know, of any reason that any application or registration relating to any Copyright may become abandoned or dedicated or of any adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Copyright Office or any court) regarding Grantor’s ownership of any Copyright, its right to register the same, or to keep and maintain the same;

(d)      If Grantor, either itself or through any agent, employee, licensee or designee, shall file an application for the registration of any Copyright with the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, Grantor shall promptly inform Collateral Agent, and, upon request of Collateral Agent, execute and deliver any and all agreements, instruments, documents and papers as Collateral Agent may request to evidence Collateral Agent’s security interest in such Copyright and the Works relating thereto or represented thereby;

(e)      Unless Grantor shall reasonably determine that a Copyright is not of material economic value to Grantor, Grantor will take all commercially reasonable steps, including, without limitation, in any proceeding before the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of the Copyrights;

(f)      In the event that any Copyright is infringed by a third party, Grantor shall promptly notify Collateral Agent and shall, unless Grantor shall reasonably determine that such Copyright is not of material economic value to Grantor, promptly sue to recover any and all damages or take such other actions as Grantor shall reasonably deem appropriate under the circumstances to protect such Copyright; and

(g)      Grantor agrees that it will not enter into any agreement (for example, a license agreement) which is inconsistent with Grantor’s obligations under this Agreement.

3.20       Control . Grantor will cooperate with Collateral Agent in obtaining control with respect to Collateral consisting of Deposit Accounts, Investment Property, Letter-of-Credit Rights, and Electronic Chattel Paper. Without limiting the foregoing, if Grantor becomes a beneficiary of a letter of credit, then Grantor shall promptly notify the Collateral Agent thereof and, if then requested by Collateral Agent, enter into a tri-party agreement with the Collateral Agent and the issuer and/or confirmation bank with respect to such letter of credit assigning the Letter-of-Credit Rights to the Collateral Agent and directing all payments thereunder to the Collateral Agent, all in form and substance reasonably satisfactory to the Collateral Agent.

3.21       Further Acts . Where Collateral is in the possession of a third party, Grantor will join with Collateral Agent in notifying such third party of Collateral Agent’s security interest and in obtaining an acknowledgment from such third party that it is holding such Collateral for the benefit of the Collateral Agent.

3.22       Commercial Tort Claims . Grantor shall promptly notify the Collateral Agent of any Commercial Tort Claim acquired by it and, unless otherwise consented to by the Collateral Agent, Grantor shall promptly enter into a supplement to this Agreement granting to the Collateral Agent a security interest in such Commercial Tort Claim.

3.23       Motor Vehicles .

(a)     Grantor shall maintain all vehicle titles at its chief executive office.

(b)     Grantor shall promptly, but in any event no later than 10 days after the Collateral Agent’s written request (the date on which the Grantor receives such request being the “ Titles Request Date ”), deliver to the Collateral Agent originals of the certificates of title or ownership for the Motor Vehicles owned by it together with appropriate grant forms executed in favor of the Collateral Agent.

(c)     Upon the acquisition after the Titles Request Date by Grantor of any Motor Vehicle, Grantor shall deliver to the Collateral Agent originals of the certificates of title or ownership for such Motor Vehicle, together with the manufacturer’s statement of origin, with the Collateral Agent listed as lienholder; provided that, the Collateral Agent shall not be required to be the lienholder if the Motor Vehicle to be acquired is subject to a purchase money security interest permitted by Section 8(b) of the Loan Agreement.

(d)     Grantor hereby appoints the Collateral Agent as its attorney-in-fact, effective the date hereof and terminating upon the termination of this Agreement, for the purpose of (i) executing on behalf of Grantor title or ownership applications for filing with appropriate state agencies to enable Motor Vehicles now owned or hereafter acquired by Grantor to be retitled and the Collateral Agent listed as lienholder thereof, (ii) filing such applications with such state agencies, and (iii) executing such other documents and instruments on behalf of, and taking such other action in the name of, Grantor as the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof (including, without limitation, for the purpose of creating in favor of the Collateral Agent a perfected Lien on the Motor Vehicles and exercising the rights and remedies of the Collateral Agent hereunder). This appointment as attorney-in-fact is coupled with an interest and is irrevocable until all of the Obligations are paid in full after the termination of the Loan Agreement and the other Loan Documents.

(e)     Any certificates of title or ownership delivered pursuant to the terms hereof shall be accompanied by odometer statements for each Motor Vehicle covered thereby.

(f)     So long as no Event of Default shall have occurred and be continuing, upon the request of Grantor, the Collateral Agent shall execute and deliver to Grantor such instruments as Grantor shall reasonably request to remove the notation of the Collateral Agent as lienholder on any certificate of title for any Motor Vehicle; provided that any such instruments shall be delivered, and the release effective, only upon receipt by the Collateral Agent of a certificate from Grantor, stating that the Motor Vehicle, the Lien on which is to be released, is to be sold or has suffered a casualty loss (with title thereto passing to the casualty insurance company therefor in settlement of the claim for such loss), the amount that Grantor will receive as sale Proceeds or insurance Proceeds, and any Proceeds of such sale or casualty loss shall be paid to the Collateral Agent hereunder to be applied to the Obligations then outstanding.

ARTICLE IV

COLLECTIONS

Except as otherwise provided in this Article IV, Grantor shall continue to collect, at its own expense, all amounts due or to become due to Grantor under the Accounts constituting part of the Collateral and all other Collateral. In connection with such collections, Grantor may take (and, at Collateral Agent’s direction given after the occurrence and during the continuance of an Event of Default, shall take) such action as Grantor or Collateral Agent may deem necessary or advisable to enforce collection of the Accounts and such other Collateral; provided , however , that Collateral Agent shall have the right at any time, without giving written notice to Grantor of Collateral Agent’s intention to do so, to notify the account debtors under any Accounts or obligors with respect to such other Collateral of the assignment of such Accounts and such other Collateral to Collateral Agent and to direct such account debtors or obligors to make payment of all amounts due or to become due to Grantor thereunder directly to Collateral Agent and, upon such notification and at the expense of Grantor, to enforce collection of any such Accounts or other Collateral, and to adjust, settle or compromise the amount or payment thereof in the same manner and to the same extent as Grantor might have done, but unless and until Collateral Agent does so or gives Grantor other instructions, Grantor shall make all collections for Collateral Agent. In addition to its rights under the preceding sentence to this Section, Collateral Agent, at any time after the occurrence of an Event of Default may require that Grantor instruct all current and future account debtors and obligors on other Collateral to make all payments directly to a lockbox (the “Lockbox”) controlled by Collateral Agent. All payments received in the Lockbox shall be transferred to a special bank account (the “Collateral Account”) maintained at the Depository Bank for the benefit of Collateral Agent subject to withdrawal by Collateral Agent only. After the earliest to occur of an Event of Default, Collateral Agent’s exercise of its right to direct account debtors or other obligors on any Collateral to make payments directly to Collateral Agent or to require Grantor to establish a Lockbox, Grantor shall immediately deliver all full and partial payments on any Collateral received by Grantor to Collateral Agent in their original form, except for endorsements where necessary. Collateral Agent, at its sole discretion, may hold any collections on the Collateral delivered to it or deposited in the Collateral Account as cash collateral or may apply such collections to the payment of the Obligations in such order as Collateral Agent may elect; provided , however , that after an Event of Default has occurred and is continuing, Collateral Agent shall apply all collections in accordance with Section 7.7. Until such payments are so delivered to Collateral Agent, such payments shall be held in trust by Grantor for and as Collateral Agent’s property, and shall not be commingled with any funds of Grantor. Any application of any collection to the payment of any Obligation is conditioned upon final payment of any check or other instrument.

ARTICLE V

ASSIGNMENT OF INSURANCE

Grantor hereby assigns to Collateral Agent, as additional security for payment of the Obligations, any and all monies due or to become due under, and any and all other rights of Grantor with respect to, any and all policies of insurance covering the Collateral. So long as no Default or Event of Default has occurred and is continuing, Grantor may itself adjust and collect for any losses of up to an aggregate amount of $50,000.00 for all occurrences during any of Grantor’s fiscal years and Grantor may use the resulting Insurance Proceeds for the replacement, restoration or repair of the Collateral. After the occurrence and during the continuance of a Default or an Event of Default, or after the aggregate amount of losses arising out of all occurrences during any of Grantor’s fiscal years exceeds $50,000.00, Collateral Agent may (but need not) in its own name or in Grantor’s name execute and deliver proofs of claim, receive such monies, and settle or litigate any claim against the issuer of any such policy and Grantor directs the issuer to pay any such monies directly to Collateral Agent and Collateral Agent, at its sole discretion and regardless of whether Collateral Agent exercises its right to collect Insurance Proceeds under this Section, may apply any Insurance Proceeds to the payment of the Obligations, whether due or not, in such order and manner as Collateral Agent may elect or may permit Grantor to use such Insurance Proceeds for the replacement, restoration or repair of the Collateral.

ARTICLE VI

EVENTS OF DEFAULT

The occurrence of any Event of Default as defined in the Loan Agreement shall constitute an Event of Default hereunder (“ Event of Default ”).

ARTICLE VII

RIGHTS AND REMEDIES ON DEFAULT

Upon the occurrence of an Event of Default, and at any time thereafter until such Event of Default is cured to the satisfaction of Collateral Agent, and in addition to the rights granted to Collateral Agent under Articles IV and V hereof, Collateral Agent may exercise any one or more of the following rights and remedies:

7.1       Acceleration of Obligations . Declare any and all Obligations to be immediately due and payable, and the same shall thereupon become immediately due and payable without further notice or demand.

7.2       Right of Offset . Offset, and cause each Lender to offset, any deposits, including unmatured time deposits, then maintained by Grantor with a Lender or with Collateral Agent, whether or not then due, against the Obligations, whether or not then due.

7.3       Deal with Collateral . In the name of Grantor or otherwise, demand, collect, receive and give receipt for, compound, compromise, settle and give acquittance for and prosecute and discontinue any suits or proceedings in respect of any or all of the Collateral.

7.4       Realize on Collateral . Take any action which Collateral Agent may deem reasonably necessary or desirable in order to realize on the Collateral, including, without limitation, the power to perform any contract, to endorse in the name of Grantor any checks, drafts, notes, or other instruments or documents received in payment of or on account of the Collateral. Collateral Agent may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral. Collateral Agent may sell the Collateral without giving any warranties as to the Collateral. Collateral Agent may specifically disclaim any warranties of title or the like. This procedure will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral.

7.5       Access to Property . Enter upon and into and take possession of all or such part or parts of the properties of Grantor, including lands, plants, buildings, machinery, equipment, Data Processing Records and Systems and other property as may be necessary or appropriate in the reasonable judgment of Collateral Agent, to permit or enable Collateral Agent to store, lease, sell or otherwise dispose of or collect all or any part of the Collateral, and use and operate said properties for such purposes and for such length of time as Collateral Agent may deem necessary or appropriate for said purposes without the payment of any compensation to Grantor therefor. Grantor shall provide Collateral Agent with all information and assistance requested by Collateral Agent to facilitate the storage, leasing, sale or other disposition or collection of the Collateral after an Event of Default has occurred and is continuing.

7.6       Other Rights . Exercise any and all other rights and remedies available to it by law or by agreement, including rights and remedies under the UCC as adopted in the relevant jurisdiction or any other applicable law, or under the Loan Agreement and, in connection therewith, Collateral Agent may require Grantor to assemble the Collateral and make it available to Collateral Agent at a place to be designated by Collateral Agent, and any notice of intended disposition of any of the Collateral required by law shall be deemed reasonable if such notice is mailed or delivered to Grantor at its address as shown on Collateral Agent’s records at least 10 days before the date of such disposition.

7.7       Application of Proceeds .

(a)     All Proceeds of Collateral received by Collateral Agent or any Lender shall be applied in accordance with the UCC, and such Proceeds applied toward the Obligations shall be applied in the following order:

FIRST, to the Collateral Agent and each Lender in an amount equal to such Person’s reasonable costs and expenses incurred in connection with the enforcement of this Agreement, the sale or other disposition of the Collateral, the delivery of the Collateral, the collection of any such Proceeds or the collection of the Obligations (including, without limitation, reasonable attorneys’ fees and legal expenses regardless of whether suit is commenced);

SECOND, to the extent of any amount remaining after application in accordance with clause FIRST above, to the Collateral Agent for distribution to the Lender for application to the Obligations then due and payable or, if such amount shall be insufficient to pay the Obligations in full, then ratably (without priority of any one over any other) to each Lender in proportion to its Percentage; and

THIRD, to the extent of any amount remaining after application in accordance with clauses FIRST and SECOND above, to Grantor or its successors or assigns or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

(b)     When payments to the Lender are based upon their respective Percentages, the amounts received by each Lender shall be promptly applied as follows (for purposes of making determinations under this Section 7.7 only): (i) first, to the unpaid interest and fees constituting part of such Lender’s Obligations; (ii) second, to the unpaid principal amount of such Lender’s Note; and (C) third, to all other Obligations owed to such Lender. If any payment to any Lender of its Percentage of any distribution would result in overpayment to such Lender, such excess amount shall instead be ratably distributed in respect of the unpaid Obligations of the other Lenders entitled to such distribution.

(c)     For purposes of applying payments received in accordance with this Section 7.7, Collateral Agent shall be entitled to rely upon each Lender for a determination of the outstanding principal, interest and other Obligations owed to such Lender.

7.8       Patents and Trademarks . Upon the occurrence and during the continuance of an Event of Default:

(a)      Collateral Agent may, at any time and from time to time, upon thirty (30) days’ prior notice to Grantor, license or, to the extent permitted by an applicable license, sublicense, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any Patent or Trademark, throughout the world for such term or terms, on such conditions, and in such manner, as Collateral Agent shall in its sole discretion determine;

(b)      Collateral Agent may (without assuming any obligations or liability thereunder), at any time enforce (and shall have the exclusive right to enforce) against any licensor, licensee or sublicensee all rights and remedies of Grantor in, to and under any one or more license or other agreements with respect to any Patent or Trademark and take or refrain from taking any action under any such license or other agreement, and Grantor hereby releases Collateral Agent from, and agrees to hold Collateral Agent free and harmless from and against, any claims arising out of, any action taken or omitted to be taken with respect to any such license or agreement;

(c)      Any and all payments received by Collateral Agent under or in respect of any Patent or Trademark (whether from Grantor or otherwise), or received by Collateral Agent by virtue of the exercise of the license granted to Collateral Agent by subsection (g) below, shall be applied to the Obligations in accordance with Section 7.7 hereof;

(d)      Collateral Agent may exercise in respect of the Patents and Trademarks, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the UCC;

(e)      In order to implement the sale, lease, assignment, license, sublicense or other disposition of any of the Patents and Trademarks pursuant to this Section 7.8, Collateral Agent may, at any time, execute and deliver on behalf of Grantor one or more instruments of assignment of the Patents and Trademarks (or any application or registration thereof), in form suitable for filing, recording or registration in any country. Grantor agrees to pay when due all reasonable costs incurred in any such transfer of the Patents and Trademarks, including any taxes, fees and reasonable attorneys’ fees;

(f)      In the event of any sale, lease, assignment, license, sublicense or other disposition of any of the Patents or Trademarks pursuant to this Section, Grantor shall supply to Collateral Agent or its designee its know-how and expertise relating to the manufacture and sale of the products relating to any Patent or Trademark subject to such disposition, and its customer lists and other records relating to such Patents or Trademarks and to the distribution of said products; and

(g)      For the purpose of enabling Collateral Agent to exercise rights and remedies under this Agreement at such time as Collateral Agent shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, Grantor hereby grants to Collateral Agent, an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to Grantor) to use, license or sublicense at such time any Patent or Trademark, now owned or hereafter acquired by Grantor, and wherever the same may be located, and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer and automatic machinery software and programs used for the compilation or printout thereof.

7.9       Copyrights . Upon the occurrence and during the continuance of an Event of Default:

(a)      Collateral Agent may, at any time and from time to time, upon thirty (30) days’ prior notice to Grantor, license or, to the extent permitted by an applicable license, sublicense, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any Copyright, for such term or terms, on such conditions, and in such manner, as Collateral Agent shall in its sole discretion determine;

(b)      Collateral Agent may (without assuming any obligations or liability thereunder), at any time, enforce (and shall have the exclusive right to enforce) against any licensor, licensee or sublicensee all rights and remedies of Grantor in, to and under any one or more license or other agreements with respect to any Copyright and take or refrain from taking any action under any such license or other agreement and Grantor hereby releases Collateral Agent from, and agrees to hold Collateral Agent free and harmless from and against, any claims arising out of, any action taken or omitted to be taken with respect to any such license or agreement;

(c)      Any and all payments received by Collateral Agent under or in respect of any Copyright (whether from Grantor or otherwise), or received by Collateral Agent by virtue of the exercise of the license granted to Collateral Agent by subsection (f) below, shall be applied to the Obligations in accordance with Section 7.7;

(d)      Collateral Agent may exercise in respect of the Copyrights, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the UCC;

(e)      In order to implement the sale, lease, assignment, license, sublicense or other disposition of any of the Copyrights pursuant to this Section 7.9, Collateral Agent may, at any time, execute and deliver on behalf of Grantor one or more instruments of assignment of the Copyrights (or any application or registration thereof), in form suitable for filing, recording or registration in the Copyright Office or any country where the relevant Copyright is of material economic value to Grantor. Grantor agrees to pay when due all reasonable costs incurred in any such transfer of the Copyrights, including any taxes, fees and reasonable attorneys’ fees; and

(f)      For the purpose of enabling Collateral Agent to exercise rights and remedies under this Agreement at such time as Collateral Agent shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, Grantor hereby grants to Collateral Agent an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to Grantor) to use, license or sublicense any Copyright, now owned or hereafter acquired by Grantor, and wherever the same may be located, and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer and automatic machinery software and programs used for the compilation or printout thereof.

ARTICLE VIII

MISCELLANEOUS

8.1       No Liability on Collateral . It is understood that Collateral Agent does not in any way assume any of Grantor’s obligations under any of the Collateral. Grantor hereby agrees to indemnify Collateral Agent against all liability arising in connection with or on account of any of the Collateral, except for any such liabilities arising on account of Collateral Agent’s negligence or willful misconduct.

8.2       No Waiver . Collateral Agent shall not be deemed to have waived any of its rights hereunder or under any other agreement, instrument or paper signed by Grantor unless such waiver is in writing and signed by Collateral Agent. No delay or omission on the part of Collateral Agent in exercising any right shall operate as a waiver of such right or any other right. A waiver on any one occasion shall not be construed as a bar to or waiver of any right or remedy on any future occasion.

8.3       Remedies Cumulative . All rights and remedies of Collateral Agent shall be cumulative and may be exercised singularly or concurrently, at their option, and the exercise or enforcement of any one such right or remedy shall not bar or be a condition to the exercise or enforcement of any other.

8.4       Governing Law . This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Minnesota, except to the extent that the perfection of the security interest hereunder, or the enforcement of any remedies hereunder, with respect to any particular Collateral shall be governed by the laws of a jurisdiction other than the State of Minnesota.

8.5       Expenses . Grantor agrees to pay the reasonable attorneys’ fees and legal expenses incurred by Collateral Agent in the exercise of any right or remedy available to it under this Agreement, whether or not suit is commenced, including, without limitation, attorneys’ fees and legal expenses incurred in connection with any appeal of a lower court’s order or judgment.

8.6       Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the successors and assigns of Grantor and Collateral Agent.

8.7       Recitals . The above Recitals are true and correct as of the date hereof and constitute a part of this Agreement.

8.8       Severability . Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement 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 Agreement.

8.9       Reinstatement . This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against Grantor for liquidation or reorganization, should Grantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations, whether as a “voidable preference”, “fraudulent conveyance”, or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

8.10       No Obligation to Pursue Others . Collateral Agent has no obligation to attempt to satisfy the Obligations by collecting them from any other person liable for them and Collateral Agent may release, modify or waive any Collateral provided by any other person to secure any of the Obligations, all without affecting Collateral Agent’s rights against Grantor. Grantor waives any right it may have to require Collateral Agent to pursue any third person for any of the Obligations.

8.11       Waiver of Jury Trial . GRANTOR HEREBY EXPRESSLY WAIVE(S) ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (a) UNDER THIS AGREEMENT 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 AGREEMENT, AND AGREE(S) THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

8.12       Collateral Agency Agreement . The provisions of the Collateral Agency Agreement by and among the Collateral Agent and the Lenders dated as of even date herewith are incorporated herein by reference as if fully set forth herein.

IN WITNESS WHEREOF, the Grantor has executed this Agreement as of the date and year first above written.

Grantor:

AIRCO 1, LLC , a Delaware limited liability company

By:                                                                      

Name: Chuck Kingsley

Its:       Vice President

COLLATERAL AGENT:

Acknowledged and Agreed as of the date and year first set forth above

MINNESOTA BANK & TRUST

By:                                                                       

Name:  Eric P. Gundersen

Its:       Senior Vice President

[Signature Page to Security Agreement]

EXHIBIT A

None.

EXHIBIT B

COMMERCIAL TORT CLAIMS

None.

Exhibit 10.5

COLLATERAL ASSIGNMENT OF PURCHASE AGREEMENT

This Collateral Assignment of Purchase Agreement (this “ Assignment ”), dated as of January 18, 2019, is made by AIRCO 1, LLC, a Delaware limited liability company (“ Borrower ”), in favor of Minnesota Bank & Trust , a Minnesota state banking corporation, in its capacity as collateral agent (in such capacity the “ Collateral Agent ”) for the benefit of itself and for the ratable benefit of the “Lenders” as hereinafter defined.

WITNESSETH :

WHEREAS, CONTRAIL AVIATION SUPPORT, LLC, a Wisconsin limited liability company (the “ Seller ”), and Borrower have entered into certain Purchase Agreement documents, to be dated on or about the date hereof (“ Airframe Purchase Agreement ”), and certain related transaction documents listed on Schedule I attached hereto (collectively, as the same may be amended, supplemented, amended and restated, renewed or otherwise modified, the “ Transaction Agreements ”), pursuant to which the Borrower will be purchasing from Seller a used Boeing 737-700 airframe bearing manufacturer serial number 30741 to be disassembled and sold as parts by the Borrower (the “ Airframe ”);

WHEREAS, pursuant to the Transaction Agreements, the Seller has made certain representations and warranties to, and covenants and agreements with, Borrower, including agreements by the Seller under certain circumstances to indemnify Borrower (collectively, the “ Representations, Warranties, Covenants and Indemnities ”);

WHEREAS, PARK STATE BANK, a Minnesota state banking corporation (“ PSB ”), MINNESOTA BANK & TRUST, a Minnesota state banking corporation (“ MBT ”; and together with PSB and their respective successors and assigns being sometimes collectively referred herein as the “ Lenders ” and individually as a “ Lender ”) and Borrower have entered into that certain Loan Agreement, dated on or about the date hereof (as the same may be amended, supplemented or otherwise modified from time to time, the “ Loan Agreement ”), and, pursuant to the Security Agreement, dated of even date with the Loan Agreement, executed by Borrower in favor of the Collateral Agent, Borrower has granted to the Collateral Agent security interests in and liens on Borrower’s assets for the benefit of itself and for the ratable benefit of the Lenders; and

WHEREAS, the Lenders have required, as a condition to its entering into the Loan Agreement, that Borrower collaterally assign to the Collateral Agent, as additional security for the repayment of the Obligations, all of its rights and remedies with respect to the Representations, Warranties, Covenants and Indemnities;

NOW, THEREFORE, in consideration of the premises set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower agrees as follows:

1.     Unless otherwise defined herein, all terms used herein shall have their defined meanings under the Loan Agreement.

2.     Borrower hereby collaterally assigns and transfers to the Collateral Agent for the benefit of itself and for the ratable benefit of the Lenders, as additional security for the repayment in full of the Obligations, all of its rights and remedies with respect to the Representations, Warranties, Covenants and Indemnities, and any payments due from the Seller to Borrower under or pursuant to the Airframe Purchase Agreement and the other Transaction Agreements.

3.     Until all the Obligations have been indefeasibly paid in full and the Loan Agreement has been terminated, Borrower hereby irrevocably authorizes and empowers the Collateral Agent or its agents, in the sole discretion of the Collateral Agent exercised in good faith after and during the continuance of an Event of Default, to: (a) assert, either directly or on behalf of Borrower, any claims Borrower may have, from time to time, against the Seller with respect to the Representations, Warranties, Covenants and Indemnities or with respect to any payments due from the Seller to Borrower under or pursuant to the Transaction Agreements, as the Collateral Agent may reasonably deem proper, and (b) to receive and collect any damages, awards and other monies resulting therefrom (“Damages”) and to apply the same on account of the Obligations in accordance with the terms of the Security Agreement. Until all the Obligations have been indefeasibly paid in full and the Loan Agreement has been terminated, Borrower hereby irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as their true and lawful attorney (and agent-in-fact) for the purpose of enabling the Collateral Agent or its agents, after the occurrence and during the continuance of an Event of Default, to assert and collect such claims and to apply such monies in the manner set forth hereinabove. The appointment of the Collateral Agent as attorney-in-fact is a power coupled with an interest. Collateral Agent shall have no liability for exercising or not exercising its rights hereunder. The rights of the Collateral Agent set forth in this Agreement shall be in addition to, and not in lieu of, any rights or obligations set forth in the Loan Agreement, the Security Agreement or any other Loan Document. All rights and remedies evidenced hereby, or evidenced or contemplated by the Loan Agreement, the Security Agreement or any other Loan Document shall be cumulative and may be exercised separately or concurrently in the sole discretion of the Collateral Agent. Notwithstanding the foregoing, Borrower shall have the right to assert claims against the Seller in connection with the Representations, Warranties, Covenants and Indemnities during every period of time in which no uncured or unwaived Event of Default exists, provided , that Borrower first gives the Collateral Agent written notice of its intention to assert any such claims where the amount at issue is in excess of $10,000 and then keeps the Collateral Agent informed of the status of any proceedings concerning such claims.

4.     Borrower shall keep the Collateral Agent informed of all material circumstances known to Borrower bearing upon the Representations, Warranties, Covenants and Indemnities, and Borrower shall not waive any of its material rights or material remedies under the Airframe Purchase Agreement or any other Transaction Agreements with respect to the Representations, Warranties, Covenants and Indemnities without the prior written consent of the Collateral Agent.

5.     All Net Damages in excess of $10,000 received by Borrower during the pendency of any Event of Default shall be paid over to Collateral Agent in the form received for application to the Obligations in such order as the Collateral Agent, in its sole discretion, may elect. “Net Damages” shall mean the Damages recovered by Borrower less reasonable costs of recovery including, without limitation, Borrower’s reasonable attorney’s fees and legal expenses.

6.     This Assignment shall continue in effect until the Obligations have been indefeasibly paid in full and the Loan Agreement has been terminated at which time this Assignment shall automatically terminate.

7.     At any time or from time to time, upon the Collateral Agent’s written request, Borrower will execute and deliver to the Collateral Agent such further documents and do such other acts and things as the Collateral Agent may reasonably request in order to effectuate the purposes of this Assignment including, without limitation, the filing or recording of this Assignment or any schedule, amendment or supplement hereto, or a financing or continuation statement with respect hereto in accordance with the laws of any applicable jurisdictions. Borrower hereby authorizes the Collateral Agent to effect any such filing or recording as aforesaid (including the filing of any such financing statements or amendments thereto without the signature of Borrower), and the Collateral Agent’s reasonable costs and expenses with respect thereto shall be part of the Obligations and shall be payable by Borrower on demand.

8.     Borrower hereby represents and warrants that, as of the date hereof: (i) the Airframe Purchase Agreement are in full force and effect and is enforceable by Borrower in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or similar laws at the time in effect affecting the enforceability of rights of creditors generally and by general equitable principles which may limit the right to obtain equitable remedies, (ii) to its knowledge, no default exists under the Airframe Purchase Agreement, (iii) Borrower has not assigned or pledged or otherwise encumbered the Airframe Purchase Agreement other than as contemplated hereby, (iv) Borrower has the requisite power, authority and legal right to assign its respective rights under the Airframe Purchase Agreement pursuant to this Assignment, (v) this Assignment has been duly authorized, executed and delivered by Borrower and constitutes a legal, valid and binding obligation of Borrower, enforceable by the Collateral Agent against Borrower in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or similar laws at the time in effect affecting the enforceability of rights of creditors generally and by general equitable principles which may limit the right to obtain equitable remedies, (vi) to its knowledge, no material consent of any other Person and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority, domestic or foreign, is required to be obtained by Borrower in connection with the execution, delivery or performance of this Assignment by Borrower except those that have been obtained, (vii) to its knowledge, the execution, delivery and performance of this Assignment will not violate any provision of any law, and (viii) the execution, delivery, and performance of this Assignment by Borrower will not violate any provision of any material contractual obligation to which Borrower is a party or upon any of its assets and will not result in the creation or imposition of any lien on any of the assets of Borrower except as contemplated by this Assignment and the other Loan Documents.

9.     Borrower: (i) will not assign, pledge or otherwise encumber any of its respective right, title or interest in, to or under the Airframe Purchase Agreement to anyone other than the Collateral Agent and its successors or assigns; (ii) will not, except with the prior written consent of the Collateral Agent, enter into any agreement amending, modifying, restating, renewing or supplementing the Airframe Purchase Agreement; in any manner which is, or could reasonably be expected to be, materially adverse to the rights of the Collateral Agent; (iii) will not, without the prior written consent of the Collateral Agent, consent or agree to any act or omission to act on the part of any party to the Airframe Purchase Agreement that, without such consent or agreement, would constitute a material default thereunder; (iv) will deliver to the Collateral Agent a copy of each demand, notice, communication or document (except those received in the ordinary course of business) delivered to it in any way relating to the Airframe Purchase Agreement; and (v) will not grant any material consents or waivers under the Airframe Purchase Agreement without receiving the prior written consent of the Collateral Agent.

10.     It is understood that the Collateral Agent does not in any way assume Borrower’s obligations under the Airframe Purchase Agreement. Borrower hereby agrees to indemnify Collateral Agent against all liability arising in connection with or on account of this Assignment (including, without limitation, any liability arising out of Collateral Agent’s enforcement of this Assignment), except for any such liabilities arising on account of Collateral Agent’s gross negligence or willful misconduct.

11.     Any provision of this Assignment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

12.      NONE OF THE TERMS OR PROVISIONS OF THIS ASSIGNMENT MAY BE WAIVED, ALTERED, MODIFIED OR AMENDED EXCEPT BY AN INSTRUMENT IN WRITING, DULY EXECUTED BY THE COLLATERAL AGENT AND Borrower. THIS ASSIGNMENT AND ALL THE RESPECTIVE OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE BINDING UPON THE SUCCESSORS AND ASSIGNS OF THE RESPECTIVE PARTIES AND SHALL, TOGETHER WITH THE RIGHTS AND REMEDIES OF EACH PARTY HEREUNDER, INURE TO THE BENEFIT OF SUCH PARTY AND ITS RESPECTIVE SUCCESSORS AND ASSIGNS. THIS ASSIGNMENT SHALL BE GOVERNED BY, AND BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF MINNESOTA.

13.      AS A SPECIFICALLY BARGAINED INDUCEMENT FOR THE COLLATERAL AGENT TO ENTER INTO THIS ASSIGNMENT AND FOR THE LENDERS TO EXTEND CREDIT TO THE BORROWER, Borrower AGREES THAT AT THE OPTION OF THE COLLATERAL AGENT, THIS ASSIGNMENT MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN MINNEAPOLIS OR ST. PAUL, MINNESOTA; AND 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 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 ASSIGNMENT, THE COLLATERAL AGENT 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.

14.     Any notice required, permitted or contemplated hereunder shall be in writing and addressed to the party to be notified at the address set forth below or at such other address as each party may designate for itself from time to time by notice hereunder, and shall be deemed validly given (i) three (3) days following deposit in the U.S. mails, with proper postage prepaid, or (ii) the next business day after such notice was delivered to a regularly scheduled overnight delivery carrier with delivery fees either prepaid or an arrangement, satisfactory with such carrier, made for the payment thereof, or (iii) upon receipt of notice given by telecopy or personal delivery:

To the Collateral Agent:

Minnesota Bank & Trust

9800 Bren Road East, Suite 200

Minnetonka, MN 554343

Attention: Mr. Eric P. Gundersen, SVP

With a copy to:

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

333 South Seventh Street, Suite 2600

Minneapolis, MN 55402

Attention: Frederick H. Ladner, Esq.

To Borrower:

Airco 1, LLC

5930 Balsom Ridge Road

Denver, North Carolina 28037

Attention: Candice Otey

Telecopy No: No fax number

With a copy to:

Winthrop & Weinstine, P.A.

225 S. 6 ^th Street

Minneapolis, MN 55402

Attention: David E. Moran

15.      AS A SPECIFICALLY BARGAINED INDUCEMENT FOR THE COLLATERAL AGENT TO ENTER INTO THIS ASSIGNMENT AND FOR THE LENDERS TO EXTEND CREDIT TO Borrower, Borrower AND THE COLLATERAL AGENT EACH WAIVES TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS ASSIGNMENT AND/OR THE CONDUCT OF THE RELATIONSHIP BETWEEN THE LENDERS, THE COLLATERAL AGENT AND Borrower.

16.      Counterparts . This Assignment may be executed in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same Assignment. Receipt by telecopy, pdf file or other electronic means of any executed signature page to this Assignment shall constitute effective delivery of such signature page.

[signature pages follow]

IN WITNESS WHEREOF, this Assignment has been duly executed on the date first above written.

[Signature Page to Collateral Assignment of Purchase Agreement]

Accepted as of January 18, 2019:

COLLATERAL AGENT:

[Signature Page to Collateral Assignment of Purchase Agreement]

SCHEDULE I

to

Collateral Assignment of Purchase Agreements

Transaction Agreements

Exhibit 10.6

ASSIGNMENT AND AGREEMENT REGARDING DISASSEMBLY CONTRACT

THIS ASSIGNMENT AND AGREEMENT is made and executed to be effective as of January 18, 2019 by and among Jet Yard , LLC, an Arizona limited liability company ("Contractor"), AIRCO 1, LLC, a Delaware limited liability company ("Borrower") and Minnesota Bank & Trust, a Minnesota state banking corporation, in its capacity as collateral agent (in such capacity the “Collateral Agent”) for the benefit of itself and for the ratable benefit of the “Lenders” as hereinafter defined.

WITNESSETH:

WHEREAS, PARK STATE BANK, a Minnesota state banking corporation (“PSB”), MINNESOTA BANK & TRUST, a Minnesota state banking corporation (“MBT”; and together with PSB and their respective successors and assigns being sometimes collectively referred herein as the “Lenders” and individually as a “Lender”) and Borrower have entered into a Loan Agreement dated as the date hereof (as amended, modified, replaced or restated from time to time, the "Loan Agreement"; capitalized terms not otherwise defined herein being used herein as therein defined) pursuant to which Lenders have severally agreed to make a term loan (the “Loan”) to Borrower in the aggregate amount of up to TWO MILLION FIVE HUNDRED THOUSAND AND NO/100THS DOLLARS ($2,500,000) to finance the acquisition of a used Boeing 737-700 airframe bearing manufacturer serial number 30741 to be disassembled and sold as parts by the Borrower (the “Airframe”); and

WHEREAS, in accordance with the Loan Agreement, Borrower delivered to PSB a Term Note in the amount of $2,100,000 and to MBT a Term Note in the amount of $400,000 (collectively, the "Notes"), which are secured by, among other instruments, a Security Agreement dated of even date hereof (the "Security Agreement"), pursuant to which Borrower has granted a security interest in all of its now owned and hereafter acquired personal property to the Collateral Agent, for the benefit of itself and for the ratable benefit of the Lenders; and

WHEREAS, Contractor and Borrower entered into that certain Disassembly Contract, dated on or about January 18, 2019 (the "Disassembly Contract"), pursuant to which Contractor agreed to disassemble the Airframes and prepare the constituent Airframe parts (the “Parts”) for sale on behalf of the Borrower.

WHEREAS, a true, correct and complete copy of the Disassembly Contract is attached hereto as Exhibits A ; and

WHEREAS, Lenders will not advance funds pursuant to the Loan Agreement unless this Assignment and Agreement is executed; and

WHEREAS, Contractor and Borrower each desire to execute this Assignment and Agreement, in accordance with the terms and provisions hereof, in order to induce Lenders to advance funds pursuant to the Loan Agreement.

NOW, THEREFORE, in consideration of the foregoing and of the mutual promises contained herein, and for the additional consideration of Ten and No/100ths Dollars ($10.00), the receipt and sufficiency of which are hereby acknowledged by Contractor and Borrower, the parties hereto hereby agree as follows:

1.      Borrower hereby assigns its rights and interests in, under and pursuant to the Disassembly Contract to Collateral Agent as security for Borrower's obligations to Lenders and the Collateral Agent pursuant to the Loan Agreement, the Note and the Security Agreement.

2.      If an Event of Default does occur under the Loan Agreement and is continuing, then Collateral Agent may, at its option, by written notice to Contractor, take over Borrower's position as “Customer” under the Disassembly Contract. In such event, Collateral Agent shall have all of the rights of Borrower under the Disassembly Contract, and Contractor shall continue to perform under the terms of the Disassembly Contract on behalf of Collateral Agent, and shall complete the disassembly and other work as provided in the Disassembly Contract, as if Collateral Agent were originally a party thereto as Customer.

3.      Collateral Agent's taking over of Borrower's position as Customer under the Disassembly Contract shall be preceded by at least three (3) Business Days' (as that term is defined in the Loan Agreement) prior written notice to Contractor. Notwithstanding anything in the Disassembly Contract to the contrary, in no event shall Collateral Agent have any obligation to perform any of Borrower's obligations under the Disassembly Contract unless and until Collateral Agent delivers such notice to Contractor.

4.      Borrower and Contractor shall not cause the Disassembly Contract to be modified or amended, and Borrower shall not waive any of its rights under the Disassembly Contract without, in either case, the prior written consent of Collateral Agent. Contractor shall not terminate, or accept termination of, the Disassembly Contract without giving at least thirty (30) days' prior written notice to Collateral Agent. Collateral Agent, upon receipt of such notice, shall have the right, but not the obligation, at its option, to cure the grounds asserted by Contractor for termination of the Disassembly Contract. The Disassembly Contract shall not be terminated by Contractor while Collateral Agent is promptly, diligently and actively prosecuting such a cure, provided that Contractor shall not be obligated to continue to perform work under the Disassembly Contract during the cure period unless Collateral Agent has agreed to pay for such performance. Borrower shall not terminate, or accept termination of, the Disassembly Contract without Collateral Agent's prior written consent.

5.      In the event Collateral Agent does take over Borrower's position as Customer under the Disassembly Contract, all payments to be made thereunder shall be subject to all of the requirements and prerequisites to advances and disbursements, if any, set forth in the Loan Agreement of even date therewith referred to therein.

6.      In addition, Borrower hereby grants to Collateral Agent a security interest in Borrower's right, title and interests in, to and under the Disassembly Contract, if and to the extent that a security interest may be granted therein under the Minnesota Uniform Commercial Code, and Borrower acknowledges that Collateral Agent shall have all of the rights and remedies with respect thereto provided for by the Minnesota Uniform Commercial Code, in addition to the other rights and remedies herein granted to Collateral Agent, in the event of the occurrence of an event of default under the Loan Agreement.

7.      In consideration of the Lenders’ making the Loan to Borrower, Contractor hereby grants to Collateral Agent a security interest, for the benefit of itself and for the ratable benefit of the Lenders, in Contractor's right, title and interests in, to and under any and all subcontracts, purchase orders and other agreements now or hereafter executed by Contractor and related to the Parts, and Contractor acknowledges that Collateral Agent shall have all of the rights and remedies with respect thereto provided for by the Minnesota Uniform Commercial Code, in addition to the other rights and remedies herein granted to Collateral Agent, in the event of the occurrence of an event of default under the Loan Agreement.

8.      Subject to the provisions hereof, this Assignment and Agreement shall be binding upon Borrower, Contractor and their successors and assigns, and shall inure to the benefit of Collateral Agent, its successors and assigns. Collateral Agent may assign its rights under this Assignment and Agreement, without the consent of Contractor or Borrower, but neither Contractor nor Borrower may assign its obligations under the Disassembly Contract or under this Assignment and Agreement without the prior written consent of Collateral Agent.

9.      Any notice required or permitted to be given by any party hereto to any other party thereto under the terms of this Assignment and Agreement shall be deemed to have been given on the date the same is deposited in the United States mail, registered or certified, return receipt requested, postage prepaid, addressed to the party to which the notice is to be given at the following address for it:

or to such other address as any such party may specify for itself in a written notice given by such party to the other parties hereto not less than ten (10) days prior to the effective date of said address change.

10.      This Assignment and Agreement may be executed in as many counterparts as may be deemed necessary or convenient, and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same instrument. Delivery of a counterpart hereof, or a signature page hereto, by facsimile or in a .pdf or similar file shall be effective as delivery of a manually executed original counterpart thereof.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of the day and year first above written.

[Signature Page to Assignment and Agreement]

EXHIBIT A

DISASSEMBLY CONTRACT

[see attached]

Exhibit 10.7

ASSIGNMENT AND AGREEMENT REGARDING CONSIGNMENT AGREEMENT

THIS ASSIGNMENT AND AGREEMENT is made and executed to be effective as of January 18, 2019 by and among Airco , LLC, a North Carolina limited liability company ("Consignee"), AIRCO 1, LLC, a Delaware limited liability company ("Borrower") and Minnesota Bank & Trust, a Minnesota state banking corporation, in its capacity as collateral agent (in such capacity the “Collateral Agent”) for the benefit of itself and for the ratable benefit of the “Lenders” as hereinafter defined.

WITNESSETH:

WHEREAS, PARK STATE BANK, a Minnesota state banking corporation (“PSB”), MINNESOTA BANK & TRUST, a Minnesota state banking corporation (“MBT”; and together with PSB and their respective successors and assigns being sometimes collectively referred herein as the “Lenders” and individually as a “Lender”) and Borrower have entered into a Loan Agreement dated as the date hereof (as amended, modified, replaced or restated from time to time, the "Loan Agreement"; capitalized terms not otherwise defined herein being used herein as therein defined) pursuant to which Lenders have severally agreed to make a term loan (the “Loan”) to Borrower in the aggregate amount of up to TWO MILLION FIVE HUNDRED THOUSAND AND NO/100THS DOLLARS ($2,500,000) to finance the acquisition of a used Boeing 737-700 airframe bearing manufacturer serial number 30741 to be disassembled and sold as parts by the Borrower (the “Airframe”); and

WHEREAS, in accordance with the Loan Agreement, Borrower delivered to PSB a Term Note in the amount of $2,100,000 and to MBT a Term Note in the amount of $400,000 (collectively, the "Notes"), which are secured by, among other instruments, a Security Agreement dated of even date hereof (the "Security Agreement"), pursuant to which Borrower has granted a security interest in all of its now owned and hereafter acquired personal property to the Collateral Agent, for the benefit of itself and for the ratable benefit of the Lenders; and

WHEREAS, Consignee and Borrower entered into that certain Consignment Agreement, dated as of January 2, 2019 (the "Consignment Agreement"), pursuant to which Consignee agreed to warehouse, overhaul, recertify and sell certain aircraft parts from the Airframe (the “Parts”) on behalf of the Borrower.

WHEREAS, a true, correct and complete copy of the Consignment Agreement is attached hereto as Exhibit A ; and

WHEREAS, Lenders will not advance funds pursuant to the Loan Agreement unless this Assignment and Agreement is executed; and

WHEREAS, Consignee and Borrower each desire to execute this Assignment and Agreement, in accordance with the terms and provisions hereof, in order to induce Lenders to advance funds pursuant to the Loan Agreement.

NOW, THEREFORE, in consideration of the foregoing and of the mutual promises contained herein, and for the additional consideration of Ten and No/100ths Dollars ($10.00), the receipt and sufficiency of which are hereby acknowledged by Consignee and Borrower, the parties hereto hereby agree as follows:

1.      Borrower hereby assigns its rights and interests in, under and pursuant to the Consignment Agreement to Collateral Agent as security for Borrower's obligations to Lenders and the Collateral Agent pursuant to the Loan Agreement, the Note and the Security Agreement.

2.      If an Event of Default does occur under the Loan Agreement and is continuing, then Collateral Agent may, at its option, by written notice to Consignee, take over Borrower's position as “Consignor” under the Consignment Agreement. In such event, Collateral Agent shall have all of the rights of Borrower under the Consignment Agreement, and Consignee shall continue to perform under the terms of the Consignment Agreement on behalf of Collateral Agent, and shall continue to warehouse, overhaul, recertify and sell the Parts as provided in the Consignment Agreement, as if Collateral Agent were originally a party thereto as Consignor.

3.      Collateral Agent's taking over of Borrower's position as Consignor under the Consignment Agreement shall be preceded by at least three (3) Business Days' (as that term is defined in the Loan Agreement) prior written notice to Consignee. Notwithstanding anything in the Consignment Agreement to the contrary, in no event shall Collateral Agent have any obligation to perform any of Borrower's obligations under the Consignment Agreement unless and until Collateral Agent delivers such notice to Consignee.

4.      Borrower and Consignee shall not cause the Consignment Agreement to be modified or amended, and Borrower shall not waive any of its rights under the Consignment Agreement without, in either case, the prior written consent of Collateral Agent. Consignee shall not terminate, or accept termination of, the Consignment Agreement without giving at least thirty (30) days' prior written notice to Collateral Agent. Collateral Agent, upon receipt of such notice, shall have the right, but not the obligation, at its option, to cure the grounds asserted by Consignee for termination of the Consignment Agreement. The Consignment Agreement shall not be terminated by Consignee while Collateral Agent is promptly, diligently and actively prosecuting such a cure, provided that Consignee shall not be obligated to continue to perform work under the Consignment Agreement during the cure period unless Collateral Agent has agreed to pay for such performance. Borrower shall not terminate, or accept termination of, the Consignment Agreement without Collateral Agent's prior written consent.

5.      In the event Collateral Agent does take over Borrower's position as Consignor under the Consignment Agreement, all payments to be made thereunder shall be subject to all of the requirements and prerequisites to advances and disbursements, if any, set forth in the Loan Agreement of even date therewith referred to therein.

6.      In addition, Borrower hereby grants to Collateral Agent a security interest in Borrower's right, title and interests in, to and under the Consignment Agreement, if and to the extent that a security interest may be granted therein under the Minnesota Uniform Commercial Code, and Borrower acknowledges that Collateral Agent shall have all of the rights and remedies with respect thereto provided for by the Minnesota Uniform Commercial Code, in addition to the other rights and remedies herein granted to Collateral Agent, in the event of the occurrence of an event of default under the Loan Agreement.

7.      In consideration of the Lenders’ making the Loan to Borrower, Consignee hereby grants to Collateral Agent a security interest, for the benefit of itself and for the ratable benefit of the Lenders, in Consignee's right, title and interests in, to and under any and all subcontracts, purchase orders and other agreements now or hereafter executed by Consignee and related to the Parts, and Consignee acknowledges that Collateral Agent shall have all of the rights and remedies with respect thereto provided for by the Minnesota Uniform Commercial Code, in addition to the other rights and remedies herein granted to Collateral Agent, in the event of the occurrence of an event of default under the Loan Agreement.

8.      Subject to the provisions hereof, this Assignment and Agreement shall be binding upon Borrower, Consignee and their successors and assigns, and shall inure to the benefit of Collateral Agent, its successors and assigns. Collateral Agent may assign its rights under this Assignment and Agreement, without the consent of Consignee or Borrower, but neither Consignee nor Borrower may assign its obligations under the Consignment Agreement or under this Assignment and Agreement without the prior written consent of Collateral Agent.

9.      Any notice required or permitted to be given by any party hereto to any other party thereto under the terms of this Assignment and Agreement shall be deemed to have been given on the date the same is deposited in the United States mail, registered or certified, return receipt requested, postage prepaid, addressed to the party to which the notice is to be given at the following address for it:

or to such other address as any such party may specify for itself in a written notice given by such party to the other parties hereto not less than ten (10) days prior to the effective date of said address change.

10.      This Assignment and Agreement may be executed in as many counterparts as may be deemed necessary or convenient, and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same instrument. Delivery of a counterpart hereof, or a signature page hereto, by facsimile or in a .pdf or similar file shall be effective as delivery of a manually executed original counterpart thereof.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of the day and year first above written.

[Signature Page to Assignment and Agreement]

EXHIBIT A

CONSIGNMENT AGREEMENT

[see attached]