Document:

Exhibit
10.4

 

EXECUTION
VERSION

 

REGISTRATION
RIGHTS AGREEMENT

 

REGISTRATION
RIGHTS AGREEMENT (this “Agreement”), dated as of December 15, 2017, by and among Marrone Bio Innovations,
Inc., a Delaware corporation, with headquarters located at 1540 Drew Avenue, Davis, CA 95618 (the “Company”),
and the Investors (as hereinafter defined).

 

WHEREAS:

 

A.
Pursuant to the Securities Purchase Agreement by and among the Company and the buyers named therein (the
“Buyers”) of even date herewith (the “Securities Purchase Agreement”), the Company has
agreed, upon the terms and subject to the conditions of the Securities Purchase Agreement, to issue and sell to each Buyer
(i) shares (the “SPA Shares”) of the Company’s common stock, par value $0.00001 per share (the
“Common Stock”) and (ii) warrants (the “SPA Warrants”), which will be exercisable to
purchase shares of Common Stock (as exercised, collectively, the “SPA Warrant Shares”) in accordance with
the terms of the SPA Warrants.

 

B.
Pursuant to the Omnibus Amendment No. 4, of even date herewith, by and among the Company and Ivy Science & Technology
Fund, Waddell & Reed Advisors Science & Technology Fund and Ivy VIP Science & Technology, the Company has agreed
to exchange a portion of the outstanding principal amount of the notes described therein for shares of Common Stock (the
“Waddell Shares”) and warrants (the “Waddell Warrants”), which shall be exercisable to
purchase shares of Common Stock (as exercised, collectively, the “Waddell Warrant Shares”) in accordance
with the terms of the Waddell Warrants.

 

C.
Pursuant to the Sixth Amendment to Loan Agreement, of even date herewith, by and between the Company and Gordon Snyder, an
individual, as administrative agent for the lenders party to that certain Loan Agreement, dated as of October 2, 2012 (as may
be amended from time to time), the Company has agreed to exchange a portion of the outstanding principal amount of the notes
described therein for shares of Common Stock (the “Snyder Shares” and, collectively with the SPA Shares
and the Waddell Shares, the “Common Shares”) and warrants (the “Snyder Warrants”),
which shall be exercisable to purchase shares of Common Stock (as exercised, collectively, the “Snyder Warrant
Shares”) in accordance with the terms of the Snyder Warrants.

 

D.
Pursuant to the Engagement Letter, as amended on December 15, 2017, by and between the Company and National Securities
Corporation (the “Placement Agent”), the Company has agreed to issue to the Placement Agent, as
consideration for its services as placement agent for the transactions under the Securities Purchase Agreement, warrants (the
“Placement Agent Warrants” and, collectively with the SPA Warrants, the Waddell Warrants and the Snyder
Warrants, the “Warrants”), which shall be exercisable to purchase shares of Common Stock (as exercised,
the “Placement Agent Warrant Shares” and, collectively with the SPA Warrant Shares, the Waddell Warrant
Shares and the Snyder Warrant Shares, the “Warrant Shares”) in accordance with the terms of the Placement
Agent Warrants.

 

    	 

     

    

 

E. In
connection with transactions described above, the Company has agreed to provide certain registration rights under the Securities
Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “1933
Act”).

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Investors hereby agree as follows:

 

1. Definitions.

 

Capitalized
terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement.
As used in this Agreement, the following terms shall have the following meanings:

 

(a) “Additional
Effective Date” means the date the Additional Registration Statement is declared effective by the SEC.

 

(b) “Additional
Effectiveness Deadline” means the date which is the earlier of (x) (i) the date which is one hundred twenty (120) calendar
days after the earlier of the Additional Filing Date and the Additional Filing Deadline and
(y) the fifth (5th) Business Day after the date the Company is notified (orally or in writing, whichever is earlier)
by the SEC that such Additional Registration Statement will not be reviewed or will not be subject to further review; provided,
however, that if the Additional Effectiveness Deadline falls on a Saturday, Sunday or other day that the SEC is closed for business,
the Additional Effectiveness Deadline shall be extended to the next Business Day on which the SEC is open for business.

 

(c) “Additional
Filing Date” means the date on which the Additional Registration Statement is filed with the SEC.

 

(d) “Additional
Filing Deadline” means if Cutback Shares are required to be included in any Additional Registration Statement, the later
of (i) the date sixty (60) days after the date substantially all of the Registrable Securities registered under the immediately
preceding Registration Statement are sold and (ii) the date six (6) months from the Initial Effective Date or the most recent
Additional Effective Date, as applicable.

 

(e) “Additional
Registrable Securities” means, (i) any Cutback Shares not previously included on a Registration Statement, and (ii)
any capital stock of the Company issued or issuable with respect to the Common Shares, the Warrants, the Warrant Shares or the
Cutback Shares, as applicable, as a result of any stock split, stock dividend, recapitalization, exchange or similar event or
otherwise, without regard to any limitations on exercise of the Warrants; provided, that any such Additional Registrable
Securities shall cease to be Additional Registrable Securities to the extent: (i) a Registration Statement with respect to the
sale of such Additional Registrable Securities has become effective under the 1933 Act and such Additional Registrable Securities
have been disposed of pursuant to such Registration Statement; (ii) such Additional Registrable Securities are able to be sold
pursuant to Rule 144 without regard to the volume and manner of sale limitations contained thereunder and without the requirement
of the Company to comply with Rule 144(c)(1); (iii) such Additional Registrable Securities shall have been otherwise transferred
and no longer bear a legend restricting transfer under the 1933 Act, and may be resold without registration under the 1933 Act;
or (iv) such Additional Registrable Securities cease to be outstanding.

 

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(f)
“Additional Registration Statement” means a registration statement or registration statements of the
Company filed under the 1933 Act covering the resale of any Additional Registrable Securities.

 

(g)
“Additional Required Registration Amount” means any Cutback Shares not previously included on a
Registration Statement, without regard to any limitations on the exercise of the Warrants.

 

(h) “Business
Day” means any day other than Saturday, Sunday or any other day on which commercial banks in the City of New York are
authorized or required by law to remain closed.

 

(i) “Closing
Date” shall have the meaning set forth in the Securities Purchase Agreement.

 

(j) “Cutback
Shares” means any of the Initial Required Registration Amount or the Additional Required Registration Amount of Registrable
Securities not included in any Registration Statements previously declared effective hereunder as a result of a limitation on
the maximum number of shares of Common Stock of the Company permitted to be registered by the staff of the SEC pursuant to Rule
415. The number of Cutback Shares shall be allocated pro rata among the Investors with each
Investor entitled to elect the portion of its Common Shares and/or Warrant Shares that are to be considered Cutback Shares. For
the purpose of determining the Cutback Shares, in order to determine any applicable Required Registration Amount, unless an Investor
referenced in the following categories (ii) or (iii) gives written notice to the Company to the contrary with respect to the allocation
of its Cutback Shares as between Common Shares and Warrant Shares set forth in categories (ii) or (iii), as applicable: (i) first,
the Placement Agent Warrant Shares shall be excluded until all the Placement Agent Warrant Shares have been excluded; (ii) second,
the Snyder Warrant Shares and the Waddell Warrant Shares shall be excluded on a pro rata basis among the holders of Snyder Warrant
Shares and Waddell Warrant Shares until all of the Snyder Warrant Shares and Waddell Warrant Shares have been excluded and thereafter
the Snyder Shares and the Waddell Shares shall be excluded on a pro rata basis among the holders of all Snyder Shares and Waddell
Shares until all of the Snyder Shares and Waddell Shares have been excluded; and (iii) third, the SPA Warrant Shares shall be
excluded on a pro rata basis among the Buyers until all of the SPA Warrant Shares have been excluded and thereafter the SPA Shares
shall be excluded on a pro rata basis among the Buyers until all of the SPA Shares have been excluded.

 

(k) “effective”
and “effectiveness” refer to a Registration Statement that has been declared effective by the SEC and is available
for the resale of the Registrable Securities required to be covered thereby.

 

(l) “Effective
Date” means the Initial Effective Date and the Additional Effective Date, as applicable.

 

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(m) “Effectiveness
Deadline” means the Initial Effectiveness Deadline and the Additional Effectiveness Deadline, as applicable.

 

(n) “Eligible
Market” means the Principal Market, The New York Stock Exchange, Inc., the NYSE American LLC, The NASDAQ Global Select
Market or The Nasdaq Global Market.

 

(o) “Filing
Deadline” means the Initial Filing Deadline and the Additional Filing Deadline, as applicable.

 

(p) “Initial
Effective Date” means the date that the Initial Registration Statement has been declared effective by the SEC.

 

(q) “Initial
Effectiveness Deadline” means the date which is one hundred eighty (180) calendar days after the Closing Date;
provided, however, that if the Initial Effectiveness Deadline falls on a Saturday, Sunday or other day that the SEC is closed
for business, the Initial Effectiveness Deadline shall be extended to the next Business Day on which the SEC is open for business.

 

(r) “Initial
Filing Date” means the date on which the Initial Registration Statement is filed with the SEC.

 

(s) “Initial
Filing Deadline” means the date which is sixty (60) calendar days after the Closing Date.

 

(t) “Initial
Registrable Securities” means (i) the Common Shares issued, (ii) the Warrant Shares issued or issuable upon exercise
of the Warrants and (iii) any capital stock of the Company issued or issuable with respect to the Common Shares, the Warrant Shares
or the Warrants, in each case as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise,
without regard to any limitations on the exercise of the Warrants; provided, that any such Initial Registrable Securities
shall cease to be Initial Registrable Securities to the extent: (i) a Registration Statement with respect to the sale of such
Initial Registrable Securities has become effective under the 1933 Act and such Initial Registrable Securities have been disposed
of pursuant to such Registration Statement; (ii) such Initial Registrable Securities are able to be sold pursuant to Rule 144
without regard to the volume and manner of sale limitations contained thereunder and without the requirement of the Company to
comply with Rule 144(c)(1); (iii) such Initial Registrable Securities shall have been otherwise transferred and no longer bear
a legend restricting transfer under the 1933 Act, and may be resold without registration under the 1933 Act; or (iv) such Initial
Registrable Securities cease to be outstanding.

 

(u) “Initial
Registration Statement” means a registration statement or registration statements of the Company filed under the 1933
Act covering the resale of the Initial Registrable Securities.

 

(v) “Initial
Required Registration Amount” means the sum of (i) the number of Common Shares issued and (ii) the maximum number of
Warrant Shares issued and issuable pursuant to the Warrants, each as of the Trading Day immediately preceding the applicable date
of determination, without regard to any limitations on the exercise of the Warrants.

 

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(w) “Investors”
means the investors listed on the Schedule of Investors attached hereto and any other holder of Registrable Securities that is
a party to this Agreement or that succeeds to the rights hereunder in accordance with Section 9.

 

(x) “Lead
Investor” means Ospraie Ag Science LLC.

 

(y) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization
and a government or any department or agency thereof.

 

(z) “Principal
Market” means The NASDAQ Capital Market.

 

(aa) “register,”
“registered,” and “registration” refer to a registration effected by preparing and filing
one or more Registration Statements (as defined below) in compliance with the 1933 Act and pursuant to Rule 415, and the declaration
or ordering of effectiveness of such Registration Statement(s) by the SEC.

 

(bb) “Registrable
Securities” means the Initial Registrable Securities and the Additional Registrable Securities; provided, that
any such Registrable Securities shall cease to be Registrable Securities to the extent: (i) a Registration Statement with respect
to the sale of such Registrable Securities has become effective under the 1933 Act and such Registrable Securities have been disposed
of pursuant to such Registration Statement; (ii) such Registrable Securities are able to be sold pursuant to Rule 144 without
regard to the volume and manner of sale limitations contained thereunder and without the Company’s requirement to comply
with Rule 144(c)(1); (iii) such Registrable Securities shall have been otherwise transferred and no longer bear a legend restricting
transfer under the 1933 Act, and may be resold without registration under the 1933 Act; or (iv) such Registrable Securities cease
to be outstanding.

 

(cc) “Registration
Statement” means the Initial Registration Statement and the Additional Registration Statement, as applicable.

 

(dd) “Required Holders” means the holders of at least a majority of the Registrable Securities and shall
include the Lead Investor so long as the Lead Investor or any of its Affiliates together maintain the Lead Investor Minimum
Threshold (as defined in the Securities Purchase Agreement).

 

(ee) “Required
Registration Amount” means either the Initial Required Registration Amount or the Additional Required Registration Amount,
as applicable.

 

(ff) “Rule
144” means Rule 144 (or any successor thereto) promulgated under the 1933 Act.

 

(gg) “Rule
415” means Rule 415 promulgated under the 1933 Act or any successor rule providing for offering securities on a continuous
or delayed basis.

 

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(hh) “SEC”
means the United States Securities and Exchange Commission.

 

(ii) “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded; provided that “Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during
the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing
time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).

 

2. Registration.

 

(a) Initial
Mandatory Registration. The Company shall prepare, and, in no event later than the Initial Filing Deadline, file with the
SEC the Initial Registration Statement on Form S-3 covering the resale of all of the Initial Registrable Securities. In the event
that Form S-3 is unavailable for such a registration, the Company shall use such other form as is available for such a registration
on another appropriate form that the Company is then eligible to use, subject to the provisions of Section 2(e). The Initial Registration
Statement prepared pursuant hereto shall register for resale at least the number of shares of Common Stock equal to the Initial
Required Registration Amount determined as of the date the Initial Registration Statement is initially filed with the SEC. The
Initial Registration Statement shall contain the “Plan of Distribution” and “Selling Stockholders”
sections in substantially the form attached hereto as Exhibit B. The Company shall use its reasonable best efforts to have
the Initial Registration Statement declared effective by the SEC no later than the Initial Effectiveness Deadline. By 9:30 a.m.
New York time on the second Business Day following the Initial Effective Date, the Company shall file with the SEC in accordance
with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Initial Registration
Statement.

 

(b) Additional
Mandatory Registrations. The Company shall prepare, and, as soon as practicable but in no event later than the Additional
Filing Deadline, file with the SEC an Additional Registration Statement on Form S-3 covering the resale of all of the Additional
Registrable Securities not previously registered on an Additional Registration Statement hereunder. To the extent the staff of
the SEC does not permit the Additional Required Registration Amount to be registered on an Additional Registration Statement,
the Company shall file Additional Registration Statements successively trying to register on each such Additional Registration
Statement the maximum number of remaining Additional Registrable Securities until the Additional Required Registration Amount
has been registered with the SEC. In the event that Form S-3 is unavailable for such a registration, the Company shall use such
other form as is available for such a registration on another appropriate form that the Company is then eligible to use, subject
to the provisions of Section 2(e). Each Additional Registration Statement prepared pursuant hereto shall register for resale at
least that number of shares of Common Stock equal to the Additional Required Registration Amount determined as of the date such
Additional Registration Statement is initially filed with the SEC. Each Additional Registration Statement shall contain the “Plan
of Distribution” and “Selling Stockholders” sections in substantially the form attached hereto as
Exhibit B. The Company shall use its reasonable best efforts to have each Additional Registration Statement declared effective
by the SEC as soon as practicable, but in no event later than the Additional Effectiveness Deadline. By 9:30 a.m. New York time
on the second Business Day following the Additional Effective Date, the Company shall file with the SEC in accordance with Rule
424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Additional Registration Statement.

 

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(c) Allocation
of Registrable Securities. The initial number of Registrable Securities included in any Registration Statement and any increase
or decrease in the number of Registrable Securities included therein shall be allocated pro rata among the Investors based on
the number of Registrable Securities held by each Investor at the time the Registration Statement covering such initial number
of Registrable Securities or increase or decrease thereof is declared effective by the SEC. In no event shall the Company include
any securities other than Registrable Securities on any Registration Statement without the prior written consent of the Required
Holders.

 

(d) Investors’
Counsel. Subject to Section 5 hereof, the Required Holders shall have the right to select one legal counsel for the Investors
to review any registration pursuant to this Section 2 (“Investors’ Counsel”), which shall be Schulte
Roth & Zabel LLP or such other counsel as thereafter designated by the Required Holders. The Company and Investors’
Counsel shall reasonably cooperate with each other in performing the Company’s obligations under this Agreement.

 

(e) Ineligibility
for Form S-3. In the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder,
the Company shall (i) use such other form as is available for such a registration on another appropriate form that the Company
is then eligible to use and (ii) use its reasonable best efforts to register the Registrable Securities on Form S-3 as soon as
practicable after the Company becomes eligible to use such form, provided that the Company shall use its reasonable best efforts
to maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form
S-3 covering the Registrable Securities has been declared effective by the SEC. Notwithstanding the foregoing, the Company shall
take all actions necessary to maintain its eligibility to register the Registrable Securities for resale by the Investors on Form
S-3.

 

3. Related
Obligations.

 

At
such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 2(a), 2(b) or 2(e), the
Company will use its reasonable best efforts to effect the registration of the Registrable Securities in accordance with the intended
method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:

 

(a) The
Company shall use its reasonable best efforts to keep each Registration Statement effective pursuant to Rule 415 as long as the
securities covered thereby are Registrable Securities (the “Registration Period”). The Company shall ensure
that each Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not
contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to
make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading.
The term “reasonable best efforts” shall mean, among other things, that the Company shall submit to the SEC, within
two (2) Business Days after the later of the date that (i) the Company learns that no review of a particular Registration Statement
will be made by the staff of the SEC or that the staff has no further comments on a particular Registration Statement, as the
case may be, and (ii) the approval of Investors’ Counsel pursuant to Section 3(c) (which approval is immediately sought),
a request for acceleration of effectiveness of such Registration Statement to a time and date not later than two (2) Business
Days after the submission of such request. The Company shall respond in writing to comments made by the SEC in respect of a Registration
Statement as soon as reasonably practicable, but in no event later than fifteen (15) days after the receipt of comments by or
notice from the SEC that an amendment is required in order for a Registration Statement to be declared effective.

 

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(b) The
Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to
Rule 424 promulgated under the 1933 Act, as may be necessary to keep such Registration Statement effective at all times during
the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of
all Registrable Securities covered by such Registration Statement until such time as all of such Registrable Securities shall
have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in
such Registration Statement. In the case of amendments and supplements to a Registration Statement which are required to be filed
pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-K, Form
10-Q, Form 8-K or any analogous report under the Securities Exchange Act of 1934, as amended (the “1934 Act”),
the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file such
amendments or supplements with the SEC on the same day on which the 1934 Act report is filed which created the requirement for
the Company to amend or supplement such Registration Statement.

 

(c) The
Company shall (A) permit Investors’ Counsel to review and comment upon (i) a Registration Statement at least four (4) Business
Days prior to its filing with the SEC and (ii) all amendments and supplements to all Registration Statements (except for Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any similar or successor reports) within
a reasonable number of days prior to their filing with the SEC, and (B) not file any Registration Statement or amendment or supplement
thereto (except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any similar
or successor reports) in a form to which Investors’ Counsel reasonably objects. The Company shall not submit a request for
acceleration of the effectiveness of a Registration Statement or any amendment or supplement thereto without the prior approval
of Investors’ Counsel, which consent shall not be unreasonably withheld. The Company shall furnish to Investors’ Counsel,
without charge, (i) copies of any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating
to any Registration Statement, (ii) promptly after the same is prepared and filed with the SEC, one copy of any Registration Statement
and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if
requested by an Investor, and all exhibits and (iii) upon the effectiveness of any Registration Statement, one copy of the prospectus
included in such Registration Statement and all amendments and supplements thereto. The Company shall reasonably cooperate with
Investors’ Counsel in performing the Company’s obligations pursuant to this Section 3.

 

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(d) The
Company shall furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge,
(i) if requested by an Investor, promptly after the same is prepared and filed with the SEC, at least one copy of such Registration
Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference,
all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement, such number of copies
of the prospectus included in such Registration Statement and all amendments and supplements thereto as such Investor may reasonably
request and (iii) such other documents, including copies of any preliminary or final prospectus, as such Investor may reasonably
request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Investor.

 

(e) The
Company shall use its reasonable best efforts to (i) register and qualify, unless an exemption from registration and qualification
applies, the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities
or “blue sky” laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions
such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary
to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain
such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company
shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where
it would not otherwise be required to qualify but for this Section 3(e), (y) subject itself to general taxation in any such jurisdiction,
or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify Investors’
Counsel and each Investor of the receipt by the Company of any notification with respect to the suspension of the registration
or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction
in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.

 

(f) The
Company shall notify Investors’ Counsel and each Investor in writing of the happening of any event but in any event on the
same Trading Day as such event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus
included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading, (provided that in no event shall notice contain any material, nonpublic information, unless an
Investor gives its prior written consent thereto), and, subject to Section 3(r), promptly prepare a supplement or amendment to
such Registration Statement to correct such untrue statement or omission, and deliver such number of copies of such supplement
or amendment to Investors’ Counsel and each Investor as Investors’ Counsel or such Investor may reasonably request.
The Company shall also promptly notify Investors’ Counsel and each Investor in writing (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to Investors’ Counsel and each Investor by facsimile or
email on the same day of such effectiveness and by overnight mail), (ii) of any request by the SEC for amendments or supplements
to a Registration Statement or related prospectus or related information and (iii) of the Company’s reasonable determination
that a post-effective amendment to a Registration Statement would be appropriate. By 9:30 a.m. New York City time on the second
Business Day following the date any post-effective amendment has become effective, the Company shall file with the SEC in accordance
with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Registration Statement.

 

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(g) The
Company shall use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of
a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction
and, if such an order or suspension is issued, use its reasonable best efforts to obtain the withdrawal of such order or suspension
at the earliest possible moment and to notify Investors’ Counsel and each Investor who holds Registrable Securities being
sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation of any proceeding
for such purpose.

 

(h) If
any Investor is required under applicable securities laws to be described in the Registration Statement as an underwriter or an
Investor reasonably believes (based on the advice of Investors’ Counsel) that it could reasonably be deemed to be an underwriter
of Registrable Securities, at the reasonable request of such Investor, the Company shall furnish to such Investor, on the date
of the effectiveness of the Registration Statement and thereafter from time to time on such dates as an Investor may reasonably
request (i) a letter, dated such date, from the Company’s independent certified public accountants in form and substance
as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed
to such Investor, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration
Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to such Investor.

 

(i) If
any Investor is required under applicable securities laws to be described in the Registration Statement as an underwriter or an
Investor reasonably believes (based on the advice of Investors’ Counsel) that it could reasonably be deemed to be an underwriter
of Registrable Securities, the Company shall make available for inspection by (i) such Investor and (ii) Investors’ Counsel
and (iii) one firm of accountants or other agents retained by the Investors (collectively, the “Inspectors”),
all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the
“Records”), as shall be reasonably deemed necessary by each Inspector, and cause the Company’s officers,
directors and employees to supply all information which any Inspector may reasonably request; provided, however, that each Inspector
shall agree to hold in strict confidence and shall not make any disclosure (except to an Investor) or use of any Record or other
information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified,
unless (a) the disclosure of such Records is necessary to avoid or correct a material misstatement or omission in any Registration
Statement or is otherwise required under the 1933 Act, (b) the release of such Records is ordered pursuant to a final, non-appealable
subpoena or order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of this Agreement. Each Investor agrees that it shall,
upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through
other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality
agreement between the Company and any Investor) shall be deemed to limit the Investors’ ability to sell Registrable Securities
in a manner which is otherwise consistent with applicable laws and regulations.

 

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(j) The
Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information
is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information
is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction,
or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement.
The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by
a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Investor and
allow such Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, such information.

 

(k) The
Company shall promptly use its reasonable best efforts to either (i) cause all of the Registrable Securities covered by a Registration
Statement to be listed on each securities exchange on which securities of the same class or series issued by the Company are then
listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange or (ii) secure
the inclusion for quotation of all of the Registrable Securities on the Principal Market or another Eligible Market that is then
the principal trading market on which the Common Stock is listed. The Company shall use its reasonable best efforts to maintain
the authorization for quotation of the Common Stock on the Principal Market or any other Eligible Market. Neither the Company
nor any of its Subsidiaries (as defined in the Securities Purchase Agreement) shall take any action which would be reasonably
expected to result in the delisting or suspension of the Common Stock on the Principal Market. The Company shall pay all fees
and expenses in connection with satisfying its obligation under this Section 3(k).

 

(l) The
Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities
to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the
case may be, as the Investors may reasonably request and registered in such names as the Investors may request.

 

    	11

     

    

 

(m) If
requested by an Investor, the Company shall as soon as practicable (i) incorporate in a prospectus supplement or post-effective
amendment such information as an Investor reasonably requests to be included therein relating to the sale and distribution of
Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being
offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be
sold in such offering (to the extent such information relates to information relating to such Investor); and (ii) make all required
filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment.

 

(n) The
Company shall use its reasonable best efforts to cause the Registrable Securities covered by a Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such
Registrable Securities.

 

(o) The
Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after
the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions
of Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal
quarter next following the applicable Effective Date of a Registration Statement.

 

(p) The
Company shall otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC in connection
with any registration hereunder.

 

(q) Within
two (2) Business Days after a Registration Statement which covers Registrable Securities is declared effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities
confirmation that such Registration Statement has been declared effective by the SEC in the form attached hereto as Exhibit
A.

 

(r) Notwithstanding
anything to the contrary herein, at any time after the Effective Date, the Company may delay the disclosure of material, non-public
information concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board of Directors
of the Company and its counsel, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise required
(a “Grace Period”); provided, that the Company shall promptly (i) notify the Investors in writing of the existence
of material, non-public information giving rise to a Grace Period (provided that in each notice the Company will not disclose
the content of such material, non-public information to the Investors) and the date on which the Grace Period will begin, and
(ii) notify the Investors in writing of the date on which the Grace Period ends; and, provided further, that no Grace Period shall
exceed twenty (20) consecutive days and during any three hundred sixty five (365) day period such Grace Periods shall not exceed
an aggregate of sixty (60) days and the first day of any Grace Period must be at least five (5) Trading Days after the last day
of any prior Grace Period (each, an “Allowable Grace Period”). For purposes of determining the length of a
Grace Period above, the Grace Period shall begin on and include the date the Investors receive the notice referred to in clause
(i) and shall end on and include the later of the date the Investors receive the notice referred to in clause (ii) and the date
referred to in such notice. The provisions of Section 3(g) hereof shall not be applicable during the period of any Allowable Grace
Period. Upon expiration of the Grace Period, the Company shall again be bound by the first sentence of Section 3(f) with respect
to the information giving rise thereto unless such material, non-public information is no longer applicable. Notwithstanding anything
to the contrary, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an
Investor in accordance with the terms of the Securities Purchase Agreement in connection with any sale of Registrable Securities
with respect to which an Investor has entered into a contract for sale, prior to the Investor’s receipt of the notice of
a Grace Period and for which the Investor has not yet settled.

 

    	12

     

    

 

(s) Neither
the Company nor any Subsidiary or affiliate thereof shall identify any Investor as an underwriter in any public disclosure or
filing with the SEC, the Principal Market or any Eligible Market and any Investor being deemed an underwriter by the SEC; provided,
however, that the foregoing shall not prohibit the Company from including the disclosure found in the “Plan of Distribution”
section attached hereto as Exhibit B in the Registration Statement.

 

(t) Neither
the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries,
on or after the date of this Agreement, without the prior written consent of the Required Holders, enter into any agreement with
respect to its securities, that conflict with or impair the registration rights granted to the Investors in this Agreement or
otherwise conflicts with the provisions hereof.

 

4. Obligations
of the Investors.

 

(a) At
least five (5) Business Days prior to the first anticipated Filing Date of a Registration Statement, the Company shall notify
each Investor in writing of the information the Company requires from each such Investor if such Investor elects to have any of
such Investor’s Registrable Securities included in such Registration Statement. It shall be a condition precedent to the
obligations of the Company to complete any registration pursuant to this Agreement with respect to the Registrable Securities
of a particular Investor that such Investor shall furnish to the Company such information regarding itself, the Registrable Securities
held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to
effect and maintain the effectiveness of the registration of such Registrable Securities and shall execute such documents in connection
with such registration as the Company may reasonably request.

 

(b) Each
Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Investor
has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities
from such Registration Statement.

 

(c) Each
Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section
3(g) or the first sentence of Section 3(f), such Investor will immediately discontinue disposition of Registrable Securities pursuant
to any Registration Statement(s) covering such Registrable Securities until such Investor’s receipt of copies of the supplemented
or amended prospectus as contemplated by Section 3(g) or the first sentence of Section 3(f) or receipt of notice that no supplement
or amendment is required. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended
shares of Common Stock to a transferee of an Investor in accordance with the terms of the Securities Purchase Agreement in connection
with any sale of Registrable Securities with respect to which an Investor has entered into a contract for sale prior to the Investor’s
receipt of a notice from the Company of the happening of any event of the kind described in Section 3(g) or the first sentence
of Section 3(f) and for which the Investor has not yet settled.

 

    	13

     

    

 

(d) Each
Investor covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it
or an exemption therefrom in connection with sales of Registrable Securities pursuant to the Registration Statement.

 

5. Expenses
of Registration.

 

All
expenses incident to the Company’s performance of or compliance with this Agreement shall be paid by the Company, including,
without limitation, all registration, listing and qualifications fees, printers fees, fees and expenses of the Company’s
independent auditors, and fees and expenses of counsel for the Company shall be paid by the Company. The Company shall also be
responsible for the reasonable fees and disbursements of Investors’ Counsel in connection with registration, filing or qualification
pursuant to Sections 2 and 3 of this Agreement, which amount shall be limited to $15,000 for each such registration, filing or
qualification; provided, however, that the Company shall not be required to reimburse the Investors’ for fees
and disbursements of Investors’ Counsel in accordance with the foregoing with respect to more than three (3) such registrations.
Notwithstanding the foregoing, in connection with any offerings pursuant to a Registration Statement filed in accordance with
this Agreement, each Investor shall pay (i) any underwriting fees, discounts or commissions attributable to the sale of Registrable
Securities by such Investor, (ii) any fees and expenses of brokers, advisors, accountants or counsel to such Investor (other than
as set forth in the immediately preceding sentence) and (iii) any applicable transfer or similar taxes.

 

6. Indemnification.

 

In
the event any Registrable Securities are included in a Registration Statement under this Agreement:

 

    	14

     

    

 

(a) To
the fullest extent permitted by law, the Company shall indemnify and hold harmless each Investor, the directors, officers, partners,
members, employees, agents, representatives of, and each Person, if any, who controls any Investor within the meaning of the 1933
Act or the 1934 Act (each, an “Indemnified Person”), against any losses, claims, damages, liabilities, judgments,
fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or several (collectively,
“Claims”), incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding,
investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified
Damages”), to which any of them may become subject insofar as such Claims arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or
in any filing made in connection with the qualification of the offering under the securities or other “blue sky” laws
of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged
omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii)
any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company
files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made,
not misleading, (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including,
without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any violation of this Agreement (the matters in the foregoing clauses
(i) through (iv) being, collectively, “Violations”). Subject to Section 6(c), the Company shall reimburse the
Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person
arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing
to the Company by such Indemnified Person or by counsel to such Indemnified Person for such Indemnified Person expressly for use
in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto if such prospectus
was timely made available by the Company pursuant to Section 3(d); and (ii) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably
withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf
of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9.

 

(b) In
connection with any Registration Statement in which an Investor is participating, each such Investor shall, severally and not
jointly, indemnify and hold harmless, to the fullest extent permitted by law, the Company, each of its directors and officers
who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the 1933 Act or the
1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified Damages to which any of them may
become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are
based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and
in conformity with written information furnished to the Company by such Investor or by counsel to such Investor expressly for
use in connection with such Registration Statement; provided, however, that the indemnity agreement contained in this Section
6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably
withheld or delayed; provided, further, however, that the Investor shall be liable under this Section 6(b) for only that amount
of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of Registrable
Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Investors pursuant
to Section 9.

 

    	15

     

    

 

(c) Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall,
if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party
a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense
thereof with counsel selected by the Indemnified Person or the Indemnified Party and reasonably acceptable to the indemnifying
party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its
own counsel with the fees and expenses of not more than one counsel for all such Indemnified Person or Indemnified Party to be
paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the Indemnified Person or Indemnified Party,
as applicable, the representation by such counsel of the Indemnified Person or Indemnified Party, as the case may be, and the
indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified
Party and any other party represented by such counsel in such proceeding. In the case of an Indemnified Person, legal counsel
referred to in the immediately preceding sentence shall be selected by the Investors holding at least a majority in interest of
the Registrable Securities included in the Registration Statement to which the Claim relates. The Indemnified Party or Indemnified
Person shall reasonably cooperate with the indemnifying party in connection with any negotiation or defense of any such action
or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified
Party or Indemnified Person which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or
Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto.
No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written
consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying
party shall, without the prior written consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment
or enter into any settlement or other compromise which does not include as a term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified Person of an unconditional release from all liability in respect to such Claim or litigation
and such settlement shall not include any admission as to fault on the part of the Indemnified Party. Following indemnification
as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person
with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure
to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to
the extent that the indemnifying party is prejudiced in its ability to defend such action as a result of such failure or delay.

 

    	16

     

    

 

(d) The
indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred.

 

(e) The
indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party
or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject
to pursuant to the law.

 

7. Contribution.

 

If
the indemnification provided for in Section 6 is unavailable or insufficient to hold harmless an indemnified party in respect
of any Losses, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid
or payable by such indemnified party as a result of such Losses in such proportion as appropriate to reflect the relative fault
of the indemnifying party, on the one hand, and indemnified party, on the other hand, which relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by such indemnified party or indemnifying party, and such parties’
relative intent, knowledge, access to information and opportunity to correct or mitigate the damage in respect of or prevent the
untrue statement or omission giving rise to such indemnification obligation; provided, however, that: (i) no Person involved in
the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the 1933 Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable
Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall
be limited in amount to the amount of net proceeds received by such seller from the sale of such Registrable Securities pursuant
to such Registration Statement.

 

8. Reports
Under the 1934 Act.

 

With
a view to making available to the Investors the benefits of Rule 144, the Company agrees that it will: (i) make and keep public
information available, as those terms are understood and defined in Rule 144; (ii) without limiting the generality of the foregoing
clause (i), file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and
the 1934 Act so long as the Company remains subject to such requirements (or, if the Company is not required to file such reports,
it will, upon the reasonable request of any Investor, make publicly available such necessary information for so long as necessary
to permit sales pursuant to Rule 144); and (iii) take all such actions necessary to maintain its eligibility to sell such securities
pursuant to Rule 144. Upon the request of an Investor, the Company will deliver to such Investor a written statement as to whether
it has complied with such requirements. The Company shall not terminate its status as an issuer required to file reports under
the 1934 Act even if the 1934 Act or the rules and regulations thereunder would no longer require or otherwise permit such termination.

 

    	17

     

    

 

9. Assignment
of Registration Rights.

 

The
rights of any Investor under this Agreement may be assigned by such Investor to any transferee of all or any portion of such Investor’s
Registrable Securities; provided, that: (i) the Investor agrees in writing with the transferee or assignee to assign such rights,
and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company is,
within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such
transferee or assignee, and (b) the Registrable Securities with respect to which such registration rights are being transferred
or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee
or assignee is restricted under the 1933 Act or applicable state securities laws; (iv) at or before the time the Company receives
the written notice contemplated by clause (ii) of this sentence, the transferee or assignee agrees in writing with the Company,
in form and substance reasonably acceptable to the Company, to be bound by all of the provisions contained herein; and (v) such
transfer shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement.

 

10. Amendment
of Registration Rights.

 

Provisions
of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company and the Required Holders. Any amendment or waiver
effected in accordance with this Section 10 shall be binding upon each Investor and the Company. No such amendment shall be effective
to the extent that it applies to less than all of the holders of the Registrable Securities. No consideration shall be offered
or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration
(other than the reimbursement of legal fees) also is offered to all of the parties to this Agreement.

 

11. Lock-Up.

 

(a) Commencing
on the date hereof and ending 180 days after the Closing Date (as defined in the Securities Purchase Agreement) (the “Lock-Up
Period”) each Investor will not, and will cause any of its affiliates (as defined in Rule 144) not to, (i) sell, offer
to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase, make any short sale or otherwise dispose
of or agree to dispose of, directly or indirectly, any shares of Common Stock or Common Stock Equivalents (each as defined in
the Securities Purchase Agreement), or establish or increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the 1934 Act and the rules and regulations of the SEC promulgated thereunder with
respect to any shares of Common Stock or Common Stock Equivalents owned directly by such Investor (including holding as a custodian),
or with respect to which such Investor has beneficial ownership within the rules and regulations of the SEC (collectively with
respect to such Investor, the “Investor’s Shares”), (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of ownership of any of the Investor’s Shares,
whether any such transaction above is to be settled by delivery of shares of Common Stock or other securities, in cash or otherwise,
or (iii) publicly disclose the intention to do any of the foregoing.

 

    	18

     

    

 

(b) Notwithstanding
the foregoing, such Investor may transfer the Investor’s Shares (i) as a bona fide gift or gifts, provided that the donee
or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any affiliate of such Investor provided
that such affiliate agrees to be bound in writing by the restrictions set forth herein or (iii) to any trust for the direct or
indirect benefit of such Buyer or the immediate family of such Buyer, provided that the trustee of the trust agrees to be bound
in writing by the restrictions set forth herein, and provided further that, solely in the case of clauses (i) and (iii), any such
transfer shall not involve a disposition for value. For purposes of this Section 11(b)(ii), “immediate family” shall
mean any relationship by blood, marriage or adoption, not more remote than first cousin. Such Investor now has, and, except as
contemplated by the immediately preceding sentence, for the duration of the Lock-Up Period will have, good and marketable title
to the Investor’s Shares, free and clear of all liens, encumbrances, and claims whatsoever, except as set forth in the Transaction
Documents (as defined in the Securities Purchase Agreement) and under applicable securities laws. Such Investor also agrees and
consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer
of the Investor’s Shares except in compliance with the foregoing restrictions. Such Investor understands and agrees that
this Section 11(b)(ii) is irrevocable and shall be binding upon such Investor’s heirs, legal representatives, successors,
and assigns.

 

12. Miscellaneous.

 

(a) This
Agreement shall be effective as of the Closing Date. This Agreement shall automatically terminate as to any Investor, at such
time when such Investor ceases to hold any Registrable Securities. This Agreement shall terminate automatically, and the Company
shall have no further obligations hereunder, at such time when no Investor holds Registrable Securities.

 

(b) If
the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or election received from such record owner of such Registrable
Securities.

 

(c) Any
notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon delivery, when sent
by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party); (iii) upon delivery, when sent by electronic mail (provided that the sending party does not receive an automated rejection
notice); or (iv) one Business Day after deposit with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

 

    	19

     

    

 

If
to the Company:

 

Marrone
Bio Innovations, Inc.

1540
Drew Avenue

Davis,
CA 95618

	Telephone:	530-302-8289
	Facsimile:	530-302-0189
	Attention:	Linda
    V. Moore, General Counsel
	E-mail:	lmoore@marronebio.com

 

With
a copy (for informational purposes only) to:

 

Morrison
& Foerster LLP

425
Market Street

San
Francisco, CA 94105

	Telephone:
    	415-258-6213
	Facsimile:
    	415-276-7201
	Attention:	Alfredo
    B. D. Silva, Esq.
	Email:	ASilva@mofo.com

 

If
to the Transfer Agent:

 

American
Stock Transfer & Trust Company, LLC

6201
15th Avenue

Brooklyn,
NY 11219

	Telephone:	718-921-8337
	Facsimile:
    	718-765-8795
	Attention:	Craig
    Colosso, Relationship Manager
	E-mail:	ccolosso@amstock.com

 

If
to Investors’ Counsel:

 

Schulte
Roth & Zabel LLP

919
Third Avenue

New
York, NY 10022

	Telephone:	(212)
    756-2000
	Facsimile:	(212)
    593-5955
	Attention:	Eleazer
    Klein, Esq.
	Email:
    	eleazer.klein@srz.com

 

If
to an Investor, to its address, facsimile number and/or email address set forth on the Schedule of Investors attached hereto,
with copies to such Investor’s representatives as set forth on the Schedule of Investors, or to such other address, facsimile
number and/or email address to the attention of such other Person as the recipient party has specified by written notice given
to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s
facsimile machine or e-mail transmission containing the time, date, recipient facsimile number or e-mail address and an image
of the first page of such transmission or (C) provided by a courier or overnight courier service shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with
clause (i), (ii) or (iii) above, respectively.

 

    	20

     

    

 

(d) Failure
of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.

 

(e) All
questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal
laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the
State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING
OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(f) If
any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity
or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

(g) This
Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to herein. This Agreement, the other Transaction
Documents and the instruments referenced herein and therein supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.

 

    	21

     

    

 

(h) Subject
to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto.

 

(i) The
headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

(j) This
Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute
one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile
transmission or electronic mail of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

 

(k) Each
party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

(l) All
consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by the Required Holders, determined as if all of the Warrants held by Investors then outstanding
have been exercised for Registrable Securities without regard to any limitations on exercise of the Warrants.

 

(m) The
language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no
rules of strict construction will be applied against any party.

 

(n) This
Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not
for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

(o) The
obligations of each Investor hereunder are several and not joint with the obligations of any other Investor, and no provision
of this Agreement is intended to confer any obligations on any Investor vis-à-vis any other Investor. Nothing contained
herein, and no action taken by any Investor pursuant hereto, shall be deemed to constitute the Investors as a partnership, an
association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in
concert or as a group with respect to such obligations or the transactions contemplated herein.

 

*
* * * * *

 

[Signature
Page Follows]

 

    	22

     

    

 

IN
WITNESS WHEREOF, each Investor and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.

 

	 	COMPANY:
	 	 	 
	 	MARRONE BIO INNOVATIONS, Inc.
	 	 	 
	 	By:	/s/
    Pamela G. Marrone
	 	Name:	Pamela
    G. Marrone
	 	Title: 	Chief Executive Officer

 

[Signature
Page to Registration Rights Agreement]

 

    	 

     

    

 

IN
WITNESS WHEREOF, each Investor and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.

 

	 	INVESTORS:
	 	 	 
	 	OSPRAIE AG SCIENCE LLC
	 	 	 
	 	By:	/s/
    Dwight Anderson
	 	Name:
    	Dwight
    Anderson
	 	Title:	Managing
    Member

 

[Signature
Page to Registration Rights Agreement]

 

    	 

     

    

 

IN
WITNESS WHEREOF, each Investor and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.

 

	 	INVESTORS:
	 	 	 
	 	Ardsley Partners Renewable

                                                                                Energy Fund, L.P.

	 	 	 
	 	By:	/s/
    Steve Napoli
	 	Name: 	Steve Napoli
	 	Title:	 Partner

 

[Signature
Page to Registration Rights Agreement]

 

    	 

     

    

 

IN
WITNESS WHEREOF, each Investor and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.

 

	 	INVESTORS:
	 	 	 
	 	Van Herk Investments B.V.
	 	 	 
	 	By:	/s/
    E.G.A. Esveld
	 	Name: 	E.G.A. Esveld
	 	Title:	Deputy

 

[Signature
Page to Registration Rights Agreement]

 

    	 

     

    

 

IN
WITNESS WHEREOF, each Investor and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.

 

	 	INVESTORS:
	 	 	 
	 	IVY SCIENCE & TECHNOLOGY FUND,
	 	 	 
	 	By:	Ivy Investment Management Company,

                                                                           its
    investment adviser,

	 	 	 
	 	By:	/s/
    Zachary H. Shafran
	 	Name:	Zachary H. Shafran
	 	Title: 	Senior Vice President

 

	 	WADDELL & REED ADVISORS SCIENCE & TECHNOLOGY FUND,
	 	 	 
	 	By:	Waddell
    & Reed Investment Management
	 	 	Company,
    its investment adviser,
	 	 	 
	 	By:	/s/
    Zachary H. Shafran
	 	Name: 	Zachary H. Shafran
	 	Title: 	Senior Vice President

 

	 	IVY VIP SCIENCE & TECHNOLOGY,
	 	 	 
	 	By:	Ivy Investment Management Company,

                                                                           its
    investment adviser,

	 	 	 
	 	By:	/s/
    Zachary H. Shafran
	 	Name: 	Zachary H. Shafran
	 	Title: 	Senior Vice President

 

[Signature
Page to Registration Rights Agreement]

 

    	 

     

    

 

IN
WITNESS WHEREOF, each Investor and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.

 

	 	INVESTORS:
	 	 	 
	 	GORDON
    SNYDER,
    as Administrative Agent
	 	 	 
	 	By:	/s/
    Gordon Snyder
	 	Name: 	Gordon Snyder
	 	Title:
    	Administrative Agent

 

[Signature
Page to Registration Rights Agreement]

 

    	 

     

    

 

IN
WITNESS WHEREOF, each Investor and the Company have caused their respective signature page to this Registration Rights Agreement
to be duly executed as of the date first written above.

 

	 	INVESTORS:
	 	 	 
	 	NATIONAL
                                         SECURITIES CORPORATION,
                                         

                                                                                as Placement Agent

	 	 	 
	 	By:	/s/
    Jonathan Rich
	 	Name: 	Jonathan Rich
	 	Title:	 EVP – Head of Investment Banking

 

[Signature
Page to Registration Rights Agreement]

 

    	 

     

    

 

SCHEDULE
OF INVESTORS

 

	 

        

        Investor
	 	Investor
    Address

    and Facsimile Number	 	Investor’s
    Representative’s Address 

    and Facsimile Number
	 	 	 	 	 
	Ospraie
        Ag Science LLC

        

        
	 	c/o
Ospraie Management LLC

        

        437
        Madison Avenue, 28th Floor

        

        New
        York, NY 10022

        

        Attention:
        Dwight Anderson

        

        Telephone:
        (212) 602-5000

        

        Email:
        dwighta@ospraie.com
	 	Schulte
Roth & Zabel LLP

        

        919
        Third Avenue

        

        New
        York, NY 10022

        

        Attention:
        Eleazer Klein, Esq.

        

        Facsimile:
        (212) 593-5955

        

        Telephone:
        (212) 756-2000

        

        Email:
        eleazer.klein@srz.com

         

        

        

        and

        

        

         

        ParkRiver
        Fund Solutions

        

        437
        Madison Avenue, 28th Floor

        

        New
        York, NY 10022

        

        Attention:
        Scott Baglio

        

        Telephone:
        (212) 602-5002

        

        Email:
        sbaglio@parkriverfs.com

        

         

	Ardsley
    Partners Renewable Energy Fund, L.P. 	 	Ardsley
Partners Renewable Energy Fund, L.P.

        

        262
        Harbor Drive, 4th Floor

        

        Stamford,
        CT 06902

        

        Attention:
        Steve Napoli

        

        Facsimile:
        (203) 355-0715

        

        Telephone:
        (203) 564-4230

        

        Email:
        steve@ardsley.com
	 	Tannenbaum
Helpern Syracuse & Hirschtritt LLP

        

        900
        Third Avenue

        

        New
        York, NY 10022

        

        Attention:
        Wayne H. Davis

        

        Tel:
        (212) 508-6705

        

        Fax:
        (646) 390-6971

        

        Email:
        davis@thsh.com

         

	Van
    Herk Investments B.V.	 	c/o
Van Herk Investments B.V.

        

        Lichtenauerlaan
        30, 3062ME Rotterdam,

        

        The
        Netherlands

        

        Attention:
        E.G.A. Esveld

        

        Telephone:
        +31 (0)10 241 1555

        

        Email:
        e.esveld@vanherkgroep.nl

         
	 	

        N/A

	

        Ivy
        Science & Technology Fund; Waddell & Reed Advisors Science & Technology Fund;

        

        Ivy
        VIP Science & Technology
	 	c/o
Ivy Investment Management Company

        Waddell
& Reed Investment Management Company

        

        6300
        Lamar Avenue

        

        Overland
        Park, KS 66202

        

        Attention:
        Zachary H. Shafran,

        

        Senior
        Vice President

        

        Facsimile:
        (913) 236-1781

        

        Telephone:
        (913) 236-1842

        

        Email:
        zshafran@waddell.com

         
	 	Kimberly
A. Wingate

        Waddell
& Reed Financial, Inc.

        6320
Lamar Avenue, Suite 110 Overland Park, KS 66202

        Telephone:
(913) 236-2672

        Email:
kwingate@waddell.com

	

        Gordon
        Snyder, as Administrative Agent
	 	

        Gordon
        Snyder

        

        28
        Middle Street, Suite 100

        

        Keene,
        NH 03431

        

        Telephone:
        (603) 721-9500

        

        Email:
        gordonsnyder@pobox.com

         
	 	

        Barrie
        Cowan

        595 Laidley Street

        San
Francisco, CA 94131

        Telephone:
(415) 244-9095

        Email:
(415) 358-9710

	

        National
Securities Corporation
	 	

        National
        Securities Corporation

        

        200
        Vesey Street, 25th Floor

        

        New
        York, NY 10281

        

        Telephone:
        212-380-2819

        

        Facsimile:
        212-380-2828

        

        Attention:
        Jonathan Rich, EVP – Head of Investment Banking

        

        Email:
        jrich@nationalsecuritiesib.com
	 	

        N/A

 

    	 

     

    

 

EXHIBIT
A

 

FORM
OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

 

American
Stock Transfer & Trust Company, LLC

6201
15th Avenue

Brooklyn,
NY 11219

Telephone:
718-921-8337

Facsimile:
718-765-8795

Attention:
Craig Colosso, Relationship Manager

E-mail:
ccolosso@amstock.com

 

Re: Marrone
Bio Innovations, Inc.

 

Ladies
and Gentlemen:

 

[We
are][I am] counsel to Marrone Bio Innovations, Inc., a Delaware corporation (the “Company”), and have represented
the Company in connection with that certain Registration Rights Agreement, dated as of December 15, 2017 (the “Registration
Rights Agreement”), entered into by and among the Company and the persons named therein (collectively, the “Holders”)
pursuant to which the Company agreed, among other things, to register the resale of the Registrable Securities (as defined in
the Registration Rights Agreement) under the Securities Act of 1933, as amended (the “1933 Act”). In connection
with the Company’s obligations under the Registration Rights Agreement, on ____________ ___, 201_, the Company filed a Registration
Statement on Form S-3 (File No. 333-_____________) (the “Registration Statement”) with the Securities and Exchange
Commission (the “SEC”) relating to the Registrable Securities which names each of the Holders as a selling
stockholder thereunder.

 

In
connection with the foregoing, [we][I] advise you that a member of the SEC’s staff has advised [us][me] by telephone that
the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS]
on [ENTER DATE OF EFFECTIVENESS] and to [our][my] knowledge, based on a review of the Stop Orders page of the
SEC’s website, there has not been issued any stop order suspending its effectiveness nor have there been any proceedings
for that purpose instituted nor are any such proceedings pending before or threatened by, the SEC and the Registrable Securities
are available for resale under the 1933 Act pursuant to the Registration Statement.

 

This
letter shall serve as our standing instruction to you that the shares of Common Stock are freely transferable by the Holders pursuant
to the Registration Statement. You need not require further letters from us to effect any future legend-free issuance or reissuance
of shares of Common Stock to the Holders as contemplated by the Company’s Irrevocable Transfer Agent Instructions dated
____________, 2018.

 

	 	Very
    truly yours,
	 	 
	 	[ISSUER’S
    COUNSEL]
	 	 
	 	By:_____________________

 

    	A-1

     

    

 

CC: [LIST
NAMES OF HOLDERS]

 

    	A-2

     

    

 

EXHIBIT
B

 

SELLING
STOCKHOLDERS

 

The
common stock being offered by the selling stockholders are those previously issued to the selling stockholders, and those issuable
to the selling stockholders, upon exercise of the warrants. For additional information regarding the issuances of those shares
of common stock and warrants, see “Private Placement of Common Shares and Warrants” above. We are registering the
shares of common stock in order to permit the selling stockholders to offer the shares for resale from time to time. Except for
the ownership of the shares of common stock and the warrants, the selling stockholders have not had any material relationship
with us within the past three years.

 

The
table below lists the selling stockholders and other information regarding the beneficial ownership of the shares of common stock
by each of the selling stockholders. The second column lists the number of shares of common stock beneficially owned by each selling
stockholder, based on its ownership of the shares of common stock and warrants, as of ________, 2018, assuming exercise of the
warrants held by the selling stockholders on that date, without regard to any limitations on exercises.

 

The
third column lists the shares of common stock being offered by this prospectus by the selling stockholders.

 

In
accordance with the terms of a registration rights agreement with the selling stockholders, this prospectus generally covers the
resale of at least the sum of (i) the maximum number of shares of common stock issued and (ii) the maximum number of shares of
common stock issuable upon exercise of the related warrants, determined as if the outstanding warrants were exercised in full
as of the trading day immediately preceding the date this registration statement was initially filed with the SEC, each as of
the trading day immediately preceding the applicable date of determination and all subject to adjustment as provided in the registration
right agreement, without regard to any limitations on the exercise of the warrants. The fourth column assumes the sale of all
of the shares offered by the selling stockholders pursuant to this prospectus.

 

    	Annex I-1

     

    

 

	

    

    

    Name of Selling Stockholder	Number
    of shares of Common Stock Owned Prior to Offering	Maximum
    Number of shares of Common Stock to be Sold Pursuant to this Prospectus	Number
    of shares of Common Stock Owned After Offering
	 

                                                                              Ospraie
        Ag Science LLC

         

        Ardsley
        Partners Renewable Energy Fund, L.P. 

         

        Van
        Herk Investments B.V.

         

        Ivy
        Science & Technology Fund; Waddell & Reed Advisors Science & Technology Fund; Ivy VIP Science & Technology

         

        Gordon
        Snyder

         

        National
        Securities Corporation
	 	 	 

 

    	Annex I-2

     

    

 

PLAN
OF DISTRIBUTION

 

We
are registering the shares of common stock previously issued and upon exercise of the warrants to permit the resale of these shares
of common stock by the holders thereof and holders of the shares of common stock warrants from time to time after the date of
this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of the shares of common stock.
We will bear all fees and expenses incident to our obligation to register the shares of common stock.

 

The
selling stockholders may sell all or a portion of the shares of common stock beneficially owned by them and offered hereby from
time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of common stock are sold through
underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent’s
commissions. The shares of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at
the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in
transactions, which may involve crosses or block transactions,

 

	●	 	on
    any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;
	 	 	 
	●	 	in
    the over-the-counter market;
	 	 	 
	●	 	in
    transactions otherwise than on these exchanges or systems or in the over-the-counter market;
	 	 	 
	●	 	through
    the writing of options, whether such options are listed on an options exchange or otherwise;
	 	 	 
	●	 	ordinary
    brokerage transactions and transactions in which the broker-dealer solicits purchasers;
	 	 	 
	●	 	block
    trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block
    as principal to facilitate the transaction;
	 	 	 
	●	 	purchases
    by a broker-dealer as principal and resale by the broker-dealer for its account;
	 	 	 
	●	 	an
    exchange distribution in accordance with the rules of the applicable exchange;
	 	 	 
	●	 	privately
    negotiated transactions;
	 	 	 
	●	 	short
    sales;
	 	 	 
	●	 	sales
    pursuant to Rule 144;
	 	 	 
	●	 	broker-dealers
    may agree with the selling securityholders to sell a specified number of such shares at a stipulated price per share;
	 	 	 
	●	 	a
    combination of any such methods of sale; and
	 	 	 
	●	 	any
    other method permitted pursuant to applicable law.

 

    	Annex I-3

     

    

 

If
the selling stockholders effect such transactions by selling shares of common stock to or through underwriters, broker-dealers
or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions
from the selling stockholders or commissions from purchasers of the shares of common stock for whom they may act as agent or to
whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or
agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of common
stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn engage
in short sales of the shares of common stock in the course of hedging in positions they assume. The selling stockholders may also
sell shares of common stock short and deliver shares of common stock covered by this prospectus to close out short positions and
to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge shares of common
stock to broker-dealers that in turn may sell such shares.

 

The
selling stockholders may pledge or grant a security interest in some or all of the warrants or shares of common stock owned by
them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell
the shares of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling stockholders
to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling
stockholders also may transfer and donate the shares of common stock in other circumstances in which case the transferees, donees,
pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

 

The
selling stockholders and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be
“underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions
allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the
time a particular offering of the shares of common stock is made, a prospectus supplement, if required, will be distributed which
will set forth the aggregate amount of shares of common stock being offered and the terms of the offering, including the name
or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling
stockholders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.

 

Under
the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed
brokers or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered
or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

 

    	Annex I-4

     

    

 

There
can be no assurance that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the
registration statement, of which this prospectus forms a part.

 

The
selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the
Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholders
and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the
shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing
may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of common stock.

 

We
will pay all expenses of the registration of the shares of common stock pursuant to the registration rights agreement, estimated
to be $______ in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance
with state securities or “blue sky” laws; provided, however, that a selling stockholder will pay all underwriting
discounts and selling commissions, if any. We will indemnify the selling stockholders against liabilities, including some liabilities
under the Securities Act, in accordance with the registration rights agreements, or the selling stockholders will be entitled
to contribution. We may be indemnified by the selling stockholders against civil liabilities, including liabilities under the
Securities Act, that may arise from any written information furnished to us by the selling stockholder specifically for use in
this prospectus, in accordance with the related registration rights agreement, or we may be entitled to contribution.

 

Once
sold under the registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable
in the hands of persons other than our affiliates.

 

    	Annex I-5EX-10.1

 Exhibit 10.1 

CREDIT AGREEMENT 

between 
 AIR T,
INC. 
 and 

MINNESOTA BANK & TRUST 

dated as of 
 December 21,
2017 
  

 TABLE OF CONTENTS 

 

					
	 	  	Page	 
	 ARTICLE I DEFINITIONS AND INTERPRETATION
	  	 	1	 
		
	 Section 1.01 Definitions
	  	 	1	 
		
	 Section 1.02 Interpretation
	  	 	19	 
		
	 ARTICLE II THE COMMITMENTS AND LOANS
	  	 	21	 
		
	 Section 2.01 Term Loan Commitments
	  	 	21	 
		
	 Section 2.02 Procedure for Term Loan Borrowing
	  	 	21	 
		
	 Section 2.03 Revolving Credit Commitment
	  	 	21	 
		
	 Section 2.04 Procedures for Revolving Credit Borrowing
	  	 	22	 
		
	 Section 2.05 Termination or Reduction of Revolving Credit Commitment
	  	 	22	 
		
	 Section 2.06 Repayment of Loans; Evidence of Debt
	  	 	22	 
		
	 Section 2.07 Optional Prepayments
	  	 	23	 
		
	 Section 2.08 Mandatory Prepayments
	  	 	24	 
		
	 Section 2.09 Application of Prepayments
	  	 	24	 
		
	 Section 2.10 Interest
	  	 	24	 
		
	 Section 2.11 Revolving Credit Commitment Fee
	  	 	24	 
		
	 Section 2.12 Letters of Credit
	  	 	25	 
		
	 ARTICLE III TAXES, ETC.
	  	 	26	 
		
	 Section 3.01 Taxes
	  	 	26	 
		
	 Section 3.02 Increased Costs; Capital Adequacy Requirements
	  	 	28	 
		
	 ARTICLE IV CONDITIONS PRECEDENT
	  	 	29	 
		
	 Section 4.01 Conditions Precedent to Initial Loans
	  	 	29	 
		
	 Section 4.02 Conditions Precedent to Term Loan D
	  	 	31	 
		
	 Section 4.03 Conditions Precedent to Each Loan
	  	 	32	 
		
	 ARTICLE V REPRESENTATIONS AND WARRANTIES
	  	 	32	 
		
	 Section 5.01 Existence; Compliance With Laws
	  	 	32	 
		
	 Section 5.02 Power; Authorization; Enforceability
	  	 	32	 

					
	 Section 5.03 No Contravention
	  	 	33	 
		
	 Section 5.04 Financial Statements
	  	 	33	 
		
	 Section 5.05 No Material Adverse Effect
	  	 	34	 
		
	 Section 5.06 No Litigation
	  	 	34	 
		
	 Section 5.07 No Default
	  	 	34	 
		
	 Section 5.08 Ownership of Property; Liens
	  	 	34	 
		
	 Section 5.09 Environmental Matters
	  	 	34	 
		
	 Section 5.10 Insurance
	  	 	35	 
		
	 Section 5.11 Material Contracts
	  	 	36	 
		
	 Section 5.12 Intellectual Property
	  	 	36	 
		
	 Section 5.13 Taxes
	  	 	36	 
		
	 Section 5.14 ERISA
	  	 	36	 
		
	 Section 5.15 Margin Regulations
	  	 	37	 
		
	 Section 5.16 Investment Company Act
	  	 	37	 
		
	 Section 5.17 Subsidiaries; Equity Interests
	  	 	37	 
		
	 Section 5.18 Labor Matters
	  	 	37	 
		
	 Section 5.19 Accuracy of Information, Etc.
	  	 	38	 
		
	 Section 5.20 Security Documents
	  	 	38	 
		
	 Section 5.21 Solvency
	  	 	38	 
		
	 Section 5.22 PATRIOT Act; OFAC and Other Regulations
	  	 	38	 
		
	 ARTICLE VI AFFIRMATIVE COVENANTS
	  	 	39	 
		
	 Section 6.01 Financial Statements
	  	 	39	 
		
	 Section 6.02 Certificates; Other Information
	  	 	40	 
		
	 Section 6.03 Notices
	  	 	41	 
		
	 Section 6.04 Maintenance of Existence; Compliance
	  	 	42	 
		
	 Section 6.05 Performance of Material Contracts
	  	 	42	 
		
	 Section 6.06 Maintenance of Property; Insurance
	  	 	42	 
		
	 Section 6.07 Inspection of Property; Books and Records; Discussions
	  	 	43	 
		
	 Section 6.08 Environmental Laws
	  	 	43	 
		
	 Section 6.09 Use of Proceeds
	  	 	43	 

					
	 Section 6.10 Additional Collateral; etc.
	  	 	44	 
		
	 Section 6.10 Further Assurances
	  	 	44	 
		
	 Section 6.11 Deposit Accounts
	  	 	45	 
		
	 ARTICLE VII NEGATIVE COVENANTS
	  	 	46	 
		
	 Section 7.01 Limitation on Debt
	  	 	46	 
		
	 Section 7.02 Limitation on Liens
	  	 	46	 
		
	 Section 7.03 Mergers; Nature of Business
	  	 	47	 
		
	 Section 7.04 Limitation on Investments
	  	 	48	 
		
	 Section 7.05 Limitation on Dispositions
	  	 	48	 
		
	 Section 7.06 Limitation on Sales and Leasebacks
	  	 	49	 
		
	 Section 7.07 Limitation on Restricted Payments; Transfers to
Non-Loan Parties
	  	 	49	 
		
	 Section 7.08 Limitation on Prepayments of Debt and Amendments of Debt Instruments
	  	 	49	 
		
	 Section 7.09 Limitation on Transactions With Affiliates
	  	 	50	 
		
	 Section 7.09 Fiscal Year
	  	 	50	 
		
	 Section 7.11 Limitation on Restrictive Agreements
	  	 	50	 
		
	 Section 7.12 Limitation on Amendments of Material Contracts
	  	 	50	 
		
	 Section 7.13 Financial Covenants
	  	 	51	 
		
	 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES
	  	 	51	 
		
	 Section 8.01 Events of Default
	  	 	51	 
		
	 Section 8.02 Remedies Upon Event of Default
	  	 	54	 
		
	 Section 8.03 Prepayment Obligations
	  	 	54	 
		
	 ARTICLE IX MISCELLANEOUS
	  	 	54	 
		
	 Section 9.01 Notices
	  	 	54	 
		
	 Section 9.02 Amendments and Waivers
	  	 	56	 
		
	 Section 9.03 Expenses; Indemnity; Damage Waiver
	  	 	56	 
		
	 Section 9.04 Successors and Assigns
	  	 	58	 
		
	 Section 9.05 Survival
	  	 	59	 
		
	 Section 9.06 Counterparts; Integration; Effectiveness
	  	 	60	 
		
	 Section 9.07 Severability
	  	 	60	 
		
	 Section 9.08 Right of Setoff
	  	 	60	 

					
	 Section 9.09 Governing Law; Jurisdiction; Consent to Service of Process
	  	 	61	 
		
	 Section 9.10 Waiver of Jury Trial
	  	 	62	 
		
	 Section 9.11 Headings
	  	 	62	 
		
	 Section 9.12 Confidentiality
	  	 	62	 
		
	 Section 9.13 USA PATRIOT Act
	  	 	63	 

 CREDIT AGREEMENT 

This Credit Agreement (this “Agreement”), dated as of December 21, 2017, is entered into between Air T, Inc., a
Delaware corporation (together with its successors and assigns, the “Borrower”), and Minnesota Bank & Trust, a Minnesota state banking corporation (together with its successors and assigns, the
“Lender”). 
 RECITALS 

The Lender has agreed to make available to the Borrower term loans and a revolving credit facility upon the terms and conditions set forth
herein. 
 NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 ARTICLE I 

DEFINITIONS AND INTERPRETATION 

Section 1.01 Definitions. As used in this Agreement, the following terms shall have the meanings set
forth below: 
 “Affiliate” as to any Person, means any other Person that, directly or indirectly through one or more
intermediaries, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person, or (b) direct or cause the direction of the management and policies of such Person, whether by contract or
otherwise. 
 “Airco” means Airco, LLC, a North Carolina limited liability company. 

“Anti-terrorism Law” means any Requirement of Law related to money laundering or financing terrorism including the
PATRIOT Act, The Currency and Foreign Transactions Reporting Act (31 U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959) (also known as the “Bank Secrecy Act”), the Trading With the Enemy Act (50
U.S.C. § 1 et seq.) and Executive Order 13224 (effective September 24, 2001). 
 “Asset Coverage Ratio” means, at
any Measurement Date, the ratio, calculated on a consolidated basis in accordance with GAAP for the Borrower and the other Loan Parties, of: (a) the sum of (i) Total Assets minus (ii) Intangible Assets; divided by
(b) the sum of (i) the outstanding principal balance of the Loans; plus (ii) Letter of Credit Obligations. 

 “Asset Sale” means any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by Section 7.05 that yields gross proceeds to any Loan Party (valued at the principal amount thereof in the case of non-cash proceeds
consisting of notes or other debt securities and valued at fair market value in the case of other non-cash proceeds) in excess of $250,000.00. 

“Banking Services” means each and any of the following bank services provided to Borrower by Lender or any of its Affiliates:
(a) commercial credit cards, (b) stored value cards, and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate
depository network services). 
 “Banking Services Liabilities” means any and all obligations of the Borrower, whether
absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services. 

“Bankruptcy Code” means Title 11 of the United States Code, as amended from time to time, or any similar federal or
state law for the relief of debtors. 
 “Blocked Person” means any Person that (a) is publicly identified on the
most current list of “Specially Designated Nationals and Blocked Persons” published by the Office of Foreign Assets Control of the US Department of the Treasury (“OFAC”) or resides, is organized or chartered, or has a
place of business in a country or territory subject to OFAC sanctions or embargo programs, or (b) is publicly identified as prohibited from doing business with the United States under the International Emergency Economic Powers Act, the Trading
With the Enemy Act, or any other Requirement of Law. 
 “Board” means the Board of Governors of the Federal Reserve
System of the United States (or any successor thereto). 
 “Borrower” has the meaning set forth in the preamble. 

“Borrowing Base” means, at any date of determination, the sum of: (a) 75% of Eligible Accounts; plus (b) 50% of
Eligible Inventory; provided, however, that the Lender reserves the right, in its sole discretion, to adjust such borrowing base percentages and components based on its periodic evaluation of the Collateral. The amount of the Borrowing Base
shall be determined periodically from the most recent Borrowing Base Certificate and supporting reports delivered to the Lender. 

“Borrowing Date” means any Business Day specified by the Borrower in a Borrowing Notice as a date on which the Borrower
requests the Lender to make a Loan hereunder. 

  
 2 

 “Borrowing Notice” means any request for a borrowing of Loans hereunder by
Borrower, which may be submitted in writing or in electronic form. 
 “Business Day” means, a day other than a
Saturday, Sunday or other day on which commercial banks in Minneapolis, Minnesota are authorized or required by law to close. 

“Capital Expenditures” with respect to any Person, means the aggregate of all expenditures by such Person for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets, software or additions to Equipment (including replacements, capitalized repairs and improvements) which are required to be capitalized under GAAP on the balance sheet
of such Person. 
 “Capital Lease Obligations” with respect to any Person, means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases under GAAP on the
balance sheet of such Person and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP. 

“Cash Equivalents” as to any Person, means (a) securities issued or directly and fully guaranteed or insured by the
United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one year from the date of acquisition by such Person,
(b) time deposits and certificates of deposit of any commercial bank having, or which is the principal banking subsidiary of a bank holding company organized under the laws of the United States or any State thereof, having maturities of not
more than one year from the date of acquisition by such Person, (c) repurchase obligations with a term of not more than 90 days for underlying securities of the types described in clause (a) above entered into with any bank meeting the
qualifications specified in clause (b) above, (d) commercial paper issued by any issuer rated at least A-1 by Standard & Poor’s Ratings Services, or at least
P-1 by Moody’s Investors Service, Inc. (or carrying an equivalent rating by a nationally recognized rating agency if both of the two named rating agencies cease publishing ratings of commercial paper
issuers generally), and in each case maturing not more than one year after the date of acquisition by such Person or (e) investments in money market funds substantially all of whose assets are comprised of securities of the types described in
clauses (a) through (d) above. 
 “Change in Law” means the occurrence after the date of this Agreement of
(a) the adoption or effectiveness of any law, rule, regulation, judicial ruling, judgment or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application by any
Governmental Authority of any law, rule, regulation or treaty, or (c) the making or issuance by any Governmental Authority of any request, rule, guideline or directive, whether or not having the force of law; provided that,
notwithstanding anything herein to the contrary (x) the Dodd-Frank Wall Street Reform 

  
 3 

 
and Consumer Protection Act of 2010, as amended and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or
directives concerning capital adequacy promulgated by the Lender for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities shall, in each
case, be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued. 
 “Change of
Control” means (a) any Person or group of persons within the meaning of §13(d)(3) of the Securities Exchange Act of 1934 (other than one or more Continuing Directors or Affiliates of Continuing Directors) becomes the
beneficial owner, directly or indirectly, of 50% or more of the outstanding Equity Interests of the Borrower, or (b) individuals who constitute the Continuing Directors cease for any reason to constitute at least a majority of the board of
directors of the Borrower. 
 “Closing Date” means the date on which the conditions precedent set forth in
Section 4.01 are satisfied or waived. 
 “Code” means the Internal Revenue Code of 1986, as amended. 

“Collateral” has the meaning for such term set forth in the Security Agreement. 

“Commitment(s)” means individually or collectively, as the case may be, the Revolving Credit Commitment and the Term Loan
Commitments. 
 “Consigned Inventory Eligibility Requirements”: As set forth on Exhibit F to this Agreement. 

“Continuing Directors” means the directors of the Borrower on the Closing Date, and each other director, if in each
case, such other director’s nomination for election to the board of directors of the Borrower is recommended by at least a 66 2/3%/a majority of the Continuing Directors. 

“Contractual Obligation” of any Person, means any provision of any security issued by such Person or of any agreement,
instrument or other undertaking to which such Person is a party or by which it or any of its property is bound, other than the Obligations. 

“Contrail” means Contrail Aviation Support, LLC, a North Carolina limited liability company. 

“CSA” means CSA Air, Inc., a North Carolina corporation. 

“Debt” of any Person at any date, without duplication, means (a) all indebtedness of such Person for borrowed
money; (b) all obligations of such Person for the deferred purchase price of property or services (other than (i) trade payables and accrued expenses incurred in the ordinary course of business and not past due for more than 61 days after
the 

  
 4 

 
date on which each such trade payable or account payable was created and (ii) any earn-out, purchase price adjustment or similar obligation until such
obligation appears in the liabilities section of the balance sheet of such Person; (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments; (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of
such property); (e) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interests in such Person or any other Person or any warrants, rights or options to acquire such Equity
Interests, valued, in the case of redeemable preferred interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under acceptance, letter of credit or similar facilities in respect of obligations of the kind referred to in subsections (a) through (e) of this definition; (g) all Guaranty Obligations of such Person in respect
of obligations of the kind referred to in subsections (a) through (f) above; and (h) all obligations of the kind referred to in subsections (a) through (g) above secured by (or which the holder of such obligation has an existing
right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation. 

“Debtor Relief Law” means the Bankruptcy Code and all other liquidation, bankruptcy, assignment for the benefit of
creditors, conservatorship, moratorium, receivership, insolvency, rearrangement, reorganization or similar debtor relief laws of the US or other applicable jurisdictions in effect from time to time. 

“Debt Service Coverage Ratio” means, at any Measurement Date, the ratio, calculated on a consolidated basis for the Borrower
and the other Loan Parties for the Measurement Period ending on such Measurement Date, of: (a) the sum of (i) EBITDA, minus (ii) dividends and other distributions paid in cash to shareholders of the Borrower; divided by (b) the
aggregate amount of scheduled annual principal payments and interest expense on the Loans. 
 “Default” means any of
the events specified in Section 8.01 which constitutes an Event of Default or which, upon the giving of notice, the lapse of time, or both pursuant to Section 8.01 would, unless cured or waived, become an Event of Default. 

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (whether in
one transaction or in a series of transactions, and including any sale and leaseback transaction) of any property (including, without limitation, any Equity Interests) by any Person (or the granting of any option or other right to do any of the
foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith. 

  
 5 

 “Dollars” means the lawful currency of the United States. 

“Domestic Subsidiary” means a Subsidiary of the Borrower incorporated or organized under the laws of the United States of
America, any state thereof or the District of Columbia. 
 “EBITDA” means, for any Measurement Period, the sum, calculated
on a consolidated basis in accordance with GAAP for the Borrower and the other Loan Parties, of: (a) net income for such Measurement Period determined in accordance with GAAP (but excluding therefrom all
non-operating income (including, without limitation, extra-ordinary, non-recurring or unusual gains) and all non-operating losses
(including, without limitation, extra-ordinary, non-recurring or unusual losses)); plus (b) the sum of the following amounts deducted in arriving at net income (but without duplication for any
item): (i) interest expense; (ii) depreciation, amortization and other non-cash charges; and (iii) federal, state, and local income taxes. 

“Eligible Accounts” means, at any date of determination, the United States dollar value (net of deposits, finance charges
and/or service charges) of only such accounts of the Loan Parties arising from the rendering of services in the ordinary course of business in which the Lender holds a first priority security interest and as to which the Lender, in its reasonable
business judgment, shall from time to time determine to be collectible in a timely manner in the ordinary course of business without dispute or set-off. Without limiting the Lender’s right, in its
reasonable business judgment, to consider any account not to be an Eligible Account, and by way of example only of types of accounts that the Lender will consider not to be Eligible Accounts, the Lender, notwithstanding any earlier classification of
eligibility, may consider any account not to be an Eligible Account if: 
 (a) any warranty is breached as to the account or
the account debtor disputes liability or makes any claim with respect to the account; 
 (b) the account is not paid by the
account debtor within 120 days after the date of the original invoice relating thereto; or (ii) the account is owed by any account debtor who has not paid 10% or more of such account debtor’s accounts within the relevant time period
specified in subsection (b)(i) above; 
 (c) a petition in bankruptcy or other application for relief under any insolvency
law is filed with respect to the account debtor owing the account, or the account debtor owing the account assigns for the benefit of creditors, becomes insolvent, fails, suspends, or goes out of business, or the Lender, in its reasonable business
judgment, shall become dissatisfied with the creditworthiness of an account debtor owing an account; 
 (d) the account
arises from a sale to an account debtor that is outside the United States unless the sale is on letter of credit, acceptance or other terms acceptable to the Lender; 

  
 6 

 (e) the account debtor is an Affiliate, supplier or creditor of a Loan Party;

 (f) the account debtor with respect thereto is the United States of America or any department, agency or instrumentality
thereof (a “Federal Governmental Authority”), or any state, county or local governmental authority, or any department, agency or instrumentality thereof, unless the relevant Loan Party has assigned its right to payment of such account to
the Lender pursuant to the Assignment of Claims Act of 1940 as amended in the case of the a Federal Governmental Authority, or pursuant to applicable state law, if any, in all other instances, and such assignment has been accepted and acknowledged
by the appropriate government officers; 
 (g) if the Lender, in its reasonable business judgment, has established a credit
limit for the account debtor with respect thereto, the aggregate dollar amount of accounts due from such account debtor, including such account, exceeds such credit limit; 

(h) such Account is evidenced by chattel paper or instruments unless the original of such chattel paper or instruments is
delivered to the Lender; 
 (i) such account arises from a transaction for which surety or performance bonds are posted; or

 (j) any account for a customer deposit. 

The amount of Eligible Accounts shall be computed on a monthly basis from the Borrowing Base Certificate and other information required to be delivered by the
Borrower to the Lender pursuant to Section 6.02. 
 “Eligible Assignee” has the meaning set forth in
Section 9.04. 
 “Eligible Inventory” shall mean the book United States dollar value of the Loan Parties’ raw
materials and finished goods inventory, in which only the Lender holds a first priority security interest and as to which the Lender, in its reasonable business judgment, shall elect from time to time to constitute Eligible Inventory. Without
limiting the Lender’s right, in its reasonable business judgment, to consider any inventory not to be Eligible Inventory, and by way of example only of types of inventory that the Lender will consider not to be Eligible Inventory, the Lender,
notwithstanding any earlier classification of eligibility, may consider any inventory not to be Eligible Inventory if: (a) such inventory is discontinued inventory; (b) such inventory (i) is not either located on premises owned,
leased or rented by Borrower or stored with a bailee or warehouseman (other than a processor), (ii) is stored at a leased or rented location, unless a fully-executed landlord waiver has been delivered to the Lender in form reasonably satisfactory to
the Lender, or (iii) is stored with a bailee or warehouseman unless an fully-executed bailee letter has been received by the Lender with respect thereto in form reasonably satisfactory to the Lender,

  
 7 

 
(c) such inventory is consigned to a Loan Party, or (d) such inventory is consigned by a Loan Party, unless such Loan Party has complied with all of the Consigned Inventory Eligibility
Requirements. The value of Eligible Inventory shall be the lower of the cost or market value of the Eligible Inventory computed in accordance with GAAP. 

“Environmental Action” means any action, suit, demand, demand letter, claim, notice of violation or non-compliance, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement relating in any way to any Environmental Law, any permit issued under any Environmental Law,
or any Hazardous Material, or arising from alleged injury or threat to health, safety or the environment including (a) by any Governmental Authority for enforcement, clean-up, removal, response, remedial
or other actions or damages and (b) any Governmental Authority or third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief. 

“Environmental Law” means any and all Federal, state, foreign, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirements of Law (including common law) as now or may at any time hereafter be in effect, and any binding judicial or administrative interpretation thereof,
including any binding judicial or administrative order, consent decree or judgment, regulating, relating to or imposing liability or standards of conduct concerning protection of the environment or, to the extent relating to exposure to substances
that are harmful or detrimental to the environment, or human health or safety. 
 “Equipment” has the meaning for such term
set forth in the Security Agreement. 
 “Equity Interests” means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership (or profit) interests in a Person (other than a corporation), securities convertible into or exchangeable for shares of capital stock of (or
other ownership or profit interests in) such Person, and any and all warrants, rights or options to purchase any of the foregoing, whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are
authorized or otherwise existing on any date of determination. 
 “ERISA” means the Employee Retirement Income
Security Act of 1974, as amended from time to time. 
 “ERISA Affiliate” means an entity, whether or not incorporated,
that is under common control with the Borrower within the meaning of §4001 of ERISA or is part of a group that includes the Borrower and that is treated as a single employer under §414 of the Code. 

“Eurodollar Rate Loan” means a Loan that accrues interest at the LIBOR Rate, as specified in the Note evidencing such
Loan. 

  
 8 

 “Excess Capital” means, as of any date of determination, calculated on a
consolidated basis for the Borrower and the other Loan Parties, the aggregate amount by which the Loan Parties’ actual Tangible Assets exceeds the amount of Tangible Assets necessary to show proforma compliance with all financial covenants
calculated as of such date, where the analysis supporting such proforma analysis is performed based on the consolidated balance sheet for the Borrower and the other Loan Parties then most-recently delivered to the Lender pursuant to
Section 6.01(a) or (b). 
 “Excess Capital Certificate” means, a certificate in form and substance acceptable to the
Lender and executed by a Responsible Officer of the Borrower, providing a detailed calculation of Excess Capital as of the date of a proposed Other Investment pursuant to Section 7.04(f) or of a Restricted Payment pursuant to Section 7.07.

 “Excluded Foreign Subsidiary” means any Subsidiary that is not organized and existing under the laws of the United
States or any state or commonwealth thereof or under the laws of the District of Columbia, and in respect of which either (a) the pledge of all the Equity Interests of such Subsidiary as Collateral or (b) a guarantee by such Subsidiary of
the Obligations, would, in the good faith judgment of the Borrower, result in the adverse tax consequences to the Borrower. 

“Event of Default” has the meaning set forth in Section 8.01. 

“Excluded Taxes” means any of the following Taxes, imposed on or with respect to the Lender (a) Taxes imposed on or
measured by net income (however denominated), and franchise Taxes, (b) any branch profits Taxes imposed by the United States or any similar Tax imposed by any other jurisdiction. 

“Fed Ex Contract” means that certain Aircraft Dry Lease and Services Agreement dated as of June 1, 2015, by and between
Federal Express Corporation and Mountain Air Cargo, Inc. 
 “GAAP” means generally accepted accounting principles in
the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied. 

“GAS” means Global Aviation Services, LLC, a North Carolina limited liability company. 

“GGS” means Global Ground Support, LLC, a North Carolina limited liability company. 

  
 9 

 “Governmental Authority” means the government of any nation or any
political subdivision thereof, whether at the national, state, territorial, provincial, municipal or any other level, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of, or pertaining to, government. 
 “Guarantor(s)”
means, individually or collectively, as the case may be, each of the Loan Parties (other than the Borrower) that are listed on Schedule A to this Agreement, together with each other Subsidiary of the Borrower that becomes a Loan Party by
executing a joinder to the Guaranty, and their respective successors and assigns. 
 “Guaranty(ies)” means,
individually or collectively, as the case may be, the Guaranty executed by the Guarantors, in favor of the Lender, dated as of the Closing Date, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time
to the extent permitted under the Loan Documents. 
 “Guaranty Obligation” as to any Person, means any
(a) obligation, contingent or otherwise, of such Person guaranteeing or having the effect of guaranteeing any Debt or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation, (ii) to purchase or lease property, securities
or services for the purpose of assuring the obligee in respect of such Debt or other obligation of the payment or performance of such Debt or other obligation, (iii) to maintain working capital, equity capital, net worth or solvency or
liquidity or any level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Debt or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such
Debt or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) Lien on any assets of such Person securing any Debt or other obligation of any other Person,
whether or not such Debt or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Debt to obtain any such Lien). The amount of any Guaranty Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guaranty Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith. 
 “Hazardous Materials” means (a) any gasoline, petroleum
or petroleum products or by-products, radioactive materials, friable asbestos or asbestos-containing materials, urea-formaldehyde insulation, polychlorinated biphenyls and radon gas, and (b) any other
chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law. 

“Heartland” means Heartland Financial USA, Inc., a Delaware corporation. 

  
 10 

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

“Indemnification Agreement” means that certain Environment and ADA Indemnification Agreement dated as of even date herewith
duly executed by the Loan Parties with regards to the North Carolina Real Property. 
 “Indemnified Taxes” means
(a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by any Loan Party under any Loan Document, and (b) to the extent not otherwise described in (a), Other Taxes. 

“Insolvency” with respect to any Multiemployer Plan, means such Plan is insolvent within the meaning of §4245 of
ERISA. 
 “Intangible Assets” means, at any date of determination, the sum, calculated on a consolidated basis in
accordance with GAAP for the Borrower and the other Loan Parties, of (i) goodwill, organizational expenses, research and development expenses, trademarks, trade names, copyrights, patents, patent applications, licenses and rights in any
thereof, covenants not to compete, training costs and other similar intangibles; (ii) deferred charges or unamortized debt discount and expense other than deferred income taxes; (iii) Investments which are not readily marketable but only
to the extent that the aggregate book value of such Investments exceeds the Non-Marketable Securities Cap; (iv) any write-up in the book value of any assets
resulting from a reevaluation thereof subsequent to the date of the Borrower’s consolidated annual financial statement described in Section 5.04(a); (v) accounts receivable, notes receivable or other receivables or amounts owed by
officers, shareholders or Affiliates; and (vii) any asset acquired subsequent to the date of this Agreement which the Lender, in its reasonable business judgment, determines to be an intangible asset. 

“Intellectual Property” means any and all intellectual property, including copyrights, copyright licenses, patents,
patent licenses, trademarks, trademark licenses, technology, know-how and processes, all rights therein, and all rights to sue at law or in equity for any past, present, or future infringement, violation,
misuse, misappropriation or other impairment thereof, whether arising under United States, multinational or foreign laws or otherwise, including the right to receive injunctive relief and all proceeds and damages therefrom. 

“Investment(s)” has the meaning set forth in Section 7.04. 

  
 11 

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

“Lender” has the meaning set forth in the preamble. 

“Letter(s) of Credit”: As provided in Section 2.12(a). 

“Letter of Credit Application”: As provided in Section 2.12(c) 

“Letter of Credit Commission”: As provided in Section 2.12(e)(i). 

“Letter of Credit Commitment” shall mean, at any date, the maximum amount of Letter of Credit Obligations which may from time
to time be outstanding hereunder, being initially $1,000,000.00 and, as the context may require, the agreement of the Lender to issue the Letters of Credit for the account of the Borrower. 

“Letter of Credit Commitment Termination Date”: The earlier of: (a) the Revolving Credit Termination Date; or
(b) the date upon which the obligation of the Lender to issue Letters of Credit is terminated pursuant to Section 2.12(b). 

“Letter of Credit Obligations”: At any date, the sum of: (a) the aggregate amount available to be drawn on the Letters
of Credit on such date; plus (b) the aggregate amount owed by the Borrower to the Lender on such date as a result of draws on the Letters of Credit for which the Borrower has not reimbursed the Lender. 

“Liabilities” means, at any Measurement Date, the aggregate amount of liabilities appearing on the Borrower’s
consolidated balance sheet at such date prepared in accordance with GAAP. 
 “Lien” means any mortgage, pledge,
hypothecation, assignment (as security), deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest, or any preference, priority or other security agreement or preferential arrangement of any kind or nature
whatsoever having substantially the same economic effect as any of the foregoing (including any conditional sale or other title retention agreement and any capital lease). 

“Loan” means any Revolving Credit Loan or any Term Loan, as the context may require, and “Loans” means
either Revolving Credit Loans or Term Loans, as the context may require. 
 “Loan Documents” means, collectively, this
Agreement, the Security Agreement, the Guaranty, the Revolving Credit Note, the Term Notes, the North Carolina Assignment, the North Carolina Deed of Trust, each Hedge Agreement and all other agreements, documents, certificates and instruments
executed and delivered to the Lender by any Loan Party in connection therewith. 

  
 12 

 “Loan Parties” means the Borrower, the Guarantors and each other Subsidiary
of the Borrower that is now, or at any time hereafter becomes, party to the Guaranty and the Security Agreement. The term “Loan Party” shall expressly exclude the Excluded Foreign Subsidiaries, Contrail and Delphax Solutions, Inc. For
avoidance of doubt, the initial Loan Parties are listed on Schedule A to this Agreement. 
 “Loan Year” means the 12-month period commencing on the date of this Agreement (or the anniversary date thereof in any subsequent year) and ending on the day preceding the immediately following anniversary date of this Agreement. 

“MAC” means Mountain Air Cargo, Inc., a North Carolina corporation. 

“Margin Stock” has the meaning specified in Regulation U of the Board as in effect from time to time. 

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, properties, liabilities
(actual or contingent), operations, condition (financial or otherwise) or prospects of the Borrower, individually, or the Borrower and its Subsidiaries taken as a whole, (b) the validity or enforceability of any Loan Document, (c) the
perfection or priority of any Lien purported to be created by any Loan Document, (d) the rights or remedies of the Lender under any Loan Document or (e) the ability of any Loan Party to perform any of its payment obligations under any Loan
Document to which it is a party. 
 “Material Contracts” with respect to any Person, means each contract to which such
Person is a party involving aggregate consideration payable by or to such Person equal to at least $5,000,000 annually or otherwise material to the business, condition (financial or otherwise), operations, performance, properties or prospects of
such Person. The Fed Ex Contract shall, in any event, be a Material Contract for purposes of this Agreement. 
 “Maturity
Date”: The earlier of: (a) the date on which the Loans become due and payable under Section 8.02 upon the occurrence of an Event of Default; or (b) (i) the Revolving Credit Termination Date for the Revolving Credit Loans;
(ii) November 30, 2027 for Term Loan A, Term Loan B and Term Loan D; or (iii) November 30, 2018 for Term Loan C. 

“Measurement Date” means the last day of each fiscal year of the Borrower, commencing with the fiscal year ending
March 31, 2018. 
 “Measurement Period” means the period of twelve (12) consecutive fiscal months ending on a
Measurement Date. 
 “Multiemployer Plan” means a Plan which is a multiemployer plan as defined in § 4001(a)(3)
of ERISA to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions. 

  
 13 

 “Net Cash Proceeds” means (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents in an amount for any Asset Sale or Recovery Event in excess of $250,000 and in the aggregate for all Asset Sales and Recovery Events in any fiscal year in excess of
$2,000,000 (including any such proceeds actually received from deferred payments of principal pursuant to a note, a receivable or otherwise), net of attorneys’ fees, accountants’ fees, investment banking fees, amounts required to be
reserved for indemnification, adjustment of purchase price or similar obligations pursuant to the agreements governing such Asset Sale, amounts required to be applied to the repayment of Debt secured by a Lien expressly permitted hereunder on any
asset that is the subject of such Asset Sale or Recovery Event (other than any Lien pursuant to a Loan Document) and other customary fees and expenses actually incurred in connection therewith and net of taxes paid or reasonably estimated to be
payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements) and (b) in connection with any issuance or sale of Equity Interests or any incurrence of Debt, the cash proceeds
received from such issuance or incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith. 

“Non-Marketable Securities Cap” means, initially $500,000, as such amount may be
increased from time-to-time with the Lender’s written consent following receipt of a request from the Borrower accompanied by such supporting materials as Lender
may require. 
 “North Carolina Assignment of Rents” means that certain Assignment of Leases and Rents document of even
date herewith executed by the Borrower in favor of the Lender with regards to the North Carolina Real Property. 
 “North Carolina
Deed of Trust” means that certain Deed of Trust of even date herewith duly executed by the Borrower, providing for a fully-perfected first and only Lien in favor of the Lender in the North Carolina Real Property. 

“North Carolina Real Property” means the real property described in the North Carolina Deed of Trust. 

“Note(s)” means, individually or collectively, as the case may be, the Revolving Credit Note and the Term Notes. 

“Obligations” means all Loans, Letter of Credit Obligations, advances, debts, liabilities, obligations, Banking Services
Liabilities, covenants and duties, owing by any Loan Party to the Lender or any Hedge Provider of any kind or nature, present or future, which arise under this Agreement, any other Loan Document or any Hedge Agreement or by operation of law, whether
or not evidenced by any note, guaranty or other instrument, whether or not for the payment of money, whether arising by reason of an extension of 

  
 14 

 
credit, opening, guarantying or confirming of a letter of credit, guaranty, indemnification or in any other manner, whether joint, several, or joint and several, direct or indirect (including
those acquired by assignment or purchases), absolute or contingent, due or to become due, and however acquired. The term includes, without limitation, all amounts owed by the Borrower to the Lender at such date as a result of draws on letters of
credit paid by the Lender for which the Borrower has not reimbursed the Lender, all principal, interest, fees, charges, expenses, attorneys’ fees, and any other sum chargeable to any Loan Party under this Agreement or any other Loan Document or
any Hedge Agreement. 
 “Other Investments”: As defined in Section 7.04. 

“Other Taxes” means any and all present or future stamp, court, recording, filing, intangible, documentary or similar
Taxes or any other excise or property Taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement or registration of, or performance under, or from the
receipt or perfection of a security interest under or otherwise with respect to this Agreement or any other Loan Document (other than Excluded Taxes imposed with respect to an assignment). 

“Participant” has the meaning set forth in Section 9.04(c). 

“Participant Register” has the meaning set forth in Section 9.04(c). 

“PATRIOT Act” has the meaning set forth in Section 9.13. 

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any
successor thereto). 
 “Person” means any individual, corporation, limited liability company, trust, joint venture,
association, company, limited or general partnership, unincorporated organization, Governmental Authority or other entity. 

“Plan” at any one time, means any “employee benefit plan” that is covered by ERISA and in respect of which the
Borrower or an ERISA Affiliate is (or, if such plan were terminated at such time, would under §4062 or §4069 of ERISA be deemed to be) an “employer” as defined in §3(5) of ERISA. 

“Projections” has the meaning set forth in Section 6.02. 

“Properties” has the meaning set forth in Section 5.09(a). 

“Recovery Event” means any settlement of or payment to any Loan Party in respect of any property or casualty insurance
claim or any condemnation proceeding relating to any asset of any Loan Party. 

  
 15 

 “Related Parties” with respect to any Person, means such Person’s
Affiliates and the directors, officers, employees, partners, agents, trustees, administrators, managers, advisors and representatives of it and its Affiliates. 

“Reorganization” with respect to any Multiemployer Plan, means that such plan is in reorganization within the meaning of
§4241 of ERISA. 
 “Reportable Event” means any of the events set forth in §4043© of ERISA, other than those events as to which the thirty day notice period is waived. 

“Requirement of Law” as to any Person, means the certificate of incorporation and
by-laws or other organizational or governing documents of such Person, and any law (including common law), statute, ordinance, treaty, rule, regulation, order, decree, judgment, writ, injunction, settlement
agreement, requirement or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. 

“Responsible Officer” with respect to any Person, means the chief executive officer, president or chief financial
officer of such Person, except that with respect to financial matters, the Responsible Officer shall be the chief financial officer or treasurer of such Person. 

“Restricted Payments” has the meaning set forth in Section 7.07. 

“Revolving Credit Commitment” means the obligation of the Lender to make Revolving Credit Loans in an aggregate
principal amount not to exceed the sum of (a) $10,000,000, minus (b) the outstanding principal balance of Term Loan C, as the same may be changed from time to time pursuant to the terms hereof. 

“Revolving Credit Commitment Fee” has the meaning set forth in Section 2.11. 

“Revolving Credit Commitment Period” means the period from and including the Closing Date to the Revolving Credit
Termination Date. 
 “Revolving Credit Loans” means any revolving credit loan made by the Lender under
Section 2.04. 
 “Revolving Credit Note” means the promissory note of the Borrower described in Section 2.06(a),
substantially in the form of Exhibit A, as such promissory note may be amended, modified or supplemented from time to time, and such term shall include any substitutions for, or renewals of, such promissory note. 

“Revolving Credit Termination Date” means the earliest to occur of (a) November 30, 2019, (b) the date the
Revolving Credit Commitment is reduced to zero pursuant to Section 2.05, and (c) the termination of the Revolving Credit Commitment pursuant to Section 8.02. 

  
 16 

 “SAIC” means Space Age Insurance Company, a Utah corporation. 

“SEC” means the Securities and Exchange Commission (or successors thereto or an analogous Governmental Authority). 

“Security Agreement” means the Security Agreement made by the Borrower and the other Loan Parties in favor of the
Lender, dated as of the Closing Date, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time to the extent permitted under the Loan Documents. 

“Single Employer Plan” means any Plan that is covered by Title IV of ERISA, other than a Multiemployer Plan. 

“Solvent” with respect to any Person as of any date of determination, means that on such date (a) the present fair
salable value of the property and assets of such Person exceeds the debts and liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the property and assets of such Person is greater than the amount
that will be required to pay the probable liability of such Person on its debts and other liabilities, including contingent liabilities, as such debts and other liabilities become absolute and matured, (c) such Person does not intend to incur,
or believe (nor should it reasonably believe) that it will incur, debts and liabilities, including contingent liabilities, beyond its ability to pay such debts and liabilities as they become absolute and matured, and (d) such Person does not
have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted. The amount of contingent liabilities at any time shall be computed as the amount that, in
the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. 

“Stratus” means Stratus Aero Partners, LLC, a Delaware limited liability company. 

“Subordination Agreement” means each subordination agreement now or hereafter executed by a creditor of the Borrower in favor
of the Lender. 
 “Subordinated Debt” means, all Debt of the Borrower which is contractually subordinated in right of
payment to the Obligations pursuant to a Subordination Agreement on a form acceptable to the Lender in its reasonable discretion. 

“Subsidiary” as to any Person, means any corporation, partnership, limited liability company, joint venture, trust or
estate of or in which more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other

  
 17 

 
class of such corporation may have voting power upon the happening of a contingency), (b) the interest in the capital or profits of such partnership, limited liability company, or joint venture
or (c) the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary”
or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower. 
 “Tangible
Assets” means, at any date of determination, the sum, calculated on a consolidated basis in accordance with GAAP for the Borrower and the other Loan Parties, of (a) Total Assets minus (b) Intangible Assets. 

“Taxes” means any and all present or future income, stamp or other taxes, levies, imposts, duties, deductions, charges,
fees or withholdings imposed, levied, withheld or assessed by any Governmental Authority, together with any interest, additions to tax or penalties imposed thereon and with respect thereto. 

“Term Loan(s):” means Term Loan A, Term Loan B, Term Loan C and Term Loan D. 

“Term Loan A”: means the Loan described in Section 2.01(a). 

“Term Loan A Commitment”: $10,000,000.00, and as the context may require, the agreement of the Bank to make Term Loan A to
the Borrower up to the amount of the Term Loan A Commitment subject to the terms and conditions of this Agreement. 
 “Term Loan
B”: means the Loan described in Section 2.01(b). 
 “Term Loan B Commitment”: $5,000,000.00, and as the
context may require, the agreement of the Bank to make Term Loan B to the Borrower up to the amount of the Term Loan B Commitment subject to the terms and conditions of this Agreement. 

“Term Loan C”: means the Loan described in Section 2.01(c). 

“Term Loan C Commitment”: $1,900,000.00, and as the context may require, the agreement of the Bank to make Term Loan C to the
Borrower up to the amount of the Term Loan C Commitment subject to the terms and conditions of this Agreement. 
 “Term Loan
D”: means the Loan described in Section 2.01(d). 
 “Term Loan D Closing Date” means the date on which
the conditions precedent set forth in Section 4.02 are satisfied or waived. 

  
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 “Term Loan D Commitment”: $1,400,000.00, and as the context may require, the
agreement of the Bank to make Term Loan D to the Borrower up to the amount of the Term Loan D Commitment subject to the terms and conditions of this Agreement. 

“Term Note A”: means the promissory note of the Borrower described in Section 2.06(b), substantially in the form of
Exhibit B, as such promissory note may be amended, modified or supplemented from time to time, and such term shall include any substitutions for, or renewals of, such promissory note. 

“Term Note B”: means the promissory note of the Borrower described in Section 2.06(c), substantially in the form
of Exhibit C, as such promissory note may be amended, modified or supplemented from time to time, and such term shall include any substitutions for, or renewals of, such promissory note. 

“Term Note C”: means the promissory note of the Borrower described in Section 2.06(d), substantially in the form of
Exhibit D, as such promissory note may be amended, modified or supplemented from time to time, and such term shall include any substitutions for, or renewals of, such promissory note. 

“Term Note D”: means the promissory note of the Borrower described in Section 2.06(e), substantially in the form of
Exhibit E, as such promissory note may be amended, modified or supplemented from time to time, and such term shall include any substitutions for, or renewals of, such promissory note. 

“Term Note(s)”: means the Term Note A, the Term Note B, the Term Note C and the Term Note D. 

“Total Assets”: At any date of determination, the aggregate amount of assets appearing on the consolidated balance
sheet of the Borrower and the other Loan Parties at such date prepared in accordance with GAAP. 
 “Total
Usage”: At any date of determination, the sum of (a) the aggregate outstanding principal amount of the Revolving Credit Loans; plus (b) the Letter of Credit Obligations. 

“Uniform Commercial Code” means the Uniform Commercial Code as in effect in the state of Minnesota from time to time.

 Section 1.02 Interpretation With reference to this Agreement and each other Loan Document, unless
otherwise specified herein or in such other Loan Document: 
 (a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes”

  
 19 

 
and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word
“shall.” Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document shall be construed as referring to such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its
entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document
in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise
specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities, accounts and contract rights. 
 (b) In the computation of periods
of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means
“to and including.” 
 (c) Any reference herein or in any other Loan Document to the satisfaction, repayment, or payment in full of
the Obligations shall mean the repayment in Dollars in full in cash or immediately available funds (and in the case of any other contingent Obligations, providing cash collateral or other collateral as may be requested by the Lender) of all of the
Obligations other than (i) unasserted contingent indemnification Obligations, and (ii) any Hedge Obligations relating to Hedge Agreements that, at such time, are allowed by the applicable Hedge Provider to remain outstanding without being
required to be repaid. 
 (d) All accounting terms not specifically or completely defined herein shall be construed in conformity with, and
all financial data required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP as in effect from time to time, and applied on a consistent basis in a manner consistent with that used in preparing the
Borrower’s audited financial statements, except as otherwise specifically prescribed herein. 

  
 20 

 ARTICLE II 

The Commitments and Loans 

Section 2.01 Term Loan Commitments. 

Subject to the terms and conditions hereof and in reliance upon the warranties of the Borrower herein, the Lender agrees: 

(a) To make a loan (the “Term Loan A”) in the amount of the Term Loan A Commitment to the Borrower at the Lender’s
principal office in Edina, Minnesota in immediately available funds on the Closing Date. 
 (b) To make a loan (the “Term Loan
B”) in the amount of the Term Loan B Commitment to the Borrower at the Lender’s principal office in Edina, Minnesota in immediately available funds on the Closing Date. 

(c) To make a loan (the “Term Loan C”) in the amount of the Term Loan C Commitment to the Borrower at the Lender’s
principal office in Edina, Minnesota in immediately available funds on the Closing Date. 
 (d) To make a loan (the “Term Loan
D”) in the amount of the Term Loan D Commitment to the Borrower at the Lender’s principal office in Edina, Minnesota in immediately available funds on the Term Loan D Closing Date. 

Amounts borrowed under this Section 2.01 and repaid or prepaid may not be reborrowed. 

Section 2.02 Procedure for Term Loan Borrowing. 

Unless the Lender determines that any applicable condition specified in Article IV has not been satisfied (in which case the Lender will promptly notify the
Borrower in writing of such determination), the Lender will make the amount of Term Loan A, Term Loan B and Term Loan C available to the Borrower at the Lender’s principal office in Edina, Minnesota in immediately available funds on the Closing
Date and the Lender will make the amount of Term Loan D available to the Borrower at the Lender’s principal office in Edina, Minnesota in immediately available funds on the Term Loan D Closing Date. 

Section 2.03 Revolving Credit Commitment.  

(a) Subject to the terms and conditions of this Agreement, the Lender agrees to make Revolving Credit Loans to the Borrower and to issue
Letters of Credit for the account of the Borrower from time to time during the Revolving Credit Commitment Period in an aggregate principal amount at any one time outstanding not exceeding the lesser of (i) the amount of the
Revolving Credit Commitment or (ii) the Borrowing Base. During the Revolving Credit Commitment Period the Borrower may use the Revolving Credit Commitment by borrowing, prepaying the Revolving Credit Loans in whole or in part, and re-borrowing, and requesting the issuance of Letters of Credit all in accordance with the terms and conditions hereof. 

(b) The Borrower shall repay all outstanding Revolving Credit Loans on the Revolving Credit Termination Date. 

  
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 Section 2.04 Procedures for Revolving Credit Borrowing.
The Borrower shall either (a) submit a draw request to the Lender in writing or telephonically; or (b) use the Lender’s electronic banking systems to request each proposed borrowing in accordance with the requirements of such
systems as may be in effect from time to time. Each such notice shall be effective upon receipt by the Lender, shall be irrevocable, and shall specify the date and amount of borrowing requested. At the request of the Lender, a telephonic request
must be confirmed in writing by the Borrower within three (3) Business Days after such request So long as (a) all conditions precedent set forth in Article IV with respect to such borrowing have been satisfied, and (b) with respect to
a request for a Revolving Credit Loan, the Total Usage at such time does not exceed the lesser of (i) the amount of the Revolving Credit Commitment or (ii) the Borrowing Base, in each case after giving effect to such
Revolving Credit Loan, the Lender shall provide immediately available funds to the Borrower in the amount of such requested borrowing on the requested borrowing date by depositing such funds into depository account number
                            , maintained by the Borrower with the Lender. Each borrowing shall be on a
Business Day 
 Section 2.05 Termination or Reduction of Revolving Credit Commitment. 

(a) Upon not less than three Business Days’ notice to the Lender, the Borrower shall have the right to terminate the Revolving Credit
Commitment or, from time to time, to reduce the aggregate amount of the Revolving Credit Commitment; provided, that no such termination or reduction of Revolving Credit Commitment shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans made on the effective date thereof, the aggregate principal amount then outstanding of all Revolving Credit Loans would exceed the Revolving Credit Commitment. Any such partial reduction shall be in an
amount equal to $500,000, or a whole multiple thereof, and shall reduce permanently the Revolving Credit Commitment then in effect. 

Section 2.06 Repayment of Loans; Evidence of Debt.  

(a) Revolving Note. The Revolving Credit Loans made by the Lender shall be evidenced by a Revolving Credit Note in the
initial amount of the Revolving Credit Commitment. The Revolving Credit Loans and the Revolving Credit Note shall mature and be payable at Maturity of the Revolving Credit Loans. The Lender shall enter in its records the amount of each of its
Revolving Credit Loans, the rate of interest borne on such Revolving Credit Loans, and the payments of the Revolving Credit Loans received by the Lender, and such records shall be conclusive evidence of the subject matter thereof, absent manifest
error. 
 (b) Term Note A. The Term Loan A made by the Bank shall be evidenced by the Term Note A in the amount of Term Loan A when
made. Term Loan A shall mature and be payable in accordance with the provisions of Term Note A. The Bank shall enter in its records the amount of Term Loan A, the rate of interest borne on Term Loan A and the payments of Term Loan A received by the
Lender, and such records shall be conclusive evidence of the subject matter thereof, absent manifest error. 

  
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 (c) Term Note B. The Term Loan B made by the Bank shall be evidenced by the Term Note B in
the amount of Term Loan B when made. Term Loan B shall mature and be payable in accordance with the provisions of Term Note B. The Bank shall enter in its records the amount of Term Loan B, the rate of interest borne on Term Loan B and the payments
of Term Loan B received by the Lender, and such records shall be conclusive evidence of the subject matter thereof, absent manifest error. 

(d) Term Note C. The Term Loan C made by the Bank shall be evidenced by the Term Note C in the amount of Term Loan C when made. Term
Loan C shall mature and be payable in accordance with the provisions of Term Note C. The Bank shall enter in its records the amount of Term Loan C, the rate of interest borne on Term Loan C and the payments of Term Loan C received by the Lender, and
such records shall be conclusive evidence of the subject matter thereof, absent manifest error. 
 (e) Term Note D. The Term Loan D
made by the Bank shall be evidenced by the Term Note D in the amount of Term Loan D when made. Term Loan D shall mature and be payable in accordance with the provisions of Term Note D. The Bank shall enter in its records the amount of Term Loan D,
the rate of interest borne on Term Loan D and the payments of Term Loan D received by the Lender, and such records shall be conclusive evidence of the subject matter thereof, absent manifest error. 

(f) The Borrower hereby unconditionally promises to pay to the Lender in full in cash, to the extent not previously paid, then-unpaid principal
amount of each Loan on its Maturity Date. 
 (g) The Lender shall maintain in accordance with its usual practice an account or accounts
evidencing indebtedness of the Borrower to the Lender resulting from each Loan, including the amounts of principal and interest payable and paid to the Lender from time to time under this Agreement. 

Section 2.07 Optional Prepayments.  

(a) Voluntary. 
 (i)
Revolving Credit Loans. The Borrower shall have the right, by giving written notice to the Lender by not later than 3:00 p.m. (Minneapolis time) on the Business Day of such payment, to voluntarily prepay the Revolving Credit Loans in whole or
in part at any time without premium or penalty. 
 (ii) Term Loans. The Borrower shall have the right, by giving written notice to the
Lender by not later than 3:00 p.m. (Minneapolis time) on the Business Day of such payment, to voluntarily prepay each Term Loan in whole or in part at any time, subject to the contemporaneous payment of any premium or fees set forth in the Term Note
evidencing such Term Loan. 

  
 23 

 Section 2.08 Mandatory Prepayments.  

(a) Revolving Credit Loans. If, at any time, the aggregate principal amount then outstanding of all Revolving Credit Loans would exceeds
the lesser of the Revolving Credit Commitment or the Borrowing Base, then the Borrower, upon demand, shall prepay the amount of such excess together with interest on the amount prepaid. 

(b) Term Loans. Upon the sale or other disposition (including, without limitation the loss or destruction of such item of equipment due
to accident, fire or other cause) of any item of: 
 (i) Equipment owned by a Loan Party, the Borrower shall make mandatory prepayments of
the Loans to the extent of any Net Cash Proceeds received. Such Net Cash Proceeds shall be applied as follows: first to the then outstanding principal balance of the Revolving Credit Loans, second to Term Loan B, until such Loan is paid in full, and
third to Term Loan C, until such Loan is paid in full; or 
 (ii) Real Property owned by a Loan Party, the Borrower shall make mandatory
prepayments of the Term Loan D to the extent of any Net Cash Proceeds received. 
 Each such prepayment shall be accompanied by payment of accrued interest
on the amount prepaid any prepayment premium described in the Note evidencing such Loan. 
 Section 2.09
Application of Prepayments.  
 (a) Any partial prepayment of a Term Loan shall be applied to installments due on such Term
Loan in the inverse order of their maturities. 
 Section 2.10 Interest.  

(a) Term Loans. The Borrower agrees to pay interest on the outstanding principal amount of each Term Loan from the date of such Term
Loan until such Term Loan is paid at the rates and at the times specified in the Term Note evidencing such Term Loan. 
 (b) Revolving
Credit Loans. The Borrower agrees to pay interest on the outstanding principal amount of the Revolving Credit Loans at the rates and at the times specified in the Revolving Credit Note. 

Section 2.11 Revolving Credit Commitment Fee. The Borrower shall pay to the Lender a fee (the
“Revolving Credit Commitment Fee”) in an amount determined by applying a rate of 0.11 % per annum to the average daily excess of the Revolving Credit Commitment over the outstanding principal balance of the Revolving Credit
Loans. Such Revolving Credit Commitment Fee shall be payable to the Lender in arrears on the last day of each calendar month, commencing December 31, 2017 for the period commencing on the date hereof and ending on December 31, 2017, and on
the Revolving Credit Termination Date. 

  
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 Section 2.12 Letters of Credit.  

(a) Letter of Credit Commitment. Subject to the terms and conditions hereinafter set forth, the Lender agrees to issue stand-by letters of credit (the “Letters of Credit”) from time to time on terms reasonably acceptable to the Lender on any Business Day during the period from the date hereof and ending on the
Revolving Credit Termination Date; provided, however, that the Lender shall not be required to issue any Letter of Credit if, after giving effect to such issuance: (i) the Total Usage would exceed the lesser of: (A) the Revolving
Credit Commitment or (B) the Borrowing Base; or (ii) the Letter of Credit Obligations would exceed the Letter of Credit Commitment. 

(b) Termination. The obligation of the Lender to issue any Letter of Credit shall terminate (i) immediately and without further
action upon the occurrence of an Event of Default of the nature referred to in Section 8.01(f); or immediately when any Event of Default (other than of the nature specified in Section 8.01(f)) shall have occurred and be continuing and the
Lender either shall have demanded payment of the Revolving Note or shall so elect by giving notice to the Borrower for purposes of this Section. 

(c) Manner of Issuance of Letters of Credit. Letters of Credit shall be issued for the account of the Borrower within two Business Days
after receipt of notice from the Borrower to the Lender specifying the date of the requested issuance, the face amount of the requested Letter of Credit, and the expiry date of the requested Letter of Credit; provided that such notice and the
required accompanying documentation is received before 12:00 noon (Minneapolis time); any notice received after 12:00 noon (Minneapolis time) on any Business Day shall be deemed to have been received on the immediately following Business Day. In no
event shall any Letter of Credit have an expiry date later than the scheduled Revolving Credit Termination Date or a maturity of greater than one year. Each request for a Letter of Credit shall be accompanied by an appropriately completed and duly
executed application for a Letter of Credit in form acceptable to the Lender (a “Letter of Credit Application”). 
 (d)
Reimbursement on Demand. The Borrower agrees to pay to the Lender on demand at the Lender’s address shown on the signature page hereof: (i) the amount of each draft or other request for payment drawn under any Letter of Credit
(whether drawn before or on its stated expiry date), and (ii) interest on all amounts referred to in clause (i) above from the date of such draw until payment in full at a fluctuating rate per annum at all times equal to the Default Rate;
provided, however, that so long as the conditions precedent set forth in Section 2.04 and Article IV are satisfied as of the date of any draw under the Letter of Credit, the Lender will make a Revolving Credit Loan in accordance with
Section 2.04 to pay any draw under a Letter of Credit. 

  
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 (e) Letter of Credit Fees. 

(i) The Borrower agrees to pay to the Lender a commission (the “Letter of Credit Commission”) upon the undrawn face amount of
the Letters of Credit outstanding from time to time. The Letter of Credit Commission shall be computed at a per annum rate equal to one percent (1.0%). The Letter of Credit Commission with respect to each Letter of Credit is payable in advance on
the date of issuance of such Letter of Credit. 
 (ii) The Borrower agrees to pay to the Lender all reasonable and customary charges, fees
and expenses which the Lender may assess in connection with the issuance, extension, amendment or payment of any Letter of Credit in accordance with the schedule therefor then in effect, and any and all reasonable out-of-pocket expenses which the Lender may pay or incur in connection therewith. 
 (f)
Obligations Absolute. The Obligations of the Borrower under this Section 2.12 shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including, without
limitation, the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit or any other agreement or instrument relating thereto (collectively, the “Related Documents”); (ii) any amendment or
waiver of, or any consent to departure from, all or any of the Related Documents; (iii) the existence of any claim, set-off, defense or other right that the Borrower may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), the Lender or any other Person, whether in connection with any Related Document, the transactions contemplated
therein, or any unrelated transaction, except as set forth in clause (v) below; (iv) any draft, statement or any other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect, except as set forth in clause (v) below; (v) payment by the Lender under any Letter of Credit against presentation of a draft or certificate which does not comply with the terms of
such Letter of Credit, except in the case of payment resulting from the gross negligence or willful misconduct of the Lender; or (vi) any other circumstance or event whatsoever, whether or not similar to any of the foregoing, except in the case
of payment resulting from the gross negligence or willful misconduct of the Lender. 
 (g) Conflicts. The rights of the Lender against
the Borrower hereunder shall be in addition to all rights under (and shall control over any conflict under) any Letter of Credit Application. 

ARTICLE III 
 Taxes, Etc.

 Section 3.01 Taxes. 

(a) Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and
clear of and without deduction or withholding for any Taxes except as required by applicable law. If the Borrower is required by applicable law to deduct or withhold any Taxes from such payments, then: 

  
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 (i) if such Tax is an Indemnified Tax, the amount payable by the Borrower shall be increased so
that after all such required deductions or withholdings are made (including deductions or withholdings applicable to additional amounts payable under this Section), the Lender receives an amount equal to the amount it would have received had no such
deduction or withholding been made, and 
 (ii) the Borrower shall make such deductions or withholdings and timely pay the full amount
deducted or withheld to the relevant Governmental Authority in accordance with applicable law. 
 (b) Without limiting the provisions of
Section 3.01(a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law. 

(c) The Borrower shall indemnify the Lender, within ten days after demand therefor, for the full amount of any Indemnified Taxes (including
Indemnified Taxes imposed on or attributable to amounts payable under this Section) paid or payable by the Lender, on or with respect to an amount payable by the Borrower under or in respect of this Agreement or under any other Loan Document,
together with any reasonable expenses arising in connection therewith and with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate from the Lender
as to the amount of such payment or liability delivered to the Borrower shall be conclusive absent manifest error. 
 (d) As soon as
practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section 3.01, the Borrower shall deliver to the Lender the original or certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the relevant return reporting such payment or other evidence of such payment reasonably satisfactory to the Lender. 

(e) If the Lender determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has
been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay over such refund (or the amount of any credit in lieu of refund) to the Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes giving rise to such refund or credit in lieu of refund), net of all
out-of-pocket expenses of the Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund or credit in
lieu of refund); provided that, the Borrower, upon the request of the Lender, agrees to repay the amount paid over to the Borrower (plus any interest, penalties or other charges imposed by the relevant Governmental Authority) to the Lender in
the event the Lender is required to repay such refund or credit in lieu of refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (e), in no event will 

 
the Lender be required to pay any amount to the Borrower pursuant to this paragraph if the payment of such amount would place the Lender in a less favorable net
after-Tax position than it would have been in if the Tax subject to indemnification had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to
such Tax had never been paid. Nothing in this paragraph (e) shall be construed to require the Lender to make available its tax returns or any other information relating to its taxes that it deems confidential to the Borrower or any other
Person. 
 Section 3.02 Increased Costs; Capital Adequacy Requirements. 

(a) If any Change in Law shall: 

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by, the Lender; 
 (ii) subject the Lender to any Taxes (other
than Indemnified Taxes) on its loans, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or 

(iii) impose on the Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or
Eurodollar Rate Loans made by the Lender; 
 and the result of any of the foregoing shall be to increase the cost to the Lender of making, converting to,
continuing or maintaining any Eurodollar Rate Loan or of maintaining its obligation to make any such Loan, or to reduce the amount of any sum received or receivable by the Lender hereunder (whether of principal, interest or any other amount) then,
upon request of the Lender, the Borrower will pay to the Lender such additional amount or amounts as will compensate the Lender for such additional costs incurred or reduction suffered. 

(b) If the Lender determines that any Change in Law affecting the Lender, or Heartland (if any), regarding capital or liquidity requirements,
has or would have the effect of reducing the rate of return on the Lender’s capital or on the capital of Heartland, if any, as a consequence of this Agreement, the Revolving Credit Commitment, the Term Loan Commitment or the Loans, to a level
below that which the Lender or Heartland could have achieved but for such Change in Law (taking into consideration the Lender’s policies and the policies of Heartland with respect to capital adequacy), then from time to time the Borrower will
pay to the Lender such additional amount or amounts as will compensate the Lender or Heartland for any such reduction suffered. 
 (c) A
certificate from the Lender setting forth the amount or amounts necessary to compensate it or its holding company, as specified in paragraph (a) or (b) of this Section and delivered to the Borrower, shall be conclusive absent manifest error.
The Borrower shall pay the Lender the amount shown as due on any such certificate within 10 days after receipt thereof. 

  
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 (d) Failure or delay on the part of the Lender to demand compensation pursuant to this Section
shall not constitute a waiver of the Lender’s right to demand such compensation; provided that, the Borrower shall not be required to compensate the Lender pursuant to this Section for any increased costs incurred or reductions suffered
more than 270 days prior to the date that the Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of the Lender’s intention to claim compensation therefor (except that, if the Change in Law
giving rise to such increased costs or reductions is retroactive, then the 270 day period referred to above shall be extended to include the period of such retroactive effect). 

ARTICLE IV 
 Conditions
Precedent 
 Section 4.01 Conditions Precedent to Initial Loans. The obligation of the Lender to
make Term Loan A, Term Loan B, Term Loan C and the initial Revolving Credit Loans or of the Lender to issue any Letter of Credit requested to be made by it hereunder is subject to the satisfaction or the waiver by the Lender of the following
conditions precedent: 
 (a) The Lender shall have received: 

(i) this Agreement, duly executed and delivered by an authorized officer of the Borrower; 

(ii) Term Note A, Term Note B, Term Note C, the Revolving Credit Note, the Security Agreement, and the Guaranty, in each case executed and
delivered by the Loan Parties party thereto; 
 (iii) results of a recent lien search in each of the jurisdictions where the Loan Parties are
organized and the assets of the Loan Parties are located, and such searches reveal no Liens on any of the assets of the Loan Parties, except for Liens permitted under this Agreement or discharged on or prior to the Closing Date pursuant to
documentation satisfactory to the Lender; 
 (iv) an Officer’s Certificate, duly executed by a responsible officer of each Loan Party,
in the form provided by Lender; 
 (v) an opinion of counsel to the Loan Parties, in form and substance acceptable to the Lender; 

(vi) one or more payoff letters, each in form and substance acceptable to the Lender in its sole and absolute discretion, executed by the
Borrower and by Branch Banking & Trust Company; and 

  
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 (vii) payment, in immediately available funds of a
non-refundable origination fee in the amount of $87,500, together with reimbursement for all expenses for which invoices have been presented (including the fees and expenses of Lender’s legal counsel), on
or before the Closing Date. 
 (b) There shall have occurred no Material Adverse Effect since March 31, 2017. 

(c) The Lender shall have received, in form and substance satisfactory to it, a certificate of each Loan Party, certified by a secretary or
assistant secretary of such Loan Party, dated the Closing Date, including: 
 (i) a certificate of incorporation, of each Loan Party that is
a corporation, certified by the Secretary of State of the state of its incorporation; 
 (ii) by-laws
for each Loan Party that is a corporation as in effect on the date on which the resolutions referred to below were adopted; 
 (iii) a
certification of formation, of each Loan Party that is a limited liability company, certified by the Secretary of State of the state of its organization; 

(iv) limited liability agreement for each Loan Party that is a limited liability company as in effect on the date on which the resolutions
referred to below were adopted; 
 (v) resolutions of the board of directors of each Loan Party approving the transaction and each Loan
Document to which it is or is to be a party; 
 (vi) a certification that the names and signatures of the officers of each Loan Party
authorized to sign each Loan Document to which it is or is to be a party and other documents to be delivered hereunder and thereunder are true and correct; 

(vii) evidence of good standing for each Loan Party from the State of its organization and each other state where it is qualified to do
business. 
 (d) The Lender shall have received an opinion of counsel to the Loan Parties, in form and substance acceptable to the Lender:

 (e) The Lender shall have received satisfactory evidence that each document (including any Uniform Commercial Code financing statement and
appropriate filings with the United States Patent and Trademark Office or United States Copyright Office) required by the Loan Documents or any Requirement of Law or reasonably requested by the Lender to be filed, registered or recorded in order to
create in favor of the Lender a perfected first priority Lien on the Collateral described therein, prior and superior in right to any other Person shall have been properly filed (or provided to the Lender) or executed and delivered in each
jurisdiction. 
 (f) The Lender or its agent shall have completed its survey of the business, operations and assets of the Borrower, and such
survey shall provide the Lender with results and information which, in the Lender’s determination, are satisfactory to the Lender. 

  
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 (g) The Lender shall have received a Borrowing Base Certificate as of a date satisfactory to the
Lender certified by a Responsible Officer of the Borrower. 
 (h) The Lender shall have received evidence of insurance coverage in form,
scope and substance satisfactory to the Lender and otherwise in compliance with the terms of Section 5.10 and Section 6.06 of this Agreement. 

Section 4.02 Conditions Precedent to Term Loan D. The Obligation of the Lender to make Term Loan D is
subject to the satisfaction or the waiver by the Lender of the conditions set forth in Section 4.01 and the following conditions precedent: 

(a) The Lender shall have received: 

(i) Term Note D, the Deed of Trust, the Assignment of Rents and the Indemnification Agreement, in each case executed and delivered by the Loan
Parties party thereto; 
 (ii) an ALTA Loan Title Insurance Policy, issued by the Title Company, insuring the Lender’s Lien on the North
Carolina Real Property and containing such endorsements as the Lender may reasonably require (it being understood that the amount of coverage, exceptions to coverage and status of title set forth in such policy must all be acceptable to the Lender);

 (iii) a current, certified ALTA/ACSM Survey of the North Carolina Real Property, which shall also be prepared in accordance with
Lender’s standard requirements; 
 (iv) a current letter addressed to Bank from an appropriate municipal officer of the City of Denver,
North Carolina regarding the zoning status and classification of the North Carolina Real Property and building code compliance, prepared in accordance with Lender’s standard requirements therefor; 

(v) copies of all documents of record concerning the North Carolina Real Property as shown on the commitment for the ALTA Loan Title Insurance
Policy referred to in Section 4.01(a)(iv); 
 (vi) a flood insurance policy covering the North Carolina Real Property, if required by
the Flood Disaster Protection Act of 1973; 
 (vii) an appraisal, prepared by an independent appraiser engaged directly by the Lender, of the
North Carolina Real Property that satisfies the requirements of the Financial Institutions Reform, Recovery and Enforcement Act, if applicable, and evidences compliance with the supervisory loan-to-value limits set forth in the Federal Deposit Insurance Corporation Improvement Act of 1991; 

(viii) a Phase I Environmental site assessment report covering the North Carolina Real Property, in form and substance acceptable to the
Lender; 
 (ix) an Officer’s Certificate, duly executed by a responsible officer of each Loan Party, in the form provided by Lender; and

  
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 (x) a written disbursement request duly executed by a responsible officer of the Borrower. 

Section 4.03 Conditions Precedent to Each Loan. The obligation of the Lender to make each Loan or to
issue each Letter of Credit requested to be made by it hereunder (including, without limitation, its initial extension of credit), is subject to the satisfaction or the waiver by the Lender of the following conditions precedent: 

(a) Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct on and as
of such date as if made on and as of such date. 
 (b) No Default or Event of Default shall have occurred and be continuing on such date or
after giving effect to the Loans requested to be made on such date. 
 Each borrowing by the Borrower hereunder shall constitute a
representation and warranty by the Borrower, as of the date such Loan is made, that the conditions contained in Article IV have been satisfied. 

ARTICLE V 

Representations and Warranties 

To induce the Lender to enter into this Agreement and to make the Loans and to issue Letters of Credit hereunder, the Borrower hereby
represents and warrants to the Lender that: 
 Section 5.01 Existence; Compliance With Laws. Each
Loan Party (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, (b) is duly qualified as a foreign corporation or other organization and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification except to the extent that the failure to qualify in such jurisdiction could not reasonably be expected to have a Material
Adverse Effect, and (c) is in compliance with all Requirements of Law except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 

Section 5.02 Power; Authorization; Enforceability. 

(a) Each Loan Party has the power and authority, and the legal right, to own or lease and operate its property, and to carry on its business as
now conducted and as proposed to be conducted, and to execute, deliver and perform the Loan Documents to which it is a party and, in the case of the Borrower, to obtain Loans hereunder. Each Loan Party has taken all necessary organizational action
to authorize the execution, delivery and 

  
 32 

 
performance of the Loan Documents to which it is a party and, in the case of the Borrower, to authorize the borrowing of Loans on the terms and conditions contained herein. No consent or
authorization of, filing with, notice to or other act by, or in respect of, any Governmental Authority or any other Person is required in connection with the extensions of credit hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Loan Documents, which consents, authorizations, filings and notices have been obtained or made and are in full force and effect, and (ii) the filings referred to in Section 4.01(e). Each Loan
Document has been duly executed and delivered by each Loan Party party thereto. 
 (b) This Agreement constitutes, and each other Loan
Document when delivered hereunder will constitute, a legal, valid and binding obligation of each Loan Party party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). 

Section 5.03 No Contravention. The execution, delivery and performance of this Agreement and the other
Loan Documents, the borrowing of Loans hereunder and the use of the proceeds thereof will not violate any Requirement of Law or any Contractual Obligation of any Loan Party and will not result in, or require, the creation or imposition of any Lien
on any of their respective properties or assets pursuant to any Requirement of Law or any such Contractual Obligation (other than the Liens created by the Loan Documents). No Requirement of Law or Contractual Obligation applicable to any Loan Party
could reasonably be expected to have a Material Adverse Effect. 
 Section 5.04 Financial Statements. 

(a) The consolidated balance sheets of the Borrower and its Subsidiaries as at March 31, 2017, and the related consolidated statements of
income and of cash flows for the fiscal year ended on such date, audited by BDO USA, LLP, present fairly the consolidated financial condition of the Borrower and its Subsidiaries as at such date, and the consolidated results of their operations and
their consolidated cash flows for the fiscal year then ended, in accordance with GAAP. 
 (b) The unaudited consolidated balance sheets of
the Borrower and its Subsidiaries as at                              , 2017, and the related unaudited
consolidated statements of income and of cash flows for the year-to-date period ended on such date, duly certified by a Responsible Officer of the Borrower, present
fairly the consolidated financial condition of the Borrower and its Subsidiaries as at such date, and the consolidated results of their operations and their consolidated cash flows for
year-to-date period then ended, in accordance with GAAP (subject to normal year-end audit adjustments and the absence of
footnotes). 

  
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 Section 5.05 No Material Adverse Effect. Since
March 31, 2017, no development or event has occurred that has had or could reasonably be expected to have a Material Adverse Effect. 

Section 5.06 No Litigation. Other than as disclosed on Schedule 5.06, no action, suit, litigation,
investigation or proceeding of or before any arbitrator or Governmental Authority is pending or threatened by or against any Loan Party or against any of its property or assets (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) that could reasonably be expected to have a Material Adverse Effect. 

Section 5.07 No Default. No Default or Event of Default has occurred and is continuing and no default
has occurred and is continuing under or with respect to any Contractual Obligation of the Borrower or any of its Subsidiaries that could reasonably be expected to have a Material Adverse Effect. 

Section 5.08 Ownership of Property; Liens. 

(a) Each Loan Party has fee simple title to, or a valid leasehold interest in, all its real property, and good title to, or a valid leasehold
interest in, all its other property, and none of such property is subject to any Lien except as permitted by Section 7.02. 
 (b) Part A
of Schedule 5.08 sets forth a complete and accurate list as of the date hereof of all Liens on the real property of any Loan Party, showing as of the date hereof the lienholder thereof and the real property of such Loan Party subject thereto. 

(c) Part B of Schedule 5.08 sets forth a complete and accurate list as of the date hereof of all real property owned by any Loan Party or any
of its Subsidiaries, showing as of the date hereof, the street address, county or other relevant jurisdiction, state, record owner and book value thereof. 

(d) Part C of Schedule 5.08 sets forth a complete and accurate list as of the date hereof of all leases of real property under which any Loan
Party is the lessee, showing as of the date hereof, the street address, county or other relevant jurisdiction, state, lessor, lessee, expiration date and annual rental cost thereof. 

(e) Part D of Schedule 5.08 sets forth a complete and accurate list as of the date hereof of all leases of real property under which any Loan
Party is the lessor, showing as of the date hereof, the street address, county or other relevant jurisdiction, state, lessor, lessee, expiration date and annual rental income thereof. 

Section 5.09 Environmental Matters. Except as, in the aggregate, could not reasonably be expected to
have a Material Adverse Effect: 

  
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 (a) none of the facilities or properties currently or formerly owned, leased or operated by any
Loan Party (the “Properties”) contain or previously contained, any Hazardous Materials in amounts or concentrations or under circumstances that constitute or constituted a violation of, or could result in liability under, any
Environmental Law; 
 (b) no Loan Party has received any notice of actual or alleged violation,
non-compliance or liability regarding compliance with Environmental Laws or other environmental matters or with respect to any of the Properties or the business operated by any Loan Party, nor is there any
reason to believe that any such notice will be received or is being threatened; 
 (c) the Properties and all operations at the Properties
are and formerly have been in compliance with all applicable Environmental Laws, and there is no contamination at, under or about the Properties or violation of any Environmental Law with respect to the Properties or the business operated by any
Loan Party; 
 (d) Hazardous Materials have not been transported or disposed of from the Properties in violation of, or in a manner or to a
location that could result in liability under, any Environmental Law; no Hazardous Materials have been generated, treated, stored or disposed of at, on or under any of the Properties in violation of, or in a manner that could result in liability
under, any applicable Environmental Law; and there has been no release or threat of release of Hazardous Materials at or from the Properties, or arising from or related to the operations of any Loan Party in connection with the Properties or the
business operated by any Loan Party, in violation of or in amounts or in a manner that could result in liability under Environmental Laws; 

(e) no administrative or governmental action or judicial proceeding is pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which any Loan Party is or will be a party with respect to the Properties or the business operated by any Loan Party, nor are there any decrees or orders or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the business operated by any Loan Party; and 
 (f) no Loan Party has assumed any
liability of any other Person under Environmental Laws. 
 Section 5.10 Insurance. The properties of
the Loan Parties are insured with financially sound and reputable insurance companies which are not Affiliates of the Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where the applicable Loan Party operates. Schedule 5.10 sets forth a description of all insurance maintained by or on behalf of the Loan Parties as of the Closing Date. Each insurance policy
listed on Schedule 5.10 is in full force and effect and all premiums in respect thereof that are due and payable have been paid.  

  
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 Section 5.11 Material Contracts. Schedule 5.11 sets forth
all Material Contracts to which any Loan Party is a party or is bound as of the Closing Date. The Borrower has delivered true, correct and complete copies of such Material Contracts to the Lender on or before the Closing Date. The Loan Parties are
not in breach or in default in any material respect of or under any Material Contract and have not received any notice of the intention of any other party thereto to terminate any Material Contract. 

Section 5.12 Intellectual Property. Each Loan Party owns, or is licensed to use, all Intellectual
Property necessary for the conduct of its business as currently conducted or proposed to be conducted. No material claim has been asserted and is pending by any Person challenging the use, validity or effectiveness of any Intellectual Property, nor
is the Borrower aware of any valid basis for any such claim. The use of Intellectual Property by each Loan Party does not materially infringe on the rights of any Person. Schedule 5.12 attached hereto is a complete list of all intellectual property
that is owned by, or licensed to, Borrower or any of its Subsidiaries. 
 Section 5.13 Taxes.Each Loan
Party has filed all Federal, state and other tax returns that are required to be filed and has paid all taxes shown thereon to be due, together with applicable interest and penalties, and all other taxes, fees or other charges imposed on it or any
of its property by any Governmental Authority (except those that are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the relevant Loan
Party). No tax Lien has been filed, and, to the knowledge of the Borrower, no claim is being asserted, with respect to any such tax, fee or other charge. No Loan Party is a party to any tax sharing agreement. 

Section 5.14 ERISA. Each Plan is in compliance with ERISA, the Code and any Requirement of Law;
neither a Reportable Event nor an “accumulated funding deficiency” (within the meaning of §412 or §430 of the Code or §302 of ERISA) has occurred (or is reasonably likely to occur) with respect to any Plan. No Single
Employer Plan has terminated, and no Lien has been incurred in favor of the PBGC or a Plan. Based on the assumptions used to fund each Single Employer Plan, the present value of all accrued benefits under each such Plan did not materially exceed the
value of the assets of such Plan allocable to such accrued benefit as of the last annual valuation date prior to the date on which this representation is made. Neither any Loan Party nor any ERISA Affiliate has incurred or is reasonably expected to
incur any Withdrawal Liability that could reasonably be expected to result in a material liability under ERISA, in connection with any Multiemployer Plan. No such Multiemployer Plan is (or is reasonably expected to be) terminated, in Reorganization,
or insolvent (within the meaning of §4245 of ERISA). 

  
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 Section 5.15 Margin Regulations. The Borrower is not
engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Loan will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock. 
 Section 5.16 Investment Company Act. No Loan Party is or is required
to be registered as an “investment company” under the Investment Company Act of 1940, as amended. 

Section 5.17 Subsidiaries; Equity Interests. 

(a) Except as disclosed to the Lender by the Borrower in writing from time to time after the Closing Date: 

(i) Part A of Schedule 5.17 sets forth the name, address of principal place of business, jurisdiction of formation and US taxpayer
identification number (or in the case of a non-US Subsidiary that does not have a US taxpayer identification number, its unique identification number issued to it by its jurisdiction of formation) of each
Subsidiary and, as to each such Subsidiary, the percentage of each class of Equity Interest owned by any Loan Party; 
 (ii) there are no
outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments (other than stock options granted to employees or directors and directors’ qualifying shares) relating to any Equity Interest of the Borrower or any
Subsidiary, except as created by the Loan Documents. 
 (b) All of the outstanding Equity Interests in each Subsidiary have been validly
issued, are fully paid and non-assessable and are owned by a Loan Party in the amounts specified on Part B of Schedule 5.17 free and clear of all Liens except those created under the Loan Documents. All of the
outstanding Equity Interests in the Borrower have been validly issued, are fully paid and non-assessable and are owned by the Persons and in the amounts specified on Part C of Schedule 5.17 free and clear of
all Liens except those created under the Loan Documents. 
 (c) No Loan Party has any equity investments in any other corporation or entity
other than those disclosed on Part D of Schedule 5.17. 
 Section 5.18 Labor Matters. Except as, in
the aggregate, could not reasonably be expected to have a Material Adverse Effect (a) there are no strikes, lockouts or other labor disputes pending or, to the knowledge of the Borrower, threatened against any Loan Party, (b) hours worked
by and wages paid to employees of each Loan Party have not violated the Fair Labor Standards Act or any other applicable Requirement of Law, and (c) all payments due in respect of employee health and welfare insurance from any Loan Party have
been paid or properly accrued on the books of the relevant Loan Party. 

  
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 Section 5.19 Accuracy of Information, Etc. The Borrower
has disclosed to the Lender all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect. No statement or information contained in this Agreement, any other Loan Document, or any other document, certificate or statement furnished by or on behalf of the Borrower to the Lender, for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statement contained herein or therein not misleading. The
Projections included in such materials are based upon good faith estimates and assumptions believed by the Borrower to be reasonable at the time made; it being recognized by the Lender that such Projections as to future events are not to be viewed
as fact and that actual results during the period or periods covered by the Projections may differ from such projected results and such differences may be material. 

Section 5.20 Security Documents. 

(a) The Security Agreement creates in favor of the Lender a legal, valid, continuing and enforceable security interest in the Collateral, the
enforceability of which is subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at law. The financing statements, releases and other filings are in appropriate form and have been or will be filed in the offices of the Secretary of State in which each Loan Party is organized. Upon such filings and/or the
obtaining of “control” (as defined in the Uniform Commercial Code), the Lender will have a perfected Lien on, and security interest in, to and under all right, title and interest of the grantors thereunder in all Collateral that may be
perfected by filing, recording or registering a financing statement or analogous document (including without limitation the proceeds of such Collateral subject to the limitations relating to such proceeds in the Uniform Commercial Code) or by
obtaining control, under the Uniform Commercial Code (in effect on the date this representation is made) in each case prior and superior in right to any other Person, except for Liens permitted under Section 7.02. 

Section 5.21 Solvency. The Borrower and each of the Loan Parties is, and after giving effect to the
incurrence of all Debt and obligations incurred in connection herewith will be, Solvent. 
 Section 5.22
PATRIOT Act; OFAC and Other Regulations. 
 (a) No Loan Party, any of its Subsidiaries or any of the Affiliates or respective
officers, directors, brokers or agents of such Loan Party, Subsidiary or Affiliate: 
 (i) has violated any Anti-terrorism Laws; or 

  
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 (ii) has engaged in any transaction, investment, undertaking or activity that conceals the
identity, source or destination of the proceeds from any category of prohibited offenses designated by the Organization for Economic Co-operation and Development’s Financial Action Task Force on Money
Laundering. 
 (b) No Loan Party, any of its Subsidiaries or any of the Affiliates or respective officers, directors, brokers or agents of
such Loan Party, Subsidiary or Affiliate that is acting or benefiting in any capacity in connection with the Loans is a Blocked Person. 

(c) No Loan Party, any of its Subsidiaries or any of the Affiliates or respective officers, directors, brokers or agents of such Loan Party,
Subsidiary or Affiliate acting or benefiting in any capacity in connection with the Loans: 
 (i) conducts any business or engages in making
or receiving any contribution of goods, services or money to or for the benefit of any Blocked Person; 
 (ii) deals in, or otherwise engages
in any transaction related to, any property or interests in property blocked pursuant to any Anti-terrorism Law; or 
 (iii) engages in or
conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-terrorism Law. 

ARTICLE VI 
 Affirmative
Covenants 
 So long as the Lender has any Revolving Credit Commitment hereunder, or any Loans, Letter of Credit Obligations or any
other amounts payable to the Lender hereunder or under any other Loan Document have not been indefeasibly paid in full, the Borrower shall, and shall cause each cause each other Loan Party to (except that, in the case of the covenants set forth in
Section 6.01, Section 6.02, and Section 6.03, the Borrower shall furnish all applicable materials to the Lender): 

Section 6.01 Financial Statements. Furnish to the Lender: 

(a) As soon as available, but in any event within 120 days after the end of each fiscal year of the Borrower, a copy of the annual audit report
of the Borrower and its Subsidiaries for such year including a copy of the audited consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such year and the related audited consolidated statements of income and of cash flows
for such year, setting forth in each case in comparative form the figures for the previous year, together with an opinion as to such audit report of BDO USA, LLP or other independent certified public accountants of nationally recognized standing
which does not contain a “going concern” or similar qualification or exception, or qualification arising out of the scope of the audit, together with related consolidating financial statements and a certificate of such accounting firm to
the Lender stating that in the course of the regular audit of the business of the Borrower 

  
 39 

 
and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default or
Event of Default has occurred and is continuing, or if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereof; provided that, in the event of any change in generally accepted
accounting principles used in the preparation of such financial statements, the Borrower shall also provide a reconciliation of such financial statements to GAAP, and 

(b) As soon as available and in any event within 45 days after the end of each fiscal quarter of each fiscal year, a copy of the unaudited
financial statements of the Borrower prepared in conformity with GAAP (except for the omission of footnotes and prior period comparative data required by GAAP and for variations from GAAP which in the aggregate are not material) consisting of a
consolidated balance sheet as of the close of such month and related consolidated statements of operations and retained earnings and cash flow for such month and from the beginning of such fiscal year to the end of such month and comparative figures
for the corresponding portion of the preceding fiscal year together with related consolidating financial statements and the other monthly reports required by the Lender, in each case certified by a Responsible Officer of the Borrower. 

All such financial statements shall be complete and correct and shall be prepared in reasonable detail and in accordance with GAAP applied (except as approved
by such accountants or Responsible Officer, as the case may be, and disclosed in reasonable detail therein) consistently throughout the periods reflected therein and with prior periods. 

Section 6.02 Certificates; Other Information. The Borrower shall furnish the following to the Lender:

 (a) [intentionally deleted] 

(b) As soon as available, and in any event within 120 days after the end of each fiscal year of the Borrower, a compliance certificate (the
“Compliance Certificate”) in the form provided by the Lender, signed by a Responsible Officer of the Borrower (i) containing all information and calculations necessary for determining compliance by the Loan Parties with the
provisions of this Agreement as of the last day of such fiscal year of the Borrower and (ii) stating that each Loan Party during such period has observed and performed all of the covenants and other agreements, and satisfied every condition
contained in this Agreement and the other Loan Documents to which it is a party to be observed, performed or satisfied by it, and that such officer has not obtained any knowledge of any Default or Event of Default except as specified in such
certificate; and 
 (c) As soon as available, and in any event within 15 days after the end of each month of each fiscal year, a borrowing
base certificate (the “Borrowing Base Certificate”) in the form provided by the Lender attached hereto showing the Borrowing Base as of the last Business Day of the previous month, accompanied by a detailed accounts receivable
aging, a detailed inventory report, a detailed accounts payable aging and other supporting reports as may be required by the Lender and the Borrowing Base Certificate and such supporting reports shall be in a form acceptable to the Lender and
certified as accurate by a Responsible Officer of the Borrower; 

  
 40 

 (d) Promptly, and in any event within 30 days thereafter, to the extent not previously disclosed
to the Lender, a description of any change in the jurisdiction of organization of any Loan Party; 
 (e) Promptly after the same are sent,
copies of all proxy statements, financial statements and reports that any Loan Party sends to any of its securities holders, and copies of all reports and registration statements that any Loan Party files with the SEC or any national securities
exchange; 
 (f) Promptly upon receipt of the same, copies of all notices, requests and other documents received by any Loan Party under or
pursuant to any Material Contract or instrument, indenture, loan agreement regarding or related to any breach or default by any party thereto or any other event that could materially impair the value of the interests or the rights of any Loan Party
or otherwise have a Material Adverse Effect and copies of the foregoing and such information and reports regarding Material Contracts and such instruments, indentures, loan agreements as the Lender may reasonably request from time to time; 

(g) As soon as available and in any event within 60 days after the end of each fiscal quarter of each fiscal year, a copy of the
Borrower’s internally prepared memorandum regarding loss contingencies, substantially in the form of the memorandum dated October 10, 2017 covering the Borrower’s second fiscal quarter of its 2018 fiscal year previously provided to
Lender; and 
 (h) Such other information respecting the business, condition (financial or otherwise), operations, performance, properties or
prospects of any Loan Party as the Lender may from time to time request. 
 Section 6.03 Notices.
Promptly and in any event within five days give notice to the Lender of: 
 (a) The occurrence of any Default or Event of Default; 

(b) Any (i) default or event of default under any Material Contract of any Loan Party or (ii) litigation, investigation or proceeding
that may exist at any time between any Loan Party and any Governmental Authority; 
 (c) Any litigation or proceeding against any Loan Party
(i) in which the amount involved is at least $500,000 and not covered in full by insurance, (ii) in which injunctive or similar relief is sought, or (iii) which relates to any Loan Document; 

(d) The following events, as soon as possible and in any event within five (5) days after the Borrower or any of its ERISA Affiliates
knows or has reason to know thereof: 

  
 41 

 (i) the occurrence of any Reportable Event with respect to any Plan, a failure to make any
required contribution to a Plan, the creation of any Lien in favor of the PBGC or any Multiemployer Plan; or 
 (ii) the institution of
proceedings or the taking of any other action by the PBGC or the Borrower or any ERISA Affiliate or any Multiemployer Plan with respect to the withdrawal from, or the termination, Reorganization or Insolvency of, any Plan; 

(e) The occurrence of any Environmental Action against or of any noncompliance by any Loan Party with any Environmental Law or relevant permit;
and 
 (f) Any development or event that has had or could reasonably be expected to have a Material Adverse Effect. 

Each notice pursuant to this Section 6.03 shall be accompanied by a statement of an executive officer of the Borrower setting forth
details of the occurrence referred to therein and stating what action the relevant Loan Party proposes to take with respect thereto. 

Section 6.04 Maintenance of Existence; Compliance. 

(a) (i) Preserve, renew and maintain in full force and effect its corporate or organizational existence and (ii) take all reasonable
action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, except, in each case, as otherwise permitted under this Agreement. 

(b) Comply with all Contractual Obligations and Requirements of Law except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect. 
 Section 6.05 Performance of Material
Contracts. Perform and observe all the terms and provisions of each Material Contract to be performed or observed by it, maintain each Material Contract in full force and effect, enforce each such Material Contract in accordance with its
terms, take all such action to such end as may be from time to time requested by the Lender and, upon request of the Lender, make to each other party to each Material Contract such demands and requests for information and reports or for action as
any Loan Party or any of its Subsidiaries is entitled to make under such Material Contract. 
 Section 6.06
Maintenance of Property; Insurance. 
 (a) Maintain and preserve all of its property useful and necessary in its business in good
working order and condition, ordinary wear and tear excepted. 
 (b) Maintain insurance with respect to its property and business (including
without limitation, property, casualty and business interruption insurance) with financially sound and reputable insurance companies that are not Affiliates of the Borrower, in such amounts and covering such risks as are usually insured against by
similar companies 

  
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engaged in the same or a similar business. Each policy of liability insurance shall name the Lender as an additional insured and each policy of real property insurance shall name the Lender as
mortgagee loss payee and each policy insuring any other Collateral shall name the Lender as lender loss payee. 

Section 6.07 Inspection of Property; Books and Records; Discussions. 

(a) Keep proper books of records and accounts, in which full, true and correct entries in conformity with GAAP and all Requirements of Law
shall be made of all dealings and transactions and assets in relation to its business and activities. 
 (b) Permit the Lender and its
representatives to (i) discuss Borrower’s business operations, properties and financial and other condition with its officers and employees and its independent public accountants and (ii) upon reasonable notice to visit the
Borrower’s offices and inspect and make abstracts from any of its books and records including, without limitation, permitting the Lender to examine any Collateral securing the Loans and reimburse the Lender for all examination fees and expenses
incurred in connection with such examinations at its then current rate for such services and for its out-of-pocket expenses incurred in connection therewith;
provided, however that the Lender agrees that, so long as no Default or Event of Default has occurred and is continuing, the Borrower’s obligations to reimburse the Lender for its examinations shall be limited to no more than one
examination per any Loan Year plus its out-of-pocket expenses incurred in connection therewith. 

Section 6.08 Environmental Laws. 

(a) Obtain, comply and maintain in all material respects, and ensure the same in all material respects by all tenants and subtenants, if any,
with all applicable Environmental Laws, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws. 

(b) Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions necessary to remove and
clean up all Hazardous Materials from any of its properties required under Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws. 

Section 6.09 Use of Proceeds. Use the proceeds of the Loans (a) to finance the acquisition of
assets by the Borrower and the Domestic Subsidiaries in the ordinary course of business, including the purchase of inventory and equipment, (b) to finance Capital Expenditures of the Borrower and of its Domestic Subsidiaries, and (c) for
general corporate purposes of the Borrower, in each case to the extent not prohibited under any Requirement of Law or the Loan Documents. 

  
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 Section 6.10 Additional Collateral; etc.  

(a) With respect to any property acquired after the Closing Date by any Loan Party that is intended to be subject to a Lien created by any Loan
Document, other than any property subject to a Lien expressly permitted by this Agreement, as to which the Lender, does not have a perfected Lien, promptly, and in any event within 30 days of acquiring such property: 

(i) execute and deliver to the Lender such supplements or amendments to the Security Agreement or such other documents as the Lender deems
necessary or advisable to grant to the Lender a security interest in such property; and 
 (ii) take all actions necessary or advisable to
grant to the Lender a perfected first priority security interest in such property, including the filing of UCC-1 financing statements in such jurisdictions as may be required by the Security Agreement or by
law or as may be requested by the Lender; and 
 (iii) execute and deliver to the Lender such supplements or amendments to any Loan Document
as the Lender deems necessary or advisable to grant to the Lender a perfected first priority security interest in the Equity Interests of such new Subsidiary that are owned by any Loan Party; 

(iv) deliver to the Lender the certificates representing such Equity Interests, together with undated stock powers, in blank, executed by a
duly authorized officer of the relevant Loan Party; 
 (v) deliver to the Lender originals of any promissory notes evidencing intercompany
loans provided by a Loan Party to any Person that is not a Loan Party, indorsed in blank by a duly authorized officer of the relevant Loan Party; and 

(vi) cause such new Subsidiary that the Borrower would like to become a Loan Party (an “Additional Loan Party”) to:
(A) execute and deliver joinders to the Guaranty the Security Agreement, each in the form provided by the Lender (B) take all actions necessary or desirable to grant to the Lender a perfected first priority security interest in the
Collateral owned by such new Subsidiary, including the filing of UCC-1 financing statements in such jurisdictions as may be required by such security agreement or by law or as may be requested by the Lender;
and (C) execute and deliver a secretary’s certificate of such new Loan Party, with charter documents, by-laws and appropriate resolutions attached. 

Section 6.11 Further Assurances. Promptly upon the request of the Lender: 

(a) Correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgement, filing or
recordation thereof; and 
 (b) Do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, conveyances, pledge agreements, mortgages, deeds of trust, trust deeds, assignments, financing
statements and continuations thereof, termination statements, notices of assignments, transfers, certificates, assurances and other instruments as the Lender, may require from time to time in order to: 

  
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 (i) carry out more effectively the purposes of the Loan Documents; 

(ii) to the fullest extent permitted by applicable law, subject any Loan Party’s properties, assets, rights or interests to the Liens now
or hereafter intended to be covered by the Security Agreement and the other Loan Documents; 
 (iii) perfect and maintain the validity,
effectiveness and priority of the Liens intended to be created under the Security Agreement and the other Loan Documents; 
 (iv) each Loan
Party (including, without limitation, each Additional Loan Party) will execute and deliver, or cause to be executed and delivered, to the Lender such documents, agreements and instruments (including, without limitation, account control agreements,
landlord waivers and bailee agreements), and will take or cause to be taken such further actions (including the filing and recording of financing statements, fixture filings, and other documents and such other actions or deliveries, as applicable),
which may be required by law or which the Lender may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority of the Liens created or intended
to be created by the Security Agreement, all in form and substance reasonably satisfactory to the Lender and all at the expense of the Borrower; and 

(v) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively to the Lender, the rights granted or now or
hereafter intended to be granted to the Lender under any Loan Document or under any other instruments executed in connection with any Loan Document to which any Loan Party is or is to be a party. 

Section 6.12 Deposit Accounts. In order to facilitate the Lender’s maintenance and monitoring of its
security interests in the Collateral, Borrower shall maintain, and cause each of the other Loan Parties to maintain, all of its operating accounts, deposit accounts and securities accounts with the Lender or an Affiliate of the Lender; provided,
however, as a matter of convenience, each Loan Party may maintain up to $75,000 in deposits in demand deposit accounts at other commercial banking institutions in locales where the Lender or an Affiliate of Lender does not maintain a banking branch;
provided further that the Borrower shall use its commercially reasonable best efforts to cause such other banking institutions to execute control agreements in favor of the Lender on forms acceptable to Lender with regards to such deposit accounts.

  
 45 

 ARTICLE VII 

Negative Covenants 
 So
long as the Lender has any Revolving Credit Commitment hereunder, or any Loans, Letter of Credit Obligations, or any other amounts payable to the Lender hereunder or under any other Loan Document have not been indefeasibly paid in full, the Borrower
shall not, and shall not permit any other Loan Party to, do any of the following without the prior written consent of the Lender: 

Section 7.01 Limitation on Debt. Create, incur, assume, permit to exist or otherwise become liable
with respect to any Debt, except: 
 (a) Debt of any Loan Party existing or arising under this Agreement and any other Loan Document; 

(b) Debt of: 
 (i) the Borrower
owed to any other Loan Party; and 
 (ii) any Loan Party owed to the Borrower or any other Loan Party; 

(c) Debt incurred to finance the acquisition of fixed or capital assets (including Capital Lease Obligations) secured by a Lien permitted under
Section 7.02(f); provided that, (i) such Debt is incurred simultaneously with such acquisition; (ii) such Debt when incurred shall not exceed the purchase price of the asset financed and (iii) the aggregate principal
amount of Debt permitted by this Section 7.01(b), shall not exceed $5,000,000 in the aggregate at any time outstanding; 
 (d) Debt
existing on the date hereof and listed on Schedule 7.1(d); 
 (e) Subordinated Debt; and 

(f) Other unsecured Debt of the Borrower or any other Loan Parties in an aggregate principal amount not to exceed $5,000,000 at any time. 

Section 7.02 Limitation on Liens. Create, incur, assume or permit to exist any Lien on any property or
assets (including Equity Interests of any of its Subsidiaries) now owned or hereafter acquired by it or on any income or rights in respect of any thereof, except: 

(a) Liens created pursuant to or arising under any Loan Document; 

(b) Liens imposed by law for taxes, assessments or governmental charges not yet due or which are being contested in good faith and by
appropriate proceedings diligently conducted if adequate reserves with respect thereto are maintained in accordance with GAAP on the books of the applicable Person; 

(c) Carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other similar Liens imposed by law, arising
in the ordinary course of business and securing obligations that are not overdue by more than 30 days or that are being contested in good faith and by appropriate proceedings diligently conducted; 

  
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 (d) Pledges and deposits and other Liens (i) made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance and other social security laws or regulations, and (ii) securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of
credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to the Borrower or another Loan Party; 

(e) Liens (including deposits) to secure the performance of bids, tenders, trade contracts, leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of like nature, in each case in the ordinary course of business; 
 (f) Easements, zoning
restrictions, rights-of-way, minor defects or irregularities in title and similar encumbrances on real property imposed by law or arising in the ordinary course of
business which, in the aggregate, are not material in amount and which do not materially detract from the value of the affected property or interfere materially with the ordinary conduct of business of the Borrower or any of its Subsidiaries; 

(g) Liens on fixed or capital assets acquired by the Borrower or any other Loan Party after the date hereof; provided that (i) such
security interests secure Debt permitted by Section 7.01(b), (ii) such Liens and the Debt secured thereby are incurred simultaneously with such acquisition, (iii) such Liens shall not apply to any other property or assets of the Borrower
or any other Loan Party, and (iv) the amount of Debt initially secured thereby is not more than 100% of the purchase price of such fixed or capital asset; 

(h) Liens on the personal property of any Loan Party disclosed on Schedule 7.02 and 

(i) Judgment or other similar Liens in connection with legal proceedings in an aggregate principal amount net of amounts for which insurance
providers have delivered written acknowledgements of coverage up to $500,000 in the aggregate, which, whether immediately or with the passage of time (i) do not give rise to an Event of Default under Section 8.01(g) and (ii) are being
contested in good faith by appropriate proceedings diligently conducted. 
 Section 7.03 Mergers; Nature of
Business. 
 (a) Merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or
liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing (i) any Subsidiary of the Borrower that is a Loan Party may merge into the Borrower
in a transaction in which the Borrower is the surviving corporation, (ii) any Loan Party (other than the Borrower) may merge into any other Loan Party in a transaction in which the surviving entity is a Loan Party, and (iii) any Subsidiary
that is not a Loan Party may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lender. 

  
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 (b) Engage in any business other than (i) businesses of the type conducted by the Borrower
and its Subsidiaries on the date hereof, and (ii) any other businesses, except for: (x) business of the types listed on Schedule 7.03 to this Agreement or (y) that are substantially similar to any type of business listed on Schedule
7.03. 
 Section 7.04 Limitation on Investments. Make any advance, loan, extension of credit (by way
of guaranty or otherwise) or capital contribution to, or purchase, hold or acquire any Equity Interests, bonds, notes, debentures or other debt securities of, or any assets constituting a business unit of, or make any other investment in, any Person
(all of the foregoing, “Investments”), except: 
 (a) Investments in Cash Equivalents; 

(b) Loans and advances to officers, directors, or employees of any Loan Party in the ordinary course of business (including for travel,
entertainment and relocation expenses) in an aggregate amount not to exceed $500,000 at any time outstanding; 
 (c) Intercompany Investments
by any Loan Party in the Borrower or any Person that, prior to such Investment, is a Loan Party; 
 (d) Extensions of trade credit in the
ordinary course of business (including any instrument evidencing the same and any instrument, security or other asset acquired through bona fide collection efforts with respect to the same); 

(e) Investments in marketable securities traded on national exchanges and other securities that carry a Standard & Poor’s rating
of BBB- or a Moody’s rating of Baa3 or better; and 
 (f) Only so long as no Default or Event of
Default has occurred and is continuing either before or following the making of any such Investment, the Borrower may make other Investments that would not otherwise be permitted by this Section 7.04 (“Other Investments”),
provided, that (a) Borrower shall provide Lender with a schedule of each Other Investment with a value (valued at cost) in excess of $100,000 attached to each Borrowing Base Certificate delivered pursuant to Section 6.02(c); and
(b) if at any time the aggregate amount (valued at cost) of Other Investments by the Borrower and the other Loan Parties on a consolidated basis exceeds $5,000,000, the amount of any additional Other Investments permitted pursuant to this
Section 7.04(f) in excess of $5,000,000 shall be limited to the amount of Excess Capital as calculated on a pro forma basis as set forth on an Excess Capital Certificate delivered to the Lender prior to the making of any such Other Investment.

 Section 7.05 Limitation on Dispositions. Dispose of any of its property, whether now owned or
hereafter acquired, or issue or sell any Equity Interests to any Person, except: 
 (a) The sale or Disposition of machinery and equipment no
longer used or useful in the business of any Loan Party; 
 (b) The Disposition of obsolete or
worn-out property of a Loan Party in the ordinary course of its business; 

  
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 (c) The sale or lease of inventory for fair value in the ordinary course of business of a Loan
Party; and 
 (d) The sale of securities of the types described in Section 7.04(e) for fair value in the ordinary course of business of
a Loan Party. 
 Section 7.06 Limitation on Sales and Leasebacks. Enter into any arrangement with
any Person whereby such Loan Party shall sell or otherwise transfer any property owned by such Loan Party to (a) such Person and thereafter rent or lease such Property from such Person or (b) any other Person to whom funds have been or are
to be advanced by such Person on the security of such Property or rental obligations of such Loan Party. 

Section 7.07 Limitation on Restricted Payments; Transfers to non-Loan
Parties.  
 (a) Declare or pay any dividend on, or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any Equity Interests of the Borrower or any of its Subsidiaries, whether now or hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of the Borrower or any of its Subsidiaries (collectively, “Restricted Payments”), provided, that: 

(i) a Subsidiary of the Borrower may make a Restricted Payment to the Borrower; 

(ii) The Borrower may declare and pay dividends and make other distributions and payments with respect to its Equity Interests if payable
solely in its Equity Interests; and 
 (iii) Only so long as no Default or Event of Default has occurred and is continuing either before or
following the making thereof, the Borrower may make Restricted Payments that would not otherwise be permitted by this Section 7.07, provided that such Restricted Payments shall be limited to the amount of Excess Capital as calculated on a pro
forma basis as set forth on an Excess Capital Certificate delivered to the Lender prior to the making of any such Restricted Payment. 
 (b)
Transfer any asset of a Loan Party to an Affiliate that is not a Loan Party. 
 Section 7.08 Limitation on
Prepayments of Debt and Amendments of Debt Instruments. 
 (a) Make or offer to make any optional or voluntary payment or prepayment on
or redemption, defeasance or purchase of any (whether principal or interest) Subordinated Debt; or 

  
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 (b) Amend, modify, waive or otherwise change, or consent or agree to any amendment, modification,
waiver or other change to any Subordinated Debt, other than any amendment, modification, waiver or other change which (i) would extend the maturity or reduce the amount of any payment of principal thereof or reduce the rate or extend any date
for payment of interest thereon; and (ii) does not involve the payment of a consent fee. 
 Section 7.09
Limitation on Transactions With Affiliates. Enter into or be a party to any transaction including any purchase, sale, lease or exchange of property, the rendering of any service or the payment of any management, advisory or similar
fees, with any Affiliate unless such transaction is: 
 (a) Otherwise permitted by the terms of this Agreement; or 

(b) In the ordinary course of business of the Borrower or the relevant Subsidiary, as the case may be, and on fair and reasonable terms no less
favorable to the Borrower or the relevant Subsidiary, as the case may be, than those that would have been obtained in a comparable transaction on an arm’s length basis from an unrelated Person. 

Section 7.10 Fiscal Year. Change the end of the Borrower’s fiscal year to a date other than March
31. 
 Section 7.11 Limitation on Restrictive Agreements. Enter into or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any Subsidiary of the Borrower to: 
 (a) Make Restricted Payments in
respect of any Equity Interests of such Subsidiary held by, or pay any Debt owed to, the Borrower or any other Subsidiary of the Borrower; 

(b) Make loans or advances to, or Investments in, the Borrower or any other Subsidiary of the Borrower; and 

(c) Transfer any of its assets to the Borrower or any other Subsidiary of the Borrower, except for such encumbrances or restrictions
(i) existing under the Loan Documents, and (ii) with respect to a Subsidiary imposed pursuant to an agreement that has been entered into in connection with the Disposition of all or substantially all of the Equity Interests or assets of
such Subsidiary. 
 Section 7.12 Limitation on Amendments of Material Contracts. Amend, supplement
or otherwise modify (pursuant to a waiver or otherwise): 
 (a) Its articles of incorporation, certificate of designation, operating
agreement, bylaws or other organizational document; or 
 (b) The terms and conditions of any Material Contract; 

  
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 in each case, in any respect materially adverse to the interests of the Lender, without the
Lender’s prior written consent. 
 Section 7.13 Financial Covenants. Permit, as of any
Measurement Date: 
 (a) the Debt Service Coverage Ratio for the Measurement Period ending on such Measurement Date to be less than or equal
to 1.25 to 1.0; or 
 (b) the Asset Coverage Ratio to be less than 1.50 to 1.00. 

ARTICLE VIII 
 Events of
Default and Remedies 
 Section 8.01 Events of Default. Each of the following events or
conditions shall constitute an “Event of Default” (whether it shall be voluntary or involuntary or come about or be effected by any Requirement of Law or otherwise): 

(a) (i) the Borrower fails to pay any principal of any Loan or any interest thereon when due, whether at stated maturity, by acceleration, by
notice of voluntary prepayment, by mandatory prepayment or otherwise; or (ii) any fee or other amount payable hereunder or under any other Loan Document when due and such failure remains unremedied for a period of five (5) days; 

(b) any representation, warranty, certification or other statement of fact made or deemed made by or on behalf of any Loan Party herein or in
any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder or in any certificate, document, report, financial statement or other document furnished by or on behalf of any Loan Party under or in
connection with this Agreement or any other Loan Document, proves to have been false or misleading in any material respect on or as of the date made or deemed made; 

(c) any Loan Party fails to perform or observe any covenant, term, condition or agreement contained in Section 6.03, Section 6.04(a),
Section 6.09, Section 6.11, or Article VII; 
 (d) any Loan Party fails to perform or observe any other covenant, term, condition
or agreement contained in this Agreement or any other Loan Document (other than as provided in subsections (a) through (c) of this Section 8.01, and such failure continues unremedied for a period of thirty (30) days after written
notice to the Borrower from the Lender; 
 (e) Any Loan Party: 

(i) fails to pay any principal or interest in respect of any Debt in excess of $1,000,000 (including any Guaranty Obligation, but excluding any
Debt outstanding under this Agreement) when due and such failure continues after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; 

  
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 (ii) fails to perform or observe any other covenant, term, condition or agreement relating to any
such Debt or contained in any instrument or agreement evidencing or relating thereto, or any other event occurs or condition exists, the effect of which failure or other event or condition is to cause, or to permit the holder or beneficiary of such
Debt (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice, if required, such Debt to become due prior to its stated maturity (or, in the case of any such Debt constituting a Guaranty Obligation, to
become payable); or any such Debt is declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption or as a mandatory prepayment), purchased or defeased, or an offer to
prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; 
 provided that, a
default, event or condition described in clause (i) or (ii) of this subsection (e) shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described in clauses
(i) and (ii) of this subsection (e) has occurred and is continuing with respect to Debt the outstanding principal amount of which exceeds in the aggregate $1,000,000. 

(f) 
 (i) Any Loan Party:
(x) commences any case, proceeding or other action under any existing or future Debtor Relief Law, seeking (A) to have an order for relief entered with respect to it, or (B) to adjudicate it as bankrupt or insolvent, or
(C) reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (D) appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial part of its assets, or (y) makes a general assignment for the benefit of its creditors; 

(ii) there is commenced against any Loan Party in a court of competent jurisdiction any case, proceeding or other action of a nature referred
to in clause (i) above which (x) results in the entry of an order for relief or any such adjudication or appointment or (y) remains undismissed, undischarged, unstayed or unbonded for thirty (30) days; 

(iii) there is commenced against any Loan Party any case, proceeding or other action seeking issuance of a warrant of attachment, execution or
similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which has not been vacated, discharged, stayed or bonded pending appeal within (30) days from the entry thereof; 

(iv) any Loan Party is generally not, or is unable to, or admits in writing its inability to, pay its debts as they become due; or 

(v) any Loan Party takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth
in clause (i), (ii) or (iii) above. 

  
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 (vi) (A) any Person shall engage in any “prohibited transaction” (as defined in
§406 of ERISA or §4975 of the Code) involving any Plan; (B) any failure to satisfy the minimum funding standard (within the meaning of Sections §412 or §430 of the Code or §302 of ERISA) shall exist with respect to any
Plan, or any Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower or any ERISA Affiliate; (C) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall
be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of trustee is likely to result in the termination of such Plan for purposes of Title IV of ERISA;
(D) any Single Employer Plan shall terminate for purposes of Title IV of ERISA; or (F) the Borrower or any ERISA Affiliate shall incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan. 
 (g) one or more final and non-appealable judgments or decrees is entered
against any Loan Party by a court of competent jurisdiction involving, in the aggregate, a liability (not paid or fully covered by insurance from an insurer that is rated at least “A” by A.M. Best Company as to which the relevant insurance
company has been notified and has not denied coverage) in an amount in excess of $50,000 and all such judgments or decrees have not been vacated, discharged, stayed or bonded pending appeal within thirty (30) days from the entry thereof; 

(h) the Security Agreement or the North Carolina Deed of Trust ceases for any reason to be valid, binding and in full force and effect or any
Lien created by the Security Agreement or the North Carolina Deed of Trust ceases to be enforceable and of the same effect and priority purported to be created thereby, other than as expressly permitted hereunder or thereunder; 

(i) any provision of any Loan Document ceases for any reason to be valid, binding and in full force and effect, other than as expressly
permitted hereunder or thereunder; 
 (ii) any Loan Party contests in any manner the validity or enforceability of any provision of any Loan
Document; 
 (iii) any Loan Party denies that it has any or further liability or obligation under any provision of any Loan Document (other
than as a result of repayment in full of the Obligations and termination of the Revolving Credit Commitment and the Term Loan Commitment) or purports to revoke, terminate or rescind any provision of any Loan Document; 

(i) any Change of Control occurs; 

(j) the Fed Ex Contract is terminated for any reason; or 

(k) there occurs in, the reasonable judgment of the Lender, a Material Adverse Effect. 

  
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 Section 8.02 Remedies Upon Event of Default. If any Event
of Default occurs and is continuing, then: 
 (a) if such event is an Event of Default specified in Section 8.01(f) above with respect
to the Borrower, the Commitments shall automatically and immediately terminate and the Loans (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents shall immediately become due and payable; 

(b) if such event is an Event of Default (other than an Event of Default under Section 8.01(f)), any or all of the following actions may
be taken: 
 (i) the Lender may, by notice to the Borrower, declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; 
 (ii) the Lender may, by notice to the Borrower, declare the Loans (with accrued interest thereon) and all
other amounts owing under this Agreement and the other Loan Documents to be due and payable forthwith, whereupon the same shall immediately become due and payable; and 

(iii) the Lender may exercise all rights and remedies available to it under the Security Agreement, the Guaranty, the North Carolina
Assignment, the North Carolina Deed of Trust and each other Loan Document. 
 Section 8.03 Prepayment
Obligations. The Borrower agrees that if the Obligations become immediately due and payable in full at a time when one or more Letters of Credit are outstanding, the Borrower shall thereupon automatically be obligated to pay the Lender,
in addition to all other amounts owing under this Agreement, the aggregate face amount of all Letters of Credit then outstanding. The foregoing obligation to pay in advance for amounts which the Lender may later have to pay pursuant to the Letters
of Credit is and shall at all times constitute a part of the “Obligations”. Amounts paid by the Borrower pursuant to this Section shall be made directly to an interest-bearing collateral account maintained at the Lender for application to
the Borrower’s reimbursement obligations under Section 2.12(d) as payments are made on the Letters of Credit, with the balance, if any, to be applied to the other Obligations. 

ARTICLE IX 

Miscellaneous 

Section 9.01 Notices. 

(a) Except in the case of notices and other communications expressly permitted to be given by telephone (or by
e-mail as provided in paragraph (b) below), all notices and other communications provided for herein shall be made in writing and mailed by certified or registered mail, delivered by hand or overnight
courier service, or sent by facsimile as follows: 

  
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	 	(i)	If to the Borrower or any other Loan Party, to it at: 

 Air T, Inc. 

5930 Balsom Ridge Road 
 Denver,
North Carolina 28037 
 Attention: Candice L. Otey 

with a copy to (which shall not consititute notice or service of process): 

Winthrop & Weinstine, P.A. 

225 S. 6th Street 

Minneapolis, MN 55402 

Attention: David E. Moran, Esq. 
  

	 	(ii)	If to the Lender, to it at 

 Minnesota Bank & Trust 

7701 France Avenue South, Suite 110 

Edina, MN 55435 
 Attention:
Mr. Eric P. Gundersen, SVP 
 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 

Minneapolis, MN 55402 

Attention: Frederick H. Ladner, Esq. 

Fax Number: 612-359-7602 

Notices mailed by certified or registered mail or sent by hand or overnight courier service shall be deemed to have been given when received. Notices sent by
facsimile during the recipient’s normal business hours shall be deemed to have been given when sent (and if sent after normal business hours shall be deemed to have been given at the opening of the recipient’s business on the next Business
Day). 
 (b) Notices and other communications to the Lender hereunder may be delivered or furnished by electronic communications (including e-mail and internet or intranet websites) pursuant to procedures approved by the Lender. The Lender or the Borrower (on behalf of the Loan Parties) may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that, approval of such procedures may be limited to particular notices or communications. 

  
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 (c) Unless the Lender specifies otherwise: 

(i) notices and other communications sent by e-mail shall be deemed received upon the sender’s
receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgment), and 

(ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended
recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; 

provided that, if such notice, e-mail or other communication is not sent during the recipient’s normal
business hours, such notice, e-mail or communication shall be deemed to have been sent at the recipient’s opening of business on the next Business Day. 

(d) Either party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other party.

 Section 9.02 Amendments and Waivers. 

(a) No failure to exercise and no delay in exercising, on the part of the Lender, any right, remedy, power or privilege hereunder or under the
other Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. No waiver of any provision of any Loan Document or consent to any departure by
any Loan Party therefrom shall in any event be effective unless the same shall comply with paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Lender may have had notice or knowledge of such Default at the time. 

(b) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except
(i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower and the Lender, or (ii) in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Lender and the Loan Party or Loan Parties that are parties thereto. 
 Section 9.03 Expenses;
Indemnity; Damage Waiver. 
 (a) The Borrower agrees to pay: 

  
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 (i) all reasonable
out-of-pocket expenses incurred by the Lender and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Lender, in connection with
the preparation, negotiation, execution, delivery and administration of the Loan Documents and any amendments, waivers or other modifications of the provisions of any Loan Document (whether or not the transactions contemplated by the Loan Documents
are consummated) and; 
 (ii) all out-of-pocket expenses
incurred by the Lender, including the fees, charges and disbursements of any counsel for the Lender, in connection with the enforcement or protection of its rights (i) in connection with the Loan Documents, including its rights under this
Section 9.03, or (ii) in connection with the Loans issued under this Agreement, including all such out-of-pocket expenses incurred in connection with any
restructuring, workout or negotiations in respect of the Loan Documents or such Loans. 
 (b) The Borrower agrees to indemnify and hold
harmless the Lender and each of its Related Parties (each, an “Indemnified Party”) from and against, any and all claims, damages, losses, liabilities and related expenses (including the reasonable fees, charges and expenses of any
counsel for any Indemnified Party, incurred by any Indemnified Party or asserted against any Indemnified Party by any Person (including the Borrower or any other Loan Party) other than such Indemnified Party and its Related Parties arising out of,
in connection with, or by reason of: 
 (i) the execution or delivery of any Loan Document or any agreement or instrument contemplated in any
Loan Document, the performance by the parties thereto of their respective obligations under any Loan Document or the consummation of the transactions contemplated by the Loan Documents; 

(ii) any Loan or the actual or proposed use of the proceeds therefrom; 

(iii) any actual or alleged presence or release of Hazardous Materials on or from any property currently or formerly owned or operated by the
Borrower or any of its Subsidiaries, or any Environmental Liability related to the Borrower or any of its Subsidiaries in any way; or 
 (iv)
any actual or prospective claim, investigation, litigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Loan Party, and
regardless of whether any Indemnified Party is a party thereto; provided that, such indemnity shall not be available to any Indemnified Party to the extent that such claims, damages, losses, liabilities or related expenses (A) are
determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnified Party or (B) result from a claim
brought by the Borrower or any other Loan Party against any Indemnified Party for breach in bad faith of such Indemnified Party’s obligations under any Loan Document, if a court of competent jurisdiction has rendered a final and non-appealable judgment in favor of the Borrower or such Loan Party on such claim. This Section 9.03 shall only apply to Taxes that represent losses, claims, damages or similar charges arising from a non-Tax claim. 

  
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 (c) The Borrower agrees, to the fullest extent permitted by applicable law, not to assert, and
hereby waives, any claim against any Indemnified Party, on any theory of liability, for special, indirect, consequential or punitive damages (including, without limitation, any loss of profits or anticipated savings), as opposed to actual or direct
damages, resulting from this Agreement or any other Loan Document or arising out of such Indemnified Party’s activities in connection herewith or therewith (whether before or after the Closing Date). 

(d) All amounts due under Section 9.03 shall be payable promptly after demand is made for payment by the Lender. 

(e) The Borrower agrees that neither it nor any of its Subsidiaries will settle, compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding in respect of which indemnification or contribution could be sought under Section 9.03 (whether or not any Indemnified Party is an actual or potential party to such claim, action or proceeding)
without the prior written consent of the applicable Indemnified Party, unless such settlement, compromise or consent includes an unconditional release of such Indemnified Party from all liability arising out of such claim, action or proceeding. 

Section 9.04 Successors and Assigns. 

(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Lender (and any attempted assignment or transfer by the Borrower without such
consent shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of the Lender) any legal or equitable right, remedy or claim under or by reason of this Agreement. 

(b) The Lender may, at any time, without the consent of the Borrower, assign to one or more Eligible Assignees (as defined below) all or a
portion of its rights and obligations under this Agreement (including all or a portion of the Commitments and the Loans at the time owing to it); provided, however, that Lender shall not, without Borrower’s prior written consent (which consent
shall not be unreasonably withheld or delayed), make any such assignment to a Person described in clauses (ii) or (iii) of the definition of “Eligible Assignee” at any time when there is no outstanding Default or Event of Default. For
purposes of this Agreement, “Eligible Assignee” means any Person other than a natural Person that is (i) an Affiliate of the Lender (which term shall, in any event, include Heartland and Subsidiaries of Heartland), (ii) a
commercial bank, insurance 

  
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company, investment or mutual fund or other Person that is an “accredited investor” (as defined in Regulation D under the Securities Act) or (iii) a corporate entity that possesses
financial sophistication and standing similar to that of the Lender. Subject to notification of an assignment, the assignee shall be a party hereto and, to the extent of the interest assigned, have the rights and obligations of the Lender under this
Agreement, and the Lender shall, to the extent of the interest assigned, be released from its obligations under this Agreement (and, in the case of an assignment covering all of the Lender’s rights and obligations under this Agreement, the
Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 3.01, Section 3.02 and Section 9.03. The Borrower hereby agrees to execute any amendment and/or any other document that may be
necessary to effectuate such an assignment, including an amendment to this Agreement to provide for multiple lenders and an administrative agent to act on behalf of such lenders. Any assignment or transfer by the Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by the Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section. 

(c) The Lender may, at any time, without the consent of the Borrower, sell participations to one or more banks or other entities (each, a
“Participant”) in all or a portion of the Lender’s rights and obligations under this Agreement (including all or a portion of the Commitments and the Loans owing to it); provided, that so long as no Default or Event of Default
is outstanding at the time of any such sale, Lender agrees that it will not sell a participation to any Person that is not an Affiliate of Lender (which term shall, in any event, include Heartland and Subsidiaries of Heartland) without
Borrower’s prior written consent, which consent shall not be unreasonably withheld or delayed. 

Section 9.05 Survival. All covenants, agreements, representations and warranties made by the Loan
Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Lender may have notice or knowledge of any Event of
Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of, or any accrued interest on, any Loan or any fee or any other amount payable under
this Agreement is outstanding and unpaid and so long as the Revolving Credit Commitment has not expired or terminated. The provisions of Section 3.01, Section 3.02 and Article IX shall survive and remain in full force and effect regardless
of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof. 

  
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 Section 9.06 Counterparts; Integration; Effectiveness. 

(a) This Agreement and any amendments, waivers, consents or supplements hereto may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable
to the Lender constitute the entire contract among the parties with respect to the subject matter hereof and supersede all previous agreements and understandings, oral or written, with respect to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been executed by the Lender and when the Lender shall have received a counterpart hereof executed by the Borrower. Delivery of an executed counterpart of a signature page to
this Agreement by facsimile or in electronic (“pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement. This Agreement and each other Loan Document has been reviewed by all
parties hereto and incorporate the requirements of such parties. Each party waives the rule of construction that any ambiguities are to be resolved against the party drafting the same and agrees such rules will not be employed in the interpretation
of this Agreement or any other Loan Document. 
 (b) The words “execution,” “signed,” “signature,” and words of
similar import in any Loan Document shall be deemed to include electronic or digital signatures or the keeping of records in electronic form, each of which shall be of the same effect, validity and enforceability as manually executed signatures or a
paper-based recordkeeping system, as the case may be, to the extent and as provided for under applicable law, including the Electronic Signatures in Global and National Commerce Act of 2000 (15 USC § 7001 et seq.), the Electronic Signatures and
Records Act of 1999 (NY State Technology Law §§ 301-309), or any other similar state laws based on the Uniform Electronic Transactions Act. 

Section 9.07 Severability. If any term or provision of any Loan Document is invalid, illegal or
unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision thereof or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination
that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify the applicable Loan Document so as to effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible. 

Section 9.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, the Lender
and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, and without prior notice to the Borrower, any such notice being expressly waived by the Borrower, to set off and appropriate
and apply any and all deposits (general or special, time or demand, provisional or final, in 

  
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whatever currency) at any time held and other obligations (in whatever currency) at any time owing by the Lender or Affiliate to or for the credit or the account of the Borrower or any Loan Party
against any and all of the obligations of the Borrower or such Loan Party now or hereafter existing under the Loan Documents to the Lender or its Affiliates, whether direct or indirect, absolute or contingent, matured or unmatured, and irrespective
of whether or not the Lender or any Affiliate shall have made any demand under the Loan Documents and although such obligations of such Loan Party are owed to a branch, office or Affiliate of the Lender different from the branch, office or Affiliate
holding such deposit or obligated on such indebtedness. The Lender agrees to notify the Borrower promptly after any such set off and appropriation and application; provided that the failure to give such notice shall not affect the validity of
such set off and appropriation and application. 
 Section 9.09 Governing Law; Jurisdiction; Consent to Service
of Process. 
 (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN
CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MINNESOTA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF. 

(b) AT THE OPTION OF THE LENDER, THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS TO WHICH THE BORROWER IS A PARTY MAY BE ENFORCED IN ANY
FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN MINNEAPOLIS OR ST. PAUL, MINNESOTA; AND THE BORROWER CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE
BORROWER COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT, THE 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. 

(c) Each Loan Party irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or
hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any such court referred to in subsection (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. 

  
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 (d) Each Loan Party irrevocably consents to the service of process in the manner provided for
notices in Section 9.01 and agrees that nothing herein will affect the right of any party hereto to serve process in any other manner permitted by applicable law. 

Section 9.10 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY. EACH PARTY HERETO (A) CERTIFIES THAT NO AGENT, ATTORNEY, REPRESENTATIVE OR ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF
LITIGATION, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 

Section 9.11 Headings. The headings in this Agreement are for reference only and shall not affect the
interpretation of this Agreement. 
 Section 9.12 Confidentiality. 

(a) The Lender agrees to maintain the confidentiality of all non-public information received from the
Borrower or any other Loan Party relating to the Borrower or its Subsidiaries or their respective businesses; provided that, in the case of information received from the Borrower or any Loan Party after the date hereof, such information is
clearly identified at the time of delivery as being confidential information (the “Information”), except that Information may be disclosed: 

(i) to its Affiliates and its Related Parties in connection with the administration of this Agreement and the preservation, exercise or
enforcement of the rights of the Lender under this Agreement, or to manage its and its Affiliates’ banking relationships with the Borrower and its Subsidiaries (it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep such Information confidential); 
 (ii) to the extent required
or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority); 

  
 62 

 (iii) to the extent required by any Requirement of Law or regulations or by any subpoena, court
order or similar legal process; 
 (iv) in connection with the exercise of any remedies hereunder or under any other Loan Document or any
suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of its rights hereunder or thereunder; 

(v) to (x) any actual or potential assignee, transferee or participant in connection with the assignment or transfer by the Lender of any
Loans or any participations therein or (y) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower or any other Loan Party or any
Subsidiary or any of their respective obligations, this Agreement or payments hereunder; 
 (vi) with the consent of the Borrower; or 

(vii) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) is
available to the Lender on a non-confidential basis prior to disclosure by the Borrower or any of its Subsidiaries, or (z) becomes available to the Lender or any of its Affiliates on a non-confidential
basis from a source other than the Borrower or any other Loan Party. 
 (b) Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own
confidential information. 
 Section 9.13 USA PATRIOT Act. The Lender hereby notifies each Loan
Party that pursuant to the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56, signed
into law October 26, 2001) (the “PATRIOT Act”), it is required to obtain, verify, and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information
that will allow the Lender to identify such Loan Party in accordance with the PATRIOT Act, and the Borrower agrees to provide, or cause the other Loan Parties to provide, such information from time to time to the Lender. 

[SIGNATURE PAGE FOLLOWS] 

  
 63 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written
above by their respective officers thereunto duly authorized. 
  

	
	Air T, Inc., a Delaware corporation
	
	
By:                         
                                         
                              

Name: Candice L. Otey
 Title:   Secretary

  

	
	Minnesota Bank & Trust, a Minnesota state banking corporation
	
	
By                         
                                         
                               

Name: Eric P. Gundersen
 Title:   Senior Vice
President

 [Credit Agreement Signature Page]

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