Air T, Inc. (NASDAQ:AIRT) Files An 8-K Entry into a Material Definitive Agreement

Air T, Inc. (NASDAQ:AIRT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement

On November 24, 2020, Contrail Aviation Support, LLC (“CAS”) and Contrail Aviation Leasing, LLC ( “CAL”), 79%-owned subsidiaries of Air T, Inc. (the “Company”) and Old National (“ONB”), entered into Supplement #8 to Master Loan Agreement and related documentation for a loan (the “Main Street Loan”) in the aggregate amount of $43,598,000 for which ONB served as lender to the Main Street Priority Loan Facility as established by the Board of Governors of the Federal Reserve System Section 13(3) of the Federal Reserve Act. On December 7, 2020, the Company learned that the Main Street Loan had been approved. The loan transaction was completed on December 8, 2020. The loan proceeds are to be used as working capital to support the operations of CAS and CAL in the ordinary course of business, which includes the acquisition from time to time of aircraft and engines and the indebtedness incurred is subject to the terms and provisions of the Master Loan Agreement.
The principal terms of the Main Street loan – Term Note G are: (a) interest on the loan accrues at a floating rate of LIBOR plus 3.00% and interest is payable commencing November 24, 2021; (b) 15% principal payments plus 15% of the amount of capitalized interest are due on November 24, 2023 and 2024, with the remainder due on the loan maturity date – November 24, 2025; (c) the loan is not guaranteed; and, (d) a 2% origination fee was paid on funding of the loan. The loan contains affirmative covenants as to cash flow coverage and tangible net worth. The terms of the loan provide for customary events of default, including, among others, those relating to a failure to make payment, breaches of representations and covenants, and the occurrence of certain events. The loan is secured by a security interest in the assets of CAS and CAL.
The foregoing description of the Main Street Loan does not purport to be complete and is qualified in its entirety by reference to Supplement #8 to Master Loan Agreement, Promissory Note – Term Note G, and the Security Agreements of CAS and CAL, copies of which are attached hereto as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, and incorporated by reference herein.
Also on November 24, 2020, but effective December 8, 2020 upon notice that the Main Street Loan had been approved and funded, CAS and CAL and ONB entered into a First Amendment to Master Loan Agreement (the “First Amendment”), to which the Master Loan Agreement dated June 24, 2019 between the parties was amended. The First Amendment permits CAS’ participation and investment in and services to one or more investment vehicles established for the purpose of acquiring aircraft and engines with certain conditions and provisos, including (i) that for purposes of the definition of Tangible Net Worth, no equity investment by CAS into an investment vehicle shall be included in the calculation of total assets unless such investment has been approved by the lender in writing and (ii) no equity investment shall be made in an investment vehicle without prior lender approval. Other than as specifically referenced in the First Amendment, the Master Loan Agreement remains in full force and effect.
The foregoing description of the First Amendment is not complete and is qualified in its entirety by reference to the First Amendment filed as Exhibit 10.5 hereto and incorporated by reference herein.
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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits
10.1.Supplement #8 to Master Loan Agreement dated November 24, 2020 between Borrowers Contrail Aviation Support, LLC and Contrail Aviation Leasing, LLC and Lender Old National Bank.
10.2.$43,598,000 Promissory Note – Term Note G of Contrail Aviation Support, LLC and Contrail Aviation Leasing, LLC in favor of Old National Bank dated November 24, 2020.
10.3.Commercial Security Agreement of Contrail Aviation Support, LLC dated November 24, 2020.
10.4.Commercial Security Agreement of Contrail Aviation Leasing, LLC dated November 24, 2020.
10.5.First Amendment to Master Loan Agreement, dated November 24, 2020 between Contrail Aviation Support, LLC, Contrail Aviation Leasing, LLC and Old National Bank.
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AIR T INC Exhibit
EX-10.1 2 supplement8tomasterloana….
To view the full exhibit click here

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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.

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