AERO SERVICES INTERNATIONAL INC, 10KSB/A, 1996-03-04

AERO SERVICES INTERNATIONAL INC
10KSB/A, 1996-03-04
PETROLEUM & PETROLEUM PRODUCTS (NO BULK STATIONS)

Previous: HALLWOOD ENERGY CORP, 10-K405, 1996-03-04

Next: AERO SERVICES INTERNATIONAL INC, 10QSB, 1996-03-04

THE PURPOSE OF THIS AMENDMENT IS TO ADD THE FINANCIAL DATA SCHEDULE

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-KSB - AMENDMENT #1

Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Fiscal year ended September 30, 1995 Commission file number
1-10190

Aero Services International, Inc.
(Exact name of registrant as specified in its charter)

Louisiana 72-0385274
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

660 Newtown-Yardley Road
Newtown, Pennsylvania 18940
(Address of principal Executive offices) (Zip Code)

(215) 860-5600
(Registrant's telephone number)

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

None

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

Common Stock (without par value)
(Title of Class)

Series A Cumulative Convertible Preferred Stock
(without par value)
(Title of Class)

Indicate by check mark whether the registrant (l) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]

State the registrant's revenues for the year ended September 30, 1995.
$10,400,740

State the aggregate market value of the voting stock held by nonaffiliates
of the registrant as of December 29, 1995.

- Common Stock (without par value) $361,911
(1) See Note Below

- Series A Cumulative Convertible
Preferred Stock $12,389
(2) See Note Below

(1) Based upon the average bid and asked prices of the Company's Common
Stock as of December 29, 1995.

(2) Based upon the closing bid price of the Company's Series A Cumulative
Convertible Preferred Stock as of December 29, 1995.

Indicate the number of shares outstanding held by nonaffiliates of each of
the Company's classes of Common Stock as of December 29, 1995:

- Common Stock (without par value) 3,966,147 shares.

State the number of shares outstanding of each of the Company's classes of
common equity as of December 29, 1995:

- Common Stock (without par value) 6,998,052 shares.

PART I

Item 1. Business

GENERAL DEVELOPMENT OF BUSINESS

Aero Services International, Inc. and subsidiaries ("the Company" or
"Aero"), founded in 1948, was incorporated in Louisiana under the name
"Pan-Air Corporation". Since 1976, the Company has conducted business
primarily under the name "Aero Services" and changed its name to "Aero
Services International, Inc." in 1980. The Company's corporate office is
located at 660 Newtown-Yardley Road, Newtown, Pennsylvania, 18940, and its
telephone number is 215-860-5600.

The Company is primarily a supplier of ground support services for
general aviation aircraft at three airports located in Chicago, Illinois;
New Orleans, Louisiana; and Morgantown, West Virginia, with its facilities
more commonly referred to as a "Fixed Base Operation" or "FBO". At
September 30, 1995 the Company operated an additional facility at Houston,
Texas, but sold it in November 1995. The Company provides on demand "line
services" for the general aviation fleet that includes the fueling, ground
handling and storage of aircraft along with the subleasing of hangar and
office space to tenants. In conjunction with its general aviation
activities the Company also provides, on a contractual basis, ground
support services for commercial airlines which would primarily include
fueling and deicing.

Beginning in October 1989, Triton Energy Corporation ("Triton"), who
had begun purchasing shares of the Company's stock in 1987 and by April
1990 owned 1,531,905 shares of common stock, 228,540 shares of Series A
preferred stock, and 250,000 shares of Series B preferred stock, began
providing financial assistance to the Company by guaranteeing certain long
term financing arrangements and by providing certain assurances to assist
in maintaining the liquidity of the Company. During 1990 Triton expanded
its support of the Company through a series of short term unsecured loans
which continued into 1993, and totalled $8,700,000 at September 30, 1993.
No loans were made during fiscal 1994.

During 1990 the management of the Company developed and began
implementing a business plan designed to return the Company to
profitability. Included within that plan were a series of measures to
reduce and control costs as well as plans to restructure and consolidate
the Company, to sell or otherwise dispose of unprofitable operations and
to focus the bulk of the Company's energy and resources on the remaining
operations. In August 1990 the Company's Board of Directors unanimously
ratified the strategy contained in the plan of the Company's management.

The application of the business plan from August 1990 until its
completion in February 1994 produced $6.7 million from the sale of 10 FBOs
that were producing combined sales in excess of $18 million but were
producing combined operating losses in excess of $800,000. While the
business plan did not reach management's goal of returning the Company to
profitability, operating losses were significantly reduced. In fiscal
1990, sales of $46 million produced an operating loss of approximately $6
million. But in fiscal 1994, sales were $21.7 million with an operating
loss of $2.7 million. Losses were reduced by the sale of non-profitable
facilities and by cost cutting methods applied to the remaining facilities
and to corporate overhead.

At the December 16, 1992 Board Meeting, Mr. John Pugh resigned as
Chief Executive Officer of the Company, a position he had held since
January 1991, effective January 1, 1993 and returned to Triton as
President and Chief Executive Officer of Triton Air Holdings. At the same
time, Mr. Pugh was appointed Chairman of the Company's Board of Directors
by its members. The Board appointed Mr. Wallace E. Congdon as the
Company's President and Chief Operating Officer also effective January 1,
1993. Mr. Congdon, a general aviation executive with more than 30 years
of experience, had been the Company's Vice President, Line Services prior
to his appointment. The Board elected not to fill the position of Chief
Executive Officer, but instead established an Executive Committee acting
in the role of Chief Executive Officer. Appointed to serve on the
Executive Committee were Mr. Pugh, Mr. William Dimeling and Mr. Richard
Hatchett.

During fiscal year 1993, the Company was notified by Triton that
Triton did not intend to extend financial support beyond October 1, 1993.
At the same time, Triton also indicated that it did not currently intend
to demand payment of any of the short term unsecured loans it had made to
the Company, nor of any of the Company's other indebtedness to Triton. As
of September 30, 1993 those short term amounts consisted of $8,700,000
plus accrued interest as well as guarantee fees of $2,006,000. Moreover,
as of September 30, 1993 Triton purchased the Company's revolving line of
credit from Whitney National Bank, in the principal amount of $6,910,000.
Triton indicated to the Company that it did not intend to demand payment
of any of these notes, totalling $17,616,000 within the next year,
although it retained the legal right to do so.

During fiscal 1994 Triton Energy Corporation and its subsidiary
Pacific Basin Company concluded the sale of the direct notes (Triton
loans), the Whitney National Bank notes acquired by Triton from Whitney,
all of its common stock and a large portion of Preferred A stock to
Transtech Holdings Co., Inc. (Transtech). Immediately prior to the sale
Triton converted all of its Preferred B stock into 1,500,000 shares of
common, which were included in the sale to Transtech.

Transtech is a holding company owned and managed by individuals with
management experience and ownership (direct and indirect) of other FBOs.
Concurrently with the sale of notes and securities, three persons, John
Pugh, Richard Hatchett, and Clark Van Nostrand, resigned as Directors of
Aero, and R. Ted Brant, Bobby R. Adkins, and Maurice Lawruk were named
directors of Aero. The new Board then elected R. Ted Brant, Chairman and
Chief Executive Officer.

At the same time, Transtech agreed to forgive a portion of the debt
($2,723,000) and further agreed to eliminate accrual of interest on the
debt from Aero through November 1994, and to forebear for the three years
collection of the remaining $15,610,000 of principal debt to the extent
that payments would exceed 50% of the Company's available cash flow.

The new Board then reviewed the Company's financial status and
determined that the Company needed to improve its liquidity so that it
would be in a position to maintain payables on a satisfactory basis and
have funds available for acquisition of alternative FBOs. Accordingly,
the Company sold its Scottsdale, Arizona; Richmond, Virginia; Tri-City,
Michigan; and Youngstown, Ohio bases. These sales produced over
$3,900,000 before expenses. In April 1995 the Company purchased 100% of
the stock of Mountain State Flight Services, Inc., (Mountain State), a
West Virginia corporation, for $390,000. Mountain State operates a FBO at
the Morgantown, WV airport. R. Ted Brant was a shareholder and President
of Mountain State.

The regulatory environment, particularly in terms of environmental
regulation, has changed dramatically over the last five to ten years for
all operators in the industry. In September 1988, for example, the
Environmental Protection Agency ("EPA") issued regulations for underground
storage tanks ("USTs") that has had a dramatic economic affect on the
industry and the Company. (See Environmental Protection on page 6.) The
effective commencement date for newly installed USTs was December 22, 1988
with all USTs having to conform to the new standards by December 1998.
During 1995 and 1994 the Company incurred expenses of $241,000 and
$16,000, respectively, in complying with these EPA regulations. At
September 30, 1995, the Company's financial statements include accruals of
$490,000 to complete any known clean-up and remediation liabilities
associated with complying with EPA regulations. Unfortunately, the
Company is unable to pass these significant cash outlays on to the
customer, accordingly the Company is unable to realize any tangible return
on these cash outlays.

The Company's independent accountants have issued a "disclaimer of
opinion" on the consolidated financial statements for the year ended
September 30, 1995. In their report to the Stockholders and Board of
Directors of the Company on page S-2 of this Annual Report on Form 10-KSB,
they cite the Company's recurring losses from operations and net capital
deficiencies at September 30, 1995 as factors that raise substantial doubt
about the Company's ability to continue as a going concern.

The Company's independent accountants issued a "going concern opinion"
on the consolidated financial statements and financial schedules for the
year ended September 30, 1994. In their report to the Stockholders and
Board of Directors of the Company they cited the Company's recurring
losses from operations and deficiencies in cash flow from operations for
the year ended September 30, 1994, and a net capital deficiency at
September 30, 1994, as factors that raised substantial doubt about the
Company's ability to continue as a going concern. The Company believes
that the 1995 and 1994 financial statements have been prepared in
accordance with generally accepted accounting principals applied on the
basis of assuming that the Company will continue as a going concern.

Management has decided that the best chance to maintain the viability
of the Company is to sell the remaining assets and use the proceeds to pay
the current liabilities. The market value of these assets is estimated to
provide enough cash to accomplish this goal with any excess to be used for
reinvestment. Several investment bankers have indicated an interest in
financing two or three major acquisitions if this plan is successful and
Transtech subordinated its debt, primarily because the Company would
retain approximately $24 million of net operating loss carryforward for
tax purposes. To this end, subsequent to September 30, 1995 the Company
has sold its lease and purchase option at Houston's Hobby Airport and
reached an agreement to participate in the ownership of a combination of
two FBOs, including one owned by the Company, at New Orleans' Lakefront
Airport. Also, negotiations are ongoing for the sale of the Chicago FBO.
The successful completion of this plan is no guarantee that the Company
can be returned to profitability or maintained as a going concern.

PRODUCTS AND SERVICES

Services

The Company supplies ground support services to corporate and other
general aviation aircraft at facilities located at four (which includes
one sold subsequent to September 30, 1995) airports in the United States.
The Company provides line services (including fuel sales, aircraft
handling and storage, and ancillary customer services), subcontracts
maintenance and repairs of aircraft, and leases hangar and office space to
various tenants. The Company also provides ground support services
(including fueling and deicing) to commercial airlines, air freight
carriers and overnight courier services at some of its locations.

Line Services

Line services are ground support services that facilitate the
day-to-day operation of aircraft. The primary line services rendered by
the Company are aircraft fueling, handling, cleaning, towing, tie-down and
aircraft hangar storage. In connection with these services, the Company
provides amenities for the passengers and crews of the aircraft, such as
passenger and pilot lounges, flight planning assistance and weather
information facilities, conference facilities, arranging of travel and
hotel accommodations, aircraft catering and ground transportation.

The Company's line service customers are primarily owners and
operators of corporate aircraft, including those based at the Company's
facilities and others that are transient. Although the business of
providing line services is highly competitive, the Company is the only
such provider at one of the airports where it maintains facilities and a
significant fuel supplier at another. At one of the other locations, the
Company operates one of four FBOs, and at the other, one of five.

Aircraft Maintenance and Repair

With the sale of the facilities at Tri-City, Michigan and Youngstown,
Ohio during the year ended September 30, 1995 and the subsequent sale of
its Houston, Texas facility in November 1995, the Company no longer
operates a major maintenance service center. Minor repairs are performed
at Morgantown and all maintenance at Chicago is subcontracted to another
company. New Orleans sold its avionics shop in September 1995, and there
are no avionics repairs at the other facilities.

Hangar and Office Leasing

The Company leases hangar, ramp (tie down) and office space to
customers whose aircraft are based at its various facilities and to
various aviation related businesses. Leases of hangar space vary in
duration and are most often associated with line service customers who
operate corporate and private aircraft. Office space tenants include
corporate flight departments, aircraft sales and charter operations,
aircraft insurance agencies, airport auto rental agencies, flight schools,
and similar aviation related businesses.

Commercial Airline Services

Commercial airline ground support services are provided to airlines
and regional air carriers on a contractual basis at one Company FBO.
Services provided include aircraft fueling and de-icing. In commercial
airline fueling, the Company receives a fee for transporting fuel owned by
the airline from a storage facility and pumping the fuel into the
airline's aircraft.

SUPPLIES

A major percentage, 56%, of the Company's sales during its last fiscal
year was derived from the sale of fuel. The availability to the Company
of an adequate supply of fuel, particularly jet fuel, is critical to the
Company's operations. The Company purchases fuel from two suppliers, with
Exxon as the major one. Management believes that the present allocations
of fuel and other supplies are adequate to meet overall demand for the
foreseeable future. Supplies could be interrupted, curtailed or allocated
in the event of a refinery shutdown, severe weather or war.

INVENTORY

Because of the nature of its business, the Company is not generally
required to maintain large amounts of inventory to meet customer
deliveries.

SEASONAL BUSINESS

The Company's business is not seasonal other than a three month
general decline in activity from mid-November until mid-February of each
year due to inclement weather and holidays, both of which cause a
reduction in general aviation travel.

BACKLOG

The Company does not have a significant backlog of orders for its
goods or services due to the nature of its business as a provider of goods
and services on demand.

RESEARCH AND DEVELOPMENT: NEW PRODUCTS

The nature of the Company's business is service related with no
amounts of money devoted to research and development.

ENVIRONMENTAL PROTECTION

The Company's business involves the storage, handling and sale of
aviation fuel utilizing underground storage tanks ("USTs"). Accordingly,
the operations of the Company are subject to a number of federal, state
and local environmental laws and regulations, which govern the use of
hazardous substances, including the storage and sale of aviation fuels,
and also including regulations of USTs.

In September 1988, the Environmental Protection Agency ("EPA") issued
regulations that required all newly installed USTs be protected from
corrosion, be equipped with devices to prevent spills and overfills, and
have a leak detection method that meets certain minimum requirements. The
effective commencement date for newly installed tanks was December 22,
1988. The only USTs installed by the Company since December 22, 1988 were
at the Company's former FBO located at Scottsdale, AZ which meets the new
standards for USTs. Underground storage tanks in place prior to December
22, 1988 must conform to the new standards by December 1998 or be removed.

Since the new EPA regulations were issued in September 1988 the
Company has reviewed its UST situation and has developed an EPA compliance
program that will systematically ensure the Company's full compliance with
these new standards by December 1998.

During 1995 and 1994, the Company incurred clean-up/remediation
expenses of $241,000 and $16,000, respectively, in complying with these
EPA regulations. At September 30, 1995, the Company's financial
statements include accruals of $490,000 for expected future clean-
up/remediation costs for existing known liabilities. While the Company
believes that all EPA problems have been identified and adequately accrued
for, it realizes that future substantial environmental liabilities are
possible in order to remain in compliance, it does not anticipate
experiencing any competitive disadvantage because the entire industry is
subject to these regulations. The Company believes it has adequate
reserves for its environmental liabilities. (See Notes to Consolidated
Financial Statements, Note F4.)

The Company does not presently maintain insurance covering losses
associated with environmental contamination. All the states in which the
Company owns or operates USTs have state operated "trust funds" which
could reimburse the Company for certain clean-up costs and liabilities
incurred from USTs. These funds, which essentially provide insurance
coverage for certain environmental liabilities, are funded by taxes on
USTs or fuels purchased within each respective state. The coverages
afforded by each state vary, but generally provide up to $1,000,000 for
the clean-up of environmental contamination and most provide for third
party liability as well. The funds require the Company to pay deductibles
ranging from $5,000 to $50,000 per occurrence.

The Company is subject to added exposure either because new situations
of contamination are discovered and/or because the regulatory environment
becomes more burdensome. Nonetheless, the Company has taken reasonable
steps currently available to accurately estimate future expenses required
by compliance with environmental regulations. Based on all information
available to date, and further based on existing regulations, the Company
has established sufficient accruals to meet its estimated identified
obligations.

FOREIGN OPERATIONS

The Company did not have any foreign sales during the last two fiscal
years.

GOVERNMENT CONTRACTS

The Company does not have any contracts with the Government which are
subject to renegotiation of profits.

COMPETITION

The Fixed Base Operations industry is highly competitive with
approximately 4,000 FBOs nationwide. Some of the Company's competitors
are highly experienced operators of networks with substantial resources,
such as Signature Flight Support which competes with the Company at Midway
Airport, Chicago. The nature of the business is such that the competition
is not necessarily confined to the same airport but extends to other
airports, due to the mobility of aircraft.

RECENT DEVELOPMENTS

On January 1, 1993, Mr. John L. Pugh resigned his position as
President and Chief Executive Officer of the Company, while remaining as
a director. He was elected Chairman by the members of the Board of
Directors and also of the Executive Committee of the Board, which acts as
the Chief Executive Officer of the Company. Simultaneously with Mr.
Pugh's resignation, the Board appointed Mr. Wallace E. Congdon, who had
been serving as Vice President, Line Services, as its President and Chief
Operating Officer.

On March 4, 1993, at the Annual Shareholders Meeting, all six sitting
directors were re-elected to the Board of Directors with Mr. Pugh
appointed to serve as Chairman.

Mr. Puetz and Mr. Crowell resigned as members of the Board of
Directors effective April 5, 1993 and May 21, 1993, respectively, both
citing personal reasons. Both Mr. Puetz and Mr. Crowell were Designated
Directors. The holders of the Series A preferred stock were advised that
they had the right to elect new Designated Directors to replace Messrs.
Puetz and Crowell, but did not indicate an interest in doing so. Those
positions therefore remained vacant until the annual meeting held May 17,
1995.

On June 1, 1993, Wallace E. Congdon, President and Chief Operating
Officer of the Company was appointed as a director to fill one of the
vacancies on the Board, bringing the Board membership to five (5) members.

On March 22, 1994, at the Annual Shareholders Meeting, John L. Pugh,
William R. Dimeling, Richard J. Hatchett, III, Clark Van Nostrand, and
Wallace E. Congdon were re-elected to the Board of Directors with Mr. Pugh
remaining as Chairman.

On May 20, 1994 Triton sold a major portion of its holdings in the
Company to Transtech along with $15,610,000 of notes payable and
$2,723,000 of accrued interest and fees due from the Company.
Simultaneously, Messrs. Pugh, Hatchett, and Van Nostrand resigned as
members of the Board of Directors. They were replaced by R. Ted Brant,
Bobby R. Adkins, and Maurice A. Lawruk, all of whom are officers or
directors of Transtech.

On May 31, 1994 the members of the Board of Directors elected R. Ted
Brant as Chairman; appointed Christopher M. Cicconi, Esquire, a partner in
the law firm of Eckert, Seamans, Cherin and Mellott as Secretary of the
Company; and appointed Paul R. Slack as Treasurer of the Company, in
addition to his position as Controller and Chief Accounting Officer.

On April 1, 1995 the Company purchased 100% of the outstanding stock
of Mountain State Flight Services, Inc. (Mountain State), a West Virginia
corporation that operates a FBO at the Morgantown, WV airport. The price
of the stock was $110,000. In addition, the Company had previously made
loans to Mountain State totalling $280,000 and secured by promissory
notes. There was no repayment of any amount prior to the purchase.

On May 17, 1995, at the Annual Shareholders Meeting, R. Ted Brant,
Wallace E. Congdon, Maurice A. Lawruk, Bobby R. Adkins, and William R.
Dimeling were re-elected to the Board of Directors, with Messrs. Brant,
Congdon, and Lawruk serving as regular directors and Messrs. Adkins and
Dimeling as Designated Directors.

On November 8, 1995, the Company sold its operating lease and purchase
option with Eagle Air to operate a FBO at Houston's Hobby Airport to
TigerAir, a corporation formed by Wallace Congdon. The purchase price was
$250,000 in the form of a promissory note. Based on the results of
operation during 1995, the Company believes significant uncertainties
exist as to the ability of TigerAir to generate the required cash
necessary to repay the note. Therefore, the Company will elect to defer
recognition of the gain on this sale. Simultaneous with the closing, Mr.
Congdon resigned his positions as President, Chief Operating Officer, and
Director of the Company.

On November 20, 1995 the members of the Board of Directors elected R.
Ted Brant as President and Chief Operating Officer of the Company.

On January 30, 1996 the Company entered into an agreement with Jason
IV Aviation, Inc. (Jason IV) to participate in the ownership of a
combination of two FBOs at Lakefront Airport, including one that the
Company owns there. Jason IV also operates at the airport. Actual
details of the agreement are being worked out.

EMPLOYEES

As of September 30, 1995, the Company had approximately 80 full-time
and 12 part-time employees. None of the employees are represented by a
union.

Item 2. Properties

The Company's corporate headquarters are located at 660
Newtown-Yardley Road in Newtown, Pennsylvania. In addition, at the time
of filing of this report, the Company operates general aviation services
facilities, commonly referred to as FBOs located at two (2) airports in
the U.S. under terms of agreements that are combinations of leases or
subleases and operating agreements between the airport operator, which may
be a city, county or other public body, and the Company. The unexpired
terms of the Company's FBO lease agreements are nine (9) years and twelve
(12) years.

The Company's other principal properties are (1) leasehold
improvements, such as hangars and fuel storage facilities; (2) equipment,
such as tugs, ground support and other vehicles and shop equipment; and
(3) inventories of fuel, parts, and equipment. The Company considers
that, in general, its physical properties (including machinery and
equipment) are well maintained, in good operating condition and adequate
for their purposes.

The Company presently has operations at the following airports:

City Airport

Chicago, IL Midway Airport
Morgantown, WV Morgantown Airport

The Company's facilities at Morgantown Airport are maintained pursuant
to leases by the Company from the owner and operator of the airport. The
facility at Midway Airport is maintained pursuant to subleases from
Beckett Aviation which is a wholly owned subsidiary of the Company. The
Company generally owns the leasehold improvements, equipment, furniture
and fixtures, vehicles and other property located there either directly or
through Beckett.

For further discussion the reader is referred to Footnote I - Certain
FBO Matters - in the financial statements attached hereto.

Item 3. Legal Proceedings

The Company is subject to several complaints filed over the last
several years in different courts or administrative agencies by different
individual former employees challenging the termination of their
employment by the Company on a variety of grounds. These claims are
encountered in the ordinary course of business, and in the opinion of
management, the resolution of these matters, either individually or in the
aggregate, will not have a material adverse effect on the Company's
financial position, cash flow, and operations in excess of accruals
already recorded. Management believes that it has established adequate
reserves for all of these claims.

In October 1992, Mary Ann Durette filed an action, individually and
as executrix, in North Carolina Superior Court, Wake County, against the
Company, Hess Aviation, Inc., Donald Weinhold and others seeking
compensatory damages in no specified amount resulting from a fatal
aircraft accident which occurred in December 1991. The co-defendants are
Weinhold, the pilot of the aircraft and a related company, and Hess, the
company which performed an annual inspection on the aircraft in November
1991. The pilot had brought the aircraft to the Company for service after
an incident in the spring of 1991. The Company removed one engine and
propeller, sent them respectively to Triad Aviation, Inc. and H & H
Propeller Services for repair, and thereafter reinstalled them on the
aircraft. The Company has filed third party claims against both Triad and
H & H for contribution and indemnity in the event of liability. The
Company has been defending the claims through legal counsel engaged by the
Company's liability insurance carrier. In November 1995, the Company was
advised by legal counsel that these claims were subject to a proposed
settlement. The Company's share of the settlement is $350,000, with
approximately $30,000 being uninsured. An attorney for the Company
negotiated the liability in this matter down to a total of $10,000, which
was paid in January 1996. The Company accrued the liability of $330,000
and has recorded a receivable from the insurance company in the amount of
$320,000 at September 30, 1995.

By letter of December 21, 1995, the Company was advised that the
Company had lost, in a binding arbitration proceeding, the defense of a
claim by Continental Airlines for alleged defective repairs performed by
the Company. The total amount awarded to Continental Airlines is
$485,858. At this point, the Company has not been officially advised as
to the portion of this award that is uninsured, but the Company's
insurance agent has unofficially estimated the amount to be approximately
10% of the total. At September 30, 1995 the Company has accrued $485,858
for this liability and has recorded a receivable from the insurance
company of $435,858.

On September 8, 1995, the United States District Court in Arizona
entered a Consent Decree which resulted in the settlement of all claims
against the Company brought by Don't Waste Arizona, Inc. The settlement
arrangements, incorporated into the Consent Decree, required the payment
of $10,000 by the Company.

On December 19, 1994 the Company received its first notice of tax due
from the State of New York in the amount of $163,000 for a diesel motor
fuels tax resulting from an audit performed in September 1994. The first
assessment covered the quarter ended November 30, 1991. The audit period
covered July 1991 through November 1993, when the Company sold its
facility in New York. Additional assessments for the period December 1,
1991 through August 31, 1992 have been received by the Company reflecting
assessments in the additional amount of $502,000. Based on current
information, it is anticipated that the total assessments for the audit
period will be approximately $1,400,000. Management has authorized the
Company's accountants to file appeals of all such assessments, and several
such appeals are currently pending and management intends to request
dismissal of these assessments. However, based upon additional research
by the Company's tax accountants and discussions with representatives of
New York state, the Company's management has decided to recognize the
potential liability in full and the financial statements at September 30,
1995 include an accrual of $1,457,000 for these assessments.

The Company is also exposed to a number of asserted and unasserted
potential claims encountered in the normal course of business. In the
opinion of management, the resolution of these matters, as well as those
discussed above or referenced elsewhere in this report, will not have a
material adverse effect on the Company's financial position, cash flow,
and operations in excess of what has already been recorded. Management
believes that it has established adequate reserves for all of these
claims.

Item 4. Submission of Matters to a Vote of Security Holders

During the fourth quarter of the fiscal year ended September 30, 1995,
no matters were submitted for a vote of security holders.

PART II

Item 5. Market for the Registrant's Common Stock and Related Security
Holder
Matters.

(a) PRICE RANGE OF COMMON STOCK

The Company's common stock, is traded in the "pink sheets" and was
also listed on the Boston Stock Exchange with the symbol AER B. However,
the Company was informed by the Boston Stock Exchange by letter dated
December 22, 1993 that the Company has fallen below its listing
requirements. Specifically, the Company's stockholder equity is below the
minimum requirement of $500,000 and the market value of public shares is
also below the minimum requirement of $500,000. The Boston Stock Exchange
must be notified in writing within 30 days of notification of the
Company's plans to rectify these deficiencies and the time frame in which
it will be accomplished. The Company responded accordingly. However, the
inability to resolve these deficiencies led to the suspension of trading
and the delisting of the Company on March 4, 1994.

The following table sets forth the high and low bid prices of the
common stock for the periods indicated. The bid prices represent
inter-dealer quotations, without retail mark-ups, mark-downs or
commissions, and may not represent actual transactions.

COMMON

HIGH LOW
Fiscal Year 1995:
First Quarter .08 .02
Second Quarter 1/16 .02
Third Quarter .15 .03
Fourth Quarter .15 1/8

Fiscal Year 1994:
First Quarter .08 .01
Second Quarter 3/16 .05
Third Quarter 3/16 1/16
Fourth Quarter 1/8 1/32

(b) APPROXIMATE NUMBER OF EQUITY SECURITY HOLDERS

As of September 30, 1995 there were approximately 671 record holders
of the Company's common stock. Included in the number of stockholders of
record are stockholders who have chosen to have their shares held in
"nominee" or "street" name. The Company does not know how many additional
shareholders this represents.

The Company has not paid cash dividends on its common stock, and the
Board of Directors of the Company has adopted a policy of retaining
earnings, if any, for operations and the expansion of the Company's
business. Therefore, the Company anticipates that it will not pay any
cash dividends on its common stock in the foreseeable future. The credit
facility signed in December 1989 prohibits the payment of dividends
without the prior written approval of the lender. Further, cash dividends
and certain other distributions on common stock are prohibited unless all
accrued dividends on the preferred stock have been paid. The total
dividends in arrears relating to preferred stock is $2,261,154 at
September 30, 1995.

Item 6. Management's Discussion and Analysis of Financial Condition and
Results of Operations

Overview

The Company's business began in 1948 at a single location and expanded
to 13 airports by 1984. In 1985 the Company purchased Beckett Aviation,
which added nine more facilities. Through sales and closures of certain
locations, the number has been reduced to four at September 30, 1995. One
additional location was sold in November 1995.
Number of FBOs
At September 30, 1993 10
Sold during fiscal 1994 (5)

At September 30, 1994 5
Sold during fiscal 1995 (2)
Purchased during fiscal 1995 1

At September 30, 1995 4

Results of Operations

The following table presents, as a percentage of net sales, certain
selected financial data for the Company for the periods indicated.

YEAR ENDED
SEPTEMBER 30,

1995 1994

Net Sales 100.0% 100.0%
Cost of Sales 51.2 53.5
Departmental costs 48.7 42.1
Administrative costs 8.0 7.8
Interest expense 16.7 7.0
Environmental Protection and
remediation cost - 0.1
Litigation costs, settlements,
and other assessments 2.2 1.9
Gain on sale of FBO operations 2.8 11.4
Other expense 11.3 0.7
Net loss (35.3) (1.7)

For a basis of comparison, the results of operations of the four remaining
facilities at September 30, 1995 are presented for the years ended September 30,
1995 and September 30, 1994. The results at Morgantown are shown from the
acquisition date of April 1, 1995.

September 30, 1995

(Dollar amounts in thousands)

CHICAGO HOUSTON NEW ORLEANS MORGANTOWN

NET SALES $4,476 $1,681 $2,108 $439

COST AND EXPENSE
Cost of Sales 1,944 1,044 1,191 256
Departmental Costs 1,618 893 722 188
Administrative Costs 179 84 73 24
Interest Expense 159 - - 1
EPA 2 - - -
Litigation Costs 12 22 7 3
562 (362) 115 (33)
Other Income/(Expense) 6 (12) 48 17

Net Income/(Loss) $ 568 $ (374) $ 163 $(16)

September 30, 1994
(Dollar amounts in thousands)

CHICAGO HOUSTON NEW ORLEANS MORGANTOWN

NET SALES $3,745 $1,979 $2,639 N/A

COST AND EXPENSE
Cost of Sales 1,656 1,286 1,514
Departmental Costs 1,484 560 797
Administrative Costs 178 50 81
Interest Expense 123 - -
Litigation Costs 16 18 4
288 65 243
Other Income/(Expense) (9) (1) -

Net Income/(Loss) $ 279 $64 $ 243 N/A

Comparison of the Years Ended September 30, 1995 and 1994

Sales for the year ended September 30, 1995 decreased by $11,328,000
compared to 1994. The combined sales of Chicago, Houston, and New
Orleans, the only FBOs to operate during all of both years, declined
$98,000 to $8,265,000. Morgantown, purchased during 1995, produced
$439,000 of sales. Therefore, the result of seven facilities being sold
during 1994 and 1995 caused a reduction of $11,669,000 in sales.

Cost of sales at continuing operations decreased from 53.3% in fiscal
1994 to 50.6% in fiscal 1995. With Morgantown included, the fiscal 1995
percentage increases to 51.0%.

Departmental costs at continuing operations (including corporate)
increased $438,000 (15.0%) and the purchase of Mountain State in fiscal
1995 added another $188,000. However, the sales of FBOs reduced expenses
in 1995 by $4,731,000 for a net decrease of $4,105,000 as compared to
fiscal 1994. These expenses increased $333,000 at Houston because for
half of the fiscal year the Company was paying rent and utilities at two
facilities until repairs were completed on the new FBO and the maintenance
shop moved into the new facility. The repairs alone accounted for $99,000
of the increase. An additional EPA accrual of $237,000 added to the
increase.

Administrative costs decreased $850,000 with $643,000 the result of
facility sales. Corporate administrative costs were reduced by $257,000
(41.2%), with the major reduction ($160,000) in director's and auditing
fees. This reduction was offset by $27,000 of increases at other
locations, primarily Houston. Administrative costs at Morgantown were
$24,000.

Interest expense due to Transtech increased by $315,000 (26.2%) due
entirely to rate increases. The interest rates on those notes are based
on prime. Other interest expense decreased by $98,000, primarily the
result of debt reduction of $774,000. The net effect was an increase of
$217,000 of expense. The Company paid Transtech $809,000 of interest
during fiscal 1995.

The Company accrued an additional $237,000 for EPA remediation
projects during fiscal year 1995. Only $4,000 of expenses were recorded
during the year for items such as removal of used oil. At September 30,
1995 the financial statements of the Company included accruals for the
resolution of environmental matters in the amount of $490,000.

The Company incurred legal expenses of $229,000 a reduction of 42.6%
from fiscal 1994.

The fixed base operations industry is highly competitive particularly
regarding fuel pricing. The flying range of business aircraft allows
pilots considerable discretion in selecting locations to purchase fuel.
As a consequence, the Company expends considerable effort in tracking
competitive pricing situations on a regular basis both at airports where
the Company operates facilities and other airports that are deemed to
represent competitive situations. Due to these competitive pressures the
Company is not always able to pass cost increases on to its customers (see
Pages 7 through 9, Competition and Properties).

Comparison of the Years Ended September 30, 1994 and 1993

Sales for the year ended September 30, 1994 decreased by $14,416,000
as compared to the previous year. The majority of the decrease is the
result of four facilities being sold during the first half of the current
year and one being sold in the fourth quarter of fiscal year 1993.
Comparing only continuing operations, including Richmond and Scottsdale
which were sold in September 1994, sales decreased $1,227,000 (5.7%). 83%
of that decrease is attributable to decreased maintenance sales at two
locations. Another 10% ($123,000) is due to a 3.4% decrease in gallons of
fuel sold, all of which occurred at Richmond and Scottsdale.

Cost of sales at continuing operations was reduced from 55.5% in
fiscal 1993 to 53.9% in fiscal 1994.

Departmental costs decreased $6,385,000 from fiscal 1993, with
$5,902,000 being the result of facility sales. Departmental costs at
continuing operations decreased $483,000 (7.9%) from $9,146,000 to
$8,580,000. A reduction of $823,000 in payroll, benefits, and incentives
was offset by increases in insurance of $88,000, real estate taxes of
$74,000, equipment rental of $65,000, and maintenance and repairs of
$30,000.

Administrative costs decreased $773,000 from fiscal 1993, with
$552,000 being the result of facility sales. At continuing operations
administrative costs were reduced by $221,000 (12.2%). Reductions in
travel and entertainment of $170,000, directors and auditors fees of
$71,000, professional fees of $52,000, telephone expenses of $47,000, and
depreciation of $21,000, were offset by increases in bad debts of $68,000,
promotion of $28,000, training of $15,000 and by a reduction of $29,000 in
recovery of bad debt.

Interest expense decreased $350,000 (18.7%) in fiscal 1994. The
primary reasons for the lower expense were the elimination of guarantee
fees accrued to Triton beginning October 1, 1993 ($143,000) and the pay-
off of the $2.8 million note due Union Bank in November 1993, ($168,000).

The Company continues to accrue interest on the Triton/Transtech
loans but has not paid any amounts as of September 30, 1994.

The Company does not presently maintain insurance covering losses
associated with environmental contamination, although insurance coverage
will be obtained wherever possible. In addition, all the states in which
the Company owns or operates USTs have state operated "trust funds" which
could reimburse the Company for certain clean-up costs and liabilities
incurred from USTs. These funds, which essentially provide insurance
coverage for certain environmental liabilities, are funded by taxes on
USTs or fuels purchased within each respective state. The coverages
afforded by each state vary, but generally provide up to $1,000,000 for
the clean-up of environmental contamination and most provide for third
party liability as well. The funds require the Company to pay deductibles
ranging from $5,000 to $50,000 per occurrence.

Only routine expenses of $16,000 were incurred for such items as
annual tank testing and fees for removal of used oil. At September 30,
1994 the financial statements of the Company included accruals for the
resolution of environmental matters in the amount of $750,000.
Approximately $500,000, which was previously accrued, was paid during the
year for ongoing remediation projects at various locations.

The Company incurred legal expenses of $399,000 during fiscal 1994,
with much of that amount due to the sales of facilities. Only one
settlement of a lawsuit was reached during the year, which required an
accrual of $18,000.

In fiscal year 1994, the Company became subject to the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes". The Company had not elected early adoption. The impact of
implementing FAS 109 did not have a material effect on the financial
statements.

Liquidity and Capital Resources

Working capital deficiency increased by $3,671,000 to ($4,245,000) at
September 30, 1995, because current assets were reduced by $2,513,000 and
current liabilities increased by $1,158,000. Cash decreased $1,951,000,
total receivables decreased $181,000, inventories decreased $279,000 and
prepaid expenses decreased $102,000. Payroll, property, and other taxes
increased $1,350,000, a result of the additional $1,458,000 accrual for
the New York State tax assessment reduced by the reversal of some
overaccrued estimates in other areas. Accrued expenses-affiliate
increased by $524,000, the amount of unpaid interest due Transtech. Other
accrued expenses increased $409,000. These increases in current
liabilities were offset by decreases in the current maturities of long
term debt ($139,000), accounts payable ($645,000), and accrued EPA
liabilities ($342,000). Additional details are contained on pages S-7 and
S-8 of the financial statements, Consolidated Statements of Cash Flows.

In May 1994, Transtech Holding Company, Inc. purchased the Company
debt from Triton consisting of the Whitney Bank loan and the promissory
notes together with accrued interest and guarantee fees which totaled
$18,333,000. Transtech then forgave the accrued interest and fees of
$2,723,000, which was recorded as additional paid-in capital. Transtech
also entered into an agreement with the Company to forebear for three
years the collection of the remaining $15,610,000 of principal to the
extent that payments would exceed 50% of the Company's available cash
flow, and to eliminate the accrual of interest on that debt for a period
of six months. Also in May, Transtech made available to the Company a
$300,000 line of credit which was then drawn in full. The Company repaid
the line of credit in full in September 1994, and advanced $45,000 to
Transtech. This amount was deducted from a December 1995 interest
payment.

In addition, in consideration for the extension of credit and debt
forgiveness and restructuring, the Company granted to Exxon (who had
financed Transtech's acquisition of the Company's Common and Series A
stock) a mortgage on the Company's leasehold interests at Tri-City
Airport, Freeland, MI. The Company also entered into agreements with
Exxon whereby Exxon will supply fuel to the Company at its locations at
Chicago (Midway), IL; Freeland, MI; Scottsdale, AZ, and Youngstown, OH.
In July 1994, the Company was named by Avfuel Corporation as a cross
defendant in an action commenced against Triton, claiming that the Company
was contractually obligated to purchase from Avfuel all of its aviation
fuel requirements. A settlement agreement was reached in September 1994
resulting in Avfuel continuing to supply fuel at Tri-City, MI, and
cancellation of Exxon's fuel agreement there. Also, Exxon agreed to the
release of the mortgage on the leasehold interest at Tri-City. The
Company sold to Avfuel the Company's facility at Tri-City Airport in
December 1994.

Simultaneously with the sale of Triton's equity, three members of the
Company's Board of Directors resigned, and were replaced by three
individuals affiliated with Transtech. The reorganized board developed a
plan that would require additional facilities sales with the majority of
the net proceeds being used to purchase other FBO's or companies that were
generating income and positive cash flow. This new plan differed from
that of the previous Board of Directors, whose plan of operation was to
sell non-profitable facilities and use the proceeds to fund current
operations and pay off debt. Accordingly, the Company sold its facilities
at Scottsdale, AZ, and Richmond, VA in September 1994 and its Tri-City, MI
facility in late December 1994. These sales produced $3,350,000 before
expenses. With the exception of the acquisition of Mountain State Flight
Services Inc., the Company has not been successful in its attempts to
locate and acquire other FBO's that will provide the cash flow required to
fund operations. As a result proceeds from the sales have been used to
fund current operations and to pay down prior accrued liabilities, such as
EPA.

The lease between Mountain State Flight Services and the City of
Morgantown, WV requires that the lessee submit plans to invest $700,000 in
new construction on the leased premises if the average gross receipts
match or exceed $225,000 per month, for a consecutive four month period.
Such plans to be submitted within 90 days of the end of the four month
period. Since sales totaled $439,000 for the six months ended September
30, 1995, management does not foresee any such investment being mandated
in the near future.

The accompanying consolidated financial statements have been prepared
on a going concern basis which contemplates the realization of assets and
the satisfaction of liabilities and commitments in the normal course of
business.

At September 30, 1995 and 1994, respectively, the Company had a
working capital deficiency of $4,245,000 and $574,000, stockholder's
deficit of $26,920,000 and $22,951,000, and had incurred a net loss of
$3,666,000 and $372,000 for the years then ended. The Company's
independent accountants issued a "disclaimer of opinion: on the
consolidated financial statements for the year ended September 30, 1995
and a "going concern opinion" on the consolidated financial statements for
the year ended September 30, 1994. They cited, in their report to the
stockholders and Board of Directors of the Company, the recurring losses
from operations and deficiencies in cash flow from operations for the
years ended September 30, 1995 and 1994, and a net capital deficiency at
September 30, 1995 and 1994 as factors that raised substantial doubt about
the Company's ability to continue as a going concern.

Management has decided that the best chance to maintain the viability
of the Company is to sell the remaining assets and use the proceeds to pay
the current liabilities. The market value of these assets is estimated to
provide enough cash to accomplish this goal and remaining for
reinvestment. Several investment bankers have indicated an interest in
financing two or three major acquisitions if this plan is successful and
Transtech subordinated its debt, primarily because the Company would
retain approximately $24 million of net operating loss carryforward for
tax purposes. To this end, subsequent to September 30, 1995 the Company
has sold its lease and purchase option at Houston's Hobby Airport reached
an agreement to participate in the ownership of a combination of two FBOs,
including one owned by the Company, at New Orleans' Lakefront Airport.
Also, negotiations are ongoing for the sale of the Chicago FBO. The
successful completion of this plan is no guarantee that the Company can be
returned to profitability or maintained as a going concern.

The financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern.

The Company has not paid cash dividends on its common stock, and the
Board of Directors of the Company has adopted a policy of retaining
earnings, if any, for operations, resolution of liabilities and the
reduction of borrowing. Therefore, the Company anticipates that it will
not pay any cash dividends on its common stock in the foreseeable future.
The credit facility signed in December 1989 prohibits the payment of
dividends without the prior written approval of the lender (Transtech).
Further, cash dividends and certain other distributions on common stock
are prohibited unless all accrued dividends on the preferred stock have
been paid. Dividends in arrears are $2,261,154 at September 30, 1995.

Future Events Likely To Have Material Impact on the Relationship Between
Costs and Revenues

The Company has sold certain of its FBOs over the last five years.
Also, the Company relinquished potential EPA liabilities at one location.
These sales will result in lower revenues not necessarily accompanied by
a proportional decrease in costs, particularly general and administrative
costs, many of which are relatively fixed and do not vary as a direct
function of sales volume. However, the sale of the Company's facility at
Houston in November 1995 eliminates the last major maintenance operation.
Since maintenance sales have a higher cost of sales percentage, future
results of operation may produce a cost of sales that is estimated to be
four to five percent lower than that produced in fiscal 1995.

Impact of Inflation

The Company does not believe that inflation has had any material
impact upon its business or operations as the Company has generally been
successful in passing along normal inflationary increases in costs to its
customers. Unusual or excessively large increases in fuel could also be
passed along, subject to certain competitive situations, but overall
demand would likely be reduced.

Item 7. Financial Statements

The response to this item is submitted as a separate section of this
report.

Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure

None.

PART III

Item 9. Directors and Executive Officers of the Company

The Executive Officers and Directors of the Company are as follows:

Name Age Position

R. Ted Brant (1)(4) 49 Chairman of the
Board of Directors
and Director

William R. Dimeling (1)(2) 54 Director

Maurice A. Lawruk (2) 63 Director

Bobby R. Adkins 49 Director

Wallace E. Congdon (1)(3) 68 President and Chief
Operating Officer and
Director

Paul R. Slack 55 Chief Accounting Officer,
Controller, Treasurer and
Assistant Secretary

(1) Member of the Human Resources Committee

(2) Member of the Audit Committee

(3) Resigned as President and Director November 8, 1995

(4) Elected by the Board to be President and Chief Operating Officer on
November 20, 1995

Except for directors elected by the Board to fill vacancies, all of
the directors are elected at the Annual Meeting and hold office for a
period of one year or until successors are elected and qualified. All of
the above named directors were elected at the May 17, 1995 Annual
Shareholders Meeting.

The officers of the Company are the Chief Operating Officer,
President, Secretary, Chief Accounting Officer, Treasurer, and such other
Vice Presidents as are elected by the Board. All of the officers are
elected by the Board and serve at the pleasure of the Board.

R. Ted Brant was elected to the Board of Directors on May 20, 1994
and was appointed Chairman and Chief Executive Officer on May 31, 1994 to
replace Mr. John Pugh, who resigned. Mr. Brant has been a director and
Vice Chairman of Piedmont Aviation Services, Inc. since 1992 and President
and Chief Executive Officer of Valley Air Services, Inc., a position he
has held since Valley's inception. Mr. Brant has experience in
industrial, construction, and engineering management and holds a B.S.
degree in Mechanical Engineering from West Virginia University. Mr. Brant
holds a pilot license. On November 20, 1995, Mr. Brant was elected
President of the Company by the Board to replace Wallace Congdon, who
resigned.

Bobby R. Adkins was elected to the Board of Directors on May 20,
1994. Mr. Adkins is Vice President Operations of Transtech Holding
Company, Inc. and of Transportech Corporation, and has served as Secretary
and Treasurer of Valley Air Services, Inc. since 1989. Mr. Adkins holds
Associate degrees in Accounting, Business Administration, and Law
Enforcement, and is a licensed commercial pilot and certified flight
instructor.

Maurice A. Lawruk was elected to the Board of Directors on May 20,
1994. Mr. Lawruk is Vice President of Valley Air Services, Inc., and is
on the Board of Directors of Transtech Holding Company, Inc. and Piedmont
Aviation Services, Inc. Mr. Lawruk also serves as Chairman of the
construction company which he founded in 1967. Mr. Lawruk previously
served for eight years on the Pennsylvania Industrial Development
Authority.

William R. Dimeling was initially elected to the Board of Directors
in April, 1987. As a member of the Board, he also serves as a member of
the Human Resources, Audit, Executive, and Independent Directors
Committees. Since 1983, he has been a partner in the investment firm of
Dimeling, Schreiber and Park in Philadelphia, Pennsylvania. From 1976
through 1983, Mr. Dimeling served as Executive Vice President of Reading
Company. Mr. Dimeling presently serves as a director and the Chairman of
the Board of Guaranty Bancshares Corporation.

Wallace E. Congdon was appointed President by the Board effective
January 1, 1993 and subsequently, elected to the Board on June 1, 1993.
As a member of the Board, he also served on the Extraordinary Transactions
Committee. Mr. Congdon joined the Company in December 1987 as General
Manager of the Chicago FBO. In August 1988, he was elected as Vice
President of Facilities and Line Services. Before joining Aero, Mr.
Congdon owned his own company, Congdon Airmotive in Atlanta, Georgia. On
November 8, 1995 Mr. Congdon resigned as President and as a member of the
Board simultaneously with his purchase of the Company's facility at
Houston's Hobby Airport.

Paul R. Slack joined the Company in December 1987 as Senior Internal
Auditor and was named Controller in May 1989. In February 1991, the Board
named Mr. Slack as Chief Accounting Officer and Controller. Subsequently,
in November 1991 Mr. Slack was named Assistant Secretary of the Company.
In May 1994, he was named Treasurer in addition to his other offices.
From 1981 until joining the Company, Mr. Slack was Senior Tax Accountant
for the accounting firm Gilbert and Gilbert in Newtown, Pennsylvania.
Previously he served as Controller of Delta Truck Body, Inc. in
Montgomeryville, Pennsylvania.

Item 10. Executive Compensation

CASH COMPENSATION

The following table shows the cash compensation paid to or accrued to, or
for the benefit of, each of the executive officers of the Company whose
aggregate compensation exceeded $100,000 per annum for services rendered to
the Company during the year ended September 30, 1995:

I. SUMMARY COMPENSATION TABLE

Annual Compensation All Other
Name and Principal Position Year Salary Bonus Compensation
($) ($) ($)

R. Ted Brant, Chairman 1995 6,000 - -
of the Board of Directors 1994 - - -
and Chief Executive Officer (a)

Wallace E. Congdon, 1995 80,100 - -
President and Chief 1994 79,038 - 8 (b)
Operating Officer (c) 1993 87,750 16,945 8 (b)

(a) Appointed by the Board of Directors in May 1994.

(b) Company contribution to 401(k) retirement plan.

COMPENSATION OF DIRECTORS

From October 1993 through May 1994, Directors, excluding those who
were also officers or employees of the Company, were eligible to receive
$15,000 annually plus $1,000 per meeting attended as compensation for
their services as Directors. At the May 31, 1994 meeting the Board
suspended indefinitely any compensation for Directors, excluding the one
remaining Director who had been receiving compensation under the previous
arrangement.

<TABLE>

<CAPTION>
III. OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE

Aggregate Option/SAR Exercises in Last Fiscal Year, & FY-End Option/SAR Value

Value of Unexercised
Number of Unexercised In-the-Money
Options/SARs at FY-End (3) Options/SARs at FY-
End (1)

Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized Unexercisable Unexercisable

<S> <C> <C> <C> <C> <C>
R. Ted Brant -0- -0- 0/ $0.00/
Chairman, Board 0 $0.00
of Directors

Larry A. Ulrich (2) -0- -0- 120,000/ $0.00/ (3)
0 $0.00

Wallace E. Congdon -0- -0- 50,000/ $0.00/
President and Chief 0 $0.00
Operating Officer

1. Market value of underlying securities at exercise, minus the exercise or base price. "Spread"
calculated by subtracting the exercise or base price ($.1410) from the bid price of underlying
securities ($.0625) as of the fiscal year-end.

2. On April 1, 1994, Mr. Ulrich resigned as Vice President, Marketing and entered into a one year
consulting agreement with the Company.

3. Mr. Ulrich was granted 20,000 at an exercise price per share of $2.50 and 100,000 shares at an
exercise price per share of $.83750.

</TABLE>

Item 11. Security Ownership of Certain Beneficial Owners and Management.

The following tables set forth, as of December 1, 1995, except as
otherwise indicated, information with respect to stock ownership of (i)
each Director of the Company, (ii) each person known by the Company to own
beneficially more than 5 percent of the shares of the Company's
outstanding Common Stock, (iii) each person known to the Company to own
beneficially more than 5 percent of the shares of the Company's
outstanding Series A preferred stock, and (iv) all officers and directors
of the Company as a group. This information has been provided to the
Company by the persons named below.

Amount of
Amount and Nature of
Nature of Percent Beneficial Percent of
Beneficial of class Ownership Class of
Name and Ownership of of Series A Series A
Address of of Common Common Preferred Preferred
Beneficial Owner Stock (1) Stock Stock (1) Stock (2)

Transtech Holding
Company, Inc. 3,407,693 (3) 42.2% 93,947 34.9%
1331 12th Avenue
Suite 109
Gables Office Complex
Altoona, PA 16601

Triton Energy Corp. 538,372 (4) 6.7% 134,593 50.0%
Including
Pacific Basin Company
6688 N. Central Exp.
Suite 1400
Dallas, TX 75206

Robert L. Starer 1,001,000 (5) 12.0%
6555 Skyline Drive
Delray Beach, FL

John F. Bricker 401,038 5.7%
826 Union Street
Suite 300
New Orleans, LA

F. P. Quinn Trading Co. 114,500 (6) 1.4% 28,625 10.6%
401 S. LaSalle Street
Suite #701
Chicago, IL 60605

William R. Dimeling 4,000 (7) * 1,000 0.4%
9100 Crefield Street
Philadelphia, PA 19118

Alinco S.A. 327,990 (8) 4.7%
c/o Faust, Rabbach &
Stanger
488 Madison Avenue
New York, NY 10022

Cesamar, S.A. 327,990 (8) 4.7%
c/o Faust, Rabbach &
Stanger
488 Madison Avenue
New York, NY 10022

Project Bond Limited 327,990 (8) 4.7%
c/o Faust, Rabbach &
Stanger
488 Madison Avenue
New York, NY 10022

All Directors and 74,000 (9) *
Officers as a group

*Less than 1%

(1) Except as otherwise noted, the shareholders listed exercise sole
voting and investment power, subject to the community property laws
where applicable.

(2) On or about June 30, 1988, the Series A preferred stockholders became
entitled (pursuant to the articles of incorporation of the Company),
voting separately as a class, to elect two (2) directors, to serve on
the Board in designated positions (the "Designated Positions") as a
result of the Company's failure to pay six quarterly dividends on the
Series A preferred stock. Under the articles of incorporation, the
holders of Series A preferred stock cannot vote with common
stockholders for the election of the Company's regular directors
while entitled to elect directors to serve in the designated
positions.

(3) Does not include voting rights shared with Triton Energy Corp. of
134,593 shares of Preferred A which are convertible into 538,372
shares of common. Triton has appointed Transtech as proxy to vote
these shares until May 20,1997, subject to certain restrictions.

(4) Includes 134,593 shares of Preferred A with voting rights shared with
Transtech Holding Company, Inc. which is convertible into 538,372
shares of common. Triton has appointed Transtech as proxy to vote
these shares until May 20, 1997, subject to certain restrictions.

(5) Represents 1,000,000 shares of common stock that Mr. Starer has a
right to acquire pursuant to stock options, and 1,000 shares of
common stock acquired by Mr. Starer in open market purchases.

(6) Based upon information filed with the SEC by F.P. Quinn Trading
Company on Schedule 13G.

(7) Represents 4,000 shares of common stock which Mr. Dimeling currently
has the right to acquire upon the conversion of 1,000 shares of
Series A preferred stock.

(8) Alinco S.A., Cesamar, S.A., and Project Bond Limited consider
themselves a "group" within the meaning of SEC Rule 13d.

(9) Includes conversion rights of Mr. Dimeling, and outstanding vested
stock options (60,000). Does not include stock and conversion rights
owned by Triton. This amount does not include common stock owned by
Transtech, whose principal owners include Ted Brant, Chairman of the
Board of Directors and Chief Executive Officer of the Company, and
Maurice Lawruk and Bob Adkins, both directors of the Company.

Item 12. Certain Relationships and Related Transactions.

EMPLOYMENT CONTRACTS

The Company entered into an employment agreement with Larry A. Ulrich
dated August 9, 1989, for Mr. Ulrich to serve as Chief Operating Officer
of the Company. On September 6, 1989 Mr. Ulrich was also appointed
President of the Company by the Board. The agreement ran for an initial
term of three (3) years, and month to month thereafter. Under the terms
of the agreement, Mr. Ulrich's salary was to be determined by the Board of
Directors based on achievement of certain objectives. If the Company
opted to terminate the agreement for any reason other than cause or
misconduct, the agreement called for a severance payment of $100,000 if
termination was within the first two years of employment, or $75,000 if
termination was after the second year of employment. The agreement also
called for the vesting of stock appreciation rights at the rate of 10,000
shares per quarter for every quarter of employment, up to 120,000 shares,
and at an option price determined by the price of the stock on September
6, 1989 and March 31, 1990. 20,000 shares expire in September 1999, and
100,000 expire in March 2000. On January 14, 1992, Mr. Ulrich resigned
his position as President and Chief Operating Officer. Simultaneously,
the Board of Directors appointed Mr. Ulrich to the position of Vice
President, Marketing. The employment agreement was amended, Mr. Ulrich's
salary was reduced and the provision that his salary would be based on
achievement of certain objectives was eliminated. On April 1, 1994 Mr.
Ulrich entered into an agreement with the Company, whereby he would resign
his employment with the Company and provide consulting services to the
Company for a period of up to 12 months beginning that date for a monthly
fee of $3,333.33. In addition, the Company agreed to pay $45,000 of
severance remaining against the $75,000 called for in the amended
agreement ($30,000 having been paid previously). The severance was to be
paid over 12 months in 26 equal bi-weekly installments, less necessary
withholding and deductions. At April 1, 1994 Mr. Ulrich owed the Company
$15,728 principal on a loan plus accrued interest of $3,456. The
agreement called for repayment of the loan by the Company withholding
$1,650 from each monthly payment of the consulting fee. The consulting
agreement was not renewed in 1995, and Mr. Ulrich was paid his severance,
less the loan due the Company, during the term of the agreement.

RELATED TRANSACTIONS

During December 1989 the Company entered into an amended and restated
loan agreement totalling $7,210,000 with Whitney National Bank, its
principal bank. Triton, the Company's then principal shareholder, agreed
to guarantee the repayment of this loan. The Company agreed to compensate
Triton for its guarantee. On September 30, 1993, Triton purchased the
loan agreement from Whitney Bank with a principal balance due of
$6,910,000. As of that date, the Company had accrued $497,000 in
guarantee fees to Triton, none of which was paid. This amount was
included in the sale to Transtech and was subsequently forgiven as
described below.

Beginning in May, 1990, Triton made cash advances to the Company at
the prime rate plus 2% pursuant to promissory notes authorized by the
Company's Board. As of May 1994, advances by Triton to the Company
totalled $8,700,000, plus accrued interest of $2,226,000.

In addition, in consideration for the extension of credit and debt
forgiveness and restructuring, the Company granted to Exxon (who had
financed Transtech's acquisition of the Company's Common and Series A
stock) a mortgage on the Company's leasehold interests at Tri-City
Airport, Freeland, MI. The Company also entered into agreements with
Exxon whereby Exxon will supply fuel to the Company at its locations at
Chicago (Midway), IL; Freeland, MI; Scottsdale, AZ, and Youngstown, OH.
In July 1994, the Company was named by Avfuel Corporation as a cross
defendant in an action commenced against Triton, claiming that the Company
was contractually obligated to purchase from Avfuel all of its aviation
fuel requirements. A settlement agreement was reached in September 1994
resulting in Avfuel continuing to supply fuel at Tri-City, MI, and
cancellation of Exxon's fuel agreement there. Also, Exxon agreed to the
release of the mortgage on the leasehold interest at Tri-City, which the
Company sold to Avfuel in December 1994.

In August 1994, the Company entered into an agreement with Transtech
to provide accounting services to three fixed based operations, reduced to
two in April 1995, that were owned or controlled by Transtech. The
agreement provided for a monthly fee of twenty-six hundred dollars,
reduced to eighteen hundred in April 1995. Through September 30, 1995,
the Company has billed Transtech $43,000 of which $14,000 had been paid.
The balance of $29,000 was paid in November 1995.

On October 20, 1989, the Company made a loan to Larry A. Ulrich,
President and Chief Operating Officer. The loan was pursuant to the
contract of employment between Mr. Ulrich and the Company dated August 9,
1989 and was in the amount of $50,000 plus interest at the prime rate as
of the date of the loan. The loan, plus interest, could be repaid as a
set-off against future severance payments that could be due to Mr. Ulrich
pursuant to his contract. In January 1991, $25,000 of amounts due for
1990 incentive payments was offset against accrued interest and principal.
In February 1992, an incentive payment of $19,363 was offset against
accrued interest and principal. On April 1, 1994, payments of $1,650 per
month were being applied against the principal amount. (See Employment
Contracts, page 26). At September 30, 1995, the loan balance and accrued
interest had been paid in full.

On April 1, 1995, the Company purchased 100% of the outstanding stock
of Mountain State Flight Services, Inc., a West Virginia corporation for
$390,000. Eighty percent of the stock was owned by Valley Air Services,
Inc., whose officers include R. Ted Brant, President and Chief Executive
Officer; Maurice A. Lawruk, Vice President; and Bobby R. Adkins,
Secretary/Treasurer. In addition, Mr. Brant and Mr. Lawruk each owned
personally 7.5% of the stock, and Mr. Adkins owned 2%.

On November 8, 1995 the Company assigned its interest in the sublease
and purchase option agreement at Houston's Hobby Airport, together with
fixed assets situated at the facility, to TigerAir, Inc., a Texas
corporation formed by Wallace E. Congdon, the then President of the
Company. In consideration of the assignment, TigerAir paid $250,000 in
the form of a non-interest bearing promissory note. Effective as of the
closing, Mr. Congdon resigned as President and as a Director of the
Company.

On May 31, 1994 the Board of Directors appointed Christopher M.
Cicconi, Esquire as the Company's Corporate Secretary. They also selected
the law firm of Eckert Seamans Cherin & Mellott, of which Mr. Cicconi is
a partner, as the Company's chief legal counsel. During fiscal 1994, the
Company was billed $75,705 for legal services by Mr. Cicconi's firm.
During fiscal 1995, the Company was billed an additional $179,360 for
legal services. At September 30, 1995 the Company had outstanding amounts
due Eckert Seamans Cherin & Mellott of $30,063.

PART IV

Item 13. Exhibits and Reports on Form 8-K.

(a) Exhibits. See Index of Exhibits annexed hereto.

(b) Reports on Form 8-K. None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

Dated: AERO SERVICES INTERNATIONAL, INC.

February 27, 1996 BY: R. Ted Brant

Chairman of the Board of
Directors and Director

February 27, 1996 BY: Paul R. Slack

Chief Accounting Officer
and Controller.

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report is signed below by the following persons in the capacities and
on the dates indicated.

Signature Title Date

R. Ted Brant Chairman of the February 27, 1996

Board and
Director

William R. Dimeling Director February 27, 1996

Maurice A. Lawruk Director February 27, 1996

Bobby R. Adkins Director February 27, 1996

Those Directors above so indicated have signed the original of this
document which is on file with Company.

INDEX OF EXHIBITS

The following is a list of exhibits filed as part of this Annual Report on
Form 10-K. Where so indicated by footnote, exhibits which were previously
filed are incorporated by reference.

Seq.
Page No.

(3.1) Amended and Restated Articles of Incorporation (1) *
(3.2) By-laws (1) *
(3.3) First Amendment to the Amended and Restated
Articles of Incorporation. (2) *

(3.4) Second Amendment to the Amended and Restated
Articles of Incorporation. (11) *

(3.5) Third Amendment to the Amended and Restated
Articles of Incorporation. (6) *

(3.6) Fourth Amendment to the Amended and Restated
Articles of Incorporation. (11) *

(4.1) Preferred Stock Purchase Agreement dated
August 27, 1989, between Registrant and
Signal Hill. (6) *

(4.2) Warrant Agreement dated August 31, 1987, between
Registrant and Signal Hill. (6) *

(4.3) Shareholders Agreement by, among and between
Triton Energy Corporation, Pacific Basis Company,
Dibo Attar, Signal Hill, N. V., Robert L. Starer
and the Company dated December 27,1988. (23) *

(4.4) Stand-Still Agreement by and among Triton Energy
Corporation, Trenk Development Corporation, Dibo
Attar, Robert L. Starer and the Company dated
December 16, 1988. (12) *<PAGE>
(4.5) Mutual Release and Settlement Agreement between
Triton Energy Corporation, Pacific Basin, G. Thomas
Graves, Dibo Attar, Robert L. Starer, William R.
Dimeling, John E. Ardell, III, James N.C. Moffat, III
dated December 9, 1988. (12) *

(10.2) Lease Agreement between Springfield Airport
Authority and Pan Air Corporation (now Aero
Services International, Inc.), dated October 1,
1980 (Capital Airport, Springfield, Illinois),
as amended by Supplement to Lease between
Springfield Airport Authority and Aero Services
International, Inc., effective February 1, 1983. (3) *

(10.3) Lease Agreement between the Board of Levee Commissioners
of the Orleans Levee District and Pan Air Corporation
(now Aero Services International, Inc. dated August 5,
1977 (New Orleans Lakefront Airport), with Addendum
dated September 1, 1985. (3) *

(10.4) First Amendment to Lease Agreement between the Board
of Levee Commissioners of the Orleans Levee District
and Aero Services International, Inc. effective
November 1, 1981. (3) *

(10.5) Second Amendment to Lease Agreement between the Board
of Levee Commissioners of the Orleans Levee District
and Aero Services International, Inc., effective
August 1, 1982. (3) *

(10.6) Third Amendment to Lease Agreement between the Board
of Levee District and Aero Services International,
Inc., dated August 1984. (3) *

(10.7) Contract of Lease between the Board of Levee
Commissioners of the Orleans Levee District and
Aero Services International, Inc., dated July 1,
1982 (New Orleans Lakefront Airport). (3) *

(10.8) Lease and Operations Agreement between Indianapolis
Airport Authority and Pan Air Corporation (now Aero
Services International, Inc.), dated December 17,
1980 (Mount Comfort Airport). (3) *<PAGE>
(10.9) Consolidated and Amended Agreement for a Fixed
Base Operation between Milwaukee County and
Mitchell Aero, Inc., dated July 15, 1980, General
Mitchell Field, Milwaukee, Wisconsin. (3) *

(10.10) Amendment No. 1 to Airport Agreement No. C-BO-279
between Milwaukee County and Mitchell Aero, Inc.
dated September 18, 1981. (3) *

(10.11) Amendment No. 2 to Airport Agreement No. C-BO-279
between Milwaukee County and Mitchell Aero, Inc.
dated January 6, 1982. (3) *

(10.12) Assignment by Mitchell Aero, Inc. to Aero Services
Milwaukee, Inc. dated November 4, 1982. (3) *

(10.13) Ground Lease between the Town of Morristown and
Pan Air Corporation, (now Aero Services
International, Inc.) dated January 1, 1980
(Morristown Municipal Airport). (3) *

(10.14) Amendment to Lease Agreement between the Town of
Morristown and Aero Services International, Inc.,
dated August 1, 1983. (3) *

(10.15) Lease and Operating Agreement between The Raleigh-
Durham Airport Authority and Aero Services
International, Inc., dated April 1, 1983
(Raleigh-Durham Airport). (3) *

(10.16) Lease, License and Agreement between the
Beaufort-Morehead City Authority and Air-Flight,
Inc., dated May 25, 1982 (Beaufort-Morehead City
Airport). (3) *

(10.17) Agreement and Lease between the Tri-City Airport
Commission and Aero Services International, Inc.
dated August 1,1 1985 (Tri-City Airport). (3) *

(10.18) Lease by Way of Concession between City of Cleveland
and Beckett Aviation Corporation dated December 16,
1982 (Cleveland Hopkins International Airport). (3) *<PAGE>
(10.19) Fixed Base Operator Lease between Arapahoe County
Public Airport Authority and CSX Beckett Aviation,
Inc., dated August 13 , 1982 (Arapahoe County
Airport). (3) *

(10.20) Lease Agreement between The Capital Region Airport
Commission and Beckett Richmond, Inc., dated
September 21, 1981 (Richard Evelyn Byrd International
Airport), as amended by Amendment to Lease Agreement
between The Capital Region Airport Commission and CSX
Beckett Aviation, Inc., dated May 1,1982, and further
amended by Lease Amendment between the Capital Region
Airport Commission and CSX Beckett Aviation, Inc.,
dated January 1, 1984. (3) *

(10.21) Fixed Base Operator Agreement between the County of
Allegheny and Beckett Aviation Corp.-Pittsburgh, dated
December 1, 1978 (Greater Pittsburgh International Airport)
as amended by Amendment between the County of Allegheny
and CSX Beckett Aviation, Inc. (undated). (3) *

(10.22) Lease Agreement between the City of Houston and
Tennessee Gas Transmission Company, dated June 23,
1954 (Houston International Airport, Lease Area
#1). (3) *

(10.23) Lease Amendment between the City of Houston and
Tennessee Gas Transmission Company, dated August
13, 1954 (Houston International Airport, Lease
Area #1). (3) *

(10.24) Lease Amendment between the City of Houston and
Tennessee Gas Transmission Company, dated March 26,
1962 (Houston International Airport, Lease Area
#1). (3) *

(10.25) Lease Amendment between the City of Houston and
Tenneco, Inc., dated December 22,1971 (Houston
International Airport, Lease Area #1). (3) *<PAGE>
(10.26) Sublease between Houston Beechcraft, Inc., and
Tenneco, Inc., dated December 22, 1971 (Houston
International Airport, Lease Area #1). (3) *

(10.27) Amendment to Lease among the City of Houston, Houston
Beechcraft, Inc. and Tenneco, Inc., dated January 10,
1977 (Houston International Airport, Lease Area #1).
(3) *

(10.28) Amendment to Lease among the City of Houston, Houston
Beechcraft, Inc. and Servair Corporation, dated
March 11, 1983 (Houston International Airport, Lease
Area #1). (3) *

(10.29) Amendment to Lease among the City of Houston, Servair
Corporation and CSX Beckett Aviation, Inc. dated
August 17, 1984 (Houston International Airport. Lease
Area #1). (3) *

(10.30) Lease Agreement between the City of Houston and
Gulfcoast Jet Center, Inc., dated July 28, 1982
(Houston International Airport. Lease Area #2).
(3) *

(10.31) Sublease with Option to Purchase Leasehold Agreement
between Gulfcoast Jet Center, Inc., dated April 13,
1983 (Houston International Airport. Lease Area #2).
(3) *

(10.32) Sublease Agreement between Sky Travel, Inc. and
Beckett Houston, Inc., dated August 28, 1980
(Houston International Airport. Lease Area #3). (3) *

(10.33) Hangar, Hangar Site and Commercial Aviation Sales and
Support Services Agreement at Chicago Midway Airport
between the City of Chicago and CSX Beckett Aviation,
Inc., dated February 15, 1984. (3) *

(10.34) Lease between the Port of Oakland and Western
Airmotive Facilities, Inc., dated June 9, 1981
(Metropolitan Oakland International Airport). (3) *<PAGE>
(10.35) First Supplemental Agreement between the Port of
Oakland and CSX Beckett Aviation, Inc., dated
November 23, 1982. (3) *

(10.36) Lease between the Port of Oakland and CSX Beckett
Aviation, Inc., dated November 23, 1982. (3) *

(10.37) License and Concession Agreement between the City of
Oakland and CSX Beckett Aviation, Inc., dated
December 1, 1982. (3) *

(10.38) Asset Purchase Agreement among CSX Beckett Aviation
Inc., Western Pacific Aviation, Inc., Western Airmotive
Facilities, Inc., Western Airmotive Company, Inc. and
Timothy J. Parrott, dated December 1, 1982. (3) *

(10.39) Assignment and Assumption Agreement between Western
Airmotive Facilities, Inc. and CSX Beckett Aviation,
Inc., dated December 3, 1982. (3) *

(10.40) Agreement and Lease between the City of Youngstown
and Beckett Aviation Corporation dated September 20,
1979 (Youngstown Municipal Airport, as amended by
Judgment Entry Modifying lease terms rendered in
Case No. 83 CV 2231. City of Youngstown v. Beckett
Aviation Corporation, CSX Beckett Aviation, Inc.,
Robert Hintz individually, Chairman and President,
in the Court of Common Pleas, Mahoning, Ohio, dated
February 11, 1985. (3) *

(10.41) Lease Agreement between the City of Scottsdale and
Scottsdale Piper, Inc., dated January 1, 1977
(Scottsdale Municipal Airport). (3) *

(10.42) Registration Agreement dated October 25, 1985 by and
among the Company and Cesamar S.A., Alinco S.A.,
Project Bond Limited, and The Pound Corporation,
Ltd. (3) *

(10.43) Assignment by and between the Company and Beckett
for the Oakland FBO location. (5) *<PAGE>
(10.44) Sublease by and between the Company and Beckett
for the Houston FBO location. (5) *

(10.45) Sublease by and between the Company and Beckett
for the Houston/Gulf Coast Jet Center FBO
location. (5) *

(10.46) Sublease by and between the Company and Beckett
for the Allegheny County, Pennsylvania FBO
location. (5) *

(10.47) Sublease by and between the Company and Beckett for
the Arapahoe County FBO location. (5) *

(10.48) Sublease by and between the Company and Beckett
for the Arapahoe County FBO location. (5) *

(10.49) Sublease by and between the Company and Beckett
for the Chicago FBO location. (5) *

(10.50) Sublease by and between the Company and Beckett
for the Chicago FBO location. (5) *

(10.51) Sublease by and between the Company and Beckett
for the Capital Region Airport Commission FBO
location. (5) *

(10.52) Employment Contract between the Company and
Orlando E. Panfile. (2) *

(10.53) Consulting Agreement between the Company and
Michael & Michael Consultants, Ltd. (2) *

(10.54) Loan Agreement between the Company and Whitney
National Bank, dated September 14, 1986. (7) *

(10.55) Security Agreement between the Company and
Whitney National Bank, dated September 18,
1986. (7) *<PAGE>
(10.56) Asset Purchase Agreement between the Company,
National Weather Corporation, and Universal
Weather and Aviation, Inc. dated July 15,
1986. (7) *

(10.57) Agency Operating Agreement between the Company
and The Airmen, Inc., dated April 9, 1986
(Downtown Airport, Kansas City, MO). (7) *

(10.58) First Amendment to Agency Operating Agreement
between the Airmen, Inc., and the Company,
dated July 8,1986. (7) *

(10.59) Option Agreement between Arthur D. Stevens and
the Company, dated April 9, 1986. (7) *

(10.60) Modification and Extension Agreement between
Beaufort-Morehead City Airport Authority and
the Company, dated June 1,1987. (13) *

(10.61) Asset Purchase Agreement between KFO Associates
and the Company dated September 22, 1987. (13) *

(10.62) Lease between Robert L. Starer and Merle A.
Starer and the Company dated May 1, 1988. (13) *

(10.63) Asset Purchase Agreement between PHH Aviation
Services, Inc., and the Company dated June 1,
1988. (10) *

(10.64) Beckett Stock Agreement between PHH Group, Inc.
and the Company dated June 1, 1988. (10) *

(10.65) Pledge and Security Agreement between PHH Group
Inc., and the Company dated June 1, 1988. (10) *

(10.66) Agreement for the Purchase and Sale of Assets
between Van Dusen Airport Services Company,
Limited Partnership and the Company dated
April 18, 1988. (10) *<PAGE>
(10.67) Agency Operating Agreement between Van Dusen Airport
Services Company, Limited Partnership and the Company
dated April 18, 1988. (10) *

(10.68) Escrow Agreement between Van Dusen Airport Services
Company, Limited Partnership and the Company dated
April 22, 1988. (10) *

(10.69) Contract for Services between Robert L. Starer and
the Company dated November 27, 1987. (8) *

(10.70) Asset Purchase and Sale Agreement between Page Avjet
Corporation and the Company dated April 22, 1987. (8) *

(10.71) Termination Agreement between Airmen, Inc. and the
Company dated July 10, 1989. (14) *

(10.72) Agreement by and among Flight Services Group, Inc.,
David C. Hurley, William H. Juvoen and the Company
dated April 19, 1989. (14) *

(10.73) Agreement of Employment between Larry A. Ulrich and
the Company dated August 10, 1989. (14) *

(10.74) Lease between Robert L. Starer and Merle A. Starer
and the Company dated November 1, 1989. (14) *

(10.75) Promissory Note from Robert L. Starer to the Company
and dated January 4, 1989. (14) *

(10.76) Promissory Note from Larry A. Ulrich to the Company
dated October 26,1989. (14) *

(10.77) Amended and Restated Loan Agreement between the Company
and Whitney National Bank of New Orleans dated
December 19, 1989. (14) *

(10.78) Fee Agreement between the Company and Triton Energy
Corporation dated December 19, 1989. (14) *

(10.79) Third Amendment to Lease by way of Concession between
the City of Cleveland and the Company, dated February 20,
1990. (15) *<PAGE>
(10.80) Replacement Letter of Credit in favor of Sovran Bank
N.A., as trustee and for the account of Beckett
Aviation, Inc. dated May 31, 1990. (15) *

(10.81) Letter Agreement between Denver Jetcenter, Inc. and
the Company, dated May 6, 1990. (15) *

(10.82) Letter Agreement between Owners Jet of Texas, Inc.
and the Company dated June 6, 1990. (15) *

(10.83) Settlement Agreement and General Release between
Mach I Aviation, Ltd., and the Company, dated
June 29, 1990. (15) *

(10.84) Agreement for the Purchase and Sale of Assets between
Pan Am Management System, Inc. and the Company
dated July 12, 1990. (15) *

(10.85) Letter Agreement between Angel Air, Inc. and the
Company, dated August 10, 1990. (15) *

(10.86) Assignment of Lease to Springfield Air Center by
the Company, dated November 30, 1990. (15) *

(10.87) Employment Agreement between John Pugh and the
Company, dated November 21, 1990. (15) *

(10.88) Schedule of Borrowings from Triton Energy *
Corporation evidenced by a Series of
Promissory Notes. (15)

(10.89) Lease between the County of Westchester and the *
Company, dated February 1, 1991. (16)

(10.90) Loan Agreement among Union Bank, Triton Energy *
Corporation, and the Company, dated January 31,
1991. (16)

(10.91) Replacement Letter of Credit in favor of Sovran *
Bank N.A., as trustee and for the account of
Beckett Aviation, Inc., dated September 15, 1991. (16)<PAGE>
(10.92) Agreement for the Purchase and Sale of Assets *
between Beaufort Aviation, Inc. and the Company,
dated March 18, 1991. (16)

(10.93) Agreement for the Purchase and Sale of Interest in *
Joint Venture between Aviation Providers
International, inc. and the Company, dated March 8,
1991. (16)

(10.94) Agreement for the Purchase and Sale of Assets *
between Flightcraft, Inc. and the Company, dated
May 17, 1991. (16)

(10.95) Lease Agreement between Triton Fuel Group, Inc. and *
the Company dated February 8, 1991. (16)

(10.96) Settlement Agreement and General Release between *
Grant Thornton and the Company, dated September 13,
1991. (16)

(10.97) Amendment to Employment Agreement between Larry A. *
Ulrich and the Company, dated January 14, 1992. (17)

(10.98) Third Amendment to Lease between the city of Scottsdale *
and Beckett Aviation, Inc. and the Company, dated
July 7, 1992. (17)

(10.99) Acknowledgement of Exercise of Option between the City *
of Youngstown and the Company, dated
September 9, 1992. (17)

(10.100) Schedule of Borrowings from Triton Energy Corporation *
evidenced by a Series of Promissory Notes. (17)

(10.101) Agreement between Horizon Capital Advisors, Inc. to act *
as financial advisor to the Company dated June 4, 1992. (17)

(10.102) Agreement for the Purchase and Sale of Westchester *
dated September 15, 1993. (22)

(10.103) Agreement for the Purchase and Sale of Raleigh-Durham *
dated July 31, 1993. (22)<PAGE>
(10.104) Agreement for the Purchase and Sale of Morristown *
dated September 15, 1993. (22)

(10.105) Agreement for the Purchase and Sale of Cleveland *
dated August 20, 1993. (22)

(10.106) Schedule of Borrowings from Triton Energy Corporation *
evidenced by a Series of Promissory Notes. (22)

(10.107) Amendment to Employment Agreement between Larry A. *
Ulrich and the Company, dated April 8, 1993. (22)

(10.108) Agreement for the Purchase and Sale of Denver dated *
May 5, 1993. (23)

(10.109) Agreement for the Purchase and Sale of Raleigh-Durham *
Avionics Division dated November 12, 1993. (23)

(10.110) Consulting Agreement between Larry A. Ulrich and *
Aero Services International, Inc. dated April 1, 1994. (23)

(10.111) Revolving Credit Loan Agreement between Aero Services *
International, Inc. and Transtech Holding Co., Inc.
dated May 13, 1994. (23)

(10.112) Revolving Promissory Note in the amount of $300,000.00 *
to Aero Services International, Inc. from Transtech
Holding Co., Inc. dated May 13, 1994. (23)

(10.113) Agreement for the Purchase and Sale of Scottsdale dated *
July 19, 1994. (23)

(10.114) Schedule of Borrowings from Avfuel Corporation *
evidenced by Promissory Notes dated
September 15, 1994. (23)

(10.115) Agreement for the Purchase and Sale of Richmond *
dated September 27, 1994. (23)

(10.116) Settlement Agreement between Aero Services International, *
Inc., Transtech Holding Company, Inc., Avfuel Corporation
and Exxon Company, U.S.A. dated September 1994. (23)<PAGE>
(10.117) Aviation Dealer Products Sales Agreement between Exxon *
Company, U.S.A. and Aero Services - Houston dated
September 12, 1994. (23)

(10.118) Aviation Dealer Products Sales Agreement between Exxon *
Company, U.S.A. and Aero Services - Chicago dated
May 20, 1994. (23)

(10.119) Aviation Dealer Products Sales Agreement between Exxon *
Company, U.S.A. and Aero Services - Youngstown dated
May 20, 1994. (23)

(10.120) Agreement for the Purchase and Sale of Tri-City dated *
September 15, 1994. (24)

(10.121) Revolving Promissory Note between Mountain State Flight *
Services and Aero Services International, Inc. dated
December 23, 1994. (24)

(10.122) Asset purchase agreement between Aero Services
International, Inc. (Seller) and Winner Aviation Corporation
(Purchaser) dated February 7, 1995

(10.123) Stock Purchase Agreement between Aero Services
International, Inc. and Mountain State Flight Services,
Ltd. dated March 31, 1995<PAGE>
(28.1) Triton Energy Corporation's Form 10-K for Year Ended *
May 31, 1991; Form 10-Q for the Quarter Ended August
31, 1991; and Prospectus for Common Offering, dated
October 9, 1991. (16)

(28.2) Triton Energy Corporation's Form 10-K for Year Ended *
May 31, 1992; Form 10-Q for Quarter Ended August 31,
1992. (17)

(28.2) Triton Energy Corporation's Form 10-Q for Quarter Ended *
November 30, 1991. (18)

(28.3) Triton Energy Corporation's Form 10-Q for Quarter Ended *
February 29, 1992. (19)

(28.4) NOT USED *

(28.5) Triton Energy Corporation's Form 10-Q for Quarter Ended *
November 30, 1992. (20)

(28.6) Triton Energy Corporation's Form 10-Q for Quarter Ended *
February 28, 1993. (21)

* THESE ARE DOCUMENTS INCORPORATED BY REFERENCE.

1. Incorporated herein by reference from the Company's Registration
Statement No. 20070425-A on Form S-18 filed December 19, 1980.

2. Incorporated herein by reference from the Company's Registration
Statement No. 33-7152 on Form S-2 filed August 22, 1986.

3. Incorporated by reference from the Company's Annual Report on Form
10-K dated December 27, 1985, File No. 0-10094.

4. Incorporated by reference from the Company's Current Report on Form
8-K dated September 25, 1985, File No. 0-10094.

5. Incorporated by reference from the Company's Current Report on Form
8-K dated February 14,1986, File No. 0-10094.

6. Incorporated by reference from the Company's Current Report on Form
8-K dated September 18, 1987, File No. 0-10094-0.

7. Incorporated by reference from the Company's Annual Report on Form
10-K dated December 23,1986, File No. 0-10094-0.

8. Incorporated by reference from the Company's Current Report Form 8-K
dated May 27,1987, File No. 0-10094-0.

9. Incorporated by reference from the Company's Current Report Form 8-K
dated May 27, 1987, File No. 0-10094-0.

10. Incorporated by reference from the Company's Current Report Form 8-K
dated June 3, 1988, File No. 0-10094-0.

11. Incorporated by reference from the Company's Current Report on Form
8-K dated July 21, 1988, File No. 0-10094-0.

12. Incorporated by reference from the Company's Current Report on Form
8-K dated December 27,1988, File No. 0-10094-0.

13. Incorporated by reference from the Company's Annual Report on Form
10-K dated December 29, 1988, File No. 0-10094-0.<PAGE>
14. Incorporated by reference from the Company's Annual Report on Form
10-K dated December 29, 1989, File No. 1-10190.

15. Incorporated by reference from the Company's Annual Report on Form
10-K dated December 29, 1990, File No. 1-10190.

16. Incorporated by reference from the Company's Annual Report on Form
10-K dated December 18, 1991, File No. 1-10190.

17. Incorporated by reference from the Company's Annual Report on Form
10-K dated January 11, 1993, File No. 1-10190.

18. Incorporated by reference from the Company's Current Report on Form
10-Q dated February 5, 1992, File No. 1-10190.

19. Incorporated by reference from the Company's Current Report on Form
10-Q dated May 14, 1992, File No. 1-10190.

20. Incorporated by reference from the Company's Current Report on Form
10-Q dated February 5, 1993, File No. 1-10190.

21. Incorporated by reference from the Company's Current Report on Form
10-Q dated May 13, 1993, File No. 1-10190.

22. Incorporated by reference from the Company's Annual Report on Form
10-K dated January 12, 1994, File No. 1-10190.

23. Incorporated by reference from the Company's Annual Report on Form
10-K dated December 28, 1994, File No. 1-10190.

24. Incorporated by reference from the Company's Current Report on Form
10-Q dated February 3, 1995, File No. 1-10190.

AERO SERVICES INTERNATIONAL, INC.
AND SUBSIDIARY COMPANIES
Form 10-KSB
Items 7, 13(a) and 13(d)

Index of Financial Statements and Schedules

The following consolidated financial statements of the Company and
its subsidiaries required to be included in Item 7 are listed below:

Page

Report of Independent Accountants S-2

Consolidated Balance Sheets at S-3
September 30, 1995 and 1994

Consolidated Statements of Operations S-5
for each of the years ended September 30, 1995
and 1994

Consolidated Statements of Changes S-6
in Stockholders' Deficit for each of the years
ended September 30, 1995 and 1994

Consolidated Statements of Cash Flows S-7
for each of the years ended September 30, 1995
and 1994

Notes to Consolidated Financial Statements S-9

The following exhibit is included in Item 13(a):
Exhibit (11.1) - Computation of earnings (loss) per share S-25

KPMG Peat Marwick LLP

1600 Market Street
Philadelphia, PA 19103-7212

INDEPENDENT AUDITORS' REPORT

To the Stockholders and Board of Directors,
Aero Services International, Inc.:

We have audited the accompanying balance sheets of Aero Services
International, Inc. and subsidiaries (the Company) as of September 30,
1995 and 1994, and the related statements of operations, stockholders'
deficit, and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to report on these financial statements based on the
results of our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our report.

In our opinion, the 1994 financial statements referred to above present
fairly, in all material respects, the financial position of Aero Services
International, Inc. as of September 30, 1994, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.

The accompanying 1995 and 1994 financial statements have been prepared
assuming that Aero Services International, Inc. will continue as a going
concern. As discussed in Note B to the financial statements, the Company
has suffered recurring losses from operations and has net working capital
deficiencies and a stockholders' deficit. During the year ended September
30, 1995, the Company's plan to return to profitability through key
acquisitions did not result in improved operating results. In addition,
the Company appears to have exhausted resources for borrowing capital. At
September 30, 1995 and 1994, these circumstances raise substantial doubt
about the entity's ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note B. The 1995
financial statements do not include any adjustments that might result from
the outcome of this uncertainty.

Because of the significance of the uncertainty discussed in the preceding
paragraph, we are unable to express, and we do not express, an opinion on
the accompanying 1995 financial statements.

KPMG PEAT MARWICK LLP

January 22, 1996
Philadelphia, Pennsylvania

Member Firm of
Klynveld Peat Marwick Goerdeler

Aero Services International, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
September 30,

(Dollar amounts in thousands)

ASSETS
1995 1994
CURRENT ASSETS
Cash $ 455 $2,406
Restricted cash 5 5
Customers receivables, less allowance for
doubtful accounts of $37 and
$147, respectively 229 1,214
Other receivables 1,045 241
Inventories 175 454
Prepaid expenses and other current assets 63 165

TOTAL CURRENT ASSETS 1,972 4,485

PROPERTY AND EQUIPMENT
Machinery and equipment 293 1,929
Furniture and fixtures 177 219
Leasehold improvements 4,290 5,147

4,760 7,295
Less: Accumulated depreciation
and amortization 2,618 4,959

PROPERTY AND EQUIPMENT, NET 2,142 2,336

ASSETS HELD FOR SALE AT NET BOOK VALUE 25 447

OTHER ASSETS 357 150

TOTAL ASSETS $ 4,496 $7,418

The accompanying notes are an integral part of these statements.

Aero Services International, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS - CONTINUED
September 30,

(Dollar amounts in thousands)

LIABILITIES 1995 1994

CURRENT LIABILITIES
Current maturities of long-term debt - other $ 55 $ 194
Accounts payable - trade 648 1,293
Accrued expenses
Property, payroll, and other taxes 3,037 1,686
Environmental remediation 250 592
Other 1,695 1,286
Affiliate 532 8
TOTAL CURRENT LIABILITIES 6,217 5,059

LONG-TERM DEBT, less current maturities
Affiliate 15,610 15,428
Other 3,554 4,189
TOTAL LONG-TERM DEBT 19,164 19,617

OTHER LONG TERM LIABILITIES 343 305

REDEEMABLE PREFERRED STOCK
Series A Cumulative Convertible Preferred
Stock - no par value - authorized 500,000
shares - issued and outstanding 269,185 in
1995 and 1994 (redemption value - $5,895
and $5,637, respectively) 5,692 5,388

STOCKHOLDERS' DEFICIT
Preferred stock - authorized, 250,000 shares
of no par value, none issued
Common stock - authorized, 15,000,000 shares
of no par value; issued 7,070,052;
outstanding 6,998,052 shares 8,399 8,702
Additional paid-in capital 3,380 3,380
Accumulated deficit (38,462) (34,796)
(26,683) (22,714)

Less: Common stock in treasury
(72,000 shares at cost) 237 237

TOTAL STOCKHOLDERS' DEFICIT (26,920) (22,951)

TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT $ 4,496 $ 7,418

The accompanying notes are an integral part of these statements.

Aero Services International, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended September 30,

(Dollar amounts in thousands, except per share amounts)

1995 1994

NET SALES $10,401 $21,729

COST AND EXPENSES
Cost of sales 5,320 11,629
Departmental costs 5,061 9,166
Administrative costs 835 1,685
Interest expense-other 218 316
Interest expense-affiliate 1,516 1,201
Litigation costs, settlements,
and other assessments 229 399
(2,778) (2,667)

Gain on sale of certain FBO operations 293 2,465
Other expense, net (1,181) (170)

NET LOSS $(3,666) $ (372)

Net loss per share $ (0.57) $ (0.14)

The accompanying notes are an integral part of these statements.
<TABLE>
Aero Services International, Inc.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
For the years ended September 30, 1995 and 1994
(Dollar amounts in thousands)
<CAPTION>

Additional
Common Stock (Accumulated Treasury Stock Paid-In
Shares Amount Deficit) Shares Amount Capital Total

<S> <C> <C> <C> <C> <C> <S> <C>
Balance at September 30, 1993 5,570,052 $4,149 $(34,424) 72,000 $237 - $(30,512)
Accretion of redeemable preferred stock - (45) - - - - (45)
Dividends in arrears on preferred stock - (438) - - - - (438)
Conversion of preferred stock 1,500,000 5,036 - - - - 5,036
Additional paid-in capital resulting
from debt forgiveness - - - - - 3,380 3,380
Net loss for the year - - (372) - - - (372)

Balance at September 30, 1994 7,070,052 8,702 (34,796) 72,000 237 3,380 (22,951)
Accretion of redeemable preferred stock - (45) - - - - (45)
Dividends in arrears on preferred stock - (258) - - - - (258)
Net loss for the year - - (3,666) - - - (3,666)

Balance at September 30, 1995 7,070,052 $8,399 $(38,462) 72,000 $237 $3,380 $(26,920)

</TABLE>

The accompanying notes are an integral part of these statements.

Aero Services International, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended September 30,

(Dollar amounts in thousands)

1995 1994

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(3,666) $(372)
Adjustments to reconcile net loss to
net cash (used) by operating activities:
Depreciation and amortization 323 705
Provision for losses on accounts receivable 12 80
Provision for obsolete and slow-moving,
excess and damaged inventory - 3
(Gain) loss on sale of certain FBO operations (293) (2,465)
(Gain) on sale of fixed assets and
amortization of deferred income - affiliate (191) (175)
Current period interest included in
debt forgiveness - 1,195
Amortization of note discount 182 -
Change in assets and liabilities net of acquisitions:
(Increase) decrease in accounts receivable 1,011 350
(Increase) decrease in other receivables (799) (196)
(Increase) decrease in inventory 317 219
(Increase) decrease in prepaid expenses 103 70
(Increase) decrease in other assets 166 -
Increase (decrease) in accounts payable-trade (751) (261)
Increase (decrease) in accounts payable-affiliate - (1,177)
Increase (decrease) in property, payroll, and other taxes 1,343 170

Increase (decrease) in accrued expenses-affiliate 524 -
Increase (decrease) in accrued expenses-other 47 (1,577)
Increase (decrease) in other long-term liabilities 38 -
Other 78 (60)

Total adjustments 2,110 (3,119)

Net Cash used by operating activities (1,556) (3,491)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of fixed assets 101 -
Proceeds from sale of certain FBO operations 420 7,950
Purchase of property and equipment (116) (29)
Acquisition of FBO, net of cash acquired (387) -

Net Cash provided by (used by) investing activities 18 7,921

(continued)

Aero Services International, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
For the years ended September 30,

(Dollar amounts in thousands)

1995 1994

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of notes payable-affiliate $ - $ 300
Proceeds from issuance of long-term debt-other - 351
Principal payments under capital lease-nonaffiliate (11) -
Principal payments of notes payable-affiliate - (300)
Principal payments of long term debt-bank (8) (2,810)
Principal payments of long term debt-other (394) (102)

Net Cash (used) provided by financing activities (413) (2,561)

Net increase (decrease) in cash and cash equivalents (1,951) 1,869
Cash and cash equivalents at beginning of year 2,406 537

Cash and cash equivalents at end of year $ 455 $2,406

Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for:
Interest $1,031 $349
Income Taxes 12 7

Supplemental Schedule of Non-cash Investing and Financing Activities
The Company issued 1,500 shares of common stock upon the conversions of
250,000 shares of redeemable preferred stock in 1994. There were no
conversions in 1995.

Dividends in arrears on the Company's preferred stocks were accrued in the
amount of $258 and $438 in 1995 and 1994, respectively. Accretion on the
Company's Series A preferred stock was accrued in the amount of $45 in
both 1995 and 1994.

In addition to the $1,195 of interest expense, another $2,185 of accrued
interest and fees were forgiven during fiscal 1994, and reclassed from
Accrued Expenses - affiliate to Additional Paid-in Capital.

The accompanying notes are an integral part of these statements.

NOTE A - NATURE OF BUSINESS

The Company operates Fixed Base Operations ("FBOs") which provide ground
support services to corporate and other general aviation aircraft at four
airports throughout the United States at September 30, 1995, with one sold
subsequently, as well as similar services to air carriers at certain of
its locations. Revenue is derived from the sale of products, including
fuel, oil, and aircraft replacement parts; from services such as aircraft
maintenance, ground handling, and the pumping of fuel owned by others; and
from the rental of hangar and office space. The Company is sometimes
referred to herein as "Aero."

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the Company's significant accounting policies follows:

1. Basis of Presentation

The accompanying consolidated financial statements have been prepared
on a going concern basis which contemplates the realization of assets
and the satisfaction of liabilities and commitments in the normal
course of business.

On May 20, 1994 Triton, pursuant to an agreement of sale, converted
all of its Preferred B stock holdings in the Company to common.
Triton then sold all of the common stock and a major portion of
Preferred A stock that it owned, together with the debt from the
Company of $18,333, to Transtech Holding Company, Inc. (Transtech).
Simultaneously, Transtech forgave $2,723 of the debt, consisting of
accrued interest and fees, and agreed to eliminate any accrual of
interest due it on the debt through November 1994. Transtech also
agreed to forebear for three years collection of the remaining
$15,610 of principal debt to the extent that payments would exceed
50% of the Company's available cash flow, as part of the agreement of
sale, three directors resigned their positions and were replaced by
three individuals affiliated with Transtech. The new Board of
Directors determined that the Company needed to acquire additional
facilities that could provide profits and, more importantly, positive
cash flow. In order to proceed in this direction, the Company sold
three of its facilities, generating $3,350 in gross proceeds, of
which a portion was used to purchase Mountain State Flight Services
Inc. (See Note I - Certain FBO Matters.) Subsequent to these sales,
the Company has been involved in negotiations to purchase several
facilities that will meet its requirements. There can be no
assurance that the Company will be able to finance such additional
purchases.

At September 30, 1995, the Company had a working capital deficiency
of $4,245, stockholders' deficit of $26,920, and had incurred a net
loss of $3,666 in 1995.

At September 30, 1994, the Company had a working capital deficiency
of $574, stockholders' deficit of $22,951, and had incurred a net
loss of $372 in 1994.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

sold its lease and purchase option at Houston's Hobby Airport and
reached an agreement to participate in the ownership of a combination
of two FBOs, including one owned by the Company, at New Orleans'
Lakefront Airport. Also, negotiations are ongoing for the sale of
the Chicago FBO. The successful completion of this plan is no
guarantee that the Company can be returned to profitability or
maintained as a going concern.

The financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern.

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.

2. Principles of Consolidation

The consolidated financial statements include the accounts of the
Company and its subsidiaries, each of which is wholly-owned. All
material intercompany accounts and transactions have been eliminated
in consolidation.

3. Inventories

Aircraft parts and accessories, fuel, and supplies, are stated at the
lower of cost or market, principally on a moving average unit cost
basis. The cost of high value items is determined by specific
identification. Provisions are made for obsolete and slow moving,
excess quantity and damaged inventory. The cost of work in process
is based on accumulated direct costs not in excess of market.

4. Property, Equipment, Depreciation and Amortization

Expenditures for new property and equipment, and significant
improvements to existing assets are capitalized at cost. Maintenance
and repairs are expensed as incurred. When assets are sold or
otherwise disposed of, the cost and related accumulated depreciation
are removed from the accounts, and any gain or loss on the
disposition is reflected in current operations. Depreciation is
provided in amounts sufficient to relate the cost of depreciable
assets to operations over their estimated service lives, principally
on the straight-line basis. Leasehold improvements are amortized
over the estimated service lives of the improvements or the lives of
the respective leases whichever is shorter. The estimated service
lives used are as follows:

Machinery and equipment 5-10 years
Furniture and fixtures 5-10 years
Leasehold improvements 1-28 years

At September 30, 1995 fixed assets with a total cost of $774 and
accumulated depreciation of $749 are segregated on the balance sheet
as Assets Held for Sale. At September 30, 1994 those amounts are
$1,774 and $1,327 respectively. For further details see Note I -
Certain FBO Matters.

The Company's fixed assets are pledged as collateral for the loan
agreement with Transtech Holding Company. See Note D - Financing
Arrangements.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Maintenance and repairs expense for 1995 and 1994 was $277 and $419,
respectively.

5. Revenue Recognition

All revenue is recognized by the accrual method. Income is recorded
when tangible goods are transferred to the consumer, when services
are rendered, and during the appropriate period of rental, regardless
of when payment is received. Costs and expenses are recorded in the
period in which they are incurred regardless of when payment is made.

6. Departmental Costs

Departmental costs are specific expenses such as salaries, employee
benefits and supplies, as well as expenditures such as rent, real
estate taxes, leasehold amortization, utilities and insurance costs
of all fixed base operations.

7. Loss Per Common Share

Loss per share is based on the weighted average number of common and
common equivalent shares outstanding during each year after giving
appropriate effect, if dilutive, for the additional number of shares
which would be issuable upon the exercise of stock warrants and
options under the treasury stock method and after deducting from
income preferred stock dividends and accretion. Weighted average
shares used in computing primary loss per share were 6,998,052 and
6,044,627, for 1995 and 1994 respectively. Fully diluted loss per
share amounts are not presented for 1995 and 1994 because the amounts
are antidilutive.

8. Accrued Property, Payroll, and Other Taxes

Included in this total at September 30, 1995 and 1994 are,
respectively, $1,496 and $1,322 for property taxes. Also included in
the balance at September 30, 1995 is an accrual of $1,457 for a New
York motor fuels tax assessment which is being appealed.

9. Cash and Cash Equivalents

The Company considers cash on hand and deposits in banks as cash and
cash equivalents. All items in this category have maturities of less
than three months. The balance of Restricted Cash at September 30,
1995 and 1994 represents restricted certificates of deposit.

10. Other Receivables

The balance of $1,045 at September 30, 1995 includes $756 of
receivables due from insurance companies for lawsuits against the
Company. A liability of $816 is recorded in accrued expense-other,
with the difference representing the Company's deductible amount of
insurance.

11. Other Assets

The balance of $357 at September 30, 1995 is the unamortized portion
of goodwill, which totalled $373, that was recorded as the result of
the acquisition of Mountain State Flight Services Inc. on April 1,
1995. See Note I - Certain FBO Matters. The goodwill is being
amortized over the remaining 12 years and 9 months of the lease term
of the FBO located on the Morgantown Airport in West Virginia. The
goodwill is based on expected

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

future cash flow from a hanger facility to be constructed for a major
corporation. Goodwill will be reviewed periodically to determine the
correctness of the amortization based on undiscounted cash flow. At
September 30, 1994 the balance of $150 was a certificate of deposit
which supported a letter of credit to the Illinois Environmental
Protection Agency. Closure of the remediation project was received
during fiscal 1995 and the return of the letter of credit was
requested. It was not returned until November 1995, but the
certificate of deposit was reclassified to the cash account at
September 30, 1995 because it matured on November 23, 1995.

12. Concentration of Credit Risk

Financial instruments that are potentially subject to credit risk
consist principally of cash equivalents and trade receivables. Cash
equivalents are placed with high credit quality financial
institutions. At September 30, 1995, no customer receivable exceeded
5% of total assets. The Company generally requires no collateral
from its customers, however, a deposit is required on major work in
process.

13. Reclassification

The Company has reclassified the presentation of certain prior year
information to conform with the current presentation format.

NOTE C - INVENTORIES

Inventories are classified as follows:
Year Ended Sept. 30
1995 1994
Aircraft parts and accessories, oil and
supplies less reserves for obsolete
and slow-moving, excess quantity and
damaged items of $49 and $85 respectively $ 55 $342

Fuel 47 57

Work in process 73 55
$175 $454

NOTE D - FINANCING ARRANGEMENTS

Notes Payable - Affiliate

Beginning in May 1990, the Company's then principal shareholder,
Triton Energy Corporation (Triton), began to advance funds to the Company
in the form of a series of short term notes in order to assist the Company
in the resolution of certain existing liabilities and to supplement the
operations of the Company. As of September 30, 1993, the amounts advanced
under this arrangement aggregated $8,700. No funds were advanced in 1994.
The notes provide for interest at 2% above prime. The rate at September
30, 1995 was 10.75%. These notes were included in the sale by Triton of
it's equity position in the Company to Transtech Holding Company on May
20, 1994. (See Note J - Related Parties).

On September 30, 1993 Triton purchased from Whitney Bank the
Company's note in the amount of $6,910 of which Triton had been the
guarantor. The terms of the note call for interest to accrue on the
outstanding principal amount at the rate per annum equal to the Prime
Rate, and for payment of quarterly principal amounts of $300, along with
accrued interest, each March 31, June 30, September 30, and December 31
until the balance is paid in full. The note is collateralized by a

NOTE D - FINANCING ARRANGEMENTS - Continued

first priority interest, mortgage, assignment or lien on certain movable,
immovable or real property, leasehold interest, equipment, accounts
receivable, and inventory. This loan was also purchased by Transtech in
May 1994, together with $2,723 of accrued interest and guarantee fees.
(See Note J - Related Parties) Upon closing of the purchase from Triton,
Transtech forgave a $2,723 portion of the debt it had just acquired, and
entered into an agreement with the Company to forebear for three years
collection of the remaining $15,610 of principal debt to the extent that
payments would exceed 50% of the Company's available cash flow, and to
eliminate the accrual of interest on that debt for a period of six months
after the closing date. The amount of interest during that six month
period was $657, which together with the $2,723 of debt forgiveness, was
recorded as Additional Paid-in Capital. The $657 was recorded as a
discount to the $15,610 of debt owed to Transtech and was amortized as
interest expense over the six month period. $475 of amortized interest
expense is included in the financial statements for the year ended
September 30, 1994, and the remaining $182 is included in the financial
statements for the year ended September 30, 1995. Interest has been
accrued subsequent to the period over which the discount was amortized.

Notes Payable - Other

On September 15, 1994 accounts payable totaling $351 due to Avfuel
Corporation were converted into two notes. One note in the amount of $140
carried an interest rate of 8% and was payable in 59 equal monthly
installments of principal and interest beginning October 7, 1994, with a
final payment of $99 due on September 7, 1999. The other note in the
amount of $211 carried an interest rate of 8% and was payable in 23 equal
monthly installments of principal and interest beginning October 7, 1994,
with a final payment of $86 due on September 7, 1996. The combined
current portion of these notes of $109, was included in the financial
statements at September 30, 1994 under the heading Current Maturities of
Long-Term Debt - Other. Both of these notes were paid in full on December
31, 1994 in conjunction with the sale of the Company's facility in Tri-
City, Michigan to Avfuel. (See Note I - Certain FBO Matters.)

The Company's subsidiary, Beckett Aviation, Inc. ("Beckett"), was
purchased in 1985 and continues to be obligated on outstanding industrial
revenue bonds and notes in the amount of $3,590 at September 30, 1995,
with current maturities of $40. These obligations are reflected in the
consolidated financial statements of the Company. CSX, the original
guarantor under the bonds and notes, continues to unconditionally
guarantee the obligations.

With respect to the industrial revenue bonds maturing in 2014 and
2013, the indenture agreement requires that a series of irrevocable
letters of credit be maintained in the amount of the borrowings for as
long as the obligations are outstanding. At September 30, 1995, the
Company's subsidiary maintains irrevocable letters of credit which expire
December 30, 1996 and May 30, 1997, respectively. If the letters of
credit are not renewed, the bonds are subject to mandatory redemption.

Pursuant to a financing agreement dated September 25, 1985, the PHH
Group, Inc. ("PHH") has agreed to indemnify CSX if it is called upon
pursuant to its guaranty of Beckett's obligations under the bonds. In
accordance with an agreement dated June 1, 1988, Aero has pledged its
Beckett stock as security for PHH's indemnification commitments and has
also agreed to pay PHH a monthly standby fee calculated at a rate of 1%
per annum on $7,600.

NOTE D - FINANCING ARRANGEMENTS - Continued

The Company sold its Denver, CO facility in February 1994. The
buyer, Denver JetCenter, Inc. contractually assumed all liability in
connection with the payment of principal, interest, and related fees on
the $3,500 industrial revenue bond. The proceeds of the bond were used to
build the facility. Interest is paid monthly with the principal due in
May 2013. The Company has not been released from this liability, however,
by the issuer of the letter of credit which guarantees payment to the bond
holders. Therefore, the Company will remain contingently liable for the
payment of interest and principal, but will have legal recourse should
Denver jetCenter fail to make any required payments. Denver JetCenter has
agreed to reimburse the Company monthly for one-half of the PHH standby
fee.

Long-Term Debt
SEPTEMBER 30
1995 1994
Affiliate - Series of demand notes bearing interest
at a floating rate (10.75% at September 30, 1995).
Principal and interest were due December 30,
1993, however, note holder has waived
repayment until May 20, 1997 or as
demanded thereafter. 1994 amount shown net
of unamortized discount of $112. $ 8,700 $ 8,588

Affiliate - Installment note bearing interest
at a floating rate (8.75% at September 30,
1995). Quarterly payments of $300 plus
interest beginning June 1997. 1994 amount
shown net of unamortized discount of $70. 6,910 6,840

Industrial revenue bond bearing interest
at a floating rate (3.81% at September 30,
1995). Interest is payable monthly and
principal is due December 2014. 3,500 3,500

Industrial development revenue note, with
interest at 61% of prime (6.42% at
September 30, 1995), as set by
Nations Bank, payable in monthly
installments of $3 excluding interest
due January 1998. 90 134

Capital lease with interest imputed at 15.3%
payable in monthly installments of $9
including interest, until May 2001. - 398

Term note bearing interest at 8.00%, requiring
monthly payments of $2, including interest,
due September 1999. - 140

Term note bearing interest at 8.00%, requiring
monthly payments of $10, including interest,
due September 1996. - 211

Other notes payable 19 -
19,219 19,811

Less: Current maturities of long-term debt 55 194

$19,164 $19,617

NOTE D - FINANCING ARRANGEMENTS - Continued

Maturities of Long-Term Debt

Annual maturities of long-term debt at September 30, 1995 are as follows:

Year ending
September 30,
1996 $ 55
1997 9,344
1998 1,210
1999 1,200
2000 1,200
Thereafter 6,210
$19,219

NOTE E - INCOME TAXES

In fiscal year 1994, the Company became subject to the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes". The Company had not elected early adoption. The impact of implementing
FAS 109 did not have a material effect on the financial statements.

FAS 109 requires the recognition of future tax benefits, such as net
operating loss carry forwards (NOL's), to the extent that realization of such
benefits are more likely than not. At September 30, 1995, the Company had NOL
carry forwards for tax purposes expiring as follows:

2002 $ 1,321
2003 680
2004 5,468
2005 5,641
2006 6,050
2007 4,424
2008 3,056
2009 2,942
2010 2,077
$31,659

The full amount of the deferred tax asset ($13,550 and $12,500 at
September 30, 1995 and 1994, respectively) which primarily related to the
NOL's was offset by a valuation allowance due to uncertainties associated
with generating earnings sufficient enough to realize these tax benefits.
In addition, the impact of the change in ownership (See Note J) could
limit the amount of the tax benefit from NOL's.

NOTE F - COMMITMENTS AND CONTINGENT LIABILITIES

1. Lease Commitments

Ground operations are conducted from leased premises which include
buildings and hangar facilities. The lease arrangements expire on various
dates through 2007, with certain options for renewal. The terms of the
leases provide for monthly payments of a fixed amount with certain
escalation clauses and in some locations additional variable amounts based
on fuel flowage or other factors.

Future minimum lease payments for all non-cancelable operating leases
having a term in excess of one year at September 30, 1995 are as follows:

NOTE F - COMMITMENTS AND CONTINGENT LIABILITIES - Continued

Year ending
September 30,
1996 $ 534
1997 393
1998 303
1999 309
2000 309
Thereafter 1,682
$ 3,530

Rental expense for all operating leases for each of the years ended
September 30, 1995 and 1994 were $1,072 and $981, respectively.

The Company subleases office space under short-term and long-term
agreements to various aviation tenants. Such sublease agreements
generally provide for a minimum monthly rent and certain renewal options.
Sublease rental income included in net sales was $158 and $280, for the
years ended September 30, 1995 and 1994.

2. Letters of Credit

At September 30, 1995, the Company has an outstanding letter of
credit totaling $5. Pledged against this letter of credit are $5 in
restricted certificates of deposit.

3. Litigation

In October 1992, Mary Ann Durette filed an action, individually and
as executrix, in North Carolina Superior Court, Wake County, against the
Company, Hess Aviation, Inc., Donald Weinhold and others seeking
compensatory damages in no specified amount resulting from a fatal
aircraft accident which occurred in December 1991. The co-defendants are
Weinhold, the pilot of the aircraft and a related company, and Hess, the
company which performed an annual inspection on the aircraft in November
1991. The pilot had brought the aircraft to the Company for service after
an incident in the spring of 1991. The Company removed one engine and
propeller, sent them respectively to Triad Aviation, Inc. and H & H
Propeller Services for repair, and thereafter reinstalled them on the
aircraft. The Company has filed third party claims against both Triad and
H & H for contribution and indemnity in the event of liability. The
Company has been defending the claims through legal counsel engaged by the
Company's liability insurance carrier. In November 1995, the Company was
advised by legal counsel that these claims were subject to a proposed
settlement. The Company's share of the settlement is $350, with
approximately $30 being uninsured. An attorney for the Company negotiated
the liability in this matter down to a total of $10 which was paid in
January 1996. The Company accrued the potential liability of $330 and has
recorded a receivable from the insurance company in the amount of $320 at
September 30, 1995.

NOTE F - COMMITMENTS AND CONTINGENT LIABILITIES - Continued

By letter of December 21, 1995, the Company was advised that the
Company had lost, in a binding arbitration proceeding, the defense of a
claim by Continental Airlines for alleged defective repairs performed by
the Company. The total amount awarded to Continental Airlines is $486.
At this point, the Company has not been officially advised as to the
portion of this award that is uninsured, but the Company's insurance agent
has unofficially estimated the amount to be approximately 10% of the
total. At September 30, 1995 the Company has accrued $486 for this
liability and has recorded a receivable from the insurance company of
$436.

During fiscal 1993, the Company was informed through legal counsel
that the Company was liable for ad valorem taxes at one of its facilities
previously believed to be tax exempt. Based on assessments and prevailing
tax rates provided, the Company has calculated and accrued for a tax
liability, including penalties and interest, of $1,350, covering the
calendar years of 1987 through 1994.

During fiscal 1995, the Company incurred $229 in legal expense and
$25 for legal settlements.

4. Environmental Matters

The Company's business involves the storage, handling and sale of
fuel, and the provision of mechanical maintenance and refurbishing
services which involve the use of hazardous chemicals. Accordingly, the
Company is required to comply with federal, state and local provisions
which have been enacted to regulate the discharge of material into the
environment or otherwise relate to the protection of the environment.

4. Environmental Matters (Continued)

During fiscal 1995, based on a report by the environmental
engineering firm overseeing the project, the Company increased the reserve
for environmental cleanup by $237 for a previously owned site in
Wisconsin. There were no increases required in 1994. The Company also
incurred expenses of $4 and $16, respectively, for routine items such as
waste oil removal and underground tank testing.

During fiscal 1991, Triton provided the Company with a guarantee to
satisfy the USEPA regulations requiring proof of financial responsibility
for underground storage tank (UST) petroleum spill clean-up and third
party liability, which is $1 million per occurrence and/or a $1 million
maximum. This guarantee expired in April 1994. However, all the states
in which the Company owns or operates USTs have state operated "trust
funds" which could reimburse the Company for certain clean-up costs and
liabilities incurred from USTs thereby satisfying the financial
responsibility requirements of the EPA. These funds, which essentially
provide insurance coverage for certain environmental liabilities, are
funded by taxes on USTs or fuels purchased within each respective state.
The coverages afforded by each state vary, but generally provide up to
$1,000 for the clean-up of environmental contamination and most provide
for third party liability as well. The funds require the Company to pay
deductibles ranging from $5 to $50 per occurrence.

NOTE G - SAVINGS PLAN

The Company has an "Employees Tax Sheltered Retirement Plan."
Employees who have completed one year with a minimum of 1000 hours of
service are eligible to participate. To participate the employee must
make contributions to the plan through salary reduction pursuant to
Section 401(K) of the Internal Revenue Code. The Company matches
contributions in an amount equal to 25% of the first 2% contributed by the
employee. Employees are immediately 100% vested in their contributions,
but 100% vesting in the Company's contributions does not occur until after
one year as a plan member. The Company's contributions to the plan for
the years ended September 30, 1995 and 1994 were not significant.

NOTE H - REDEEMABLE PREFERRED STOCK AND STOCK WARRANTS

Series A Cumulative Convertible Preferred Stock

During fiscal 1986, the Company completed a public offering of
422,000 units, each unit consisting of one share of Series A Cumulative
Convertible Preferred Stock ("Series A preferred stock") and two common
stock purchase warrants ("warrants"). Under the terms of the offering,
the holders of the Series A preferred stock are entitled to receive
cumulative cash dividends at the annual rate of $.96 per share and to
preference in liquidation over common stockholders of $13.50 per share,
plus accrued and unpaid dividends. Dividends are cumulative from date of
issue and payable quarterly, except in certain instances in which the
Company is not required or may decline to pay such dividends. Each share
of Series A preferred stock is convertible into four shares of common
stock at an initial price of $3.375 per share, subject to adjustment.

The Series A preferred stock is subject to mandatory redemption at
the rate of 7-1/2% of the issue in each of the years 1996 through 2005,
with the remainder to be redeemed on August l, 2006. The mandatory
redemption price is $13.50 per share plus accrued and unpaid dividends.
The excess of the mandatory redemption price over the net proceeds
received by the Company is accreted during the period in which the stock
is outstanding. Periodic accretion based on the interest method is
charged to common stock.

NOTE H - REDEEMABLE PREFERRED STOCK AND STOCK WARRANTS - Continued

The Company has the option, subject to payment of full dividends, to
redeem the Series A preferred stock in whole or in part at $13.50 per
share for the year ended August 1, 1994 and thereafter.

Triton was the holder of 228,540 shares of outstanding Series A
preferred stock at September 30, 1993, but sold 93,947 shares to Transtech
Holding Company in May 1994.

If the Company fails to (i) pay six quarterly dividends or (ii) make
two scheduled mandatory redemptions, then the holders of the Series A
preferred stock, voting as a class, are entitled to elect two additional
members to the Board of Directors. As of September 30, 1990, the Company
had failed to pay six quarterly dividends, and therefore the holders of
the Series A preferred stock, voting as a class, were entitled to, and did
elect two members to the Board of Directors. These directors resigned
during 1993 and were replaced at the annual shareholders meeting held May
17, 1995. No dividends were paid in 1994 or 1995.

There are also certain restrictions against the payment of dividends
and certain other distributions on common stock and against the
acquisition of common stock by the Company unless all accrued dividends
have been paid and all required mandatory redemptions effected.

Total dividends in arrears relating to Series A preferred stock
amounted to $2,261 at September 30, 1995.

At September 30, 1995, the Company has reserved 1,076,740 shares of
common stock for the conversion of outstanding Series A preferred stock.

Series B Cumulative Convertible Preferred Stock

In August 1987, the Company completed a private offering to an
existing shareholder of 250,000 shares of Series B Cumulative Convertible
Preferred Stock ("Series B preferred stock") at a price of $4.00 per
share. The holder of the Series B preferred stock is entitled to receive
cumulative cash dividends at a dividend rate of 8% per annum and to
preference in liquidation over common stockholders of $12.00 per share,
plus accrued and unpaid dividends. Dividends are cumulative but not to be
paid unless Preferred A dividends are current. In the event of
non-payment of Series A dividends, the dividend rate becomes 12%.

Each share of Series B preferred stock was convertible into six
shares of common stock at an initial price of $2.00 per share, subject to
adjustment. Triton held all of the 250,000 shares and, in May 1994
converted all of them to 1,500,000 shares of common stock, which were then
sold to Transtech.

NOTE H - REDEEMABLE PREFERRED STOCK AND STOCK WARRANTS - Continued

The following is a schedule of the changes in Redeemable Preferred Stock for
the years ended September 1995 and 1994.

Series A Series B
Shares Amount Shares Amount Total

Balance September 30, 1993 269,185 $5,085 250,000 $4,856 $9,941

Accretion of Series A
Preferred Stock - 45 - - 45

Dividends in Arrears - 258 - 180 438

Conversion of Series B
Preferred Stock - - (250,000) (5,036) (5,036)

Balance September 30, 1994 269,185 5,388 0 0 5,388

Accretion of Series A
Preferred Stock - 46 - - 46

Dividends in Arrears - 258 - - 258

Balance September 30, 1995 269,185 $5,692 0 $ 0 $5,692

Stock Options

The Company maintains a Stock Option Plan (the "Plan"), which provides
for the granting of stock options to officers and other key employees of
the Company. Stock appreciation rights in the same amounts have been
granted to holders of stock options and can be exercised by surrendering
related stock options. At September 30, 1995 the Company has 450,000
options and related stock appreciation rights outstanding and reserved for
issuance under the Plan. There were no awards granted in 1995 or 1994.
The options and related stock appreciation rights generally vest over
three years. At September 30, 1995, fully vested options exercisable
totalled 340,000 with an average exercisable price of $1.31 per share.

Prior to establishment of the Plan, the Company on December 10, 1987,
granted non-qualified stock options to Robert L. Starer, then President
and Chief Executive Officer, to acquire 1,000,000 shares of common stock
at a price of $2.00 per share. As of September 30, 1995, the Company has
reserved 1,000,000 shares in connection with Mr. Starer's options.

NOTE I - CERTAIN FBO MATTERS

During fiscal 1990, the Company developed and began implementing a
strategic business plan that was designed to return the Company to
profitability. Part of this plan was to sell or close unprofitable
operations and to sell certain FBO's as required to generate working
capital. The Company has recorded losses on individual base values at the
time of consummation or when a loss is probable. Alternatively, gains on
individual bases had been deferred until the ultimate consummation of the
divestiture plan. During fiscal 1994 the Company completed the business
plan by selling its facilities at White Plains, NY, Morristown, NJ,
Denver, CO, and the remaining portion of Raleigh-Durham, NC.

NOTE I - CERTAIN FBO MATTERS - (Continued)

With the sale of Triton's major portion of its equity in the Company
(see Note J) came the resignation of three directors, including John Pugh,
the Chairman. These positions were filled in May 1994 by two officers and
one director of Transtech Holding Company, Inc., the acquirer of Triton's
holdings. The reorganized Board of Directors decided that the Company's
continued existence required additional facility sales with the proceeds
being used to purchase other FBOs that will contribute operating income.
Under this plan the Company has sold its facilities at Richmond, VA,
Scottsdale, AZ, Freeland, MI, and Youngstown, OH producing gross proceeds
of $3,933 and has purchased a facility at Morgantown, WV for $390. The
Company has been actively negotiating for the purchase of several
additional FBOs which will provide the needed operating income. There can
be no assurances that the Company can obtain additional financing for
acquisitions.

Following is a discussion of each FBO effected by either plan during
1994 and 1995.

Morgantown - On December 23, 1994, in anticipation of acquiring all of its
outstanding stock, the Company advanced $150 to Mountain State Flight
Services, Inc. (Mountain State), a West Virginia corporation, which
operates an FBO at the Morgantown, WV airport. The advance was secured by
a promissory note bearing interest at the rate of nine percent per annum,
and due and payable on February 22, 1995. R. Ted Brant, the Chairman of
the Board of Directors and Chief Executive Officer of the Company was also
President of, and a shareholder of, Mountain State. Another $30 was
advanced on February 3, 1995 and an additional $100 was advanced on
February 21, 1995, secured by a promissory note. On April 1, 1995, the
Company bought 100% of the outstanding stock of Mountain State for $110.
There was no repayment of any of the $280 of notes prior to the purchase
and were considered as part of the acquisition cost. Operating results
for 1995 from the date of acquisition were: Sales of $439 produced a net
loss of ($16).

Youngstown - On February 10, 1995 the Company sold its facility at the
Youngstown, OH airport for $120 for the fixed assets and $463 for various
inventories, including work-in-process. A gain of $76 was recorded as a
result of the sale. The Company had been operating on a month-to-month
lease since July 1994 while negotiating with the airport authority for
renewal terms. When management determined that it could not obtain
favorable terms, they decided to sell the assets. Financial results at
this location during fiscal 1994 were as follows: Sales $3,073; Operating
Loss ($137). During the four months in 1995 the facility was owned, it
produced sales of $1,181 with an operating loss of ($41).

Tri-City - On September 15, 1994 the Company entered into an agreement to
sell its facility at the Tri-City Airport in Freeland, MI for $300 plus
the assumption of a $387 note payable due on a capital lease included in
the sale, resulting in a gain of approximately $217. Settlement was made
in late December 1994. The gain was recognized in fiscal 1995. Financial
results at this location during fiscal 1994 were as follows: Sales $1,604;
operating loss ($74). During the three months in 1995 the facility was
owned, it produced sales of $510 with an operating profit of $18.

Richmond - On September 30, 1994 the Company sold its facility at the
Richmond, VA Richard E. Byrd International Airport for $2,050 resulting in
a gain of $839. Financial results at this location during fiscal 1994
were as follows: Sales $3,698; operating income $116.

NOTE I - CERTAIN FBO MATTERS - (Continued)

Scottsdale - On September 8, 1994 the Company sold its facility at the
Scottsdale, AZ airport for $1,000 resulting in a loss of $60. Financial
results at this location during fiscal 1994 were as follows: Sales $3,478;
operating loss ($62).

Houston - In July 1994 the Company entered into a 12 month lease with
Eagle Directions, Inc. to operate the Eagle Air FBO on Houston's Hobby
Airport, where the Company had been operating a maintenance only FBO on a
month-to-month lease. The extended approval process delayed actual
possession from occurring until November 21, 1994. The agreement contains
an option to purchase the facility with the owner providing financing.
This is a full service FBO and the Company relocated its maintenance
operations and terminated the month-to-month lease. By September 1995,
the results of operations convinced management that they would not
exercise the purchase option or extend the lease with Eagle Air. On
November 8, 1995 the Company assigned its interest in the sublease and
option agreement together with the fixed assets situated at the facility
to TigerAir, Inc., a Texas corporation formed by Wallace E. Congdon, the
then President of the Company. In consideration of the assignment,
TigerAir paid $250 in the form of a non-interest bearing promissory note
due and payable on the first to occur of: (1) TigerAir's subsequent sale
of the Houston FBO; (2) a change in ownership of TigerAir; or (3) the
third anniversary date of the date of closing. Effective as of the
closing, Mr. Congdon resigned as President and as a director of the
Company. Based on the results of operation during 1995, the Company
believes significant uncertainties exist as to the ability of TigerAir to
generate the required cash necessary to repay the note. Therefore, the
Company will elect to defer recognition of the gain on this sale.

Denver - On February 19, 1994 the Company sold its facility at Arapahoe
County Airport in Colorado. The purchase price was the assumption by the
buyer of the obligations of Beckett of the industrial revenue bond related
to that facility in the amount of $3,500. (See Note D, Financing
Arrangements). A gain of $16 was recognized on the sale in fiscal 1994 as
a result of a $224 writedown of assets in fiscal 1993.

Westchester - On November 12, 1993 the Company sold its facility at
Westchester County Airport in White Plains, New York for $4,000, resulting
in a gain of $995.

Morristown - On November 12, 1993 the Company sold its facility at the
Morristown, New Jersey airport to Jet Support Systems, Inc. for $850,
resulting in a gain of $122.

Raleigh-Durham - This facility was sold on July 31, 1993 but the Company
leased back the space required to maintain the avionics and maintenance
departments. In November 1993 these departments were sold for $50,
resulting in a gain of $18.

Cleveland - This facility was sold on September 16, 1993 for $1,000, but
recognition of the resulting gain of $535 was deferred until fiscal 1994
upon the completion of the Board of Directors 1990 divestiture plan.

NOTE J - RELATED PARTIES

During December 1989 the Company entered into an amended and restated
loan agreement with its principal bank. In connection with that agreement
Triton agreed to provide certain financial guarantees in an amount
determined by formula. During fiscal 1991, Triton fully guaranteed the
loan. The Company agreed to compensate Triton for its guarantee. Through
September 30, 1993 when Triton assumed this debt, the Company accrued $497
in guarantee fee, of which no amounts had been paid. The $497 was
included in the sale by Triton to Transtech of its interest in the
Company.

NOTE J - RELATED PARTIES - (Continued)

Beginning in May, 1990, the Company's then principal shareholder made
cash advances to the Company at prime plus 2% pursuant to promissory notes
authorized by the Company's Board. As of September 30, 1994 advances by
Triton to the Company totalled $8,700, plus accrued interest of $2,229 of
which no amounts had been paid. The $2,229 of accrued interest was
included in the sale by Triton to Transtech of its interest in the
Company.

In May 1994 Triton sold the majority of its equity in the Company to
Transtech (See Note D, Notes Payable - Affiliate). During May 1994,
Transtech extended a $300 line of credit to the Company which was drawn
down in full. In September 1994 the Company repaid the line of credit in
full. At September 30, 1995, Transtech owned 42.2% of the Company's
common stock and 34.9% of the Company's preferred. The Company is also
indebted to Transtech in the amount of $15,610. During fiscal year 1995,
$1,334 of interest expense was recorded against the $15,610 loans due to
Transtech, and $809 was paid. At September 30, 1995 the Company has $532
of accrued interest due to Transtech recorded on the financial statements.

In addition, in consideration for the extension of credit and debt
forgiveness and restructuring, the Company granted to Exxon (which had
financed Transtech's acquisition of the Company's Common and Series A
stock) a mortgage on the Company's leasehold interests at Tri-City
Airport, Freeland, MI. The Company also entered into agreements with
Exxon whereby Exxon will supply fuel to the Company at its locations at
Chicago (Midway), IL; Freeland, MI; Scottsdale, AZ, and Youngstown, OH.
In July 1994, the Company was named by Avfuel Corporation as a cross
defendant in an action commenced against Triton, claiming that the Company
was contractually obligated to purchase from Avfuel all of its aviation
fuel requirements. A settlement agreement was reached in September 1994
resulting in Avfuel continuing to supply fuel at Tri-City, MI, and
cancellation of Exxon's fuel agreement there. Also, Exxon agreed to the
release of the mortgage on the leasehold interest at Tri-City, which the
Company sold to Avfuel in December 1994.

In August 1994, the Company entered into an agreement with Transtech
to provide accounting services to three fixed base operations, reduced to
two in April, 1995, that were owned or controlled by Transtech. The
agreement provided for a monthly fee of twenty-six hundred dollars,
reduced to eighteen hundred in April, 1995. Through September 30, 1995,
the Company has billed Transtech $43 of which $14 has been paid. The
balance of $29 was paid by November 1995.

On April 1, 1995, the Company purchased 100% of the outstanding stock
of Mountain State Flight Services, Inc., a West Virginia corporation for
$390. Eighty percent of the stock was owned by Valley Air Services, Inc.,
whose officers include R. Ted Brant, President and Chief Executive
Officer; Maurice A. Lawruk, Vice President; and Bobby R. Adkins,
Secretary/Treasurer. In addition, Mr. Brant and Mr. Lawruk each owned
personally 7.5% of the stock, and Mr. Adkins owned 2%.

On November 8, 1995 the Company assigned its interest in the sublease
and purchase option agreement at Houston's Hobby Airport, together with
fixed assets situated at the facility, to TigerAir, Inc., a Texas
corporation formed by Wallace E. Congdon, the then President of the
Company. In consideration of the assignment, TigerAir paid $250 in the
form of a non-interest bearing promissory note. Effective as of the
closing, Mr. Congdon resigned as President and as a Director of the
Company.

NOTE J - RELATED PARTIES - (Continued)

On May 31, 1994 the Board of Directors appointed Christopher M.
Cicconi, Esquire as the Company's Corporate Secretary. They also selected
the law firm of Eckert Seamans Cherin & Mellott, of which Mr. Cicconi is
a partner, as the Company's chief legal counsel. During fiscal 1994, the
Company was billed $76 for legal services by Mr. Cicconi's firm. During
fiscal 1995, the Company was billed an additional $179 for legal services.
At September 30, 1995 the Company had outstanding amounts due Eckert
Seamans Cherin & Mellott of $30.

NOTE K - SUBSEQUENT EVENTS

On January 30, 1996 the Company entered into an agreement with Jason
IV Aviation, Inc. (Jason IV) to participate in the ownership of a
combination of two FBOs at Lakefront Airport in New Orleans, including one
that the Company owns there. Jason IV also operates at the airport.
Actual details of the agreement are being worked out.

Aero Services International, Inc. and Subsidiaries

EXHIBIT 11.1 - COMPUTATION OF PER SHARE LOSS

(Dollar amounts in thousands, except share and per share amounts)

Primary loss per common and common Year Ended
equivalent share September 30, 1995

Average common shares outstanding 6,998,052

Net Loss $ 3,666
Add:
Dividends on Series A
Cumulative Convertible Preferred Stock 258
Accretion of Series A Cumulative
Convertible Preferred Stock 45

$ 3,969

Net Loss per common share
and common equivalent share $ 0.57

Note (1)

The Series A Cumulative Convertible Preferred Stock is not considered
as common stock equivalents in the computation of primary loss per share
because, at the time of issuance, the effective yield was greater than two
thirds of the then current average A corporate bond yield.

Note (2)

The effect of the assumed exercise of the common stock options is
antidilutive.

Fully diluted loss per share is antidilutive and therefore not
presented.

Aero Services International, Inc. and Subsidiaries

EXHIBIT 11.1 - COMPUTATION OF PER SHARE LOSS

(Dollar amounts in thousands, except share and per share amounts)

Primary loss per common and common Year Ended
equivalent share September 30, 1994

Average common shares outstanding 6,044,627

Net Loss $ 372
Add:
Dividends on Series A and Series B
Cumulative Convertible Preferred Stock 438
Accretion of Series A Cumulative
Convertible Preferred Stock 45

$ 856

Net Loss per common share
and common equivalent share $ 0.14

Note (1)

The Series A and Series B Cumulative Convertible Preferred Stock are
not considered as common stock equivalents in the computation of primary
loss per share because, at the time of issuance, the effective yield was
greater than two thirds of the then current average A corporate bond
yield.

Note (2)

The effect of the assumed exercise of the common stock options is
antidilutive.

Fully diluted loss per share is antidilutive and therefore not
presented.

<ARTICLE> 5
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> SEP-30-1995
<CASH> 455
<SECURITIES> 0
<RECEIVABLES> 229
<ALLOWANCES> 0
<INVENTORY> 175
<CURRENT-ASSETS> 1,972
<PP&E> 4,760
<DEPRECIATION> (2,618)
<TOTAL-ASSETS> 4,496
<CURRENT-LIABILITIES> 6,217
<BONDS> 0
<COMMON> 8,399
5,692
0
<OTHER-SE> (35,082)
<TOTAL-LIABILITY-AND-EQUITY> 4,496
<SALES> 10,401
<TOTAL-REVENUES> 10,401
<CGS> 5,320
<TOTAL-COSTS> 5,320
<OTHER-EXPENSES> 6,125
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,734
<INCOME-PRETAX> (3,666)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,666)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,666)
<EPS-PRIMARY> (.57)
<EPS-DILUTED> 0

</TABLE>

10.123 Stock Purchase Agreement between Aero Services
International, Inc. and Mountain State Flight Services,
Ltd. dated March 31, 1995
STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of the 31st day of March, 1995 by and among AERO
SERVICES INTERNATIONAL, INC. (the "Buyer"), MOUNTAIN STATE FLIGHT
SERVICES, LTD. (the "Corporation"), and each of VALLEY AIR
SERVICES, INC., MAURICE A. LAWRUK, R. TED BRANT, DONALD DEVORRIS,
DEBORAH S. KING, BOBBY R. ADKINS, and ALICE F. BUFORD
(collectively, the "Shareholders," and, individually, a
"Shareholder").

W I T N E S S E T H:

WHEREAS, the Shareholders are the owners of all of the issued
and outstanding shares of the capital stock of the Corporation,
consisting, in the aggregate, of One Hundred (100) shares of common
stock, par value One Dollar ($1.00) per share (the "Stock"), as
follows:

Shareholder Number of Shares

Valley Air Services, Inc. 70.0
Maurice A. Lawruk 7.5
R. Ted Brant 7.5
Donald Devorris 7.5
Deborah S. King 4.5
Bobby R. Adkins 2.0
Alice F. Buford 1.0; and

WHEREAS, the Buyer desires to acquire from the Shareholders,
and the Shareholders desire to sell to the Buyer, all of the Stock
on the terms and conditions set forth in this Agreement (the
"Purchase");

NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements hereinafter set forth, and of the
respective representations and warranties herein, and for other
good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged, the Buyer, the Corporation, and the
Shareholders, intending to be legally bound, hereby agree as
follows:

1. Sale of Stock. Subject to the terms and conditions set
forth in this Agreement:

1.1 The Shareholders hereby agree, at the Closing, to sell
and transfer the Stock to the Buyer and the Buyer agrees, at the
Closing, to acquire such Stock.

1.2. The Shareholders shall make such sale, transfer,
assignment and delivery of the Stock by delivering the Buyer all
certificates evidencing ownership of the Stock, free and clear of
all liens, encumbrances or claims of others whatsoever, duly
endorsed in blank or accompanied by appropriate instruments of
transfer satisfactory to the Buyer.

1.3 The purchase price (the "Purchase Price") for the Stock
shall be, in the aggregate, One Hundred Ten Thousand Dollars
($110,000), which is Eleven Hundred Dollars ($1,100) per share.

1.4 The Purchase Price shall be paid to the Shareholders
within forty-five (45) days of the Closing Date.

2. Closing. The closing (the "Closing") under this Agreement
shall take place at the offices of the Buyer at 660 Newtown-Yardley
Road, Newtown, Pennsylvania 18940, effective as of March 31, 1995,
(the "Closing Date"). Closing may also take place at such other
time and place as the parties shall mutually agree in writing.

3. Representations and Warranties of the Corporation and the
Shareholders. The Corporation and the Shareholders hereby jointly
and severally make the following representations and warranties,
each of which is true and correct on the date hereof and will be
true and correct on the Closing Date, and each of which shall
survive the Closing Date and the transactions contemplated hereby
to the extent set forth in Section 9 hereof.

3.1. Corporate Existence and Qualification. The Corporation
is a corporation duly organized, validly existing and in good
standing under the laws of the State of West Virginia and is duly
qualified to conduct its business in each jurisdiction where the
nature of its business or its properties require it be so
qualified. The Corporation has the corporate power and authority
to own and use its properties and to transact the business in which
it is engaged, and to enter into this Agreement and to consummate
the transaction contemplated hereby.

3.2. Capitalization. The entire authorized capital stock
of the Corporation consists of One Thousand (1,000) shares of
common stock, par value One Dollar ($1.00) per share (the "Common
Stock"). There are presently issued and outstanding One Hundred
(100) shares of Common Stock, all of which are duly authorized,
validly issued, fully paid and non-assessable and without
restriction on the right of transfer thereof and which were issued
in compliance with all applicable federal and state securities or
"blue-sky" laws and regulations. The remaining authorized shares
have never been issued. There are no outstanding warrants,
options, contracts, calls, or other rights of any kind with regard
to any authorized and unissued, or issued by not outstanding,
shares of Common Stock or any other security of the Corporation of
any kind. The Shareholders do not have any right or obligation to
purchase or redeem any shares of Common Stock or any other security
of the Corporation of any kind.

3.3 Title to Stock. The Shareholders are the only record
and beneficial owners of the issued and outstanding shares of
Common Stock and the Shareholders have full right and title without
any lien or encumbrance whatsoever to such shares and full and
unrestricted right, power and authority to exchange, assign,
transfer and deliver such shares, free and clear of claims,
charges, equities, restrictions, pledges, liens or encumbrances of
any kind. The Shareholders acquired such shares legally and
without knowledge or notice of any infirmity with respect to such
shares. Each of the certificates representing such shares is in
the form approved by the Board of Directors of the Corporation and
has been duly executed by the Officers of the Corporation
authorized to execute the same and bears the corporate seal of the
Corporation, duly affixed hereto by an authorized officer of the
Corporation. There are no restrictions as to the transferability
of such shares.

3.4. Subsidiaries. The Corporation (i) does not own, of
record or beneficially, any capital stock or other securities of
any other corporation; (ii) does not own, directly or indirectly,
any interest in a business, in a business trust, joint stock
company or other business organization or association; (iii) and is
not a party to any partnership, joint venture or other business
venture.

3.5 Agreement Legal and Authorized. The execution and
delivery of this Agreement does not, and the consummation by
Shareholders of the transactions contemplated herein and the
fulfillment by Shareholders of the terms, conditions, and
provisions hereof, will not:

(a) conflict with, or result in a breach of, any of the
terms, conditions or provisions of, or constitute a default under
Articles of Incorporation or By-laws or any agreement or other
instrument to which the Corporation or the Shareholders are a party
or by which any of the Corporation's properties or assets are
bound, or grant any other party the right to terminate an agreement
with the Corporation;

(b) conflict with, violate or result in a breach of any
law, administrative regulation or court decree applicable to the
Corporation or the Shareholders; or

(c) result in the creation or imposition of any lien,
charge or encumbrance of any nature upon any of the properties or
assets of the Corporation or upon outstanding the Corporation Stock
except as provided herein.

3.6. Valid and Binding Obligation. The Shareholders have
the right, power, legal capacity and authority to enter into and
perform their obligations under this Agreement. This Agreement
constitutes a valid, binding and enforceable obligation of the
Shareholders. The sale of stock owned by Valley Air Services, Inc.
has been approved by its Board of Directors, and to the extent
required by applicable law, its shareholders.

3.7. Financial Statements. The financial statement of the
Corporation, appearing as Schedule 3.7 is true, complete and
correct, and presents fairly the financial position of the
Corporation at the respective dates indicated and the results of
operations of the Corporation for the respective periods indicated,
and does not omit to state or reflect any material fact concerning
the Corporation required to be stated or reflected therein or
necessary to make the statements therein not misleading.

3.8. Events Subsequent to Financial Statement. Since the
date of the financial statement appearing as Schedule 3.7, there
has been no, actual, threatened or anticipated:

(a) material change in the financial condition, assets,
liabilities, prospects or business of the Corporation;

(b) damage, destruction or loss (whether or not covered
by insurance) materially adversely affecting the business,
prospects or any property of the Corporation or any material
deterioration in the operating condition of the Corporation's
assets;

(c) declaration, setting aside or payment of a dividend,
return of capital or other distribution in respect of any of the
Corporation's capital stock, or any direct or indirect redemption,
purchase or other acquisition of any capital stock or securities
convertible into or exchangeable for such capital stock;

(d) strike, lockout, labor trouble or any event or
condition of any character materially adversely affecting the
business, properties or prospects of the Corporation;

(e) mortgage or pledge of or creation of any other lien,
claim or encumbrance with respect to any of the Corporation's
assets, whether tangible or intangible;

(f) making or authorization of any capital expenditures
in excess of Five Thousand Dollars ($5,000);

(g) cancellation or waiver of any right material to the
operation of the Corporation's business or any cancellation or
waiver of any debts or claims of substantial value or any
cancellation or waiver of any debts or claims against any affiliate
of the Corporation;

(h) sale, transfer or other disposition of any assets of
the Corporation, except sales of assets in the ordinary course of
business;

(i) payment, discharge or satisfaction of any liability
or obligation (whether accrued, absolute, contingent or otherwise)
by the Corporation, other than the payment, discharge or
satisfaction, in the ordinary course of business, of liabilities or
obligations shown or reflected on the financial statement attached
hereto or incurred in the ordinary course of business since the
date thereof;

(j) write-offs as uncollectible of any notes or accounts
receivable of the Corporation or write-downs of the value of any
assets or inventory by the Corporation other than in immaterial
amounts or in the ordinary course of business consistent with past
practice;

(k) change by the Corporation in the method of accounting
or keeping its books of record or accounting practices, or any
write-up of the book value of any of the Corporation's assets; or

(l) creation, incurrence, assumption or guarantee by the
Corporation of any obligations or liabilities (whether absolute,
accrued, contingent or otherwise and whether due or to become due),
except in the ordinary course of business or any creation,
incurrence, assumption or guarantee by the Corporation of any
indebtedness for money borrowed.

3.9. Accounts Payable; Undisclosed Liabilities. The current
accounts payable of the Corporation are as set forth on Schedule
3.9 hereto. The Corporation does not have any liabilities or
obligations whatsoever, whether due or to become due, accrued,
absolute, contingent or otherwise, including liabilities for or in
respect of taxes (including, without limitation, any interest or
penalties relating thereto), and the Shareholders know of no basis
for any claim against the Corporation for any liability, except (a)
to the extent set forth and used in determining the net worth of
the Corporation in the financial statement (b) to the extent
specifically set forth in this Agreement or on any of the Schedules
delivered pursuant hereto, or (c) liabilities or obligations
incurred in the normal and ordinary course of the Corporation since
compilation of the financial statement.

3.10. Taxes.

(a) The Corporation has filed, or caused to be filed,
with the appropriate foreign, federal, state, local and other
agencies, all tax returns and tax reports required by law to be
filed by it and such returns and reports are true, complete and
correct.

(b) No audit or any federal, state or local income tax
returns or other tax returns by the Corporation is in progress, or
threatened. Neither the Corporation nor the Shareholders have any
information concerning of reasonable grounds to anticipate any such
audit within the foreseeable future.

(c) There exists no past due unpaid federal, state or
local income or other tax or any tax deficiency by a governmental
agency or authority having jurisdiction assessed against the
Corporation.

(d) All income, profits, franchise, sales and use,
occupation, property, excise, ad valorem and other taxes due have
been fully paid, or adequate reserves have been set up for the same
and reflected on the financial statement, except reserves for such
as may have accrued or been incurred in the ordinary course of
business since the compilation of the financial statement.

(e) There exist no grounds for the assertion or
assessment of any additional taxes against the Corporation or its
assets.

(f) Copies of all federal income tax returns, tax
examination reports and statements of deficiencies assessed
against, or agreed to by, the Corporation with respect to the last
three (3) years will be made available to the Buyer. Such tax
returns, and all records pertinent to their preparation, shall
remain the property of the Corporation after closing and shall be
delivered into possession of the Buyer at or before that time. No
waiver of any statute of limitations has been given and is in
effect against the Corporation.

3.11. Real and Personal Property - Owned. The Corporation
has good and merchantable title to all real and personal property
reflected on Schedule 3.11 and all such property is located at the
location specified on Schedule 3.11. The Corporation holds title
to such property free and clear of all mortgages, options, liens,
charges, security interests, claims, restrictions and other
encumbrances of every kind and there exists no restriction on the
use or transfer of such property.

3.12. Necessary Property; Title to Assets. The tangible and
intangible property owned or leased by the Corporation constitute
all of such property now used in, and necessary for the conduct of,
the business of the Corporation in the manner and to the extent
presently conducted or planned by it. There exists no restriction
or reservation affecting the Corporation's title to or the utility
of its assets which would prevent it from utilizing such assets, or
any part thereof after the Purchase is consummated, to the same
full extent that they might continue to do so if the transaction
contemplated hereby did not take place. The Corporation has
registered the fictitious name "Piedmont Aviation" which is
available to the Corporation and used by it currently without
interference. The use of all names shall belong exclusively to the
Corporation and are not, and will not, be used by the Shareholders
individually or through any other entity which they own or control.
All of the following assets are owned by the Corporation, are
proprietary property of the Corporation, and shall remain with the
Corporation at and after closing: All customer lists and marketing
information, all patents, the rights to and absolute use of all
trade secrets, formulas, plans, technical specification and all
other data pertaining to the production of the Corporation's retail
products, and all rights to and absolute use of all catalogues,
advertising and promotional materials, including artwork and
exhibits.

3.13. Use and Condition of Property. All currently used
property and assets of the Corporation are in good operating
condition and repair as required for their use in the business of
the Corporation as presently conducted or planned; and no notice of
any violation of any law, statute, ordinance, or regulation or
assessment for public improvements relating to any of such property
or assets has been received by the Shareholders or the Corporation
except such as have been fully complied with. All improvements
located on, and the use presently being made of, all real property,
leased or owned by the Corporation, comply with all applicable
zoning ordinances. the Corporation and the Shareholders are not
aware of any proposed, pending or threatened change in any such
code, ordinance or standard which would adversely affect the
business of the Corporation or the use of its property and assets.
The Corporation has not received any written or oral notice or
order by any governmental or other public authority, any insurance
company which has issued a policy with respect to any of such
properties or any board of fire underwriters or other body
exercising similar functions which (a) relates to violations or
alleged violations of building, safety, fire or other ordinances or
regulations, (b) claims any defect or deficiency with respect to
any such properties or (c) requests the performance of any repairs,
alterations or other work to or in any of such properties or in the
streets bounding the same.

The Corporation and the Shareholders are not aware of any
proposed, pending or threatened condemnation proceeding or similar
action affecting the property or assets of the Corporation and
there are no proposed, pending or threatened changes with respect
to any streets or public amenities appurtenant thereto or in the
vicinity thereof which would adversely affect the business of the
Corporation or the use of its property and assets.

3.14. Inventory. Schedule 3.14 hereto contains a summary
of the Corporation's inventory as of the last day of the month for
the month immediately preceding the date hereof.

3.15. Accounts Receivable. The Accounts receivable and
notes receivable of the Corporation are as set forth on Schedule
3.15 hereto. All the accounts and notes receivable of the
Corporation represent amounts receivable for merchandise actually
delivered or services actually provided (or, in the case of non-
trade accounts or notes, represent amounts receivable in respect of
other bona fide business transactions), have arisen in the ordinary
course of business, are not subject to any counterclaims or offsets
and have been billed. All such receivables are fully collectable
in the normal and ordinary course of business, except to the extent
of a reserve in an amount not in excess of the reserve for doubtful
accounts reflected on the attached financial statement. There are
no deposits held by the Corporation which may in the future become
due to the Corporation's customers except as set forth in a
certificate heretofore delivered by the Corporation setting forth,
at the date of such certificate, the amount of customer deposits
held by the Corporation.

3.16. Contract and Commitments. The Corporation does not
have outstanding:

(a) any contact providing for any expenditure by the
Corporation for the purchase of any real property, machinery,
equipment or other items which are in the nature of capital
investment; or any contract providing for an expenditure by the
Corporation for the purchase of supplies or other items which are
in the nature of inventory which are not in the ordinary course of
business and consistent ordinary course of business and consistent
with past business practices of the Corporation;

(b) any contract, bid or offer to sell products or to
provide services to third parties which (1) is, at a price which
would result in a net loss on the sale of such products or
providing such services, or (2) which is pursuant to terms or
conditions the Corporation cannot reasonably expect to satisfy or
fulfill in their entirety;

(d) any loan agreement, indenture, promissory note,
conditional sales agreement or other similar type of agreement
other than those reflected in the attached financial statement or
otherwise disclosed in writing to the Buyer.

All leases, contracts and other commitments to which the
Corporation is a party or by which it is bound are in full force
and effect; all parties to such leases, contracts and other
commitments have complied with the provisions thereof; no such
party is in default under any of the terms thereof; and no event
has occurred that with the passage of time or the giving of notice
or both would constitute a default by any party under any provision
thereof.

3.17. Debt Instruments. A list of all instruments defining
the terms on which the Corporation has borrowed or is committed to
loan money outside of the ordinary course of its business, or has
given or committed to give a guarantee of any obligation or any
other person is set forth in Schedule 3.17.

3.18. Reasonableness - Validity of Contracts. No purchase
commitment for materials, supplies, component parts or other items
of inventory to which the Corporation is a party is in excess of
normal, ordinary, usual and current requirements of its business or
at a price in excess of the current reasonable market price. Each
of the contracts and agreements to which the Corporation is a party
is a valid and binding obligation of the parties thereto in
accordance with its terms and conditions. No party to any such
contract or agreement is in default with respect to any term or
condition thereof, nor has any event occurred which, through the
passage of time or the giving of notice, or both, would constitute
a default thereunder or would cause the acceleration of any
obligation of any party thereto or the creation of a lien or
encumbrance upon any asset of the Corporation.

3.19. No Breach of Contract. The Corporation is not in
default under, or in violation of, any provision of its Articles of
Incorporation, By-laws, any promissory note, indenture or any
evidence of indebtedness or security therefore, lease, contract,
purchase or other commitment or any other agreement to which the
Corporation is a party or by which the Corporation is bound which
may result in an advance effect on the business or financial
condition of the Corporation.

3.20. Litigation. There is no suit, claim, action or
proceeding now pending or threatened before any court,
administrative or regulatory body, or any governmental agency, nor
are the Shareholders or the Corporation aware of any grounds
therefor, to which the Corporation is a party or which may result
in any judgment, order, decree, liability or other determination
which will, or could have any material adverse effect upon the
business or financial condition of the Corporation. No such
judgment, order or decree has been entered against the Corporation
nor any such liability incurred which has, or could have, such
effect. There is no claim action or proceeding now pending or
threatened before any court, administrative or regulatory body, or
any governmental agency, nor are the Shareholders or the
Corporation aware of any grounds therefor, which will, or could,
prevent or hamper the consummation of the transactions contemplated
by this Agreement.

3.21. Compliance with Laws. Schedule 3.21 sets forth a list
of all material permits, certificates, licenses, orders,
registrations, franchises, authorizations and other approvals
(including those related to environmental matters) from all
federal, state, local and foreign bodies and held by the
Corporation. The Corporation holds all licenses and permits
necessary and required for the conduct of its businesses. Such
licenses and permits are valid and in full force and effect, and
will not be terminated or otherwise adversely affected by the
consummation of the transaction contemplated hereby. All claims,
suits, actions or proceedings (including government investigations
and audits) pending or threatened at any time and the disposition
thereof, relating to the release, discharge or emission of any
pollutants or contaminants (including hazardous and toxic
substances) or the handling, generation, treatment, storage or
disposal of any wastes or otherwise relating to the protection of
the environment resulting from or relating to the operation of the
Corporation are identified on Schedule 3.21 hereto. With respect
to each such pending, threatened or prior matter, Schedule 3.21
lists the date of the claim, suit, action or proceeding (including
governmental investigations and audits), the claimant or
investigating agency, the nature and a brief description of the
matter, the damages claimed or relief sought, and the status or
outcome of the matter. Except as disclosed on Schedule 3.21, no
notice, citation, summons or order has been issued, no complaint
has been filed, no penalty has been assessed, no claim has been
asserted and no investigation, proceeding (including governmental
investigations and audits) or review has been conducted or is
pending or threatened by any governmental or other entity (a) with
respect to any alleged violation by the Corporation of any law,
ordinance, rule, regulation or order of any governmental entity, or
(b) with respect to any alleged failure by the Corporation to have
any permit, certificate, license, approval, registration or
authorization required in connection with its business, or (c) with
respect to any release, generation, treatment, storage, recycling,
transportation or disposal of wastes (including any hazardous or
toxic or polluting substances) generated or released by the
Corporation or any other environmental matter. To the best of the
Shareholders' knowledge, the Corporation is not in violation of any
federal, state or local law, regulation, permit, provision or
ordinance relating to the generation, storage, transportation,
treatment or disposal of wastes (including hazardous, toxic or
polluting substances), has obtained and adhered to all necessary
permits or other approvals necessary to store, dispose or otherwise
handle wastes (including hazardous, toxic and polluting
substances), and has reported, to the extent required by federal,
state and local law, all past and present sites where wastes
(including hazardous, toxic or polluting substances), if any, from
the Corporation have been treated, stored or disposed.

3.22. Officers, Directors, Employees and Consultants. Set
forth on Schedule 3.22 hereto is a complete list of:

(a) all directors of the Corporation;

(b) all officers (with office held) of the Corporation;
and

(c) the name and current annual salary rate of each
employee and a description of any perquisites of office enjoyed by
such employees.

3.23. Indebtedness to and from Officers, Directors and
Others. Except as set forth on Schedule 3.23 hereto, the
Corporation is not indebted to any shareholder, director, officer,
employee or agent of the Corporation except for amounts due as
normal salaries, wages, bonuses and reimbursements of ordinary
expenses on a current basis.

3.24. Compensation and Perquisites of Agents and Employees.
The Corporation has properly and accurately reflected on its books
and records all compensation paid to and perquisites provided to or
on behalf of its agents and employees. Such compensation and
perquisites have been properly and accurately disclosed in the
financial statements and other public or private reports, records
or filings of the Corporation, to the extent required by law.
Neither the Internal Revenue Service nor any other federal, state,
local or other governmental agency or entity has initiated or
threatened any investigation of any deduction claimed by the
Corporation with respect to any of such compensation or
perquisites, the disclosure of such compensation or perquisites in
any public or private reports, records or filings of the
Corporation, or otherwise relating to such compensation or
perquisites.

3.25. Labor Agreements, Employee Benefit Plans, and
Employment Agreements. There are no long-term employment
agreements between the Corporation and any employee. All
agreements are oral and may be terminated by the Corporation at
will, except to the extent that "at will" terminations are limited,
restricted or prohibited by applicable state or federal law. The
Corporation is not a party to (a) any union, collective bargaining
or similar agreement, (b) any profit sharing, deferred
compensation, bonus, stock option, stock purchase, retainer,
consulting, health, welfare, or incentive plan or agreement whether
legally binding or not, (c) any plan or policy providing for
"fringe benefits" to its employees, including but not limited to,
vacation, disability, sick leave, medical, hospitalization, life
insurance and other insurance plans, and related benefits, except
as set forth on Schedule 3.25 hereto. There are no negotiations,
demands or proposals which are pending or have been made which
concern matters that would be covered by the type of agreements
listed in this Section.

3.26. Over-time, Back Wages, Vacation and Minimum Wages.
No present or former employee of the Corporation has any material
claim against the Corporation (whether under federal or state law,
any employment agreement, or otherwise) on account of or for (a)
over-time pay, other than over-time pay for the current payroll
period, (b) wages or salary for any period other than the current
payroll period, (c) vacation, time off or pay in lieu of vacation
or time off, other than that earned in respect of the current
fiscal year, or (d) any violation of any statute, ordinance or
regulation relating to minimum wages or maximum hours of work.

3.27. Discrimination, Occupational Safety, Wage-price and
Other Statutes and Regulations. No person or party (including, but
not limited to, governmental agencies of any kind) has any claim or
basis for any action or proceeding, against the Corporation arising
out of any statute, ordinance or regulation relating to
discrimination in employment or employment practices, occupational
safety and health standards, or inflationary wage or price
standards, which would have an adverse effect on the business or
condition, financial or otherwise, of the Corporation.

3.28. Insurance Policies. Set forth on Schedule 3.28 hereto
is a list of all insurance policies and bonds in force of which the
Corporation is the owner, insured or beneficiary, or covering the
Corporation and any of its properties, operations or personnel.
Also set forth on Schedule 3.28 hereto is a listing of when each
such policy or bond became effective and changes or coverage or
premiums over the past three years. Policies thereon described
evidence insurance in such amounts and against such risk and losses
as are generally maintained with respect to comparable businesses
and properties. There is no default with respect to any provisions
contained in any such policy, nor has there been any failure to
give any notice or present any claim under any such policy in a
timely fashion or in the manner or detail required by such policy.
No notice of cancellation or non-renewal with respect to, or
disallowance of any claim under, any such policy has been received
by the Corporation. The Corporation has not been refused any
insurance, nor has its coverage been limited by any insurance
carrier to which it has applied for insurance or with which it has
carried insurance during the last five (5) years.

3.29. Energy Regulations. The Corporation is not currently
subject to any pending action resulting from a default or violation
of any applicable statute, law, ordinance, decree, order, rule or
regulation of any federal or state governmental body (including but
not limited to the Department of Energy) relating to energy
management, energy allocation or energy conservation.

3.30. Guarantees. The Corporation is not a guarantor,
indemnitor or otherwise liable for any indebtedness of any other
person, firm or corporation except as endorser of checks received
by the Corporation and deposited in the ordinary course of
business.

3.31. Product Warranties. Set forth on Schedule 3.31 hereto
are the Corporation's standard forms of product warranties and
guarantees utilized by it and copies of all other material product
warranties and guarantees. Except as set forth on Schedule 3.31,
no products liability, warrant or similar claims have been made
against the Corporation, and there are no liabilities of the
Corporation, fixed or contingent, asserted or unasserted, with
respect to any product liability or any similar claim that relates
to any product manufactured or sold by the Corporation.

3.32. Broker's Fees. Neither the Corporation nor any of its
officers, directors, or employees on behalf of the Corporation has
paid or agreed to pay any brokerage fee, or commission or any
finder's fees to any broker, agent or finder on account of this
Agreement or any matters contemplated by it.

3.33. Bank Accounts and Safe Deposit Boxes. Set forth on
Schedule 3.33 hereto are (a) the name, branch, account number, and
purpose of all bank accounts maintained by the Corporation together
with the names of authorized signatories on each such account, (b)
the amounts and terms of each compensating balance and the reasons
therefor, (c) the location of all safe deposit boxes maintained by
the Corporation together with the names of the persons with
authorized access thereto, and (d) the name and account number of
all securities brokers with which the Corporation maintains a
securities brokerage account and the names of all persons
authorized to deal or give instructions therewith. All the
Shareholders and the Corporation's employees except as shall be
designated at Closing shall be removed as signatories thereon or
thereto.

3.34. Books and Records. The books of account, stock record
books and minute books and other corporate records of the
Corporation are in all material respects complete and correct, have
been maintained in accordance with good business practices and the
matters contained therein are accurately reflected, to the extent
appropriate, on the Financial Statement. The articles of
incorporation and bylaws and all amendments thereto of the
Corporation, and the minute books and stock books of the
Corporation have been complete to the date hereof. All of such
records shall remain the property of the Corporation after Closing
and shall be delivered into the possession of the Buyer on or
before that date.

3.35. Securities Registration. The Corporation Stock is not
registered nor required to be registered under Section 12(a) of the
Securities Exchange Act of 1934, as amended.

3.36. Full Disclosure. The Corporation and Shareholder
shall provide full and unrestricted access to all financial records
of the Corporation to the Buyer. No representation or warranty by
the Corporation, or the Shareholders in this Agreement, or in any
certificate, exhibit, schedule or other document furnished or to be
furnished by the Corporation, or the Shareholders pursuant hereto,
contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the
statements contained therein not misleading.

3.37. Absence of Certain Conditions. Since the date of the
Financial Statement in Schedule 3.7, (other than as disclosed in
the Adjusted Balance Sheet set forth on Schedule 3.7) the
Corporation did not:

(a) Mortgage, pledge, or subject to lien, lease, security
interest or other charge or encumbrance any of the properties or
assets of the Corporation.

(b) Transfer, sell or dispose of any of the assets or
properties of the Corporation, except in the ordinary and usual
course of business.

(c) Incur, create, assume and guarantee any indebtedness,
liabilities, or obligations other than (1) in the usual and
ordinary course of business and with a maturity date of less than
one year or (2) that are incurred pursuant to contracts disclosed
in the Schedule delivered pursuant hereto.

(d) Enter into any contract or commitment or engage in
any transaction which is not in the usual and ordinary course of
business or which is inconsistent with past practices.

(e) Make any material capital expenditure or enter into
any lease of capital equipment or real estate.

(f) Enter into any contract, other than in the ordinary
course of business, which is to be performed in more than thirty
(30) days, other than those described in writing to the Buyer.

(g) Forgive or cancel any debts or claims or waive any
rights except in the ordinary course of business.

(h) Increase the rate of compensation to the officers,
agents, or salaried employees of the Corporation.

(i) Increase the rate of compensation to non-salaried
employees of the Corporation, provided, however, that ordinary
merit increases not unusual in character or amount may be made in
the ordinary course of business.

(j) Make any payments of severance of termination pay.

(k) Enter into or amend any stock option, deferred
compensation, bonus, profit-sharing, incentive, compensation
payment, pension, retirement, medical, hospitalization, life
insurance, other insurance, or other plan.

(l) Enter into any employment contracts or collective
bargaining agreement.

(m) Issue any additional shares of stock or other
securities.

(n) Make any distribution to the Shareholders by way of
dividends, purchase of shares, or otherwise.

(o) Make any amendments to or changes in its articles of
incorporation or by-laws.

(p) Perform any act, or attempt to do any act, or permit
any act or omission to act, which will cause a breach of any
material contract, commitment or obligation to which the
Corporation is a party.

3.38. Right to Negotiate Contracts of Employment. the
Shareholders and the Corporation agree that the Buyer shall have
the right to negotiate contracts of employment with the current
management and supervisory personnel of the Corporation.

4. Representations and Warranties of the Buyer. The Buyer
hereby makes the following representations and warranties, each of
which is true and correct on the date hereof and will be true and
correct on the Closing Date, and each of which shall survive the
Closing Date and the transactions contemplated hereby to the extent
set forth in Section 9 hereof.

3.1. Corporate Existence and Qualification. The Buyer is
a corporation duly organized, validly existing and in good standing
under the laws of the State of Louisiana and is duly qualified to
conduct its business in each jurisdiction where the nature of its
business or its properties require it be so qualified. The Buyer
has the corporate power and authority to own and use its properties
and to transact the business in which it is engaged, and to enter
into this Agreement and to consummate the transaction contemplated
hereby.

3.2. Agreement Legal and Authorized. The execution and
delivery of this Agreement does not, and the consummation by the
Buyer of the transactions contemplated herein and the fulfillment
by the Buyer of the terms, conditions, and provisions hereof, will
not:

(a) conflict with, or result in a breach of, any of the
terms, conditions or provisions of, or constitute a default under
Articles of Incorporation or By-laws or any agreement or other
instrument to which the Buyer is a party or by which any of the
Buyer's properties or assets are bound, or grant any other party
the right to terminate an agreement with the Buyer; or

(b) conflict with, violate or result in a breach of any
law, administrative regulation or court decree applicable to the
Buyer.

3.3. Valid and Binding Obligation. The Buyer has the
right, power, legal capacity and authority to enter into and
perform its obligations under this Agreement. This Agreement
constitutes a valid, binding and enforceable obligation of the
Buyer.

3.4. Broker's Fees. Neither the Buyer nor any of its
employees has paid or agreed to pay any brokerage fee or commission
or any finder's fee to any broker, agent or finder on account of
this Agreement.

5. Covenants of the Corporation and Shareholders. The
Corporation and Shareholders jointly and severally agree that from
and after the date of this Agreement and until the Closing Date
they will conduct the Corporation's business subject to the
following provisions and limitations contained in this Section 5.

5.1. Operation of Business. Without the prior written
consent of the Buyer, the Corporation will not:

(a) Mortgage, pledge or subject to lien, lease, security
interest, or other charge or encumbrance any of the properties or
assets of the Corporation.

(b) Transfer, sell, or dispose of any of the assets or
properties of the Corporation, except in the ordinary and usual
course of business.

(c) Incur, create, assume or guarantee any indebtedness,
liabilities, or obligations other than (1) in the usual and
ordinary course of business and with a maturity date of less than
one year or (2) that are incurred pursuant to contracts disclosed
in the Schedule delivered pursuant hereto.

(d) Enter into any contract or commitment or engage in
any transaction which is not in the usual and ordinary course of
business or which is inconsistent with past practices.

(e) Make any material capital expenditure or enter into
any lease of capital equipment or real estate.

(f) Forgive or cancel any debts or claims, or waive any
rights except in the ordinary course of business.

(g) Increase the rate of compensation to the officers,
agents, or salaried employees, of the Corporation.

(h) Increase the rate of compensation to non-salaried
employees of the Corporation, provided, however, that ordinary
merit increases not unusual in character or amount may be made in
the ordinary course of business.

(i) Make any payments of severance or termination pay.

(j) Enter into or amend any stock option, deferred
compensation, bonus, profit-sharing, incentive compensation
payment, pension, retirement, medical, hospitalization, life
insurance, other insurance, or other plan.

(k) Enter into any employment contracts or collective
bargaining agreement.

(l) Issue any additional shares of stock or other
securities.

(m) Make any distribution to the Shareholders by way of
dividends, purchase of shares, or otherwise.

(n) Make any amendments to or changes in its articles of
incorporation or by-laws.

(o) Perform any act, or attempt to do any act, or permit
any act or omission to act, which will cause a breach of any
material contract commitment or obligation to which the Corporation
is a party.

5.2. Preservation of Business. The Corporation shall
carry on its business diligently and substantially in the same
manner as heretofore conducted and shall keep its business
organizations intact, including its present employees (except for
such as may be discharged for cause and with prior notification to
the Buyer) and its present relationships with suppliers and
customers and others having business relations with it. The
Corporation will at all times maintain in inventory supplies to
allow it to continue and operate its business, after the Closing
Date, free from any reasonable shortage of such items.

5.3. Insurance and Maintenance of Property. The
Corporation will cause all property owned or leased by it to be
insured against all ordinary and insurable risks and will operate,
maintain, and repair all its property in a careful, prudent, and
efficient manner.

5.4. Full Access. the Buyer shall have full access at all
reasonable times to all premises, properties, books, records,
contracts, tax records, and documents of the Corporation and the
Corporation will furnish to the Buyer any information in respect of
the business and affairs of the Corporation as the Buyer may from
time to time reasonably request. Such examination and
investigation by the Buyer shall not affect the warranties and
representations of the Corporation and the Shareholders contained
in this Agreement.

5.5. Books, Records, and Financial Statements. The
Corporation shall maintain its books and financial records in
accordance with generally accepted accounting principles
consistently applied, and on a basis consistent with the past
practices of the Corporation. Said books and financial records
shall fairly and accurately reflect the operations of the
Corporation. The Corporation shall furnish to the Buyer as
available, monthly financial statements and operating reports
applicable to the operations of the Corporation, all of which shall
be prepared in accordance with generally accepted accounting
principles consistently applied and shall present fairly the
financial position and results of operations of the Corporation at
the dates and for the periods indicated.

6. Covenants of the Corporation, Shareholders, and the Buyer.

6.1. Confidentiality. Each party to this Agreement
covenants and agrees with the other parties to hold in confidence
all documents and information concerning the other parties
furnished to it in connection with the transaction contemplated by
this Agreement and not otherwise available to it, and agrees to use
such information only in connection with such transaction. Each
party further agrees not to release or disclose such information to
any other person, except its outside accountants, attorneys, and
consultants. If the transaction contemplated by this Agreement
shall not be consummated, such confidence shall be maintained and
such information shall not be used in competition with any other
party (except to the extent that such information was previously
known to such party, in the public domain, or later acquired by
such party from other legitimate sources and all such documents
shall immediately thereafter be returned to the party furnishing
same.

6.2. Good Faith Efforts. Each party to this Agreement
shall, respectively, utilize his, her, or its best good faith
efforts to carry out the intent and purposes of this Agreement and
to cure or correct any unintentional deviations from this Agreement
and to accomplish any of the undertakings in this Agreement.

7. Conditions Precedent to the Obligations of the Buyer to
Close. The obligations of the Buyer to consummate the transactions
contemplated by this Agreement are subject to satisfaction of each
of the conditions set forth in this Section 7 on or before the
Closing Date, subject to the right of the Buyer to waive any one or
more of such conditions.

7.1. Representations and Warranties of the Shareholders
and the Corporation. The representations and warranties of the
Shareholders and the Corporation contained in this Agreement and in
any certificate, exhibit, schedule or other document delivered to
the Buyer pursuant to the provisions of this Agreement or in
connection with the transaction contemplated hereby shall be true
and correct on and as of the Closing Date as though such
representations and warranties were made on the Closing Date.

7.2. Performance of this Agreement. The Shareholders and
the Corporation shall have performed and complied with all
agreements and conditions required by this Agreement to be
performed or complied with by them prior to or at the Closing.

7.3. Certificate. The Shareholders and the Corporation
shall have delivered to the Buyer a certificate, dated that Closing
Date, certifying to the fulfillment of the conditions specified in
Sections 7.1, 7.7, and 7.8 of this Agreement. Such certificate or
certificates shall be deemed a representation and warranty of the
Shareholders and the Corporation hereunder.

7.4. Approval by Boards of Directors and Shareholders.
The Shareholders and Board of Directors of the Corporation shall
have approved and adopted this Agreement and the transactions
contemplated hereby to the extent required by law and by the
Articles of Incorporation and By-Laws of the Corporation.

7.5. Secretary's Certificate. The Buyer shall have
received from the Secretary of the Corporation a certificate
certifying the approval by the Board of Directors and Shareholders
of this Agreement and the transactions contemplated hereby.

7.6. Material Adverse Change. There shall have been no
material adverse change, actual or threatened, in the properties,
business or condition, financial or otherwise, of the Corporation,
whether or not covered by insurance, as a result of fire, flood,
explosion, earthquake, disaster, accident or other calamity, labor
dispute, any action of the United States or other governmental
authority, riots, civil disturbance, uprisings, activity of the
Armed Forces, or act of God or the public enemy.

7.7. No Lawsuits. No suit, action or other proceeding or
investigation shall be threatened or pending before or by any court
or governmental agency concerning this Agreement or the
consummation of the transactions contemplated hereby, or in
connection with any material claim against the Corporation not
disclosed on the Schedules hereto. No governmental agency shall
have threatened or directed any request for information concerning
this Agreement, the transaction contemplated hereby, or the
consequences or implications of such transaction to the
Shareholders, Corporation or the Buyer, or any officer, director
employee or agent of any of them.

7.8. No Restriction. There shall not exist any
conditions, restrictions or reservations affecting the title to or
utility of the assets or property of the Corporation which would
prevent them from occupying and utilizing said assets and property,
or any part thereof, to the same full extent that they might
continue to do so if the Purchase contemplated hereby did not take
place.

7.9. Audit and Investigation. The Buyer shall have the
absolute right to have audits performed by their accountant(s) of
all financial records, tax returns, bank statements, audit reports
and all other materials relating to the conduct and operation of
the Corporation. The Buyer shall be reasonably satisfied with the
results of any audit and investigation of the Corporation
undertaken by them between the date of this Agreement and the
Closing Date.

7.10. Governmental Approvals. The Buyer shall have
obtained the approval or consent of such government agencies or
bodies, domestic or foreign, as the Buyer shall deem reasonably
necessary in connection with the consummation of the Purchase.

7.11. Further Assurances. The Buyer shall have received
such further instruments and documents as may reasonably be
required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained and the
performance of all conditions to the consummation of such
transactions.

7.12. Approval of Counsel. The validity of the
transactions herein contemplated and the form and substance of all
stock certificates, powers of attorney, instruments, closing
documents and other documents or certificates to be delivered by
the Corporation or Shareholders hereunder shall be satisfactory to
counsel for the Buyer.

7.13. Resignations. The Shareholders shall cause to be
delivered, at the Closing, written resignations of the
Corporation's directors and officers.

8. Conditions Precedent to the Obligations of the
Shareholders to Close. The obligations of the Shareholders to
consummate the transactions contemplated by this Agreement are
subject to satisfaction of each of the conditions set forth in this
Section 8 on or before the Closing Date, subject to the right of
the Shareholders to waive any one or more such conditions.

8.1. Representations and Warranties of the Buyer. The
representations and warranties of the Buyer contained in this
Agreement and in any certificate, exhibit, schedule or other
document delivered to the Shareholders pursuant to the provisions
of this Agreement or in connection with the transactions
contemplated hereby shall be true and correct on and as of the
Closing Date as though such representations and warranties were
made on the Closing Date.

8.2. Performance of this Agreement. The Buyer shall have
performed and complied with all agreements and conditions required
by this Agreement to be performed or complied with by it prior to
or at the Closing.

8.3. Approval of Counsel. The validity of the
transactions herein contemplated and the form and substance of all
instruments, closing documents, and other documents or certificates
to be delivered by the Buyer hereunder shall be satisfactory to
counsel for the Shareholders.

9. Indemnification; Survival of Representations and
Warranties.

9.1. Survival of Warranties and Representations. All
representations, warranties, and agreements of the Buyer, the
Corporation, and the Shareholders made under or pursuant to this
Agreement shall survive the Closing Date for a period of one (1)
year.

9.2. Indemnification. The Shareholders hereby covenant
and agree, for a period of one (1) year after the Closing Date, to
indemnify and hold harmless the Buyer from and against any and all
loss, liability image or expense (including, but not limited to,
reasonable attorney's fees incident thereto) arising out of, or
resulting from, any material misrepresentation or the breach of any
warranty, representation or covenant made by the Corporation or the
Shareholders in this Agreement, the Schedules hereto and any and
all written statements, certificates, instruments and documents
delivered to the Buyer pursuant to this Agreement on or before the
Closing Date. The Shareholders hereby covenant and agree, for a
period of one (1) year after the Closing Date, to indemnify the
Buyer against any and all liabilities of the Corporation of any
nature, whether accrued, absolute, contingent or otherwise, to the
extent not reflected in the Financial Statement attached hereto
including all tax liabilities, for any period prior to the date of
Closing or arising out of transactions entered into, and any stated
facts existing, prior to such date. The Shareholders hereby
covenant and agree, for a period of one (1) year after the Closing
Date, to indemnify and hold harmless buyer from and against any and
all loss, liability, damage or expense (including but not limited
to, reasonable attorney's fees incident thereto) arising out of, or
resulting from, the content or operations of the business of the
Corporation and all of its business equipment up to the date of
closing on the purchase and sale of stock provided for in this
agreement. Notwithstanding any of the foregoing provision, the
Shareholders' liability hereunder shall be limited to a cumulative
amount of One Hundred Thousand Dollars ($100,000).

9.3. Remedies. In the event that any claim is made
against the Buyer for any matter for which the Shareholders have
agreed to indemnify the Buyer per the terms of Section 9.2 of this
Agreement, the Shareholders shall have the right to defend such
claim. The Buyer agrees to provide the Shareholders at the
Shareholders' expense, with all material and information in the
Buyer's possession reasonably necessary to the defense of any such
claim by the Shareholders. The Buyer shall give the Shareholders
notice of any such claim with reasonable promptness. In the event
of litigation, such notice shall be in writing and sent to the
Shareholders within ten (10) days of receipt of the Complaint by
the Buyer. The Shareholders shall notify the Buyer in writing with
reasonable promptness (and in the event of litigation, within five
(5) days of receipt of the aforesaid notice of litigation) as to
whether the Shareholders intend to contest such claim or liability.
In the interim, the Buyer shall take any action it deems
appropriate with respect to such claim to protect against default.
If the Shareholders do not move to contest or defend any claims as
required herein, then upon such failure to do so, the Buyer shall
be entitled upon demand to immediate payment from the Shareholders
of the indemnified amount.

10. Termination.

10.1. Termination by the Shareholders. The Shareholders
may terminate this Agreement by giving written notice to the Buyer
at any time prior to the Closing if a condition to the performance
of the Shareholders hereunder shall not be fulfilled on or before
the date specified for the fulfillment thereof or if a material
default under or a material breach of this Agreement shall be made
by the Buyer.

10.2. Termination by the Buyer. The Buyer may terminate
this Agreement by giving written notice to the Shareholders at any
time prior to the Closing if a condition to the performance of the
Buyer hereunder shall not be fulfilled on or before the date
specified for the fulfillment thereof or if a material default
under or a material breach of this Agreement shall be made by the
Corporation or the Shareholders, or if a material misstatement,
error or omission in any representation or warranty set forth
herein or in any certificate, exhibit, schedule or other document
furnished by the Shareholders pursuant hereto shall occur or be
made by the Shareholders.

10.3. In the Event of Termination. In the event of the
termination and abandonment of the closing of this transaction
pursuant to the provisions of Section 10 of this Agreement, this
Agreement shall become void and have no effect, without any
liability on the part of any party or the directors, officers or
stockholders of the Buyer, the Shareholders or the Corporation
except for the provisions contained in the last sentence of Section
6.1 and all of Section 11.3 hereof; provided, however, that if any
party hereto willfully fails to perform its obligations herein, any
other party may seek any available legal or equitable remedies in
addition to those provided herein. The parties hereto shall have
the right to seek specific performance hereof.

11. Miscellaneous.

11.1. Notices. All notices, requests, consents, waivers,
elections and demands (collectively, "Notices") required or
permitted under this Agreement or any other Document shall be in
writing and shall be personally delivered or sent by messenger,
certified U.S. mail (return receipt requested), express courier
service or facsimile (with confirmation copy sent by overnight
delivery service unless receipt of the facsimile is confirmed), in
all cases with postage or charges prepaid, and any such Notice
shall be effective when first received by the addressee at its
address set forth below:

If to the Buyer:

Aero Services International, Inc.
660 Newtown-Yardley Road
Newtown, PA 18940
Attention: Wallace E. Congdon, President
Facsimile: (215) 968-6010

If to the Shareholders:

Maurice A. Lawruk
Lawruk Builders, Inc.
210 West Plank Road
Altoona, PA 16602
Facsimile: (814) 944-3549

R. Ted Brant
Lawruk-Brant Partnership
1331 12th Avenue
Suite 109
Gables Office Complex
Altoona, PA 16601
Facsimile: (814) 941-4302

Donald Devorris
304 E. Ward Avenue
Altoona, PA 16602
Facsimile: (814) 949-8286

Deborah S. King
1331 12th Avenue
Suite 109
Gables Office Complex
Altoona, PA 16601
Facsimile: (814) 941-4302

Bobby R. Adkins
1331 12th Avenue
Suite 109
Gables Office Complex
Altoona, PA 16601
Facsimile: (814) 941-4302

Alice F. Buford
1331 12th Avenue
Suite 109
Gables Office Complex
Altoona, PA 16601
Facsimile: (814) 941-4302

Valley Air Services, Inc.
1331 12th Avenue
Suite 109
Gables Office Complex
Altoona, PA 16601
Facsimile: (814) 941-4302

If to the Corporation:

Mountain State Flight Services, Inc.
1331 12th Avenue
Suite 109
Gables Office Complex
Altoona, PA 16601
Attention: R. Ted Brant
Facsimile: (814) 941-4302

Any party may alter the address to which Notices are to be sent by
giving notice of such change of address in conformity with the
provisions of this section for the giving of Notices.

11.2. Successors and Assigns; Entire Agreement;
Modification. This Agreement shall be binding upon and inure to
the benefit of the respective parties hereto and their respective
assigns, successors, heirs, executors, and administrators. This
Agreement contains the entire agreement between the parties hereto
with respect to the transactions contemplated herein and shall not
be modified or amended except by an instrument in writing signed by
or on behalf of the parties hereto. However, at any time prior to
the Closing Date, either the Shareholders or the Buyer may:

(a) extend the time for the performance of any
obligations or acts of the other of them;

(b) waive any inaccuracies by the other in the
representations and warranties contained herein or in any document
delivered pursuant hereto; and

11.3. Expenses. The Shareholders and Buyer shall pay their
own expenses incident to the preparation and execution of this
Agreement and the consummation of the transactions contemplated
hereby. The Corporation shall bear none of such expenses. The
Corporation shall have no liability or responsibility for payment
of any finders' fee or brokers' commissions arising from this
transaction.

11.4. Governing Law; Unenforceability. This Agreement
shall be governed by and construed and enforced in accordance with
the laws of the Commonwealth of Pennsylvania without giving effect
to its conflicts of laws provisions.

11.5. Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall
be deemed an original but all of which together shall constitute
one and the same instrument.

11.6. Headings. The paragraph headings in this Agreement
are for convenience of reference only and shall not be deemed to
alter or affect any provisions hereof.

IN WITNESS WHEREOF, intending to be legally bound, the parties
hereto have duly executed this Agreement as of the date first
hereinabove written.

WITNESS/ATTEST: BUYER:

AERO SERVICES INTERNATIONAL, INC.

________________________ By: ______________________________
Deborah S. King R. Ted Brant

Its: CEO
<PAGE>
[SIGNATURES CONTINUED ON NEXT PAGE]

CORPORATION:

MOUNTAIN STATE FLIGHT SERVICES, LTD.

________________________ By: ______________________________
Deborah S. King R. Ted Brant

Its: President

SHAREHOLDERS:

________________________ ___________________________________
Deborah S. King Maurice A. Lawruk

________________________ ___________________________________
Deborah S. King R. Ted Brant

________________________ ___________________________________
Deborah S. King Donald Devorris

________________________ ___________________________________
Deborah S. King Deborah S. King

________________________ ___________________________________
Deborah S. King Bobby R. Adkins

________________________ ___________________________________
Deborah S. King Alice F. Buford

VALLEY AIR SERVICES, INC.

________________________ By:______________________________
Deborah S. King R. Ted Brant

Its: President
<PAGE>
WRITTEN CONSENT IN LIEU OF A MEETING OF THE
BOARD OF DIRECTORS
OF
MOUNTAIN STATE FLIGHT SERVICES, LTD.

The undersigned, being all the directors of Mountain State
Flight Services, Ltd. (the "Corporation"), hereby adopt the
following resolutions by written consent without a meeting:

WHEREAS, the shareholders of the Corporation have
determined to sell all of the issued and outstanding
shares of the Corporation's common stock to Aero Services
International, Inc.

NOW, THEREFORE, BE IT RESOLVED, that the officers of the
Corporation be, and hereby are, authorized, empowered and
directed, in the name and on behalf of the Corporation,
to execute and deliver a stock purchase agreement (the
"Stock Purchase Agreement") for the sale of all of the
issued and outstanding shares of common stock of the
Corporation, which Stock Purchase Agreement shall be in
substantially the form and under substantially the terms
and conditions as set forth in Exhibit A hereto; and

BE IT FURTHER RESOLVED, that the officers of the
Corporation be, and hereby are, authorized, empowered and
directed, in the name and on behalf of the Corporation,
to execute and deliver all such other documents,
certificates and instruments, and to take all such other
acts, and do all such other things as shall be both
reasonable and necessary in order to effectuate these
resolutions and the transactions herein contemplated; and

BE IT FURTHER RESOLVED, that all actions heretofore taken
by the officers of the Corporation, and any of them, in
connection with and with respect to the transactions
contemplated by these resolutions be, and the same hereby
are, approved, confirmed and ratified in each and every
respect as the acts and deeds of the Corporation; and

BE IT FURTHER RESOLVED, that the Secretary of the
Corporation be, and hereby is, directed to file this
Consent with the minutes of the proceedings of the Board
of Directors.

This Consent may be executed in one or more counterparts, all
of which, taken together, shall constitute a single executed
original.

IN WITNESS WHEREOF, the undersigned have hereunto set their
hands as of this 31st day of March, 1995.

_______________________________
_______________________________
R. Theodore Brant Maurice Lawruk

_______________________________
Donald Devorris<PAGE>
CERTIFICATE OF SECRETARY

The undersigned, Bobby R. Adkins, duly elected, qualified and
acting as Secretary of Mountain State Flight Services, Ltd. (the
"Corporation"), certifies that:

1. Attached to this certificate as Exhibit A is
a true and complete copy of resolutions
adopted by Written Consent in Lieu of a
Meeting of the Board of Directors on March
31, 1995 (the "Resolutions"). The
Resolutions have not been amended and are in
full force and effect on and as of the date
of this certificate.

2. Attached to this certificate as Exhibit B is
a true and complete copy of the Articles of
Incorporation and all amendments thereto of
the Corporation as in effect on and as of the
date of this certificate.

3. Attached to this certificate as Exhibit C is
a true and complete copy of the Bylaws of the
Corporation as in effect on and as of the
date of this certificate.

4. Each of the following persons is, on and as
of the date of this certificate, a duly
elected, qualified and acting officer of the
Corporation, holding the office set forth
beside his respective name, and is authorized
to execute and deliver documents and to
effect other transactions pursuant to or
contemplated by the Resolutions, and the
signature appearing opposite his name below
is the true and genuine signature of such
officer:

NAME OFFICE SIGNATURE

R. Theodore Brant President _______________________

Bobby R. Adkins Vice President/
Secretary/Treasurer_______________________

IN WITNESS WHEREOF, I have executed this certificate as of the
5th day of
May , 1995.

Bobby R. Adkins,
Secretary

<PAGE>
CERTIFICATE

The undersigned, Valley Air Services, Inc., Maurice A. Lawruk,
R. Theodore Brant, Donald Devorris, Deborah S. King, Bobby R.
Adkins and Alice F. Buford (collectively, the "Shareholders") and
Mountain State Flight Services, Ltd. (the "Corporation") hereby
certify that:

1. The representations and warranties of the
Shareholders and the Corporation contained in
the Stock Purchase Agreement by and among
Aero Services International, Inc. (the
"Buyer") the Corporation and the Shareholders
dated March 31, 1995 (the "Agreement") and in
any certificate, exhibit, schedule or other
document delivered to the Buyer pursuant to
the provisions of the Agreement or in
connection with the transaction remain true
and correct as of the date hereof.

2. No suit, action or other proceeding or
investigation is threatened or pending before
or by any court or governmental agency
concerning the Agreement or consummation of
the transaction, or in connection with any
material claim against the Corporation not
disclosed on the schedules attached and made
a part of the Agreement. No governmental
agency has threatened or directed any request
for information concerning the Agreement, the
transaction, or the consequences or
implications of such transaction to the
undersigned, the Buyer, or any officer
director, employee or agent of any of them.

3. No conditions, restrictions or reservations
exist that affect the title to or utility of
the assets or property of the Corporation
which would prevent them from occupying and
utilizing said assets and property, or any
part thereof as of the date hereof.

IN WITNESS WHEREOF, we have executed this certificate as of
the 5th day of
May , 1995.

VALLEY AIR SERVICES, INC.

By:
_________________________________

[SIGNATURES CONTINUED ON THE NEXT PAGE]<PAGE>
___________________________________
Maurice A. Lawruk

___________________________________
R. Theodore Brant

___________________________________
Donald Devorris

___________________________________
Deborah S. King

___________________________________
Bobby R. Adkins

___________________________________
Alice F. Buford

MOUNTAIN STATE FLIGHT SERVICES, LTD.

By: _______________________________
R. Ted Brant<PAGE>
CERTIFICATE OF SECRETARY

The undersigned, Bobby R. Adkins, duly elected, qualified and
acting as Secretary of Valley Air Services, Inc. (the
"Corporation"), certifies that:

2. Each of the following persons is, on and as
of the date of this certificate, a duly
elected, qualified and acting officer of the
Corporation, holding the office set forth
beside his respective name, and is authorized
to execute and deliver documents and to
effect other transactions pursuant to or
contemplated by the Resolutions, and the
signature appearing opposite his name below
is the true and genuine signature of such
officer:

NAME OFFICE SIGNATURE

R. Theodore Brant President _________________________

Maurice A. Lawruk Vice President_________________________

Bobby R. Adkins Secretary _________________________

IN WITNESS WHEREOF, I have executed this certificate as of the
5th day of
May , 1995.

_______________________________
Bobby R. Adkins,
Secretary<PAGE>

10.122 Asset Purchase Agreement between Aero Services
International, Inc. (Seller) and Winner Aviation
Corporation (Purchaser) dated February 7, 1995<PAGE>
PURCHASE AND SALE

THE YOUNGSTOWN, OHIO FBO FACILITY

AERO SERVICES INTERNATIONAL, INC.

BETWEEN

AERO SERVICES INTERNATIONAL, INC.

("SELLER")

AND

WINNER AVIATION CORPORATION

("PURCHASER")

February 7, 1995

Christopher M.
Cicconi, Esquire
Eckert Seamans
Cherin & Mellott
213 Market Street
Harrisburg, PA 17101<PAGE>
CLOSING INDEX

PURCHASE AND SALE OF
THE YOUNGSTOWN, OHIO FBO FACILITY OF
AERO SERVICES INTERNATIONAL, INC. BETWEEN
AERO SERVICES INTERNATIONAL, INC. ("SELLER")
AND WINNER AVIATION CORPORATION ("PURCHASER")

Closing: Effective February 7, 1995

Document

1. Asset Purchase Agreement
(with Schedules and Exhibits)

2. Bill of Sale and Assignment

3. Certificate of Incumbency/Secretary's Certificate - Aero
Services International, Inc.

4. Written Consent in Lieu of a Meeting of the Board of
Directors of Aero Services International, Inc.

5. Officer's Certificate - Aero Services International, Inc.

6. Incumbency Certificate - Winner Aviation Corporation

7. Officer's Certificate - Winner Aviation Corporation

8. Secretary's Certificate as to Corporate Matters - Winner
Aviation Corporation<PAGE>
JFH-2/7/95-A

ASSET PURCHASE AGREEMENT

BETWEEN

AERO SERVICES INTERNATIONAL, INC.

("SELLER")

AND

WINNER AVIATION CORPORATION

("PURCHASER")

February 7, 1995<PAGE>
JFH-2/7/95-A
ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT is made this 7th day of
February, 1995, between AERO SERVICES INTERNATIONAL, INC., a
Louisiana corporation, with offices at 660 Newtown-Yardley
Road, Newtown, PA 18940, ("Seller"), and WINNER AVIATION
CORPORATION, a Pennsylvania corporation, with offices at 32 W.
State Street, Sharon, PA 16146, ("Purchaser").

In consideration of the mutual covenants, agreements and
warranties herein contained, it is agreed that Purchaser shall
acquire from Seller, except as specifically set forth herein,
all of the Purchased Assets (as defined herein), free and
clear of any and all liens, claims, encumbrances, and
interests of any kind or nature and upon such other terms and
conditions are hereinafter set forth.

DEFINITIONS

The following terms shall have the meanings set forth
herein for the purposes of the transaction described in this
Agreement:

"Accounts Receivable" shall mean all service and repair
receivables, credit card, charge invoices, and other accounts
and notes receivable, other than Work in Process related to
the conduct of the Operations at the Facility.

"Agreement" shall mean this Asset Purchase Agreement,
including all Exhibits and Schedules hereto, as it may be
amended from time to time in accordance with its terms.

"Closing" shall mean the consummation of the transactions
contemplated herein, subject to the terms and conditions set
forth herein, in accordance with Article IX hereof.

"Closing Date" shall mean the date on or before February
10, 1995, on which the Closing occurs or is to occur.

"Contracts" shall mean and include (i) that certain
aviation fuel supply agreement between Seller and Exxon
Company, U.S.A., a copy of which is attached hereto as part of
Schedule 1.4 (the "Exxon Fuel Supply Contract"); (ii)
inventory purchase orders and repair orders, and all other
purchase orders for non-capital expenditures entered into in
the ordinary course of Seller's business; and (iii) any other
contracts and agreements entered into by Seller with the
written consent of Purchaser.

"Deposit" shall have the meaning given to it in Section
2.1.

"Excluded Assets" shall have the meaning given to it in
Section 1.3.

"Final Indemnity Payment Date" shall mean the date that is
forty-five (45) days after the Closing Date.

"GAAP" shall mean the U.S. generally accepted accounting
principles at the time in effect.

"Indemnity Fund" shall have the meaning given to it in
Section 2.2.

"Permits" shall have the meaning given to it in Section
1.2.

"Purchase Price" shall mean Four Hundred Thousand Dollars
($400,000.00) as paid and adjusted in accordance with Article
II and other provisions of this Agreement.

"Purchased Assets" shall have the meaning given to them in
Section 1.1.

"Shelf Inventory" shall mean all inventory except for
parts included in Work in Process.

"Work in Process" shall have the meaning given to it in
Section 2.1.

PURCHASE AND SALE

1.1 Purchased Assets. Subject to the terms and conditions
set forth in this Agreement, at the Closing Seller shall sell,
assign, transfer and deliver to Purchaser, and Purchaser shall
purchase, acquire and take assignment and delivery from
Seller, free and clear of any and all liens, claims,
encumbrances or interest, substantially all of the assets,
including work in process identified on Schedule 1.1h attached
hereto, and all information and records, (or copies thereof)
relating to such assets, including historical sales records
and service and repair manuals, owned by Seller primarily
located at and related to or used in conjunction with its
operations ("Operations" or "FBO") at the Youngstown-Warren
Regional Airport, Youngstown, Ohio ("Facility"), except for
those assets specifically excluded in Section 1.3. All of the
assets sold, assigned, transferred and delivered to Purchaser
hereunder are referred to collectively herein as the
"Purchased Assets." The Purchased Assets include (but are not
limited to) the following: Garrett Tools (Schedule 1.1a);
Shop Tools and Equipment (Schedule 1.1b); Avionics Shop
(Schedule 1.1c); Engine Test Stand (Schedule 1.1d);
Furnishings and Fixtures (Schedule 1.1e); Inventory Parts
(Schedule 1.1f); Inventory Fuel (Schedule 1.1g); Work in
Process (Schedule 1.1h); and All Ground Equipment (Schedule
1.1i).

1.2 Assignment of Other Assets. Subject to the terms and
conditions set forth in this Agreement, Seller will assign and
transfer to Purchaser, free and clear of any and all liens,
claims, encumbrances or interests of any kind or nature,
effective as of the Closing Date, all of Seller's right, title
and interest in and to, and Purchaser will take assignment of,
the following, except as specifically excluded in Section 1.3
hereof (and all of the following shall be deemed included in
the term "Purchased Assets" as used herein): all of the
licenses, certificates, permits, approvals, registrations,
consents and other authorizations under any law, statute,
rule, regulation, order or ordinance applicable to the
Facility or otherwise required by any governmental authority
in connection with the business or operations of the Facility,
including (but not limited to) Seller's rights under (a) its
FAA Station Repair Certificate (JYID161K); (b) its lease
agreement with Facility; and (c) Exxon Fuel Agreement (the
"Permits").

1.3 Excluded Assets. The following assets of Seller
shall be retained by Seller and are not being sold or assigned
to Purchaser hereunder (all of the following are referred to
collectively as the ("Excluded Assets")): Avfuel above-ground
fuel tank; Computer equipment; Accounts Receivable; Avfuel
Leased Fuel Trucks; Seller's trade names and logos and cash on
hand.

1.3A Sales, Warranty and Repair Records. In accordance
with applicable requirements of the Federal Aviation
Administration, and other regulatory requirements, Seller and
Purchaser acknowledge and agree that Seller shall retain all
original records of sales,warranties and repairs made by
Seller at the FBO (collectively, the "Sales, Warranty and
Repair Records"). For a period of four (4) years from the
Closing Date, Seller shall, on reasonable notice, permit
Purchaser access to such Sales, Warranty and Repair Records,
and shall on Purchaser's reasonable request, at Purchaser's
cost and expense, provide Purchaser with copies of any such
records.

1.4 No Assumed Obligations.

(a) Except for the Contracts as defined hereinbefore, for
which Purchaser assumes all rights and responsibilities on the
Closing Date, Purchaser shall neither assume nor be liable for
any other obligations of Seller. Purchaser is not liable for
any obligations or liabilities of Seller of any nature
whatsoever, whether now existing or hereafter arising related
to the Purchased Assets or the Facility or to products or
services of Seller. Seller is responsible for environmental
matters relating to conditions in existence at or prior to the
Closing Date on or about the leasehold, and assets owned or
used by Seller in conducting its Operations at the Facility.

ARTICLE II

PURCHASE PRICE AND PAYMENT

2.1 Payment of Purchase Price. In consideration of the
sale, conveyance, assignment, transfer and delivery of the
Purchased Assets and the representations, covenants and
warranties contained herein:

(a) On the Closing Date, Purchaser shall pay to Seller,
in immediately available funds, the Purchase Price less the
amount of the Indemnity Fund. The Purchase Price shall be
computed as follows:

(1) Four Hundred Thousand Dollars ($400,000), plus

(2) Seller's costs of parts (wholesale cost) direct
labor and outside services allocable to Work in Process on the
Closing Date; plus

(3) The amount by which Seller's cost of Shelf
Inventory on the Closing Date exceeds $280,000; or less

(4) The amount by which Seller's costs of Shelf
Inventory on the Closing Date is less than $280,000; less

(5) Any payments received by Seller on account of
Work in Process.

(b) In computing the Purchase Price, Work in Process
includes only (i) work orders for which work was commenced
after February 3, 1995; (ii) the current Seiple, Tucker and
Tucker, Shopvac, Southwest Limited, Corporate Jet and Hallman
Chevrolet repair orders; and (iii) any other work orders for
which work has been commenced, but not completed prior to the
Closing Date.

(c) On or before the Final Indemnity Payment Date,
Purchaser shall pay to Seller all amounts of the Indemnity
Fund, other than those amounts (i) paid to Purchaser with the
consent of Seller; (ii) "In Dispute"; or (iii) ordered to be
paid to Purchaser in a final decision entered by an Arbitrator
under the provisions of Section 2.2 hereof.

2.2 Indemnity Fund.

(a) On the Closing Date, Purchaser shall retain an amount
equal to Twenty-Five Thousand Dollars ($25,000) of the
Purchase Price as the "Indemnity Fund."

(b) From and after the Closing Date until the Final
Indemnity Payment Date, payments from the Indemnity Fund may
be made as follows:

(i) With the consent of Seller, or pursuant to a
final decision of an Arbitrator, Purchaser shall be paid an
amount equal to Purchaser's actual damages caused by any
material misstatement of fact by Seller hereunder or in
connection with the transactions contemplated in this
Agreement or any material breach by Seller of any covenant or
promise contained herein.

(c) Purchaser shall give to Seller ten (10) days prior
written notice of the proposed payment or application of any
amount out of the Indemnity Fund in accordance with this
Section 2.2; such notice shall describe the amount, date and
purpose of such payment and shall identify the person to whom
such payment is proposed to be made. Seller shall have ten
(10) days from receipt of such notice to advise Purchaser in
writing of Seller's consent to such payment or of Seller's
intent to contest the amount and purpose of any payment or
application from the Indemnity Fund whereupon the proposed
payment shall be deemed "In Dispute." Any disputes relating
to amounts contested by Seller shall be resolved in accordance
with American Arbitration Association procedures. Purchaser
and Seller hereby agree that such determination shall be final
and binding without any right of reconsideration or appeal
whatsoever.

ARTICLE III

REPRESENTATIONS AD WARRANTIES OF SELLER

Seller represents and warrants to Purchaser as follows:

3.1 Due Authorization; Consents; No Violations.

(a) (i) Seller has full power and authority to enter
into this Agreement and to consummate the transactions
contemplated hereby; and (ii) this Agreement has been duly
executed and delivered by Seller, and, assuming due
authorization, execution and delivery of this Agreement by
Purchaser, constitutes the valid and binding obligation of
Seller, enforceable in accordance with its terms.

(b) No consents or approvals of, or filings or
registrations by Seller with, any governmental authority or
any other person not a party to this Agreement are necessary
in connection with the execution and delivery of this
Agreement by Seller and the consummation by Seller of the
transactions contemplated hereby, except where the failure to
obtain such consents or approvals would not, either singly or
in the aggregate, have a material adverse effect on the
financial condition, business or operations of the Facility.

(c) Neither the execution and delivery of this Agreement
by Seller and the performance by Seller hereunder, not the
consummation of the transaction contemplated hereby, will
violate, conflict with, result in the breach of or accelerate
the performance required by any of the terms, conditions or
provisions of the articles of incorporation or bylaws of
Seller or any covenant, agreement or understanding to which
Seller is a party or any order, ruling, decree, judgment,
arbitration award or stipulation to which Seller is subject,
or constitute a default thereunder or result in the creation
or imposition of any lien, charge or encumbrance thereunder
upon any of the Purchased Assets, or allow any person or
entity to accelerate any debt secured by any Purchased Asset,
or allow any person or entity to interfere with Purchaser's
full use and enjoyment of any of the Purchased Assets.

3.2 Title to Properties. Seller has good and valid title
to the Purchased Assets, free and clear of claims and
encumbrances. Seller has not encumbered any of its assets.

3.3 Executory Contracts and Leases. There are no
executory contracts or unexpired leases relating to any of the
Purchased Assets, except for Work in Process and purchase
orders for inventory and repair orders entered into in the
ordinary course of business.

3.4 Disclosure. No representations or warranties made by
Seller in this Agreement and no statements made by Seller in
any certificate, schedule, exhibit or other writing delivered
by Seller or referred to in or pursuant to this Agreement
contain, or at the date of its delivery will contain, any
untrue statement of a material fact or omit or will omit any
statement of a material fact necessary to make complete,
accurate and not misleading every representation, warranty and
statement of Seller set forth in this Agreement or any such
certificate, schedule, exhibit or other writing.

3.5 Permits. The Permits are valid, transferable and
sufficient to operate lawfully the operations at the Facility
as previously operated by Seller.

3.6 Inventories. The inventories acquired by Purchaser
hereunder shall be in accordance with the physical inventory
to be undertaken by the parties jointly prior to Closing.

3.7 Litigation. There are no suits, actions or other
proceedings or investigations involving Seller or its
Operations, Facility or Purchased Assets pending or, to
Seller's best knowledge, threatened.

3.8 Compliance with Law. Seller is in compliance in all
material respects with all applicable federal, state and local
laws, rules, etc. relating to the Operations, Facility and
Purchased Assets.

3.9 Condition of the Property; Independent Investigation.
Prior to the date of this Agreement, Buyer has had complete
freedom of access to the FBO and all of Seller's books,
records, contracts, agreements related to the ownership,
operation and maintenance of the FBO, as well as to Seller's
personnel involved with the ownership, operation and mainte-
nance of the FBO. During the period from the date of this
Agreement to the Closing or termination of this Agreement,
Buyer shall be given continued access to the FBO, the
Purchased Assets, the Contracts, and all books and records
relating thereto. In making the decision to enter into this
Agreement and to consummate the transactions contemplated
hereby, Buyer has relied, and may rely, only on Seller's
express representations and warranties as set forth in this
Agreement, and has not relied on any other representations,
warranties, or statements by Seller, its officers, directors
or employees or on the representations, warranties or
statements of any other person or entity. As to all other
matters not described herein, Buyer has relied and will rely
solely on the basis of its own independent investigation of
the FBO and the Purchased Assets, including, without
limitation, the physical condition of the FBO. Without
diminishing the scope of the express representations,
warranties and covenants of Seller in this Agreement and
without affecting or impairing Buyer's right to rely thereon,
BUYER ACKNOWLEDGES THAT SELLER HAS NOT MADE, AND SELLER HEREBY
EXPRESSLY DISCLAIMS AND NEGATES ANY OTHER REPRESENTATION OR
WARRANTY, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, RELATING
TO THE PHYSICAL CONDITION OF THE PROPERTY (INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE) AND FURTHER, BUYER
ACCEPTS ALL OF THE PURCHASED ASSETS IN THEIR "AS IS, WHERE IS"
CONDITION.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to Seller as follows:

4.1 Due Incorporation. Purchaser is a corporation duly
organized, validly existing and in good standing under the
laws of the Commonwealth of Pennsylvania and has the requisite
corporate power and authority to carry on its business as now
being conducted. Purchaser is in good standing as a foreign
corporation authorized to do business in each jurisdiction
where the nature of the assets owned by Purchaser in such
state or the conduct of the business by Purchaser in such
state or the conduct of the business by Purchaser therein
would require Purchaser to be so qualified.

4.2 Due Authorization; Consents; no Violations.

(a) (i) Purchaser has full power and authority to enter
into this Agreement and to consummate the transactions
contemplated hereby; and (ii) this Agreement has been duly
executed and delivered by Purchaser, and, assuming due
authorization, execution and delivery of this Agreement by
Seller, constitutes the valid and binding obligation of
Purchaser, enforceable in accordance with its terms.

(b) No consents or approvals of, or filings or
registrations by Purchaser with, any Governmental Authority or
any other person not a party to his Agreement are necessary in
connection with the execution and delivery of this Agreement
by Purchaser and the consummation by Purchaser of the
transactions contemplated hereby, except where the failure to
obtain such consents or approvals would not, either singly or
in the aggregate, have a material adverse effect on the
financial condition, business or operations of Purchaser.

(c) Neither the execution and delivery of this Agreement
by Purchaser and the performance by Purchaser hereunder, nor
the consummation of the transactions contemplated hereby, will
violate, conflict with, result in the breach of or accelerate
the performance required by any of the terms, conditions or
provisions of the articles of incorporation or bylaws of
Purchaser or any covenant, agreement or understanding to which
Purchaser is a party or any order, ruling, decree, judgment,
arbitration award or stipulation to which Purchaser is
subject, or constitute a default thereunder or allow any
person or entity to accelerate any debt.

4.3 Financing. On the date hereof, Purchaser will have
available funds or financing facilities to purchase the
Purchased Assets and to consummate the transactions
contemplated by this Agreement and on the Closing Date the
Purchaser will have sufficient funds available to consummate
the transactions contemplated hereby.

4.4 Assignee. In the event Purchaser assigns this
Agreement in accordance with Section 11.8, this Article IV
shall apply to such assignee.

ARTICLE V

COVENANTS OF SELLER

Seller agrees that, except as contemplated by this
Agreement or as agreed in writing by Purchaser, from the date
hereof to the Closing Date or the date of termination of this
Agreement:

5.1 Best Efforts. Subject to the terms and conditions of
this Agreement, Seller shall cooperate with Purchaser and use
its best efforts to fulfill its obligations under the terms of
this Agreement and to facilitate the consummation of the
transactions contemplated hereby.

5.2 Access to Facility and Information. Seller shall
afford Purchaser and Purchaser's representative reasonable
access during normal business hours, without unreasonable
interference with Seller's business operations, to the
Facility and to all of the facilities, properties and books
and records of Seller relating to its operations at the
Facility and the Purchased Assets and shall make Seller's
officers and employees available to Purchaser as Purchaser
shall from time to time reasonably request. Purchaser and its
representatives shall be furnished with such additional
information concerning Seller relating to its operations at
the Facility and the Purchased Assets as Purchaser shall
reasonably request. Subject to the requirements of law,
Purchaser shall hold in confidence all non-public information
and if this Agreement is terminated, shall deliver to Seller
all documents, work papers and other material (including
copies) obtained by Purchaser in connection herewith, whether
obtained before or after the execution hereof.

5.3 Ordinary Course. Seller (i) shall maintain its
Operations at the Facility substantially in the manner in
which it is presently being maintained and shall not take, or
permit to be taken, any action except in the usual and
ordinary course of business consistent with recent past
practice (except as required to consummate the transactions
contemplated hereby or as otherwise permitted by Purchaser)
and (ii) shall not enter into, modify, renew or terminate any
agreement, arrangement or transaction, except agreements,
arrangements or transactions in the usual and ordinary course
of business consistent with recent past practice.

5.4 Books and Records. Seller shall maintain its books,
accounts and records relating to its Operations at the
Facility and the Purchased Assets in the usual, regular and
ordinary manner, and on a basis consistent with past practice.

5.5 Preservation of Purchase Assets. Seller shall not
sell or dispose of, or agree to sell or dispose of, any of the
Purchased Assets, or suffer or permit the creation of any
mortgage, pledge, lien, security interest, claim or other
encumbrance (except for any liens for taxes not yet due and
payable or being contested in good faith or for any judgment
or other liens, in each case for which reserves required by
GAAP have been provided) and Seller shall preserve intact the
Purchased Assets and not commingle any Excluded Assets with
any Purchased Assets.

5.6 Maintenance of Insurance. Seller shall, consistent
with past practice, maintain insurance applicable to its
Operations at the Facility in full force and effect,
substantially comparable in amount, scope and coverage to that
in effect on the date of this Agreement.

5.7 No Default. Seller shall not do any act or omit to
do any act which will cause a material breach of any contract,
commitment or obligation which would have a material adverse
effect on the condition, business or Operations of the
Facility.

5.8 Non-Disclosure concerning Purchaser. Seller will not
disclose to any potential competitive bidder confidential
information concerning Purchaser gained by Seller in
connection with Purchaser's offer to purchase the Purchased
Assets.

5.9 Consents and Approvals. Seller shall cooperate with
Purchaser in determining whether any consents or approvals by
third parties are necessary or appropriate in order to
consummate the transactions contemplated hereby and shall use
all reasonable commercial efforts to obtain all such consents
and approvals. Seller shall cooperate with Purchase in making
all filings, applications, statements and reports to any
governmental authorities which may be required to be made
prior to the Closing Date pursuant to any applicable statue,
rule or regulations in connection with the Agreement and the
transactions contemplated hereby.<PAGE>
ARTICLE VI

COVENANTS OF PURCHASER

Purchase agrees that from the date hereof to the Closing
Date or the date of termination of this Agreement:

6.1 Best Efforts. Subject to the terms and conditions of
this Agreement, Purchaser shall cooperate with Seller and use
its best efforts to fulfill its obligations under the terms of
this Agreement, and to facilitate the consummation of the
transactions contemplated hereby.

6.2 Consents and Approvals. Purchaser shall cooperate
with Seller in determining whether any other consents or
approvals by third parties are necessary or appropriate in
order to consummate the transactions contemplated hereby and
shall use all commercially reasonable efforts to obtain all
such consents and approvals. Purchaser shall cooperate with
Seller in making any filings, applications, statements and
reports to any governmental authorities which may be required
to be made prior to the Closing Date pursuant to any
applicable statue, rule or regulation in connection with this
Agreement and the transactions contemplated hereby.

ARTICLE VII

CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER

7.1 Conditions Precedent. The obligations of Purchaser
under this Agreement are subject to satisfaction by Seller or
waiver by Purchaser in writing of the following conditions
precedent on or before the Closing Date and upon the failure
timely to satisfy such conditions, Purchaser may terminate
this Agreement:

(a) Accuracy of Representations and Warranties. The
representations and warranties of Seller contained in this
Agreement shall be true and correct in all material respects
on and as of the Closing Date with the same force and effect
as though made on and as of the Closing Date (except for such
changes as are contemplated or permitted by this Agreement);

(b) Compliance with Agreements and Covenants; Schedules.
Seller shall, in all material respects, have performed all
obligations and agreements and complied with all covenants
contained in this Agreement to be performed and complied with
by it on or prior to the Closing Date.

(c) Actions or Proceedings. No court order shall have
been entered and remain in effect in any action or proceeding
which enjoins or prohibits the consummation of the
transactions contemplated by this Agreement.

(d) Licenses, Permits, Authorizations. Purchaser shall
have received all material licenses, permits, certificates,
agreements and authorizations required for it to acquire and
operate the Purchased Assets;

(e) No Material Adverse Change. No material adverse
change in the Purchased Assets shall have occurred from the
date of this Agreement until the Closing;

(f) Condition of Equipment. Purchaser shall have
satisfied itself that the Purchased Assets are in working
order and are usable, generally serviceable and complete and
intact and that all applicable ancillary equipment, tools,
spare parts, manuals and technical service bulletins,
operating systems used in connection therewith, wherever
located, have been delivered to Purchaser;

ARTICLE VIII

CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER

The obligations of Seller under this Agreement are subject
to the satisfaction by Purchaser or waiver by Seller in
writing of the following conditions precedent on or before the
Closing Date and upon the failure timely to satisfy such
conditions, Seller may terminate this Agreement:

8.1 Compliance with Agreements and Covenants. Purchaser
shall, in all material respects, have performed all
obligations and agreements and complied with all covenants
contained in this Agreement to be performed and complied with
by it on or prior to the Closing Date.

8.2 Actions or Proceedings. No court order shall have
been entered and remain in effect in any action or proceeding
which enjoins or prohibits the consummation of the
transactions contemplated by this Agreement. (Seller agrees
to use its good efforts to have such action or proceeding
dismissed or such order removed.)

ARTICLE IX

CLOSING

9.1 Closing. Subject to the terms and conditions set
forth herein, the Closing shall take place at the offices of
Purchaser, 32 W. State Street, Sharon, PA 16146, or such other
place as may be agreed upon, on or before the Closing Date,
time being of the essence.

9.2 Deliveries by Seller. At the Closing, Seller will
deliver to Purchaser the following:

(a) A Bill of Sale in the form set forth in Exhibit A;

(b) Evidence reasonably satisfactory to Purchaser of the
satisfaction of the conditions to Closing set forth in Article
VII;

(c) All Permits, certificates and other licenses referred
to in this Agreement which are in accordance with applicable
laws, regulations, rules and orders are assignable by Seller;

(d) Possession of the Purchased Assets as at the
Facility.

9.3 Deliveries by Purchaser. At the Closing, Purchaser
will deliver to Seller the portion of the Purchase Price to be
paid at the Closing pursuant to Section 2.1.

ARTICLE X

TERMINATION

10.1 Termination. This Agreement may be terminated by
written notice at any time on or prior to the Closing Date (a)
with the mutual consent of Seller and Purchaser; (b) by Seller
or Purchaser provided that the party electing so to terminate
this Agreement shall not have breached in any material respect
its covenants and agreements set forth in this Agreement; (c)
by Purchaser pursuant to Article VII hereof; or (d) by Seller
pursuant to Article VIII hereof. If the Closing does not take
place on or before the Closing Date, this Agreement shall be
void.

10.2 Effect of Termination. In the event this Agreement
is terminated in accordance with Section 10.1, neither Seller
or Purchaser shall have any further obligations under this
Agreement except that the indemnification provisions of this
Agreement and the obligations set forth in of Section 5.2
shall continue in full force and effect thereafter and any
Permits or other property of Seller therefore transferred to
Purchaser shall be retransferred or returned to Seller or its
nominee at Seller's expense.

ARTICLE XI

MISCELLANEOUS

11.1 Expenses. Except as otherwise provided by this
Agreement, each party shall bear its own fees, costs and
expenses incurred in connection with Purchaser's acquisition,
and Seller's sale. of the Purchased Assets, including, but not
limited to fees of attorneys, consultants and accountants.

11.2 Amendment; Waiver. This Agreement may be amended,
modified or supplemented but only in writing signed by all of
the parties hereto. The failure of a party hereto at any time
or times to require performance of any provision hereof shall
in no manner affect its right at a later time to enforce the
same. No waiver by a party of any condition or of any breach
of any term, covenant, representation or warranty contained in
this Agreement shall be effective unless in writing, and no
waiver in any one or more instances shall be deemed to be a
further or continuing waiver of any such condition or breach
in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or
warranty.

11.3 Survival. All representations and warranties of the
parties contained in this Agreement or in any other
certificate or other writing delivered or to be delivered
pursuant to this Agreement and in connection with the Closing
hereunder shall terminate on the Closing Date. All
indemnities of the parties contained in this Agreement shall
survive the Closing.

11.4 Notices. Any notice, request, instruction or other
document to be given hereunder by a party hereto shall be in
writing and shall be deemed to have been given, (i) when
received if delivered by hand, (ii) on the date of
transmission if sent by telex, telecopy or other wire
transmission or (iii) three days after being deposited in the
U.S. mail, certified or registered mail, postage prepaid:

(a) If to Seller, addressed as follows:

Wallace E. Congdon, President
AERO SERVICES INTERNATIONAL, INC.
Midway Airport
5200 W. 63rd Street
Chicago, IL 60638

Fax: 312-581-3777

with a copy to:

Ted Brant
Fax: 814-941-4302

and
Christopher M. Cicconi, Esq.
Eckert, Seamans, Cherin & Mellott
One South Market Square Building
213 Market Street
Harrisburg, PA 17101

Fax: 717-237-6019

(b) If to Purchaser addressed as follows:

James E. Winner, Jr., President
WINNER AVIATION CORPORATION
32 W. State Street
Sharon, PA 16146

with a copy to John F. Hornbostel, Jr., General Counsel

Fax: 412-983-2001

or to such other individual or address as party hereto may
designate for itself by notice given as herein provided.

11.5 Counterparts. This Agreement may be executed
simultaneously in counterparts, each of which shall be deemed
an original, but all of which together shall constitute one
and the same instrument.

11.6 Headings. The headings preceding the text of
Articles, Sections, Subsections and Schedules of this
Agreement are for convenience only and shall not be deemed
part of this Agreement, nor shall they affect its meaning,
construction or effect.

11.7 Applicable Law. This Agreement shall be governed by
and construed and enforced in accordance with the internal
laws of the Commonwealth of Pennsylvania, without giving
effect to the principles of conflicts of law thereof. Any
arbitration proceedings provided for in this Agreement shall
be conducted in Pittsburgh, Pennsylvania. The forum for any
court action between the parties relating to this Agreement
shall be in the Federal District Court for Western District of
Pennsylvania.

11.8 Assignment. This Agreement may not be assigned by
any party hereto without the prior written consent of the
other party except that Purchaser may, on or before the
Closing Date, may assign all of its rights and obligations
under this Agreement to an affiliate of Purchaser where upon
such assignee shall be deemed the "Purchaser" hereunder and
Winner Aviation Corporation will thereafter have no rights or
obligations under this Agreement, except that Winner Aviation
Corporation shall remain liable for repayment of the Indemnity
Fund.

11.9 Third-Party Beneficiaries. This Agreement is solely
for the benefit of the parties hereto and, other than as
specified herein, no provision of this Agreement shall be
deemed to confer upon third parties any remedy, claim,
liability, reimbursement, claim of action or other right in
excess of those existing without reference to this Agreement.

11.10 Other Instruments. Upon the reasonable request of
Purchaser, Seller will on and after the Closing Date, execute
and deliver to Purchaser such other documents, releases,
assignments and other instruments and take such other steps as
may be reasonably required to effectuate completely the
transfer and assignment to Purchaser of, and to vest fully in
Purchaser title to, each of the Purchased Assets.

11.11 Entire Understanding. This Agreement sets forth
the entire agreement and understanding of the parties hereto
in respect to the transactions contemplated hereby and
supersedes all prior agreements, arrangements and
understandings relating to the subject matter hereof and is
not intended to confer upon any other person any rights or
remedies hereunder, other than as expressly provided herein.
The representations and warranties contained in this Agreement
are the sole representations and warranties made by the
parties hereto with respect to the transactions contemplated
hereby and supersede any and all prior disclosures or other
information, oral or written, provided in connection with the
negotiation of this Agreement or otherwise. There have been
no representations or statements, oral or written, that have
been relied on by any party hereto, except those expressly set
forth in this Agreement.

11.12 Waiver of Jury Trial. Each of Seller and Purchaser
irrevocably waives trial by jury in any action or proceeding
with respect to this Agreement.

11.13 Indemnification. Seller shall indemnify Purchaser
and save it harmless from, and against, and pay any damages,
losses, obligations, liabilities, claims, costs and expenses
incident to any obligations or liabilities or any action,
claim or proceeding arising out of Seller's conduct of the
Operations before Closing Date*, Purchaser shall indemnify
Seller and save it harmless from, and against, and pay any
damages, losses, obligations liabilities, claims, costs and
expenses incident to any obligations or liabilities on any
action, claim or proceeding arising out of Purchaser's conduct
of the Operations after Closing Date.

IN WITNESS WHEREOF, intending to be legally bound hereby,
the parties hereto have caused this Agreement to be executed
and delivered by their respective duly authorized
representatives on the date first above written.

AERO SERVICES INTERNATIONAL,
INC.

R. Ted Brant
Chairman and CEO

Attest:

Secretary
WINNER AVIATION CORPORATION

James E. Winner, Jr.,
President

Attest:

John F. Hornbostel, Jr.
Secretary<PAGE>
Page 15a

Addendum to 11.13*

*or Seller's non-payment of the wholesale cost of any item
reflected in Inventory Parts as set forth on Schedule 1.1f.
In the event that Seller fails to pay the wholesale cost of
any item set forth on Schedule 1.1f within twenty (20) days
after receiving written notice of such non-payment from
Purchaser, then in lieu of any other indemnity payments to be
made hereunder resulting from such non-payment, Purchaser
shall be entitled to receive liquidated damages from Seller in
concurrent equal to three times (3X) the wholesale cost of
such unpaid Inventory Part(s).

WINNER AVIATION CORPORATION

Charles R. Hale, Vice President

Attest:

John F. Hornbostel, Jr., Secretary

AERO SERVICES INTERNATIONAL,
INC.

R. Ted Brant, Chairman and CEO

Attest:

Christopher Cicconi, Secretary<PAGE>