To the extent responsive, the information included in Items 2.01 and 2.03 is incorporated herein by reference.

Item 2.01 Completion of Acquisition or Disposition of Assets

On December 20, 2019, Contrail Aviation Leasing Ireland DAC, CRO No. 662616 (“CAL-Ireland), a wholly-owned subsidiary of Contrail Aviation Support, LLC (“CAS”), a 79%-owned subsidiary Air T, Inc. (the “Company”), completed a purchase of one Airbus A320-200 airframe with serial number 1183 and two V2527-A5 engines with serial numbers V10682 and V10683 (collectively, “Aircraft 1183”) to a sale agreement dated the same date. The transaction value for the purchase exceeded $10,000,000.* The Aircraft is subject to a lease, novated by CAL-Ireland as the lessor.

On December 20, 2019, Contrail acquired one Airbus A321-100 aircraft with serial number 576 and two CFM56-5B2 engines with serial numbers 779171 and 779177 from Diamond Head 3 (Ireland) DAC (collectively, “Aircraft 576”). Aircraft 5763 is the second of three aircraft to be purchased to that Aircraft Sale and Purchase Agreement dated June 4, 2019. The total transaction value for the purchase of Aircraft 576 exceeded $8,000,000.* While the parties project a closing date of January 1, 2020 for the one remaining aircraft, there is no assurance at this time that the closing will occur.

On December 23, 2019, Aircraft MSN 29922 Trust, a trust controlled by Contrail Aviation Leasing, LLC, a wholly-owned subsidiary of CAS (“CAL”, and together with CAS and CAL-Ireland, the “Subsidiaries”), completed a sale of one Boeing 737-800 Aircraft with serial number 29922 and two CFM International, Inc., model CFM56-7B24 engines with serial numbers 890420 and 890421, to that Purchase Agreement dated December 13, 2019. The total transaction value exceeded $10,000,000.*

The purchases and sale as discussed above continue Contrail’s business of purchasing aircraft and/or aircraft engines for the purpose of leasing or disassembling them and selling them for parts.

The foregoing summary of the terms of the transaction documents do not purport to be complete and is qualified in its entirety by reference to the documents which are filed as Exhibits 10.1, 10.2, 10.3, and 10.10 respectively hereto and are incorporated by reference herein.

To the extent responsive, the information included in Item 2.03 is incorporated herein by reference.

*Portions of the transaction exhibits have been omitted for confidential treatment.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

On December 19, 2019, the Subsidiaries entered into Supplement #6 to that certain Master Loan Agreement with Old National Bank (“ONB”). In connection therewith, the Subsidiaries entered into that certain Promissory Note Term Note E in the principal amount of $6,894,790 to ONB (“Term Note E”). The Term Note E has a maturity date of December 1, 2022, with a variable interest rate equal to the LIBOR rate plus 3.75% per year. There are additional affirmative covenants regarding quarterly cash flow coverage and tangible net worth.

to that Aircraft Security Agreement dated December 19, 2019, ONB has a first position lien on Aircraft 1183. Furthermore, ONB has a first position lien of CAS’ 50% beneficial interest in CAL-Ireland holding title to Aircraft 1183 to that Subsidiary Equity Pledge Agreement dated December 19, 2019.

The Company amended and extended its guaranty to ONB of $1,600,000 for borrowings of CAS and CAL to also include the obligations of CAL-Ireland and to any future subsidiaries formed to facilitate acquisition of aircraft

and engine assets for which that certain Master Loan Agreement establishes the lending facility. Furthermore, CAS guarantees all debts of CAL-Ireland.

The foregoing summary of the terms of the financing documents do not purport to be complete and is qualified in its entirety by reference to the documents which are filed as Exhibits 10.4, 10.5, 10.6, 10.7, 10.8, and 10.9 respectively hereto and are incorporated by reference herein.

To the extent responsive, the information included under Item 2.01 regarding the acquisition of Aircraft 1183 is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

*Portions of the transaction exhibit have been omitted for confidential treatment.

AIR T INC Exhibit
EX-10.1 2 exhibit101-aircraftsaleagr.htm EXHIBIT 10.1 Exhibit EXECUTION VERSION CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.AIRCRAFT SALE AGREEMENTDated as of December 20,…
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About Air T, Inc. (NASDAQ:AIRT)

Air T, Inc. is a holding company. The Company operates through five segments: overnight air cargo, ground equipment sales, ground support services, printing equipment and maintenance, and leasing. The company’s overnight air cargo segment operates in the air express delivery services industry. The ground equipment sales segment manufactures and provides mobile deicers and other specialized equipment products to passenger and cargo airlines, airports, the United States military and industrial customers. The ground support services segment provides ground support equipment maintenance and facilities maintenance services to domestic airlines and aviation service providers. The printing equipment and maintenance segment designs, manufactures and sells advanced digital print production equipment, maintenance contracts, spare parts, supplies and consumable items for these systems. The Company’s leasing segment provides funding for equipment leasing transactions.