Exhibit 10.3

 

 

AMENDED AND RESTATED PLEDGE AGREEMENT

 

THIS AMENDED AND RESTATED PLEDGE AGREEMENT (the “Pledge Agreement”), dated as of
April 3, 2019, (the “Effective Date”), is entered into by and between AIRCO,
LLC, a North Carolina limited liability company (the “Pledgor”), and MINNESOTA
BANK & TRUST, a Minnesota state banking corporation company (the “Lender”).
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Loan Agreement (hereinafter
defined).

 

WHEREAS, Pledgor’s wholly-owned subsidiary, AIRCO 1, LLC, a Delaware limited
liability company (“Borrower”), has entered into that certain Second Loan
Agreement dated as of February 22, 2018 (the “Existing Loan Agreement”), by and
between Borrower and Lender, pursuant to which Lender has extended credit to the
Borrower;

 

WHEREAS, as a condition to Lender’s entering into the Existing Loan Agreement,
Pledgor has executed and delivered to Lender that certain Pledge Agreement dated
as of February 22, 2018 (the “Existing Pledge Agreement”), pursuant to which
Pledgor pledged to Lender one hundred percent (100%) of the issued limited
liability company membership interests (collectively, the "Pledgor Interests"),
in the Borrower;

 

WHEREAS, Lender and Borrower have entered into that certain Loan Agreement dated
as of April 3, 2019 (such Loan Agreement, as amended, modified, supplemented,
extended, replaced or restated from time to time being referred to herein as,
the “Loan Agreement”), pursuant to which Lender has agreed, subject to the terms
and conditions set forth therein, to provided a revolving line of credit to
Borrower in the original principal amount of up to $10,000,000, a portion of the
initial proceeds of which will be used to refinance the outstanding indebtedness
under the Existing Loan Agreement;

 

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

 

WHEREAS, Lender has required, as a condition to entering into the Loan
Agreement, that Pledgor execute and deliver this Pledge Agreement amending and
restating the Existing Pledge Agreement in its entirety;

 

NOW, THEREFORE, for and in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor and Lender hereby agree to amend and restate the Existing
Pledge Agreement in its entirety to read as follows:

 

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

 

1.1     Pledged Interest.

 

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

 

 

--------------------------------------------------------------------------------

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

--------------------------------------------------------------------------------

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

--------------------------------------------------------------------------------

 

 

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

 

Section 7.     Distributions.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

--------------------------------------------------------------------------------

 

 

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

 

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

 

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

 

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

 

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

 

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

 

 

--------------------------------------------------------------------------------

 

 

Section 9.     Remedies.

 

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

 

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

 

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

 

 

--------------------------------------------------------------------------------

 

 

Section 10.     Lender Appointed Attorney-in-Fact.

 

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

 

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

 

Section 11.     Waivers.

 

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

 

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

 

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

 

 

--------------------------------------------------------------------------------

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

--------------------------------------------------------------------------------

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

--------------------------------------------------------------------------------

 

 

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

 

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

 

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

 

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

 

Section 25.     Effect on Existing Pledge Agreement. On the Effective Date, the
Existing Pledge Agreement shall be completely amended and restated by this
Agreement, and each reference to the “Pledge Agreement,”“therein,” “thereof,”
“thereby,”or words of like import referring to the Existing Pledge Agreement in
any Loan Document shall mean and be a reference to this Agreement. This
Agreement amends and restates the Existing Pledge Agreement in its entirety, but
does not alter the original date and continuing effectiveness of the security
interests granted by the Existing Pledge Agreement

 

(Signature Page Follows)

 

 

--------------------------------------------------------------------------------

 

 

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

 

  AIRCO, LLC,   a North Carolina limited liability company       By:            
                                                                               
  Its:                                                                          
                    

Address for Notices:

     

AirCo, LLC

5930 Balsom Ridge Road

Denver, North Carolina 28037

Attention: Candice Otey

 

 

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

 

 

Air T, Inc.

5000 W 36th St, Suite 130

Minneapolis, MN 55416

Attention: Mark Jundt, Esq., General Counsel

 

 

 

[Signature page to Pledge Agreement]

 

 

--------------------------------------------------------------------------------

 

 

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

 

 

MINNESOTA BANK & TRUST, a Minnesota state

banking corporation

      By:                                                                      
                                                  Name: Eric P. Gundersen  
Its:      Senior Vice President

 

 

Address for Notices:

 

9800 Bren Road East, Suite 200

Minnetonka, MN 55343

Attention: Mr. Eric P. Gundersen, SVP

Telephone No.: (952) 841-9331

 

 

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

 

 

Fabyanske, Westra, Hart & Thomson, P.A

333 South Seventh Street, Suite 2600

Attention: Frederick H. Ladner, Esq.

 

 

 

[Signature page to Pledge Agreement]

 

 

--------------------------------------------------------------------------------

 

 

SCHEDULE I

 

to

 

PLEDGE AGREEMENT

 

dated as of April 3, 2019

 

PLEDGED SUBSIDIARIES

 

 

 

Pledged Membership Interests

 

 

Name

 

 Membership Interests of Pledgor

Subject to Pledge

     

AIRCO 1, LLC

 

100%

 

 

--------------------------------------------------------------------------------

 

 

EXHIBIT A

 

to

 

PLEDGE AGREEMENT

 

STOCK POWER

 

FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer to
_____________________________ one hundred percent (100%) of the limited
liability company membership interests of AIRCO 1, LLC, a Delaware limited
liability company (the “Membership Interests”), standing in the name of the
undersigned on the books of said limited liability company and does hereby
irrevocably constitute and appoint ___________________________________ as the
undersigned’s true and lawful attorney, for it and in its name and stead, to
sell, assign and transfer all or any of the Membership Interests, and for that
purpose to make and execute all necessary acts of assignment and transfer
thereof; and to substitute one or more persons with like full power, hereby
ratifying and confirming all that said attorney or substitute or substitutes
shall lawfully do by virtue hereof.

 

Dated: _______________

 

 

 

AIRCO, LLC,

a North Carolina limited liability company

         

By:

                                                                               
                                 

Name:                                                                          
                            

Its:                                                                            
                               

 

 

--------------------------------------------------------------------------------

 

 

EXHIBIT B

 

to

 

PLEDGE AGREEMENT

 

FORM OF ACKNOWLEDGEMENT AND CONSENT

 

 

The undersigned hereby acknowledges receipt of a copy of the Amended and
Restated Pledge Agreement dated as of April 3, 2019, made by AIRCO, LLC, a North
Carolina limited liability company ("Borrower") for the benefit of MINNESOTA
BANK & TRUST, a Minnesota state banking corporation company, as Lender (the
“Pledge Agreement”). The undersigned agrees for the benefit of Lender that:

 

 

1.

The undersigned will be bound by the terms of the Pledge Agreement and will
comply with such terms insofar as such terms are applicable to the undersigned.

 

 

2.

The undersigned will notify Lender promptly in writing of the occurrence of any
events which may result in Borrower receiving any of the interests or rights
described in Section 1.1(b) of the Pledge Agreement.

 

 

3.

The terms of Section 7(b)(vi) of the Pledge Agreement shall apply to it, mutatis
mutandis, with respect to all actions that may be required of it under or
pursuant to or arising out of Section 7 of the Pledge Agreement.

 

 

4.

This Acknowledgement and Consent shall be considered the written approval of the
undersigned, if required by its articles of organization, operating agreement or
similar document, for all matters referred to in the Pledge Agreement that may
require the consent of the undersigned.

 

 

 

 

AirCo 1, LLC,

A Delaware limited liability company

 

By:                                                                             
                                          

Its: