8-K

______________________________________________________________________________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549  

______________________________________________________________________________

FORM 8-K 

______________________________________________________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): May 30, 2024

______________________________________________________________________________

AIR T, INC.

(Exact Name of Registrant as Specified in Charter)  

______________________________________________________________________________

Delaware	001-35476	52-1206400
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

11020 David Taylor Drive, Suite 305,

Charlotte, North Carolina 28262

(Address of Principal Executive Offices, and Zip Code)

________________(980) 595-2840__________________

Registrant’s Telephone Number, Including Area Code

Not applicable___

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	AIRT	NASDAQ Global Market
Alpha Income Preferred Securities (also referred to as 8% Cumulative Capital Securities) (“AIP”)	AIRTP	NASDAQ Global Market

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

	Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
☐	Emerging growth company
☐	If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Item 1.01 Entry into a Material Definitive Agreement

On May 30, 2024, Contrail Aviation Support, LLC (“CAS”), a majority-owned subsidiary Air T, Inc. (the “Company”), entered into a Membership Interest Redemption and Earnout Agreement (the “Redemption Agreement”) with OCAS, Inc., a corporation owned by the Chief Executive Officer of CAS, Joe Kuhn (the “Seller”). Pursuant to the Redemption Agreement, CAS agreed to purchase and redeem from the Seller, 16% of its 21% interest in CAS, effective as of April 1, 2024. The purchase price for the redeemed interest is $4,570,000, plus an earnout amount. Interest accrues on the principal amount at an annual rate equal to the 10 year Treasury bond yield plus 375 basis points, compounded monthly. The rate adjusts on each anniversary date of the note. The cash purchase price is payable pursuant to a secured, subordinated promissory note, payable beginning on May 1, 2024 and monthly thereafter for a 12 month period of interest payments only with the outstanding balance amortized and paid over the following three (3) years. The payment obligation under the note may be deferred if CAS’ forecast indicates that any payment following the first 12 month period would cause a loan default or a loan default exists. Initially, the payment obligation would revert back to interest only, unless a default exists, in which case no payment would be required. If CAS is unable to make a payment for 12 months, then interest shall cease to accrue. The note is expressly subordinated to the payment in full of all indebtedness of CAS on or prior to the date of the note or thereafter created.

Under the Redemption Agreement, the Seller is also entitled to an annual earnout payment in each fiscal year through March 31, 2029 where CAS’s Adjusted EBITDA exceeds $7,000,000. The annual payment amount equals 9.14% of CAS’ Adjusted EBITDA (as defined in the Redemption Agreement) above $7,000,000 in Adjusted EBITDA. Pursuant to the Redemption Agreement, CAS is required to calculate earnout payments annually within 30 days following completion of the annual audits of the Company and CAS and payment of any amount due is required following satisfaction of a procedure to address any objections to the calculated amount. Similar to payments under the note, earnout payments are subordinated and subject to the payment in full of all then outstanding senior debt and no earnout payment may be made if such payment causes or would cause a loan default or if a loan default exists. In such case, any earnout payments would be deferred until CAS is no longer reasonably at risk of a loan default or has been authorized by the lender to resume payments. Any deferred earnout payment will accrue interest at a rate equal to the note rate.

The parties to the Redemption Agreement also indemnified and released each other for certain matters.

In connection with the Redemption Agreement, the parties agreed to certain technical amendments to the First Amended and Restated Operating Agreement of CAS and entered into a new Put and Call Agreement with respect to the remaining five percent (5%) interest in CAS held by the Seller. Pursuant to the new Put and Call Agreement, commencing April 1, 2026 and at any time thereafter, either CAS or the Seller has the option to elect by written notice to purchase or sell all of the remaining five percent (5%) interest in CAS held by the Seller. The purchase price for the five percent (5%) interest is equal to five percent (5%) of the CAS Equity Value, which is defined as an amount equal to nine times (9x) the average Adjusted EBITDA of CAS’ for the three (3) most recent completed fiscal years at the time an option notice is delivered, plus cash and cash -like items and minus debt and debt-like items. The purchase price for the five percent (5%) interest is to be paid in equal quarterly installments over a three (3) year period, together with interest at the then current ten year (10)-year Treasury bond yield plus 250 basis points, adjusted annually. Payment shall be evidenced by a Secured Subordinated Promissory Note with subordination and payment deferral provisions similar to the note provisions described above.

The foregoing description of the Redemption Agreement, the Secured Subordinated Promissory Note, the Subordinated Security Agreement, the Second Amendment to First Amended and Restated Operating Agreement and the Put and Call Option Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of such documents a copy of which are attached hereto as Exhibit 10.1, 10.2, 10.3, 10.4, and 10.5, which are incorporated herein by reference.

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

The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference to this Item 2.03.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

10.1	Form of Membership Interest Redemption and Earnout Agreement by and between Contrail Aviation Support, LLC and OCAS, Inc. executed May 30, 2024, without schedules.
10.2	Form of Secured Subordinated Promissory Note between Contrail Aviation Support, LLC and OCAS, Inc., executed May 30, 2024.
10.3	Form of Subordinated Security Agreement between Contrail Aviation Support, LLC and OCAS, Inc. executed May 30, 2024.
10.4	Form of Second Amendment to First Amended and Restated Operating Agreement of Contrail Aviation Support, LLC executed May 30, 2024.
10.5	Form of Put and Call Option Agreement by and between Contrail Aviation Support, LLC, OCAS, Inc. and Air T, Inc. executed May 30, 2024, without schedules.
10.6	Exhibit A to Put Option Agreement (Secured Subordinated Promissory Note)
10.7	Exhibit B to Put Option Agreement (Secured Subordinated Security Agreement)
104	Inline XBRL for the cover page of this Current Report on Form 8-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: May 31, 2024

AIR T, INC.

By: /s/ Brian Ochocki

Brian Ochocki, Chief Financial Officer

EX-10.1

MEMBERSHIP INTEREST REDEMPTION AND EARNOUT AGREEMENT THIS MEMBERSHIP INTEREST REDEMPTION AND EARNOUT AGREEMENT (the “Agreement”), is made effective as of April 1, 2024 (the “Effective Date”), by and between Contrail Aviation Support, LLC, a North Carolina limited liability company (the “Company”), and OCAS, Inc., a Wisconsin corporation (f/k/a Contrail Aviation Support Inc.)(“Seller”). This Agreement is also executed by Air T, Inc., a Delaware corporation, for purposes of Sections 7(d) and 9 (“Air T”). RECITALS: WHEREAS, Seller is a party to that certain First Amended and Restated Operating Agreement of the Company, effective as of July 18, 2016, as amended (the “Operating Agreement”); WHEREAS, Seller holds a 21% Membership Interest (as that term is defined in the Operating Agreement) in the Company; WHEREAS, Seller desires to sell to the Company, and the Company is willing to purchase and redeem from Seller, 16% of Seller’s Membership Interest in the Company (such Membership Interest to be purchased, the “Redeemed Interest”), represented by 1,000 units in the Company, as more fully described and in accordance with the terms and conditions set forth herein; WHEREAS, Seller will retain a 5% Membership Interest in the Company, represented by 312.5 units in the Company (the “Retained Interest”); and WHEREAS, as partial consideration for the redemption of the Redeemed Interest, and as an incentive for Seller to continue its contributions to the success of the Company, the parties have agreed to an earnout arrangement, the terms of which are incorporated herein as Exhibit A. 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 agree as follows: AGREEMENT: 1. Redemption of Redeemed Interest. Subject to the terms and conditions of this Agreement, Seller shall sell, transfer, assign, convey, and deliver the Redeemed Interest to the Company, and the Company shall purchase and redeem the Redeemed Interest from Seller, effective as of the Effective Date (the “Closing”). The Company and Seller hereby waive any notice or other technical requirements relating to the redemption of the Redeemed Interest as set forth in the Operating Agreement or any other agreement, document, or instrument, and any notice or other waiting periods related thereto. 2. Purchase Price. The aggregate purchase price for the Redeemed Interest shall be (a) Four Million Five Hundred Seventy Thousand and 00/100 Dollars ($4,570,000.00) (the “Cash Purchase Price”) plus (b) the Earnout calculated and paid in accordance with Exhibit A attached hereto and incorporated herein (the “Earnout”). The Cash Purchase Price shall

- 2 - be payable to Seller at Closing by delivery by the Company to Seller of a Secured Subordinated Promissory Note, in an original principal amount equal to the Cash Purchase Price, in substantially the form attached hereto as Exhibit B (the “Note”). 3. Assignment Separate from Certificate. Seller shall execute and deliver to the Company the Assignment Separate from Certificate attached hereto as Exhibit C (the “Assignment Separate from Certificate”), so as to transfer to the Company all right, title, and interest of Seller to the Redeemed Interest. Subject to Section 8 hereof, Seller acknowledges and agrees that the Company will not deliver the Note to Seller in payment of the Purchase Price for the Redeemed Interest unless and until Seller has executed and delivered to the Company the Assignment Separate from Certificate and such additional documents as the Company may reasonably request. 4. Subordination Agreement. As a condition precedent to Closing, it is agreed that the parties shall enter into a subordination agreement in a form acceptable to and required by the senior lender of the Company. Such subordination agreement shall stipulate that the payments made to Seller under this Agreement, including the Note and Earnout Payments (as defined in Exhibit A) shall be subordinate to all existing and future debts owed by the Company to such senior lender. 5. Representations and Warranties of Seller. Seller hereby represents and warrants to the Company that the following are true and accurate as of the Closing: (a) Authority. This Agreement constitutes the legal, valid, and binding obligation of Seller, enforceable against Seller in accordance with its terms; and Seller has all requisite right, power, authority, and capacity to execute and deliver this Agreement, and perform its obligations hereunder. (b) Title. Seller owns all right, title, and interest in and to the Redeemed Interest free and clear of all pledges, liens, claims, charges, proxies, security interests, options, encumbrances, and restrictions whatsoever, other than the rights of the Company and its members pursuant to the Operating Agreement. (c) Ownership; Right to Sell. Seller holds all right, title, and interest in and to the Redeemed Interest and is the sole owner, beneficially and of record, of the Redeemed Interest and has the absolute and unrestricted legal capacity, right, power, and authority to sell the Redeemed Interest to the Company. Seller has not sold, assigned, pledged, or otherwise transferred any of the Redeemed Interest to any other person. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will constitute a violation or default under any term or provision of any contract, commitment, indenture, or other agreement or restriction of any kind or character to which Seller is bound. (d) Access to Information. Seller has received and reviewed such information concerning the business and financial condition of the Company necessary to make an informed decision regarding the sale of the Redeemed Interest. Seller has had the opportunity to meet with members of management of the Company and to ask

- 3 - such questions and review such documentation as Seller may have requested in writing and has used such access to Seller’s satisfaction for the purpose of obtaining information relating to Seller’s decision to sell the Redeemed Interest. (e) No Legal Claims; Non-contravention. There are no claims, actions, suits, proceedings, or investigations pending or threatened against Seller that may affect the Redeemed Interest owned by Seller or the consummation of the transactions contemplated by this Agreement. Seller is not operating under or subject to, or in default with respect to, any order, writ, injunction, judgment, stipulation, award, or decree of any court or other governmental agency. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will constitute a violation or default under any term or provision of any contract, commitment, indenture, or other agreement, or restriction of any kind or character to which Seller is bound. (f) Fair Value; Voluntary Agreement. Seller believes that the Purchase Price to be received for the sale of the Redeemed Interest, and the terms of payment of such Purchase Price under the Note, is fair and reasonable under the circumstances. Seller is consummating the transactions contemplated by this Agreement with a full understanding of all of the terms, conditions, and risks related to the transactions contemplated hereby, and willingly assumes those terms, conditions, and risks. (g) Legal Representation. Seller acknowledges that it has obtained, or had the opportunity to obtain, separate legal counsel to represent it in the transactions contemplated by this Agreement or has been given an opportunity to obtain such counsel prior to the execution and delivery of this Agreement. (h) Additional Documents. Seller will, upon request by the Company or its officers, execute and deliver any additional documents reasonably necessary to complete the sale, assignment, and transfer of the Redeemed Interests to the Company. 6. Representations and Warranties of the Company. The Company hereby represents and warrants to Seller that the following are true and accurate as of the Closing: (a) Authority. This Agreement constitutes the legal, valid, and binding obligation of the Company, enforceable against the Company in accordance with its terms; and the Company has all requisite right, power, authority, and capacity to execute and deliver this Agreement, and perform its obligations hereunder. (b) No Legal Claims; Non-contravention. There are no claims, actions, suits, proceedings, or investigations pending or threatened against the Company that may affect the Redeemed Interest or the consummation of the transactions contemplated by this Agreement. The Company is not operating under or subject to, or in default with respect to, any order, writ, injunction, judgment, stipulation, award or decree of any court or other governmental agency. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will constitute a violation or default under any term or provision of any contract,

- 4 - commitment, indenture, or other agreement or restriction of any kind or character to which Company is bound. The Company has secured all requisite consent from its Senior Lender(s) to the transactions contemplated by this Agreement. (c) Fair Value; Voluntary Agreement. The Company believes that the Purchase Price to be paid for the Redeemed Interest, and the terms of payment of such Purchase Price under the Note, is fair and reasonable under the circumstances. The Company is consummating the transactions contemplated by this Agreement with a full understanding of all of the terms, conditions, and risks related to the transactions contemplated hereby, and willingly assumes those terms, conditions, and risks. 7. Indemnification and Waiver. (a) Seller shall indemnify, defend, and hold harmless the Company from and against any and all claims, liabilities, losses, damages, costs, and expenses, including, but not limited to, court costs and attorneys’ fees, which result from or relate to a breach of Seller’s warranties, representations, and/or obligations under this Agreement. Seller’s representations, warranties, and agreements as contained in this Agreement and in any certificate, instrument, or document delivered by or on behalf of any of the parties hereto shall survive the consummation of the transactions contemplated hereby and shall in no way be affected by any investigation or knowledge of the subject matter thereof made by or on behalf of the Company. (b) The Company shall indemnify, defend, and hold harmless the Seller from and against any and all claims, liabilities, losses, damages, costs, and expenses, including, but not limited to, court costs and attorneys’ fees, which result from or relate to a breach of the Company’s warranties, representations, and/or obligations under this Agreement. Company’s representations, warranties, and agreements as contained in this Agreement and in any certificate, instrument, or document delivered by or on behalf of any of the parties hereto shall survive the consummation of the transactions contemplated hereby and shall in no way be affected by any investigation or knowledge of the subject matter thereof made by or on behalf of the Seller. (c) In consideration of the covenants, agreements, payments, and undertakings of the parties under this Agreement, effective upon the Effective Date, and except for fraud, intentional wrongful conduct and to the extent expressly provided for herein to the contrary, Joseph Kuhn, and Seller, on behalf of itself and its respective present and former owners, shareholders, members, beneficial owners, subsidiaries, affiliates, officers, directors, managers, and its and their respective successors and assigns (collectively, “Seller Releasors”) hereby releases, waives, and forever discharges the Company and its present and former members, owners, parents, subsidiaries, officers, governors, managers, members, agents, representatives, affiliates, successors, and assigns (collectively, “Company Releasees”) of and from any and all actions, causes of action, suits, losses, liabilities, rights, debts, dues, sums of money, accounts, reckonings, obligations, costs, expenses, liens, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises,

- 5 - variances, trespasses, damages, judgments, extents, executions, claims, and demands, of every kind and nature whatsoever, whether now known or unknown, foreseen or unforeseen, matured or unmatured, suspected or unsuspected, in law, admiralty, or equity, in each case whether absolute or contingent, liquidated or unliquidated, known or unknown, and whether arising under any agreement or understanding or otherwise (collectively, “Claims”), which any of such Seller Releasors ever had, now have, or hereafter can, shall, or may have against any of such Company Releasees for, upon, or by reason of any matter, cause, or thing whatsoever from the beginning of time through the Effective Date, except for (i) any Claims under this Agreement or any documents delivered pursuant to this Agreement including, without limitation, the Note, the Put and Call Option Agreement (as hereinafter defined), and the Security Agreement (as hereinafter defined); (ii) any Claims with respect the Retained Interest; and (iii) any Claims that may not be waived under applicable law. (d) In consideration of the covenants, agreements, payments, and undertakings of the parties under this Agreement, effective upon the Effective Date, and except for fraud, intentional wrongful conduct, and to the extent expressly provided for herein to the contrary, the Company and Air T, on behalf of itself and its respective present and former owners, shareholders, members, beneficial owners, subsidiaries, affiliates, officers, directors, managers, and its and their respective successors and assigns (collectively, “Company Releasors”) hereby releases, waives, and forever discharges Seller, and its present and former shareholders, owners, parents, subsidiaries, officers, governors, directors, agents, representatives, affiliates, successors, and assigns (collectively, “Seller Releasees”) of and from any and all actions, causes of action, suits, losses, liabilities, rights, debts, dues, sums of money, accounts, reckonings, obligations, costs, expenses, liens, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands, of every kind and nature whatsoever, whether now known or unknown, foreseen or unforeseen, matured or unmatured, suspected or unsuspected, in law, admiralty, or equity, in each case whether absolute or contingent, liquidated or unliquidated, known or unknown, and whether arising under any agreement or understanding or otherwise (collectively, “Claims”), which any of such Company Releasors ever had, now have, or hereafter can, shall, or may have against any of such Seller Releasees for, upon, or by reason of any matter, cause, or thing whatsoever from the beginning of time through the Effective Date, except for (i) any Claims under this Agreement or any documents delivered pursuant to this Agreement including, without limitation, the Note, the Put and Call Option Agreement (as hereinafter defined), and the Security Agreement (as hereinafter defined); (ii) any Claims with respect the Retained Interest; and (iii) any Claims that may not be waived under applicable law. 8. Closing. The Closing of the transactions provided for in this Agreement (the “Closing”) shall take place by delivery of the closing deliveries specified in Section 9 below (the “Closing Deliveries”) on the Effective Date via overnight delivery, facsimile, electronic transmission, and other similar means for exchanging documentation, and the Parties will

- 6 - not be required to be in attendance at the same location at the Closing. All actions and deliveries to take place at the Closing shall be deemed to take place simultaneously, and no delivery shall be deemed to have been made until all such actions and deliveries have been completed. 9. Closing Deliveries. (a) At the Closing, the Seller shall deliver the following: 1. This Agreement, duly executed by Seller; 2. The Assignment Separate from Certificate, duly executed by the Seller; 3. The Note, duly executed by Seller; 4. A Security Agreement and Unit Pledge to secure the Company’s performance of the Note, in a form acceptable to the Company and Seller (the “Security Agreement”), duly executed by Seller; 5. The Second Amendment to First Restated Operating Agreement of Contrail Aviation Support, in a form acceptable to the Company and Seller (the “OA Amendment”), duly executed by Seller; 6. A Put and Call Option Agreement, in a form acceptable to the Company, Seller, and Air T (the “Put and Call Option Agreement”), duly executed by Seller; and (b) At the Closing, the Company shall deliver the following: 1. This Agreement, duly executed by the Company and Air T; 2. The Note, duly executed by the Company; 3. The Security Agreement, duly executed by the Company; 4. The OA Amendment, duly executed by the Company and Air T; and 5. The Put and Call Option Agreement, duly executed by the Company and Air T. 10. Notices. Any notice required or permitted to be given pursuant to any provisions of this Agreement shall be in writing, signed by or on behalf of the person giving the same, and delivered by hand or mailed to the parties at the following addresses (or to such other address as a party may designate from time to time) by registered or certified mail, postage prepaid, return receipt requested, or by a third party company or governmental entity providing delivery services in the ordinary course of business, which guarantees delivery on a specified date:

- 7 - If to the Company: Contrail Aviation Support, LLC c/o Air T, Inc. 5000 W 36th Street, Suite 200 Minneapolis, MN 55416 Attention: General Counsel If to Seller: OCAS, Inc. --------------------------- Attn: Joseph Kuhn With a copy to: Haus, Roman and Banks, LLP 148 E. Wilson Street, Suite 200 Madison, WI 53703 Attn: Michael E. Banks 11. Miscellaneous (a) Binding Agreement. This Agreement will be binding upon and will inure to the benefit of the Company, Seller and their respective successors and assigns. (b) Further Assurances. The parties hereto agree that at any time and from time to time, at the expense of each such party, the parties will promptly execute and deliver all further instruments, certificates, and documents and take all further action that may be reasonably necessary or desirable or that may be reasonably necessary for either party to exercise and enforce its respective rights and remedies hereunder. (c) Successors and Assigns, Third Party Beneficiaries. This Agreement is binding upon and shall inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and permitted assigns. There are no third-party beneficiaries of this Agreement. The Company may not assign its rights or obligations under this Agreement, or any document executed pursuant to this Agreement, without the Seller’s prior written consent, provided that consent to any assignment shall not relieve the Company of its continuing obligations under this Agreement, and the Company shall remain jointly and severally liable with such assignee following assignment. (d) Governing Law. This Agreement is made and executed under the laws of the State of North Carolina and is intended to be governed by the laws of said state. (e) Amendments. This Agreement may not be amended or modified except in writing signed by all parties to be bound by such amendment or modification. (f) Entire Agreement. This Agreement, together with the Closing Deliveries, collectively, contains all of the terms agreed upon by the parties with respect to the

- 8 - subject matter hereof and supersedes all prior agreements, arrangements, or understandings, whether oral or written, with respect to the subject matter hereof. (g) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including .pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. [Signature Page to Follow]

[Signature Page to Membership Interest Redemption and Earnout Agreement] IN WITNESS WHEREOF, the parties hereto have executed and delivered this Membership Interest Redemption and Earnout Agreement as of the day and year first above written. COMPANY: CONTRAIL AVIATION SUPPORT, LLC /s/ Miriam Kuhn By: Miriam Kuhn Its: Chief Financial Officer SELLER: OCAS, INC. /s/ Joseph Kuhn By: Joseph Kuhn Its: President AIR T: AIR T, INC. By: ____/s/ Nick Swenson______________ Nick Swenson Title: President & Chief Executive Officer

A-1 EXHIBIT A CONTINGENT EARNOUT 1. Contingent Earnout Payments. Beginning on the fiscal year that begins on April 1, 2024, and extending through five (5) consecutive fiscal years, ending on March 31, 2029 (the “Earnout Period”), Seller shall be eligible to receive certain earnout payments (the “Earnout Payments”), which shall be payable in accordance with the following: a. Subject to the terms of this Agreement, Seller shall be eligible to receive an Earnout Payment in each fiscal year where the Company achieves a minimum of $7,000,000.00 in Adjusted EBITDA (as defined in Section h herein), in which case the Company shall pay Seller an Earnout Payment equal to 9.14% of the Company’s Adjusted EBITDA above $7,000,000.00, the amount of which shall be uncapped. For avoidance of doubt, no Earnout Payments shall be made for fiscal years where the Company generates less than $7,000,000.00 in Adjusted EBITDA. b. Earnout Payments shall be calculated annually by the Company, and such calculation (the “Earnout Statement”) shall be completed and delivered to Seller within thirty (30) days following the completion of the annual audits of both the Company and Air T, Inc. (the “Earnout Notice Date”). c. Notwithstanding anything herein to the contrary, Earnout Payments shall be subordinated and subject to the payment in full of all then outstanding Senior Debt (as that term is defined in the Note) of the Company. No Earnout Payments shall be made during the Earnout Period if such payment causes or would cause a Loan Default (as that term is defined in the Note) or such Loan Default otherwise exists of any Senior Debt. In such case, any Earnout Payments due and owing to Seller shall be deferred until the Company is no longer reasonably at risk of a Loan Default (based on the Company’s rolling twelve (12)-month forecast jointly prepared in accordance with the Note) or has been authorized by the holder of any Senior Debt that it can resume making Earnout Payments. Any deferred Earnout Payments shall accrue interest at a rate equal to the Note rate, for a period not to exceed twelve (12) consecutive months or eighteen (18) combined months, whichever is less. Accrued interest shall be paid in a lump sum, together with the Earnout Payment next coming due following deferral hereunder. d. Seller shall have thirty (30) days from the Earnout Notice Date to review and respond to the Earnout Statement. If Seller objects to the Company’s calculation of the Earnout Statement, then Seller shall deliver written notice to the Company setting forth a reasonably detailed description of the basis of the objection (the “Objection Notice”). If no Objection Notice is received by the Company prior to the end of the thirty (30)- day review period, then Seller shall be deemed to have accepted the Earnout Statement for all purposes hereunder, and the Company shall, within five (5) business days thereafter, pay the Earnout Payment to Seller. If the Company timely receives an Objection Notice, the Company shall promptly pay any undisputed amount of the Earnout Payment, and the Company and Seller shall work in good faith to resolve any disputed amount within thirty (30) days thereafter (the “Resolution Period”). Failing

A-2 resolution during the Resolution Period, the dispute shall be referred to an independent arbitration accountant (the “Independent Accountant”), agreed to by the parties, and not otherwise affiliated with the Company, Seller, or their affiliates within the last three (3) years (the “Independence Standard”), and if the parties are unable to agree on the designation of such Independent Accountant within ten (10) days following expiration of the Resolution Period, then each party shall name an accountant in writing, and the accountants so named shall mutually select a third accountant meeting the Independence Standard to serve as the Independent Accountant. If one party selects an accountant under the previous sentence (the “Selecting Party”) and the other party fails to select an accountant within ten (10) days following receipt of the written selection of the Selecting Party, then the accountant chosen by the Selecting Party shall serve as the Independent Accountant. Upon the final resolution of such dispute, the Company shall, within fifteen (15) days thereafter, pay any additional Earnout Payment, if any, to Seller, including interest from the Earnout Notice Date to the date of payment at the rate of the then current ten (10)-year Treasury bond yield plus 250 basis points (the “Prescribed Rate”). The Company and Seller shall each pay one half (1/2) of the fees and costs of the Independent Accountant. e. The Company shall promptly provide Seller and its agents with reasonable access to the Company’s books, records, and other information to allow Seller to calculate the Company’s Adjusted EBITDA, evaluate the accuracy of the Company Earnout Statement, and prepare its Objection Notice. Failure of the Company to provide the access specified herein (which access may include the transmission of electronic copies of supporting materials to Seller or its designated agents) shall extend Seller’s review period for delivering its Objection Notice for a reasonable period of time following the date on which such materials and access have been provided. Nothing contained herein limits the books, records, and other information to which Seller is entitled as a Member of the Company under applicable law. f. The decision of the Independent Account hereunder shall be final and binding on the parties only in the case in which the total cumulative value disputed is less than $2 million. If the cumulative amount in dispute exceeds $2 Million, absent the written agreement of the parties to some other procedure, the parties shall be free to pursue all remedies available at law or in equity. g. If Seller commences legal action to collect amounts that the Independent Accountant determines are due, Seller shall be entitled to recover its costs, expenses, and reasonable attorney fees from the Company. h. For the purposes of this Agreement: (1) “EBITDA” shall mean the Company’s Net Income (Loss), with the following adjustments: (a) Add to Net Income (Loss) Interest Expense,

A-3 (b) Add to Net Income (Loss) Depreciation, (c) Add to Net Income (Loss) Engine Depreciation, (d) Add to Net Income (Loss) Amortization Expense, (e) Add to Net Income (Loss) Swap mark-to-market loss, (f) Add to Net Income (Loss) Inventory Write-Downs, (g) Add to Net Income (Loss) Realized Loss on Engine Sales, (h) Add to Net Income (Loss) Corporate Expense Allocation, (i) Subtract from Net Income (Loss) Interest Income, (j) Subtract from Net Income (Loss) Swap mark-to-market gain, and (k) Subtract from Net Income (Loss) gains from PPP Loan Forgiveness. (2) “Adjusted EBITDA” shall mean the Company’s EBITDA, with the following adjustments: (a) Subtract from EBITDA Engine Depreciation, (b) Subtract from EBITDA Inventory Write-Downs, (c) Subtract from EBITDA Realized Loss on Engine Sales, (d) Subtract from EBITDA OCAS Note Interest, and (e) Add to EBITDA Interest Income earned on leased assets; and (f) Adjusted EBITDA shall be adjusted to account for other non-recurring income (subtractions) and expense (additions) items that were not included in EBITDA. This includes, but is not limited to, any non-cash stock-related compensation expenses. (3) A detailed illustration of the calculation of the Company’s EBITDA and Adjusted EBITDA is attached hereto as Schedule 1, and is incorporated herein.

A-4 i. During the Earnout Period, the Company shall not take any actions having the primary purpose or material effect of shifting or transferring Company revenue or earnings to its parent or affiliates companies controlling, controlled by, or under common control with the Company or Air T. Any revenue or earnings which are shifted or transferred in violation hereof shall be added to the Adjusted EBITDA when calculating the Earnout Payments.

EXHIBIT B SECURED SUBORDINATED PROMISSORY NOTE (See attached)

C-1 EXHIBIT C ASSIGNMENT SEPARATE FROM CERTIFICATE FOR VALUE RECEIVED, the undersigned (the “Transferor”) hereby sells, assigns, and transfers unto Contrail Aviation Support, LLC, a North Carolina limited liability company (the “Company”), a sixteen percent (16%) membership interest in the Company (the “Redeemed Interest”), represented by 1,000 units, standing in the Transferor’s name on the books of the Company and does hereby irrevocably constitute and appoint any appropriate officer of the Company to transfer said Redeemed Interest on the books of the Company with full power of substitution. Dated: April 1, 2024 TRANSFEROR: OCAS, INC. /s/ Joseph Kuhn By: Joseph Kuhn Its: President 29025322v2

EX-10.2

SECURED SUBORDINATED PROMISSORY NOTE (“Note”) $4,570,000.00 Minneapolis, Minnesota April 1, 2024 FOR VALUE RECEIVED, Contrail Aviation Support, LLC, a North Carolina limited liability company (“Maker”), hereby agrees and promises to pay to the order of OCAS, Inc., a Wisconsin corporation (the “Holder”), the principal sum of Four Million Five Hundred Seventy Thousand and 00/100 Dollars ($4,570,000.00), in lawful money of the United States and immediately available funds, together with interest on the unpaid principal balance thereof accruing at an annual rate equal to the ten (10) year Treasury bond yield on the date of this Note plus 375 basis points per annum (the “Note Rate”), compounded monthly, calculated on the basis of a 365-day year for the actual number of days elapsed. The Note Rate shall adjust annually, on each anniversary of the date of this Note. 1. Purchase Agreement. The parties hereto acknowledge that this Note is being made pursuant to that certain Membership Interest Redemption and Earnout Agreement (the “Redemption Agreement”) between Maker and Holder, of even date herewith. Any capitalized terms used but not otherwise defined herein shall have the meaning given in the Redemption Agreement. 2. Payment; Accrual of Interest. (a) Beginning on May 1, 2024, and continuing on the 1st day of each month thereafter (i) for a period of twelve (12) months (the “Interest Only Period”), Maker shall make interest only payments to Holder; and (ii) following the Interest Only Period, the outstanding balance of this Note shall be amortized and paid over the following three (3) years (the “P&I Period”). (b) Notwithstanding the foregoing, in the event that the Maker’s rolling twelve (12)-month forecast (which shall be transmitted to Holder monthly, and reviewed jointly by Maker and Holder) indicates that any payment during the P&I Period would cause a Loan Default or such Loan Default otherwise exists of any Senior Debt (as those terms are defined below), the payment structure shall revert back to an interest-only basis. If any interest-only payment causes or would also cause a Loan Default or such Loan Default otherwise exists of any Senior Debt, Maker shall not be obligated to make any payment during such period, but interest shall continue to accrue on the balance of this Note for a period of up to twelve (12) months. If Maker is unable to make a payment for twelve (12) consecutive months or eighteen (18) combined months, whichever is less, due to a Loan Default or reasonably anticipated prospective Loan Default, interest shall cease to accrue. Accrual of interest shall recommence once Maker is no longer at risk of a Loan Default or has been authorized by the holder of any Senior Debt that it can resume payments under this Note. In the event scheduled principal payments are not made due to the above, the loan maturity date shall be extended until the balance of all principal and accrued interest is paid in full. 3. Application of Payment. Any payments received by Holder in accordance with this Note shall be applied first, to any fees incurred for costs of collection under this Note, second to accrued and unpaid interest on this Note, and last, to principal until all principal has been paid in full. 4. Prepayment. Maker may prepay this Note in whole or in part at any time without premium or penalty. 5. Event of Default. As used herein, the term “Event of Default” shall mean any of the following events:

2 (a) Maker fails to pay any amount required to be paid by Maker hereunder within ten (10) business days of when such amount becomes due, subject to the terms set forth in Section 2, and such failure continues for more than five (5) business days after written notice thereof is provided to Maker, or (b) Maker (i) makes an assignment for the benefit of creditors, (ii) institutes a voluntary case seeking relief under any law relating to bankruptcy, insolvency, reorganization, or other relief for debtors, or (iii) has an involuntary case commenced seeking the liquidation or reorganization Maker under any law relating to bankruptcy or insolvency, and such case is not dismissed or vacated within sixty (60) days of its filing. 6. Acceleration. The unpaid balance of this Note shall mature and become immediately due and payable upon the following events: (a) Event of Default, or (b) The occurrence of a Sale Event (as hereinafter defined) with respect to Maker. As used herein, a “Sale Event” shall mean occurrence of any of the following in a single transaction or a series of related transactions: (i) the sale of all or substantially all of the assets of Maker to a third-party, or (ii) the sale of a majority of Maker’s issued and outstanding membership interests or other equity to a third-party (whether by merger, consolidation, sale, or transfer of membership interests). Upon maturity by acceleration or otherwise, all unpaid amounts shall bear interest at the rate that is the lesser of (a) of one percent (1%) per month, compounded monthly; or (b) the highest rate allowed by law, compounded monthly. 7. Subordination. Holder, by acceptance hereof, covenants and agrees, that any payment obligations of Maker under this Note are hereby expressly subordinated to the payment in full of all indebtedness of Maker outstanding on or prior to the date hereof or hereafter created, or incurred by Maker for money borrowed from banks, finance companies, trust companies, pension trusts, insurance companies, or other financial institutions (collectively, the “Senior Debt”). Upon any distribution of the assets of Maker upon dissolution, winding up, liquidation, or reorganization of Maker, Senior Debt shall also explicitly include any accrued and declared unpaid tax distributions owed to Air T, Inc. by Maker minus any debt owed by Air T, Inc. to Maker. Upon any distribution of the assets of Maker upon dissolution, winding up, liquidation, or reorganization of Maker, lenders of such Senior Debt are entitled to receive payment in full in cash before Holder is entitled to receive any payment. Notwithstanding the foregoing, Holder may accept payments of principal and interest under this Note so long as no default or event of default (as such terms may be defined in an agreement relating to such Senior Debt) (“Loan Default”) has occurred and is continuing under any obligations constituting Senior Debt. Upon receipt from Maker or any holder or agent of Senior Debt of notice of the occurrence of any such Loan Default, Holder agrees to adhere to the stipulations of any existing subordination agreement between the parties hereto and any holder of the Senior Debt. Holder further agrees to execute and deliver any additional customary forms of subordination agreement requested from time to time by a Senior Debt holder that are consistent with the terms hereof. 8. Security. This Note is secured by collateral which is referenced in a Security Agreement executed by Maker of even date herewith (the “Security Agreement”), and includes, but is not limited to, any property referenced in any related document necessary to perfect such security interest. 9. Usury. Notwithstanding anything to the contrary contained herein, if the rate of interest of this Note is determined by a court of competent jurisdiction to be usurious, then said interest rate, fees, and/or charges shall be reduced to the maximum amount permissible under applicable law. 10. Authority. By execution hereof, each of the parties hereto acknowledges and agrees that this Note constitutes the legal, valid, and binding obligation of such party, enforceable against such party in

3 accordance with its terms, and such party has all requisite right, power, authority, and capacity to execute and deliver this Note and perform its obligations hereunder. 11. Miscellaneous (a) Governing Law. This Note is made and executed under the laws of the State of North Carolina and is intended to be governed by the laws of said state. (b) Collection and Attorney Fees. Maker agrees to pay all costs of collection, including reasonable attorney fees, incurred by Holder in enforcing this Note. Maker hereby waives presentment, protest, demand, and notice of dishonor. (c) Amendment and Modification; Waiver. No purported amendment, modification or waiver of any provision hereof shall be binding unless set forth in a written document signed by the parties hereto (in the case of amendments or modifications) or by the party to be charged thereby (in the case of waivers). Any waiver shall be limited to the provision hereof in the circumstances or events specifically made subject thereto, and shall not be deemed a waiver of any other term hereof or of the same circumstance or event upon any reoccurrence thereof. (d) Entire Agreement. This Note, the Security Agreement, and the Redemption Agreement constitute the entire agreement of the parties relating to the subject matter of this Note and supersedes all other oral or written agreements relating thereto. (e) Severability. If any provision of this Note is deemed to be invalid by reason of the operation of law, or by reason of the interpretation placed thereon by any administrative agency or any court, Maker and Holder shall negotiate an equitable adjustment in the provisions of the same in order to effect, to the maximum extent permitted by law, the purpose of this and the validity and enforceability of the remaining provisions, or portions or applications thereof, shall not be affected thereby and shall remain in full force and effect. (f) Assignability. With the exception of assignments to Permitted Assigns, Holder may not assign its interest in this Note without the prior written consent of the Maker. Permitted Assigns shall include only Holder’s spouse, lineal descendants (and / or their spouses), or a trust for the benefit of any of the foregoing. Maker may not assign its interest in this Note without the prior written consent of the Holder. (g) Notices. Unless otherwise required under applicable law, all notices required under this Note shall be provided in the manner described in the Redemption Agreement. [Signature Page to Follow]

[Signature Page to Secured Subordinated Promissory Note] IN WITNESS WHEREOF, the undersigned have caused this Secured Subordinated Promissory Note to be duly executed and delivered effective as of the day and year first above written above. MAKER: CONTRAIL AVIATION SUPPORT, LLC /s/ Miriam Kuhn By: Miriam Kuhn Its: Chief Financial Officer HOLDER: OCAS, INC. /s/ Joseph Kuhn By: Joseph Kuhn Its: President 28154386v2

EX-10.3

1 SUBORDINATED SECURITY AGREEMENT Date: April 1, 2024 Debtor: Contrail Aviation Creditor: OCAS, Inc. a Wisconsin Support, LLC, a North corporation ("Creditor") Carolina limited liability Company ("Debtor") Address: 5000 W. 36th Street Address: --------------------------- Suite 200 Minneapolis, MN 55416 This Subordinated Security Agreement ("Agreement") is made with respect to the following facts and objectives: A. Debtor has purchased and redeemed a sixteen percent (16%) membership interest in Debtor, represented by one thousand (1,000) of the membership units (the "Redeemed Interest"), held by Creditor under the terms of a Membership Interest Redemption and Earnout Agreement by and among Debtor, Creditor [and the other parties thereto] of even date herewith (the "Redemption Agreement"). The terms of the Redemption Agreement are incorporated herein by this reference; B. That the Purchase Price (as defined in the Note) for the Redeemed Interest under the Redemption Agreement is being paid to Creditor in the principal amount, and under the installment and interest terms contained in the Redemption Agreement and the Secured Subordinated Promissory Note between Creditor and Debtor, of even date herewith, executed in connection with the Redemption Agreement (the "Note"); C. To induce Creditor to accept payment of the Purchase Price in installments, Debtor has agreed to execute this Agreement giving Creditor a security interest in the Redeemed Interest transferred to Debtor pursuant to the Redemption Agreement. NOW, THEREFORE, in order to carry out the intent of the foregoing recitals, which are made a contractual part of this Agreement, and for good and valuable consideration, the Debtor agrees as follows: (1) SECURITY INTEREST. To secure the payment of all principal and interest under the Note, and payment and performance of the Debtor's obligations under the Redemption Agreement, the Note, and this Agreement, including any renewal, refinancing, extension, or modification of said obligations (collectively, the "Obligations"), the Debtor hereby grants to Creditor a purchase money security interest in all of Debtor's right, title, and interest in and to the Redeemed Interest, transferred by Creditor to Debtor under the terms of the Redemption Agreement (the "Collateral"). The security interest extends to all

2 membership rights evidenced by the Collateral (the "Membership Rights"), including, but not limited to: (a) all of Debtor's right, title, and interest in and to the Debtor represented by the Collateral; (b) the right to capital, profits, and distributions of and from the Debtor attributable to the Collateral; (c) the right to be a member of the Debtor, to the extent represented by the Collateral; and (d) the rights of a member under the Debtor's Operating Agreement, as amended, and applicable law. (2) MEMBERSHIP RIGHTS. If no event of default as described in this Agreement (an "Event of Default") has occurred or is continuing, Debtor may continue to exercise Membership Rights with respect to the Collateral. If an Event of Default has occurred, Debtor shall cease exercising Membership Rights, and Creditor may exercise all Membership Rights as to any of the Collateral and Debtor shall execute and deliver to Creditor any additional instruments which are, in the judgment of Creditor, necessary or desired for Creditor to exercise such Membership Rights. (3) DUTY OF CREDITOR. Debtor shall have all risk of loss of the Collateral. Creditor shall have no liability or duty, either before or after the occurrence of an Event of Default, on account of loss of or damage to the Collateral, to collect or enforce any of its rights against the Collateral, to collect any income accruing on the Collateral, or to preserve rights against other parties. If Creditor actually receives any notices requiring action with respect to Collateral in Creditor's possession, Creditor shall take reasonable steps to forward such notices to Debtor. Debtor is responsible for responding to notices concerning the Collateral, and to exercise Membership Rights and to assume all obligations of a member of the Debtor under the Debtor's Operating Agreement, as amended, and applicable law with respect to the Collateral. Creditor's sole responsibility is to take such action as is reasonably requested by Debtor in writing; however, Creditor is not responsible to take any action that, in Creditor's sole judgment, would affect the value of the Collateral as security for the Obligations adversely. While Creditor is not required to take certain actions, if action is needed, in Creditor's sole discretion, to preserve and maintain the Collateral, Debtor authorizes Creditor to take such actions, but Creditor is not obligated to do so. (4) RESERVED. (5) REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to Creditor that: (a) This Agreement has been duly executed and delivered by Debtor, constitutes Debtor's valid and legally binding obligations, and is enforceable against Debtor in accordance with its terms. (b) The execution, delivery, and performance of this Agreement, the grant of the security interest in the Collateral, and the consummation of the transactions contemplated will not, with or without the giving of notice or the lapse of time, (i) violate any law applicable to Debtor, (ii) violate any judgment, writ, injunction, or order of any court or governmental body or

3 officer applicable to Debtor, (iii) violate or result in the breach of any agreement to which Debtor is a party or by which any of Debtor's properties, including the Collateral, is bound. (c) During the term of this Agreement, Debtor will not sell, assign, transfer, encumber, or otherwise dispose of any Collateral or any interest therein without the prior written consent of the Creditor, and upon receiving such written consent, only in accordance with the Debtor's Operating Agreement, as amended. (d) Debtor will do such further acts and execute and deliver such additional conveyances, certificates, instruments, legal opinions, and other assurances as Creditor may at any time request or require to protect, assure, or enforce its interests, rights, and remedies under this Agreement. Debtor authorizes Creditor to file with the appropriate governmental offices in the State of North Carolina, Minnesota, and elsewhere one or more Uniform Commercial Code financing statements covering the Collateral containing such legends as Creditor shall deem necessary or desirable to protect Creditor's interest in the Collateral, and amendments or continuations whenever necessary to continue the perfection of Creditor's security interest. (e) Debtor will not file any amendments, correction statements, or termination statements to financing statements concerning the Collateral without the prior written consent of Creditor. (f) Debtor is the sole owner of the Collateral and has the right to grant the security interest provided for herein to Creditor. (6) EVENTS OF DEFAULT. Debtor shall be in default and Creditor shall have the rights and remedies of a secured party under Title 9 of the Uniform Commercial Code of the State of North Carolina (the "Uniform Commercial Code"), in addition to any other remedies available to it under this Agreement, the Redemption Agreement, the Note, and any other agreement between the parties, if, subject to the restrictions set forth in Section 2 of the Note (a) Debtor fails to pay any amounts due under the Note when the same become due and payable, after the expiration of any applicable grace or cure period provided for in the Note, other than as a result of Debtor's inability to make any such payments due any restrictions imposed by Debtor's Senior Debt (as defined in the Note); (b) Debtor fails to perform any of the Obligations when the same become due and payable or performable under the Note, this Agreement, or the Redemption Agreement; (c) an Event of Default occurs under the Note, the Redemption Agreement, or this Agreement; or (d) any representation or warranty made by Debtor in the Note, this Agreement, or the Redemption Agreement contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein not misleading in light of the circumstances in which they were made.

4 (7) REMEDIES. If an Event of Default occurs, and in addition to any other rights and remedies Creditor has under the Uniform Commercial Code, Redemption Agreement, and the Note, Creditor may, in its discretion, and subject to the rights of any senior creditors holding any Senior Debt (as defined in the Note) (a) deliver a notice of exclusive control to the Debtor, and the Debtor is thereafter authorized and directed to permit Creditor to exercise complete and exclusive control over the Collateral; (b) cause the Collateral to be transferred and re-titled in the name of the Creditor; (c) exercise Membership Rights with respect to the Collateral; and (d) sell or otherwise dispose of the Collateral in payment of the Obligations. Upon the commencement of any proceeding under any bankruptcy, receivership, or other insolvency law by or against the Debtor the entire unpaid balance of the Note and all accrued interest shall become immediately due and payable in full, without declaration, presentment, or other notice or demand, all of which are hereby waived by the Debtor. (8) APPOINTMENT OF CREDITOR AS AGENT. Debtor appoints Creditor, its successors and assigns, as Debtor's agent and attorney-in-fact to carry out this Agreement and take any action or execute any instrument that Creditor considers necessary or convenient for such purpose. If Debtor fails to perform any act required by this Agreement, Creditor may perform such act in the name of Debtor and at Debtor's expense. (9) EXPENSES. Debtor agrees that Debtor will pay to Creditor upon demand the amount of any out-of-pocket expenses, including the fees and disbursements of counsel, that Creditor incurs in connection with the administration or enforcement of this Agreement, including expenses incurred to preserve the value of the Collateral and Creditor's security interest, the collection, sale or other disposition of any of the Collateral, the exercise by Creditor of any of its rights, or any action to enforce its rights under this Agreement to the extent allowed by applicable law (the "Enforcement Costs"). Any Enforcement Cost not paid on demand shall bear interest at the lesser of twelve percent (12%) per year, compounded monthly, or the highest rate allowed by law. (10) RELEASE OF COLLATERAL. The security interest granted to Creditor shall not terminate and Creditor shall not be required to return the Collateral to Debtor or to terminate its security interest unless and until the Obligations have been fully paid and performed. After termination of this security interest Creditor shall terminate or authorize Debtor to terminate any financing statements filed by Creditor with respect to the Collateral. (11) MISCELLANEOUS. A carbon, photographic, or other reproduction of this Agreement is sufficient as a financing statement. No provision of this Agreement can be waived, modified, amended, abridged, supplemented, terminated, or discharged and the security interest cannot be released or terminated, except by a writing duly executed by the Creditor. A waiver shall be effective only if in writing, and only in the specific instance and for the specific purpose given. No delay or failure to act shall preclude the exercise or enforcement of any of the Creditor's rights or remedies. All rights and remedies of the Creditor shall be cumulative and may be exercised singularly, concurrently, or successively at the Creditor's option, and the exercise or enforcement of any one such right or remedy

5 shall not be a condition to or bar the exercise or enforcement of any other. This Agreement shall bind and benefit the Debtor and the Creditor and their respective successors and assigns and shall take effect when executed by the Debtor and delivered to the Creditor, and the Debtor waives notice of the Creditor's acceptance hereof. If any provision or application of this Agreement is held unlawful or unenforceable in any respect, such illegality or unenforceability shall not affect other provisions or applications which can be given effect, and this Agreement shall be construed as if the unlawful or unenforceable provision or application had never been contained herein or prescribed hereby. All representations and warranties contained in this Agreement shall survive the execution, delivery, and performance of this Agreement and the creation, payment, and performance of the Obligations. This Agreement shall be governed by and construed in accordance with the internal laws of the State of North Carolina. IN WITNESS WHEREOF, the Debtor has executed this Agreement effective on the date first indicated above. DEBTOR: Contrail Aviation Support, LLC ___/s/ Miriam Kuhn___________ By: Miriam Kuhn Its: Chief Financial Officer

EX-10.4

1 SECOND AMENDMENT TO FIRST AMENDED AND RESTATED OPERATING AGREEMENT OF CONTRAIL AVIATION SUPPORT, LLC This Second Amendment to the First Amended and Restated Operating Agreement of Contrail Aviation Support, LLC (“Second Amendment”) is made as of April 1, 2024 (the “Second Amendment Date”) by and among Contrail Aviation Support, LLC, a North Carolina limited liability company (the “Company”), OCAS, Inc., a Wisconsin corporation (f/k/a Contrail Aviation Support Inc.) (“OCAS”), and Air T, Inc., a Delaware corporation (“Air T”). In this Second Amendment, OCAS and Air T may be collectively referred to as the “Members”, and each a “Member”. RECITALS: A. The Company and the Members are parties to that certain First Amended and Restated Operating Agreement of the Company, dated July 18, 2016, as amended by that certain First Amendment to the First Amended and Restated Operating Agreement, dated August 23, 2023 (collectively, the “Operating Agreement”). B. The Members wish to terminate certain put and call rights granted to the Members under Section 8.1 of the Operating Agreement, as provided herein. C. Capitalized terms which are not defined in this Second Amendment shall have the meaning assigned to such terms in the Operating Agreement. NOW, THEREFORE, the undersigned agree as follows: 1. Amendment to Section 8.1. Section 8.1 of the Operating Agreement is hereby deleted in its entirety and shall be of no further force and effect, except that the appraisal process described in Sections 8.1(c) and 8.1(d) shall remain in effect solely for purposes of determining the Strike Price in cases where members other than OCAS have experienced a Purchase Event (i.e., the Withdrawing Member is a person or entity other than OCAS). 2. Amendment to Section 8.5. Notwithstanding anything contained in Section 8.5 of the Operating Agreement to the contrary, if the Withdrawing Member is OCAS, and the Purchasing Members and the Withdrawing Member are unable to agree upon a purchase price for the Withdrawing Member’s Units Interests within thirty (30) days after the Purchase Notice is given, then the purchase price shall be equal to the “Purchase Price” specified in the Put and Call Option Agreement between the Company, OCAS, and Air T dated on or about the date hereof. 3. Survival. This Second Amendment is made part of the Operating Agreement. Except as modified hereby, the Operating Agreement remains in full force and effect as written. In the event of a conflict between the Operating Agreement and this Second Amendment with respect to the subject matter of this Second Amendment, this Second Amendment shall control.

2 4. Governing Law. This Second Amendment shall be governed by and construed in accordance with the laws of the State of North Carolina, without giving effect to provisions thereof regarding conflict of laws. 5. Counterparts. This Second Amendment may be executed in any number of counterparts, all of which will be considered one and the same amendment notwithstanding that all parties hereto have not signed the same counterpart. Signatures on this Second Amendment which are transmitted electronically shall be valid for all purposes. [SIGNATURE PAGE TO FOLLOW]

3 IN WITNESS WHEREOF, the undersigned have executed this Second Amendment as of the day and year first written above. MEMBERS: AIR T, INC. By: /s/ Nick Swenson Name: Nick Swenson Title: President & Chief Executive Officer OCAS, INC. By: /s/ Joseph G. Kuhn Name: Joseph G. Kuhn Title: President COMPANY: CONTRAIL AVIATION SUPPORT, LLC By: /s/ Miriam Kuhn Name: Miriam Kuhn Title: Chief Financial Officer

EX-10.5

    PUT AND CALL OPTION AGREEMENT This Put and Call Option Agreement (this “Agreement”), is made and entered as of April 1, 2024, by and between Contrail Aviation Support, LLC, a North Carolina limited liability company (the “Company”), OCAS, Inc., a Wisconsin corporation (f/k/a Contrail Aviation Support Inc.) (“OCAS”), and Air T, Inc. (“Air T”). RECITALS: WHEREAS, the parties are currently parties to that certain First Amended and Restated Operating Agreement of the Company, dated effective as of July 18, 2016, as amended (the “Operating Agreement”); WHEREAS, OCAS currently holds a 5% Membership Interest (the “OCAS Interests”) in the Company and Air T currently holds a 95% Membership Interest in the Company; and WHEREAS, the Operating Agreement currently grants the Members of the Company certain put and call rights as it relates to the OCAS Interests (the “Prior Put/Call Rights”); and WHEREAS, simultaneously with the execution of this Agreement, the parties shall enter into an amendment to the Operating Agreement terminating such Prior Put/Call Rights, and such rights shall be replaced by those certain rights and obligations granted under this Agreement. NOW, THEREFORE, in consideration of the foregoing and the mutual and dependent covenants hereinafter set forth, the parties agree as follows: AGREEMENT: 1. Defined Terms. Capitalized terms used but not otherwise defined herein shall have the meaning given to them in the Operating Agreement. 2. Grant of Option. (a) Commencing on April 1, 2026, and at any time thereafter (the “Option Period”) (i) the Company (the “Buyer”) shall have the option to purchase all of the OCAS Interests (the “Call”); and (ii) OCAS shall have the option to sell all of the OCAS Interests to the Buyer (the “Put”) (either of such options, the “Option”). Either of the Buyer or OCAS may elect to exercise its Option by delivering written notice to the Company and the other Members (the “Option Notice”) prior to or during the Option Period. In the event the Buyer or OCAS delivers an Option Notice, such notice shall constitute an irrevocable obligation of the Buyer to purchase and OCAS to sell the OCAS Interests in accordance with this Section 2. (b) By delivering the Option Notice, OCAS represents and warrants to the Company that (A) OCAS has full right, title, and interest in and to the OCAS Interests, (B) OCAS has all the necessary power and authority and has taken all necessary action to sell the OCAS Interests as contemplated by this Section 2, and (C) the OCAS Interests are free and clear of any and all mortgages, pledges, security interests, options, rights of first offer,

     2 encumbrances, or other restrictions or limitations of any nature whatsoever other than those arising as a result of or under the terms of this Agreement or the Operating Agreement. (c) By delivering the Option Notice, the Buyer represents and warrants to OCAS that (A) Buyer has all power and authority and has taken all necessary action to purchase the OCAS Interests as contemplated by this Section 2, (B) there is no Loan Default of any Senior Debt; and (C) exercise of the Option and payment of the Purchase Price for the OCAS Interests will not cause a Loan Default and is not likely to cause a Loan Default of any Senior Debt; and (D) the Buyer has requisite cash flow to fund payments of the Purchase Price under this Agreement. In this Agreement, the terms “Senior Debt” and “Loan Default” shall have the meaning assigned to such terms in the Promissory Note attached hereto as Exhibit A. 3. Purchase Price. (a) The purchase price for the OCAS Interests shall be equal to five percent (5%) of the Company Equity Value (the “Purchase Price”). (b) For purposes of this Agreement: (i) “Company Equity Value” shall mean nine times (9x) the average Adjusted EBITDA for the Company’s most recent three (3) completed fiscal years at the time the Option Notice was delivered, plus cash and cash-like items, minus debt and debt-like items; and (ii) “EBITDA” shall mean the Company’s Net Income (Loss), with the following adjustments: (A) Add to Net Income (Loss) Interest Expense, (B) Add to Net Income (Loss) Depreciation, (C) Add to Net Income (Loss) Engine Depreciation, (D) Add to Net Income (Loss) Amortization Expense, (E) Add to Net Income (Loss) Swap mark-to-market loss, (F) Add to Net Income (Loss) Inventory Write-Downs, (G) Add to Net Income (Loss) Realized Loss on Engine Sales, (H) Add to Net Income (Loss) Corporate Expense Allocation, (I) Subtract from Net Income (Loss) Interest Income, (J) Subtract from Net Income (Loss) Swap mark-to-market gain, and

     3 (K) Subtract from Net Income (Loss) gains from PPP Loan Forgiveness. (iii) “Adjusted EBITDA” shall mean the Company’s EBITDA, with the following adjustments: (A) Subtract from EBITDA Engine Depreciation, (B) Subtract from EBITDA Inventory Write-Downs, (C) Subtract from EBITDA Realized Loss on Engine Sales, (D) Subtract from EBITDA OCAS Note Interest, and (E) Add to EBITDA Interest Income earned on leased assets. (F) Adjusted EBITDA shall be adjusted to account for other non-recurring income (subtractions) and expense (additions) items that were not included in EBITDA. This includes, but is not limited to, any non-cash stock-related compensation expenses. (iv) A detailed illustration of the calculation of the Company’s EBITDA and Adjusted EBITDA is attached hereto as Schedule 1, and is incorporated herein. An illustration of the calculation of the Company Equity Value is attached hereto as Schedule 2, and is incorporated herein. (c) The Company agrees to provide OCAS with its calculation of the Company’s Equity Value annually commencing with the Company’s fiscal year ending March 31, 2026, and each fiscal year thereafter until the Option has been exercised. Such calculation and supporting detail shall be provided to OCAS within sixty (60) days of the date the Company’s annual financial statements have been prepared for the applicable fiscal year (each, a “Company Equity Value Statement”). OCAS shall have sixty (60) days from receipt of the Company Equity Value Statement to review and respond to the Company Equity Value Statement. If OCAS objects to the Company’s calculation of the Company’s Equity Value, then OCAS shall deliver written notice to the Company setting forth a reasonably detailed description of the basis of the objection (the “Objection Notice”). If no Objection Notice is received by the Company prior to the end of the sixty (60)-day review period, then Seller shall be deemed to have accepted the Company Equity Value Statement. If the Company timely receives an Objection Notice, the Company and OCAS shall work in good faith to resolve any disputes within thirty (30) days thereafter (the “Resolution Period”). Failing resolution during the Resolution Period, the dispute shall be referred to an independent arbitration accountant (the “Independent Accountant”), agreed to by the parties, and not otherwise affiliated with the Company, Seller, or their affiliates within the last three (3) years (the “Independence Standard”), and if the parties are unable to agree on the designation of such Independent Accountant within ten (10) days following expiration of the Resolution Period, then each party shall name an accountant in writing, and the accountants so named shall mutually select a third

     4 accountant meeting the Independence Standard to serve as the Independent Accountant. If one party selects an accountant under the previous sentence (the “Selecting Party”) and the other party fails to select an accountant within ten (10) days following receipt of the written selection of the Selecting Party, then the accountant chosen by the Selecting Party shall serve as the Independent Accountant. The Company and Seller shall each pay one half (1/2) of the fees and costs of the Independent Accountant, and the decision of the Independent Accountant shall be final and binding on the parties only in the case in which the total cumulative value disputed is less than $2 Million. If the cumulative amount in dispute exceeds $2 Million, absent the written agreement of the parties to some other procedure, the parties shall be free to pursue all remedies available at law or in equity. (d) The Purchase Price shall be paid in equal quarterly installments over a three (3) year period, together with interest at the then current ten (10)-year Treasury bond yield as of the date of Closing, and adjusted annually, plus 250 basis points. Payment of the Purchase Price shall be evidenced by a Secured Subordinated Promissory Note in the form attached hereto as Exhibit A (the “Note”). Payment of the Note shall be secured by a security interest in the OCAS Interests in the form of the Security Agreement attached hereto as Exhibit B (the “Security Agreement”). (e) Closing of the Option (the “Closing”) will occur on a date agreed upon by Buyer and OCAS that is within thirty (30) days of delivery of the Option Notice (the “Closing Deadline”). Notwithstanding the foregoing, if the Purchase Price has not yet been determined by the Closing Deadline, then the Closing shall occur on the date that is five (5) business days following the date on which the Purchase Price has been determined as provided herein. At the Closing, Buyer, and OCAS shall deliver the executed Security Agreement and Promissory Note, and OCAS shall deliver instruments of assignment and transfer with respect to the OCAS Interest. The parties shall each take such further actions as may be reasonably necessary to consummate the sale contemplated by this Agreement including, without limitation, entering into agreements and delivering certificates and instruments and consents as may be deemed reasonably necessary or appropriate. (f) From the date of this Agreement through the Closing of the Option, the Company shall promptly provide OCAS and its agents with reasonable access to the Company’s books, records, and other information to allow OCAS to calculate the Company Equity Value, calculate the Company’s Adjusted EBITDA, evaluate the accuracy of the Company Equity Value Statement, and prepare its Objection Notice. Failure of the Company to timely provide the access specified herein (which access shall include the transmission of electronic copies of supporting materials to OCAS or its designated agents upon OCAS’ request) shall extend OCAS’s review period for delivering its Objection Notice for a reasonable period of time following the date on which such materials and access have been provided. 4. Notices. Any notice required or permitted to be given pursuant to any provisions of this Agreement shall be in writing, signed by or on behalf of the person giving the same, and delivered by hand or mailed to the parties at the following addresses (or to such other address as a party may designate from time to time) by registered or certified mail, postage prepaid, return

     5 receipt requested, or by a third party company or governmental entity providing delivery services in the ordinary course of business, which guarantees delivery on a specified date: If to the Company or Air T: Contrail Aviation Support, LLC c/o Air T, Inc. 5000 W 36th Street, Suite 200 Minneapolis, MN 55416 Attention: General Counsel If to OCAS: OCAS, Inc. --------------------------- Attn: Joseph Kuhn With a copy to: Haus, Roman and Banks, LLP 148 E. Wilson Street, Suite 200 Madison, WI 53703 Attn: Michael E. Banks 5. Entire Agreement. This Agreement, together with the Exhibits and Schedules attached hereto, which are incorporated herein by this reference, constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. 6. Successor and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. However, neither this Agreement nor any of the rights of the parties hereunder may otherwise be transferred or assigned by any party hereto, except that (a) if the Company shall merge or consolidate with or into, or sell or otherwise transfer substantially all its assets to, another company which assumes the Company’s obligations under this Agreement, the Company may assign its rights hereunder to that company and (b) OCAS may assign its rights and obligations under this Agreement to a person or entity acquiring the OCAS Interests, directly or indirectly, in a manner permitted by the Company’s Operating Agreement, as amended. 7. No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express, or implied, is intended to or shall confer upon any other person any legal or equitable right, benefit, or remedy of any nature whatsoever, under or by reason of this Agreement. 8. Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement. 9. Amendment and Modification; Waiver. This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this

     6 Agreement shall operate or be construed 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. 10. Severability. If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement 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, a court of competent jurisdiction may modify this Agreement so as to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible. 11. Governing Law. This Agreement is governed by the laws of the State of North Carolina, without giving effect to the conflicts of laws provisions thereof. 12. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall together be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, email, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement. 13. No Strict Construction. The parties to this Agreement have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties, and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. [SIGNATURE PAGE FOLLOWS]

     7 IN WITNESS WHEREOF, the parties hereto have executed this Put and Call Option Agreement on the date first written above. COMPANY: CONTRAIL AVIATION SUPPORT, LLC /s/ Miriam Kuhn By: Miriam Kuhn Its: Chief Financial Officer OCAS: OCAS, INC. /s/ Joseph Kuhn By: Joseph Kuhn Its: President AIR T: AIR T, INC. /s/ Nicholas J. Swenson By: Nicholas J. Swenson Its: President and Chief Executive Officer

    SCHEDULE 1 COMPANY’S ADJUSTED EBITDA CALCULATION            

    SCHEDULE 2 COMPANY EQUITY VALUE 9x the average Adjusted EBITDA 50,000,000 + Cash (Note l) 223,604 + PV of Section 197 Tax Amortization Benefit (Note 2) 258,007 +/(-) Swap Asset/(Liability) (Note l) 1,720,106 + Non-Operating Assets (Note l) 4,927,155 (-) Accrued Distributions (Note 1) (200,000) (-) Interest Bearing Debt (Note 1) (28,152,844) Indicated Equity Value 28,776,028 Notes (1) As reported on the balance sheet of the Company as of the last day of the calendar month immediately preceding delivery of the Option Notice. (2) See Schedule 2.1

     10 SCHEDULE 2.1 PRESENT VALUE OF SECTION 197 TAX AMORTIZATION BENEFIT Redemption Date PV Redemption Date PV 4/1/2026 258,007 1/1/2029 104,168 5/1/2026 252,806 2/1/2029 100,125 6/1/2026 247,604 3/1/2029 96,082 7/1/2026 242,402 4/1/2029 92,039 8/1/2026 237,201 5/1/2029 88,475 9/1/2026 231,999 6/1/2029 84,910 10/1/2026 226,797 7/1/2029 81,346 11/1/2026 221,595 8/1/2029 77,782 12/1/2026 216,394 9/1/2029 74,217 1/1/2027 211,192 10/1/2029 70,653 2/1/2027 205,990 11/1/2029 67,088 3/1/2027 200,789 12/1/2029 63,524 4/1/2027 195,587 1/1/2030 59,959 5/1/2027 191,001 2/1/2030 56,395 6/1/2027 186,415 3/1/2030 52,831 7/1/2027 181,829 4/1/2030 49,266 8/1/2027 177,243 5/1/2030 46,124 9/1/2027 172,657 6/1/2030 42,981 10/1/2027 168,071 7/1/2030 39,839 11/1/2027 163,485 8/1/2030 36,696 12/1/2027 158,900 9/1/2030 33,554 1/1/2028 154,314 10/1/2030 30,411 2/1/2028 149,728 11/1/2030 27,269 3/1/2028 145,142 12/1/2030 24,126 4/1/2028 140,556 1/1/2031 20,984 5/1/2028 136,513 2/1/2031 17,841 6/1/2028 132,470 3/1/2031 14,699 7/1/2028 128,427 4/1/2031 11,557 8/1/2028 124,384 5/1/2031 8,667 9/1/2028 120,341 6/1/2031 5,778 10/1/2028 116,298 7/1/2031 2,889 11/1/2028 112,255 8/1/2031 - 12/1/2028 108,211

     11 EXHIBIT A SECURED SUBORDINATED PROMISSORY NOTE

    EXHIBIT B SECURITY AGREEMENT

EX-10.6

SECURED SUBORDINATED PROMISSORY NOTE (“Note”) $[__________________] Minneapolis, Minnesota [___________ ___, 20___] FOR VALUE RECEIVED, Contrail Aviation Support, LLC, a North Carolina limited liability company (“Maker”), hereby agrees and promises to pay to the order of OCAS, Inc., a Wisconsin corporation (the “Holder”), the principal sum of [ __________________ Dollars ($___________)], in lawful money of the United States and immediately available funds, together with interest on the unpaid principal balance thereof accruing at an annual rate equal to the ten (10) year Treasury bond yield on the date of this Note plus 250 basis points per annum (the “Note Rate”), compounded monthly, calculated on the basis of a 365-day year for the actual number of days elapsed. The Note Rate shall adjust annually, on each anniversary of the date of this Note. 1. Purchase Agreement. The parties hereto acknowledge that this Note is being made pursuant to that certain Membership Interest Redemption and Earnout Agreement (the “Redemption Agreement”) between Maker and Holder, of even date herewith. Any capitalized terms used but not otherwise defined herein shall have the meaning given in the Redemption Agreement. 2. Payment; Accrual of Interest. (a) Beginning on [_____ ____, 20___ (the date 30 days following the closing], and continuing quarterly thereafter (with payments on _________________ of each year), the outstanding balance of this Note shall be amortized and paid over the following three (3) years in quarterly installments (the “P&I Period”). (b) Notwithstanding the foregoing, in the event that the Maker’s rolling twelve (12)-month forecast (which shall be transmitted to Holder monthly, and reviewed jointly by Maker and Holder) indicates that any payment during the P&I Period would cause a Loan Default or such Loan Default otherwise exists of any Senior Debt (as those terms are defined below), the payment structure shall revert to an interest-only basis. If any interest-only payment causes or would also cause a Loan Default or such Loan Default otherwise exists of any Senior Debt, Maker shall not be obligated to make any payment during such period, but interest shall continue to accrue on the balance of this Note for a period of up to twelve (12) months. If Maker is unable to make a payment for twelve (12) consecutive months or eighteen (18) combined months, whichever is less, due to a Loan Default or reasonably anticipated prospective Loan Default, interest shall cease to accrue. Accrual of interest shall recommence once Maker is no longer at risk of a Loan Default or has been authorized by the holder of any Senior Debt that it can resume payments under this Note. In the event scheduled principal payments are not made due to the above, the loan maturity date shall be extended until the balance of all principal and accrued interest is paid in full. 3. Application of Payment. Any payments received by Holder in accordance with this Note shall be applied first, to any fees incurred for costs of collection under this Note, second to accrued and unpaid interest on this Note, and last, to principal until all principal has been paid in full. 4. Prepayment. Maker may prepay this Note in whole or in part at any time without premium or penalty. 5. Event of Default. As used herein, the term “Event of Default” shall mean any of the following events:

2 (a) Maker fails to pay any amount required to be paid by Maker hereunder within ten (10) business days of when such amount becomes due, subject to the terms set forth in Section 2, and such failure continues for more than five (5) business days after written notice thereof is provided to Maker, or (b) Maker (i) makes an assignment for the benefit of creditors, (ii) institutes a voluntary case seeking relief under any law relating to bankruptcy, insolvency, reorganization, or other relief for debtors, or (iii) has an involuntary case commenced seeking the liquidation or reorganization Maker under any law relating to bankruptcy or insolvency, and such case is not dismissed or vacated within sixty (60) days of its filing. 6. Acceleration. The unpaid balance of this Note shall mature and become immediately due and payable upon the following events: (a) Event of Default, or (b) The occurrence of a Sale Event (as hereinafter defined) with respect to Maker. As used herein, a “Sale Event” shall mean occurrence of any of the following in a single transaction or a series of related transactions: (i) the sale of all or substantially all of the assets of Maker to a third-party, or (ii) the sale of a majority of Maker’s issued and outstanding membership interests or other equity to a third-party (whether by merger, consolidation, sale, or transfer of membership interests). Upon maturity by acceleration or otherwise, all unpaid amounts shall bear interest at the rate that is the lesser of (a) of one percent (1%) per month, compounded monthly; or (b) the highest rate allowed by law, compounded monthly. 7. Subordination. Holder, by acceptance hereof, covenants and agrees, that any payment obligations of Maker under this Note are hereby expressly subordinated to the payment in full of all indebtedness of Maker outstanding on or prior to the date hereof or hereafter created, or incurred by Maker for money borrowed from banks, finance companies, trust companies, pension trusts, insurance companies, or other financial institutions (collectively, the “Senior Debt”). Upon any distribution of the assets of Maker upon dissolution, winding up, liquidation, or reorganization of Maker, Senior Debt shall also explicitly include any accrued and declared unpaid tax distributions owed to Air T, Inc. by Maker minus any debt owed by Air T, Inc. to Maker. Upon any distribution of the assets of Maker upon dissolution, winding up, liquidation, or reorganization of Maker, lenders of such Senior Debt are entitled to receive payment in full in cash before Holder is entitled to receive any payment. Notwithstanding the foregoing, Holder may accept payments of principal and interest under this Note so long as no default or event of default (as such terms may be defined in an agreement relating to such Senior Debt) (“Loan Default”) has occurred and is continuing under any obligations constituting Senior Debt. Upon receipt from Maker or any holder or agent of Senior Debt of notice of the occurrence of any such Loan Default, Holder agrees to adhere to the stipulations of any existing subordination agreement between the parties hereto and any holder of the Senior Debt. Holder further agrees to execute and deliver any additional customary forms of subordination agreement requested from time to time by a Senior Debt holder that are consistent with the terms hereof. 8. Security. This Note is secured by collateral which is referenced in a Security Agreement executed by Maker of even date herewith (the “Security Agreement”), and includes, but is not limited to, any property referenced in any related document necessary to perfect such security interest. 9. Usury. Notwithstanding anything to the contrary contained herein, if the rate of interest of this Note is determined by a court of competent jurisdiction to be usurious, then said interest rate, fees, and/or charges shall be reduced to the maximum amount permissible under applicable law. 10. Authority. By execution hereof, each of the parties hereto acknowledges and agrees that this Note constitutes the legal, valid, and binding obligation of such party, enforceable against such party in

3 accordance with its terms, and such party has all requisite right, power, authority, and capacity to execute and deliver this Note and perform its obligations hereunder. 11. Miscellaneous (a) Governing Law. This Note is made and executed under the laws of the State of North Carolina and is intended to be governed by the laws of said state. (b) Collection and Attorney Fees. Maker agrees to pay all costs of collection, including reasonable attorney fees, incurred by Holder in enforcing this Note. Maker hereby waives presentment, protest, demand, and notice of dishonor. (c) Amendment and Modification; Waiver. No purported amendment, modification or waiver of any provision hereof shall be binding unless set forth in a written document signed by the parties hereto (in the case of amendments or modifications) or by the party to be charged thereby (in the case of waivers). Any waiver shall be limited to the provision hereof in the circumstances or events specifically made subject thereto, and shall not be deemed a waiver of any other term hereof or of the same circumstance or event upon any reoccurrence thereof. (d) Entire Agreement. This Note, the Security Agreement, and the Redemption Agreement constitute the entire agreement of the parties relating to the subject matter of this Note and supersedes all other oral or written agreements relating thereto. (e) Severability. If any provision of this Note is deemed to be invalid by reason of the operation of law, or by reason of the interpretation placed thereon by any administrative agency or any court, Maker and Holder shall negotiate an equitable adjustment in the provisions of the same in order to effect, to the maximum extent permitted by law, the purpose of this and the validity and enforceability of the remaining provisions, or portions or applications thereof, shall not be affected thereby and shall remain in full force and effect. (f) Assignability. With the exception of assignments to Permitted Assigns, Holder may not assign its interest in this Note without the prior written consent of the Maker. Permitted Assigns shall include only Holder’s spouse, lineal descendants (and / or their spouses), or a trust for the benefit of any of the foregoing. Maker may not assign its interest in this Note without the prior written consent of the Holder. (g) Notices. Unless otherwise required under applicable law, all notices required under this Note shall be provided in the manner described in the Redemption Agreement. [Signature Page to Follow]

[Signature Page to Secured Subordinated Promissory Note] IN WITNESS WHEREOF, the undersigned have caused this Secured Subordinated Promissory Note to be duly executed and delivered effective as of the day and year first above written above. MAKER: CONTRAIL AVIATION SUPPORT, LLC By: Its: HOLDER: OCAS, INC. By: Joseph Kuhn Its: President 28154386v2

EX-10.7

1 SUBORDINATED SECURITY AGREEMENT Date: [____________, ____] Debtor: Contrail Aviation Creditor: OCAS, Inc. a Wisconsin Support, LLC, a North corporation ("Creditor") Carolina limited liability Company ("Debtor") Address: [5000 W. 36th Street Address: ------------------------------ Suite 200 Minneapolis, MN 55416] This Subordinated Security Agreement ("Agreement") is made with respect to the following facts and objectives: A. Debtor has purchased and redeemed a five percent (5%) membership interest in Debtor, represented by three hundred twelve and one-half (312.5) of the membership units (the "Redeemed Interest"), held by Creditor under the terms of a Put and Call Option Agreement by and among Debtor, Creditor and the other parties thereto of even date herewith (the "Redemption Agreement"). The terms of the Redemption Agreement are incorporated herein by this reference; B. That the Purchase Price (as defined in the Note) for the Redeemed Interest under the Redemption Agreement is being paid to Creditor in the principal amount, and under the installment and interest terms contained in the Redemption Agreement and the Secured Subordinated Promissory Note between Creditor and Debtor, of even date herewith, executed in connection with the Redemption Agreement (the "Note"); C. To induce Creditor to accept payment of the Purchase Price in installments, Debtor has agreed to execute this Agreement giving Creditor a security interest in the Redeemed Interest transferred to Debtor pursuant to the Redemption Agreement. NOW, THEREFORE, in order to carry out the intent of the foregoing recitals, which are made a contractual part of this Agreement, and for good and valuable consideration, the Debtor agrees as follows: (1) SECURITY INTEREST. To secure the payment of all principal and interest under the Note, and payment and performance of the Debtor's obligations under the Redemption Agreement, the Note, and this Agreement, including any renewal, refinancing, extension, or modification of said obligations (collectively, the "Obligations"), the Debtor hereby grants to Creditor a purchase money security interest in all of Debtor's right, title, and interest in and to the Redeemed Interest, transferred by Creditor to Debtor under the terms of the Redemption Agreement (the "Collateral"). The security interest extends to all

2 membership rights evidenced by the Collateral (the "Membership Rights"), including, but not limited to: (a) all of Debtor's right, title, and interest in and to the Debtor represented by the Collateral; (b) the right to capital, profits, and distributions of and from the Debtor attributable to the Collateral; (c) the right to be a member of the Debtor, to the extent represented by the Collateral; and (d) the rights of a member under the Debtor's Operating Agreement, as amended, and applicable law. (2) MEMBERSHIP RIGHTS. If no event of default as described in this Agreement (an "Event of Default") has occurred or is continuing, Debtor may continue to exercise Membership Rights with respect to the Collateral. If an Event of Default has occurred, Debtor shall cease exercising Membership Rights, and Creditor may exercise all Membership Rights as to any of the Collateral and Debtor shall execute and deliver to Creditor any additional instruments which are, in the judgment of Creditor, necessary or desired for Creditor to exercise such Membership Rights. (3) DUTY OF CREDITOR. Debtor shall have all risk of loss of the Collateral. Creditor shall have no liability or duty, either before or after the occurrence of an Event of Default, on account of loss of or damage to the Collateral, to collect or enforce any of its rights against the Collateral, to collect any income accruing on the Collateral, or to preserve rights against other parties. If Creditor actually receives any notices requiring action with respect to Collateral in Creditor's possession, Creditor shall take reasonable steps to forward such notices to Debtor. Debtor is responsible for responding to notices concerning the Collateral, and to exercise Membership Rights and to assume all obligations of a member of the Debtor under the Debtor's Operating Agreement, as amended, and applicable law with respect to the Collateral. Creditor's sole responsibility is to take such action as is reasonably requested by Debtor in writing; however, Creditor is not responsible to take any action that, in Creditor's sole judgment, would affect the value of the Collateral as security for the Obligations adversely. While Creditor is not required to take certain actions, if action is needed, in Creditor's sole discretion, to preserve and maintain the Collateral, Debtor authorizes Creditor to take such actions, but Creditor is not obligated to do so. (4) RESERVED. (5) REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to Creditor that: (a) This Agreement has been duly executed and delivered by Debtor, constitutes Debtor's valid and legally binding obligations, and is enforceable against Debtor in accordance with its terms. (b) The execution, delivery, and performance of this Agreement, the grant of the security interest in the Collateral, and the consummation of the transactions contemplated will not, with or without the giving of notice or the lapse of time, (i) violate any law applicable to Debtor, (ii) violate any judgment, writ, injunction, or order of any court or governmental body or

3 officer applicable to Debtor, (iii) violate or result in the breach of any agreement to which Debtor is a party or by which any of Debtor's properties, including the Collateral, is bound. (c) During the term of this Agreement, Debtor will not sell, assign, transfer, encumber, or otherwise dispose of any Collateral or any interest therein without the prior written consent of the Creditor, and upon receiving such written consent, only in accordance with the Debtor's Operating Agreement, as amended. (d) Debtor will do such further acts and execute and deliver such additional conveyances, certificates, instruments, legal opinions, and other assurances as Creditor may at any time request or require to protect, assure, or enforce its interests, rights, and remedies under this Agreement. Debtor authorizes Creditor to file with the appropriate governmental offices in the State of North Carolina, Minnesota, and elsewhere one or more Uniform Commercial Code financing statements covering the Collateral containing such legends as Creditor shall deem necessary or desirable to protect Creditor's interest in the Collateral, and amendments or continuations whenever necessary to continue the perfection of Creditor's security interest. (e) Debtor will not file any amendments, correction statements, or termination statements to financing statements concerning the Collateral without the prior written consent of Creditor. (f) Debtor is the sole owner of the Collateral and has the right to grant the security interest provided for herein to Creditor. (6) EVENTS OF DEFAULT. Debtor shall be in default and Creditor shall have the rights and remedies of a secured party under Title 9 of the Uniform Commercial Code of the State of North Carolina (the "Uniform Commercial Code"), in addition to any other remedies available to it under this Agreement, the Redemption Agreement, the Note, and any other agreement between the parties, if, subject to the restrictions set forth in Section 2 of the Note (a) Debtor fails to pay any amounts due under the Note when the same become due and payable, after the expiration of any applicable grace or cure period provided for in the Note, other than as a result of Debtor's inability to make any such payments due any restrictions imposed by Debtor's Senior Debt (as defined in the Note); (b) Debtor fails to perform any of the Obligations when the same become due and payable or performable under the Note, this Agreement, or the Redemption Agreement; (c) an Event of Default occurs under the Note, the Redemption Agreement, or this Agreement; or (d) any representation or warranty made by Debtor in the Note, this Agreement, or the Redemption Agreement contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein not misleading in light of the circumstances in which they were made.

4 (7) REMEDIES. If an Event of Default occurs, and in addition to any other rights and remedies Creditor has under the Uniform Commercial Code, Redemption Agreement, and the Note, Creditor may, in its discretion, and subject to the rights of any senior creditors holding any Senior Debt (as defined in the Note) (a) deliver a notice of exclusive control to the Debtor, and the Debtor is thereafter authorized and directed to permit Creditor to exercise complete and exclusive control over the Collateral; (b) cause the Collateral to be transferred and re-titled in the name of the Creditor; (c) exercise Membership Rights with respect to the Collateral; and (d) sell or otherwise dispose of the Collateral in payment of the Obligations. Upon the commencement of any proceeding under any bankruptcy, receivership, or other insolvency law by or against the Debtor the entire unpaid balance of the Note and all accrued interest shall become immediately due and payable in full, without declaration, presentment, or other notice or demand, all of which are hereby waived by the Debtor. (8) APPOINTMENT OF CREDITOR AS AGENT. Debtor appoints Creditor, its successors and assigns, as Debtor's agent and attorney-in-fact to carry out this Agreement and take any action or execute any instrument that Creditor considers necessary or convenient for such purpose. If Debtor fails to perform any act required by this Agreement, Creditor may perform such act in the name of Debtor and at Debtor's expense. (9) EXPENSES. Debtor agrees that Debtor will pay to Creditor upon demand the amount of any out-of-pocket expenses, including the fees and disbursements of counsel, that Creditor incurs in connection with the administration or enforcement of this Agreement, including expenses incurred to preserve the value of the Collateral and Creditor's security interest, the collection, sale or other disposition of any of the Collateral, the exercise by Creditor of any of its rights, or any action to enforce its rights under this Agreement to the extent allowed by applicable law (the "Enforcement Costs"). Any Enforcement Cost not paid on demand shall bear interest at the lesser of twelve percent (12%) per year, compounded monthly, or the highest rate allowed by law. (10) RELEASE OF COLLATERAL. The security interest granted to Creditor shall not terminate and Creditor shall not be required to return the Collateral to Debtor or to terminate its security interest unless and until the Obligations have been fully paid and performed. After termination of this security interest Creditor shall terminate or authorize Debtor to terminate any financing statements filed by Creditor with respect to the Collateral. (11) MISCELLANEOUS. A carbon, photographic, or other reproduction of this Agreement is sufficient as a financing statement. No provision of this Agreement can be waived, modified, amended, abridged, supplemented, terminated, or discharged and the security interest cannot be released or terminated, except by a writing duly executed by the Creditor. A waiver shall be effective only if in writing, and only in the specific instance and for the specific purpose given. No delay or failure to act shall preclude the exercise or enforcement of any of the Creditor's rights or remedies. All rights and remedies of the Creditor shall be cumulative and may be exercised singularly, concurrently, or successively at the Creditor's option, and the exercise or enforcement of any one such right or remedy

5 shall not be a condition to or bar the exercise or enforcement of any other. This Agreement shall bind and benefit the Debtor and the Creditor and their respective successors and assigns and shall take effect when executed by the Debtor and delivered to the Creditor, and the Debtor waives notice of the Creditor's acceptance hereof. If any provision or application of this Agreement is held unlawful or unenforceable in any respect, such illegality or unenforceability shall not affect other provisions or applications which can be given effect, and this Agreement shall be construed as if the unlawful or unenforceable provision or application had never been contained herein or prescribed hereby. All representations and warranties contained in this Agreement shall survive the execution, delivery, and performance of this Agreement and the creation, payment, and performance of the Obligations. This Agreement shall be governed by and construed in accordance with the internal laws of the State of North Carolina. IN WITNESS WHEREOF, the Debtor has executed this Agreement on the date first indicated above. DEBTOR: Contrail Aviation Support, LLC ______________________________ By: Its:

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Cover	May 31, 2024
Entity Information
Document Type	8-K
Document Period End Date	May 31, 2024
Entity Registrant Name	AIR T, INC.
Entity Incorporation, State	DE
Entity File Number	001-35476
Entity Tax Identification Number	52-1206400
Entity Address, Street	11020 David Taylor Drive, Suite 305,
Entity Address, City	Charlotte
Entity Address, State	NC
Entity Address, Postal Zip Code	28262
City Area Code	980
Local Phone Number	595-2840
Written Communications	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0000353184
Amendment Flag	false
Amendment Description
Document Effective Date	May 30, 2024
Soliciting Material	false
Common Stock
Entity Information
Title of 12(b) Security	Common Stock
Trading Symbol	AIRT
Security Exchange Name	NASDAQ
Cumulative Capital Securities
Entity Information
Title of 12(b) Security	Alpha Income Preferred Securities (also referred to as 8% Cumulative Capital Securities) (“AIP”)
Trading Symbol	AIRTP
Security Exchange Name	NASDAQ