Bank of America Temporary increase in LOC dated 1/12/06


    EXHIBIT
      10.1

     

    PROMISSORY
      NOTE

    


    
      	
               

              Borrower: AirT,
                Inc.; Mountain Air Cargo, Inc.; MAC Aviation Services, LLC; Global
                Ground
                Support, LLC; and CSA Air, Inc.

              3542
                Airport Road

              Maiden,
                NC 28650

               

            	 	
               

              Lender: Bank
                of America, N.A.

              CCS-Commercial
                Banking

              NC1-014-13-05

              200
                South College Street, 13th
                Floor

              Charlotte,
                NC 28255

            


    

    


    Principal
      Amount: $8,000,000.00Date
      of Note: January 12, 2006

    


    PROMISE
      TO PAY.
      AirT,
      Inc.; Mountain Air Cargo, Inc.; MAC Aviation Services, LLC; Global Ground
      Support, LLC; and CSA Air, Inc. (“Borrower”) jointly and severally promise to
      pay to Bank of America, N.A. (“Lender”), or order, in lawful money of the United
      States of America, the principal amount of Eight Million & 00/100 Dollars
      ($8,000,000.00) or so much as may be outstanding, together with interest on
      the
      unpaid outstanding principal balance of each advance. Interest shall be
      calculated from the date of each advance until repayment of each
      advance.

     

    PAYMENT.
      Borrower will pay this loan in one payment of all outstanding principal plus
      all
      accrued unpaid interest on August 31, 2007. In addition, Borrower will pay
      regular monthly payments of all accrued unpaid interest due as of each payment
      date, beginning January 31, 2006, with all subsequent interest payments to
      be
      due on the last day of each month after that. Unless otherwise agreed or
      required by applicable law, payments will be applied first to any accrued unpaid
      interest; then to principal; then to any late charges; and then to any unpaid
      collection costs. The annual interest rate for this Note is computed on a
      365/360 basis; that is, by applying the ratio of the annual interest rate over
      a
      year of 360 days, multiplied by the outstanding principal balance, multiplied
      by
      the actual number of days the principal balance is outstanding. Borrower will
      pay Lender at Lender’s address shown above or at such other place as Lender may
      designate in writing.

     

    VARIABLE
      INTEREST RATE.
      The
      interest rate on this Note is subject to change from time to time based on
      changes in an independent index which is the “LIBOR Daily Floating Rate” which
      is the 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 Lender from time to time) as determined for each banking day at
      approximately 11:00 a.m. London time two (2) business 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
      Lender’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 Lender ( the “Index”). The Index is
      not necessarily the lowest rate charged by Lender on its loans. If the Index
      becomes unavailable during the term of this loan, Lender may designate a
      substitute Index after notice to Borrower. Lender will tell Borrower the current
      Index rate upon Borrower’s request. The Interest rate change will not occur more
      often than each date of such change in the Index. Borrower understands that
      Lender may make loans based on other rates as well. The interest rate to be
      applied to the unpaid principal balance of this Note will be at a rate of 1.370
      percentage points over the Index. NOTICE: Under no circumstances will the
      interest rate on this Note be more than the maximum rate allowed by applicable
      law.

     

    PREPAYMENT.
      Borrower may pay without penalty all or a portion of the amount owed earlier
      than it is due. Early payments will not, unless agreed to by Lender in writing,
      relieve Borrower of Borrower’s obligation to continue to make payments of
      accrued unpaid interest. Rather, early payments will reduce the principal
      balance due. Borrower agrees not to send Lender payments marked “paid in full,”
“without recourse,” or similar language. If Borrower sends such a payment,
      Lender may accept it without losing any of Lender’s rights under this Note, and
      Borrower will remain obligated to pay further amount owed to Lender. All written
      communications concerning disputed amounts, including any check or other payment
      instrument that indicates that the payment constitutes “payment in full” of the
      amount owed or that is tendered with other conditions or limitations or as
      full
      satisfaction of a disputed amount must be mailed or delivered to: Bank of
      America, N.A., NC1-014-13-05, P.O. Box 30120, Charlotte, NC
      28254-3693.

     

    LATE
      CHARGE.
      If a
      payment is 15 days or more late, Borrower will be charged 4.000% of the unpaid
      portion of the regularly scheduled payment. This late charge shall be paid
      to
      Lender by Borrower to compensate Lender for Lender’s extra costs and expenses
      caused by the late payment.

     

    INTEREST
      AFTER DEFAULT.
      Upon
      default, including failure to pay upon final maturity, Lender, at is option
      may,
      if permitted under applicable law, increase the variable interest rate on this
      Note to 7.370 percentage points over the Index. The interest rate will not
      exceed the maximum rate permitted by applicable law.

     

    DEFAULT.
      Each of
      the following shall constitute an event of default (“Event of Default”) under
      this Note:

     

    Payment
      Default.
      Borrower fails to make any payment when due under this Note.

     

    Other
      Defaults.
      Borrower fails to comply with or to perform any other term, obligation, covenant
      or condition contained in this Note or in any of the related documents or to
      comply with or to perform any term, obligation, covenant or condition contained
      in any other agreement between Lender and Borrower.

     

    Default
      in Favor of Third Parties.
      Borrower or any Grantor defaults under any loan, extension of credit, security
      agreement, purchase or sales agreement, or any other agreement, in favor of
      any
      other creditor or person that may materially affect any of Borrower’s property
      or Borrower’s ability to repay this Note or perform Borrower’s obligations under
      this Note or any of the related documents.

     

    False
      Statements.
      Any
      warranty, representation or statement made or furnished to Lender by Borrower
      or
      on Borrower’s behalf under this Note or the related documents is false or
      misleading in any material respect, either now or at the time made or furnished
      or becomes false or misleading at any time thereafter.

     

    Insolvency.
      The
      dissolution or termination of Borrower’s existence as a going business, the
      insolvency of Borrower, the appointment of a receiver for any part of Borrower’s
      property, any assignment for the benefit of creditors, any type of creditor
      workout, or the commencement of any proceeding under any bankruptcy or
      insolvency laws by or against Borrower.

     

    Creditor
      or Forfeiture Proceedings.
      Commencement of foreclosure or forfeiture proceedings, whether by judicial
      proceeding, self-help, repossession or any other method, by any creditor of
      Borrower or by any governmental agency against any collateral securing the
      loan.
      This includes a garnishment of any of Borrower’s accounts, including deposit
      accounts, with Lender. However, this Event of Default shall not apply if there
      is a good faith dispute by Borrower as to the validity or reasonableness of
      the
      claim which is the basis of the creditor or forfeiture proceeding and if
      Borrower gives Lender written notice of the creditor or forfeiture proceeding
      and deposits with lender monies or a surety bond for the creditor or forfeiture
      proceeding, in an amount determined by Lender, in its sole discretion, as being
      an adequate reserve or bond for the dispute.

     

    Events
      Affecting Guarantor.
      Any of
      the preceding events occurs with respect to any guarantor, endorser, surety,
      or
      accommodation party of any of the Indebtedness or any guarantor, endorser,
      surety, or accommodation party dies or becomes incompetent, or revokes or
      disputes the validity of, or liability under, any guaranty of the Indebtedness
      evidenced by this Note.

     

    Change
      in Ownership.
      Any
      change in ownership of twenty-five (25%) or more of the common stock of
      Borrower.

     

    Adverse
      Change.
      A
      material adverse change occurs in Borrower’s financial condition, or Lender
      believes the prospect of payment or performance of this Note is
      impaired.

     

    Insecurity.
      Lender
      in good faith believes itself insure.

     

    LENDER’S
      RIGHTS.
      Upon
      default, Lender may declare the entire unpaid principal balance on this Note
      and
      all accrued unpaid interest immediately due, and then Borrower will pay that
      amount.

     

    ATTORNEYS’
      FEES; EXPENSES.
      Lender
      may hire or pay someone else to help collect this Note if Borrower does not
      pay.
      Borrower will pay Lender that amount. This includes, subject to any limits
      under
      applicable law, Lender’s attorneys’ fees and Lender’s legal expenses, whether or
      not there is a lawsuit, including attorneys’ fees, expenses for bankruptcy
      proceedings (including efforts to modify or vacate any automatic stay of
      injunction), and appeals. If not prohibited by applicable law, Borrower also
      will pay any court costs, in addition to all other sums provided by
      law.

     

    GOVERNING
      LAW.
      This
      Note will be governed by federal law applicable to Lender and, to the extent
      not
      preempted by federal law, the laws of the State of North Carolina without regard
      to its conflicts of law provisions. This Note has been accepted by Lender in
      the
      State of North Carolina.

     

    CHOICE
      OF VENUE.
      If
      there is a lawsuit, Borrower agrees upon Lender’s request to submit to the
      jurisdiction of the courts of any County, State of North Carolina.

     

    RIGHT
      OF SETOFF.
      To the
      extent permitted by applicable law, Lender reserves a right of setoff in all
      Borrower’s accounts with Lender (whether checking, savings, or some other
      account). This includes all accounts Borrower may open in the future. However,
      this does not include any IRA or Keogh accounts, or any trust accounts for
      which
      setoff would be prohibited by law. Borrower authorizes Lender, to the extent
      permitted by applicable law, to charge or setoff all sums owing on the debt
      against any and all such accounts.

     

    LINE
      OF CREDIT.
      This
      Note evidences a revolving line of credit. Advances under the Note, as well
      as
      directions for payment from Borrower’s accounts, may be requested orally or in
      writing by Borrower or by an authorized person. Lender may, but need not,
      require that all oral requests be confirmed in writing. Borrower agrees to
      be
      liable for all sums either: (A) advanced in accordance with the
      instructions of an authorized person or (B) credited to any of Borrower’s
      accounts with Lender. The unpaid principal balance owing on this Note at any
      time may be evidenced by endorsements on this Note or by Lender’s internal
      records, including daily computer print-outs. Lender will have no obligation
      to
      advance funds under this Note if: (A) Borrower or any guarantor is in
      default under the terms of this Note or any agreement that Borrower or any
      guarantor has with Lender, including any agreement made in connection with
      the
      signing of this Note; (B) Borrower or any guarantor ceases doing business
      or is insolvent; (C) any guarantor seeks, claims or otherwise attempts to
      limit, modify or revoke such guarantor’s guarantee of this Note or any other
      loan with Lender; (D) Borrower has applied funds provided pursuant to this
      Note for purposes other than those authorized by Lender; or (E) Lender in
      good faith believes itself insecure.

     

    ARBITRATION.
      (a) This paragraph 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 arbitration provision only, the term “parties” shall
      include any parent corporation, subsidiary or affiliate of Lender 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. The
              arbitration will take place on an individual basis without resort to
              any
              form of class action.

          


     

    	(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 paragraph. In the event of any
              inconsistency, the terms of this paragraph 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, any party to
              this agreement may substitute 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, 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 the statute of limitations,
              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). 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.

          


     

    ASSIGNMENT.
      Lender
      may sell or offer to sell this Note, together with any and all documents
      guaranteeing, securing or executed in connection with this Note, to one or
      more
      assignees without notice to or consent of Borrower. Lender is hereby authorized
      to share any information it has pertaining to the loan evidenced by this Note,
      including without limitation credit information on the undersigned, any of
      its
      principles, or any guarantors of this Note, to any such assignee or prospective
      assignee.

     

    COUNTERPARTS.
      This
      Note may be executed in any number of counterparts, each of which when so
      executed shall be deemed to be an original and all of which taken together
      shall
      constitute one and the same agreement.

     

    PRE
      BILLING.
      If the
      Borrower and Lender elect to use pre-billing calculation, for each payment
      date
      (the “Due Date”) the amount of each payment debit will be determined as follows:
      On the “Billing Date” Lender will prepare and mail to Borrower an invoice of the
      amounts that will be due on that Due Date (“Billed Amount”). (The “Billing Date”
will be a date that is a specified number of calendar days prior to the Due
      Date, which number of days will be mutually agreed from time to time by Lender
      and Borrower.) The calculation of the Billed Amount will be made on the
      assumption that no new extensions of credit or payments will be made between
      the
      Billing Date and the Due Date, and that there will be no changes in the
      applicable interest rate. On the Due Date Lender will debit the Designated
      Account for the Billed Amount, regardless of the actual amount due on that
      date
      (“Accrued Amount”). If the Due Date does not fall on a Business Day, Lender
      shall debit the Designated Account on the first Business Day following the
      Due
      Date. For purposes of this Agreement, “Business Day” means a day other than
      Saturday, Sunday or other day on which commercial banks are authorized to close
      or are in fact closed in the state where the Lender’s lending office is located.
      If the Billed Amount debited to the Designated Account differs from the Accrued
      Amount, the difference will be treated as follows: If the Billed Amount is
      less
      than the Accrued Amount, the Billed Amount for the following Due Date will
      be
      increased by the amount of the underpayment. Borrower will not be in default
      by
      reason of any such underpayment. If the Billed Amount is more than the Accrued
      Amount, the Billed Amount for the following Due Date will be decreased by the
      amount of the overpayment. Regardless of any such difference, interest will
      continue to accrue based on the actual amount of principal outstanding without
      compounding. Lender will not pay interest on any overpayment.

     

    AUTOMATIC
      PAYMENTS.
      Borrower hereby authorizes Lender automatically to deduct from Borrower’s
      account numbered 510028053
      the
      amount of any loan payment. If the funds in the account are insufficient to
      cover any payment, Lender shall not be obligated to advance funds to cover
      the
      payment. At any time and for any reason, Borrower or Lender may voluntarily
      terminate Automatic Payments.

     

    TERMINATION
      OF AUTOMATIC PAYMENTS.
      In the
      event that Borrower terminates the Automatic Payment arrangement with Lender,
      Borrower agrees that the interest rate under the Note will increase, at the
      discretion of the Lender, by one-half percentage point (0.50%) per annum over
      the rate of interest stated in the Note, and the amount of each interest
      installment will be increased accordingly. The effective rate of interest under
      the Note shall not in any event exceed the maximum rate permitted by
      law.

     

    OPTIONAL
      RENEWAL CLAUSE.
      This
      Note will be considered renewed if and only if Lender has sent to Borrower
      a
      written notice of renewal (the “Renewal Notice”) effective as of the Expiration
      Date. If this Note is renewed, it will continue to be subject to all the terms
      and conditions set forth herein except as modified by the Renewal Notice. If
      this Note is renewed, the term “Expiration Date” shall mean the date set forth
      in the Renewal Notice as the Expiration Date, and all outstanding principal
      plus
      all accrued interest shall be paid on the Expiration Date. The same process
      for
      renewal will apply to any subsequent renewal of this Note. A renewal fee may
      be
      charged at Lender’s option. The amount of the renewal fee will be specified in
      the Renewal Notice.

     

    ADVANCES
      UNDER THE LINE OF CREDIT.
      Except
      as otherwise provided in this Note, advances under the line of credit provided
      under this Note will be available until the earlier of any event of default
      under this Note, or August 31, 2007 (the “Expiration Date”). Borrower may
      borrow, repay and re-borrow under this Note at any time until the Expiration
      Date. The total principal amount outstanding under this Note at any one time
      must not exceed the principal amount of this Note, provided that the amount
      advanced hereunder does not exceed any borrowing base or other limitation on
      borrowings by Borrower. The total principal amount outstanding under this Note
      during each period specified below must not exceed the principal amounts
      specified below, provided that the amount advanced hereunder does not exceed
      any
      borrowing base or other limitation on borrowings by Borrower:

     

    
      	
              Period

               

            	
              Amount

               

            
	
              From
                the date of this Note until April 30, 2006

               

            	
              $8,000,000.00

               

            
	
              From
                May 1, 2006 until expiration date

               

            	
              $7,000,000.00

               

            


    

    FINAL
      AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT:
      (A) THIS DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES WITH
      RESPECT TO THE SUBJECT MATTER HEREOF, (B) THIS DOCUMENT SUPERSEDES ANY
      COMMITMENT LETTER, TERM SHEET OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS
      RELATING TO THE SUBJECT MATTER HEREOF, UNLESS SUCH COMMITMENT LETTER, TERM
      SHEET
      OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS EXPRESSLY PROVIDES TO THE
      CONTRARY, (C) THERE AR NO ORAL AGREEMENTS BETWEEN THE PARTIES, AND
      (D) THIS DOCUMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR,
      CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE
      PARTIES.

     

    ADDITIONAL
      DEFAULTS.
      Each of
      the following shall constitute an additional event of default (“Event of
      Default”) under this Note:

     

    Event
      of Default Under Related Documents.
      A
      default or event of default occurs under the terms of any promissory note,
      guaranty, pledge agreement, security agreement or other agreement or instrument
      executed by Borrower or any guarantor, pledgor, accommodation party or other
      obligor in connection with or relating to this Note.

     

    Judgment.
      The
      entry of a judgment against any Borrower or guarantor, pledgor, accommodation
      party or other obligor which Lender deems to be of a material nature, in
      Lender’s sole discretion.

     

    Creditor
      or Forfeiture Proceedings.
      Commencement of foreclosure or forfeiture proceedings, whether by judicial
      proceeding, self-help, repossession or any other method, by any creditor of
      Borrower or by any governmental agency against any assets of Borrower and/or
      any
      guarantor, pledgor, accommodation party or other obligor. This includes a
      garnishment of: (1) any of Borrower’s accounts, including deposit accounts,
      with Lender and/or (2) any account, including deposit accounts, with Lender
      of any guarantor, pledgor, accommodation party or other obligor. However, this
      Event of Default shall not apply if there is a good faith dispute by such
      Borrower and/or guarantor, pledgor, accommodation party or other obligor as
      to
      the validity or reasonableness of the claim which is the basis of the creditor
      or forfeiture proceeding and if such Borrower and/or guarantor, pledgor,
      accommodation party or other obligor gives Lender written notice of the creditor
      of forfeiture proceeding and deposits with Lender monies or a surety bond for
      the creditor or forfeiture proceeding, in an amount determined by Lender, in
      its
      sole discretion, as being an adequate reserve or bond for the
      dispute.

     

    Adverse
      Change of Obligor.
      A
      material adverse change occurs in the financial condition of any guarantor,
      pledgor, accommodation party or other obligor, as determined by Lender in its
      sole discretion.

     

    Resignation/Withdrawal.
      The
      resignation or withdrawal of any partner or a material owner of Borrower or
      any
      guarantor, pledgor, accommodation party or other obligor or any substantial
      change in the present executive or management personnel of Borrower, any
      guarantor, pledgor, accommodation party or other obligor, as determined by
      Lender in its sole discretion.

     

    ADDRESS
      FOR NOTICES.
      Any
      notice required to be given under this Note shall be given in writing, and
      shall
      be effective when actually delivered, when actually received by telefacsimile
      (unless otherwise required by law), when deposited with a nationally recognized
      overnight courier, or, if mailed, when deposited in the United States mail,
      as
      first class, certified or registered mail postage prepaid, directed if to
      Borrower at the address shown near the beginning of this Note and if to Lender
      at the address set forth below. Any party may change its address for notices
      under this Note by giving formal written notice to the other parties, specifying
      that the purpose of the notice is to change the party’s address. For notice
      purposes, Borrower agrees to keep Lender informed at all times of Borrower’s
      current address. Unless otherwise provided or required by law, if there is
      more
      than one Borrower, any notice given by Lender to any Borrower is deemed to
      be
      notice given to all Borrowers. Notwithstanding anything to the contrary herein,
      all notices and communications to the Lender shall be directed to the following
      address:

     

    Bank
      of
      America, N. A.

    Charlotte
      CCS - Attn: Notice Desk

    200
      South
      College, 13th
      Floor

    Charlotte,
      NC 28255.

     

    SUCCESSOR
      INTERESTS. The
      terms
      of this Note shall be binding upon Borrower, and upon Borrower’s heirs, personal
      representatives, successors and assigns, and shall inure to the benefit of
      Lender and its successors and assigns.

     

    GENERAL
      PROVISIONS.
      Lender
      may delay or forgo enforcing any of its rights or remedies under this Note
      without losing them. Each Borrower understands and agrees that, with or without
      notice to Borrower, Lender may with respect to any other borrower (a) make
      one
      or more additional secured or unsecured loans or otherwise extend additional
      credit; (b) alter, compromise, renew, extend, accelerate, or otherwise change
      one or more times the time for payment or other terms of any indebtedness,
      including increases and decreases of the rate of interest on the indebtedness;
      (c) exchange, enforce, waive, subordinate, fail or decide not to perfect, and
      release any security, with or without the substitution of new collateral; (d)
      apply such security and direct the order or manner of sale thereof, including
      without limitation, any non-judicial sale permitted by the terms of the
      controlling security agreements, as Lender in its discretion may determine;
      (e)
      release, substitute, agree not to sue, or deal with any one or more of
      Borrower’s sureties, endorsers, or other guarantors on any terms or in any
      manner Lender may choose; and (f) determine how, when and what application
      of
      payments and credits shall be made on any other indebtedness owing by such
      other
      Borrower. Borrower and any other person who signs, guarantees or endorses this
      Note, to the extent allowed by law, waive presentment, demand for payment,
      and
      notice of dishonor. Upon any change in the terms of this Note, and unless
      otherwise expressly stated in writing, no party who signs this Note, whether
      as
      maker, guarantor, accommodation maker or endorser, shall be released from
      liability. All such parties agree that Lender may renew or extent (repeatedly
      and for any length of time) this loan or release any party or guarantor or
      collateral; or impair, fail to realize upon or perfect Lender’s security
      interest in the collateral; and take any other action deemed necessary by lender
      without the consent of or notice to anyone. All such parties also agree that
      Lender may modify this loan without the consent of or notice to anyone other
      than the party with whom the modification is made. The obligations under this
      Note are joint and several.

     

    PRIOR
      TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
      OF
      THIS NOTE, INCLUDNG THE VARIABLE INTEREST RATE PROVISIONS. EACH BORROWER AGREES
      TO THE TERMS OF THE NOTE.

     

    BORROWER
      ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY
      NOTE.

     

    THIS
      NOTE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS NOTE IS AND SHALL
      CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO
      LAW.

     

    BORROWER:

     

    AIR
      T, INC.

    


    


    By:
      /s/
      John J. Gioffre(Seal)

    John
      J.
      Gioffre, CFO of Air T, Inc.

    


    


    MOUNTAIN
      AIR CARGO, INC.

    


    


    By:/s/
      John J. Gioffre(Seal)

    John
      J.
      Gioffre, CFO of Mountain Air

    Cargo,
      Inc.

    


    


    MAC
      AVIATION SERVICES, LLC

    


    AIR
      T, INC., Member of MAC Aviation Services, LLC

    


    


    By:/s/
      John J. Gioffre(Seal)

    John
      J.
      Gioffre, CFO of Air T, Inc.

    


    


    GLOBAL
      GROUND SUPPORT, LLC

    


    


    By:/s/
      John J. Gioffre(Seal)

    John
      J.
      Gioffre, CFO/Member of Global

    Ground
      Support, LLC

    


    


    CSA
      AIR, INC.

    


    


    By:/s/
      John J. Gioffre(Seal)

    John
      J.
      Gioffre, CFO of CSA Air, Inc.