[BANK OF AMERICA]

LOAN AGREEMENT

This Agreement dated as of September 18, 2007, is among Bank of America, N.A.
(the "Bank"), Air T, Inc.; Csa Air, Inc.; Mountain Air Cargo, Inc.; MAC Aviation
Services LLC; Global Ground Support, LLC and Global Aviation Services, LLC; are
sometimes referred to collectively as the "Borrowers" and individually as the
“Borrower”).

1.           DEFINITIONS

In addition to the terms which are defined elsewhere in this Agreement, the
following terms have the meanings indicated for the purposes of this Agreement:

1.1           "Borrowing Base" means the sum of:

(a)           85% of the Prime Government Receivables; and

(b)           85% Commercial Receivables; and

(c)
50% of the Unbilled Receivables; and

(d)
The lesser of Two Million Five Hundred Thousand and 00/100 Dollars
($2,500,000.00) or a percentage of the value of Eligible Inventory calculated by
adding together:

 
(i)
50% of the value of Eligible Inventory consisting of raw materials; and

 
(ii)
40% of the value of Eligible Inventory consisting of finished goods.

(e)
less the amount of the letters of credit outstanding at any one time (including
the drawn and unreimbursed amounts of the letters of credit).

In determining the value of Eligible Inventory to be included in the Borrowing
Base, the Bank will use the lowest of (i) the Borrower's cost, (ii) the
Borrower's estimated market value, or (iii) the Bank's independent determination
of the resale value of such inventory in such quantities and on such terms as
the Bank deems appropriate.

After calculating the Borrowing Base as provided above, the Bank may deduct such
reserves as the Bank may establish from time to time in its reasonable credit
judgment, including, without limitation, reserves for rent at leased locations
subject to statutory or contractual landlord’s liens, inventory shrinkage,
dilution, customs charges, warehousemen’s or bailees’ charges, liabilities to
growers of agricultural products which are entitled to lien rights under the
federal Perishable Agricultural Commodities Act or any applicable state law, and
the amount of estimated maximum exposure, as determined by the Bank from time to
time, under any interest rate contracts which the Borrower enters into with the
Bank (including interest rate swaps, caps, floors, options thereon, combinations
thereof, or similar contracts).  In addition to the foregoing, the Bank may
deduct from the Borrowing Base two (2) times the monthly rent/lease payment for
the leased property located at 540 East 56 Highway, Olathe, Kansas, if the
principal amount outstanding under the Facility No. 1 commitment exceeds 70% of
the Borrowing Base for any ninety (90) day period.

1.2  
"Borrowing Base Certificate" means a report in the format shown as Exhibit A,
calculated by the Borrower and setting forth the Borrowing Base on which the
requested extension of credit is to be based.

1.3  
"Credit Limit" means the amount of Seven Million and 00/100 Dollars
($7,000,000.00).

1.4  
"Eligible Inventory" means inventory which satisfies the following requirements:

(a)           The inventory is owned by the Borrower free of any title defects
or any liens or interests of others except thesecurity interest in favor of the
Bank.  This does not prohibit any statutory liens which may exist in favor of
thegrowers of agricultural products which are purchased by the Borrower.

(b)
The inventory is located at locations which the Borrower has disclosed to the
Bank and which are acceptable to the Bank.  If the inventory is covered by a
negotiable document of title (such as a warehouse receipt) that document must be
delivered to the Bank.  Inventory which is in transit is not acceptable unless
it is covered by a commercial letter of credit issued by the Bank, the seller of
the inventory is required to present shipping or title documents to the Bank as
a condition to obtaining payment, and the final destination of such inventory is
a location acceptable to the Bank.

(c)
The inventory is held for sale or use in the ordinary course of the Borrower's
business and is of good and merchantable quality.  Display items,
work-in-process, parts, samples, and packing and shipping materials are not
acceptable.  Inventory which is obsolete, unsalable, damaged, defective, used,
discontinued or slow-moving, or which has been returned by the buyer, is not
acceptable.

(d)
The inventory is covered by insurance as required in the "Covenants" section of
this Agreement.

(e)
The inventory has not been manufactured to the specifications of a particular
account debtor.

(f)
The inventory is not subject to any licensing agreements which would prohibit or
restrict in any way the ability of the Bank to sell the inventory to third
parties.

(g)
The inventory has been produced in compliance with the requirements of the U.S.
Fair Labor Standards Act (29 U.S.C. §§201 et seq.).

(h)
The inventory is not placed on consignment.

(i)           The inventory is otherwise acceptable to the Bank.

1.6           "Eligible Receivables" means an account receivable that satisfies
the following requirements:

(a)
The account is based upon an enforceable order or contract, written or oral, for
inventory shipped or for services performed and the same were shipped or
performed by the Borrower in accordance with such order or contract and in the
ordinary course of the Borrower's business and without any further obligation on
the part of the Borrower to service, repair, or maintain any such goods sold and
does not relate to any warranty claim or obligation.

(b)
There are no conditions which must be satisfied before the Borrower is entitled
to receive payment of the account.  Accounts arising from COD sales,
consignments, bill and hold sales, sale or return, guaranteed sales or on the
basis of any other understanding are not acceptable.

(c)
The debtor upon the account does not claim any present or contingent (and no
fact exists which is the basis for any future) claim, deduction or dispute or
defense in law or equity to payment of the account.

(d)
The account balance does not include the amount of any counterclaims, offsets,
claims for credits, allowances, or adjustments because of returned, inferior, or
damaged inventory or unsatisfactory services, or for any other reason including,
without limitation, those arising on account of a breach of any express or
implied representation or warranty 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).  To the extent any counterclaims,
offsets, or contra accounts exist in favor of the account debtor, such amounts
shall be deducted from the account balance.

(e)
Except for Unbilled Receivables, the account is evidenced by an invoice or other
documentation in form acceptable to the Bank, dated no later than the date of
shipment or performance and containing only terms normally offered by the
Borrower.

(f)
The amount shown on the books of the Borrower and on any invoice, certificate,
schedule or statement delivered to the Bank is owing to such Borrower and no
partial payment has been received unless reflected with that delivery.

(g)
The account represents a genuine obligation of the account debtor for goods sold
to and accepted by the account debtor, or for services performed for and
accepted by the account debtor.  To the extent any credit balances exist in
favor of the account debtor, such credit balances represent customary credits,
adjustments and/or discounts given to an account debtor by the Borrower in the
ordinary course of its business and shall be deducted from the account balance.

(h)
The account balance does not arise from services under or related to any
warranty obligation of the Borrower or out of any finance charges, services
charges or other fees for the time value of money, payable by the account
debtor.  To the extent any such charges are included, such amounts shall be
deducted from the account balance.

(i)
With respect to Commercial Receivables only, the Borrower is not prohibited by
the laws of the state where the account debtor is located from bringing an
action in the courts of that state to enforce the account debtor's obligation to
pay the account.  The Borrower has taken all appropriate actions to ensure
access to the courts of the state where the account debtor is located,
including, where necessary, the filing of a Notice of Business Activities Report
or other similar filing with the applicable state agency or the qualification by
the Borrower as a foreign corporation authorized to transact business in such
state.

(j)
The account is owned by the Borrower free of any title defects or any liens or
interests of others except the security interest in favor of the Bank.  The
Borrower has the full and unqualified right and power to assign and grant a
security interest in, and lien on, the account to the Bank as security and
collateral for the payment of the obligations under this Agreement, which lien
is perfected as to the account by the filing of financing statements and which
lien upon such filing constitutes a first priority security interest and lien.

(k)           The account debtor upon the account is not any of the following:

 
(i)
An employee, affiliate, parent or subsidiary of the Borrower, or an entity which
has common officers or directors with the Borrower.

(ii)  
Any person or entity located, incorporated or primarily conducting business in a
foreign country.

(iii)  
The U.S. government or any agency or department of the U.S. government unless
the Bank agrees in writing to accept the obligation, the Borrower complies with
the procedures in the Federal Assignment of Claims Act of 1940 (41 U.S.C. § 15)
with respect to the obligation, and the underlying contract expressly provides
that neither the U.S. government nor any agency or department thereof shall have
the right of set-off against the Borrower.

(l)           The account is not in default.  An account will be considered in
default if any of the following occur:

(m)           the account is not paid within sixty (60) days from its due date;

(ii)           the account debtor obligated upon the account suspends business,
makes a general assignment for the benefit of creditors, fails to pay its debts
generally as they come due, or any petition is filed by or against the account
debtor obligated upon the account under any bankruptcy law or any other law or
laws for the relief of debtors in the United States, any state or territory
thereof, or any foreign jurisdiction;

(iii)           there is an appointment of a receiver or trustee for the account
debtor or for any of the assets of the account debtor, including, without
limitation, the appointment of or taking possession by a “custodian,” as defined
in the Federal Bankruptcy Code;

(iv)           the initiation by or against the account debtor of any other type
of any formal or informal proceeding for the insolvency, dissolution or
liquidation of, settlement of claims against, or winding up of affairs of, the
account debtor;

(v)           the death or judicial declaration of incompetency of an account
debtor who is an individual;

(vi)           the sale, assignment, or transfer of all or any material part of
the assets of the account debtor.

(n)           The account is not owing by any account debtor for which the Bank
has deemed fifty percent (50%) or more of such account debtor's other accounts
(or any portion thereof) due to the Borrower, to be non-Eligible Receivables.

(o)
The account does not arise from the sale of goods which remain in the Borrower's
possession or under the Borrower's control.

(p)
The account is not evidenced by a promissory note or chattel paper, is not
secured by any letter of credit nor is the account debtor obligated to the
Borrower under any other obligation which is evidenced by a promissory note.

(q)
No bond or other undertaking by a guarantor or surety has been or is required to
be obtained, supporting the performance of the Borrower or any other Obligor in
respect of the Borrower’s agreements with the account debtor.

(r)
The account is not subject to a restriction that forbids or makes void or
unenforceable the assignment or grant of a security interest by the Borrower to
the Bank, unless the Borrower has obtained any necessary consents.

(s)
No part of the account represents a final billing or a retainage.

(t)
The Bank in the good faith exercise of its sole and absolute discretion has not
deemed the account ineligible because of uncertainty as to the creditworthiness
of the account debtor or because the Bank otherwise considers the collateral
value of such account to the Bank to be impaired or its ability to realize such
value to be insecure.

(u)
The account is otherwise acceptable to the Bank.

In addition to the foregoing limitations, the dollar amount of accounts included
as Eligible Receivables which are the obligations of a single account debtor
(excluding accounts from any governmental authority) shall not exceed the
concentration limit established for that account debtor.  To the extent the
total of such accounts exceeds an account debtor's concentration limit, the
amount of any such excess shall be excluded.  The concentration limit for each
account debtor shall be equal to twenty-five percent (25%) of the total amount
of the Borrower's Eligible Receivables at that time.

It is provided, however, that if the account debtor obligated upon an account is
one of the account debtors listed below, the concentration limit applicable to
each such account debtor will be increased to the percentage set forth below:

Account Debtor                                           Concentration Limit
Federal Express                                                      40%
United States Air Force                                        40%

1.7           "Unbilled Receivables" means Eligible Receivables, notwithstanding
their unbilled status which have resulted from unbilled costs actually incurred
and arising out of work actually performed during the last week of the most
previous month by the Borrower under written contracts with Federal Express
which (i) have been accepted by Federal Express and (ii) are properly billable
to Federal Express in accordance with the applicable contract.

1.8           "Prime Government Receivables" means Eligible Receivables which
have resulted from an amount due and owing directly from the U.S. Government or
any department or agency thereof.

1.9           "Commercial Receivables" means Eligible Receivables other than
Prime Government Receivables, Sub Contractor or Other Government Receivables, or
Unbilled Receivables which have resulted from an amount due owing from account
debtors.

2.           FACILITY NO. 1: LINE OF CREDIT AMOUNT AND TERMS

2.1           Line of Credit Amount.

(a)
During the availability period described below, the Bank will provide a line of
credit to the Borrowers.  The amount of the line of credit (the "Facility No. 1
Commitment") is equal to the lesser of (i) the Credit Limit or (ii) the
Borrowing Base.

(b)
This is a revolving line of credit.  During the availability period, the
Borrowers may repay principal amounts and reborrow them.

 (c)
The Borrowers agree not to permit the principal balance outstanding to exceed
the Facility No. 1 Commitment.  If the Borrowers exceed this limit, the
Borrowers will immediately pay the excess to the Bank upon the Bank's demand.

2.2           Availability Period.  The line of credit is available between the
date of this Agreement and August 31, 2009, or such earlier date as the
availability may terminate as provided in this Agreement (the "Facility No. 1
Expiration Date").

The availability period for this line of credit will be considered renewed if
and only if the Bank has sent to the Borrowers a written notice of renewal
effective as of the Facility No. 1 Expiration Date for the line of credit (the
“Renewal Notice”).  If this line of credit is renewed, it will continue to be
subject to all the terms and conditions set forth in this Agreement except as
modified by the Renewal Notice.  The Borrower specifically understands and
agrees that the interest rate applicable to this line of credit may be increased
upon renewal and that the new interest rate will apply to the entire outstanding
principal balance of the line of credit.  If this line of credit is renewed, the
term “Expiration Date” shall mean the date set forth in the Renewal Notice as
the Expiration Date and the same process for renewal will apply to any
subsequent renewal of this line of credit.  A renewal fee may be charged at the
Bank’s option.  If so, the amount will be specified in the Renewal Notice.

2.3           Repayment Terms.

(a)
The Borrowers will pay interest on September 30, 2007, and then on the same day
of each month thereafter until payment in full of any principal outstanding
under this facility.

(b)
The Borrowers will repay in full any principal, interest or other charges
outstanding under this facility no later than the Facility No. 1 Expiration
Date.

2.4           Interest Rate.

(a)
The interest rate is a rate per year equal to the BBA LIBOR Daily Floating plus
1.37 percentage point(s).

(b)
The BBA LIBOR Daily Floating Rate is a fluctuating rate of interest equal to the
rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as selected by the Bank from time to time as
determined for each banking day at approximately 11:00 a.m. London time two (2)
London Banking Days prior to the date in question, for U.S. Dollar deposits (for
delivery on the first day of such interest period) with a one month term, as
adjusted from time to time in the Bank’s sole discretion for reserve
requirements, deposit insurance assessment rates and other regulatory costs.  If
such rate is not available at such time for any reason, then the rate for that
interest period will be determined by such alternate method as reasonably
selected by the Bank.  A "London Banking Day" is a day on which banks in London
are open for business and dealing in offshore dollars.

3.           COLLATERAL

3.1           Personal Property.  The personal property listed below now owned
or owned in the future by the parties listed below will secure the Borrowers’
obligations to the Bank under this Agreement.  The collateral is further defined
in security agreement(s) executed by the owners of the collateral.  In addition,
all personal property collateral owned by any of the Borrowers securing this
Agreement shall also secure all other present and future obligations of any of
the Borrowers to the Bank (excluding any consumer credit covered by the federal
Truth in Lending law, unless the Borrowers have otherwise agreed in writing or
received written notice thereof).  All personal property collateral securing any
other present or future obligations of any of the Borrowers to the Bank shall
also secure this Agreement.

(a)
Equipment owned by the Borrowers.

(b)
Inventory owned by the Borrowers.

(c)
Receivables owned by the Borrowers.

(d)
Transport equipment including aircraft and vehicles.

4.           FEES AND EXPENSES

4.1           Fees.

(a)
Waiver Fee.  If the Bank, at its discretion, agrees to waive or amend any terms
of this Agreement, the Borrowers will, at the Bank's option, pay the Bank a fee
for each waiver or amendment in an amount advised by the Bank at the time the
Borrowers request the waiver or amendment.  Nothing in this paragraph shall
imply that the Bank is obligated to agree to any waiver or amendment requested
by the Borrowers.  The Bank may impose additional requirements as a condition to
any waiver or amendment.

(b)
Late Fee.  To the extent permitted by law, the Borrowers agree to pay a late fee
in an amount not to exceed four percent (4%) of any payment that is more than
fifteen (15) days late.  The imposition and payment of a late fee shall not
constitute a waiver of the Bank’s rights with respect to the default.

4.2           Expenses.  The Borrowers agree to immediately repay the Bank for
expenses that include, but are not limited to, filing, recording and search
fees, appraisal fees, title report fees, and documentation fees.

4.3           Reimbursement Costs.

(a)
The Borrowers agree to reimburse the Bank for any expenses it incurs in the
preparation of this Agreement and any agreement or instrument required by this
Agreement.  Expenses include, but are not limited to, reasonable attorneys'
fees, including any allocated costs of the Bank's in-house counsel to the extent
permitted by applicable law.

(b)
The Borrower agrees to reimburse the Bank for the cost of periodic field
examinations of the Borrower's books, records and collateral, and appraisals of
the collateral, at such intervals as the Bank may reasonably require.  The
actions described in this paragraph may be performed by employees of the Bank or
by independent appraisers.

5.           DISBURSEMENTS, PAYMENTS AND COSTS

5.1           Disbursements and Payments.

(a)
Each payment by the Borrowers will be made in U.S. Dollars and immediately
available funds by direct debit to a deposit account as specified below or, for
payments not required to be made by direct debit, by mail to the address shown
on the Borrowers' statement or at one of the Bank’s banking centers in the
United States.

(b)
Each disbursement by the Bank and each payment by the Borrowers will be
evidenced by records kept by the Bank.  In addition, the Bank may, at its
discretion, require the Borrowers to sign one or more promissory notes.

5.2           Requests for Credit; Equal Access by all Borrowers.  If there is
more than one Borrower, any Borrower (or a person or persons authorized by any
one of the Borrowers), acting alone, can borrow up to the full amount of credit
provided under this Agreement.  Each Borrower will be liable for all extensions
of credit made under this Agreement to any other Borrower.

5.3           Telephone and Telefax Authorization.

(a)
The Bank may honor telephone or telefax instructions for advances or repayments
given, or purported to be given, by any one of the individuals authorized to
sign loan agreements on behalf of any of the Borrowers, or any other individual
designated by any one of such authorized signers.

(b)
Advances will be deposited in and repayments will be withdrawn from account
number NC-000510028053 owned by the Borrowers or such other of the Borrowers'
accounts with the Bank as designated in writing by the Borrowers.

(c)
The Borrowers will indemnify and hold the Bank harmless from all liability,
loss, and costs in connection with any act resulting from telephone or telefax
instructions the Bank reasonably believes are made by any individual authorized
by the Borrowers to give such instructions.  This paragraph will survive this
Agreement's termination, and will benefit the Bank and its officers, employees,
and agents.

5.4           Direct Debit.

(a)
The Borrowers agree that interest and principal payments and any fees will be
deducted automatically on the due date from account number NC-000510028053 owned
by the Borrowers or such other of the Borrowers' accounts with the Bank as
designated in writing by the Borrowers.

(b)
The Borrowers will maintain sufficient funds in the account on the dates the
Bank enters debits authorized by this Agreement.  If there are insufficient
funds in the account on the date the Bank enters any debit authorized by this
Agreement, the Bank may reverse the debit.

(c)
The Borrowers may terminate this direct debit arrangement at any time by sending
written notice to the Bank at the address specified at the end of this
Agreement.  If the Borrowers terminate this arrangement, then the principal
amount outstanding under this Agreement will at the option of the Bank bear
interest at a rate per annum which is 0.5 percentage point(s) higher than the
rate of interest otherwise provided under this Agreement.

5.5           Banking Days.  Unless otherwise provided in this Agreement, a
banking day is a day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close, or are in fact closed, in the state
where the Bank's lending office is located, and, if such day relates to amounts
bearing interest at an offshore rate (if any), means any such day on which
dealings in dollar deposits are conducted among banks in the offshore dollar
interbank market.  All payments and disbursements which would be due on a day
which is not a banking day will be due on the next banking day.  All payments
received on a day which is not a banking day will be applied to the credit on
the next banking day.

5.6           Interest Calculation.  Except as otherwise stated in this
Agreement, all interest and fees, if any, will be computed on the basis of a
360-day year and the actual number of days elapsed.  This results in more
interest or a higher fee than if a 365-day year is used.  Installments of
principal which are not paid when due under this Agreement shall continue to
bear interest until paid.

5.7           Default Rate.  Upon the occurrence of any default or after
maturity or after judgement has been rendered on any obligation under this
Agreement, all amounts outstanding under this Agreement, including any interest,
fees, or costs which are not paid when due, will at the option of the Bank bear
interest at a rate which is 6.0 percentage point(s) higher than the rate of
interest otherwise provided under this Agreement.  This may result in
compounding of interest.  This will not constitute a waiver of any default.

5.8           Overdrafts.  At the Bank's sole option in each instance, the Bank
may do one of the following:

(a)
The Bank may make advances under this Agreement to prevent or cover an overdraft
on any account of any Borrower with the Bank.  Each such advance will accrue
interest from the date of the advance or the date on which the account is
overdrawn, whichever occurs first, at the interest rate described in this
Agreement.  The Bank may make such advances even if the advances may cause any
credit limit under this Agreement to be exceeded.

(b)
The Bank may reduce the amount of credit otherwise available under this
Agreement by the amount of any overdraft on any account of any Borrower with the
Bank.

This paragraph shall not be deemed to authorize the Borrowers to create
overdrafts on any of the Borrowers' accounts with the Bank.

5.9           Payments in Kind.  If the Bank requires delivery in kind of the
proceeds of collection of the Borrowers' accounts receivable, such proceeds
shall be credited to interest, principal, and other sums owed to the Bank under
this Agreement in the order and proportion determined by the Bank in its sole
discretion.  All such credits will be conditioned upon collection and any
returned items may, at the Bank's option, be charged to the Borrowers.

6.           CONDITIONS

Before the Bank is required to extend any credit to the Borrowers under this
Agreement, it must receive any documents and other items it may reasonably
require, in form and content acceptable to the Bank, including any items
specifically listed below.

6.1           Authorizations.  If any Borrower or any guarantor is anything
other than a natural person, evidence that the execution, delivery and
performance by such Borrower and/or such guarantor of this Agreement and any
instrument or agreement required under this Agreement have been duly authorized.

6.2           Governing Documents.  If required by the Bank, a copy of the
Borrowers' organizational documents.

6.3           Security Agreements.  Signed original security agreements covering
the personal property collateral which the Bank requires.

6.4           Perfection and Evidence of Priority. Evidence that the security
interests and liens in favor of the Bank are valid, enforceable, properly
perfected in a manner acceptable to the Bank and prior to all others' rights and
interests, except those the Bank consents to in writing.  All title documents
for motor vehicles which are part of the collateral must show the Bank's
interest.

6.5           Payment of Fees.  Payment of all fees and other amounts due and
owing to the Bank, including without limitation payment of all accrued and
unpaid expenses incurred by the Bank as required by the paragraph entitled
"Reimbursement Costs."

6.6           Good Standing.  Certificates of good standing for each Borrower as
applicable from its state of formation and from any other state in which such
Borrowers is  required to qualify to conduct its business.

6.7           Insurance.  Evidence of insurance coverage, as required in the
"Covenants" section of this Agreement.

7.           REPRESENTATIONS AND WARRANTIES

When the Borrowers sign this Agreement, and until the Bank is repaid in full,
the Borrowers make the following representations and warranties.  Each request
for an extension of credit constitutes a renewal of these representations and
warranties as of the date of the request:

7.1           Formation.  If any Borrower is anything other than a natural
person, it is duly formed and existing under the laws of the state or other
jurisdiction where organized.

7.2           Authorization.  This Agreement, and any instrument or agreement
required hereunder, are within each Borrower's powers, have been duly
authorized, and do not conflict with any of its organizational papers.

7.3           Enforceable Agreement.  This Agreement is a legal, valid and
binding agreement of each Borrower, enforceable against each Borrower in
accordance with its terms, and any instrument or agreement required hereunder,
when executed and delivered, will be similarly legal, valid, binding and
enforceable.

7.4           Good Standing.  In each state in which each Borrower does
business, it is properly licensed, in good standing, and, where required, in
compliance with fictitious name statutes.

7.5           No Conflicts.  This Agreement does not conflict with any law,
agreement, or obligation by which any Borrower is bound.

7.6           Financial Information.  All financial and other information that
has been or will be supplied to the Bank is sufficiently complete to give the
Bank accurate knowledge of the Borrowers' (and any guarantor's) financial
condition, including all material contingent liabilities.  Since the date of the
most recent financial statement provided to the Bank, there has been no material
adverse change in the business condition (financial or otherwise), operations,
properties or prospects of any Borrower (or any guarantor).  If any Borrower is
comprised of the trustees of a trust, the foregoing representations shall also
pertain to the trustor(s) of the trust.

7.7           Lawsuits.  There is no lawsuit, tax claim or other dispute pending
or threatened against any Borrower which, if lost, would impair such Borrower’s
financial condition or ability to repay the loan, except as have been disclosed
in writing to the Bank.

7.8           Collateral.  All collateral required in this Agreement is owned by
the grantor of the security interest free of any title defects or any liens or
interests of others, except those which have been approved by the Bank in
writing.

7.9           Permits, Franchises.  Each Borrower possesses all permits,
memberships, franchises, contracts and licenses required and all trademark
rights, trade name rights, patent rights, copyrights and fictitious name rights
necessary to enable it to conduct the business in which it is now engaged.

7.10           Other Obligations.  No Borrower is in default on any obligation
for borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation, except as have been disclosed in
writing to the Bank.

7.11           Tax Matters.  No Borrower has any knowledge of any pending
assessments or adjustments of its income tax for any year and all taxes due have
been paid, except as have been disclosed in writing to the Bank.

7.12           No Event of Default.  There is no event which is, or with notice
or lapse of time or both would be, a default under this Agreement.

7.13           Insurance.  Each Borrower has obtained, and maintained in effect,
the insurance coverage required in the "Covenants" section of this Agreement.

7.14           Merchantable Inventory; Compliance with FLSA.  All inventory
which is included in the Borrowing Base is of good and merchantable quality and
free from defects, and has been produced in compliance with the requirements of
the U.S. Fair Labor Standards Act (29 U.S.C. §§201 et seq.).

7.15           Prime Government Receivables and Unbilled Receivables.  With
respect to all Prime Government Receivables and Unbilled Receivables, to the
best of the Borrower’s knowledge (a) there has been no default or cancellation
with respect thereto, (b) Prime Government Receivables and Unbilled Receivables
are not dependent on any future appropriations, (c) the assignment of all sums
due thereunder does not violate any law, statute, or regulation and is
permissible, (d) the Borrower has the right to assign all monies due thereunder,
(e) any prior assignment with respect thereto have been terminated; and (f) the
Borrower is not subject to any pending or threatened debarment proceedings.

7.16           Assignment of Claims Act.  The Borrower hereby covenants and
agrees that the Borrower will promptly, upon request by the Bank, comply with
any and all of the requirements of the Assignment of Claims Act (Title 31
Section 3727 and Title 41 Section 15 of the United States Code), where such
statutes are applicable to any Eligible Receivables, and shall take all such
other action as may be necessary to facilitate the direct assignment to the Bank
of the payments due or to become due under any Eligible Receivables which has at
least One Million Dollars and 00/100 Dollars ($1,000,000.00) in payment
obligations to the Borrower and which has a duration of at least twelve (12)
months, and such further action as may be necessary to facilitate the creation
and perfection of the Bank’s security interest in such payments..

8.           COVENANTS

The Borrowers agree, so long as credit is available under this Agreement and
until the Bank is repaid in full:

8.1           Use of Proceeds.

(a)
To use the proceeds of Facility No. 1 only for working capital.

(b)
The proceeds of the credit extended under this Loan Agreement may not be used
directly or indirectly to purchase or carry any "margin stock" as that term is
defined in Regulation U of the Board of Governors of the Federal Reserve System,
or extend credit to or invest in other parties for the purpose of purchasing or
carrying any such "margin stock," or to reduce or retire any indebtedness
incurred for such purpose.

8.2           Financial Information.  To provide the following financial
information and statements in form and content acceptable to the Bank, and such
additional information as requested by the Bank from time to time.  The Bank
reserves the right, upon written notice to the Borrowers, to require the
Borrowers to deliver financial information and statements to the Bank more
frequently than otherwise provided below, and to use such additional information
and statements to measure any applicable financial covenants in this Agreement.

(a)
Within one hundred fifty (150) days of the fiscal year end, the annual financial
statements of the Borrowers.  These financial statements must be audited (with
an opinion satisfactory to the Bank) by a Certified Public Accountant acceptable
to the Bank.  The statements shall be prepared on a consolidated basis.

(b)
Within sixty (60) days of the period's end, quarterly financial statements of
the Borrowers, certified and dated by an authorized financial officer.  These
financial statements may be company-prepared.  The statements shall be prepared
on a consolidated basis.

(c)
Within 150 days of the end of each fiscal year and within 60 days of the end of
each quarter, a compliance certificate of the Borrower in the format as shown in
Exhibit B, signed by an authorized financial officer and setting forth whether
there existed as of the date of such financial statements and whether there
exists as of the date of the certificate, any default under this Agreement and,
if any such default exists, specifying the nature thereof and the action the
Borrower is taking and proposes to take with respect thereto.

(d)
Upon the Bank’s request, a detailed aging of the Borrower’s receivables by
invoice or a summary aging by account debtor as specified by the Bank.

(e)           Upon the Bank’s request, a Borrowing Base Certificate as of the
last day of each month.  Bank mayalso request copies of the invoices or the
record of invoices from the Borrower's sales journal for EligibleReceivables
included in the Borrowing Base Certificate (including a listing of the names and
addresses of the account debtors obligated there under).

(f)
Upon the Bank’s request, a summary aging by vendor of accounts payable as
specified by the Bank.

(g)
Upon the Bank’s request, an inventory listing as specified by the Bank.  The
listing must include a description of the inventory, its location and cost, and
such other information as the Bank may require.

(h)
Promptly upon the Bank's request, such other books, records, statements, lists
of property and accounts, budgets, forecasts or reports as to the Borrowers and
as to each guarantor of the Borrowers' obligations to the Bank as the Bank may
request.

8.3           Debt to Worth Ratio.  To maintain on a consolidated basis a ratio
of Total Liabilities (excluding the non-current portion of Subordinated
Liabilities) to Tangible Net Worth not exceeding 1.5:1.0.

"Total Liabilities" means the sum of current liabilities plus long term
liabilities.

"Tangible Net Worth" means the value of total assets (including leaseholds and
leasehold improvements and reserves against assets but excluding goodwill,
patents, trademarks, trade names, organization expense, unamortized debt
discount and expense, capitalized or deferred research and development costs,
deferred marketing expenses, and other like intangibles, and monies due from
affiliates, officers, directors, employees, shareholders, members or managers)
less total liabilities, including but not limited to accrued and deferred income
taxes, but excluding the non-current portion of Subordinated Liabilities.

"Subordinated Liabilities" means liabilities subordinated to the Borrowers'
obligations to the Bank in a manner acceptable to the Bank in its sole
discretion.

8.4           Funded Debt to EBITDA Ratio.  To maintain on a consolidated basis
a ratio of Funded Debt to EBITDA not exceeding 3:1.0.

“Funded Debt” means all outstanding liabilities for borrowed money and other
interest-bearing liabilities, including current long term debt, less the
non-current portion of Subordinated Liabilities.

''EBITDA'' means net income, less income or plus loss from discontinued
operations and extraordinary items, plus income taxes, plus interest expense,
plus depreciation, depletion, and amortization.  This ratio will be calculated
at the end of each reporting period for which the Bank requires financial
statements, using the results of the twelve-month period ending with that
reporting period.

This ratio will be calculated at the end of each reporting period for which the
Bank requires financial statements, using the results of the twelve-month period
ending with that reporting period.

''Subordinated Liabilities'' means liabilities subordinated to the Borrower's
obligations to the Bank in a manner acceptable to the Bank in its sole
discretion.

8.5           Bank as Principal Depository.  To maintain the Bank as their
principal depository bank, including for the maintenance of business, cash
management, operating and administrative deposit accounts.

8.6           Other Debts.  Not to have outstanding or incur any direct or
contingent liabilities or lease obligations (other than those to the Bank), or
become liable for the liabilities of others, without the Bank's written consent.
This does not prohibit:

(a)        Acquiring goods, supplies, or merchandise on normal trade credit.

(b)        Endorsing negotiable instruments received in the usual course of
business.

(c)        Obtaining surety bonds in the usual course of business.

(d)        Liabilities, lines of credit and leases in existence on the date of
this Agreement disclosed in writing to the Bank.

8.7           Other Liens.  Not to create, assume, or allow any security
interest or lien (including judicial liens) on property any Borrower now or
later owns, except:

(a)        Liens and security interests in favor of the Bank.

(b)        Liens for taxes not yet due.

(c)        Liens outstanding on the date of this Agreement disclosed in writing
to the Bank.

8.8           Maintenance of Assets.

(a)        Not to sell, assign, lease, transfer or otherwise dispose of any part
of any Borrower's business or any Borrower's assets except in the ordinary
course of business.

(b)        Not to sell, assign, lease, transfer or otherwise dispose of any
assets for less than fair market value, or enter into any agreement to do so.

(c)        Not to enter into any sale and leaseback agreement covering any of
its fixed assets.

(d)        To maintain and preserve all rights, privileges, and franchises the
Borrowers now have.

(e)        To make any repairs, renewals, or replacements to keep the Borrowers'
properties in good working condition.

8.9           Investments.  Not to have any existing, or make any new,
investments in any individual or entity, or make any capital contributions or
other transfers of assets to any individual or entity, except for:

(a)
Existing investments disclosed to the Bank in writing.

(b)
Investments in the Borrowers' current subsidiaries.

(c)
Investments in any of the following:

 
(i)
certificates of deposit;

 
(ii)
U.S. treasury bills and other obligations of the federal government;

 
(iii)
readily marketable securities (including commercial paper, but excluding
restricted stock and stock subject to the provisions of Rule 144 of the
Securities and Exchange Commission).

8.10           Loans.  Not to make any loans, advances or other extensions of
credit to any individual or entity, except for:

(a)
Existing extensions of credit disclosed to the Bank in writing.

(b)
Extensions of credit to the Borrowers' current subsidiaries.

(c)
Extensions of credit in the nature of accounts receivable or notes receivable
arising from the sale or lease of goods or services in the ordinary course of
business to non-affiliated entities.

8.11           Change of Management.  Not to make any substantial change in the
present executive or management personnel of the Borrowers.

8.12           Change of Ownership.  Not to cause, permit, or suffer any change
in capital ownership such that there is a change of more than twenty-five
percent (25%) in the direct or indirect capital ownership of any Borrower.

8.13           Additional Negative Covenants.  Not to, without the Bank's
written consent:

(a)        Enter into any consolidation, merger, or other combination, or become
a partner in a partnership, a member of a joint venture, or a member of a
limited liability company.

(b)        Acquire or purchase a business or its assets.

(c)        Engage in any business activities substantially different from each
Borrower's present business.

(d)        Liquidate or dissolve any Borrower's business.

8.14           Notices to Bank.  To promptly notify the Bank in writing of:

(a)
Any lawsuit over Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00)
against any Borrower (or any guarantor or, if any Borrower is comprised of the
trustees of a trust, any trustor).

(b)
Any substantial dispute between any governmental authority and any Borrower (or
any guarantor or, if any Borrower is comprised of the trustees of a trust, any
trustor).

(c)
Any event of default under this Agreement, or any event which, with notice or
lapse of time or both, would constitute an event of default.

(d)
Any material adverse change in any Borrower's (or any guarantor’s, or, if any
Borrower is comprised of the trustees of a trust, any trustor’s) business
condition (financial or otherwise), operations, properties or prospects, or
ability to repay the credit.

(e)
Any change in any Borrower's name, legal structure, place of business, or chief
executive office if such Borrower has more than one place of business.

(f)
Any actual contingent liabilities of any Borrower (or any guarantor or, if any
Borrower is comprised of the trustees of a trust, any trustor), and any such
contingent liabilities which are reasonably foreseeable.

8.15           Insurance.

(a)
General Business Insurance.  To maintain insurance satisfactory to the Bank as
to amount, nature and carrier covering property damage (including loss of use
and occupancy) to any of the Borrowers' properties, business interruption
insurance, public liability insurance including coverage for contractual
liability, product liability and workers' compensation, and any other insurance
which is usual for the Borrowers' business.  Each policy shall provide for at
least 30 days prior notice to the Bank of any cancellation thereof.

(b)
Insurance Covering Collateral.  To maintain all risk property damage insurance
policies (including without limitation windstorm coverage, and hurricane
coverage as applicable) covering the tangible property comprising the
collateral.  Each insurance policy must be for the full replacement cost of the
collateral and include a replacement cost endorsement. The insurance must be
issued by an insurance company acceptable to the Bank and must include a
lender's loss payable endorsement in favor of the Bank in a form acceptable to
the Bank

(c)
Evidence of Insurance.  Upon the request of the Bank, to deliver to the Bank a
copy of each insurance policy, or, if permitted by the Bank, a certificate of
insurance listing all insurance in force.

8.16           Compliance with Laws.  To comply with the laws (including any
fictitious or trade name statute), regulations, and orders of any government
body with authority over any Borrower's business.  The Bank shall have no
obligation to make any advance to any Borrowers except in compliance with all
applicable laws and regulations and any Borrowers shall fully cooperate with the
Bank in complying with all such applicable laws and regulations.

8.17           ERISA Plans.  Promptly during each year, to pay and cause any
subsidiaries to pay contributions adequate to meet at least the minimum funding
standards under ERISA with respect to each and every Plan; file each annual
report required to be filed pursuant to ERISA in connection with each Plan for
each year; and notify the Bank within ten (10) days of the occurrence of any
Reportable Event that might constitute grounds for termination of any capital
Plan by the Pension Benefit Guaranty Corporation or for the appointment by the
appropriate United States District Court of a trustee to administer any
Plan.  "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.  Capitalized terms in this paragraph shall have the
meanings defined within ERISA.

8.18           Books and Records.  To maintain adequate books and records.

8.19           Audits.  To allow the Bank and its agents to inspect each
Borrower's properties and examine, audit, and make copies of books and records
at any reasonable time.  If any of the Borrowers' properties, books or records
are in the possession of a third party, the Borrowers authorize that third party
to permit the Bank or its agents to have access to perform inspections or audits
and to respond to the Bank's requests for information concerning such
properties, books and records.

8.20           Perfection of Liens.  To help the Bank perfect and protect its
security interests and liens, and reimburse it for related costs it incurs to
protect its security interests and liens.

8.21           Cooperation.  To take any action reasonably requested by the Bank
to carry out the intent of this Agreement.

8.22           Assignment Of Claims Act.  To promptly comply, upon request by
the Bank, with any and all of the requirements of Title 31 Section 3727 and
Title 41 Section 15 of the United States Code and all rules and regulations
relating thereto, as amended, where such statutes, rules and regulations are, at
the option of the Bank, applicable to particular contracts, and shall at all
times take all such other action as may be necessary to facilitate and/or ensure
perfection of the Bank’s security interest in and the assignment of the
contracts.

9.           DEFAULT AND REMEDIES

If any of the following events of default occurs, the Bank may do one or more of
the following: declare the Borrowers in default, stop making any additional
credit available to the Borrowers, and require the Borrowers to repay their
entire debt immediately and without prior notice.  If an event which, with
notice or the passage of time, will constitute an event of default has occurred
and is continuing, the Bank has no obligation to make advances or extend
additional credit under this Agreement.  In addition, if any event of default
occurs, the Bank shall have all rights, powers and remedies available under any
instruments and agreements required by or executed in connection with this
Agreement, as well as all rights and remedies available at law or in equity.  If
an event of default occurs under the paragraph entitled "Bankruptcy," below,
with respect to any Borrower, then the entire debt outstanding under this
Agreement will automatically be due immediately.

9.1           Failure to Pay.  The Borrowers fail to make a payment under this
Agreement when due.

9.2           Other Bank Agreements.  Any default occurs under any other
agreement any Borrower (or any Obligor) or any of the Borrowers' related
entities or affiliates has with the Bank or any affiliate of the Bank.  For
purposes of this Agreement, “Obligor” shall mean any guarantor, any party
pledging collateral to the Bank, or, if any Borrower is comprised of the
trustees of a trust, any trustor.

9.3           Cross-default.  Any default occurs under any agreement in
connection with any credit any Borrower (or any Obligor) or any of the
Borrowers’ related entities or affiliates has obtained from anyone else or which
any Borrower (or any Obligor) or any of the Borrowers’ related entities or
affiliates has guaranteed.

9.4           False Information.  Any Borrower or any Obligor has given the Bank
false or misleading information or representations.

9.5           Bankruptcy.  Any Borrower, any Obligor, or any general partner of
any Borrower or of any Obligor files a bankruptcy petition, a bankruptcy
petition is filed against any of the foregoing parties, or any Borrower, any
Obligor, or any general partner of any Borrower or of any Obligor makes a
general assignment for the benefit of creditors.

9.6           Receivers.  A receiver or similar official is appointed for a
substantial portion of any Borrower's or any Obligor's business, or the business
is terminated, or, if any Obligor is anything other than a natural person, such
Obligor is liquidated or dissolved.

9.7           Lien Priority.  The Bank fails to have an enforceable first lien
(except for any prior liens to which the Bank has consented in writing) on or
security interest in any property given as security for this Agreement (or any
guaranty).

9.8           Judgments.  Any judgments or arbitration awards are entered
against any Borrower or any Obligor, or any Borrower or any Obligor enters into
any settlement agreements with respect to any litigation or arbitration, in an
aggregate amount of Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00)
or more in excess of any insurance coverage.

9.9           Material Adverse Change.  A material adverse change occurs, or is
reasonably likely to occur, in any Borrower's (or any Obligor's) business
condition (financial or otherwise), operations, properties or prospects, or
ability to repay the credit; or the Bank determines that it is insecure for any
other reason.

9.10           Government Action.  Any government authority takes action that
the Bank believes materially adversely affects any Borrower's or any Obligor's
financial condition or ability to repay.

9.11           Default under Related Documents.  Any default occurs under any
guaranty, subordination agreement, security agreement, deed of trust, mortgage,
or other document required by or delivered in connection with this Agreement or
any such document is no longer in effect, or any guarantor purports to revoke or
disavow the guaranty.

9.12           ERISA Plans.  Any one or more of the following events occurs with
respect to a Plan of any Borrower subject to Title IV of ERISA, provided such
event or events could reasonably be expected, in the judgment of the Bank, to
subject any Borrower to any tax, penalty or liability (or any combination of the
foregoing) which, in the aggregate, could have a material adverse effect on the
financial condition of such Borrower:

(a)
A reportable event shall occur under Section 4043(c) of ERISA with respect to a
Plan.

(b)
Any Plan termination (or commencement of proceedings to terminate a Plan) or the
full or partial withdrawal from a Plan by any Borrower or any ERISA Affiliate.

9.13           Other Breach Under Agreement.  A default occurs under any other
term or condition of this Agreement not specifically referred to in this
Article.  This includes any failure or anticipated failure by any Borrower (or
any other party named in the Covenants section) to comply with the financial
covenants set forth in this Agreement, whether such failure is evidenced by
financial statements delivered to the Bank or is otherwise known to the
Borrowers or the Bank.

9.14           Material Default Under any Eligible Receivables.  A material
default by the Borrower occurs under the terms of any Eligible Receivables or
any breach in the Borrower’s performance obligations occurs under any Eligible
Receivables.

9.15           Termination of Eligible Receivables.   Any Eligible Receivable is
terminated for default.

10.           ENFORCING THIS AGREEMENT; MISCELLANEOUS

10.1           GAAP.  Except as otherwise stated in this Agreement, all
financial information provided to the Bank and all financial covenants will be
made under generally accepted accounting principles, consistently applied.

10.2           North Carolina Law.  This Agreement shall be governed by and
construed in accordance with the laws of North Carolina.  To the extent that the
Bank has greater rights or remedies under federal law, whether as a national
bank or otherwise, this paragraph shall not be deemed to deprive the Bank of
such rights and remedies as may be available under federal law.

10.3           Successors and Assigns.  This Agreement is binding on the
Borrowers’ and the Bank's successors and assignees.  The Borrowers agree that
they may not assign this Agreement without the Bank's prior consent.  The Bank
may sell participations in or assign this loan, and may exchange information
about the Borrowers (including, without limitation, any information regarding
any hazardous substances) with actual or potential participants or
assignees.  If a participation is sold or the loan is assigned, the purchaser
will have the right of set-off against the Borrowers.

10.4           Dispute Resolution Provision.  This paragraph, including the
subparagraphs below, is referred to as the “Dispute Resolution Provision.”  This
Dispute Resolution Provision is a material inducement for the parties entering
into this agreement.

(a)
This Dispute Resolution Provision concerns the resolution of any controversies
or claims between the parties, whether arising in contract, tort or by statute,
including but not limited to controversies or claims that arise out of or relate
to: (i) this agreement (including any renewals, extensions or modifications); or
(ii) any document related to this agreement (collectively a "Claim").  For the
purposes of this Dispute Resolution Provision only, the term “parties” shall
include any parent corporation, subsidiary or affiliate of the Bank involved in
the servicing, management or administration of any obligation described or
evidenced by this agreement.

(b)
At the request of any party to this agreement, any Claim shall be resolved by
binding arbitration in accordance with the Federal Arbitration Act (Title 9,
U.S. Code) (the "Act").  The Act will apply even though this agreement provides
that it is governed by the law of a specified state.

(c)
Arbitration proceedings will be determined in accordance with the Act, the
then-current rules and procedures for the arbitration of financial services
disputes of the American Arbitration Association or any successor thereof
("AAA"), and the terms of this Dispute Resolution Provision.  In the event of
any inconsistency, the terms of this Dispute Resolution Provision shall
control.  If AAA is unwilling or unable to (i) serve as the provider of
arbitration or (ii) enforce any provision of this arbitration clause, the Bank
may designate another arbitration organization with similar procedures to serve
as the provider of arbitration.

(d)
The arbitration shall be administered by AAA and conducted, unless otherwise
required by law, in any U.S. state where real or tangible personal property
collateral for this credit is located or if there is no such collateral, in the
state specified in the governing law section of this agreement.  All Claims
shall be determined by one arbitrator; however, if Claims exceed Five Million
Dollars ($5,000,000), upon the request of any party, the Claims shall be decided
by three arbitrators.  All arbitration hearings shall commence within ninety
(90) days of the demand for arbitration and close within ninety (90) days of
commencement and the award of the arbitrator(s) shall be issued within thirty
(30) days of the close of the hearing.  However, the arbitrator(s), upon a
showing of good cause, may extend the commencement of the hearing for up to an
additional sixty (60) days.  The arbitrator(s) shall provide a concise written
statement of reasons for the award.  The arbitration award may be submitted to
any court having jurisdiction to be confirmed and have judgment entered and
enforced.

(e)
The arbitrator(s) will give effect to statutes of limitation in determining any
Claim and may dismiss the arbitration on the basis that the Claim is barred. For
purposes of the application of any statutes of limitation, the service on AAA
under applicable AAA rules of a notice of Claim is the equivalent of the filing
of a lawsuit.  Any dispute concerning this arbitration provision or whether a
Claim is arbitrable shall be determined by the arbitrator(s), except as set
forth at subparagraph (h) of this Dispute Resolution Provision.  The
arbitrator(s) shall have the power to award legal fees pursuant to the terms of
this agreement.

(f)
This paragraph does not limit the right of any party to: (i) exercise self-help
remedies, such as but not limited to, setoff; (ii) initiate judicial or
non-judicial foreclosure against any real or personal property collateral; (iii)
exercise any judicial or power of sale rights, or (iv) act in a court of law to
obtain an interim remedy, such as but not limited to, injunctive relief, writ of
possession or appointment of a receiver, or additional or supplementary
remedies.

(g)
The filing of a court action is not intended to constitute a waiver of the right
of any party, including the suing party, thereafter to require submittal of the
Claim to arbitration.

(h)
Any arbitration or trial by a judge of any Claim will take place on an
individual basis without resort to any form of class or representative action
(the “Class Action Waiver”).  Regardless of anything else in this Dispute
Resolution Provision, the validity and effect of the Class Action Waiver may be
determined only by a court and not by an arbitrator.  The parties to this
Agreement acknowledge that the Class Action Waiver is material and essential to
the arbitration of any disputes between the parties and is nonseverable from the
agreement to arbitrate Claims. If the Class Action Waiver is limited, voided or
found unenforceable, then the parties’ agreement to arbitrate shall be null and
void with respect to such proceeding, subject to the right to appeal the
limitation or invalidation of the Class Action Waiver.  The Parties acknowledge
and agree that under no circumstances will a class action be arbitrated.

(i)
By agreeing to binding arbitration, the parties irrevocably and voluntarily
waive any right they may have to a trial by jury in respect of any
Claim.  Furthermore, without intending in any way to limit this agreement to
arbitrate, to the extent any Claim is not arbitrated, the parties irrevocably
and voluntarily waive any right they may have to a trial by jury in respect of
such Claim.  This waiver of jury trial shall remain in effect even if the Class
Action Waiver is limited, voided or found unenforceable.  WHETHER THE CLAIM IS
DECIDED BY ARBITRATION OR BY TRIAL BY A JUDGE, THE PARTIES AGREE AND UNDERSTAND
THAT THE EFFECT OF THIS AGREEMENT IS THAT THEY ARE GIVING UP THE RIGHT TO TRIAL
BY JURY TO THE EXTENT PERMITTED BY LAW.

10.5           Severability; Waivers.  If any part of this Agreement is not
enforceable, the rest of the Agreement may be enforced.  The Bank retains all
rights, even if it makes a loan after default.  If the Bank waives a default, it
may enforce a later default.  Any consent or waiver under this Agreement must be
in writing.

10.6           Attorneys' Fees.  The Borrowers shall reimburse the Bank for any
reasonable costs and attorneys' fees incurred by the Bank in connection with the
enforcement or preservation of any rights or remedies under this Agreement and
any other documents executed in connection with this Agreement, and in
connection with any amendment, waiver, "workout" or restructuring under this
Agreement.  In the event of a lawsuit or arbitration proceeding, the prevailing
party is entitled to recover costs and reasonable attorneys' fees incurred in
connection with the lawsuit or arbitration proceeding, as determined by the
court or arbitrator.  In the event that any case is commenced by or against the
Borrowers under the Bankruptcy Code (Title 11, United States Code) or any
similar or successor statute, the Bank is entitled to recover costs and
reasonable attorneys' fees incurred by the Bank related to the preservation,
protection, or enforcement of any rights of the Bank in such a case.  As used in
this paragraph, "attorneys' fees" includes the allocated costs of the Bank's
in-house counsel.

10.7           Joint and Several Liability.  This paragraph shall apply if two
or more Borrowers sign this agreement:

(a)
Each Borrower agrees that it is jointly and severally liable to the Bank for the
payment of all obligations arising under this Agreement, and that such liability
is independent of the obligations of the other Borrower(s). Each obligation,
promise, covenant, representation and warranty in this Agreement shall be deemed
to have been made by, and be binding upon, each Borrower, unless this Agreement
expressly provides otherwise.  The Bank may bring an action against any
Borrower, whether an action is brought against the other Borrower(s).

(b)
Each Borrower agrees that any release which may be given by the Bank to the
other Borrower(s) or any guarantor will not release such Borrower from its
obligations under this Agreement.

(c)
Each Borrower waives any right to assert against the Bank any defense, setoff,
counterclaim, or claims which such Borrower may have against the other
Borrower(s) or any other party liable to the Bank for the obligations of the
Borrowers under this Agreement.

(d)
Each Borrower waives any defense by reason of any other Borrower’s or any other
person's defense, disability, or release from liability.  The Bank can exercise
its rights against each Borrower even if any other Borrower or any other person
no longer is liable because of a statute of limitations or for other reasons.

(e)
Each Borrower agrees that it is solely responsible for keeping itself informed
as to the financial condition of the other Borrower(s) and of all circumstances
which bear upon the risk of nonpayment.  Each Borrower waives any right it may
have to require the Bank to disclose to such Borrower any information which the
Bank may now or hereafter acquire concerning the financial condition of the
other Borrower(s).

(f)
Each Borrower waives all rights to notices of default or nonperformance by any
other Borrower under this Agreement.  Each Borrower further waives all rights to
notices of the existence or the creation of new indebtedness by any other
Borrower and all rights to any other notices to any party liable on any of the
credit extended under this Agreement.

(g)
The Borrowers represent and warrant to the Bank that each will derive benefit,
directly and indirectly, from the collective administration and availability of
credit under this Agreement.  The Borrowers agree that the Bank will not be
required to inquire as to the disposition by any Borrower of funds disbursed in
accordance with the terms of this Agreement.

(h)
Until all obligations of the Borrowers to the Bank under this Agreement have
been paid in full and any commitments of the Bank or facilities provided by the
Bank under this Agreement have been terminated, each Borrower (a) waives any
right of subrogation, reimbursement, indemnification and contribution
(contractual, statutory or otherwise), including without limitation, any claim
or right of subrogation under the Bankruptcy Code (Title 11, United States Code)
or any successor statute, which such Borrower may now or hereafter have against
any other Borrower with respect to the indebtedness incurred under this
Agreement; (b) waives any right to enforce any remedy which the Bank now has or
may hereafter have against any other Borrower, and waives any benefit of, and
any right to participate in, any security now or hereafter held by the Bank.

(i)
Each Borrower waives any right to require the Bank to proceed against any other
Borrower or any other person; proceed against or exhaust any security; or pursue
any other remedy.  Further, each Borrower consents to the taking of, or failure
to take, any action which might in any manner or to any extent vary the risks of
the Borrowers under this Agreement or which, but for this provision, might
operate as a discharge of the Borrowers.

10.8           One Agreement.  This Agreement and any related security or other
agreements required by this Agreement, collectively:

(a)
represent the sum of the understandings and agreements between the Bank and the
Borrowers concerning this credit;

(b)
replace any prior oral or written agreements between the Bank and the Borrowers
concerning this credit; and

(c)
are intended by the Bank and the Borrowers as the final, complete and exclusive
statement of the terms agreed to by them.

In the event of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will prevail.  Any reference in any
related document to a “promissory note” or a “note” executed by the Borrowers
and dated as of the date of this Agreement shall be deemed to refer to this
Agreement, as now in effect or as hereafter amended, renewed, or restated.

10.9           Disposition of Schedules and Reports.  The Bank will not be
obligated to return any schedules, invoices, statements, budgets, forecasts,
reports or other papers delivered by the Borrowers.  The Bank will destroy or
otherwise dispose of such materials at such time as the Bank, in its discretion,
deems appropriate.

10.10                      Returned Merchandise.  Until the Bank exercises its
rights to collect the accounts receivable as provided under any security
agreement required under this Agreement, the Borrowers may continue their
present policies for returned merchandise and adjustments.  Credit adjustments
with respect to returned merchandise shall be made immediately upon receipt of
the merchandise by the Borrowers or upon such other disposition of the
merchandise by the debtor in accordance with the Borrowers' instructions.  If a
credit adjustment is made with respect to any Acceptable Receivable, the amount
of such adjustment shall no longer be included in the amount of such Acceptable
Receivable in computing the Borrowing Base.

10.11                      Verification of Eligible Receivables.  The Bank may
at any time, either orally or in writing, request confirmation from any debtor
of the current amount and status of the Eligible Receivables upon which such
debtor is obligated.

10.12                      Waiver of Confidentiality.  The Borrowers authorize
the Bank to discuss the Borrowers' financial affairs and business operations
with any accountants, auditors, business consultants, or other professional
advisors employed by the Borrowers, and authorize such parties to disclose to
the Bank such financial and business information or reports (including
management letters) concerning the Borrowers as the Bank may request.

10.13                      Indemnification.  The Borrower will indemnify and
hold the Bank harmless from any loss, liability, damages, judgments, and costs
of any kind relating to or arising directly or indirectly out of (a) this
Agreement or any document required hereunder, (b) any credit extended or
committed by the Bank to the Borrower hereunder, (c) any claim, whether
well-founded or otherwise, that there has been a failure to comply with any law
regulating the Borrower's sales or leases to or performance of services for
debtors obligated upon the Borrower's Eligible Receivables and disclosures in
connection therewith, and (d) any litigation or proceeding related to or arising
out of this Agreement, any such document, any such credit, or any such
claim.  This indemnity includes but is not limited to attorneys' fees (including
the allocated cost of in-house counsel).  This indemnity extends to the Bank,
its parent, subsidiaries and all of their directors, officers, employees,
agents, successors, attorneys, and assigns.  This indemnity will survive
repayment of the Borrower's obligations to the Bank.  All sums due to the Bank
hereunder shall be obligations of the Borrower, due and payable immediately
without demand.

10.14                      Notices.  Unless otherwise provided in this Agreement
or in another agreement between the Bank and the Borrowers, all notices required
under this Agreement shall be personally delivered or sent by first class mail,
postage prepaid, or by overnight courier, to the addresses on the signature page
of this Agreement, or sent by facsimile to the fax numbers listed on the
signature page, or to such other addresses as the Bank and the Borrowers may
specify from time to time in writing.  Notices and other communications shall be
effective (i) if mailed, upon the earlier of receipt or five (5) days after
deposit in the U.S. mail, first class, postage prepaid, (ii) if telecopied, when
transmitted, or (iii) if hand-delivered, by courier or otherwise (including
telegram, lettergram or mailgram), when delivered.

10.15                      Headings.  Article and paragraph headings are for
reference only and shall not affect the interpretation or meaning of any
provisions of this Agreement.

10.16                      Counterparts.  This Agreement may be executed in as
many counterparts as necessary or convenient, and by the different parties 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
agreement.

10.17                      Borrower Information; Reporting to Credit
Bureaus.  The Borrower authorizes the Bank at any time to verify or check any
information given by the Borrower to the Bank, check the Borrower’s credit
references, verify employment, and obtain credit reports.  The Borrower agrees
that the Bank shall have the right at all times to disclose and report to credit
reporting agencies and credit rating agencies such information pertaining to the
Borrower and/or all guarantors as is consistent with the Bank's policies and
practices from time to time in effect.

10.18                      Prior Agreement Superseded.  This Agreement
supersedes the Loan Agreement entered into as of May 23, 2001, between the Bank
and the Borrowers, and any credit outstanding thereunder shall be deemed to be
outstanding under this Agreement.

10.19                      Additional Remedy for Failure to Assign Payments as
Requested.  The Borrower acknowledges that the Bank will be irreparably harmed
if the Borrower fails, after request by the Bank, to promptly assign payments
due or to become due under any Eligible Receivables when required by the Bank,
pursuant to this Agreement, and that the Bank shall have no adequate remedy at
law.  Therefore, the Borrower agrees that the Bank shall be entitled to the
following remedies, in addition to all other remedies allowed by law or under
this Agreement:

(a)
an injunction compelling the Borrower’s compliance with the provisions of this
Agreement requiring the Borrower to assign payments due or to become due under
any Eligible Receivables;

(b)
the appointment of a receiver, with instructions that the receiver shall comply,
in the Borrower’s name and on its behalf, with the provisions of this Agreement
requiring the Borrower to assign payments due or to become due under any
Eligible Receivables; and

(c)
such other or further equitable relief as may be necessary or desirable to
secure to the Bank the benefits of the rights of an assignee under the
Assignment of Claims Act (Title 31 Section 3727 and Title 41 Section 15 of the
United States Code).

This Agreement is executed as of the date stated at the top of the first page.

               
Borrower:
Bank:
   
Air T, Inc.
Bank of America, N.A.
                   
By:
 /S/ John Parry
(Seal)
By: ______________________________________
 
John Parry, VP Finance
        Authorized Signer
         
Borrower:
             
Csa Air, Inc.
                                             
By:
  /S/ John Parry
(Seal)
       
John Parry, VP Finance
           

Borrower:
 
Mountain Air Cargo, Inc.
         
By:
  /S/ John Parry
(Seal)
 
John Parry, VP Finance

Borrower:
 
MAC Aviation Services LLC
         
By:
  /S/ John Parry
(Seal)
 
John Parry, Member

Borrower:
 
MAC Aviation Services LLC
         
By:
  /S/ John Parry
(Seal)
 
John Parry, Member

        
Borrower:
 
Global Ground Support,  LLC
     
By:
 
(Seal)
 
John Parry, Member
 
Borrower:
 
Global Ground Support,  LLC
         
By:
 /S/ John Parry
(Seal)
 
John Parry, Member
 

 
Borrower:
 
Global Aviation Services, LLC
 
 
By:  ________ /S/ John Parry________________(Seal)
       Authorized Signer
 
By:  ___________________________________(Seal)
       Authorized Signer
Address where notices to Borrowers are to be sent:
 
 
Address where notices to Bank are to be sent:
          
3524 Airport Road
 
Bank of America, N.A.
Maiden, NC  28650
 
GCIB Credit Services
  
1075 Main Street, 2nd Floor
Telephone:  (828) 464-8741
 
Waltham, MA 02451
Facsimile:   (828)  465-5281
     

Affiliate Sharing Notice.  Notice to Individual Borrowers, Guarantors and
Pledgors (“Obligors”):  From time to time Bank of America, N.A. (the “Bank”) may
share information about the Obligor’s experience with Bank of America
Corporation (or any successor company) and its subsidiaries and affiliated
companies (the “Affiliates”).  The Bank may also share with the Affiliates
credit-related information contained in any applications, from credit reports
and information it may obtain about the Obligor from outside sources.  If the
Obligor is an individual, the Obligor may instruct the Bank not to share this
information with the Affiliates.  The Obligor can make this election by (1)
calling the Bank at 1.888.341.5000, (2) visiting the Bank online at
www.bankofamerica.com, selecting “Privacy & Security,” and then selecting “Set
Your Privacy Preferences," or (3) contacting the Obligor’s client manager or
local banking center.  To help the Bank complete the Obligor’s request, the
Obligor should include the Obligor’s name, address, phone number, account
number(s) and social security number.  If the Obligor makes this election,
certain products or services may not be made available to the Obligor.  This
request will apply to information from applications, consumer reports and other
outside sources only, and may take six to eight weeks to be fully
effective.  Through the normal course of doing business, including servicing the
Obligor’s accounts and better serving the Obligor’s financial needs, the Bank
will continue to share transaction and account experience information, as well
as other general information among the Affiliates.  The Bank may change this
policy from time to time.  Visit our website, www.bankofamerica.com, for the
latest policy.

USA Patriot Act Notice.  Federal law requires all financial institutions to
obtain, verify and record information that identifies each person who opens an
account or obtains a loan.  The Bank will ask for the Borrower’s legal name,
address, tax ID number or social security number and other identifying
information.  The Bank may also ask for additional information or documentation
or take other actions reasonably necessary to verify the identity of the
Borrower, guarantors or other related persons.