Purchase Agreement dated May 12, 2017, by and between Contrail Aviation Support, LLC and China Airlines Ltd

1.  Definitions

2.  Sale

3.  Purchase Price; Deposit; Purchase Price Adjustment

4.  Inspection of Aircraft; Value at Closing; Delivery Condition; Deregistration; Export

5.  Representations and Warranties of Seller

(a)   Organization, Etc.

(b)   Organizational Authorization

(c)   No Violation

(d)   Approvals

(e)   Valid and Binding Agreements

(f)   Litigation

(g)   Encumbrances

(h)   Brokers’ Fees

(i) Title to Interests

(j) Operation

6.  Disclaimer

7.  Representations and Warranties of Buyer

(a)   Organization, Etc.

(b)   Authorization

(c)   No Violation

(d)   Approvals

(e)   Valid and Binding Agreements

(f)   Litigation

(g)   Broker’s Fees

8.  Conditions Precedent to the Obligations of Seller

(a)   Purchase Price

(b)   Due Authorization, Execution and Delivery

(c)   Representations and Warranties

(d)   Additional Information

(e)   Illegality

(f)   No Proceedings

(g)   Delivery Location

(h)   Approvals, Consents and Notices

(i) Insurance

9.  Conditions Precedent to the Obligations of Buyer

(a)   Due Authorization, Execution and Delivery

(b)   Representations and Warranties

(c)   Additional Information

(d)   Illegality

(e)   No Proceedings

(f)   Delivery Location

(g)   Material Damage

(h)   Liens

10.  International Registry

11.  Further Assurances

12.  Taxes, Indemnities and Insurance

(a)   Buyer’s Obligations regarding Taxes

(b)   Seller’s Indemnity

(c)   Buyer’s Indemnity

(d)   Withholding

(e)   Contest Resolution

(f)   Cooperation

(g)   Notice of Claims

(h)   Insurance

13.  Know Your Customer

14.  Miscellaneous

(a)   Notices

(b)   Confidentiality

(c)   Limitation of Liability of Any Party

(d)   Headings

(e)   References

(f)   Governing Law

(g)   Arbitration/Jurisdiction

(h)   Severability

(i) Amendments in Writing

(j) Survival

(k)   Expenses

(1)   Execution in Counterparts

(m) Entire Agreement

(n)   Exhibits and Schedules

(o)   Successors and Assigns

(p)   No Third Party Benefit

(q)   Assignment

The purchase price for the Aircraft shall be in the amount and allocated (as applicable) as set forth on Schedule 2 hereto (collectively and individually, the “Purchase Price”).

Buyer has previously paid to Seller a security deposit in the amount and allocation (as applicable) as set forth on Schedule 2 hereto (the “Deposit”) which shall be non-refundable to Buyer unless any of the following events occur:

Seller fails to deliver the Aircraft to Buyer on or before the Final Closing Date;

the Aircraft suffers an Event of Loss or Material Damage between the time of Technical Acceptance and Delivery. “Material damage” shall mean any damage 1) exceeding $100,000 in the total amount; 2) affecting the current non-incident statement; or 3) preventing Buyer from ferrying the Aircraft to the U.S.A. (Buyer shall negotiate in good faith with Seller to resolve concerns over any material damage to the Aircraft before requesting termination of the Purchase Agreement and return of the Deposit.);

Buyer’s or Seller’s material breach of this Agreement;

Buyer does not issue the Certificate of Technical Acceptance to Seller; or

Seller’s inability to satisfy the Conditions Precedent listed in Section 9 of this Agreement, save where such failure is as a result of Buyer’s breach of the Purchase Agreement.

Prior to Closing, Seller shall provide an original undated signed bill of sale in the form shown on Exhibit C, and Buyer shall provide an original undated signed delivery receipt for the Aircraft in the form shown on Exhibit A, to an escrow agent designated by Buyer, and reasonably acceptable to Seller, to be held by such escrow agent until Seller gives notice that the full Purchase Price has been received by Seller. Said bill of sale shall be delivered (and shall only be delivered) to Buyer by the escrow agent upon receiving Seller’s email confirmation of receipt of the full Purchase Price in cleared funds in Seller’s bank account, which confirmation Seller shall provide immediately upon receiving the Purchase Price.

At Closing, Buyer shall deliver to Seller an amount equal to the Purchase Price (less the Deposit), in immediately available funds, by wire transfer to the following account:

Buyer shall have the opportunity to perform inspections of the Aircraft and Aircraft Documents prior to Closing at Taiwan Taoyuan International Airport (“Inspection”). Buyer shall be entitled to perform a general inspection of the Aircraft, including (i) a physical “walk around” inspection of the Aircraft interiors and exteriors; (ii) review of the engine borescopes and engine performance checks and (iii) an inspection of all Aircraft Documents relating to such Aircraft. Upon Buyer’s confirmation that the Aircraft and Aircraft Documents are in a condition required by this Agreement and as otherwise acceptable to Buyer, Buyer shall execute and deliver to Seller the Certificate of Technical Acceptance.

Seller shall provide to Buyer at the time of delivery all Aircraft records, including but not limited to, the following current documentation: (i) updated disk sheets, and (ii) non-incident statement(s) and non-PMA/DER statement(s), all in the form presented to Buyer in connection with the Inspection.

The confidential portion has been omitted pursuant to a request for confidential treatment filed by Air T, Inc. with the Securities Exchange Commission and filed separately with the Commission.

At Closing, the Aircraft (including the Aircraft Documents) shall be delivered to Buyer in “as-is” “where-is” basis. Seller makes no warranties, guarantees or representations of any kind, either express or implied, statutory or otherwise, as to the condition of the Aircraft.

The export and re importation of the Aircraft under this Agreement are subject to the export laws of the State of Registration. Buyer shall be responsible for the post-closing exportation process required for the Aircraft, including any and all costs associated therewith.

Organization, Etc. Seller is duly organized, validly existing and in good standing under the laws of Taiwan, Republic of China with all requisite organizational power and authority to own, participate in or hold under lease its properties and enter into and perform its obligations under this Agreement and the Transfer Documents to which Seller is or will be a party (collectively, the “Seller Agreements”);

Organizational Authorization. Seller has taken, or caused to be taken, all necessary organizational action (including, without limitation, the obtaining of any consent or approval of any of its board of directors or committee thereof or any officers required by its charter documents or other organizational agreements) to authorize the execution and delivery of this Agreement and each of the Seller Agreements and the performance of its obligations hereunder and thereunder;

No Violation. The execution and delivery by Seller of this Agreement and the Seller Agreements, the performance by Seller of its obligations hereunder and thereunder and the consummation by Seller on the date hereof and on the Closing Date of the transactions contemplated hereby and thereby, do not and will not (i) violate or contravene any provision of the charter documents or other organizational agreements of Seller, (ii) violate or contravene any law applicable to or binding on Seller or (iii) violate, contravene or constitute any default under, or result in the creation of any lien upon, any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, lease, loan or other material agreement, instrument or document to which Seller is a party or by which Seller or any of its properties is or may be bound or affected;

Approvals. The execution and delivery by Seller of this Agreement and the Seller Agreements, the performance by Seller of its obligations hereunder and thereunder and the consummation by Seller on the Closing Date of the transactions contemplated hereby or thereby do not and will not require the consent, approval or authorization of, or the giving of notice to, or the registration with, or the recording or filing of any documents with, or the taking of any other action in respect of any Government Entity;

Valid and Binding Agreements. This Agreement has, and the Seller Agreements have been or as of the Closing Date will have been, duly authorized, executed and delivered by Seller and, assuming the due authorization, execution and delivery by the other party or parties thereto, this Agreement and, as of the Closing Date, the Seller Agreements constitute the legal, valid and binding obligations of Seller and are enforceable against Seller in accordance with the respective terms thereof, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium and other similar laws affecting the rights of creditors generally and general principles of equity, whether considered in a proceeding at law or in equity;

Litigation. There are no pending or, or to the knowledge of Seller, threatened actions or proceedings against Seller before any court, administrative agency or tribunal which, if determined adversely to Seller, would prohibit or materially adversely affect the ability of Seller to perform its obligations under this Agreement or the Seller Agreements;

Encumbranccs. Seller has not previously sold, assigned, encumbered, transferred or conveyed and, except as contemplated hereby, has no obligation to sell, assign, encumber, transfer or convey, any of its right, title or interest in, to or under the Aircraft;

Brokers’ Fees. Buyer shall not be liable for the fees of any broker or other Person acting on Seller’s behalf in connection with the transactions contemplated hereby;

Title to Interests. Seller is the sole owner of the Aircraft and has good title thereto, free and clear of any and all Liens. At Closing, such title shall be transferred to Buyer free and clear of all Liens.

Organization, Etc. Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of North Carolina, U.S.A., and has the power and authority to own, participate in or hold under lease its properties and to enter into and perform its obligations under this Agreement and the Transfer Documents to which Buyer is a party (collectively, the “Buyer Agreements”);.

Authorization. Buyer has taken, or caused to be taken, all necessary action (including, without limitation, the obtaining of any consent or approval of its members required by its certificate of formation or limited liability company agreement) to authorize the execution and delivery of this Agreement and each of the Buyer Agreements, as the case may be, and the performance of its obligations hereunder and thereunder;

No Violation. The execution and delivery by Buyer of this Agreement and the Buyer Agreements, the performance by Buyer of its obligations hereunder and thereunder and the consummation by Buyer on the Closing Date of the transactions contemplated hereby and thereby, do not and will not (i) violate or contravene any provision of the certificate of formation, limited liability company agreement, other charter documents or other organizational agreements of Buyer, (ii) violate or contravene any law applicable to or binding on Buyer or (iii) violate, contravene or constitute any default under, or result in the creation of any lien upon, any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, lease, loan or other material agreement, instrument or document to which Buyer is a party or by which Buyer or any of its properties is or may be bound or affected;

Approvals. The execution and delivery by Buyer of this Agreement and the Buyer Agreements, the performance by Buyer of its obligations hereunder and thereunder and the consummation by Buyer on the Closing Date of the transactions contemplated hereby and thereby do not and will not require the consent, approval or authorization of, or the giving of notice to, or the registration with, or the recording or filing of any documents with, or the taking of any other action in respect of, (i) any trustee or other holder of any debt of Buyer and (ii) any Government Entity;

Valid and Binding Agreements. This Agreement has been and the Buyer Agreements have been or as of the Closing Date will have been duly authorized, executed and delivered by Buyer and, assuming the due authorization, execution and delivery by the other party or parties thereto, this Agreement and, as of the Closing Date, the Buyer Agreements constitute the legal, valid and binding obligations of Buyer and are enforceable against Buyer in accordance with the respective terms thereof, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium and other similar laws affecting the rights of creditors generally and general principles of equity, whether considered in a proceeding at law or in equity;

Litigation. There are no pending or, to the knowledge of Buyer, threatened actions or proceedings against Buyer before any court, administrative agency or tribunal which, if determined adversely to Buyer would materially adversely affect the ability of Buyer to perform its obligations under this Agreement or the Buyer Agreements; and

Broker’s Fees. Seller shall not be liable for the fees of any broker or other person acting on Buyer’s behalf in connection with the transactions contemplated hereby.

Purchase Price. Seller shall have received the Purchase Price via wire transfer to Seller’s account as specified in Section 3;

Due Authorization, Execution and Delivery. This Agreement and each other Transfer Document shall have been duly authorized, executed and delivered by each party thereto other than Seller;

Representations and Warranties. The representations and warranties of Buyer contained herein and in any other Buyer Agreements shall be true and correct as of Closing in all material respects;

Additional Information. Seller shall have received such other documents and evidence with respect to Buyer as Seller may reasonably request in order to establish the authority of Buyer to consummate the transactions contemplated by this Agreement and the other Transfer Documents on such date, the taking by Buyer of all appropriate action in connection therewith and compliance by Buyer with the conditions set forth in this Agreement on such date;

Illegality. The performance on such date of the transactions contemplated hereby, upon the terms and conditions set forth herein, shall not, in the reasonable judgment of Seller, violate, and shall not subject Seller to any penalty or liability under, any law, rule or regulation binding upon Seller;

No Proceedings. No legal or governmental action, suit or proceeding shall have been instituted or threatened before any court, administrative agency or tribunal, nor shall any order, judgment or decree have been issued or proposed to be issued by any court, administrative agency or tribunal to set aside, restrain, enjoin or prevent the consummation of this Agreement or the transactions contemplated hereby;

Delivery Location. The Aircraft shall be located at the agreed Delivery Location;

Approvals, Consents and Notices. All approvals and consents of, or notices to, any Governmental Entity, any trustee or holder of any indebtedness or obligation of the Seller or any other person, which are required in connection with the transaction contemplated by this Agreement shall have been duly obtained, given or accomplished; and

Insurance. Seller shall have received the insurance certificate specified in Section 12(h).

Due Authorization. Execution and Delivery. This Agreement and each other Transfer Document shall have been duly authorized, executed and delivered by each party thereto other than Buyer;

Representations and Warranties. The representations and warranties of Seller contained in the Transfer Documents shall be true and correct as of the Closing Date in all material respects;

Additional Information. Buyer shall have received such other documents and evidence with respect to Seller as Buyer may reasonably request in order to establish the authority of Seller to consummate the transactions contemplated by this Agreement and other Transfer Documents on such date, the taking by Seller of all appropriate corporate action in connection therewith and compliance by Seller with the conditions set forth in the Transfer Documents on such date;

Illegality. The performance of the transactions contemplated hereby, upon the terms and conditions set forth herein, shall not, in the reasonable judgment of Buyer, violate, and shall not subject any Buyer to any penalty or liability under, any law, rule or regulation binding upon such Buyer;

No Proceedings. No legal or governmental action, suit or proceeding shall have been instituted or threatened before any court, administrative agency or tribunal, nor shall any order, judgment or decree have been issued or proposed to be issued by any court, administrative agency or tribunal to set aside, restrain, enjoin or prevent the consummation of this Agreement or the transactions contemplated hereby;

Delivery Location. The Aircraft shall be located at the agreed Delivery Location;

Material Damage. No Material Damage (as defined in Section 3) or an Event of Loss with respect to the Aircraft shall have occurred;

Liens. The Aircraft shall be free and clear of all Liens;

Buyer’s Obligations regarding Taxes. Buyer hereby agrees promptly to pay and indemnify each Seller Indemnitee from and against any and all Taxes payable in connection with the sale, transfer and delivery by Seller to Buyer of the Aircraft or in connection with any other transaction to occur on or after the Closing expressly contemplated hereby. The foregoing shall expressly exclude any liability for Taxes on or based on or measured by the gross or net income of Seller or capital gains of Seller or Taxes imposed by a taxing authority in a jurisdiction that would not have been imposed but for the business activity (other than the transactions contemplated hereby) or tax residence of Seller in such jurisdiction. The parties agree to cooperate in takingactions to minimize or eliminate Taxes in connection with this transaction.

Seller’s Indemnity. Seller hereby covenants and agrees that it will pay and assume liability for, and indemnify, protect, defend, save and keep harmless each Buyer Indemnitee from and against, any and all liabilities, Taxes, obligations, losses, damages, settlements, claims, actions, suits, penalties, costs and expenses (including, without limitation, reasonable fees and expenses of counsel) of whatsoever kind and nature which may at any time or from time to time be imposed upon, incurred by or asserted against any Buyer Indemnitee in any way relating to, resulting from or arising out of (i) any inaccuracy or breach of any representation or warranty made by Seller under this Agreement or any Seller Agreements, (ii) any failure by Seller to have observed or performed any of its obligations under or in connection with this Agreement or any Seller Agreements, or (iii) any claims made after Closing, solely to the extent any such claim is attributable to (A) the gross negligence or willful misconduct of Seller and occurring prior to Closing, or (B) the existence of any Liens on the Aircraft attributable to the period occurring prior to Closing.

Buyer’s Indemnity. Buyer hereby covenants and agrees upon demand of Seller to pay and assume liability for, and indemnify, protect, defend, save and keep harmless each Seller Indemnitee from and against, any and all liabilities, Taxes, fees, obligations, losses, damages, settlements, claims, actions, suits, penalties, costs and expenses (including, without limitation, reasonable fees and expenses of counsel) of whatsoever kind and nature which may at any time or from time to time be imposed upon, incurred by or asserted against any Seller Indemnitee in any way relating to, resulting from or arising out of (i) any inaccuracy or breach of any representation or warranty made by Buyer under this Agreement or any Buyer Agreements, (ii) any failure by Buyer to have observed or performed any of its obligations under or in connection with this Agreement or any Buyer Agreements in respect of or to the extent attributable to the period from and after Closing, or (iii) any claims made after Closing, solely to the extent such claim is not attributable (A) to the period occurring prior to Closing or (B) to Seller’s failure to perform its obligations under this Agreement or the Seller Agreements.

Withholding. If any Tax is required by law to be deducted or withheld from or with respect to any amount paid or payable by Buyer or the Seller pursuant to this Agreement (the “Paying Party”) to the other party hereto (the “Receiving Party”), then the Paying Party shall pay such additional amount as shall be necessary to enable the Receiving Party to receive, after all such withholding (including any withholding from or with respect to such additional amount), the amount that the Receiving Party would have received if such deduction or withholding had not been made.

Contest Resolution. If a claim is made by any tax authority against a party hereto (the “taxed party”) with respect to any Tax of which another party (the “indemnifying party”) is obligated to indemnify under this Section 12, the taxed party shall promptly notify the indemnifying party of such claim; provided, however, that the failure to give such notice will not prejudice or otherwise affect any of the rights of the taxed party hereunder unless such failure materially and adversely affects the indemnifying party in exercising its contest rights hereunder or to the extent such failure results in any increase in, or fine or penalty with respect to, any amounts claimed to be payable by the indemnifying party to the taxed party pursuant to this Section 12. If reasonably requested by the indemnifying party in writing, the taxed party shall (at the expense and direction of the indemnifying party) contest in the name of the taxed party or indemnifying party (as applicable), the validity, applicability or amount of such Taxes so indemnified by (i) if permitted by applicable law without adverse consequences to the taxed party, resisting payment thereof, (ii) paying under protest, if protest is necessary or proper, and (iii) if payment be made, using reasonable commercial efforts to obtain a refund thereof in appropriate administrative and judicial proceedings. If the taxed party becomes eligible for a refund of any Taxes paid by the indemnifying party, it shall notify the indemnifying party and, if reasonably requested by the indemnifying party and permissible under applicable law, the taxed party shall consider in good faith any request by the indemnifying party to assign such right to the indemnifying party. Should the taxed party obtain a refund of all or any part of the Taxes paid by the indemnifying party, the taxed party shall pay the indemnifying party the amount of such refund, plus, any interest thereon (net of any taxes imposed on such interest) obtained by the taxed party from the taxing authority if fairly attributable to such Taxes.

Cooperation. Seller and Buyer shall reasonably cooperate so as to minimize any potential tax risk to Buyer or Seller as a result of the transactions contemplated hereby. Seller and Buyer shall provide one another with such assistance as may reasonably be required in connection with the preparation of any tax return, any audit or other examination by any taxing authority, or any judicial or administrative proceedings relating to liability for Taxes arising from the transactions contemplated by this Agreement, and shall provide one another upon written request with any records or information that are relevant to such Tax return, audit or examination or proceedings. The party requesting assistance, records or information under the preceding sentence shall reimburse the other for reasonable out-of-pocket expenses incurred by the other in providing such assistance, records or information.

Notice of Claims. Seller and Buyer agree to provide written notification to the other party promptly after becoming aware of any liability, obligation or claim, whether pending or threatened, that is the subject of indemnification pursuant to this Section 12; unless the failure to provide such notification would not materially and adversely affect the indemnifying party in exercising its contest rights hereunder or result in any increase in, or fine or penalty with respect to, any amounts claimed to be payable by the indemnifying party to the other party pursuant to this Section 12, provided, that the failure by either party to so notify the other party will not in any manner affect either party’s other obligations under this Section 12.

Insurance. For the earlier of a period of two years after the purchase of the Aircraft or the dismantling of the Aircraft, or the airframe or engine, Buyer shall, or shall cause any subsequent buyer or operator to, at its own cost and expense, maintain and keep in full force and effect an insurance policy(ies) for the Aircraft and Engines providing $10,000,000 of aviation products liability coverage, except in the event that any Engine is returned to service, in which event $500,000,000 of aviation general liability coverage shall be provided with respect to such Engine. Aviation General Liability insurance covering Buyer’s or any operator’s aviation activities shall include Premises Liability, Contractual Liability, Products Liability, War Risks Liability, and including Extended Coverage Endorsement (Aviation Liabilities) AVN52 or equivalent covering War and Allied Perils excluded by War, Hijacking and Other Perils Exclusion Clause AVN48B or any modification or substitution thereof for the time in force. Such policies shall be carried with insurers reasonably acceptable to Seller. Such insurance shall include the Seller and any other Seller Indemnitees as Additional Insureds. Such policies shall include a Waiver of Subrogation Clause, Breach of Warranty Clause, and Severability of Interest Clause in favor of the Additional Insureds. Buyer shall furnish an insurance certificate evidencing the same at Closing, and, upon Seller’s request, at the expiration of an existing certificate.

Notices.

Confidentiality.

Each party hereto shall keep strictly confidential any and all Confidential Information furnished to it or to its Affiliates, or their respective officers, employees, agents, directors or advisers (collectively, “Representatives”) in the course of negotiations relating to this Agreement or any transaction contemplated by this Agreement, and the business and financial reviews and investigation conducted by any party hereto in connection with this Agreement, and each such party has instructed its Representatives having access to such Confidential Information of such obligation of confidentiality. The obligations of confidentiality set forth herein shall not apply to information to the limited extent (v) it is contained in a Transfer Document that is publicly filed as contemplated hereby; (w) it is required to be disclosed by any Governmental Entity or required to be disclosed by applicable law or administrative proceeding, (x) for which a party has received a subpoena or similar demand (provided that such party shall to the extent permitted by applicable law first, as promptly as practicable upon receipt of such subpoena or demand, furnish a copy thereof to the other party), (y) that such information is generally available to the public or in the possession of the receiving party before its disclosure by the disclosing party to the receiving party or (z) that it is given to the receiving party by another Person other than in breach of obligations of confidentiality owed by such Person to the disclosing party. Notwithstanding the foregoing, each party acknowledges and agrees that any party may disclose Confidential Information to (A) regulators, (B) such party’s counsel, Affiliates, beneficiaries, hedging arrangement providers, insurance brokers and providers, reinsurers and auditors provided that such recipients maintain the confidentiality of the Confidential Information and (C) prospective transferees and lenders who agree to keep such Confidential Information confidential.

Notwithstanding anything herein to the contrary, any party to this Agreement (and any Representative) may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure; provided, however, that such disclosure may not be made to the extent required to be kept confidential to comply with any applicable federal or state securities laws.

Limitation of Liability of Any Party. THE PARTIES ACKNOWLEDGE AND AGREE THAT, NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NO PARTY SHALL BE LIABLE TO ANOTHER PARTY TO THIS AGREEMENT OR ASSERT A CLAIM FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES, REGARDLESS OF THE NATURE OR THEORY OF ANY UNDERLYING CAUSE OF ACTION THAT MIGHT OTHERWISE APPLY.

Headings. Headings used herein are for convenience only and shall not in any way affect the construction of, or be taken into consideration in interpreting, this Agreement.

References. Any reference to a specific Section or Section number shall be interpreted as a reference to that Section of this Agreement unless otherwise expressly provided.

Governing Law; Jurisdiction; Attorney Fees. This Agreement and any other Transfer Documents shall in all respects be governed by, and construed in accordance with, the laws of the State of New York, U.S.A., including all matters of construction, validity and performance, without giving effect to principles of conflicts of law. The federal courts located in the State of New York shall serve as the exclusive forum for any such dispute and the parties irrevocably consent to the jurisdiction of such courts. In the event of a dispute between the parties, the prevailing party shall be entitled to reasonable attorney fees and costs.

Severability. If any provision hereof should be held invalid, illegal or unenforceable in any respect in any jurisdiction, then, to the fullest extent permitted by law, (i) all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be construed in order to carry out the intentions of the parties hereto as nearly as may be possible, and (ii) such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction.

Amendments in Writing. No amendment, modification, waiver, termination or discharge of any provision of this Agreement, or any consent to any departure by Seller or Buyer from any provision hereof, shall in any event be effective unless the same shall be in writing and signed by Seller and Buyer, and each such amendment, modification, waiver, termination or discharge shall be effective only in the specific instance and for the specific purpose for which given.

Survival. Notwithstanding anything contained herein to the contrary, all agreements, indemnities, representations and warranties contained in this Agreement shall survive the Closing Date and the consummation of the transactions contemplated hereby for such date.

Expenses. Each of Seller and Buyer shall be responsible for its own costs and expenses incurred in connection with the negotiation, preparation, execution and delivery of this Agreement and the Transfer Documents, and shall not have any right of reimbursement or indemnity for such costs and expenses as against the Buyer or Seller, respectively. Notwithstanding anything to the contrary, Buyer shall be responsible for any cost associated with the registration of the transfer of title in the State of Registration including any special aviation counsel fees. [Subject to review by Taiwanese counsel.]

Execution in Counterparts; Signatures. This Agreement, the other Transfer Documents and any amendments, waivers or consents hereto or thereto may be executed by Seller and Buyer in separate counterparts (or upon separate signature pages bound together into one or more counterparts), each of which, when so executed and delivered, shall be an original, but all such counterparts shall together constitute one and the same instrument. Promptly upon Closing, each Party shall provide executed originals of this Agreement and the Transaction Documents, as applicable, to the other Party. Nevertheless, facsimile and PDF copy signatures shall also be treated as original signatures for all purposes.

Entire Agreement. This Agreement and the other Transfer Documents constitute the entire agreement of Seller and Buyer with respect to the subject matter hereof or thereof, and all prior or contemporaneous understandings or agreements, whether written or oral, between Seller and Buyer with respect to such subject matter are hereby superseded in their entirety. In the event of a conflict between this Agreement and any other Transfer Document, the terms and conditions of this Agreement shall govern.

Exhibits and Schedules. The exhibits and schedules attached hereto are incorporated by reference herein and shall have the same force and effect with respect to the provisions set forth therein as though fully set forth in this Agreement.

Successors and Assigns. This Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by Seller and Buyer, and their respective successors and assigns.

No Third Party Benefit. Seller and Buyer agree that except as provided in Section 12 with respect to Seller Indemnitees and Buyer Indemnitees, the provisions of this Agreement, including, without limitation, Section 2, are for the sole benefit of Seller and Buyer and their respective successors and assigns, and are not for the benefit, directly or indirectly, of any other Person.

Assignment. Neither party shall assign or delegate this Agreement, or any of its rights or obligations hereunder, without the prior written consent of the other party.

Unless the context otherwise indicates, any reference in this Agreement to:

a “part” means any engine, module, component, instrument, furnishing, control, appliance, accessory, reverser, nacelle, equipment or other item or equipment of any kind whether similar to any of the foregoing or not;

a “regulation” includes any present or future directive, regulation, request or requirement (in each case whether or not having the force of law) but, if not having the force of law, the compliance with which is in accordance with the general practice of the persons to whom it is addressed;

any “agreement”, “license” or other document includes any agreement, license or other instrument as varied, novated, amended or replaced from time to time (but without prejudice to any restrictions on such variation, novation, amendment or replacement);

the expressions “hereof”, “herein” and similar expressions shall be construed as references to this Agreement as a whole and shall not be limited to the particular clause in which the relevant expressions appear and the expressions “thereof”, “therein” and similar expressions shall be construed in like fashion;

references to any statute or other legislative provision shall be read to include any statutory or legislative modification or re-enactment thereof or any substitution therefor;

references to a party shall be read to include its successors and permitted assigns;

a Clause or Schedule shall be construed as a reference to a clause hereof or a schedule hereto;

a word importing the singular number shall be construed so as to include the plural and vice versa;

the expression “in writing” includes by facsimile or e-mail; and

the index, clause and sub-clause headings in this Agreement (including their use in cross references) are for ease of reference only and shall not affect the interpretation of this Agreement.

In this Agreement, the following terms have the following meanings:

The confidential portion has been omitted pursuant to a request for confidential treatment filed by Air T, Inc. with the Securities Exchange Commission and filed separately with the Commission.

Copies of original Certificates delivered by the Manufacturer, such as:

Copies of original Documents delivered by the Manufacturer, such as:

Letters signed and stamped by Quality Assurance:

Current aircraft hours and cycles

Current engines hours and cycles, including LLP Disk Sheets

Accident and Incident report

Summary of Maintenance Program

AD compliance

Life-limited Parts status and traceability

AD compliance report

Engine Modification / service bulletin /inspection report and applicable forms

Last heavy maintenance records for each module

Engine log books

Engine removal history

Last 3 months’ trend monitoring reports

APU status (FH, FC, limits)

Life-limited Part status and traceability

AD compliance report

Modification status

Last heavy maintenance documents

APU log books

Last test cell report

Aircraft component inventory

Hard time component inventory

Landing Gear status with last Overhaul and life-limited Part status

AD compliance report

Modification status

Buyer has inspected the Aircraft in accordance with the provisions of Section 4 of the Agreement at [insert inspection location] and the Aircraft and found the Aircraft to be satisfactory; and

Buyer has received and inspected all of the Aircraft Documents and found them to be complete and satisfactory.