a102-overline_notexxxair






      6164796.v4  OVERLINE NOTE      U.S. $5,000,000.00              Dated as of June 9, 2022  Minnetonka, Minnesota        FOR VALUE RECEIVED, on the Overline Termination Date (as defined in the Credit  Agreement hereinafter defined) the undersigned, AIR T, INC., a Delaware corporation (the  “Maker”), promises to pay to the order of MINNESOTA BANK & TRUST, a Minnesota state  banking corporation (the “Lender”), the principal sum of FIVE MILLION AND NO/100THS  DOLLARS (U.S. $5,000,000.00) or, if less, the aggregate unpaid principal amount of all  Overline Loans (as hereinafter defined) made by the Lender to the Maker pursuant to the Credit  Agreement.    Interest.  The Maker promises to pay interest on the unpaid principal amount hereof from the  date hereof until such principal amount is paid in full at a fluctuating annual rate of interest equal  to the greater of (a) 2.50% or (b) the sum of (i) the Prime Rate (hereinafter defined), as in effect  on the date hereof and as the same may adjust from time to time, plus (ii) 0.50%. Interest  accrued during each calendar month shall be due and payable on the first day of the following  calendar month, with the first such interest payment due on July 1, 2022.  Interest shall also be  payable at maturity and interest accrued after maturity shall be payable on demand.  The term  “Prime Rate” shall mean the prime rate published in the money rates section of the Wall Street  Journal, floating, and changing with each change of such published rate, or if the Wall Street  Journal ceases to publish such rate, as published in the Federal Reserve Board’s Statistical  Release H. 15.  If the Prime Rate becomes unavailable during the term of this loan, Lender may  designate a substitute index after notifying Maker.  Lender will tell Maker the current Index rate  upon Maker’s request.  Maker understands that Lender may make loans based on other rates as  well.  Interest on the unpaid principal balance of this Note will be calculated as described in the  “INTEREST CALCULATION METHOD” paragraph.  NOTICE:  under no circumstances will  the interest rate on this Note be more than the maximum rate allowed by applicable law.    Payments.  Both principal and interest are payable in lawful money of the United States of  America to the Lender at 9800 Bren Road East, Suite 200, Minnetonka, MN  55343 (or other  location specified by the Lender) in immediately available funds.  By its execution of this Note,  the Maker authorizes the Lender to charge from time to time against any of Maker’s depository  accounts maintained with the Lender any such payments when due and the Lender will use its  reasonable efforts to notify the Maker of such charges.    Interest Calculation Method.  Interest on this Note shall be calculated on the basis of a 360-day  year and the actual number of days elapsed in any portion of a month in which interest is due.  If  any payment to be made by the Maker hereunder shall become due on a day other than a  DocuSign Envelope ID: 70B9FD62-0052-408A-BE24-C0025BA3E219 





 






OVERLINE NOTE  Page 2      U.S. $5,000,000.00              June 9, 2022            Business Day, such payment shall be made on the next succeeding Business Day.    Prepayment; Minimum Interest Charge.  In any event, even upon full prepayment of this  Note, Maker understands that Lender is entitled to a minimum interest charge of $10.00.  Other  than Maker’s obligations to pay any minimum interest charge, Maker may pay without penalty  all or a portion of the amount earlier than it is due.  Early payments will not, unless agreed to by  Lender in writing, relieve Maker of Maker’s obligation to continue to make payments of accrued  unpaid interest.  Rather, early payment will reduce the principal balance due.  Maker agrees not  to send Lender payments marked “paid in full”, “without recourse”, or similar language.  If  Maker sends such a payment, Lender may accept it without losing any of  Lender’s rights under  this Note, and Maker will remain obligated to pay any further amount owed to Lender.  All  written communications concerning disputed amounts, including any check or other payment  instrument that indicates that the payment constitutes “payment in full” of the amount owed or  that is tendered with other conditions or limitations or as full satisfaction of a disputed amount  must be mailed or delivered to:  Minnesota Bank & Trust, 9800 Bren Road East, Suite 200,  Minnetonka, MN  55343.    Late Charge.  If a payment due hereunder is not made within seven days after the date when  due, Maker shall pay to Lender a late payment charge of 5% of the amount of the overdue  payment to compensate Lender for a portion of the cost related to handling the overdue payment.    Interest After Default.  Upon the occurrence of an Event of Default, including failure to pay  upon final maturity, the interest rate on this Note shall be increased by adding an additional  3.000 percentage point margin (“Default Rate Margin”).  The Default Rate Margin shall also  apply to each succeeding interest rate change that would have applied had there been no default.   However, in no event will the interest rate exceed the maximum interest rate limitations under  applicable law.    Credit Agreement.  This Note is the Overline Note referred to in, and is entitled to the benefits  of, the Third Amended and Restated Credit Agreement dated as of August 31, 2021 (as amended,  modified, supplemented or restated from time to time being the “Credit Agreement”; capitalized  terms not otherwise defined herein being used herein as therein defined) between the Maker, its  co-Borrower, Jet Yard, LLC, an Arizona limited liability company, and the Lender.  The Credit  Agreement, among other things, (i) provides for the making of Overline Loans (the “Overline  Loans”) by the Lender to the Maker from time to time in an aggregate amount not to exceed at  any time outstanding the dollar amount first above mentioned, the indebtedness of the Maker  resulting from each such Overline Loan being evidenced by this Note; (ii) contains provisions for  DocuSign Envelope ID: 70B9FD62-0052-408A-BE24-C0025BA3E219 





 






OVERLINE NOTE  Page 3      U.S. $5,000,000.00              June 9, 2022            acceleration of the maturity hereof upon the happening of certain stated events prior to the  maturity hereof upon the terms and conditions therein specified;  and (iii) contains provisions for  the mandatory prepayment hereof upon certain conditions.    Security Agreement.  This Note is secured by, among other things, that certain Amended and  Restated Security Agreement dated as of August 31, 2021, executed by the Maker and certain of  its Subsidiaries in favor of the Lender.    Waiver of Presentment and Demand for Payment; Etc.  Maker and any endorsers or  guarantors hereof severally waive presentment and demand for payment, notice of intent to  accelerate maturity, protest or notice of protest and non-payment, bringing of suit and diligence  in taking any action to collect any sums owing hereunder or in proceeding against any of the  rights and properties securing payment hereunder, and expressly agree that this Note, or any  payment hereunder, may be extended from time to time, and consent to the acceptance of further  security or the release of any security for this Note, all without in any way affecting the liability  of Maker and any endorsers or guarantors hereof.  No extension of time for the payment of this  Note, or any installment thereof, made by agreement by Lender with any Person now or hereafter  liable for the payment of this Note, shall affect the original liability under this Note of the  undersigned, even if the undersigned is not a party to such agreement.    Event of Default.   Any “Event of Default” (as defined in the Credit Agreement) shall constitute  an Event of Default under this Note.  Upon the occurrence of an Event of Default, in addition to  any other rights or remedies Lender may have at law or in equity or under the Credit Agreement  or under any other Loan Document, Lender may, at its option, without notice to Maker, declare  immediately due and payable the entire unpaid principal sum hereof, together with all accrued  and unpaid interest thereon plus any other sums owing at the time of such Event of Default  pursuant to this Note, the Security Agreement or any other Loan Document.  The failure to  exercise the foregoing or any other options shall not constitute a waiver of the right to exercise  the same or any other option at any subsequent time in respect of the same event or any other  event.  The acceptance by the holder of any payment hereunder which is less than payment in  full of all amounts due and payable at the time of such payment shall not constitute a waiver of  the right to exercise any of the foregoing options at that time or at any subsequent time.    Expense Reimbursement.  Maker agrees to pay all expenses for the preparation of this Note, as  set forth in the Credit Agreement, including exhibits, and any amendments to this Note as may  from time to time hereafter be required, and the reasonable attorneys’ fees and legal expenses of  counsel for Lender from time to time incurred in connection with the preparation and execution  DocuSign Envelope ID: 70B9FD62-0052-408A-BE24-C0025BA3E219 





 






OVERLINE NOTE  Page 4      U.S. $5,000,000.00              June 9, 2022            of this Note and any document relevant to this Note, any amendments hereto or thereto, and the  consideration of legal questions relevant hereto and thereto.  Maker agrees to reimburse Lender  upon demand for all reasonable out-of-pocket expenses (including attorneys’ fees and legal  expenses) in connection with Lender’s enforcement of the obligations of the Maker hereunder or  under the Security Agreement or any other collateral document, whether or not suit is  commenced including, without limitation, attorneys’ fees and legal expenses in connection with  any appeal of a lower court’s order or judgment.  The obligations of the Maker under this  paragraph shall survive any termination of the Credit Agreement, this Note, the Security  Agreement, and any other Loan Document.    Successors and Assigns.  This Note shall be binding upon and shall inure to the benefit of the  parties hereto and their respective successors and assigns except that  Maker may not assign or  transfer its rights hereunder without the prior written consent of Lender, which consent may be  withheld in Lender’s sole discretion.  In connection with the actual or prospective sale by the  Lender of any interest or participation in the loan obligation evidenced by this Note, Maker  hereby authorizes the Lender to furnish any information concerning the Maker or any of its  affiliates, however acquired, to any Person or entity.    Usury.  Maker and Lender agree that no payment of interest or other consideration made or  agreed to be made by Maker to Lender pursuant to this Note shall, at any time, be in excess of  the maximum rate of interest permissible by law.  In the event such  payments of interest or other  consideration provided for in this Note shall result in an effective rate of interest which, for any  period of time, is in excess of the limit of the usury or any other law applicable to the loan  evidenced hereby, all sums in excess of those lawfully collectible as interest for the period in  question shall, without further agreement or notice between or by any party hereto, be applied to  the unpaid principal balance and not to the payment of interest; if a surplus remains after full  payment of principal and lawful interest, the surplus shall be remitted by Lender to Maker, and  Maker hereby agrees to accept such remittance.  This provision shall control every other  obligation of the Maker and Lender relating to this Note.    Business Purpose Loan.  The Loan is a business loan.  Maker hereby represents that this loan is  for commercial use and not for personal, family or household purposes. The Maker agrees that  the Loan evidenced by this Note is an exempted transaction under the Truth In Lending Act, 15  U.S.C., §1601, et seq.  DocuSign Envelope ID: 70B9FD62-0052-408A-BE24-C0025BA3E219 





 






OVERLINE NOTE  Page 5      U.S. $5,000,000.00              June 9, 2022            Governing Law.  THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS  NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF  MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES  THEREOF.    WAIVER OF DEFENSES.  OTHER THAN CLAIMS BASED UPON THE FAILURE OF  THE LENDER TO ACT IN A COMMERCIALLY REASONABLE MANNER, THE MAKER  WAIVES EVERY PRESENT AND FUTURE DEFENSE (OTHER THAN THE DEFENSE OF  PAYMENT IN FULL), CAUSE OF ACTION, COUNTERCLAIM OR SETOFF WHICH THE  MAKER MAY NOW HAVE OR HEREAFTER MAY HAVE TO ANY ACTION BY THE  LENDER IN ENFORCING THIS NOTE OR ANY OF THE LOAN DOCUMENTS.  THIS  PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER GRANTING ANY  FINANCIAL ACCOMMODATION TO THE MAKER.    Waiver of Right to Jury Trial; Venue.  MAKER AND THE LENDER (BY ITS  ACCEPTANCE OF THIS NOTE), HAVING BEEN REPRESENTED BY COUNSEL, EACH  KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL  BY JURY IN ANY ACTION RELATING TO OR ARISING FROM THIS NOTE.  AT THE  OPTION OF LENDER, THIS NOTE MAY BE ENFORCED IN ANY UNITED STATES  DISTRICT COURT FOR THE DISTRICT OF MINNESOTA OR THE STATE COURT  SITTING IN HENNEPIN OR RAMSEY COUNTY, MINNESOTA. MAKER CONSENTS TO  THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY  ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT PROPER OR CONVENIENT.  IN  THE EVENT AN ACTION IS COMMENCED IN ANOTHER JURISDICTION OR VENUE  UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY  FROM THE RELATIONSHIP CREATED BY THIS NOTE, LENDER, AT ITS OPTION,  SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE  JURISDICTIONS AND VENUES ABOVE DESCRIBED, OR IF SUCH TRANSFER  CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE  DISMISSED WITHOUT PREJUDICE.      DocuSign Envelope ID: 70B9FD62-0052-408A-BE24-C0025BA3E219 





 






OVERLINE NOTE  Page 6      U.S. $5,000,000.00                        IN WITNESS WHEREOF, the Maker has caused this Overline Note to be signed by its  duly authorized officer in favor of Minnesota Bank & Trust and to be dated as of the date set  forth above.      AIR T, INC., a Delaware corporation    By:        Name: Brian Ochocki  Its: Chief Financial Officer     DocuSign Envelope ID: 70B9FD62-0052-408A-BE24-C0025BA3E219