AERO SERVICES INTERNATIONAL INC, 10KSB, 1997-05-15

AERO SERVICES INTERNATIONAL INC
10KSB, 1997-05-15
PETROLEUM & PETROLEUM PRODUCTS (NO BULK STATIONS)

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U.S. Securities and Exchange Commission

Washington, D.C. 20549

Form 10-KSB

(Mark One)

[ X ]15,ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
For the fiscal year ended September 30, 1996

[ ]15,TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [No Fee Required]
For the transition period from to
Commission file number
Aero Services International, Inc.
(Name of small business issuer 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)

Issuer's telephone number (215) 860-5600

Securities registered under Section 12(b) of the Exchange Act:

Title of each class Name of each exchange on which registered

None

Securities registered under Section 12(g) of the Exchange Act:

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

Series A Cumulative Convertible Preferred Stock (without par value)
Title of class
Check whether the registrant (l) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 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 there is no disclosure of delinquent filers in response 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 issuer's revenues for the year ended September 30, 1996.
$7,802,387

State the aggregate market value of the voting stock held by non-
affiliates as of September 30, 1996.

- Common Stock (without par value) $178,477
(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 September 30, 1996.

(2) Based upon the closing bid price of the Company's Series A Cumula-
tive Convertible Preferred Stock as of September 30, 1996.

State the number of shares outstanding of each of the Company's classes
of common equity as of September 30, 1996:

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

Item 1. Description of 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 two airports located in Chicago, Illinois 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 two additional facilities, one at Houston, Texas, which was sold in
November 1995, and one in New Orleans, Louisiana, which was sold in May 1996.
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.

During the fiscal year ended September 30, 1994 the Company completed
a business plan begun during fiscal year 1990 that included the sale or
closure of unprofitable operations and the sale of certain FBOs as required
to generate working capital. During fiscal year 1994, the Company sold its
avionics business at Raleigh-Durham, NC and its FBOs located at White Plains,
NY, Morristown, NJ, and Denver, CO. (See Note D of the Consolidated
Financial Statements on page S-13 regarding the Arapahoe County Industrial
Revenue Bonds in connection with the Denver FBO.)

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 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; 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.

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.

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. 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 May 10, 1996 the Company sold, to Jason IV, owner of a competitor FBO
on the airport, its leasehold interest at New Orleans' Lakefront Airport for
$900,000. The Company received $300,000 cash at settlement and two
promissory notes for the balance. A note in the amount of $100,000, bearing
interest at the rate of 8% per annum is due and payable on April 30, 1997.
A note in the amount of $500,000 bearing interest at the rate of 9% per annum
is due and payable on March 31, 1999. Interest on both notes is being paid
monthly.

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 commence-
ment date for newly installed USTs was December 22, 1988 with all USTs having
to conform to the new standards by December 1998. During 1996 and 1995 the
Company incurred expenses of $1,000 and $241,000, respectively, in complying
with these EPA regulations. However, from 1988 through 1996, the Company has
incurred $3,152,000 of expense in complying with these same regulations. At
September 30, 1996, the Company's financial statements include accruals of
$457,000 for 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 issued a "disclaimer of opinion"
on the consolidated financial statements for the year ended September 30,
1996. In their report to the Stockholders and Board of Directors of the
Company they cited the Company's recurring losses from operations and net
capital deficiencies at September 30, 1996 as factors that raise substantial
doubt about the Company's ability to continue as a going concern.

In an attempt to maintain the viability of the Company, Management is
currently examining an offer to purchase the Company's Chicago FBO. Also
being explored, is the possibility of obtaining a line of credit using the
Chicago FBO as collateral. The plan is to use the proceeds to pay current
liabilities. Also, the Company is in negotiations with an airport authority
located in the Mid-Atlantic region to open a new FBO. The lease would
require minimal start-up costs. Subsequent to September 30, 1996 the Company
has hired an investment banking firm to assist it in planning the best method
of utilizing the Company's approximate $33 million of net operating loss
carryforwards. The successful completion of these plans is no guarantee that
the Company can be returned to profitability or maintained as a going
concern.

BUSINESS OF ISSUER

The Company supplies ground support services to corporate and other
general aviation aircraft at facilities located at two airports in the United
States. The Company provides line 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 de-
icing) to commercial airlines, air freight carriers and overnight courier
services at 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. At the other location, the Company
operates one of four FBOs.

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. All maintenance at the two remaining
facilities is subcontracted to other companies.

Hangar and Office Leasing

The Company leases hangar, ramp (tie down) and office space to customers
whose aircraft are based at its 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 business-
es.

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, 62%, 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 exclusively from Exxon.
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.

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.

During 1996 and 1995, the Company incurred clean-up/remediation expenses
of $1,000 and $241,000, respectively, in complying with these EPA regula-
tions. At September 30, 1996, the Company's financial statements include
accruals of $457,000 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 and it does not anticipate experiencing any competitive disadvan-
tage 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 environmen-
tal 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.

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 approxi-
mately 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.

EMPLOYEES

As of September 30, 1996, the Company had approximately 48 full-time and
6 part-time employees. None of the employees are represented by a union.

Item 2. Description of 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 eight (8) years with the City of Chicago and eleven (11) years
with the City of Morgantown.

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 between Mountain State Flight Services, Inc., a wholly owned
subsidiary of the Company, and the City of Morgantown. 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 past 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 as to which the
Company believes it has strong defenses and intends to vigorously defend its
position.

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 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, 1996,
no matters were submitted for a vote of security holders.
PART II

Item 5. Market for Common Equity and Related Stockholder 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 stockholders' 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 accom-
plished. 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 1996:
First Quarter .10 .03
Second Quarter 1/16 .02
Third Quarter 3/32 .05
Fourth Quarter 3/32 .03

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

(b) APPROXIMATE NUMBER OF EQUITY SECURITY HOLDERS

As of September 30, 1996 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 distribu-
tions 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 $2,519,572 at September 30, 1996.
Item 6. Management's Discussion and Analysis or Plan of Operation

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 two at September 30, 1996.

Number of FBOs
At September 30, 1994 5
Sold during fiscal 1995 (2)
Purchase during fiscal 1995 1

At September 30, 1995 4
Sold during fiscal 1996 (2)

At September 30, 1996 2

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,

1996 1995

Net Sales 100.0% 100.0%
Cost of Sales 44.3 51.2
Departmental costs 40.3 48.7
Administrative costs 11.3 10.2
Interest expense 21.9 16.7
Gain on sale of FBO operations 2.5 2.8
Other income (expense) (1.5) (11.3)
Net loss (16.8) (35.3)

For a basis of comparison, the results of operations of the two remaining
facilities at September 30, 1996 are presented for the years ended September
30, 1996 and September 30, 1995. The 1995 results at Morgantown are shown
from the acquisition date of April 1, 1995. Income and expenses not related
to a specific location are shown as Corporate.

September 30, 1996

(Dollar amounts in thousands)

CHICAGO MORGANTOWN CORPORATE

NET SALES $5,867 $905 $36

COST AND EXPENSE
Cost of Sales 2,381 495 26
Departmental Costs 2,022 347 435
Administrative Costs 219 62 548
Interest Expense 156 2 1,548
1,089 (1) (2,521)

Other Income/(Expense) (2) - (150)

Net Income/(Loss) $ 1,087 $ (1) $(2,671)
September 30, 1995
(Dollar amounts in thousands)

CHICAGO MORGANTOWN CORPORATE

NET SALES $4,476 $439 $6

COST AND EXPENSE
Cost of Sales 1,944 256 1
Departmental Costs 1,620 188 980
Administrative Costs 191 27 554
Interest Expense 159 1 1,570
562 (33) (3,099)
Other Income/(Expense) 6 17 (1,212)

Net Income/(Loss) $ 568 $(16) $(4,311)

Description of the Years Ended September 30, 1996 and 1995

Sales for the year ended September 30, 1996 decreased by $2,599,000
compared to 1995. However, the combined sales of Chicago and Morgantown, the
only FBO's in operation during both years, increased $1,857,000 (38%) in part
due to Morgantown being included for only six months in fiscal 1995. Other
sales recorded as corporate sales, including aircraft charter, increased
$30,000. Therefore the result of four locations being sold during 1995 and
1996 was a reduction in sales of $4,486,000.

Cost of sales at continuing FBOs decreased from 44.8% to 42.5%.

Departmental costs at continuing FBOs (including corporate) increased
$16,000 (0.6%). Increases at the two FBOs of $561,000 in proportion to
increased sales were offset by reductions of corporate expenses in the same
category. Corporate expenses recorded in 1995 of $373,000 for EPA and
equipment rental expenses account for two thirds of the decrease in 1996.
Also, corporate payroll and related expenses were reduced by $217,000 in
1996.

Administrative costs decreased $186,000 in 1996. At continuing
operations, including corporate, administrative costs increased by $57,000
(7.4%). Sales of the four locations during the two years accounted for a
decrease of $243,000 of expenses in this category.

Interest expense in 1996 in total was about equal to 1995. No
additional debt was incurred until August 1996 and interest rates remained
stable. The Company recorded $1,488,000 of interest expense on the debt owed
to Transtech. The Company paid Transtech $375,000 of interest during 1996.

As of September 30, 1995 the Company had received notices of tax due
from the State of New York which totalled $665,000. (See comparison of the
Years Ended September 30, 1995 and 1994 following this section). Additional
assessments have been received during 1996 which cover the period September
1992 through November 1993 and total $1,003,000. The Company has filed
appeals on the additional assessments, but a total accrual of $1,457,000 was
recorded in the financial statements at September 30, 1995 for this potential
liability, and was increased to $1,668,000 at September 30, 1996. The
Company has attempted to negotiate a settlement with the state and has made
an offer which has been rejected by New York officials.

The Company did not accrue any additional amounts for EPA remediation
projects during fiscal year 1996. Only $1,000 of expenses were recorded
during the year for items such as removal of used oil. At September 30, 1996
the financial statements of the Company included accruals for the remediation
of the environmental matters in the amount of $457,000.

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 6
through 7, Competition).

Description 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 was
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.

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 accoun-
tants 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 additional $793,022 above the
assessments received was calculated based on actual gallons sold during the
period plus estimated penalty and interest. The Consolidated Statement of
Operations (Page S-5) for 1995 includes an additional expense of $1,142,645,
net of the reversal of excess reserves, in the category of Other In-
come/Expense for this issue.

Liquidity and Capital Resources

Working capital deficiency increased by $12,839,000 to ($17,084,000) at
September 30, 1996 because current assets were reduced by $916,000 and
current liabilities were increased by $11,923,000. The major components of
these changes were a reduction of $781,000 in other receivables and an
increase of $8,851,000 in current maturities of long term debt due affili-
ates, and an increase of $3,500,000 in current maturities of long term debt-
other. The $3,500,000, which represents an industrial revenue bond due in
December 2014, was reclassified from long term because the letter of credit
which supports the bond expired in December 1996 and was extended for five
months. The letter of credit is held by Barclays Bank, who intends to
discontinue this service, but has given the Company five months to find
another source. PHH Corporation, from whom the Company purchased Beckett
Aviation Inc., has agreed to use its resources to help the Company secure the
letter of credit. If the letter of credit is not renewed the bond would be
called. Because of the uncertainty surrounding the renewal of the letter of
credit, management decided to reclassify the debt as short-term. Other
receivables decreased primarily because the Company had recorded a receivable
of $756,000 from two insurance carriers at September 30, 1995 based on
proposed settlements of two lawsuits. These claims were paid by the
insurance carriers during 1996. Demand loans due to Transtech totalling
$8,700,000 were reclassified from long term debt to short term because an
addendum, approved by the Board of Directors in March 1996, to the Note and
Modification Agreement of May 20, 1994 changed the due dates of the notes to
the earlier of demand or June 30, 1996. Additional details regarding working
capital are contained on pages S-7 and S-8 of the financial statements,
Consolidated Statements of Cash Flows.

During 1995 the Company acquired 100% of the common stock of Mountain
State Flight Services Inc. which operates an FBO at Morgantown, West
Virginia. The lease with the City of Morgantown 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. Average sales per month during 1996 were
$76,000, therefore 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, 1996 and 1995, respectively, the Company had a working
capital deficiency of $17,084,000 and $4,245,000, stockholders' deficit of
$27,571,000 and $26,920,000, and had incurred a net loss of $1,309,000 and
$3,666,000 for the years then ended. The Company's independent accountants
issued a disclaimer of opinion on the consolidated financial statements for
the years ended September 30, 1996 and 1995. 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, 1996 and 1995, and a net capital deficiency at September
30, 1996 and 1995 as factors that raised substantial doubt about the
Company's ability to continue as a going concern.

In an attempt to maintain the viability of the Company, Management is
currently examining an offer to purchase the Company's Chicago FBO. Also
being explored, is the possibility of obtaining a line of credit using the
Chicago FBO
as collateral. The plan is to use the proceeds to pay current liabilities.
Also, the Company is in negotiations with an airport authority located in the
Mid-Atlantic region to open a new FBO. The lease would require minimal
start-up costs. Subsequent to September 30, 1996 the Company has hired an
investment banking firm to assist it in planning the best method of utilizing
the Company's approximate $33 million of net operating loss carryforwards.
The successful completion of these plans 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
$2,519,572 at September 30, 1996.

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, Executive Officers, Promoters and Control Persons:
Compliance with Section 16(a) of the Exchange Act.

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

Name Age Position

R. Ted Brant (1) 50 Chairman of the
Board of Directors,
President and Chief
Executive Officer,
and Director

William R. Dimeling (1)(2) 55 Director

Maurice A. Lawruk (2) 64 Director

Bobby R. Adkins 50 Director and
Chief Operating Offi-
cer

Paul R. Slack 56 Chief Accounting
Officer,
Controller, Treasurer
and Assistant Secretary

James R. Affleck, Jr. 56 Assistant Treasurer

(1) Member of the Human Resources Committee

(2) Member of the Audit Committee

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 Board of Directors determined that it was in the financial interest of
the Company to forgo holding the 1996 Annual Meeting and postponed any
business which would have been conducted at that meeting until the occurrence
of the annual meeting for 1997.

The officers of the Company are the Chief Executive Officer, 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.
He was appointed as Chief Operating Officer in November 1995, a position
formerly held by Wallace Congdon. 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. Mr. Dimeling presently
serves as a director and the Chairman of the Board of Guaranty Bancshares
Corporation.

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.

James R. Affleck, Jr. joined the Company in September 1987 as manager
of special projects. In May 1994 he was named assistant treasurer. Mr.
Affleck's duties involve general oversight of cash management, insurance,
human resources and benefit programs and investor relations.

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, 1996:

I. SUMMARY COMPENSATION TABLE

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

R. Ted Brant, Chairman 1996 12,046 - -
of the Board of Directors, 1995 6,000 - -
Chief Executive Officer, (a)1994 - - -
and President (d)

Wallace E. Congdon, 1996 10,154 - -
President and Chief 1995 80,100 - -
Operating Officer (c) 1994 79,038 - 8 (b)

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

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

(d) Appointed by the Board of Directors in November 1995.

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. However, as a
result of an informal agreement between that Director and the Chairman, no
compensation has been paid to, or accrued for, that Director.

<TABLE>

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> <S> <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- 0/ $0.00/
President and Chief 0 $0.00
Operating Officer (4)

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.

4. Mr. Congdon resigned as President and Chief Operating Officer on November 8, 1995.

</TABLE>

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

The following tables set forth, as of November 7, 1996, 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 and
Amount and Nature of
Nature of Percent Beneficial Percent
Beneficial of Class Ownership of Class
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 24,000 (9) * 1,000 0.4%
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 (20,000). 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

No employee of the Company had employment contracts during 1995 and
1996.

RELATED TRANSACTIONS

In May 1994 Triton Energy Corporation (Triton) sold the majority of its
equity in the Company to Transtech (See Note D to the Consolidated Financial
Statements, Notes Payable-Affiliate). At September 30, 1996, Transtech owned
42.2% of the Company's common stock and 34.9% of the Company's preferred
stock. The Company is also indebted to Transtech in the amount of $15,610,-
000 in the form of notes that were purchased from Triton. During fiscal year
1996, $1,488,000 of interest expense was recorded against the $15,610,000
loans due to Transtech, of which $375,000 was paid and $962,000 was forgiven
and reclassified as Additional Paid-in Capital. During fiscal year 1995,
$1,334,000 of interest expense was recorded against the $15,610,000 loans and
$809,000 was paid. At September 30, 1996 the Company has $684,000 of accrued
interest due to Transtech recorded on the financial statements.

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 1995, the Company was
billed $179,000 for legal services by Mr. Cicconi's firm. During fiscal
1996, the Company was billed an additional $145,000 for legal services. At
September 30, 1996 the Company had outstanding amounts due Eckert Seamans
Cherin & Mellott of $35,000.

The Company provides accounting services to Transportech Inc., a wholly
owned subsidiary of Transtech, which operates one FBO. The Company receives
a monthly fee of nine hundred dollars. The Company sub-leases two fuel
trucks to Transportech at a monthly fee of two thousand three hundred eighty-
five dollars.

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, Secre-
tary/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.

In January 1996 the Company purchased a 40% interest in a company called
Peakwood, L.L.C. for $150,000 (See Note B-11 to the Consolidated Financial
Statements, Other Assets). $115,000 of this amount was borrowed from the
following related parties: Transportech, a wholly owned subsidiary of
Transtech Holding Co., $20,000; Maurice Lawruk, Company Director, $40,000;
James Affleck, Company Assistant Treasurer, $34,000; R. Ted Brant, Company
Director and CEO, $15,000; Bobby Adkins, Company Director, $4,000; and Alice
Buford, a shareholder of Transtech, $2,000. The Company issued promissory
notes bearing an interest rate of 10% per annum with principal and interest
due in February 1997. At that time the Company exercised its option
contained within the notes to extend them for one additional year. All
interest due and payable was paid at the time of the extension.

In July 1996 the Company purchased a 1975 Cessna Citation 500 aircraft
owned by R. Ted Brant, the Chairman of the Board and Chief Executive Officer
of the Company for $708,000. As part of the purchase agreement the Company
will make monthly payments directly to Cessna Corporation on the existing
loan, the balance being $533,000 at September 30, 1996. From June 1995 to
March of 1996 attempted to develop a charter department using the Cessna
belonging to Mr. Brant. This was to pay all related operating expenses and
to receive a commission on all charters. Charters were made through Piedmont
Aviation Services, Inc., Winston Salem, NC. All expenses and income less the
Company's commission, were charged to a balance sheet account. In March
1996, the Company was owed $36,000. At that time total management of the
aircraft reverted to Piedmont with the expenses and charter income continuing
to be processed by the Company at the time of the purchase, the Company was
due $128,000. The difference between the purchase price and the note balance
assumed was charged to the owners account. The aircraft continues to be
managed by Piedmont who is the exclusive agent for scheduling the aircraft
usage. Piedmont operates as an air taxi operator and leases aircraft in
connection with its business, and will lease the Company's aircraft when
possible. The Company receives 75% of the net billings. Piedmont provides
the flight crew and the Company is responsible for fuel and maintenance. Mr.
Brant is also a director and Vice-Chairman of Piedmont.
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.
May 15, 1997

BY:

R. Ted Brant
Chairman of the Board of
Directors and Director

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

Chairman of the May 15, 1997
R. Ted Brant Board and
Director

Director

William R. Dimeling

Director

Maurice A. Lawruk

Director

Bobby R. Adkins

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

Independent Auditors' Report S-2

Consolidated Balance Sheets at S-3
September 30, 1996 and 1995

Consolidated Statements of Operations S-5
for the years ended September 30, 1996
and 1995

Consolidated Statements of S-6
Stockholders' Deficit for the years
ended September 30, 1996 and 1995

Consolidated Statements of Cash Flows S-7
for the years ended September 30, 1996
and 1995

Notes to Consolidated Financial Statements S-9

The following exhibit is included in Item 13(a):
Exhibit (11.1) - Computation of per share loss S-24
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 Internation-
al, Inc. and subsidiaries as of September 30, 1996 and 1995, 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 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 misstate-ment. 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.

The accompanying 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. 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 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 financial statements.

KPMG PEAT MARWICK LLP

April 15, 1997
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
1996 1995
CURRENT ASSETS
Cash $ 390 $ 455
Restricted cash - 5
Customers receivables, less allowance for
doubtful accounts of $15 and
$37, respectively 316 229
Other receivables 264 1,045
Inventories 47 175
Prepaid expenses and other current assets 39 63

TOTAL CURRENT ASSETS 1,056 1,972

PROPERTY AND EQUIPMENT
Transportation equipment 708 -
Machinery and equipment 299 293
Furniture and fixtures 163 177
Leasehold improvements 4,423 4,290

5,593 4,760
Less: Accumulated depreciation
and amortization 2,862 2,618

PROPERTY AND EQUIPMENT, NET 2,731 2,142

ASSETS HELD FOR SALE AT NET BOOK VALUE - 25

OTHER ASSETS 940 357

TOTAL ASSETS $4,727 $4,496

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 1996 1995

CURRENT LIABILITIES
Current maturities of long term debt-affiliate $ 8,851$ -
Current maturities of long term debt-other 3,544 55
Accounts payable-trade 970 648
Accrued expenses
Property, payroll, and other taxes 3,059 3,037
Other 1,032 1,945
Affiliate 684 532
TOTAL CURRENT LIABILITIES 18,140 6,217

LONG TERM DEBT, less current maturities
Affiliate 7,407 15,610
Other 10 3,554
TOTAL LONG TERM DEBT 7,417 19,164

OTHER LONG TERM LIABILITIES 744 343

REDEEMABLE PREFERRED STOCK
Series A Cumulative Convertible Preferred
Stock - no par value - authorized 500,000
shares - issued and outstanding 269,185 in
1996 and 1995 (redemption value - $6,153
and $5,895, respectively) 5,997 5,692

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 8,702 8,702
Additional paid-in capital 3,735 3,077
Accumulated deficit (39,771) (38,462)
(27,334) (26,683)

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

TOTAL STOCKHOLDERS' DEFICIT (27,571) (26,920)

TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT $ 4,727 $ 4,496

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)

1996 1995

NET SALES $ 7,802 $10,401

COST AND EXPENSES
Cost of sales 3,456 5,320
Departmental costs 3,146 5,061
Administrative costs 878 1,064
Interest expense-affiliate 1,488 1,516
Interest expense-other 218 218

(1,384) (2,778)

Gain on sale of certain FBO operations 197 293
Other expense, net (122) (1,181)

NET LOSS $(1,309) $(3,666)

Net loss per share $ (0.23) $ (0.57)

The accompanying notes are an integral part of these statements.
Aero Services International, Inc.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
For the years ended September 30, 1996 and 1995

(Dollar amounts in thousands)

<TABLE>

Additional
Common Stock (Accumulated Treasury Stock Paid-In
Shares Amount Deficit) Shares Amount Capital
Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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 8,702 (38,462) 72,000 237 3,077 (26,920)
Accretion of redeemable preferred stock - - - - - (46) (46)
Dividends in arrears on preferred stock - - - - - (258) (258)
Additional paid-in capital resulting
from debt forgiveness - - - - - 962 962
Net loss for the year - - (1,309) - - - (1,309)

Balance at September 30, 1996 7,070,052 $8,702 $(39,771) 72,000 $237 $3,735 $(27,571)

</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)

1996 1995

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(1,309) $(3,666)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 286 323
Provision for losses on accounts receivable 22 12
Provision for obsolete and slow-moving,
excess and damaged inventory 11 -
Gain on sale of certain FBO operations (197) (293)
Gain on sale of fixed assets (100) (191)
Current period interest included in
debt forgiveness 438 -
Amortization of note discount - 182
Change in assets and liabilities net of acquisitions:
Decrease in restricted cash 5 -
(Increase) decrease in accounts receivable (109) 1,011
(Increase) decrease in other receivables 781 (799)
Decrease in inventory 117 317
Decrease in prepaid expenses 24 103
(Increase) decrease in other assets (468) 166
Increase (decrease) in accounts payable-trade 322 (751)
Increase in accrued property, payroll, and other taxes 22 1,343
Increase in accrued expenses-affiliate
net of debt forgiveness 676 524
Increase (decrease) in accrued expenses-other (913) 47
Increase in other long term liabilities 401 38
Other 16 78

Net cash provided by (used in) operating activities 25 (1,556)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of fixed assets 3 101
Proceeds from sale of certain FBO operations 300 420
Purchase of property and equipment (871) (116)
Acquisition of FBO, net of cash acquired - (387)
Other investments (115) -

Net cash provided by (used in) investing activities (683) 18

(continued)

The accompanying notes are an integral part of these statements.
Aero Services International, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
For the years ended September 30,

(Dollar amounts in thousands)

1996 1995

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long term debt-affiliate $ 654 $ -
Principal payments under capital lease-nonaffiliate (11) (11)
Principal payments of long term debt-affiliate (6) -
Principal payments of long term debt-bank (4) (8)
Principal payments of long term debt-other (40) (394)

Net cash provided by (used in) financing activities 593 (413)

Net decrease in cash and cash equivalents (65) (1,951)
Cash and cash equivalents at beginning of year 455 2,406

Cash and cash equivalents at end of year $ 390 $455

Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for:
Interest $ 590 $1,031
Income Taxes - 12

Supplemental Schedule of Non-cash Investing and Financing Activities
Dividends in arrears on the Company's preferred stock were accrued in the
amount of $258 in both 1996 and 1995. Accretion on the Company's preferred
stock was accrued in the amount of $46 in 1996 and $45 in 1995.

In addition to the $438 of current interest expense, another $524 of accrued
interest was forgiven during fiscal 1996, 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 two
airports in the United States at September 30, 1996, as well as similar
services to air carriers at one 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.
There are three customers who each contributed more than 5% of sales during
fiscal year 1996. As a group, their total sales contribution equalled 23.5%.
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.

At September 30, 1996, the Company had a working capital deficiency of
$17,084, stockholders' deficit of $27,571, and had incurred a net loss
of $1,309 in 1996.

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.

Management has decided that the best chance to maintain the viability
of the Company is to sell some, if not all, of the remaining assets and
use the proceeds to pay the current liabilities. To this end,
subsequent to September 30, 1996 the Company has hired an investment
banking firm to examine the Company's position and to develop a plan
whereby the Company maintains viability and is able to utilize its net
operating loss carryforward of approximately $33,000. The successful
completion of this plan is no guarantee that the Company can be returned
to profitability or maintained as a going concern.

During the year ended September 30, 1996 the Company sold its lease and
purchase option at Houston's Hobby Airport and its lease at New
Orleans's Lakefront Airport.

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.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

2. Principles of Consolidation

The consolidated financial statements include the accounts of the
Company and its subsidiaries, Beckett Aviation, Inc. and Mountain State
Flight Services, Inc., 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 remaining lives of the respective leases,
whichever is shorter. The estimated service lives used are as follows:

Transportation equipment 7 years
Machinery and equipment 5-10 years
Furniture and fixtures 5-10 years
Leasehold improvements 1-22 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. 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.

Maintenance and repairs expense for 1996 and 1995 was $227 and $277,
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.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

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. Fully diluted loss
per share amounts are not presented because the amounts are
antidilutive.

8. Accrued Property, Payroll, and Other Taxes

Included in this total at September 30, 1996 and 1995 are, respectively,
$1,313 and $1,496 for property taxes. Also included are accruals of
$1,668 and $1,457, respectively, for a New York motor fuels tax
assessment which is being appealed. (See Note F, Section 3 -
Litigation.)

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
represents restricted certificates of deposit.

10. Other Receivables

The balance at September 30, 1996 includes a note receivable of $100 due
April 1997 from the purchaser of the New Orleans facility.

The balance of $1,045 at September 30, 1995 included $756 of receivables
due from insurance companies for lawsuits against the Company. A
liability of $816 was recorded in accrued expense-other, with the
difference representing the Company's deductible amount of insurance.
These amounts were settled in fiscal 1996.

11. Other Assets

The balance of $940 at September 30, 1996 includes the $500 note
receivable from the sale of the New Orleans facility; $325 of
unamortized goodwill; and $115 representing the net investment in a
company called Peakwood, L.L.C. (See Note J - Related Parties.)
Goodwill of $325 is related to 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 at the time of acquisition. The Company
assesses the recoverability of this intangible asset by determining
whether the amortization of the goodwill balance over its remaining life
can be recovered through projected undiscounted future results.
Peakwood, L.L.C. was formed in January 1996 for the purpose of acquiring
and managing certain Dun & Bradstreet Receivable Management Services.
The Company's initial investment was $150 for a 40% interest. The
Company's share of the loss for the nine months ended September 30, 1996
was $35, and has been recorded on the equity method, thereby reducing
the original investment.

The balance of $357 at September 30, 1995 is the unamortized portion of
goodwill.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

12. Concentration of Credit Risk and Fair Value of Financial Instruments

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, 1996, no customer receivable exceeded 5% of total
assets. The Company generally requires no collateral from its
customers.

The carrying amount of cash, customer receivables, other receivables,
accounts payable and accrued expenses approximates fair value because
of the short maturity of these instruments.

The fair value of the debt with affiliate is impracticable to determine
due to the related party nature of the instruments. The fair value of
the Industrial Revenue Bond is also impractical to determine.

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
1996 1995
Aircraft parts and accessories, oil and
supplies less reserves for obsolete
and slow-moving, excess quantity and
damaged items of $57 and $49 respectively $18 $ 55

Fuel 29 47

Work in process - 73
$47 $175

NOTE D - FINANCING ARRANGEMENTS

Long Term Debt - Affiliate

Included in this category are $8,700 of various demand loans due to
Transtech Holding Company, (Transtech) the Company's principal shareholder.
These notes provide for interest at 2% above prime. The rate at September
30, 1996 was 10.25%.

Also included is a note due to Transtech in the amount of $6,910. 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 first priority interest, mortgage, assignment
or lien on certain movable, immovable or real property, leasehold interest,
equipment, accounts receivable, and inventory. Transtech purchased these
notes along with stock from Triton Energy Corporation in May 1994. At that
point Transtech forgave $2,723 of accrued interest and fees relating to the
notes, and entered into an agreement with the Company to forbear for three
years collection of the $15,610 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
NOTE D - FINANCING ARRANGEMENTS - Continued

a period of six months. This agreement was later amended to extend the
elimination of interest on the note in the amount of $6,910 through June 30,
1996. Since May 1994, $4,343 of interest and fees have been reclassified as
Additional Paid-in Capital. Subsequent to September 30, 1996, Transtech has
agreed to forgo collection of the June 30, 1997 and September 30, 1997
installments.

In July 1996 the Company purchased an airplane owned by R. Ted Brant,
the Chairman of the Board and Chief Executive Officer of the Company for
$708. As part of the purchase agreement the Company will make monthly
payments directly to Cessna Corporation on the existing loan, which is still
in the name of Mr. Brant. The balance at September 30, 1996 is $533. Of
this amount, $36 is classified as short term debt at September 30, 1996.
(See Note J - Related Parties.)

During fiscal 1996, the Company borrowed amounts which vary from $2 to
$40 and total $115 from certain members of the Board of Directors, a Company
Officer and Transportech Corporation, a wholly owned subsidiary of Transtech.
For value received, the Company issued promissory notes bearing an interest
rate of 10% per annum with principal and interest due in February 1997. At
that time the Company exercised its option contained within the notes to
extend them for one additional year. All interest due and payable was paid
at the time of the extension.

Long Term Debt - Other

CHICAGO INDUSTRIAL REVENUE BOND

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 $3,550 at September 30, 1996, with
current maturities of $40. However, due to the uncertainty surrounding the
renewal of the letter-of-credit supporting the $3,500 bond that matures in
2014, Management has decided to reclassify that amount as short-term debt at
September 30, 1996. (See below.) These obligations are reflected in the
consolidated financial statements of the Company. CSX Corporation, the
original guarantor under the bonds and notes, continues to unconditionally
guarantee the obligations.

ARAPAHOE COUNTY INDUSTRIAL REVENUE BOND

The Company sold its Denver, CO facility in February 1994. The buyer,
Denver JetCenter, Inc. (Denver Jet) contractually assumed all liability in
connection with the payment of principal, interest, and related fees on the
$3,500 industrial revenue bonds which mature in 2013 and were the source of
the funds used to construct the facility. As a result of the sale, the
assets of the Denver, CO facility and the industrial revenue bonds were
removed from the Company's financial statements. As background information
on this transaction, CSX Beckett, a wholly-owned subsidiary of CSX
Corporation, entered into a loan agreement for $3,500 with Arapahoe County,
CO dated May 1, 1983. The funds were provided by the sale of floating rate
monthly demand Industrial Development Revenue Bonds (IRBs) issued by Arapahoe
County. The bond offering required a letter of credit, which was provided
by Barclays Bank International Limited (Barclays). When that letter of
credit expired it was replaced by a subsequent one dated May 31, 1990.
Pursuant to an indenture of trust between CSX Corporation, then the owner of
100% of CSX Beckett, and the trustee for the bondholders of the IRBs, the
trustee has the right to draw against the letter of credit, as necessary, to
make payments of principal and interest to the bondholders. To assure
reimbursement to Barclays for any amounts it must pay in the event the
trustee draws on the letter of credit (1) CSX Beckett entered into a
reimbursement agreement between itself and Barclays, dated May 1, 1983, pur-
NOTE D - FINANCING ARRANGEMENTS - Continued

suant to which Barclays is to be repaid for amounts drawn on the letter of
credit; and (2) CSX Corporation entered into a guaranty agreement, dated May
1, 1983 (CSX Guaranty), in which CSX Corporation unconditionally and
irrevocably guarantees the prompt and complete payment when due of all
indebtedness, obligations and liabilities of CSX Beckett to Barclays with
respect to the reimbursement agreement.

The CSX Guaranty also states that Barclays, when making any demand
hereunder against CSX Corporation, may, but shall be under no obligation to,
make a similar demand on CSX Beckett or any other guarantor, and any failure
by Barclays to make any such demand or to collect any payments from CSX
Beckett or any such guarantor or to realize on any collateral security for
the obligations or any release of CSX Beckett or such other guarantor shall
not relieve CSX Corporation of its obligations or liabilities hereunder.

When the Company acquired CSX Beckett, then named Beckett Aviation, Inc.
from CSX Corporation in 1985, Beckett retained its obligations to Barclays
under the reimbursement agreement, as well as its obligations to Arapahoe
County under the loan agreement, and CSX Corporation remains liable to
Barclays under the CSX Guaranty. Furthermore, as part of the transaction in
which the Company acquired Beckett, PHH Corporation (PHH), which was involved
in the financing, agreed to indemnify CSX Corporation in the event it were
ever called upon under the CSX Guaranty. Therefore, in the event CSX
Corporation is required to make payment to Barclays, PHH is obligated to
repay that amount to CSX Corporation. PHH, in an effort to obtain some
security in the event it is required to reimburse CSX Corporation, executed
an agreement with the Company on June 1, 1988, which gives PHH a continuing
security interest in the Beckett stock.

On May 5, 1993, the Company, Beckett, and Denver Jet entered into an
agreement whereby Denver Jet agreed to acquire the Denver facility and to
assume all of the Company's and Beckett's obligations with respect to the
Denver IRBs. The agreement required a consent by Barclays to the assumption
of the bond obligations. Barclays signed a letter agreement with Beckett
dated January 31, 1994, in which Barclays agreed to consent to the
transaction as described in the sales agreement. As part of the closing
documents, Denver Jet assumed the performance of all of the terms, covenants
and conditions imposed upon Beckett or the Company, or either of them, under
or in connection with the IRBs, including, without limitation, the obligation
to make all payments of interest and principal thereunder.

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, 1996, 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. The letter of credit due to
expire on December 30, 1996 was renewed until May 31, 1997. (See Note K,
Subsequent Events on page S-23.)
Long-Term Debt Schedule
SEPTEMBER 30
1996 1995
Affiliate - Series of demand notes bearing interest
at a floating rate (10.25% at September 30, 1996).
Principal and interest were due December 30,
1993, however, note holder had waived
repayment until June 30, 1996 or as
demanded thereafter. $8,700 $ 8,700

Affiliate - Installment note bearing interest
at a floating rate (8.25% at September 30,
1996). Quarterly payments of $300 plus
interest beginning December 1997. 6,910 6,910

Industrial revenue bond bearing interest
at a floating rate (3.76% at September 30,
1996). Interest is payable monthly and
principal is due December 2014. 3,500 3,500

Installment note bearing interest at 9.50%,
requiring monthly payments of $7 including
interest, until March 2006. 533 -

Affiliate - Various term notes bearing
interest at 10.00%. Principal and interest
due February 1997. 115 -

Industrial development revenue note, with
interest at 61% of prime (6.06% at
September 30, 1996), as set by Nations
Bank, payable in monthly installments of
$3 excluding interest due January 1998. 5090

Other notes payable 4 19
19,812 19,219

Less: Current maturities of long term debt 12,395 55

$7,417 $19,164

Maturities of Long-Term Debt

Annual maturities of long-term debt at September 30, 1996 are as follows:

Year ending
September 30,
1997 $12,395
1998 1,250
1999 1,244
2000 1,248
2001 1,253
Thereafter 2,422
$19,812
NOTE E - INCOME TAXES

The Company follows the provisions of Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes". 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, 1996, the Company had NOL carryforwards for tax
purposes expiring as follows:

2002 $ 1,308
2003 680
2004 5,468
2005 5,641
2006 6,050
2007 4,424
2008 3,056
2009 2,955
2010 2,768
2011 870
$33,220

The full amount of the deferred tax asset (approximately $11,837 and
$11,627 at September 30, 1996 and 1995, 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
(See also NOTE D regarding the Arapahoe County Industrial Revenue Bonds.)

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, 1996 are as follows:

Year ending
September 30,
1997 $ 457
1998 374
1999 379
2000 374
2001 371
Thereafter 1,651
$ 3,606

Rental expense for all operating leases for each of the years ended
September 30, 1996 and 1995 were $555 and $1,072, 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 $99 and $158, for the years ended
September 30, 1996 and 1995.
NOTE F - COMMITMENTS AND CONTINGENT LIABILITIES - Continued

2. Letters of Credit

At September 30, 1995, the Company had an outstanding letter of credit
totaling $5. Pledged against this letter of credit was $5 in restricted
certificates of deposit. The letter of credit expired during 1996 and the
certificates were not renewed.

3. Litigation

The Company is subject to several complaints filed over the past 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 and operations
in excess of accruals already recorded. Management believes that it has
established adequate reserves for all of these claims as to which the Company
believes it has strong defenses and intends to vigorously defend its
position.

On December 19, 1994 the Company received its first notice of tax due
from the State of New York in the amount of $163 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 three month assessments for subsequent periods have been received
each quarter by the Company reflecting assessments in the additional amount
of $1,505. Management has authorized the Company's accountants to file
appeals of all such assessments, and several such appeals are currently
pending. However, the Company's management decided to recognize the
potential liability in full and the financial statements at September 30,
1995 included an accrual of $1,457 for these assessments. At September 30,
1996 the total accrual was increased to $1,668 based on additional
assessments.

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.

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 1996. At September 30, 1996, the Company
has a total of $457 accrued for the cleanup of three formerly owned sites
presently under remediation.
NOTE F - COMMITMENTS AND CONTINGENT LIABILITIES - Continued

During fiscal 1991, Triton Energy Corporation 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,
1996 and 1995 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 additional paid-in
capital. The first redemption was due on August 1, 1996, but no redemption
was made. The Louisiana Business Corporation Law provides that a corporation
may redeem shares of its capital stock subject to redemption out of surplus
or stated capital so long as any such redemption would not reduce stated
capital below the aggregate allocated value of issued shares remaining after
the redemption and so long as sufficient net assets remain to satisfy amounts
payable upon liquidation with respect to any remaining issued shares having
a preferential right to participate in assets upon NOTE H - REDEEMABLE
PREFERRED STOCK AND STOCK WARRANTS - Continued

liquidation. Also, the terms of the issue state that the Company may not
redeem any shares unless full accrued dividends have been paid on all
outstanding shares, and also, if such redemption would reduce working capital
below $9,000 or cash below $1,500. At September 30, 1996 the Company had
accrued and unpaid dividends totalling $2,519, a working capital deficit of
($17,084), and a cash balance of $390. The Company's obligation to redeem
shall be cumulative.

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 Energy Corporation 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 1996 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 $2,519 at September 30, 1996.

At September 30, 1996, the Company has reserved 1,076,740 shares of
common stock for the conversion of outstanding Series A preferred stock.

The following is a schedule of the changes in Redeemable Preferred Stock
for the years ended September 1996 and 1995.

Series A
Shares Amount

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

Accretion of Series A
Preferred Stock - 46

Dividends in Arrears - 258

Balance September 30, 1995 269,185 5,692

Accretion of Series A
Preferred Stock - 47

Dividends in Arrears - 258

Balance September 30, 1996 269,185 $5,997
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, 1996 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 1996 or 1995. The options and related
stock appreciation rights generally vest over three years. At September 30,
1996, fully vested options exercisable totalled 290,000 with an average
exercise price of $0.55 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, 1996, the Company has reserved
1,000,000 shares in connection with Mr. Starer's options.

NOTE I - CERTAIN FBO MATTERS

With the sale of Triton Energy Corporation's major portion of its equity
in the Company 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; Youngstown, OH; Houston, TX; and New Orleans,
LA; producing gross proceeds of $4,239 plus notes receivable totalling $600
and has purchased a facility at Morgantown, WV for $390. (Also see NOTE D
for discussion of the sale of the facility at Denver, CO.) Subsequent to
September 30, 1996, the Company has hired an investment banking firm to
assist in developing a plan for the Company to return to profitability.

Following is a discussion of each FBO effected by this plan during 1995
and 1996.

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 $439; operating loss ($16). Operating results for
1996 were: Sales $905; operating loss ($1).

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
the four months in 1995 the facility was owned were: Sales $1,181; operating
loss ($41).
NOTE I - CERTAIN FBO MATTERS - Continued

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. During the three
months in 1995 the facility was owned, it produced sales of $510 with an
operating profit of $18.

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 contained an option to
purchase the facility with the owner providing financing. This was 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.

In April 1996, TigerAir ceased operations at Hobby Airport. The
landlord seized the assets on the premises for back rent. These assets were
pledged to the Company as security for the note. Since Texas law gives
preference to the landlord in this particular situation, the Company was
forced to compromise and allow the sale of the assets. The Company received
$6 and, as a result, recorded a loss of $98 on the sale. Operating results
for the period during 1996 prior to the sale to TigerAir were: Sales of $386
produced an operating profit of $41.

New Orleans - On May 10, 1996 the Company sold, to Jason IV, owner of a
competitor FBO on the airport, its leasehold interest at New Orleans'
Lakefront Airport, together with all of the assets located there for $900,
plus the invoice cost of the fuel and oil inventory on hand at February 1,
1996, the effective date of the sale, plus 35% of the cash flow (as defined
in the agreement) from the combined operations for the months of February and
March 1996. Payment of $300 plus the cost of the fuel and oil inventory and
35% of February's cash flow was received at settlement. $100 was paid in the
form of a promissory note bearing interest at the rate of 8% per annum from
April 1, 1996 until paid, and due and payable on April 30, 1997. $500 was
paid in the form of a promissory note bearing interest at the rate of 9% per
annum from April 1, 1996 until paid and due and payable on March 31, 1999.
Interest on both notes is to be paid monthly. All interest payments have
been made through September 30, 1996 as due.

The sale of the New Orleans facility will generate a total gain of $886.
However, the gain is being recognized as cash is received, with a gain of
$295 being recognized during 1996. No further gain will be recognized until
the $100 note is paid. Operating results for the period during 1996 prior
to the sale to Jason IV were: Sales of $609 produced an operating profit of
$10.
NOTE J - RELATED PARTIES

In May 1994 Triton Energy Corporation (Triton) sold the majority of its
equity in the Company to Transtech (See Note D, Long Term Debt-Affiliate).
At September 30, 1996, 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, in the form of notes that were purchased
from Triton. During fiscal year 1996, $1,488 of interest expense was
recorded against the $15,610 loans due to Transtech, of which $375 was paid
and $962 was forgiven and reclassified as Additional Paid-in Capital. During
fiscal year 1995, $1,334 of interest expense was recorded against the $15,610
loans and $809 was paid. At September 30, 1996 the Company has $684 of
accrued interest due to Transtech recorded on the balance sheet.

The Company provides accounting services to Transportech Inc., a wholly
owned subsidiary of Transtech, which operates one FBO. The Company receives
a monthly fee of $1. The Company sub-leases two fuel trucks to Transportech
at a monthly fee of $2.

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.

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 1995, the Company was
billed $179 for legal services by Mr. Cicconi's firm. During fiscal 1996,
the Company was billed an additional $145 for legal services. At September
30, 1996 the Company had outstanding amounts due Eckert Seamans Cherin &
Mellott of $35.

In July 1996 the Company purchased a 1975 Cessna Citation 500 aircraft
owned by R. Ted Brant, the Chairman of the Board and Chief Executive Officer
of the Company for $708. As part of the purchase agreement the Company will
make monthly payments directly to Cessna Corporation on the existing loan,
the balance being $533 at September 30, 1996. From June 1995 to March of
1996 attempted to develop a charter department using the Cessna belonging to
Mr. Brant. This was to pay all related operating expenses and to receive a
commission on all charters. Charters were made through Piedmont Aviation
Services, Inc., Winston Salem, NC. All expenses and income, less the
Company's commission, were charged to a balance sheet account. In March
1996, the Company was owed $36. At that time total management of the
aircraft reverted to Piedmont with the expenses and charter income continuing
to be processed by the Company. At the time of the purchase, the Company was
due $128. The difference between the purchase price and the note balance
assumed was charged to the owners account. The aircraft continues to be
managed by Piedmont who is the exclusive agent for scheduling the aircraft
usage. Piedmont operates as an air taxi operator and leases aircraft in
connection with its business, and will lease the Company's aircraft when
possible. The Company receives 75% of the net billings. Piedmont provides
the flight crew and the Company is responsible for fuel and maintenance. Mr.
Brant is also a director and Vice-Chairman of Piedmont.
NOTE J - RELATED PARTIES - Continued

In January 1996 the Company purchased a 40% interest in a company called
Peakwood, L.L.C. for $150 (See Note B-11, Other Assets). $115 of this amount
was borrowed from the following related parties: Transportech, a wholly
owned subsidiary of Transtech Holding Co., $20; Maurice Lawruk, Company
Director, $40; James Affleck, Company Assistant Treasurer, $34; R. Ted Brant,
Company Director and CEO, $15; Bobby Adkins, Company Director, $4; and Alice
Buford, a shareholder of Transtech, $2. The Company issued promissory notes
bearing an interest rate of 10% per annum with principal and interest due in
February 1997. At the option of the Company, the payment date may be
extended for one additional year with interest on the balance due at the
final maturity.

NOTE K - SUBSEQUENT EVENTS

The letter of credit issued by Barclays Bank which supports the
Industrial Revenue Bond in Cook County, Illinois totalling $3,500 was due to
expire on December 31, 1996. Barclays Bank agreed to extend the expiration
date of the letter of credit until May 31, 1997. This date coincides with
the expiration of a separate letter of credit in the same amount which
supports the Industrial Revenue Bond in Arapahoe County, Colorado. (See NOTE
D regarding the Company's guaranty of certain of these bond obligations.)
In consideration of the extended letter of credit, the Company paid Barclays
Bank a fee of $25 and agreed to give a leasehold mortgage on its Chicago
facility to PHH Corporation which obtained a back-up letter of credit in
favor of Barclays Bank as per terms of the agreement. The Company also
entered into an Escrow Agreement with PHH Corporation which establishes a
sinking fund for the Chicago Industrial Revenue Bond and requires the Company
to deposit a monthly sum according to an agreed upon schedule beginning with
$9 in January 1997 and increasing to $12 by April 1999 and continuing through
December 2009.
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, 1996

Average common shares outstanding 6,998,052

Net Loss $ 1,309
Add:
Dividends on Series A
Cumulative Convertible Preferred Stock 258
Accretion of Series A Cumulative
Convertible Preferred Stock 47

$ 1,614

Net Loss per common share
and common equivalent share $ 0.23

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, 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)

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.

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. (9)

(3.5) Third
Amendment to
the Amended
and Restated*
Articles of Incorporation. (5)

(3.6) Fourth
Amendment to
the Amended
and Restated*
Articles of Incorporation. (9)

(4.1) Preferred
Stock Purchase
Agreement
dated*
August 27, 1989, between Registrant and
Signal Hill. (5)

(4.2) Warrant Agreement
dated August 31, 1987, between *
Registrant and Signal Hill. (5)

(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. (21)

(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. (10)

(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. (10)

(10.1)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)

(10.2)Sublease by and between the Company and Beckett*
for the Chicago FBO location. (4)

(10.3)Sublease by and between the Company and Beckett*
for the Chicago FBO location. (4)

(10.4)Loan Agreement between the Company and Whitney*
National Bank, dated September 14, 1986. (6)

(10.5) Security Agreement between the Company and*
Whitney National Bank, dated September 18,
1986. (6)

(10.6)Asset Purchase Agreement between the Company,*
National Weather Corporation, and Universal
Weather and Aviation, Inc. dated July 15,
1986. (6)

(10.7)Agency Operating Agreement between the Company*
and The Airmen, Inc., dated April 9, 1986
(Downtown Airport, Kansas City, MO). (6)

(10.8)First Amendment to Agency Operating Agreement*
between the Airmen, Inc., and the Company,
dated July 8,1986. (6)

(10.9)Option Agreement between Arthur D. Stevens and*
the Company, dated April 9, 1986. (6)

(10.10)Asset Purchase Agreement between KFO Associates*
and the Company dated September 22, 1987. (11)

(10.11)Lease between Robert L. Starer and Merle A.*
Starer and the Company dated May 1, 1988. (11)

(10.12)Asset Purchase Agreement between PHH Aviation*
Services, Inc., and the Company dated June 1,
1988. (8)

(10.13)Beckett Stock Agreement between PHH Group, Inc.*
and the Company dated June 1, 1988. (8)

(10.14)Pledge and Security Agreement between PHH Group*
Inc., and the Company dated June 1, 1988. (8)

(10.15)Agreement for the Purchase and Sale of Assets*
between Van Dusen Airport Services Company,
Limited Partnership and the Company dated
April 18, 1988. (8)

(10.16)Agency Operating Agreement between Van Dusen Airport*
Services Company, Limited Partnership and the Company
dated April 18, 1988. (8)

(10.17)Escrow Agreement between Van Dusen Airport Services*
Company, Limited Partnership and the Company dated
April 22, 1988. (8)

(10.18)Asset Purchase and Sale Agreement between Page Avjet*
Corporation and the Company dated April 22, 1987. (7)

(10.19)Termination Agreement between Airmen, Inc. and the*
Company dated July 10, 1989. (12)

(10.20)Agreement of Employment between Larry A. Ulrich and*
the Company dated August 10, 1989. (12)

(10.21)Lease between Robert L. Starer and Merle A. Starer*
and the Company dated November 1, 1989. (12)

(10.22)Promissory Note from Robert L. Starer to the Company*
and dated January 4, 1989. (12)

(10.23)Promissory Note from Larry A. Ulrich to the Company*
dated October 26,1989. (12)

(10.24)Amended and Restated Loan Agreement between the*
Company and Whitney National Bank of New Orleans dated
December 19, 1989. (12)

(10.25)Fee Agreement between the Company and Triton Energy*
Corporation dated December 19, 1989. (12)

(10.26)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. (13)

(10.27)Letter Agreement between Denver Jetcenter, Inc. and*
the Company, dated May 6, 1990. (13)

(10.28)Letter Agreement between Owners Jet of Texas, Inc.*
and the Company dated June 6, 1990. (13)

(10.29)Settlement Agreement and General Release between*
Mach I Aviation, Ltd., and the Company, dated
June 29, 1990. (13)

(10.30)Agreement for the Purchase and Sale of Assets between*
Pan Am Management System, Inc. and the Company
dated July 12, 1990. (13)

(10.31)Letter Agreement between Angel Air, Inc. and the*
Company, dated August 10, 1990. (13)

(10.32)Assignment of Lease to Springfield Air Center by*
the Company, dated November 30, 1990. (13)

(10.33)Employment Agreement between John Pugh and the*
Company, dated November 21, 1990. (13)

(10.34) Schedule of Borrowings from Triton Energy *
Corporation evidenced by a Series of
Promissory Notes. (13)

(10.35)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. (14)

(10.36)Agreement for the Purchase and Sale of Assets*
between Beaufort Aviation, Inc. and the Company,
dated March 18, 1991. (14)

(10.37)Agreement for the Purchase and Sale of Interest in*
Joint Venture between Aviation Providers
International, inc. and the Company, dated March 8,
1991. (14)

(10.38)Agreement for the Purchase and Sale of Assets*
between Flightcraft, Inc. and the Company, dated
May 17, 1991. (14)

(10.39)Lease Agreement between Triton Fuel Group, Inc. and*
the Company dated February 8, 1991. (14)

(10.40)Settlement Agreement and General Release between*
Grant Thornton and the Company, dated September 13,
1991. (14)

(10.41) Amendment to
Employment
Agreement
between Larry
A.*
Ulrich and the
Company, dated
January 14,
1992. (15)

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

(10.43) Agreement for
the Purchase
and Sale of
Westchester*
dated
September 15,
1993. (20)

(10.44)Agreement for the Purchase and Sale of Raleigh-Durham*
dated July 31, 1993. (20)

(10.45)Agreement for the Purchase and Sale of Morristown*
dated September 15, 1993. (20)

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

(10.47)Schedule of Borrowings from Triton Energy Corporation*
evidenced by a Series of Promissory Notes. (20)

(10.48)Amendment to Employment Agreement between Larry A.*
Ulrich and the Company, dated April 8, 1993. (20)

(10.49)Agreement for the Purchase and Sale of Denver dated*
May 5, 1993.
(21)

(10.50)Agreement for the Purchase and Sale of Raleigh-Durham*
Avionics Division dated November 12, 1993. (21)

(10.51)Consulting Agreement between Larry A. Ulrich and*
Aero Services International, Inc. dated April 1, 1994. (21)

(10.52)Revolving Credit Loan Agreement between Aero Services*
International, Inc. and Transtech Holding Co., Inc.
dated May 13, 1994. (21)

(10.53)Revolving Promissory Note in the amount of $300,000.00*
to Aero Services International, Inc. from Transtech
Holding Co., Inc. dated May 13, 1994. (21)

(10.54)Agreement for the Purchase and Sale of Scottsdale dated*
July 19, 1994. (21)

(10.55)Schedule of Borrowings from Avfuel Corporation*
evidenced by Promissory Notes dated
September 15,
1994. (21)

(10.56)Agreement for the Purchase and Sale of Richmond*
dated September 27, 1994. (21)

(10.57) Settlement
Agreement
between Aero
Services
International,
*
Inc.,
Transtech
Holding
Company, Inc.,
Avfuel
Corporation
and Exxon
Company,
U.S.A. dated
September
1994. (21)

(10.58) Aviation
Dealer
Products Sales
Agreement
between Exxon*
Company,
U.S.A. and
Aero Services
- Houston
dated
September 12,
1994. (21)

(10.59) Aviation
Dealer
Products Sales
Agreement
between Exxon*
Company,
U.S.A. and
Aero Services
- Chicago
dated
May 20, 1994.
(21)

(10.60) Aviation
Dealer
Products Sales
Agreement
between Exxon*
Company, U.S.A. and Aero Services - Youngstown dated
May 20, 1994. (21)

(10.61) Agreement for
the Purchase
and Sale of
Tri-City dated
*
September 15, 1994. (22)

(10.62)Revolving Promissory Note between Mountain State Flight*
Services and Aero Services International, Inc. dated
December 23, 1994. (22)

(10.63) Asset purchase
agreement
between Aero
Services*
International,
Inc. (Seller)
and Winner
Aviation
Corporation
(Purchaser)
dated February
7, 1995. (23)

(10.64) Stock Purchase
Agreement
between Aero
Services*
International,
Inc. and
Mountain State
Flight
Services,
Ltd. dated
March 31,
1995. (23)

(10.65) Transfer
Agreement
between Aero
Services
International,
Inc. and
TigerAir, Inc.
dated November
8, 1995.

(10.66) Non-Recourse
Assignment and
Assumption
Agreement
between Aero
Services
International,
Inc. and
TigerAir,
Inc. dated
November 8,
1995.

(10.67) Promissory
Note from
TigerAir, Inc.
to the Company
dated
November 8,
1995.

(10.68) Line of Credit
Note from
TigerAir, Inc.
to the Company
dated November
8, 1995.

(10.69) Security
Agreement
between Aero
Services
International,
Inc.
and TigerAir,
Inc. dated
November 8,
1995.

(10.70) Operating
Agreement of
Peakwood,
L.L.C. between
Aero
Services
International,
Inc. and
Peakwood
Capital
Corporation
dated January
11, 1996.

(10.71) Asset Purchase
Agreement
between Aero
Services
International,
Inc. and Jason
IV Aviation,
Inc. dated May
10, 1996.

(10.72) Promissory
Note from
Jason IV
Aviation, Inc.
to the
Company dated
April 1, 1996.

(10.73) Promissory
Note from
Jason IV
Aviation, Inc.
to the Company
dated April 1,
1996.

(10.74) Security
Agreement
between Aero
Services
International,
Inc. and Jason
IV Aviation,
Inc. dated May
10, 1996.

(10.75) Guaranty and
Suretyship
Agreement
between
Orlando E.
Panfile and
Aero Services
International,
Inc. dated May
10, 1996.

(10.76) Pledge
Agreement
between
Orlando E.
Panfile and
Aero
Services
International
Inc. dated May
10, 1996.

(10.77) Bill of Sale,
Assignment and
Assumption
Agreement
between Aero
Services
International,
Inc. and Jason
IV
Aviation, Inc.
dated May 7,
1996.

(10.78) Lease
Agreement
between the
City of
Morgantown and
Mountain State
Flight
Services dated
September 1,
1996.

(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. (14)

(28.2)Triton Energy Corporation's Form 10-K for Year Ended*
May 31, 1992; Form 10-Q for Quarter Ended August 31,
1992. (15)

(28.2)Triton Energy Corporation's Form 10-Q for Quarter Ended*
November 30, 1991. (16)

(28.3)Triton Energy Corporation's Form 10-Q for Quarter Ended*
February 29, 1992. (17)

(28.4) NOT USED*

(28.5)Triton Energy Corporation's Form 10-Q for Quarter Ended*
November 30, 1992. (18)

(28.6)Triton Energy Corporation's Form 10-Q for Quarter Ended*
February 28, 1993. (19)

* 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 February 14,1986, File No. 0-10094.

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

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

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

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

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

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

11.Incorporated by reference from the Company's Annual Report on Form 10-K
dated December 29, 1988, File No. 0-10094-0.

12.Incorporated by reference from the Company's Annual Report on Form 10-K
dated December 29, 1989, File No. 1-10190.

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

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

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

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

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

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

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

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

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

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

23.Incorporated by reference from the Company's Annual Report on Form 10-
KSB dated February 29, 1996, File No. 1-10190.

<ARTICLE> 5
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> SEP-30-1996
<CASH> 390
<SECURITIES> 0
<RECEIVABLES> 316
<ALLOWANCES> 0
<INVENTORY> 47
<CURRENT-ASSETS> 1,056
<PP&E> 5,593
<DEPRECIATION> (2,862)
<TOTAL-ASSETS> 4,727
<CURRENT-LIABILITIES> 18,140
<BONDS> 0
<COMMON> 8,702
5,997
0
<OTHER-SE> (36,036)
<TOTAL-LIABILITY-AND-EQUITY> 4,727
<SALES> 7,802
<TOTAL-REVENUES> 7,802
<CGS> 3,456
<TOTAL-COSTS> 3,456
<OTHER-EXPENSES> 4,024
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,706
<INCOME-PRETAX> (1,309)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,309)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,309)
<EPS-PRIMARY> (.23)
<EPS-DILUTED> 0

</TABLE>

(10.65) Transfer Agreement between Aero Services International, Inc.
and TigerAir, Inc. dated November 8, 1995.

TRANSFER AGREEMENT

THIS TRANSFER AGREEMENT (this "Agreement") is made and
entered into as of the 8th day of November, 1995, by and between
AERO SERVICES INTERNATIONAL, INC., a Louisiana corporation
("Aero"), TIGERAIR, INC., a Texas corporation ("TigerAir"), and
WALLACE E. CONGDON ("Congdon").

W I T N E S S E T H:

WHEREAS, Eagle Directions, Inc., a Delaware corporation
("Eagle") is the lessee of certain real property, with
improvements thereon, located at the Houston Hobby Airport in
Houston, Texas (the "Airport"), at which location Eagle has
operated fixed base operations serving the aviation industry;
and

WHEREAS, Eagle's leasehold interest at the Airport is the
subject of that certain lease agreement by and between the City
of Houston and Sky Travel Jet Service, Inc., dated March 15,
1989 (the "Municipal Lease"), which Municipal Lease was assigned
to, and assumed by, Eagle pursuant to that certain assignment
and assumption of lease by and among Sky Travel Jet Service,
Inc. and Eagle, dated as of February 10, 1993; and

WHEREAS, as of October 20, 1994, Eagle and Aero entered into
that certain sublease agreement, a copy of which is attached
hereto as Exhibit A (the "Sublease"), pursuant to which Sublease
Aero, among other things, is the sub-lessee of Eagle's leasehold
interest under the Municipal Lease; and

WHEREAS, pursuant to the Sublease, Aero currently operates
the Houston FBO (as hereinafter defined); and

WHEREAS, as of October 20, 1994, Aero and Eagle entered into
that certain option agreement, a copy of which is attached
hereto as Exhibit B (the "Option Agreement"), pursuant to which,
among other things, Eagle granted Aero an option (the "Option")
to purchase and acquire, from Eagle, Eagle's leasehold interest
under the Municipal Lease, together with all of Eagle's rights,
title and interest in and to the Operational Assets (as defined
in the Option Agreement) used in the operation of the Houston
FBO; and

WHEREAS, Eagle's leasehold interest at the Airport and
Eagle's ownership interest in the Operational Assets, together
with all of Eagle's rights, title and interest therein or with
respect thereto, may be referred to as the "Houston FBO"; and

WHEREAS, Congdon has caused TigerAir to be incorporated for
the purposes of (i) acquiring the Transferred Rights (as
hereinafter defined), (ii) acquiring the Transferred Assets (as
hereinafter defined), and (iii) operating the Houston FBO; and

WHEREAS, Congdon and TigerAir desire that TigerAir (i)
acquire all of Aero's right, title and interest to, in and under
the Option Agreement and the Sublease, (ii) acquire all of
Aero's right, title and interest in and to the Transferred
Assets, and (iii) assume all of Aero's obligations under the
Option Agreement and the Sublease, and otherwise with respect to
the Transferred Assets and the Houston FBO; and

WHEREAS, under the terms and conditions hereinafter set
forth, Aero is willing to sell, transfer and assign the
Transferred Rights and the Transferred Assets to TigerAir,
including all of Aero's right, title, interest and obligations
with respect thereto, and otherwise with respect to the Houston
FBO;

NOW, THEREFORE, in consideration of the foregoing, for other
good and valuable consideration the receipt and adequacy of
which are hereby acknowledged, intending to be legally bound,
the parties agree as follows:

1. Recitals. The foregoing recitals constitute a material part of
this Agreement, and are expressly incorporated herein by reference.

2. Assignment of Option Agreement and Sublease; Sale of Equipment
and Inventory.

(a)Option
Agreement and Sublease. Aero hereby assigns, transfers and sets
over, without recourse, unto TigerAir all of its rights, title
and interest in, to and under the Option Agreement and the
Sublease (the "Transferred Rights"). TigerAir hereby accepts
the assignment of all of the Transferred Rights, and, further,
assumes all of Aero's obligations, whether actual or contingent,
under or otherwise with respect to the Option Agreement and the
Sublease, and otherwise with respect to the Houston FBO.
b)Equipment.
Aero hereby sells, transfers and assigns to TigerAir, all of the
personal property used in the operation of the Houston FBO and
located at the Houston FBO as of the Closing, other than
computer equipment and software (the "Transferred Assets"). The
parties expressly acknowledge and agree that any and all
computer equipment and software used by Aero at the Houston FBO
is excluded from the Transferred Assets. THE TRANSFERRED ASSETS
ARE SOLD AND TRANSFERRED HEREUNDER "AS IS" AND TIGERAIR ACKNOWLEDGES THAT
AERO HAS NOT MADE, AND AERO HEREBY EXPRESSLY DISCLAIMS AND NEGATES ANY
REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE,
RELATING TO THE PHYSICAL CONDITION OF THE TRANSFERRED ASSETS (INCLUDING,
WITHOUT LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE) AND FURTHER, TIGERAIR ACCEPTS ALL OF THE
PURCHASED ASSETS IN THEIR "AS IS" CONDITION.

(c)Fuel and Oil
Inventory. Aero and TigerAir will mutually conduct a physical
inventory of all fuel and oil on hand at the Houston FBO at the
Closing Date (the "Fuel and Oil Inventory"), which Fuel and Oil
Inventory shall be sold, transferred and assigned to TigerAir as
of the Closing.

3. Consents.
(a)Consent of Eagle.
The assignment of the Transferred Rights is subject to
and contingent on the execution of an assignment and consent by
and among Aero, TigerAir and Eagle (the "Assignment and
Consent"), pursuant to which (i) Aero assigns the Sublease and
the Option Agreement to TigerAir, (ii) TigerAir assumes Aero's
obligations under and with respect to the Sublease and the
Option Agreement, and (iii) Eagle consents to the non-recourse
assignment of the Sublease and the Option Agreement by Aero to
TigerAir.

(b)Consent of the City of Houston. The assignment of the Transferred Rights
and TigerAir's assumption of the Sublease and the Option Agreement
is subject to the approval and consent of the City of Houston,
Texas (the "City"), to be evidenced by an instrument in form and
substance acceptable to the City. The foregoing
notwithstanding, as between Aero and TigerAir, the City's
approval and consent shall not be a condition precedent to the
effectiveness of this Agreement or any provision hereof. Aero
makes no representations or warranties with respect to the
City's willingness to consent to TigerAir's assumption of the
Sublease and the Option Agreement.

4. Assumption of Obligations. In conjunction with the sale,
transfer and assignment of the Transferred Rights and the Transferred
Assets, TigerAir shall assume (i) all of Aero's obligations under and
with respect to the Option Agreement, (ii) all of Aero's
obligations under and with respect to the Sublease, (iii) the
Exxon Fuel Supply Contract described in Section 8 hereof, (iv)
the AvFuel Refueler Agreements described in Section 9 hereof,
(v) the employment of all current employees at the Houston FBO,
as further described in Section 10 hereof (the "Employees"), and
(vi) all other obligations of Aero with respect thereto, and
otherwise in connection with, the Houston FBO. (Hereinafter,
the obligations of Aero assumed by TigerAir under and with
respect to the Option Agreement, the Sublease, the Exxon Fuel
Supply Contract, the AvFuel Refueler Agreements, the Employees,
and otherwise in connection with the Houston FBO, may be
referred to as the "Assumed Obligations".)

5. Consideration. In consideration of Aero's sale, transfer and
assignment of the Transferred Rights and the Transferred Assets
to TigerAir, TigerAir shall pay to Aero the amount of Two
Hundred Fifty Thousand Dollars ($250,000), (ii) assume the
Assumed Obligations, and (iii) indemnify and hold Aero harmless
as described in Section 23 hereof. In addition to the
foregoing, at the Closing TigerAir shall pay Aero an amount
equal to Aero's invoice cost of the Fuel and Oil Inventory.

6. Payment of Cash Portion of Consideration. TigerAir shall pay the Two
Hundred Fifty Thousand Dollars ($250,000) referenced in Section
5 hereof in the form of a non-interest bearing promissory note
made payable by TigerAir to Aero in the original principal
amount of Two Hundred Fifty Thousand Dollars ($250,000), which
promissory note shall contain the terms and conditions set forth
in Exhibit C hereof (the "Acquisition Promissory Note"). The
principal amount of the Acquisition Promissory Note shall be due
and payable on the first to occur of: (i) TigerAir's subsequent
sale of the Houston FBO; (ii) a change in ownership of TigerAir;
or (iii) the third anniversary date of the date of the Closing
Date (as hereinafter defined). The invoice cost of Fuel and Oil
Inventory shall be treated as an advance on the Working Capital
Note (as hereinafter defined).

7. Closing. The Closing at which the all of Aero's right, title and
interests to the Transferred Rights shall be transferred to
TigerAir, and at which TigerAir shall assume the Assumed
Obligations (the "Closing") shall occur at 12:00 a.m., local
time, at the offices of Eckert Seamans Cherin & Mellott, located
at 213 Market Street, Harrisburg, Pennsylvania 17101, on
November 8, 1995 or such other date as may be mutually agreed to
by Aero, Congdon and TigerAir, which date shall not be more that
two (2) weeks from the date of this Agreement (the "Closing
Date").

8. Exxon Fuel Supply Contract. As of the Closing, Tiger Air shall assume
that certain fuel supply contract by and between Aero and Exxon
Company, U.S.A., a division of Exxon Corporation, a New Jersey
corporation ("Exxon"), a copy or which is attached hereto as
Exhibit D (the "Exxon Fuel Supply Contract"). TigerAir shall be
responsible for obtaining Exxon's consent to the assignment and
the assumption of the Exxon Fuel Supply Contract, and shall
provide Aero with adequate assurances, reasonably acceptable to
Aero, that the Exxon Fuel Supply Contract will not be canceled
by TigerAir prior to its expiration in accordance with its
terms.

9. AvFuel Refueler Agreements. As of the Closing, TigerAir shall assume
those certain refueler lease agreements by and between Aero and
AvFuel Corporation, a Michigan corporation ("AvFuel"), a copies
of which are attached hereto as Exhibit E (the "AvFuel Refueler
Agreements"). TigerAir shall be responsible for obtaining
AvFuel's consent to the assignment and the assumption of the
AvFuel Refueler Agreements, and shall provide Aero with adequate
assurances, reasonably acceptable to Aero, that the AvFuel
Refueler Agreements will not be canceled by TigerAir prior to
their expiration in accordance with their respective terms. In
the event that AvFuel requires a sublease of the AvFuel Refueler
Agreements rather than an assignment to TigerAir, then TigerAir
shall, as directed by Aero, either (i) promptly pay each invoice
from AvFuel within the period set forth for payment in the
AvFuel Refuel Agreements and sublease, or (ii) within two (2)
days of Aero's payment of any such invoices fully reimburse Aero
for such payment.

10. Employees. As of the Closing, TigerAir shall continue the employment,
under current terms and conditions, of each of the Employees of
Aero at the Houston FBO whose names are set forth on Schedule 10
hereto. TigerAir shall assume all obligations with respect to
the Employees, and shall provide each such Employee with the
same salaries and benefits currently provided by Aero.

11. Aero Accounts Receivable. Aero's accounts receivable are expressly
excluded from the assignment described in Section 2 hereof. As
of the Closing Date, or as soon as practicable thereafter, Aero
and TigerAir shall prepare a schedule (to be attached hereto as
Schedule 11) of Aero's accounts receivable in existence as of
12:01 a.m. on the Closing Date ("Aero's Accounts Receivable").
From and after the Closing, TigerAir shall use its best efforts
to collect Aero's Accounts Receivable and to remit the same to
Aero without withholding any fees or commissions therefor. Each
amount collected by TigerAir with respect to Aero's Accounts
Receivable shall be remitted by TigerAir to Aero within five (5)
days after the collection thereof.

12. Work in Process. Work in process shall be prorated based on percentage
of completion at the Closing Date. Aero and TigerAir shall
identify on a schedule (to be attached hereto as Schedule 12)
all such items of work in process as of the Closing Date, and
shall indicate the percentages of the fee to be allocated
between Aero and TigerAir based on the percentage work completed
as of the Closing Date. To the extent practicable, Aero shall
invoice customers for so much of any work in process as has been
completed by Aero as of the Closing Date. Any portion of a
deposit received by Aero for work in process that exceeds Aero's
allocated percentage of the fee for such work shall be delivered
to TigerAir at the Closing. Any uncollected amounts owing to
Aero for work in process shall be remitted by TigerAir within
five (5) days after the collection thereof. Aero and TigerAir
shall warrant any work in process completed by them to the
extent of their respective contributions to such completed work
in process, and shall indemnify and hold each other harmless
with respect thereto.

13. Revolving Working Capital Loan. Aero agrees that, at the Closing, Aero
shall provide a revolving working capital loan (the "Working
Capital Loan") to TigerAir in the principal amount not to exceed
Fifty Thousand Dollars ($50,000), which loan shall be evidenced
by a promissory note in the form attached hereto as Exhibit F
(the "Working Capital Note"). The Working Capital Loan shall be
subject to the following terms and conditions:

(a)Interest.
The outstanding principal amount of the Working Capital Note shall
bear interest at the fixed annual rate of nine and one-half
percent (9.5%). Interest accrued under the Working Capital Loan
shall be due and payable monthly in arrears.
(b)Credit Line Cap. The principal amount outstanding under the Working Capital
Loan shall not, at any time, exceed the Maximum Availability (as
hereinafter defined). Any amounts under the Working Capital
Loan that exceed the Credit Line Cap shall be immediately due
and payable.

(c)Maximum
Availability; Repayment. As of the Closing, the maximum
availability (the "Maximum Availability") under the Working
Capital Loan shall be Fifty Thousand Dollars ($50,000).
Commencing on the sixtieth (60th) day following the Closing, and
on the same day of each month thereafter, the Maximum
Availability shall be reduced by Five Thousand Dollars ($5,000),
such that on the sixtieth (60th) day following the Closing the
Maximum Availability shall be reduced to Forty-five Thousand
Dollars ($45,000), and on the same day of the next following
month, the Maximum Availability shall be reduced to Forty
Thousand Dollars ($40,000), and so on until the Maximum
Availability is reduced to zero.

14. Security. The full and prompt payment by TigerAir of Acquisition
Promissory Note, the Working Capital Note and TigerAir's other
obligations hereunder shall be secured by: (i) TigerAir's
accounts receivable and work in process from the operation of
the Houston FBO; (ii) a first priority security interest in all
existing and after-acquired fixtures and personal property owned
by TigerAir, including replacements, additions, substitutions,
products and proceeds thereof; (iii) a pledge by Congdon of all
of Congdon's options to acquire stock of Aero; (iv) a pledge by
Congdon of all of the issued and outstanding shares of TigerAir
now or hereafter owned by Congdon. TigerAir and Congdon shall
execute and deliver such assignments, pledge agreements,
security agreements and financing statements as shall be
required by Aero to create and perfect all such security
interests. The foregoing notwithstanding, Aero acknowledges and
agrees that on the payment in full of all amounts due on account
of the Working Capital Note and on the Termination of the
Working Capital Loan, Aero will, on TigerAir's request, agree to
subordinate its first priority security interest in TigerAir's
accounts receivable and personal property to the first priority
security interest therein of a commercial lending institution
that, at such time, provides a credit facility to TigerAir.

15. Prorations. Operation of the Houston FBO until 12:01 a.m. on the
Closing Date shall be for the account of Aero, and thereafter
for the account of TigerAir. Those items of revenue and expense
of the Houston FBO and other items hereinafter described shall
be prorated and adjusted between Aero and TigerAir as of the
Closing Date as follows:

(a)General Adjustment. Real estate taxes, possessory interest taxes,
personal property taxes, lease payments and rents, and any other
receipts and expenses attributable to any lease by Aero, as
lessor or lessee, and other operating income and expenses
relating to the Houston FBO, shall be prorated as of the Closing
Date between Aero and TigerAir. All business, license,
occupation, sales, use, withholding or similar taxes, or any
other taxes of any kind relating to the Houston FBO and
attributable to the period prior to the Closing Date shall be
paid by Aero, and all such taxes attributable to the period on
and after the Closing Date shall be paid by TigerAir.

(b)Utilities.
TigerAir shall make appropriate arrangements for transfer of all
necessary utility and other services in TigerAir's name to be
effective as of the Closing Date. In lieu of prorating power,
gas and water bills, the appropriate utilities will be requested
by Aero to take meter readings as close to the Closing Date as
possible and to bill Aero for service prior to such readings and
to bill TigerAir for service thereafter. The readings may occur
before or after the Closing Date. With respect to telephone
services, on receiving a copy of the next following billing for
telephone service after the Closing, Aero will either pay
directly or reimburse TigerAir within ten (10) business days
after receipt thereof for those charges attributable to calls
made prior to the Closing Date. General monthly charges
reflected by such billing for telephone service to the Houston
FBO will be prorated on the basis of the number of days Aero
occupied the Houston FBO during the period covered by the
billing.

(c)Fuel and Oil
Flowage Fees and Taxes. Any and all fuel flowage fees and taxes
paid, or due to be paid, with respect to Fuel and Oil Inventory
shall be prorated as of the Closing.

(d)Implementation
of Prorations and Other Payments. Prior to the Closing Date,
Aero and TigerAir shall undertake in good faith to mutually
agree on a closing statement setting forth the determination of
the items to be prorated and accounted for hereunder, and the
net amount due, if any, to either Aero or TigerAir, as the case
may be, shall be paid or credited at the Closing.

16. Resignation. Effective as of the Closing, Congdon shall resign as
President and as a director of Aero. Congdon shall execute a
general release in favor of Aero, in form and content identical
to the form of release attached hereto as Exhibit G, waiving any
and all rights, claims and causes of action associated with
Congdon's employment with Aero and with the termination thereof
in accordance with this Section 16.

17. Cooperation. Following his resignation as described in Section 16
hereof, Congdon shall cooperate with, and make himself available
to, Aero at mutually agreed times for the purpose of concluding
and winding-up any matters, including litigation, in which
Congdon has participated, supervised, or otherwise been
involved. Aero will reimburse Congdon for his actual out-of-
pocket expenses in connection with his activities pursuant to
this Section 17.

18. Aero's Representations and Warranties. Aero represents and warrants to
Aero as follows:
(a)Aero is a corporation duly organized and validly existing under the laws
of the State of Louisiana. Aero has the right, power and
authority to enter into this Agreement.

(b)The execution
and delivery of this Agreement by Aero, has been duly and
validly authorized by all requisite action of Aero and does not
contravene or breach any provision of Aero's certificate of
incorporation or bylaws.

(c)This Agreement
has been duly executed and delivered by Aero and constitutes a
legal, valid and binding obligation of Aero, enforceable against
Aero in accordance with its terms.

19. Representations and Warranties of Congdon and TigerAir. Congdon and
TigerAir represent and warrant to Aero as follows:
(a)TigerAir is
a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas, and has all
requisite corporate power and authority to enter into this
Agreement, and to purchase and assume the Sublease, the Option
Agreement, the Exxon Fuel Supply Contract, and the AvFuel
Refueler Agreements, together with all of Aero's rights and
obligations under and with respect to each of the foregoing, and
to perform and carry out all of its duties and obligations in
the transactions contemplated by this Agreement.
(b)The execution,
delivery and performance of this Agreement and the consummation
of transactions on the part of TigerAir herein contemplated have
been duly authorized by all necessary corporate action on the
part of TigerAir. This Agreement, and the other documents to be
executed and delivered by TigerAir pursuant hereto, are the
legal, valid and binding obligations of TigerAir, enforceable in
accordance with their terms.
(c)The execution
and delivery of this Agreement by TigerAir, and the performance
of its obligations hereunder, do not (i) contravene its articles
of incorporation or bylaws, or (ii) breach any contract or
agreement to which TigerAir is a party or by which it is bound.
(d)Congdon has
the right, power and authority to enter into this Agreement and
to perform and carry out all of his duties and obligations in
the transactions contemplated by this Agreement.
(e)The execution
and delivery of this Agreement by Congdon, and the performance
of his obligations hereunder, do not contravene or breach any
contract or agreement to which Congdon is a party or by which he
is bound.
(f)This Agreement
has been duly executed and delivered by TigerAir and Congdon and
constitutes the legal, valid and binding obligation of each of
TigerAir and Congdon, enforceable against TigerAir and Congdon
in accordance with its terms.
(g)Neither
TigerAir nor Congdon have any knowledge of any actions,
proceedings or investigations pending or threatened against or
involving TigerAir and/or Congdon (including any bankruptcy
proceeding) before any court, arbitrator, administrative agency
or other governmental authority which would adversely affect
TigerAir's ability to assume, and perform under, the Sublease,
the Option Agreement, the Exxon Fuel Supply Contract, and the
AvFuel Refueler Agreements.

20. Covenant Not to Compete. Aero covenants and agreed that for a
period of three (3) years from the Closing Date, Aero will not,
directly or indirectly, at the Houston Hobby Airport, engage in,
or own (excluding passive investment interests of publicly-
traded and registered under Section 12 of the Securities
Exchange Act of 1934, as amended), manage, operate, control or
participate in the ownership, management, operation or control
of or otherwise be connected in any manner with any business
which engages in any activity that is directly or indirectly
competitive with the fixed base operation business of TigerAir
at the Houston FBO.

21. Salary Cap. TigerAir and Congdon covenant and agree that so
long as there exists an outstanding balance under the Acquisition
Promissory Note or the Working Capital Loan, Congdon shall not
be paid a salary by TigerAir that exceeds his current salary as
President of Aero.

22. Insurance. At TigerAir's own cost and expense, TigerAir shall
maintain at all times during which there is a balance outstanding under
the Acquisition Promissory Note and the Working Capital Note
Agreement (i) all-risk property and casualty insurance against
loss, destruction or damage to the Houston FBO for the
replacement value thereof, (ii) comprehensive general liability
insurance (on an occurrence basis), with policy limits not less
than Two Million Dollars ($2,000,000) per occurrence, which
shall cover risks of bodily injury and property damage arising
out of the condition, maintenance, use or operation of Houston
FBO, (iii) workers' compensation insurance required by
applicable law, (iv) all-risk builder's risk insurance during
any construction at the Houston FBO, (v) business interruption
insurance in amounts sufficient to cover debt service, lease
payments, property taxes, insurance and general operating
expenses of the Houston FBO, and (vi) such other insurance Aero
may reasonably require, all (except workers' compensation
insurance) naming Aero as additional loss payee or additional
insured, as applicable. At the request of Aero, from time to
time, TigerAir shall furnish to Aero with a certificate signed
by a duly authorized representative of each insurer showing the
insurance then maintained by TigerAir, and stating that such
insurance complies with the terms of this Section 22, together
with evidence that payment of the premiums on such insurance is
current. If TigerAir shall fail to maintain insurance as
provided by this Section 22, then Aero may at its option
maintain the insurance required by this Section 22 and, in such
event, TigerAir shall reimburse Aero on demand for the
reasonable cost of such insurance together with interest at the
rate of nine and one-half percent (9.5%) per annum. Each policy
for insurance described in this Section 22 shall provide that,
if any premium or installment is not paid when due, or if such
insurance is to be canceled, terminated or materially changed
for any reason whatsoever, the insurer will notify Aero at least
thirty (30) days prior to such cancellation, termination or
change.

23. Indemnification. In addition to the other obligations and
covenants of TigerAir and Congdon hereunder, TigerAir and Congdon agree to
indemnify, hold harmless and defend Aero and its directors,
officers, agents and employees, from and against any and all
losses, costs, damages, liabilities or expenses (including, but
not limited to, experts', consultants' and attorneys' fees and
costs) arising out of or related to the Transferred Rights, the
Transferred Assets, and the Assumed Obligations.

24. Broker. Each of the parties hereto represents and warrants
to the other that neither such party nor any director, officer or agent
of such party, as the case may be, has entered into any
agreement for the payment of any brokerage or finder's fees to
any person, firm or corporation in connection with the
transactions contemplated by this Agreement, and each agrees to
indemnify and hold and save the other harmless from any such
fees (including reasonable attorneys' fees and other expenses
incurred in connection with any such claim) which may be due or
asserted by reason of any such agreement or purported agreement
by the indemnifying party.

25. Further Assurances. Each party shall, at the request of the
other, at any time and from time to time prior to or following the
Closing, execute and deliver to the requesting party all such
further instruments as may be reasonably necessary or
appropriate in order effectuate or confirm the transactions
herein contemplated.

26. Notices. All
notices, requests, demands, directions and other communications
required or permitted under the provisions of this Agreement, or
otherwise with respect hereto, shall be in writing and shall be:
(i) mailed by first class registered or certified mail, return
receipt requested, postage prepaid; or (ii) sent by next day
business courier (such as Federal Express or the like); or (iii)
personally delivered; or (iv) transmitted by fax, telegram or
telex (with a hard copy to follow within twenty-four (24) hours
by first class registered or certified mail, return receipt
requested, postage prepaid, or by next day business courier
[such as Federal Express or the like], or by personal delivery),
as follows:

if to Aero, to:

Aero Services International, Inc.
660 Newton-Yardley Road
Newton, Pennsylvania 18940
Attention: James Affleck
Facsimile: (215) 968-6010

with a copy to:

Eckert Seamans Cherin & Mellott
One South Market Square Building
213 Market Street, P. O. Box 1248
Harrisburg, PA 17108-1248
Attention: Christopher M. Cicconi, Esquire
Facsimile: (717) 237-6019

if to TigerAir or Congdon, to:

Wallace E. Congdon
4109 Fryer Street
The Colony, Texas 75056
Facsimile: (214) 370-0630

with a copy to:

Michael S. Burg, Esq.
5858 Westheimer, Suite 700
Houston, Texas 77057
Facsimile: (713) 974-2351

or to such other address(es) or to the attention of such other
person(s) and officer(s) as the addressee of any such notice
shall have previously furnished to the sender in writing. Each
notice or communication which shall be transmitted in the manner
described above, or which shall be delivered to a telegraph
company, shall be deemed sufficiently given, served, sent, or
received for all purposes at such time as it is sent to the
addressee (with return receipt, delivery receipt [or with
respect to a telex the answer back, or a fax the activity
report] being deemed conclusive evidence of such mailing,
transmission or delivery), or at such time as delivery is
refused by the addressee on presentation.

27. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal, substantive laws of
the Commonwealth of Pennsylvania, including its statutes of
limitation, but without regard to its rules governing conflict
of laws.

28. Assignment; Binding Effect. This Agreement may not be assigned
by either party hereto without the prior written consent of the
other, which consent shall not be unreasonably withheld.

29. Partial Invalidity. If any term, provision, covenant or condition of
this Agreement, or any application thereof, should be held by a
court of competent jurisdiction to be invalid, void or
unenforceable, shall continue in full force and effect and shall
in no way be affected, impaired or invalidated.

30. Headings. The section headings appearing herein are for the
convenience of reference only, and in no way whatsoever define,
limit or describe the scope or intent of this Agreement.

31. Entire Agreement; Amendment; Waiver. This Agreement constitutes the
entire agreement between the parties pertaining to the subject
matter contained herein and supersedes all prior agreements,
informational memoranda, representations and understandings of
the parties. No amendment or modification of this Agreement
shall be binding unless executed in writing by the parties.
Except as may be otherwise provided in this Agreement, no waiver
of any of the provisions of this Agreement shall be deemed, or
shall constitute, a waiver of any other provision, whether or
not similar, nor shall any waiver constitute a continuing
waiver, and no waiver shall be binding unless evidenced by an
instrument in writing executed by the party against whom the
waiver is sought to be enforced.

32. Counterparts. This Agreement may be executed in any number of
counterparts, with each such counterpart being deemed to be an
original instrument.

33. Confidentiality. Neither party shall provide this Agreement or a copy
or summary hereof to any person or entity or disclose its
existence or any of the provisions thereof without the prior
written consent of the other, except as may be required by law
or order of court.

IN WITNESS WHEREOF, and intending to be legally bound
hereby, the parties have executed this Agreement as of the date
first set forth above.

AERO SERVICES
INTERNATIONAL, INC.

hristopher Cicconi By: Paul R. Slack
Secretary Its: Assistant Secretary

TIGERAIR, INC.

Allison L. Blumer By: W. E. Congdon

Assistant Secretary Its:President

Allison L. Blumer W. E. Congdon
Witness
Wallace E. Congdon

(10.66) Non-Recourse Assignment and Assumption Agreement between Aero
Services International, Inc. and TigerAir, Inc. dated
November 8, 1995
NON-RECOURSE ASSIGNMENT AND ASSUMPTION WITH CONSENT

THIS NON-RECOURSE ASSIGNMENT AND ASSUMPTION is made and
entered into as of this 8th day of November, 1995, by and
between AERO SERVICES INTERNATIONAL, INC., a Louisiana
corporation ("Aero"), and TIGERAIR, INC., a Texas corporation ("TigerAir"), and
is consented to by EAGLE DIRECTIONS, INC., a Delaware corporation ("Eagle").

W I T N E S S E T H:

1. Non-Recourse Assignment. For good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, Aero does hereby sell, transfer, assign, and
deliver to TigerAir, without recourse to Aero, all of Aero's
right, title and interest in, to and under (i) that certain
sublease, dated as of October 20, 1994, by and between Aero, as
sublessee, and Eagle, as sub-lessor (the "Sublease"), and (ii)
that certain option agreement, dated as of October 20, 1994, by
and between Aero and Eagle (the "Option Agreement"), pursuant to
which, among other things, Eagle granted Aero an option to
purchase and acquire, from Eagle, Eagle's leasehold interest at
the Houston Hobby Airport in Houston, Texas (the "Airport"),
together with all of Eagle's rights, title and interest in and
to the Operational Assets (as defined in the Option Agreement)
used in the fixed based operations previously managed by Eagle,
and currently managed by Aero, at the Airport (the "Houston
FBO").

2. Assumption. TigerAir does hereby accept the foregoing
sale, transfer and assignment of all Aero's right, title and
interest in, to and under the Sublease and the Option Agreement,
and hereby assumes and covenants with Aero and Eagle that it
will pay, perform and discharge, when lawfully due, each and
every obligation of Aero under and with respect to the Sublease
and the Option Agreement, and, further, agrees to assume and
perform each and every other obligation of Aero with respect to
the Houston FBO, including, without limitation, (i) that certain
fuel supply contract, dated as of _______________ _____, 1994,
by and between Aero and Exxon Company, U.S.A., a division of
Exxon Corporation, a New Jersey corporation, (ii) those certain
refueler agreements, dated as of _______________ _____, 19____,
by and between Aero and AvFuel Corporation, a Michigan
corporation, and (iii) the employment of all current employees
at the Houston FBO.

3. Further Assurances. Each of Aero and TigerAir hereby covenants
that, from time to time, after delivery of this instrument, at the
other's request and without further consideration, such party
shall do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and delivered, any and all such further
acts, instruments and other things or writings reasonably
requested by the other party in order to evidence and effectuate
the consummation of any of the transactions referenced herein.

4. Consent to Non-Recourse Assignment and Assumption. Eagle hereby
consents to (i) the non-recourse assignment by Aero to TigerAir
of the Sublease and the Option Agreement and (ii) the assumption
thereof by TigerAir.

5. Release of Aero. Aero hereby represents and warrants to Eagle that
there does not now exist a default by Aero under the terms of
the sublease. Eagle hereby releases Aero of any and all
obligations and duties arising under or with respect to the
Sublease and the Option Agreement, effective as of the date
hereof.

IN WITNESS WHEREOF, and intending to be legally bound
hereby, the parties have executed this Non-Recourse Assignment
and Assumption with Consent as of the date first set forth
above.
AERO SERVICES
INTERNATIONAL, INC.

Christopher Cicconi By: Paul R. Slack
Secretary Its: Assistant Secretary

TIGERAIR, INC.
Allison L. Blumer By: W. E. Congdon
Assistant Secretary Its:President

EAGLE DIRECTIONS, INC.

By: William E. Earl
Secretary Its:President

(10.67) Promissory Note from TigerAir, Inc. to the Company dated
November 8, 1995.

PROMISSORY NOTE

$250,000 November 8, 1995

FOR VALUE RECEIVED, TigerAir, Inc., a Texas corporation (the
"Maker"), promises to pay to the order of Aero Services
International, Inc. a Louisiana corporation (together with its
successors and assigns and any other transferee or successor
then becoming holder of this Note, "Payee"), in lawful money of
the United States of America at the principal office of Payer at
660 Newtown-Yardley Road, Newtown, Pennsylvania 18940, or at
such other place as Payee may from time to time designate by
written notice to Maker, Two Hundred Fifty Thousand Dollars
($250,000) together with all interest, fees, costs and penalties
thereon, as follows:

1. Agreement. This Note is the Acquisition Note issued pursuant to, and
is payable in accordance with, that certain Transfer Agreement
by and among Maker and Payee of even date herewith (the
"Agreement"). Any capitalized term used in this Note but not
defined herein shall have the meaning ascribed to such term in
the Agreement. The terms, covenants, conditions, provisions,
stipulations and agreements of the Agreement are incorporated
herein by reference, and are hereby made a part of this Note to
the same extent and with the same effect as if they were fully
set forth herein, and Maker hereby covenants to abide by and to
comply with each and every term, covenant, provision,
stipulation, promise, agreement and condition set forth in this
Note and in the Agreement. The holder of this Note is entitled
to the benefits of the Agreement to which reference is hereby
made for a statement of the terms and conditions under which
this Note is issued and may enforce the agreements of Maker
contained therein and exercise remedies provided for thereby or
otherwise available in respect thereof.

2. Interest. From the date hereof through and including the Maturity Date
(as hereinafter defined) no interest shall accrue on the
principal sum of this Note. Commencing on the Maturity Date and
continuing until repayment in full of all sums due hereunder,
the unpaid principal sum of this Note shall bear interest at the
rate of twelve percent (12%) per annum (the "Default Interest
Rate"). Interest at the Default Interest Rate shall accrue
daily. All computations of interest hereunder shall be made on
the basis of a year of 360 days, for the actual number of days
occurring in the period for which such interest is payable
(including the first day but excluding the last day).

3. Payments and Maturity. The entire outstanding principal sum under this
Note shall be due and payable on the first to occur of: (i)
Maker's sale of the Houston FBO (as defined in the Agreement);
(ii) the issuance, sale, transfer or assignment of shares of
Maker's stock resulting in a transfer of ownership or change in
control of Maker; or (iii) the third (3rd) anniversary of the
date hereof, unless accelerated by Payee (the "Maturity Date").

4. Prepayment. Maker shall have the right, at any time, to prepay the
outstanding principal amount of this Note, in whole or in part
from time to time (without premium or penalty).

5. Application of Payments. Each and all of the payments made hereunder
shall be applied first to expenses and costs incurred by Payee
and for which Maker is responsible; second, to any accrued and
unpaid fees; third, to accrued and unpaid interest hereunder, if
any; and, fourth, to the principal balance of this Note.

6. Security. Payment of this Note is secured in accordance with Section
14 of the Agreement, including the security interests and liens
granted pursuant thereto or otherwise in connection therewith
and any other assignments and conveyances made from time to time
pursuant to the Agreement.

7. Default. If Maker (i) fails in any way to perform its obligations
under this Note, the Working Capital Note (as defined in the
Agreement), the Agreement, or any other instrument, document or
agreement executed by Maker pursuant to or in otherwise in
connection with the Agreement, (ii) fails in any way to observe
any covenant or agreement under this Note, the Working Capital
Note, the Agreement, or any other instrument, document or
agreement executed by Maker pursuant to or in otherwise in
connection with the Agreement, or (iii) fails to make any
payment when due under this Note or the Working Capital Note,
which default is not cured within ten (10) days, then, Payee, at
its option and without further notice to Maker, may declare
immediately due and payable the entire unpaid principal sum due
hereunder (with interest to accrue thereafter at the Default
Interest Rate), and all other charges and sums due by Maker
under this Note of the Agreement; and payment thereof may be
enforced and recovered in whole or in part at any time by one or
more of the remedies provided to Payee in the Agreement, or at
law or equity. In such case Payee may also recover all costs of
suit and other expenses in connection therewith, together with
an attorneys' commission, for collection, of five percent (5%)
of the total amount then due by Maker to Payee, together with
interest on any judgment obtained by Payee at the Default Inter-
est Rate. Payee may exercise this option to accelerate during
any default by Maker regardless of any prior forbearance.

8. Confession of Judgment. MAKER DOES HEREBY IRREVOCABLY AUTHORIZE AND
EMPOWER ANY ATTORNEY OF COURT OF RECORD OF PENNSYLVANIA OR ELSEWHERE
TO, ON THE OCCURRENCE OF A DEFAULT UNDER THIS NOTE, APPEAR FOR AND ENTER
JUDGMENT AGAINST IT FOR THE UNPAID PRINCIPAL SUM DUE HEREUNDER, TOGETHER
WITH ALL ACCRUED AND UNPAID INTEREST, IF ANY, AND ALL OTHER CHARGES OR SUMS
DUE HEREUNDER, TOGETHER WITH ATTORNEYS' COMMISSION OF FIVE PERCENT (5%)
FOR COLLECTION, WITH OR WITHOUT DECLARATION, WITH COSTS OF SUIT, RELEASE
OF ERRORS, WITHOUT STAY OF EXECUTION; AND MAKER ALSO WAIVES THE RIGHT OF
INQUISITION ON ANY REAL ESTATE THAT MAY BE LEVIED UPON TO COLLECT THE NOTE,
AND DOES HEREBY VOLUNTARILY CONDEMN THE SAME, AND AUTHORIZE THE
PROTHONOTARY TO ENTER UPON THE WRIT OF EXECUTION SAID VOLUNTARY
CONDEMNATION; AND FURTHER AGREES THAT SAID REAL ESTATE MAY BE SOLD ON A
WRIT OF EXECUTION, AND MAKER HEREBY WAIVES AND RELEASES ALL RELIEF FROM
ANY AND ALL APPRAISEMENT, STAY OF EXEMPTION LAWS OF ANY STATE NOW IN FORCE
OR HEREINAFTER TO BE PASSED. IF COPIES OF THIS NOTE, VERIFIED BY AFFIDAVIT OF
THE HOLDER HEREOF OR SOMEONE ON THE HOLDER'S BEHALF, HAS BEEN FILED IN
SUCH ACTION, IT WILL NOT BE NECESSARY TO FILE THE ORIGINAL OF THIS NOTE AS A
WARRANT OF ATTORNEY. THE AUTHORITY AND POWER TO APPEAR FOR AND ENTER
JUDGMENT AGAINST MAKER WILL NOT BE EXHAUSTED BY THE INITIAL EXERCISE OF
THE AUTHORIZED POWER, AND THE POWER MAY BE EXERCISED FROM TIME TO TIME
AS OFTEN AS THE HOLDER DEEMS NECESSARY OR DESIRABLE; AND THIS INSTRUMENT
WILL BE A SUFFICIENT WARRANT.

THE PRECEDING PARAGRAPH SETS FORTH A WARRANT OF AUTHORITY FOR AN
ATTORNEY, PROTHONOTARY OR CLERK TO CONFESS JUDGMENT AGAINST MAKER. IN
GRANTING THIS WARRANT OF ATTORNEY TO CONFESS JUDGMENT, MAKER HEREBY
KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, AND, AFTER CONSULTATION WITH
LEGAL COUNSEL OF ITS OWN CHOOSING, UNCONDITIONALLY WAIVES ANY AND ALL
RIGHTS IT HAS OR MAY HAVE TO PRIOR NOTICE, AND AN OPPORTUNITY FOR PRIOR
HEARING UNDER THE CONSTITUTIONS AND LAWS OF THE UNITED STATES OF AMERICA,
THE COMMONWEALTH OF PENNSYLVANIA AND ALL OTHER APPLICABLE JURISDICTIONS.

MAKER UNDERSTANDS THE MEANING AND EFFECT OF THE WARRANT OF
AUTHORITY TO CONFESS JUDGMENT CONTAINED IN THE FOREGOING PARAGRAPHS.
SPECIFICALLY, MAKER UNDERSTANDS, AMONG OTHER THINGS, THAT (i) MAKER IS
RELINQUISHING THE RIGHT TO HAVE NOTICE, AN OPPORTUNITY TO BE HEARD, AND THE
RIGHT TO HAVE THE BURDEN OF PROOF OF DEFAULT REST ON PAYEE PRIOR TO THE
ENTRY OF JUDGMENT, (ii) THE ENTRY OF JUDGMENT MAY RESULT IN A LIEN ON
MAKER'S PROPERTY, (iii) MAKER'S PROPERTY MAY BE TAKEN TO PAY THE PRINCIPAL
AMOUNT, INTEREST, LATE CHARGES, COSTS AND ATTORNEYS' FEES AS PROVIDED
ABOVE.

TO THE EXTENT PERMITTED BY LAW, ACTING UNDER REPRESENTATION OF
COUNSEL, MAKER HEREBY IRREVOCABLY WAIVES ANY DUE PROCESS RIGHTS TO
PREJUDGMENT NOTICE AND HEARING AND/OR POST-SEIZURE RELIEF ARISING IN
CONNECTION WITH, OR IN ANY WAY RELATED TO, PAYEE'S RIGHT TO CONFESS
JUDGMENT AGAINST MAKER AS HEREIN PROVIDED, AND MAKER ACKNOWLEDGES AND
UNDERSTANDS THAT BY WAIVING THESE RIGHTS, MAKER HAS CONSENTED TO ALLOW
PAYEE TO ENTER A COURT JUDGMENT AGAINST MAKER AND TO SEIZE MAKER'S
PROPERTY WITHOUT PRIOR NOTICE OR HEARING IN ORDER TO SATISFY THE
OBLIGATIONS OWED BY MAKER TO PAYEE.

MAKER HEREBY KNOWINGLY AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE, OR OTHERWISE INVOLVING, THIS NOTE. MAKER
FURTHER IRREVOCABLY CONSENTS TO THE JURISDICTION AND VENUE OF ANY STATE
OR FEDERAL COURT SITTING IN OR FOR BUCKS COUNTY, PENNSYLVANIA.

9. Cumulation of Remedies. The remedies of Payee as provided hereunder
and under the Agreement and any other document, instrument or
agreement executed by Maker in connection herewith or therewith,
together with all other remedies provided at law or equity,
shall be cumulative and concurrent, and may be pursued singly,
successively or together at the sole discretion of Payee, and
may be exercised as often as occasion therefor shall occur; and
the failure to exercise any such right or remedy shall in no
event be construed as a waiver or release thereof.

10. Waiver and Release. To the extent permitted by law, Maker hereby
waives and releases all errors, defects and imperfections in any
proceedings instituted by Payee under the terms hereof or of the
Loan Agreement, as well as all benefit that might accrue to
Maker by virtue of any present or future laws exempting any
property, or any part of the proceeds arising from any sale of
any property, from attachment, levy or sale under execution, or
providing for any stay of execution, exemption from civil pro-
cess, or extension of time for payment; and maker agrees that
any property that may be levied against pursuant to a judgment
obtained by virtue hereof, on any writ of execution issued
thereon, may be sold on any such writ in whole or in part in any
order desired by Payee.

Maker and all endorsers, sureties and guarantors, hereby
jointly and severally waive presentment for payment, demand,
notice of demand, notice of non-payment or dishonor, protest and
notice of protest of this Note, and all other notices in connec-
tion with the delivery, acceptance, performance, default or
enforcement of the payment of this Note, and they agree that the
liability of each of them shall be unconditional, without regard
to the liability of any other party, and shall not be affected
in any manner by an indulgence, extension of time, renewal,
waiver or modification granted or consented to by Payee. Maker
and all endorsers, sureties and guarantors consent to any and
all extensions of time, renewals, waivers, or modifications that
may be granted by Payee with respect to the payment or other
provisions of this Note, and to the release of collateral or any
part thereof, with or without substitution, and agree that
additional makers, endorsers, guarantors, or sureties may become
parties hereto without notice to them or affecting their
liability hereunder.

Payee shall not be deemed, by any act of omission or commis-
sion, to have waived any of its rights or remedies hereunder
unless such waiver is in writing and signed by Payee, and then
only to the extent specifically set forth in the writing. A
waiver on one event shall not be construed as continuing or as
a bar to or waiver of any right or remedy to a subsequent event.

11. Governing Law. This instrument shall be governed by and construed
according to the laws of the Commonwealth of Pennsylvania,
including its statutes or limitation but without regard to its
rules governing conflict of laws.

12. Jurisdiction and Venue. Maker consents to the jurisdiction and venue
of the Federal and State Courts sitting in or for Bucks County,
Pennsylvania in any action on, related to, or mentioning this
Note.

13. Captions. The captions or headings used herein are for the convenience
of reference only and shall not be deemed to define, limit or
describe the scope or intent of this Note.

14. Partial Invalidity. In the event that any provision of this Note (or
any part of any provision) is held by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall
not affect any other provisions (or remaining parts of the
affected provision) of this Note; but this Note shall be con-
strued as if such invalid, illegal, or unenforceable provision
had not been contained herein, but only to the extent it is
invalid, illegal, or unenforceable.

15. Maximum Rate of Interest. It is not intended by this Note to charge
interest at a rate in excess of the maximum rate of interest
permitted to be charged to Maker under applicable law, but if,
notwithstanding, interest in excess of the maximum rate shall be
paid under this Note, the excess shall be retained by Payee and
applied to reduce the principal sum outstanding, or returned to
Maker.

16. Pronouns and Form. Whenever used, the singular number shall include
the plural, the plural the singular, and the use of any gender
shall be applicable to all genders, and words "Payee" and
"Maker" shall be deemed to include their respective successors
and assigns.

IN WITNESS WHEREOF, intending to be legally bound Maker has
caused this Note to be executed and delivered on the date first
above written.

TigerAir, Inc.

Allison L. Blumer By: Wallace E. Congdon
Assistant Secretary Its: President

(10.68) Line of Credit Note from TigerAir, Inc. to the Company dated
November 8, 1995.

LINE OF CREDIT NOTE

$50,000 November 8th, 1995

FOR VALUE RECEIVED, TigerAir, Inc., a Texas corporation (the
"Maker"), promises to pay to the order of Aero Services
International, Inc. a Louisiana corporation (together with its
successors and assigns and any other transferee or successor
then becoming holder of this Note, "Payee"), in lawful money of
the United States of America at the principal office of Payer at
660 Newtown-Yardley Road, Newtown, Pennsylvania 18940, or at
such other place as Payee may from time to time designate by
written notice to Maker, the lesser of Fifty Thousand Dollars
($50,000) or the aggregate unpaid principal amount then
outstanding on the Working Capital Loan (as defined in that
certain Transfer Agreement by and among Maker and Payee of even
date herewith (the "Agreement")), together with all interest,
fees, costs and penalties thereon, as follows:

1. Agreement. This Note is the Working Capital Note issued pursuant to,
and is payable in accordance with, the Agreement. Any
capitalized term used in this Note but not defined herein shall
have the meaning ascribed to such term in the Agreement. The
terms, covenants, conditions, provisions, stipulations and
agreements of the Agreement are incorporated herein by
reference, and are hereby made a part of this Note to the same
extent and with the same effect as if they were fully set forth
herein, and Maker hereby covenants to abide by and to comply
with each and every term, covenant, provision, stipulation,
promise, agreement and condition set forth in this Note and in
the Agreement. The holder of this Note is entitled to the
benefits of the Agreement to which reference is hereby made for
a statement of the terms and conditions under which this Note is
issued and may enforce the agreements of Maker contained therein
and exercise remedies provided for thereby or otherwise
available in respect thereof.

2. Interest. Commencing as of the date hereof and continuing until
repayment in full of all sums due hereunder, the unpaid
principal sum of this Note shall bear interest at the rate of
nine and one-half percent (9.5%) per annum (the "Interest
Rate"). Interest shall accrue daily. All computations of
interest hereunder shall be made on the basis of a year of 360
days, for the actual number of days occurring in the period for
which such interest is payable (including the first day but
excluding the last day).

3. Payments and Maturity. The entire outstanding principal sum under this
Note shall be due and payable on October 7, 1996, unless
accelerated by Payee (the "Maturity Date"). Accrued interest on
the outstanding principal sum of this Note shall be payable
monthly in arrears, and shall be due and payable on the first
(1st) day of each month. Any amount of principal outstanding
hereunder in excess of the Credit Line Cap (as defined in the
Agreement) shall be immediately due and payable. All unpaid
principal, accumulated interest and any fees or charges owed to
Payee shall be payable in full on the Maturity Date.

4. Prepayment. Maker shall have the right, at any time, to prepay the
outstanding principal amount of this Note, in whole or in part
from time to time (without premium or penalty), provided that
Maker contemporaneously therewith pays Payee all accrued but
unpaid interest together with all other sums then due hereunder
or on account hereof.

5. Late Charges and Default Interest. Any payment of principal or
interest not paid within ten (10) business days after the date
on which it is due shall result in a late charge in the amount
of five percent (5%) of the payment so due. The assessment or
collection of such charge shall not be construed as a waiver by
Payee of any default occasioned by the failure of Maker to make
such payment within ten (10) business days of its due date.
During the continuance of an Event of Default (as hereinafter
defined), interest shall accrue on the outstanding principal sum
of this Note at the rate of twelve percent (12%) per annum (the
"Default Interest Rate").

6. Application of Payments. Each and all of the payments made hereunder
shall be applied first to expenses and costs incurred by Payee
and for which Maker is responsible; second, to any accrued and
unpaid fees; third, to accrued and unpaid interest hereunder;
and, fourth, to the principal balance of this Note.

7. Advances. Advances of principal, prepayment and readvances under the
Working Capital Loan may be made from time to time in accordance
with the Agreement, but Payee, in its sole discretion, may
refuse to make advances or readvances hereunder during the
continuance of an Event of Default hereunder.

8. Statement of Account. From time to time, Payee may furnish Maker with
a statement of Maker's account under the Working Capital Loan,
which statement shall be deemed to be correct, accepted by and
binding on Maker, unless Payee receives a written statement of
exceptions from Maker within twenty (20) days after such
statement of account has been furnished to Maker.

9. Security. Payment of this Note is secured in accordance with Section
14 of the Agreement, including the security interests and liens
granted pursuant thereto or otherwise in connection therewith
and any other assignments and conveyances made from time to time
pursuant to the Agreement.

10. Event of Default. If Maker (i) fails in any way to perform its
obligations under this Note, the Acquisition Capital Note (as
defined in the Agreement), the Agreement, or any other
instrument, document or agreement executed by Maker pursuant to
or in otherwise in connection with the Agreement, (ii) fails in
any way to observe any covenant or agreement under this Note,
the Acquisition Note, the Agreement, or any other instrument,
document or agreement executed by Maker pursuant to or in
otherwise in connection with the Agreement, or (iii) fails to
make any payment when due under this Note or the Acquisition
Note, which default is not cured within ten (10) days (each of
the foregoing constituting an "Event of Default" hereunder),
then, Payee, at its option and without further notice to Maker,
may declare immediately due and payable the entire unpaid
principal sum due hereunder (with interest to accrue thereafter
at the Default Interest Rate), and all other charges and sums
due by Maker under this Note of the Agreement; and payment
thereof may be enforced and recovered in whole or in part at any
time by one or more of the remedies provided to Payee in the
Agreement, or at law or equity. In such case Payee may also
recover all costs of suit and other expenses in connection
therewith, together with an attorneys' commission, for
collection, of five percent (5%) of the total amount then due by
Maker to Payee, together with interest on any judgment obtained
by Payee at the Default Interest Rate. Payee may exercise this
option to accelerate during any default by Maker regardless of
any prior forbearance.

11. Confession of Judgment. MAKER DOES HEREBY IRREVOCABLY AUTHORIZE AND
EMPOWER ANY ATTORNEY OF COURT OF RECORD OF PENNSYLVANIA OR ELSEWHERE
TO, ON THE OCCURRENCE OF A DEFAULT UNDER THIS NOTE, APPEAR FOR AND ENTER
JUDGMENT AGAINST IT FOR THE UNPAID PRINCIPAL SUM DUE HEREUNDER, TOGETHER
WITH ALL ACCRUED AND UNPAID INTEREST, IF ANY, AND ALL OTHER CHARGES OR SUMS
DUE HEREUNDER, TOGETHER WITH ATTORNEYS' COMMISSION OF FIVE PERCENT (5%)
FOR COLLECTION, WITH OR WITHOUT DECLARATION, WITH COSTS OF SUIT, RELEASE
OF ERRORS, WITHOUT STAY OF EXECUTION; AND MAKER ALSO WAIVES THE RIGHT OF
INQUISITION ON ANY REAL ESTATE THAT MAY BE LEVIED UPON TO COLLECT THE NOTE,
AND DOES HEREBY VOLUNTARILY CONDEMN THE SAME, AND AUTHORIZE THE
PROTHONOTARY TO ENTER UPON THE WRIT OF EXECUTION SAID VOLUNTARY
CONDEMNATION; AND FURTHER AGREES THAT SAID REAL ESTATE MAY BE SOLD ON A
WRIT OF EXECUTION, AND MAKER HEREBY WAIVES AND RELEASES ALL RELIEF FROM
ANY AND ALL APPRAISEMENT, STAY OF EXEMPTION LAWS OF ANY STATE NOW IN FORCE
OR HEREINAFTER TO BE PASSED. IF COPIES OF THIS NOTE, VERIFIED BY AFFIDAVIT OF
THE HOLDER HEREOF OR SOMEONE ON THE HOLDER'S BEHALF, HAS BEEN FILED IN
SUCH ACTION, IT WILL NOT BE NECESSARY TO FILE THE ORIGINAL OF THIS NOTE AS A
WARRANT OF ATTORNEY. THE AUTHORITY AND POWER TO APPEAR FOR AND ENTER
JUDGMENT AGAINST MAKER WILL NOT BE EXHAUSTED BY THE INITIAL EXERCISE OF
THE AUTHORIZED POWER, AND THE POWER MAY BE EXERCISED FROM TIME TO TIME
AS OFTEN AS THE HOLDER DEEMS NECESSARY OR DESIRABLE; AND THIS INSTRUMENT
WILL BE A SUFFICIENT WARRANT.

12. Cumulation of Remedies. The remedies of Payee as provided hereunder
and under the Agreement, together with all other remedies
provided at law or equity, shall be cumulative and concurrent,
and may be pursued singly, successively or together at the sole
discretion of Payee, and may be exercised as often as occasion
therefor shall occur; and the failure to exercise any such right
or remedy shall in no event be construed as a waiver or release
thereof.

13. Waiver and Release. To the extent permitted by law, Maker hereby
waives and releases all errors, defects and imperfections in any
proceedings instituted by Payee under the terms hereof or of the
Agreement, as well as all benefit that might accrue to Maker by
virtue of any present or future laws exempting any property, or
any part of the proceeds arising from any sale of any property,
from attachment, levy or sale under execution, or providing for
any stay of execution, exemption from civil process, or
extension of time for payment; and maker agrees that any
property that may be levied against pursuant to a judgment
obtained by virtue hereof, on any writ of execution issued
thereon, may be sold on any such writ in whole or in part in any
order desired by Payee.

14. Governing Law. This instrument shall be governed by and construed
according to the laws of the Commonwealth of Pennsylvania,
including its statutes or limitation but without regard to its
rules governing conflict of laws.

15. Jurisdiction and Venue. Maker consents to the jurisdiction and venue
of the Federal and State Courts sitting in or for Bucks County,
Pennsylvania in any action on, related to, or mentioning this
Note.

16. Captions. The captions or headings used herein are for the convenience
of reference only and shall not be deemed to define, limit or
describe the scope or intent of this Note.

17. Partial Invalidity. In the event that any provision of this Note (or
any part of any provision) is held by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall
not affect any other provisions (or remaining parts of the
affected provision) of this Note; but this Note shall be con-
strued as if such invalid, illegal, or unenforceable provision
had not been contained herein, but only to the extent it is
invalid, illegal, or unenforceable.

18. Maximum Rate of Interest. It is not intended by this Note to charge
interest at a rate in excess of the maximum rate of interest
permitted to be charged to Maker under applicable law, but if,
notwithstanding, interest in excess of the maximum rate shall be
paid under this Note, the excess shall be retained by Payee and
applied to reduce the principal sum outstanding, or returned to
Maker.

19. Pronouns and Form. Whenever used, the singular number shall include
the plural, the plural the singular, and the use of any gender
shall be applicable to all genders, and words "Payee" and
"Maker" shall be deemed to include their respective successors
and assigns.

IN WITNESS WHEREOF, intending to be legally bound Maker has
caused this Note to be executed and delivered on the date first
above written.
TigerAir, Inc.
Allison L. Blumer By: W. E. Congdon
Secretary Wallace E. Congdon
It's President

(10.69) Security Agreement between Aero Services International, Inc. and
TigerAir, Inc. dated November 8, 1995.

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this "Security Agreement") is made
and entered into as of this 8th day of November, 1995, by and
between TIGERAIR, INC., a Texas corporation ("Debtor") and AERO SERVICES
INTERNATIONAL, INC., a Louisiana corporation (the "Secured Party").

W I T N E S S E T H:

WHEREAS, as of even date herewith, Debtor, the Secured Party
and Wallace E. Congdon have entered into that certain Transfer
Agreement (the "Agreement"), pursuant to which the Secured Party
has agreed to sell, transfer and assign certain rights and
assets to Debtor, as more particularly described in the
Agreement; and

WHEREAS, as of even date herewith, in accordance with the
Agreement, Debtor has executed and delivered to the Secured
Party (i) that certain promissory note in the original principal
amount of Two Hundred Fifty Thousand Dollars ($250,000) (the
"Acquisition Promissory Note") and (ii) that certain promissory
note in the original principal amount of up to Fifty Thousand
Dollars ($50,000) (the "Working Capital Note"); and

WHEREAS, the Acquisition Promissory Note and the Working
Capital Promissory Note, each of which is more particularly
described in the Agreement, may, hereinafter, be referred to as
the "Notes"; and

WHEREAS, as a condition for entering into the Agreement and
accepting the Notes in accordance therewith, the Secured Party
has required that Debtor execute and deliver this Security
Agreement;

NOW, THEREFORE, in consideration of these premises and for
other good and valuable consideration, the receipt and suffi-
ciency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:

1. Definitions. Capitalized terms used in this Security Agreement but not
otherwise defined herein shall have the meanings ascribed
thereto in the Agreement. In addition, the following terms
shall have the meanings set forth below:

"Accounts" means any right to payment for goods sold or leased or for
services rendered which is not evidenced by an Instrument or
Chattel Paper, whether or not it has been earned by performance,
including but not limited to accounts receivable and contract
rights. Without limiting the foregoing, Accounts shall include
all "accounts" as defined in the Uniform Commercial Code as in
effect from time to time in the Commonwealth of Pennsylvania
("UCC").

"Accounts Receivable" means all Debtors present or future Accounts,
accounts receivable, other receivables, contract rights, Chattel
Paper, notes, cash, cash equivalents, rights under letters of
credit, Instruments and Documents, and all proceeds thereof,
together with all Instruments, all Documents representing any of
the foregoing, all rights in any merchandise or goods which any
of the same may represent, and all right, title, security and
guaranties with respect to each Account Receivable, including
any right of stoppage in transit.

"Chattel Paper" means any writing or writings which evidence both a
monetary obligation and a security interest in or a lease of
specific goods. Without limiting the foregoing, Chattel Paper
shall include all "chattel paper" as defined in the UCC.

"Documents" means "documents of title" as defined in Section 1-201 of
the UCC, and receipts of the kind described in Subsection (2) of
Section 7-201 of the UCC.

"Equipment" means all now owned or hereafter acquired goods which are
used or bought for use by the Debtor in its business, including
but not limited to equipment, tools, tooling, machinery,
furniture and fixtures, vehicles and trade fixtures and all
parts, instruments, accessories, alterations, modifications,
replacements, additions, tools, supplies, operating manuals and
improvements intended to be used on or in connection with the
foregoing. Without limiting the foregoing, Equipment shall
include all "equipment" as defined in the UCC.

"Fixtures" means all present and future fixtures, goods, inventory,
machinery and Equipment, including but not limited to fittings,
appliances, furniture, apparatus, chattels, building materials
and articles of personal property of every kind and character,
together with any renewals, replacements and substitutions
thereof, and additions and accessions thereto, which now or in
the future become affixed to or attached to or placed upon or
used in any way in connection with the Houston FBO (as defined
in the Agreement), together with all right, title and interest
of the Secured Party in and to any and all deposits made under
any conditional bill of sale, chattel mortgage or security
interest to which any Fixtures are or shall be subject, and all
deposits made thereunder, together with the benefit of any
payments now or hereafter made thereon. In addition, the term
"Fixtures" includes all right, title and interest of Debtor as
lessee under any and all leases relating to any Fixtures,
together with any options to purchase the Fixtures which are
subject to such leases and together with the benefit of any
payments at any time made on such leases.

"General Intangibles" means any present or future personal property of
Debtor (including things in action) other than tangible personal
property, goods, Accounts, Accounts Receivable, Chattel Paper,
Documents, Equipment, Instruments, and money, including but not
limited to leases, rents generated from all real property owned
or leased by Debtor, tax refunds and rights to receive tax
refunds, certificates and policies of insurance and insurance
proceeds, patents and patent applications, copyrights, licenses,
federal and state trademarks, and goodwill associated therewith,
trade names, service marks and names, logos, goodwill, customer
lists, causes of action, judgments, rights of indemnification,
contribution and subrogation, rights against suppliers or
manufacturers, royalties, computer programs, tapes and software,
designs, blueprints, plans and know how. Without limiting the
foregoing, General Intangibles shall include all "general
intangibles" as defined in the UCC.

"Instruments" means negotiable instruments (as defined in Section 3-104
of the UCC) or certificated securities (as defined in Section 8-
102 of the UCC) or any other writings which evidence a right to
the payment of money and are not themselves security agreements
or leases and are of the type which are in the ordinary course
of business transferred by delivery with any necessary
endorsement or assignment. Without limiting the foregoing,
Instruments shall include all "instruments" as defined in the
UCC.

"Inventory" means any and all present and future goods, merchandise and
other personal property, including, without limitation, goods in
transit, of Debtor, which are or may at any time be held for
sale or lease, furnished or to be furnished under any contract
of service, or held as raw materials, work in process, finished
goods, supplies or materials which are used or consumed in
connection with Debtor's business, and any present and future
property of Debtor, the sale or other disposition of which has
given rise to an Account Receivable and which has been returned
to or repossessed or stopped in transit by Debtor, and the
products of any such goods, merchandise and other personal
property. Without limiting the foregoing, Inventory shall
include all "inventory" as defined in the UCC.

"Proceeds" means all proceeds of Accounts, Accounts Receivable, Chattel
Paper, Documents, Equipment, General Intangibles, Instruments
and Inventory, including but not limited to the following:

a.
All returned or repossessed goods arising from, or relating
to, any sale or other disposition of any of the foregoing;

b.
All components, accessories, additions, attachments,
appurtenances and improvements, pertaining or attached to
any of the foregoing;

c.
All substitutions, renewals, and replacements of or to any
of the foregoing;

d.
All books, records, computer software, disks or tapes of or
relating to any of the foregoing; and

e.
All cash and non-cash proceeds and products, whether
immediate or remote, of or relating to any of the foregoing.

Without limiting the above, Proceeds shall include all
"proceeds" as defined in the UCC.

2. Grant of Security Interest. To secure the prompt repayment of all
amounts due under the Agreement and the Notes and the observance
and performance by Debtor of all of the conditions, obligations,
covenants, promises and agreements contained in the Agreement,
the Notes, and any other instruments or documents executed and
delivered to the Secured Party in connection with the
transactions contemplated by the Agreement, Debtor hereby grants
to the Secured Party a first lien and continuing security
interest in and to all of its now owned and hereafter acquired
present and future personal property and Fixtures of every kind,
nature and description, wherever located, to the full extent of
Debtor's interest therein, including but not limited to
Accounts, Accounts Receivable, Chattel Paper, Documents,
Equipment, Fixtures, General Intangibles, Instruments,
Inventory, and Proceeds of any of the foregoing, and all books
and records (including, without limitation, customer lists,
credit files, computer programs, print-outs and other computer
materials and records) of Debtor pertaining to any of the
foregoing (hereinafter, collectively, the "Collateral").

This security interest in the Collateral shall secure
payment of the Notes, and shall secure performance by Debtor of
its obligations under the Agreement, the Notes, this Security
Agreement and all other documents executed between Debtor and
the Secured Party (the "Transactional Documents") (all of which
obligations are referred to as the "Obligations").

3. Additional Documentation. At the Secured Party's request, Debtor shall
execute and deliver to the Secured Party, at any time hereafter,
all supplemental documentation that the Secured Party may
reasonably request to perfect the security interests granted the
Secured Party hereby, in form and substance acceptable to the
Secured Party, and pay the costs of any recording or filing of
the same. Debtor agrees that a carbon, photographic, or other
reproduction of this Security Agreement or of a financing
statement is sufficient as a financing statement. Debtor,
immediately on acquiring property for which separate perfection
is necessary, shall deliver to the Secured Party any and all
evidence of ownership of any such property (including, without
limitation, properly endorsed certificates of title and
applications for title and assignments of Interstate Commerce
Commission licenses) and shall take all such action as may be
necessary to perfect the Secured Party's security interest in
such property.

4. Inspections. After reasonable prior notice, the Secured Party (by any
of its officers, employees or agents) shall have the right, at
any time, and from time to time during Debtor's usual business
hours, to inspect the Collateral, all records related thereto
(and to make extracts from such records) and the premises upon
which any of the Collateral is located, to discuss Debtor's
affairs and finances with any accountant, account debtor or
creditor of Debtor and to verify the amount, quality, quantity,
value and condition of, or any other matter relating to, the
Collateral.

5. Financing Statements. Debtor will take all necessary action to permit
the Secured Party immediately to perfect its first lien and
security in the Collateral, whether by filing UCC-1 financing
statements, by filing financing statements required by motor
vehicle titling authorities to perfect the Secured Party's
security interest in any motor vehicles which may be included in
the Equipment or, at the Secured Party's request, by showing the
Secured Party as holder of such security interest on the
certificate of title for such Equipment. Such filings shall be
in form and substance reasonably required by the Secured Party,
and Debtor will pay all costs of recording and filing any
financing, continuation or termination statements with respect
to the security interest created by this Security Agreement,
together with costs and expenses of any lien search required by
the Secured Party.

6. Insurance. Debtor will maintain insurance coverage on the Collateral
in accordance with the applicable provisions of the Agreement.

7. Representations and Warranties. Debtor hereby represents and warrants
unto the Secured Party that, at the execution hereof and during
the term of this Security Agreement, and as long as any of the
Indebtedness under the Transactional Documents remains unpaid,
unless otherwise consented to in writing by the Secured Party:

a.
All of the representations and warranties contained in the
Transactional Documents are true and correct.

b.
The security interest granted to the Secured Party in the
Collateral shall constitute a first lien, and Debtor is and
shall be lawfully possessed and the sole owner of the
Collateral, and are authorized to pledge, sell, consign,
assign, transfer and create a security interest in the same.

c.
The Collateral shall continue to be free from all pledges,
liens, encumbrances and security interests or other claims
in favor of others, of any kind or character, legal or
equitable, except the first lien and security interest in
favor of the Secured Party created by this Security
Agreement, and that Debtor will warrant, and, at the Secured
Party's request, defend the same from all claims and demands
of all other persons.

d.
The Collateral will only be used by Debtor in the operation
of its business, including the operation of the Houston FBO,
and will not be held for sale or leased to others, or
otherwise disposed of by Debtor.

e.
Any guarantee, security, property or right received by
Debtor in connection with the Collateral shall be received
by it as an agent of, and on behalf of, the Secured Party
and will be kept separate from other property of Debtor,
capable of identification, and will be delivered and paid
immediately by Debtor to the Secured Party as additional
security.

f.
The offices or locations where Debtor keeps or will keep the
Collateral and books and records concerning the Collateral
are located only at (i) the Houston FBO, (ii) 4109 Frye
Street, The Colony, Texas 75056, and 5858 Westheimer, Suite
700, Houston, Texas 77057 c/o Michael S. Burg, Esq. Such
addresses or locations include and designate Debtor's
registered office, principal place of business and other
offices and places of business, and are the sole offices,
residences and places of business of Debtor. Debtor shall
not establish any other such office or location without the
Secured Party's prior written consent, which consent shall
not be unreasonably withheld or delayed; provided, however,
that in no event shall any such office or location be
outside the United States of America or in any jurisdiction
which has not adopted Article 9 of the Uniform Commercial
Code; and provided, further, that in connection with any
move permitted hereunder Debtor shall provide the Secured
Party with reasonable written notice of such move (in no
event later than thirty (30) days before such move), along
with a list of all Uniform Commercial Code filings and other
filings or recordings which are necessary to perfect a
security interest in the Collateral, and a reasonable
opportunity (in no event fewer than thirty (30) days) to
perfect such interests in the jurisdiction to which the
office or location is moved, such interests to be perfected
at Debtor's cost and expense.

g.
Except for the due and proper filing of financing statements
on Form UCC-1, and filings with motor vehicle lien recording
authorities, no further action is required to establish and
perfect the first lien and security interest of the Secured
Party in and to the Collateral.

8. Affirmative Covenants. Debtor hereby covenants and warrants unto the
Secured Party that at the execution hereof and during the term
of this Security Agreement, and as long as any of the
Indebtedness under the Transactional Documents remains unpaid,
unless otherwise consented to in writing by the Secured Party:

a.
Debtor will comply with all of the affirmative covenants set
forth in the Transactional Documents.

b.
Debtor will, not later than thirty (30) days after acquiring
additional Collateral, promptly advise the Secured Party of
the type, description, nature, cost and quantity thereof.
Should Debtor at any time fail to advise the Secured Party
of any such acquisition, such failure shall not affect,
diminish, modify or limit the Secured Party's lien or
security interest in all Collateral which Debtor may acquire
from time to time hereafter.

c.
Debtor will, at its own cost and expense, keep the
Collateral in as good and substantial repair as the same is
when acquired, reasonable wear and tear excepted.

d.
Debtor will comply with all of the requirements of law in
order to preserve and perfect the Secured Party's security
interest in the Collateral.

e.
Debtor will promptly (and in no event later than two (2)
Business Days) advise the Secured Party, after discovery of
any new facts which, under applicable law, would affect the
priority of the security interest granted to the Secured
Party by this Security Agreement.

f.
Debtor will provide the Secured Party, promptly following
request therefor, timely evidence of the existence of all
policies of insurance required by the Secured Party to be
maintained as provided for herein and evidence that the
Secured Party is named thereon as a loss payee, as its
interest may appear.

g.
Debtor will notify the Secured Party immediately of any
information which Debtor have or may receive with regard to
the Collateral which might in any way materially and
adversely affect the value of same or the rights or remedies
of the Secured Party in respect thereof.

9. Negative Covenants. Debtor hereby covenants and warrants unto the
Secured Party that, at the execution hereof and during the term
of this Security Agreement, and as long as any of the
Indebtedness under the Transactional Documents remains unpaid,
Debtor shall not, without the prior written consent of the
Secured Party:

a.
Fail to comply with any of the negative covenants set forth
in the Transactional Documents.

b.
Pledge, assign or encumber the Collateral to any entity
other than the Secured Party or create, suffer or permit to
be created any lien thereon, whether such lien is superior
or inferior to that of the Secured Party.

c.
Sell, lease or have removed from the locations listed in
Section 7(f) hereof, any Collateral or other assets except
in the ordinary course of business.

10. Event of Default. Any Event of Default under any other Transactional
Documents, shall constitute an Event of Default hereunder.

11. Remedies. On an Event of Default, and at any time thereafter prior to
its cure, Secured Party may declare all obligations secured
hereby, although otherwise unmatured and contingent, to be
immediately due and payable, without notice or demand
whatsoever. Secured Party shall have, in addition to any other
rights and remedies contained in the Agreement and any other
document executed in connection with the Agreement, all the
rights and remedies of a secured party under the applicable
Uniform Commercial Code or other applicable law, all of which
rights and remedies shall be cumulative and nonexclusive, to the
extent permitted by law.

On an Event of Default, and at any time thereafter prior to
its cure, Secured Party has the right (i) to enter upon the
premises of Debtor without any obligation to pay rent to Debtor,
through self-help and without judicial process, without first
obtaining a final judgment or giving Debtor notice and
opportunity for a hearing on the validity of Secured Party's
claim, or any other place or places where the Collateral is
located and kept, without such entry constituting a breach of
the peace, and to remove the Collateral therefrom to the
premises of Secured Party or any agent of Secured Party, for
such time as Secured Party may desire, effectively to collect or
liquidate the Collateral, or (ii) to require Debtor to assemble
the Collateral and make it available to Secured Party, at
Debtor's expense, at a place to be designated, in Secured
Party's sole discretion, and Debtor waives all claims of damages
due to or arising from or connected with any such taking.

On an Event of Default, and at any time thereafter prior to
its cure, Secured Party has the right (i) to lease, sell or
otherwise dispose of all or any Collateral in its then
condition, or after any further manufacturing or processing
thereof, at public or private sale or sales, with such notice as
may be required by law (it being agreed by Debtor that, in the
absence of any contrary requirement of law, five (5) days' prior
notice of a public or private sale of Collateral shall be deemed
reasonable notice), in lots or in bulk, for cash or on credit,
all as Secured Party, in its sole discretion, may deem
advisable; (ii) to adjourn such sales from time to time with or
without notice; and (iii) to conduct such sales on Debtor's
premises or elsewhere and use Debtor's premises without charge
for such sales for such time or times as Secured Party may see
fit. Secured Party is hereby granted a license or other right
to use, without charge, Debtor's labels, patents, copyrights,
rights of use of any name, trade secrets, trade names,
trademarks and advertising matter, or any property of a similar
nature, as it pertains to the Collateral, in advertising for
sale and selling any Collateral, and Debtor's rights under all
licenses and all franchise agreements shall inure to Secured
Party's benefit. Secured Party shall have the right to sell,
lease or otherwise dispose of any Collateral, or any part
thereof, for cash, credit or any combination thereof, and
Secured Party may purchase all or any part of the Collateral at
public or, to the extent permitted by law, private, sale and, in
lieu of actual payment of such purchase price, may set off the
amount of such price against Debtor's obligations to Secured
Party. The proceeds realized from the sale of any Collateral
shall be applied, first, to the reasonable costs, expenses and
attorneys' fees incurred by Secured Party for collection and for
acquisition, completion, protection, removal, storage, sale and
delivery of the Collateral; second, to interest due upon any of
Debtor's obligations to Secured Party; and, third, to the
principal of Debtor's obligations to Secured Party. If any
deficiency shall arise, Debtor shall remain liable to Secured
Party therefor.

Secured Party shall also have the right to notify all
account debtors to pay all amounts due after an Event of Default
directly to Secured Party at the address set forth in Secured
Party's notice to such account debtors.

In any exercise of the rights of Secured Party under this
Security Agreement, any combination or all of the Collateral may
be offered for sale for one total price, and the proceeds of any
such sale accounted for in one account without distinction
between the items of security or without assignment to them of
any proportion of such proceeds, Debtor hereby waiving the
application of any doctrine of marshalling.

Any notice required to be given by Secured Party of a sale,
lease or other disposition of the Collateral or any other
intended action by Secured Party, given at least five (5) days
prior to such proposed action, shall constitute commercially
reasonable and fair notice thereof to Debtor.

All remedies hereunder are cumulative and not alternative.
The remedies set forth herein are in addition to all other
remedies available to Secured Party at law and in equity.

12. Attorney-in-Fact. Debtor hereby appoints the Secured Party as Debtor's
attorney-in-fact to do any and every act which Debtor is
obligated by this Security Agreement to do, and exercise all
rights of Debtor in the Collateral and to do all other things
necessary or desirable to preserve and protect the Collateral
and to protect the Secured Party's interest in said Collateral.
Anyone to whom the Secured Party represents its authority and
capacity to act as attorney-in-fact for Debtor shall be entitled
to rely on the Secured Party's sole representation of such
authority (without any further evidence thereof), and Debtor
agrees to hold harmless anyone taking any action in reliance on
the Secured Party's authority as Debtor's attorney-in-fact.

13. Termination. On the payment in full of all of Debtor's Indebtedness
under the Transactional Documents, this Security Agreement shall
terminate, except that all representations and warranties of
Debtor contained herein shall survive.

14. Notices. All notices, requests, demands, directions and other commu-
nications required or permitted under the provisions of this
Security Agreement, or otherwise with respect hereto, shall be
in writing and shall be: (i) mailed by first class registered
or certified mail, return receipt requested, postage prepaid; or
(ii) sent by next day business courier (such as Federal Express
or the like); or (iii) personally delivered; or (iv) transmitted
by fax, telegram or telex (with a hard copy to follow within
twenty-four (24) hours by first class registered or certified
mail, return receipt requested, postage prepaid, or by next day
business courier [such as Federal Express or the like], or by
personal delivery), as follows:

if to the Debtor, to:

TigerAir, Inc.
c/o Wallace E. Congdon
4109 Frye Street
The Colony, Texas 75056
Facsimile: (214) 370-0630

with a copy to:

Michael S. Burg, Esq.
5858 Westheimer, Suite 700
Houston, Texas 77057
Facsimile: (713) 974-2351

if to the Secured Party, to:

Aero Services International, Inc.
660 Newton-Yardley Road
Newton, Pennsylvania 18940
Attention: James Affleck
Facsimile: (215) 968-6010

with a copy to:

Eckert Seamans Cherin & Mellott
One South Market Square Building
213 Market Street, P. O. Box 1248
Harrisburg, PA 17108-1248
Attention: Christopher M. Cicconi, Esquire
Facsimile: (717) 237-6019

15. Modification or Amendment. This Security Agreement may not be changed,
amended or modified in any way nor may any right or remedy with
respect hereto be waived or released, except by an agreement in
writing signed by the party against whom enforcement of any
change, amendment, modification, waiver or release is sought.

16. Rights, Remedies and Powers. Each and every right, remedy and power
granted to the Secured Party hereunder (i) shall be cumulative
and in addition to any other right, remedy or power held by the
Secured Party or now or hereafter existing in equity, at law, by
statute or otherwise, or available to the Secured Party under
the Transactional Documents or any other document executed in
connection with the Indebtedness under the Transactional
Documents, and (ii) may be exercised independently and as often
and in such order as the Secured Party may deem expedient. No
failure on the part of the Secured Party to exercise, and no
delay in exercising, any right hereunder shall operate as a
waiver of such right; nor shall any single or partial exercise
of any right hereunder, or under the Transactional Documents
preclude any other or further exercise of such right or the
exercise of any other right.

17. Successors and Assigns. This Security Agreement shall be binding on
and inure to the benefit of the Secured Party and Debtor and its
successors and assigns, except that Debtor may not assign or
transfer any of its rights under this Security Agreement without
the prior written consent of the Secured Party.

18. Illegality. In the event that any one or more of the provisions
contained in this Security Agreement should be invalid, illegal
or unenforceable in any respect, then the validity, legality and
enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby.

19. Controlling Law. This Security Agreement shall be construed in
accordance with and governed by the substantive law of the
Commonwealth of Pennsylvania, including its statutes of
limitation but without regard to its rules governing conflict of
laws.

20. Consent to Jurisdiction. Debtor hereby consents to the jurisdiction
and venue of the federal and state courts located in, or having
jurisdiction over, Bucks, Pennsylvania, in any action brought by
or against Debtor, on, mentioning, related to or connected with
this Security Agreement.

21. Waiver of Jury Trial. Debtor hereby knowingly waives the right to any
jury trial in any action, proceeding, or counterclaim arising
out of or in any way connected with this Security Agreement.

22. Section Headings. Section headings are inserted for convenience only
and shall not affect any construction or interpretation of this
Security Agreement.

23. Counterparts. This Security Agreement may be executed in several
counterparts, each of which will be deemed to be an original,
and in each case such counterparts will constitute one and the
same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this
Security Agreement to be executed in their respective names as
of the date hereinabove written.

DEBTOR:
TIGERAIR, INC.

Allison L. Blumer By: W. E. Congdon

Assistant Secretary Its:President

SECURED PARTY:
AERO SERVICES INTERNATIONAL, INC.

Christopher Cicconi By: Paul R. Slack
Secretary Its:Assistant Secretary

STATE OF TEXAS :
: SS
COUNTY OF HARRIS :

On this, the 8th day of November, 1995, before me, the undersigned officer,
personally appeared WALLACE E. CONGDON, who acknowledged himself to be the
President of TIGERAIR, INC., a Texas corporation, and that he as such
President, being authorized to do so, executed the foregoing instrument
for the purposes therein contained by signing the name of TIGERAIR, INC. as
President.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Allison L. Blumer
Notary Public

(10.70) Operating Agreement of Peakwood, L.L.C. between Aero Services
International, Inc. and Peakwood Capital Corporation dated
January 11, 1996.

OPERATING AGREEMENT
OF
PEAKWOOD, L.L.C.

THIS OPERATING AGREEMENT, made as of the 11th day of
January, 1996, by and between PEAKWOOD CAPITAL CORPORATION, a
Virginia corporation, and AERO SERVICES INTERNATIONAL, INC., a
Louisiana corporation.

W I T N E S S E T H :

In consideration of the mutual covenants herein contained,
the parties agree as follows:

1. FORMATION
AND TERM.
A.Formation.
The parties have formed a limited liability company pursuant to the Virginia
Limited Liability Company Act by filing articles of organization
with the Virginia State Corporation Commission.

B.Term.

The Company shall continue until December 31, 2026, unless sooner terminated
in accordance with this Agreement and the Virginia Limited
Liability Company Act.

2. DEFINITIONS.

The following terms used in this Agreement shall (unless otherwise
expressly provided herein or unless the context otherwise
requires) have the following respective meanings:

A.Act.
The Virginia Limited Liability Company Act, as set forth in the Code of
Virginia, as it may be amended or superseded from time to time.

B.Agreement.
This Operating Agreement, as originally executed and as amended from time to
time, as the context requires.

C.Bankruptcy.

(1) The filing
of an application by a Member for, or its consent to, the
appointment of a trustee, receiver, or custodian of its assets;

(2) The entry
of an order for relief with respect to a Member in proceedings
under the United States Bankruptcy Code, as amended or
superseded from time to time;

(3) The making
by a Member of a general assignment for the benefit of
creditors;

(4) The entry
of an order, judgment or decree by any court of competent
jurisdiction appointing a trustee, receiver or custodian of the
assets of a Member unless the proceedings and the person
appointed are dismissed within ninety (90) days;

(5) The failure
by a Member generally to pay its debts as the debts become due
within the meaning of Section 303(h)(1) of the United States
Bankruptcy Code, as determined by the Bankruptcy Court, or the
admission in writing of its inability to pay its debts as they
become due; or

(6) Suffering
or permitting a Member's Interest to become subject to the
enforcement of any rights of a creditor of a Member, whether
arising out of an attempted charge upon that Member's Interest
by judicial process or otherwise, if that Member fails to
effectuate the release of those enforcement rights, whether by
legal process, bonding, or otherwise, within ninety (90) days
after actual notice of that creditor's action.

D.Capital Account.

As of any date the capital account maintained for each Member under Section 5E.

E.Capital Contribution.

The total amount of money and the agreed upon fair market value of
property contributed to the Company by a Member on the date of
contribution, net of liabilities secured by that contributed
property that the Company is considered to assume or to be
subject to under Section 752 of the Code.

F.Code.
The 1986 Internal Revenue Code, as amended from time to time.

G.Company.

Peakwood,
L.L.C.

H.Disposition.
The sale, assignment, transfer, exchange or other disposition of an
Interest, in any manner, whether voluntary or involuntary, or by
operation of law or otherwise.

I.Gain or Loss from Sale.

Any gain or loss for federal income tax purposes resulting from the sale or
other disposition of the capital assets of the Company not in
the ordinary course of the Company's business.

J.Interest.

The ownership interest, expressed as a percentage, of a Member in the Company
at any particular time, initially as set forth in Section 5A,
including the right of the Member to any and all benefits to
which the Member is entitled and the obligations to which the
Member is subject under the Agreement.

K.Manager.

A person chosen pursuant to Section 7A.

L.Members.

Peakwood Capital Corporation, a Virginia corporation, and Aero Services
International, Inc., a Louisiana corporation, and any person or
entity admitted as an additional Member or a successor Member
under this Agreement.

M.Net Income or Net Loss.

The income or loss, as the case may be, of the Company for a period as
determined in accordance with Section 703(a)(1) of the Code,
including each item of income, gain, loss or deduction required
to be separately stat
ed.

N.Regulations.

The regulations issued under the Code, as amended from time to time.

O.Successor in Interest.

The person who succeeds to an Interest upon the death, incompetency,
dissolution or Bankruptcy of a Member.

3. NAME, OFFICE OF THE COMPANY AND REGISTERED AGENT.

A.Name.

The name of the Company is Peakwood, L.L.C. The business of the Company may
be conducted under such trade or fictitious names as the Members
may determine.

B.Office of the
Company.

The principal place of business of the Company shall be Crestar Bank Building,
Suite 1250, 310 First Street, Roanoke, Virginia 24011. The
specified office of the Company at which shall be kept the
records required to be maintained by the Company under the Act
shall be P. O. Box 571, Roanoke, Virginia 24003, or such other
place or places as the Members shall deem advisable.

C.Registered
Agent.

The Company's agent for service of process shall be G. Franklin Flippin, 200
First Campbell Square, P. O. Box 2887, Roanoke, Virginia 24001-
2887, or such other person as the Members may designate.

4. BUSINESS OF THE COMPANY.

The business of the Company shall be to acquire, manage, hold, lease,
sell, exchange or otherwise dispose of certain Dun & Bradstreet
Receivable Management Services franchises and other franchises.

5. MEMBERS,
INTERESTS
AND CAPITAL.

A.Members and Interests.

The names and Interests of the Members are as follows:

Name Interests

Peakwood Capital Corporation 60%
Aero Services International, Inc. 40%

B.Initial
Capital Contribution.

The Members
shall contribute to the Company the property set forth opposite
the name of each as specified below:

Name
Contribution

Peakwood Capital Corporation
The right to purchase franchises for Dun & Bradstreet Receivable Management
Services for Western Virginia, Kentucky and West Virginia (the "Franchises ")

Aero Services International, Inc.$150,000

The Capital Contribution of Aero Services International, Inc., shall be
payable to the Company in three installments to be made on or
before the following dates in the amounts specified and shall be
repaid to Aero Services International, Inc., in accordance with
Section 6 of the Agreement:

January 10, 1996$100,000
February 10, 1996$ 25,000
March 10, 1996$ 25,000

C.
Failure to Make Capital Contribution in Accordance with this
Agreement.

In the event
that Aero Services International, Inc., fails to contribute any
installment of its Capital Contribution to the Company on or
before the dates specified in subparagraph B of this Section 5,
Peakwood Capital Corporation may, at its option exercisable by
notice to Aero Services International, Inc., within thirty (30)
days after the due date of such installment, purchase the
Interest of Aero Services International, Inc., at a purchase
price of fifty percent (50%) of capital actually contributed;
provided, however, that Aero Services International, Inc., shall
have a period of fifteen (15) days from the date of said notice
to cure any such failure to contribute an installment.

D.Guaranty of
Company Indebtedness. The Members
shall not be obligated to guarantee the Company indebtedness
unless they mutually agree to do so.

E.Capital
Accounts.
(1)A Capital
Account shall be established and maintained for each Member. A
Member shall have a single Capital Account, regardless of class
and regardless of the time or manner in which any portion of
that Interest was acquired. If an Interest is transferred in
accordance with this Agreement, the transferee shall succeed to
the Capital Account of the transferor to the extent it relates
to the transferred Interest.

(2)As of any
date, a Member's Capital Account shall consist of: (i) the sum
of (A) the amount of money contributed by it to the Company, (B)
the agreed upon fair market value of property contributed by it
to the Company, (C) allocations to it of Net Income and Gain
from Sale (or items thereof), and (D) the amount of any Company
liabilities assumed by that Member or that are secured by any
Company assets distributed to that Member; minus (ii) the sum of
(A) the amount of money distributed to it by the Company, (B)
the fair market value of property distributed to it by the
Company, (C) allocations to it of Net Loss and Loss from Sale
(or items thereof), and (D) the amount of any liabilities of
that Member assumed by the Company or secured by any property
contributed by that Member to the Company other than those taken
into account in calculating Capital Contributions.

(3)The principles
governing the adjustments of Capital Accounts are intended to
satisfy the capital account maintenance requirements of
Regulation Section 1.704-1(b)(2)(iv) and shall be construed
consistently therewith.

F. Additional Provisions on Capital and Obligations of Members.

(1)No Member
gives up any of its rights to be repaid his or its Capital
Contributions in favor of any other Member.

(2)No Member
shall be paid interest on its Capital Account.

(3)No Member
shall have the right to demand and receive property other than
cash in return of its Capital Contributions.

(4)No Member
shall have the right to demand and receive property of the
Company in return of its Capital Contributions until the
termination of the Company.

(5)The liability
of any Member for the losses, debts, liabilities and obligations
of the Company shall be limited to paying its capital
contributions when due under the Agreement, its share of any
undistributed assets of the Company, and (only to the extent
required by the Act) any amounts previously distributed to it
from the Company.

6. ALLOCATIONS AND DISTRIBUTIONS.

A.Net Income.

Net Income
shall be allocated among the Members in proportion to their
respective Interests.

B.Net Loss and
Credits.

Net Loss and tax credits shall be allocated among the Members in proportion
to their respective Interests.

C.Funds
Available for Distribution.

Fifty percent (50%) of the taxable income of the Company shall be paid to Aero
Services International, Inc., on a quarterly basis beginning on
June 30, 1996 (if such funds are available), until such time as
Aero Services International, Inc. has received priority
distributions in the amount of $150,000. Notwithstanding the
foregoing, funds available for distribution as a result of the
sale or other disposition of the capital assets of the Company
other than in the ordinary course of business shall be paid to
Aero Services International, Inc., until such time as total
priority distributions to it total $150,000.

All other funds available for distribution shall be allocated and
distributed among the Members in proportion to their respective
Interests at such time as the Members shall determine.

D.Gain from
Sale.

Gain from Sale
shall be allocated among the Members in proportion to their
respective Interests.

E.Loss from
Sale.

Loss from Sale
shall be allocated among the Members in proportion to their
respective interests.

7. MANAGEMENT.

A.Manager.

The Company's business shall be managed by a Manager selected by a vote of
Members with a majority of interests in the Company. The
initial Manager shall be Peakwood Capital Corporation.

B.Management of
the Company.

The Manager
shall have full charge of the management, conduct and operation
of the Company business in all respects and all matters and may
delegate certain aspects of its duties to one or more agents or
Members.

C.Compensation
and Reimbursement of Manager.

(1) Peakwood Capital Corporation shall receive $5,000 per month in
compensation for services rendered to the Company as the Manager
and for use by the Company of Peakwood Capital Corporation's
office space and existing furniture and equipment.

(2) The Manager
shall be entitled to charge to the Company, or to be reimbursed
by the Company for, all expenses incurred by it in connection
with Company business.

8. TELEMARKETING SERVICES.

Aero Services International, Inc., shall be given priority
consideration by the Manager to provide telemarketing services
for the Company on an as needed basis. The Manager shall, on a
case by case basis and in its sole discretion, determine whether
the telemarketing services of Aero Services International, Inc.,
will be efficient, professional and in the best interests of the
Company.

9. AUTHORITY OF
THE MEMBERS
AND MANAGER
TO ENGAGE IN
OTHER
BUSINESSES.
Any of the Members and the Manager may engage in and/or possess an
interest in other business ventures of any nature and
description, independently or with others, whether or not in
competition with the Company, including but not being limited
to, the ownership, financing, leasing, operation, management,
brokerage and/or development of franchises, including but not
limited to Dun & Bradstreet Receivable Management Services
franchises; and neither the Company nor any of the Members shall
have any right by virtue of this Agreement in or to any
independent venture or to any income or profits derived
therefrom. Neither the Manager nor any Member shall be
obligated to present any particular investment opportunity to
the Company even if such opportunity is of a character which, if
presented to the Company, could be taken by the Company, and the
Manager and each Member shall have the right to take for its own
account (individually or as a trustee) or to recommend to others
any such particular investment opportunity.

10. ACCOUNTS, BOOKS, RECORDS, ACCOUNTING, REPORTS AND TAX MATTERS.

A.Bank Accounts.

The funds of the Company shall be deposited in the name of the Company in
such bank or savings and loan accounts as may be designated by
the Manager, and the Manager shall arrange for the appropriate
conduct of such accounts, including the signatures to be
required.

B.Books and
Records.

The Manager shall keep or cause to be kept complete and accurate books of
account, in which shall be entered fully and accurately each and
every transaction of the Company, and the records required to be
maintained by the Company pursuant to the Act. The Company's
books and records shall be maintained at the principal office of
the Company or at such other place as the Manager may from time
to time designate, and each Member shall at all reasonable times
have access thereto and the right to inspect and copy for
purposes related to the Company's business.

C.Tax Information.

The Manager shall use its best efforts to cause the Company to deliver to
each Member within seventy-five (75) days after the end of each
taxable year the information relating to the Company necessary
for the preparation of the Member's federal income tax return.

D.Tax Elections.

The Manager may make all elections for federal income tax purposes.

E.Tax Matters Partner.

Peakwood Capital Corporation is designated as the "tax matters partner"
for purposes of the Code. The Members may name a substitute or
successor at any time.

11. INDEMNIFICATION AND EXCULPATION OF MEMBERS AND MANAGERS.

A.
Indemnification.

The Members and the Manager shall be indemnified and held harmless by the
Company from any liability resulting from any act performed by
or omission made by them on behalf of the Company, except for
acts or omission of gross negligence or willful misconduct, to
the fullest extent that a director or officer of a stock
corporation may be indemnified and held harmless under Chapter
9 of Title 13.1 of the Virginia Code, 1950, as amended.

B.Exculpation.

The Members and Manager shall not be liable to the Company or to any Member
for or as a result of any act, omission or error in judgement
that was taken, omitted or made by the Members or Manager in
accordance with the standards established by Section 12.1-1024.1
of the Act. In any proceeding brought or in the right of the
Company or brought by or on behalf of Members of the Company, a
Member or Manager shall have no liability for damages other than
for willful misconduct or a knowing violation of the criminal
law.

12. ASSIGNABILITY OF COMPANY INTERESTS.

A.Limitations.

No Member may withdraw or resign from the Company, nor may any member make a
Disposition of all or any part of her Interest without the prior
written consent of the Members owning a majority of the
Interests, including the Member proposing to withdraw, resign or
make a Disposition.

B.Pledge or
Encumbrance of Interests.

No Member maypledge or encumber all or any part of its Interest, in any
manner, whether voluntarily or involuntarily, by operation of
law or otherwise, without the consent of the Members owning a
majority of the Interests.

13. DEATH,INCOMPETENCY, DISSOLUTION OR BANKRUPTCY OF A MEMBER.

A.
Events.

Upon the death, incompetency, dissolution or Bankruptcy of a Member, the
other Member shall have the option, exercisable by notice to the
Successor in Interest within thirty (30) days after the event,
to purchase the Member's entire interest.

B.Purchase
Price.

If a Member
having the option elects to purchase the interest of the
deceased, incompetent, dissolved or Bankrupt Member, the
purchase price shall be an amount equal to the Member's
proportionate share of the amount by which the fair market value
of all property owned by the Company, less a deemed 7% sales
commission in the case of all assets customarily sold by an
agent or broker, exceeds Company liabilities, with no value
assigned to goodwill of the Company and with no discount for
lack of marketability or minority interest.

14. TERMINATION.

A.
Events Causing Dissolution and Winding Up.

Any of the following events shall cause the dissolution and winding up of
the Company:

(1) Consent in
writing by a majority in interest of the Members.

(2) The sale
or other disposition of the Company.

(3) Expiration
of the term set forth in Section 1B.

(4) Any other
event causing dissolution under the Act unless a majority of the
remaining Members agree to continue the business of the Company
pursuant to Section 14B.

B.Election to
Continue Company.

An event set
forth in Section 14A shall not result in the dissolution,
winding up and termination of the Company if, within ninety (90)
days after the occurrence of that event, a majority in interest
of the Members votes to continue the Company.

C.Winding Up
Company Affairs.

(1) Upon the occurrence of any of the events specified in Section 14A(1) -
(3) or the events specified in Section 14A(4) and the failure of
the Members to continue the business under Section 14B, the
Manager shall wind up the affairs of the Company. After the
payment of, or provisions for, all debts of the Company, the
proceeds of the sale of the Company assets or the Company assets
shall be distributed to the Members in accordance with their
Capital Accounts. If any assets are distributed in kind, they
shall be distributed on the basis of the fair market value
thereof. Unless the Members otherwise agree, there shall be
distributed to the Members as tenants-in-common, an undivided
interest in the assets equal to the distributions to which they
are entitled.

(2) If the Company is "liquidated" within the meaning of Regulation Section
1.704-1(b)(2)(ii)(g), then the liquidating distributions shall
be made by the later of (i) the end of the Company taxable year
in which the liquidation occurs, or (ii) ninety (90) days after
the date of liquidation.

(3) The Company shall terminate when all assets of the Company have been sold
and/or distributed and all affairs of the Company have been
wound up.

15. AMENDMENTS.

This Agreement may be amended by the Members in any manner with the
approval of Members holding a majority of the Interests.

16. MISCELLANEOUS PROVISIONS.

A.Governing Law.

This Agreement and the rights and liabilities of the parties shall be
determined in accordance with the laws of the Commonwealth of
Virginia.

B.Severability.

Every provision of this Agreement is intended to be severable. If any
term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the
validity of the remainder of the terms or provisions within this
Agreement.

C.Successors.

Subject to the limits on transferability contained herein, each and all of the
covenants, terms provisions and agreements herein contained
shall be binding upon and inure to the benefit of the
successors, heirs, and assigns of the respective parties.

D.Entire
Agreement.

This Operating
Agreement embodies the entire agreement and understanding
between the Members with respect to the subject matter hereof,
and supersedes all prior agreements and understandings between
such Members relating to the subject matter hereof. No
amendment, modification, termination or waiver of any provision
of this Agreement shall be affected unless the same shall be set
forth in writing signed by Members holding a majority of the
Interests.

IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the day and year first above written.

MEMBERS:

PEAKWOOD
CAPITAL CORPORATION,
a Virginia corporation

By:

Paul J. Head,
President

AERO SERVICES INTERNATIONAL, INC., a Louisiana corporation

By:

R. Theodore
Brant, Chairman

(10.71)
Asset Purchase Agreement between Aero Services International, Inc.
and Jason IV Aviation, Inc. dated May 10, 1996.

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made this
10th day of May, 1996, by and among AERO SERVICES INTERNATIONAL,
INC. ("Seller"), a Louisiana corporation with its principal
place of business at 660 Newtown-Yardley Road, Newtown,
Pennsylvania 18940, JASON IV AVIATION, INC. ("Purchaser"), a
Louisiana corporation with its principal place of business at
5500 Stars and Stripes Boulevard, New Orleans, Louisiana 70126,
and ORLANDO E. PANFILE, an individual residing at 96 Buckhaven
Hill, Upper Saddle River, New Jersey 07458 ("Panfile").

W I T N E S S E T H:

WHEREAS, Seller is the owner of fixed base operations
serving the aviation industry at the New Orleans Lakefront
Airport, located in New Orleans, Louisiana (the "Airport"); and

WHEREAS, Seller was the lessee under a certain lease
agreement by and between Seller and the Board of Levee
Commissioners of the Orleans Levee District (the "Levee Board")
("Seller's FBO Lease"); and

WHEREAS, Purchaser is the owner of its own fixed base
operations serving the aviation industry at the Airport; and

WHEREAS, Purchaser is also a lessee under a lease agreement
by and between Purchaser and the Levee Board; and

WHEREAS, as of February 1, 1996, Seller and Purchaser
consolidated, for operational purposes, their fixed base
operations at the Airport; and

WHEREAS, since February 1, 1996, Purchaser has been
managing and operating the consolidated fixed base operations of
Purchaser and Seller at the Airport; and

WHEREAS, under the terms and conditions hereinafter set
forth, Purchaser desires to purchase and acquire from Seller,
and Seller desires to sell, transfer and assign to Purchaser,
all of Seller's right title and interest in and to Seller's FBO
Lease and certain of Seller's assets used in the operation of
Seller's FBO (as hereinafter defined);

NOW, THEREFORE, in consideration of the foregoing premises,
the mutual promises and covenants hereinafter set forth, and for
other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto, intending
to be legally bound, hereby agree as follows:

1. Definitions. In addition to the terms defined
elsewhere in this Agreement, unless otherwise stated in this
Agreement, the following terms will have the meanings set forth
below:

1.1. "Assumed Obligations" has the meaning ascribed to
such term in Section 2.2 hereof.

1.2. "Cash Flow" means net income (as determined in
accordance with Generally Accepted Accounting Principles),
adjusted for non-cash income and expenses by adding to the net
income, depreciation expense, and reducing net income by Three
Thousand Dollars ($3,000) per month for corporate overhead.

1.3. "Closing" means the transfer, assignment,
conveyance and sale of the Purchased Assets from Seller to
Purchaser in exchange for the payment by Purchaser to Seller of
the Purchase Price and the assumption by Purchaser of the
Assumed Obligations, and the consummation of all other
transactions as contemplated by, and in accordance with the
terms and conditions of this Agreement.

1.4. "Closing Date" means the date on which the
Closing occurs, which shall be May 7, 1996, or such other date
as mutually agreed to by Purchaser and Seller.

1.5. "Consolidated Operations" means Seller's FBO and
Purchaser's FBO, as consolidated for operational purposes, as of
the Effective Date and as operated and maintained by Purchaser
since the Effective Date.

1.6. "Contracts" means those written agreements listed
on Schedule 1.6 hereto, entered into by Seller pertaining to
Seller's FBO.

1.7. "Effective Date" means February 1, 1996.

1.8. "Excluded Assets" means Seller's cash on hand or
on deposit, Seller's accounts receivable and those other items
listed on Schedule 1.8 hereto, which are not being sold,
transferred and assigned to Purchaser hereunder.

1.9. "F F & E" means the furniture, fixtures, and
equipment used by Seller at Seller's FBO, listed on Schedule 1.9
hereto, that are being sold, transferred and assigned to
Purchaser hereunder.

1.10. "Inventory" means the inventory, including
oil and fuel inventory, on hand at Seller's FBO as of the
Effective Date, as set forth on Schedule 1.10 hereto.

1.11. "Permitted Encumbrances" means those liens
and encumbrances affecting the Purchased Assets listed on
Schedule 1.11 hereto.

1.12. "Purchase Price" has the meaning ascribed to
such term in Section 2.3 hereto.

1.13. "Purchased Assets" means the F F & E,
Inventory, Seller's FBO Lease, and the Contracts as defined
herein, but does not include Seller's cash on hand or on deposit
or Seller's accounts receivable.

1.14. "Purchaser's FBO" means the fixed base
operations of Purchaser (including, without limitation,
Purchaser's leasehold interest and operational assets at the
Airport) as maintained and operated by Purchaser at the Airport
prior to and on the Effective Date.

1.15. "Seller's FBO" means the fixed base
operations of Seller (including, without limitation, Seller's
leasehold interest and operational assets at the Airport) as
maintained and operated by Seller at the Airport prior to the
Effective Date.

1.16. "Senior Lender" means Huntington National
Bank, a national banking institution with offices in Cincinnati,
Ohio, or such other bank or lending institution that provides
financing to Purchaser in an amount of not less than Seven
Hundred Fifty Thousand Dollars ($750,000), to be used by
Purchaser as operating capital and to retire Purchaser's current
indebtedness to Gulf Coast Bank and Trust Company, with offices
in New Orleans, Louisiana ("Gulf Coast Bank").

2. Sale and Purchase of Assets; Assumed Obligations.
2.1. On the terms and subject to the conditions set
forth in this Agreement, Purchaser hereby agrees to purchase the
Purchased Assets from Seller and Seller hereby agrees to sell,
convey, transfer, assign and set over the Purchased Assets to
Purchaser (which Purchased Assets were physically delivered to
Purchaser on the Effective Date), in their "AS IS" and "WHERE
IS" condition, free and clear of all liens and encumbrances,
except for the Permitted Encumbrances.

2.2. Purchaser hereby assumes, and expressly agrees to
pay, perform and discharge, each and all of the liabilities and
obligations shown on Schedule 2.2 hereto, together with the cost
of (and payment obligations with respect to) any and all
inventory, equipment or other assets of whatever nature and kind
delivered to the Consolidated Operations as of and after the
Effective Date, regardless of when ordered, and regardless of
whether ordered by Purchaser or Seller (collectively, the
"Assumed Obligations"). Except for the Assumed Obligations, the
Contracts and Seller's FBO Lease, each of which is expressly
assumed by Purchaser, the parties acknowledge and agree that
Purchaser does not and will not assume any responsibility or
liability whatsoever for any of Seller's other debts,
obligations, or liabilities arising at any time.

2.3. In consideration for Seller's sale, transfer,
conveyance and assignment of the Purchased Assets to Purchaser,
at the Closing, Purchaser shall pay the Purchase Price and
assume the Assumed Obligations. The Purchase Price for the
Purchased Assets shall be (i) Nine Hundred Thousand Dollars
($900,000), plus the invoice cost of all oil inventory and fuel
stored in refueler trucks at Seller's FBO as of the Effective
Date, plus thirty-five percent (35%) of Cash Flow from the
Consolidated Operations for each of February 1996 and March
1996, plus, if the Closing does not occur on or before May 15,
1996, thirty-five percent (35%) of Cash Flow from the
Consolidated Operations for April 1996 (provided, however, that
if Cash Flow from the Consolidated Operations exceeds Seven
Hundred Thousand Dollars ($700,000) for the current fiscal year
of Purchaser, then, Seller shall receive forty percent (40%) of
Cash Flow from the Consolidated Operations for each of February
1996, March 1996, and, if applicable, April 1996, with such
additional amount ("Seller's Additional Share of Cash Flow")
being due and payable by Purchaser to Seller within sixty (60)
calendar days after the last day of Purchaser's current fiscal
year). The Purchase Price shall be paid, as follows:

( a ) Three Hundred Thousand Dollars ($300,000),
plus Seller's portion of Cash Flow from the Consolidated
Operations for February 1996 (but not including Seller's
Additional Share of Cash Flow for such month, if any), plus the
invoice cost of all oil inventory and fuel stored in refueler
trucks at Seller's FBO as of the Effective Date shall be paid in
cash or by wire transfer at or prior to the Closing.

( b ) Six Hundred Thousand Dollars ($600,000),
shall be paid in the form of promissory notes delivered by
Purchaser to Seller at the Closing, as follows:

(i) a promissory note, dated April 1, 1996, made
payable by Purchaser to the order of Seller in the original
principal amount of One Hundred Thousand Dollars ($100,000), in
the form attached hereto as Exhibit A (the "A Note"), which A
Note shall bear interest at the rate of eight percent (8%) per
annum from April 1, 1996 until paid; and

(ii) a promissory note, dated April 1, 1996, made
payable by Purchaser to the order of Seller in the original
principal amount of Five Hundred Thousand Dollars ($500,000.00),
in the form attached hereto as Exhibit B (the "B Note"), which
B Note, shall bear interest at the rate of nine percent (9%) per
annum from April 1, 1996 until paid.

Interest shall accrue on the outstanding principal amount
of the A Note from and after April 1, 1996, and shall be due and
payable monthly in arrears on the first (1st) day of each month,
commencing on the first (1st) day of May, 1996. The entire
outstanding principal amount of the A Note, together with all
accrued but unpaid interest and fees, shall be due and payable
on April 30, 1997, unless previously accelerated. Interest
shall accrue on the outstanding principal amount of the B Note
from and after April 1, 1996, and shall be due and payable
monthly in arrears on the first (1st) day of each month,
commencing on the first (1st) day of May, 1996. The entire
outstanding principal amount of the B Note, together with all
accrued but unpaid interest and fees, shall be due and payable
on March 31, 1999, unless previously accelerated. If, prior to
the payment in full of all principal, interest and fees due
under and account of both the A Note and the B Note
(hereinafter, referred to, collectively, as the "Notes"), (i)
Purchaser sells or otherwise disposes of all or any portion of
the Consolidated Operations, or any of the assets used in
connection therewith, except in accordance with Section 11.2
hereof, or (ii) by reason of newly issued stock, the sale of
issued and outstanding stock, or otherwise, there is a change in
ownership of Purchaser, all amounts due under and on account of
this Agreement and the Notes shall be immediately due and
payable. For the purposes of this Agreement, a "change in
ownership" of Purchaser shall occur if Panfile ceases to own at
least a majority of the issued and outstanding stock of
Purchaser.

So long as there are any amounts outstanding under the
Notes, Purchaser shall, commencing on May 1, 1996, and on the
first (1st) day of each month thereafter, pay to Seller the
additional amount of One Thousand Two Hundred Fifty Dollars
($1,250) as a fee for consulting services.

( c ) Seller's portion of Cash Flow from the
Consolidated Operations for March, 1996 (but not including
Seller's Additional Share of Cash Flow for each month) shall be
set off against the amount due to Purchaser from Seller for
Defense Fuel Sales not collected by Seller prior to the Closing
Date or paid by Seller to Purchaser at Closing.

( d ) If the Closing occurs after May 15, 1996,
Purchaser shall, on or before May 30, 1996, deliver to Seller an
amount equal to Seller's portion of Cash Flow from the
Consolidated Operations for April 1996.

( e ) Purchaser shall pay Seller's Additional Share of
Cash Flow, if any, in cash or by wire transfer, within sixty
(60) calendar days after the last day of Purchaser's current
calendar year.

2.4. For the purpose of securing Purchaser's
obligations under Section 2.3 hereof (including, without
limitation Purchaser's obligation to pay all amounts due and
owing under the Notes and Purchaser's obligation to pay Seller
Seller's portion of Cash Flow from the Consolidated Operations,
if applicable), and Purchaser's obligations under Section 15
hereof (relating to Purchaser's indemnification of Seller),
Purchaser and Seller shall enter into (i) a security agreement
in the form attached hereto as Exhibit C (the "Purchased Assets
Security Agreement"), pursuant to which Purchaser shall grant
Seller a security interest in the Purchased Assets, and (ii) a
security agreement in the form attached hereto as Exhibit D (the
Consolidated Security Agreement), pursuant to which Purchaser
shall grant Seller a security interest in all of Purchaser's
tangible and intangible personal property, including, without
limitation, furniture, fixtures, equipment, inventory, work in
process and accounts receivable. In accordance with the
Consolidated Security Agreement, the security interest granted
thereunder shall be effective on the first to occur (i) the date
on which a Senior Lender has provided financing to Purchaser as
contemplated herein, (ii) the date on which Gulf Coast Bank has
consented to Sellers second priority security interest in all
of Purchasers tangible and intangible personal property, or
(iii) the one hundred twentieth (120th) day after the Closing
Date. In accordance with the Consolidated Security Agreement,
Sellers security interest shall be subordinate in priority only
to the interest of the Senior Lender, securing an amount not to
exceed One Million Five Hundred Thousand Dollars ($1,500,000)
(the "Senior Debt"), or (ii) if no Senior Lender is in place,
Gulf Coast Bank. At such time as a Senior Lender is in place
and Seller has a second priority security interest in all of
Purchasers tangible and intangible personal property, Seller
shall release its lien under the Purchased Assets Security
Agreement. At such time as it becomes apparent that a Senior
Lender will not provide financing to Purchaser as contemplated
herein, but in all cases before one hundred twenty (120) days
after the Closing Date, Purchaser will use its best efforts to
obtain the consent of Gulf Coast Bank to Purchaser's granting
Seller a security interest in all of Purchaser's tangible and
intangible personal property as contemplated by this Section
2.4, to the effect that, should Gulf Coast Bank not be replaced
by a Senior Lender, Seller shall have a security interest in all
of Purchaser's tangible and intangible personal property, which
security interest shall be subordinate in priority only to the
interest of Gulf Coast Bank (but only to those certain assets to
which Gulf Coast Bank's security interest shall have attached
prior to the Effective Date). Under no circumstances shall Gulf
Coast Bank be granted, and under no circumstances shall there be
deemed to exist in favor of Gulf Coast Bank, a security interest
in the Purchased Assets senior in priority to Seller's security
interest in the Purchased Assets. Purchaser further
acknowledges and agrees that if Gulf Coast Bank is not replaced
by a Senior Lender within ninety (90) days after the Closing
Date, Purchaser will use its best efforts to obtain alternate
financing sufficient to satisfy and retire Purchaser's
indebtedness to Gulf Coast Bank, the effect of which shall be
that Seller's security interest in all of Purchaser's tangible
and intangible personal property shall be first in priority to
all other parties (including, without limitation, the party
providing such alternate financing). For the purpose of this
Section 2.4, "alternate financing" means financing provided by
a party other than the Senior Lender for the purpose of
satisfying and retiring the Gulf Coast Bank. Alternate
financing shall not exceed the amount required to satisfy and
retire Purchaser's indebtedness to Gulf Coast, and the party
providing alternate financing shall not be entitled to the
priorities afforded to the Senior Lender under this Agreement.
In accordance with this Section 2.4, Purchaser shall execute and
deliver financing statements on form UCC-1 (together with
appropriate filing fees), and such other documents or
instruments reasonably requested by Seller to evidence or
effectuate the security interest herein above described. In
order to effectuate the provisions of this Section 2.4,
Purchaser shall request the Senior Lender or Gulf Coast Bank, as
the case may be, to enter into an intercreditor agreement with
Seller, addressing, among other things, their respective
priorities with respect to the collateral described herein.

2.5. Panfile shall personally guarantee and become
surety for the full and prompt payment of the Notes and the full
and prompt payment and performance of all of Purchaser's other
obligations under the Notes and the indemnification provisions
set forth in Section 14.2 of this Agreement, which guaranty and
suretyship shall be evidenced by a guaranty and suretyship
agreement in the form attached hereto as Exhibit E (the "Panfile
Guaranty"). Until such time as Aero has (i) a first priority
security interest in the Pledged Shares (as hereinafter
defined), or (ii) a perfected security interest in the Pledged
Shares subordinate only to the interest of either the Senior
Lender or Gulf Coast Bank, the Panfile Guaranty shall be
unlimited. As security for Panfile's full and prompt
performance under the Panfile Guaranty, Panfile shall execute
and deliver a stock pledge agreement in the form attached hereto
as Exhibit F (the "Panfile Pledge Agreement"), together with a
stock power (separate from the certificate(s)) executed in
blank, pursuant to which Panfile shall pledge to Seller all of
the issued and outstanding shares of Purchaser's capital stock
standing in Panfile's name (the "Pledged Shares"), which shall
constitute all of the issued and outstanding shares of
Purchaser's capital stock. In accordance with its terms, the
Panfile Pledge Agreement shall be effective on the first to
occur of (i) the date on which a Senior Lender has provided
financing to Purchaser, as contemplated herein, (ii) the date on
which Gulf Coast Bank has consented to Sellers second priority
security interest in the pledged shares as contemplated herein,
or (iii) the one hundred twentieth (120th) day after the Closing
Date. In accordance with the Panfile Pledge Agreement, Seller
shall have a security interest in the Pledged Shares, which
security interest shall be subordinate in priority only to the
interest of (i) the Senior Lender, and only if and to the extent
that the Senior Lender requires a security interest in the
Pledged Shares, or (ii) if no Senior Lender is in place, Gulf
Coast Bank. If a Senior Lender requiring a pledge of the
Pledged Shares is in place and Purchaser's indebtedness to Gulf
Coast Bank is satisfied and retired within one hundred twentieth
(120) days after the Closing Date, then the Panfile Pledge
Agreement shall be effective to grant Seller a security interest
in the Pledged Shares subordinate only to the interest of the
Senior Lender. If the Senior Lender does not require a pledge
of the Pledged Shares, then Seller's security interest in the
Pledged Shares shall be first in priority to all other parties,
and the stock certificate(s) evidencing the Pledged Shares,
together with the stock powers shall be delivered to the Seller.
If a Senior Lender is not in place and Purchaser's indebtedness
to Gulf Coast Bank is not satisfied and retired within one
hundred twenty (120) days after the Closing Date, Seller shall
have a security interest in the Pledged Shares which security
interest shall be subordinate in priority only to the interest
of Gulf Coast Bank. At such time as it becomes apparent that a
Senior Lender will not provide financing to Purchaser as
contemplated herein, but in all cases before one hundred twenty
(120) days after the Closing Date, Purchaser and Panfile will
use their best efforts to obtain the consent of Gulf Coast Bank
to Panfile's pledge of the Pledged Shares to Seller as
contemplated by this Section 2.5. At such time as Seller shall
have (i) a perfected first priority security interest in the
Pledged Shares, or (ii) a perfected security interest in the
Pledged Shares subordinate only to the interest of either the
Senior Lender or Gulf Coast Bank, Seller's recourse under the
Panfile Guaranty shall be limited to Seller's remedies under the
Panfile Pledge Agreement. Panfile hereby represents and
warrants to Seller that he is the sole stockholder of Purchaser
and that no other person or entity has any options, warrants or
other rights to acquire Purchaser's stock. Panfile further
represents and warrants to Seller that, except as expressly
provided herein, there are no liens, pledges or other
encumbrances of, against, or with respect to the Pledged Shares,
and Panfile covenants and agrees that, except for the Senior
Lender, Panfile shall not grant or permit any liens, pledges or
other encumbrances of, against, or with respect to the Pledged
Shares. In order to effectuate the provisions of this Section
2.5, Purchaser shall request the Senior Lender or Gulf Coast
Bank, as the case may be, to enter into an intercreditor
agreement with Seller, addressing, among other things, their
respective priorities with respect to the Pledged Shares and the
obligation of the Senior Lender or Gulf Coast Bank, as the case
may be, to hold the certificate(s) evidencing the Pledged Shares
and to release such certificate(s) only to Seller if any amounts
remain outstanding on the Notes or under this Agreement at such
time as the Senior Lender or Gulf Coast Bank, as the case may
be, release such certificate(s).

In addition to the foregoing, until the Notes have been
paid in full Panfile hereby grants to Aero the first right and
option to purchase all or any portion of the Pledged Shares on
Panfile's receipt of a bona fide offer from an independent third
party to purchase all or any portion of the Pledged Shares, and
Purchaser shall decide to sell same for such amount, the terms
of which right of first refusal is set forth with more
particularity in Section 17.1 hereof.

2.6. At the Closing, on receipt of the consideration
described in Section 2.3 hereof, Seller shall, as may be
appropriate, deliver to Purchaser:

(a) a general bill of sale conveying or assigning the F F
& E and the Inventory to Purchaser;

(b) an assignment and assumption of Seller's right and
obligations under and otherwise with respect to Seller's FBO
Lease, if necessary;

(d) the certificate described in Section 8.3 below;

(e) a copy of resolutions adopted by the board of
directors of Seller, certified by Seller's Secretary,
authorizing the sale of the Purchased Assets and the other
transactions contemplated by this Agreement;

(f) any other documents, instruments, or agreements
reasonably necessary to effectively transfer ownership of the
Purchased Assets from Seller to Purchaser or to accomplish the
objectives of this Agreement;

(g) a covenant not to compete by Seller as provided in
Section 13 hereafter; and

(h) a check in the amount of Forty-Seven Thousand Forty
Dollars ($47,040) which amount, the parties agree, is equal to
all payments collected by Seller, since the Effective Date, on
account of defense fuel sales at the Consolidated Operations
from and after the Effective Date.

2.7. The Closing will take place at the offices of
Jason III Aviation, Inc. in Cincinnati, Ohio, at 12:00 p.m.
local time on the Closing Date.

3. Seller's Representations and Warranties. Seller
warrants and represents to Purchaser, that, as of the Effective
Date:

3.1. Seller is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Louisiana.

3.2. The execution, delivery, and performance by
Seller of this Agreement has been duly authorized by all
necessary corporate action on the part of Seller; this Agreement
is a valid and binding obligation of Seller; Seller has all
necessary corporate power, capacity, and authority to own the
Purchased Asset
s, to enter into and perform this Agreement, and
to convey the Purchased Assets to Purchaser.

3.3. All persons who execute and deliver this
Agreement, and any other agreement, document, or instrument
required by or ancillary to this Agreement, in the name and on
behalf of Seller shall be duly authorized by all necessary
corporate authority and fully competent to so execute and
deliver this Agreement and those documents, and their actions
shall bind Seller to the performance of its obligations
specified herein and therein.

3.4. The execution of this Agreement and the
fulfillment of all its terms and conditions by Seller will not,
to the best of Seller's knowledge, materially violate, result in
a material breach of, or constitute a material default under any
agreement, instrument, statute, regulation, rule, judgment,
order or decree to which Seller is a party or by which Seller is
bound, or to which Seller may be subject.

3.5. Seller has good and marketable title to the
Purchased Assets, free and clear of all liens and encumbrances,
other than the Permitted Encumbrances.

3.6. To the best of Seller's knowledge: the Contracts,
if any, are in full force and effect and are valid, binding, and
enforceable in accordance with their terms; there are no
material defaults thereunder; and no event exists that with or
without notice or lapse of time would constitute a material
default thereunder. To the best of Seller's knowledge, the
assignment of the Contracts will not create a material default
under any agreement between Seller and any third party. As of
the Effective Date, there was, to Seller's knowledge, no
material default by Seller or any notice of termination given by
Seller existing with respect to any of the Contracts. The
Contracts constitute all of the material written agreements that
Seller has with suppliers or customers covering purchases or
sales of goods or services at Seller's FBO. On the Closing
Date, there will be no contracts to which Seller is a party and
which may be binding upon Purchaser or the Purchased Assets
other than the Contracts or contracts terminable at will by
Purchaser on the Closing Date without payment of any premium or
penalty.

3.7. To the best of Seller's knowledge, there are no
actions, suits, proceedings, or investigations in connection
with, or otherwise affecting, the Purchased Assets (whether or
not purportedly on behalf of or against Seller) pending or
threatened against or affecting Seller at law or equity or
bankruptcy, or before or by any federal, state, municipal or
other governmental department, commission, board, bureau,
agency, or instrumentality, domestic or foreign, that may result
in any adverse change in or charge against the Purchased Assets
or that would in any way interfere with the ability of Seller to
perform this Agreement. Seller has not received any notice of
violation of any laws, regulations, ordinances, or orders
applicable to the ownership or operation of the Purchased
Assets, or any applicable zoning ordinance, regulation, or other
law, order, or requirement relating to the operation or use of
the Purchased Assets by Seller, and to the knowledge of Seller
there are no such violations.

3.8. Seller has not had any material, oral or written
understanding with any third persons that would affect the
Purchased Assets or the transfer of the Purchased Assets to
Purchaser, in a manner adverse to the interests of Purchaser.

3.9. Except as set forth on Schedule 3.10 hereto,
there are no licenses, permits, or other regulatory approvals
from local, state, or federal officials that are necessary for
the operation of Seller's FBO.

3.10. All returns and reports concerning franchise
taxes, unemployment insurance, withholding and payroll taxes,
personal property taxes, Social Security, and other reports
required to have been filed by the Seller relating to the
Purchased Assets pursuant to any law or regulation have been
duly filed; and all taxes, interest and penalties relating to
the Purchased Assets that are due to any taxing authority,
federal, state, or local, with respect to any tax period
previously ended have been duly paid or arrangements have been
made to pay the same when due subsequent to the Closing Date.
There are no tax liens in favor of any governmental entity
affecting the Purchased Assets.

3.11. No representation or warranty by Seller in
this Agreement, no certification furnished to Purchaser by
Seller under this Agreement, and no Exhibit or other instrument
previously furnished or to be furnished to Purchaser by Seller
pursuant to this Agreement or in connection with the
transactions contemplated hereunder contains or will contain any
untrue statement of material fact, or omits or will omit to
state a material fact necessary to make the statements contained
herein not misleading.

4. Purchaser's Representations and Warranties. Purchaser
warrants and represents to Seller, as an inducement to Seller to
enter into and perform this Agreement, that:

4.1. Purchaser is a corporation duly organized,
validly existing, and in good standing under the laws of the
State or Louisiana.

4.2. The execution, delivery and performance by
Purchaser of this Agreement, the Notes and the Security
Agreement has been duly authorized by all necessary corporate
action on the part of Purchaser; this Agreement, the Notes and
the Security Agreement constitute the valid binding obligations
of Purchaser; Purchaser has all necessary corporate power,
capacity, and authority to own its properties, to enter into and
perform this Agreement, the Notes and the Security Agreement and
to purchase the Purchased Assets from Seller.

4.3. All persons who execute and deliver this
Agreement, and any other agreement, document or instrument
required by or ancillary to this Agreement (including, without
limitation, the Notes), in the name and on behalf of Purchaser
shall be duly authorized by all necessary corporate authority
and fully competent to so execute and deliver this Agreement and
those documents, and their action shall bind Seller to the
performance of its obligations specified herein and therein.

4.4. With the exception of Gulf Coast Bank, the
consent of which Purchaser shall use its best efforts to obtain
the execution of this Agreement, the Notes, the Security
Agreement and any other document or instrument in connection
herewith or related hereto, and the fulfillment of all of the
terms and conditions hereunder or thereunder by Purchaser will
not violate, result in a breach of, or constitute a default
under any agreement, instrument, regulation, rule, judgment,
order, or decree to which Purchaser is a party or by which
Purchaser or its properties are bound, or to which Purchaser or
its properties may be subject.

4.5. Except as set forth on Schedule 4.5 hereto
("Purchaser's Current Indebtedness"), other than trade payables
in the ordinary course of business (which, in the aggregate, do
not exceed Five Hundred Thousand Dollars ($500,000)), the Senior
Debt, and Purchaser indebtedness and obligations to Seller under
this Agreement, there exists no other indebtedness or
obligations of Purchaser.

4.6. There are no actions, suits, proceedings, or
investigations (whether or not purportedly on behalf of or
against Purchaser) pending or threatened against or affecting
Purchaser at law or equity or bankruptcy, or before any federal,
state, municipal or other governmental department, commission,
board, bureau, agency, or instrumentality, domestic or foreign,
that may result in any adversely affect Purchaser's ability to
perform hereunder or under the Notes.

4.7 The security interests in favor of Gulf Coast
Bank are as represented in Section 2.4 and Section 2.5 hereof.

4.8. Between the Effective Date and the Closing,
Purchaser has not:

(a) Entered into any contract, agreement, or
understanding affecting the Consolidated Operations, or any
portion thereof, except in the normal course of business.

(b) Except as existing prior to the Effective
Date and disclosed to Seller, created, assumed or permitted to
exist any mortgage, pledge, lien, or encumbrance affecting the
Consolidated Operations, or any portion thereof.

(d) Except for trade payables in the normal
course of business, incurred any indebtedness to any third
party.

4.9. No representation or warranty by Purchaser in
this Agreement, no certification furnished to Seller by
Purchaser under this Agreement, and no Exhibit or other
instrument previously furnished or to be furnished to Seller by
Purchaser pursuant to this Agreement or in connection with the
transactions contemplated hereunder contains or will contain any
untrue statement of material fact, or omits or will omit to
state a material fact necessary to make the statements contained
herein not misleading.

5. Statement with Respect to Brokers. Each of the
parties hereto represents and warrants to the other that neither
such party nor any director, officer or agent of such party, as
the case may be, has entered into any agreement for the payment
of any brokerage or finder's fees to any person, firm or
corporation in connection with the transactions contemplated by
this Agreement, and each agrees to indemnify and hold and save
the other harmless from any such fees (including reasonable
attorneys' fees and other expenses incurred in connection with
any such claim) which may be due or asserted by reason of any
such agreement or purported agreement by the indemnifying party.

6. Pre-Closing Covenants of Seller.

6.1. Between the Effective Date and the Closing Date,
unless otherwise provided in this Agreement, Seller will not,
without the written consent of Purchaser:

(a) Enter into any contract, agreement, or
understanding affecting Seller's FBO except in the normal and
usual course of business.

(b) Create, assume, or permit to exist any
mortgage, pledge, lien, or encumbrance affecting the Purchased
Assets that did not exist on the Effective Date hereof.

(c) Sell, assign, lease, transfer, or otherwise
dispose of any of the Purchased Assets, except in the normal and
usual course of business.

6.2. Between the date of this Agreement and the
Closing Date, Seller will:

(a) Provide Purchaser and Purchaser's
representatives with such information and records relating to,
or concerning, the Purchased Assets and the operation of,
Seller's FBO as Purchaser may reasonably request.

(b) Deliver to Purchaser true, accurate, and
complete copies of all documents, instruments, contracts, and
agreements listed on the Exhibits attached hereto that are the
responsibility of Seller.

(c) Prepare or cooperate with Purchaser in the
preparation of all documents reasonably necessary to adequately
transfer the Purchased Assets from Seller to Purchaser.

(d) Cooperate with and assist Purchaser, at
Purchaser's sole cost and expense, in any dealing Purchaser may
have with local, state, or federal officials relating to the
transfer to Purchaser from Seller, or the obtaining by
Purchaser, of any licenses, permits, or other regulatory
approvals that are necessary or desirable for the operation of
Seller's FBO.

7. Pre-Closing Covenants of Purchaser. Between the
Effective Date and the Closing Date, and after the Closing Date
with respect to the period between the Effective Date and the
Closing Date, Purchaser shall:

(a) Provide Seller and Seller's representatives
with full access during normal business hours to the all
financial books and records relating to, or concerning, the
Consolidated Operations (including, without limitation,
financial statements, income statements, statements of profit
and loss, balance sheets, and documents related to Seller's
security interests hereunder), as Seller may reasonably request;

(b) Deliver, or cause to be delivered, to Seller
true, accurate and complete copies of all documents,
instruments, contracts, and agreements listed on the Exhibits
hereto, that are the responsibility of Purchaser and/or Panfile.

(c) Prepare or cooperate with Seller in the
preparation of all documents reasonably necessary to adequately
transfer the Purchased Assets from Seller to Purchaser, secure
the performance by Purchaser of its obligations under the Notes,
and effectuate the assumption by Purchaser of the Assumed
Liabilities.

(d) Use its best efforts to preserve favorable
relationships with customers, contractors and employees and
other persons having business relationships with Purchaser
and/or Seller at the Consolidated Operations.

(e) Maintain in full force and effect insurance
policies and contracts (including, without limitation, general
liability, fire and hazard) covering the assets and operation of
the Consolidated Operations (including, without limitation, the
Purchased Assets), in such amounts and for such coverage as
shall be necessary to fully insure such assets for their full
replacement value and as is otherwise reasonable and customary
in the industry in which the Consolidated Operations are
conducted. All such insurance policies shall name Seller as an
additional insured, as its interests appear.

(f) Provide Seller with true and complete copies
of all reports of any and all judgement, docket and lien
searches conducted by or on behalf of Purchaser, whether
conducted at the request of the Senior Lender, Gulf Coast Bank,
or otherwise.

(g) Provide Seller with true and complete copies
of documents, instruments and certificates evidencing, or
otherwise related to, Purchaser's indebtedness to Gulf Coast
Bank.

(h) Provide Seller with true and complete copies
of documents, instruments and certificates evidencing, or
otherwise related to, the Senior Debt.

(i) Provide Seller with true and complete copies
of documents, instruments and certificates evidencing, or
otherwise related to, that certain Three Hundred Thousand Dollar
($300,000) personal loan made to Panfile by the Huntington
National Bank as of the Closing Date.

8. Conditions Precedent to the Obligation of Purchaser to
Close. The obligation of Purchaser to purchase the Purchased
Assets or to otherwise effect the transactions contemplated by
this Agreement on the Closing Date is subject, at the option of
Purchaser, to the satisfaction or fulfillment, on or prior to
the Closing Date, of all of the following conditions precedent
to the Closing:

8.1. The representations and warranties of Seller set
forth in this Agreement shall be true and correct in all
material respects on and as of the Effective Date.

8.2. All the terms, conditions, and covenants to be
complied with and performed by Seller on or prior to the Closing
Date shall have been complied with or performed in all material
respects.

8.3. Purchaser shall have received on the Closing Date
a certificate dated the Closing Date signed on behalf of Seller
by its Chief Executive Officer, President, or a Vice President
stating that (a) the representations and warranties of Seller
set forth in Sections 3.1, 3.2, 3.3, 3.4 and 3.5 hereof are in
all material respects true, correct, and accurate as of the
Closing Date, and (b) all of the covenants set forth in this
Agreement to be performed by Seller on or prior to the Closing
Date have been performed in all material respects.

9. Conditions Precedent to the Obligations of Seller to
Close. The obligation of Seller to sell the Purchased Assets or
to otherwise effect the transactions contemplated by this
Agreement on the Closing Date is subject, at the option of
Seller, to the satisfaction or fulfillment, on or prior to the
Closing Date, of all the following conditions precedent to the
Closing:

9.1. The representations and warranties of Purchaser
set forth in this Agreement shall be true and correct in all
material respects on and as of the Closing Date.

9.2. All of the terms, conditions, and covenants to be
complied with and performed by the Purchaser on or prior to the
Closing Date shall have been complied with and performed in all
material respects.

9.3. Seller shall have received on the Closing Date a
certificate dated the Closing Date, executed by Purchaser's
Secretary, certifying as to: (a) Purchaser's Articles of
Incorporation; (b) Purchaser's Bylaws, (c) the resolutions of
Purchaser's Board of Directors authorizing the execution and
delivery of this Agreement, the performance hereunder, and the
transactions contemplated herein (including, without limitation
the execution and delivery of the Notes and the Security
Agreement); and (d) the incumbency of officers authorized to
execute and deliver this Agreement and the other documents and
instruments executed and delivered pursuant hereto, in
connection herewith, or contemplated hereby.

9.4. Seller shall have received on the Closing Date a
certificate dated the Closing Date signed on behalf of Purchaser
by its Chief Executive Officer, President, or a Vice President
stating that all the representations and warranties of Purchaser
set forth in this Agreement are in all material respects true,
correct, and accurate as of the Closing Date, and (b) all of the
covenants set forth in this Agreement to be performed by
Purchaser on or prior to the Closing Date have been performed in
all material respects.

9.5. All consents and approvals necessary for
transfer, sale and assignment of the Purchased Assets hereunder
and for the assumption by Purchaser of the Assumed Obligations,
the Contracts and the FBO Lease, shall have been obtained.

10. Post-Closing Covenants of Seller. Seller hereby
covenants and agrees that on and after the Closing Date:

10.1. Seller will, at the request of Purchaser,
from time to time, one or more times, at Purchaser's sole cost
and expense, furnish to Purchaser all such documents,
instruments, consents, conveyances, assignments, and other
writings as shall be reasonably necessary to vest, or to
effectively confirm the vesting of, good and marketable title to
the Purchased Assets in the Purchaser, or to effectuate the
purposes of this Agreement.

10.2. Any amounts received by Seller on account of
Defense Fuel Sales at the Consolidated Operations, which amounts
have not been (i) collected by Seller prior to the Closing Date,
and paid to Purchaser at Closing, or (ii) set off against
Sellers portion of Cash Flow from the Consolidated Operations
for March 1996 in accordance with Section 2.3 (c) hereof
(Subsequent Defense Fuels Collections), shall be allocated
between Seller and Purchaser on a pro rata basis in accordance
with the following:

Purchaser's Share of Subsequent Defense
Defense Fuel Sales not remitted at closing less March, 1996 Cash Flow
Fund Collections = Defense Fuel Sales not remitted at closing

The Purchaser's Share of Subsequent Defense Fund Collections
shall be paid to Purchaser by Seller within five (5) business
days of the Sellers receipt of such amounts with the remaining
portion of such amounts to be retained by Seller. This practice
will continue until an amount equal to all amounts collected by
Seller on accounts of Defense Fuel Sales but not paid to
Purchaser at Closing, or set off against Sellers portion of
Cash Flow from the Consolidated Operations for March 1996, shall
have been forwarded to Purchaser.

11. Post-Closing Covenants of Purchaser. Purchaser and
Panfile hereby covenant and agree that on and after the Closing
Date:

11.1. Purchaser and Panfile, as the case may be,
will, at the request of Seller, from time to time, one or more
times, at Seller's sole cost and expense (except for filing fees
for (i) the renewal of UCC financing statements or (ii) the
filing or recording of other security instruments which fees
shall be borne by Purchaser), furnish to Seller all such
documents, instruments, consents, conveyances, assignments, and
other writings as shall be reasonably necessary to evidence or
effectuate the transactions contemplated herein, including,
without limitation the obligations of Purchaser and Panfile, as
the case may be, under and with respect to the Notes, the
Security Agreement, the Panfile Guaranty, the Panfile Pledge
Agreement and the Assumed Obligations.

11.2. Until the Notes have been paid in full,
Purchaser shall not, without Seller's prior written consent:

(a) Take or enter into any of the following
actions if the expenditure, commitment or obligation with
respect thereto shall exceed Fifty Thousand Dollars ($50,000)
per year, for any single item or for all items listed in this
Section 11.2(a) in the aggregate (excluding amounts owing to
Seller under the Notes): (i) any capital expenditure, lease,
lease-purchase or other contractual obligation, the termination
of any existing or undertaking of any new or expanded business
or project, or source of revenue, or other business activity,
involving the expenditure or commitment to expend by Purchaser,
(ii) any increase in the Senior Debt or modification of the
Senior Loan Documents, and, with the exclusion of the Notes and
the other obligations expressly contemplated herein, the
incurring or securing of any indebtedness (hereby defined to
include all obligations, contingent or otherwise, which in
accordance with generally accepted accounting principles should
be classified on Purchaser's balance sheet as liabilities,
including but not limited to indebtedness for monies due, debts
incurred, monies borrowed, guarantees, endorsements and other
contingent obligations), and (iii) any bonuses to Purchaser's
officers, directors or employees;

(b) With the exclusion of security interests
granted to Seller and the existing security interest of the
Senior Lender under the Senior Loan Documents, grant or permit
any mortgage, pledge or encumbrance of a material part of the
assets or accounts receivable of the Purchaser (including,
without limitation, the Purchased Assets);

(c) Sell, transfer, convey, assign or otherwise
dispose of any assets of Purchaser (including, without
limitation, the Purchased Assets) having a fair market value of
more than Ten Thousand Dollars ($10,000) per year, other than
sales in the ordinary course of business;

(d) Sell, transfer, convey, encumber, retire,
purchase or repurchase, issue, or authorize the issuance of
capital stock of the Purchaser, or declare or pay of any
dividend or distribution thereon or by reason thereof, or effect
any change in the rights of the authorized and/or issued capital
stock (including treasury shares) of Purchaser;

(e) Merge or consolidate with any other entity;

(f) On the occurrence and during the continuance
of a default hereunder or under the Notes, enter into of any
employment contracts with Purchaser's officers or other
employees (other than oral contracts terminable at will or on
notice not exceeding ninety (90) days), or enter into any agency
or commission contracts with Purchaser's independent contractors
or consultants;

(g) On the occurrence and during the continuance
of a default hereunder or under the Notes, establish or increase
the benefits of any deferred compensation, profit sharing,
health care (including mental health or physical illness), stock
option, pension or retirement arrangement or plan;

(h) Establish, dissolve or liquidate any
subsidiary, or transfer to any affiliate or subsidiary any
assets of Purchaser having a value in excess of Fifty Thousand
Dollars ($50,000) for any single item, or in the aggregate;

(i) Settle of any litigation in which Purchaser
is a party if the amount in dispute in such litigation is Fifty
Thousand Dollars ($50,000) or more; and

(j) Until such time as Purchaser obtains
financing from a Senior Lender, the aggregate indebtedness of
Purchaser, except for trade payables in the ordinary courses of
business, shall not exceed Seven Hundred Fifty Thousand Dollars
($750,000).

11.3. Until the Notes have been paid in full,
Purchaser shall:

(a) Provide Seller and Seller's representatives
with full access, at Seller's expense, during normal business
hours to all financial books and records relating to, or
concerning, the Consolidated Operations (including, without
limitation, financial statements, income statements, statements
of profit and loss, balance sheets, and documents related to
Seller's security interests hereunder), as Seller may reasonably
request, but not more than quarterly, except during such periods
as Seller shall be entitled (or, in accordance with this
Agreement, may elect) to receive Sellers portion of Cash Flow
from the Consolidated Operations during which time Seller shall
be entitled to such information on a monthly basis;

(b) Use its best efforts to preserve favorable
relationships with customers, contractors and employees and
other persons having business relationships with Purchaser
and/or Seller at the Consolidated Operations;

(c) Maintain in full force and effect insurance
policies and contracts (including, without limitation, general
liability, fire and hazard) covering the assets and operation of
the Consolidated Operations, in such amounts and for such
coverage as shall be necessary to fully insure such assets for
their full replacement value and as is otherwise reasonable and
customary in the industry in which the Consolidated Operations
are conducted. All such insurance policies shall name Seller as
an additional insured, as its interests appear;

(d) Pay and perform, when due, all obligations
to Senior Lender under, or otherwise with respect to, the Senior
Debt;

(e) Pay and perform, when due, all obligations
to Gulf Coast Bank;

(f) Pay and perform, when due, any and all
obligations for money owed; and

(g) Perform all obligations (including, without
limitation, all payment obligations), and keep all covenants
under and otherwise with respect to the then current lease with
the Levee Board for the Consolidated Operations or any other
operations or leasehold interest of Purchaser at the Airport.

11.4. Within ten (10) days after the Closing Date,
Purchaser and Panfile shall demonstrate to Sellers reasonable
satisfaction that the security interests in favor of Gulf Coast
Bank described in Section 2.4 and Section 2.5 hereof are as
represented therein.

11.5. As soon as the same are available, Purchaser
shall provide Seller with true and correct copies of all
documents and instruments evidencing, or otherwise related to,
the Senior Debt (the "Senior Loan Documents").

12. Survival of Warranties, Representations and Covenants.
Each of the representations, warranties, and covenants made by
Seller and Purchaser contained in this Agreement shall survive
the Closing.

13. Noncompetition Agreement. In addition to and
contingent upon the sale of the Purchased Assets by Seller to
Purchaser on the Closing Date as provided in this Agreement, and
in consideration of the mutual benefits accruing hereunder and
contingent on Purchaser making all payments required at Closing
and under the Notes on a timely basis, and complying in all
material respects with its other obligations under this
Agreement, Seller agrees that, for a period of two (2) years
after the Closing Date, neither Seller, nor any subsidiary of
Seller, shall participate, directly or indirectly, as an owner,
principal, shareholder, partner, trustee, fiduciary, or in any
such similar capacity in any activity directly competitive with
Purchaser's conduct of the Consolidated Operations at the
Airport using the Purchased Assets, within a twenty-five (25)
mile radius of the Airport (the "Restricted Territory"). This
agreement not to compete shall include the agreement of Seller
not to (A) request any customers of Purchaser to curtail or
cancel their business with Purchaser at the Consolidated
Operations at the Airport, (B) induce, or attempt to influence,
any employee of Purchaser to terminate employment with Purchaser
or to enter into any employment or business relationship with
any other person or entity (including Seller), or (C) to
interfere with or disrupt any of Purchaser's relationships with
suppliers.

14. Indemnification.

14.1. Seller covenants and agrees to indemnify and
save and hold Purchaser harmless at all times after the Closing
in respect of any and all claims, liabilities, loss, cost,
damage and expense, including reasonable attorneys' fees and
expenses (collectively, "Damages") arising from, by reason of or
in connection with (i) any untruth, breach or inaccuracy in any
material respect of any representation or warranty of Seller set
forth in this Agreement or in any certificate or other
instrument provided by Seller pursuant to this Agreement and
(ii) any breach or failure to perform with respect to any
covenant of Seller under this Agreement. No claim will be made
or recovery had for any matter of which Purchaser had actual or
constructive knowledge on the Closing Date.

14.2. Purchaser covenants and agrees to indemnify
and save and hold Seller harmless at all times after the Closing
in respect of any and all claims, liabilities, loss, cost,
damage and expense, including reasonable attorneys' fees and
expenses (collectively, "Damages") arising from, by reason of or
in connection with (i) any untruth, breach or inaccuracy in any
material respect of any representation or warranty of Purchaser
set forth in this Agreement or in any certificate or other
instrument provided by Seller pursuant to this Agreement and
(ii) any breach or failure to perform with respect to any
obligation or covenant Purchaser under this Agreement. No claim
will be made or recovery had for any matter of which Seller had
actual or constructive knowledge on the Closing Date.
14.3. Promptly after receipt by an indemnified
party under Section 14.1 or 14.2 of notice of the commencement
of any action in or before any court or administrative agency (a
"Proceeding") against it, such indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying
party under such Section, give notice to the indemnifying party
of the commencement thereof, but the failure so to notify the
indemnifying party shall not relieve the indemnifying party of
any liability that it may have to any indemnified party except
to the extent the indemnifying party demonstrates that the
defense of such action is prejudiced thereby. In case any such
Proceeding shall be brought against an indemnified party and it
shall give notice to the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish (unless the
indemnifying party is also a party to such Proceeding and the
indemnified party determines in good faith that joint
representation would be inappropriate), to assume the defense
thereof with counsel satisfactory to such indemnified party and,
after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party
under such Section 14.1 or 14.2, as the case may be, for any
fees of other counsel or any other expenses with respect to the
defense of such Proceeding, in each case subsequently incurred
by such indemnified party in connection with the defense
thereof, other that reasonable costs of investigation. If an
indemnifying party assumes the defense of such a Proceeding, (a)
no compromise or settlement thereof may be effected by the
indemnifying party without the indemnified party's consent
unless (i) there is no finding or admission of any violation of
legal requirements applicable to the indemnified party or the
Consolidated Operations under federal, state or local laws
and/or regulations or any violation of the rights of any person,
and no effect on any other claims that may be made against the
indemnified party and (ii) the sole relief provided is monetary
damages that are paid in full by the indemnifying party and (b)
the indemnifying party shall have no liability with respect to
any compromise or settlement thereof effected without its prior
written consent, which consent shall not be unreasonably
withheld. If notice is given to an indemnifying party or the
commencement of any Proceeding and it does not, within ten (10)
days after the indemnified party's notice is given, give notice
to the indemnified party of its election to assume the defense
thereof, the indemnifying party shall be bound by any
determination made in such Proceeding or any compromise or
settlement thereof effected by the indemnified party.
Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability
that a Proceeding may adversely affect it or its affiliates
other than as a result of monetary damages, such indemnified
party may, by notice to the indemnifying party, assume the
exclusive right to defend, compromise or settle such Proceeding,
but the indemnifying party shall not be bound by any
determination of a Proceeding so defended or any compromise or
settlement thereof effected without its prior written consent,
which consent shall not be unreasonably withheld.

15. Condition of the Seller's FBO and Purchased Assets;
Independent Investigation. Prior to the date of this Agreement,
Purchaser has had complete freedom of access to Seller's FBO and
all of Seller's books, records, contracts, agreements related to
the ownership, operation and maintenance of the Seller's FBO, as
well as to Seller's personnel involved with the ownership,
operation and maintenance of the Seller's FBO. During the
period from the Effective Date of this Agreement to the Closing
Date or termination of this Agreement, Purchaser shall be given
continued access to Seller's FBO, the Purchased Assets, the
Contracts, and all books and records relating thereto, all as
part of the Consolidated Operations maintained and operated by
Purchaser. In making the decision to enter into this Agreement
and to consummate the transactions contemplated hereby,
Purchaser has relied, and may rely, only on Seller's express
representations and warranties set forth in this Agreement, and
Purchaser has not relied, and may not rely, on any other
representations, warranties, or statements by Seller, its
offices, directors or employees or on the representations,
warranties or statements of any other person or entity. As to
all other matters not described herein, Purchaser has relied and
will rely solely on the basis of its own independent
investigation of Seller's FBO and the Purchased Assets,
including, without limitation, the condition of the Purchased
Assets and the physical and environmental condition of Seller's
FBO. PURCHASER 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 PURCHASED
ASSETS AND THE OTHER REAL AND PERSONAL PROPERTY CONSTITUTING
SELLER'S FBO (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED OR
EXPRESS WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE) AND FURTHER, PURCHASER ACCEPTS ALL OF THE PURCHASED
ASSETS IN THEIR "AS IS" AND "WHERE IS" CONDITION.

16. Seller's Damages on Purchaser's Breach. On
Purchaser's default in payment of any amount due under the Notes
(which default is not cured within the period provided in the
Notes), Seller may elect, in its sole and absolute discretion,
in lieu of the payments due under the Notes for each month
during which such payment default continues, to receive from
Purchaser (and, on such election by Seller, Purchaser shall be
obligated to pay to Seller) an amount equal to thirty-five
percent (35%) of Cash Flow from the Consolidated Operations for
each month during which such default continues, such amount to
be paid within fifteen (15) after the last day of each such
month; provided, however, that if Cash Flow from the
Consolidated Operations exceeds Seven Hundred Thousand Dollars
($700,000) for the fiscal year of Purchaser in which such
default occurs, then Seller shall receive (in the aggregate
taking into account the thirty-five percent (35%) of Cash Flow
herein above referenced) forty percent (40%) of Cash Flow from
the Consolidated Operations for each month that Purchaser was in
default in such fiscal year and Seller made the election
described in this Section 16, all such amounts being due and
payable within sixty (60) calendar days after the last day such
fiscal year.

17. Miscellaneous.

17.1. Right of First Refusal to Purchase. In the
event Purchaser shall receive from a third party at any time
before the Notes are paid in full a bona fide offer (the "Third
Party Offer") to purchase the Consolidated Operations, or any
portion thereof, including without limitation, the Purchased
Assets (the "Offered Assets") at a specified price, whether such
price be first fixed by Purchaser or the third party, and
Purchaser shall decide to sell same for such amount, Purchaser
shall promptly give to Seller notice of the terms of such Third
Party Offer and of Purchaser's willingness to sell for the price
offered, and Seller shall have the first refusal and privilege
(which will hereafter be referred to as an "option") of
purchasing said Offered Assets at the price and under the terms
set forth in the Third Party Offer; such option to be exercised
by Seller's notifying Purchaser in writing, within ten (10) days
after Seller receives such notice from Purchaser, that it will
purchase said Offered Assets for the amount and under the terms
specified in the Third Party Offer; provided, however, that,
unless Seller shall agree to the contrary, the closing of any
purchase by Seller pursuant to this Section 17.1 shall occur not
later than sixty (60) days after Seller's notice to Purchaser of
Seller's determination to exercise its option hereunder.

In the event Seller shall not give Purchaser
notice, within said ten (10) day period, of its election to
purchase for the amount and under the terms specified in the
Third Party Offer, Purchaser may thereafter sell the said
Offered Assets to the party making the Third Party Offer. If
for any reason the said Offered Assets are not sold to the party
making the Third Party Offer, for the purchase price and under
the terms and conditions set forth therein, within one hundred
(120) days from Seller's receipt of notice of the Third Party
Offer hereunder, the restrictions set forth in this Section 17
shall again apply to any proposed sale of the Consolidated
Operations, or any portion thereof, by Purchaser to any
subsequent potential bona fide purchaser, including, without
limitation the party having made the expired Third Party Offer.

The giving by Seller of the notice of the
exercise of any purchase option herein before granted shall fix
or determine the right of Seller to purchase the Offered Assets
included in the option which Seller elects to exercise, and the
obligation of Purchaser to sell the same on the same terms and
conditions set out in the bona fide Third Party Offer; provided,
however, that the closing of any purchase by Seller pursuant to
this Section 17.1 shall be not later than sixty (60) days after
Seller's notice to Purchaser of Seller's determination to
exercise its option hereunder.

On the sale by Purchaser of all or part of the
Consolidated Operations, including the assets comprising the
Consolidated Operations, the Notes shall become immediately due
and payable.

17.2. Entire Agreement. This Agreement, together
with the Schedules and executed Exhibits hereto, embodies the
entire agreement and understanding of the parties hereto and
supersedes all previous agreements, arrangements, and
understandings concerning the subject of this Agreement.

17.3. Amendments. No amendment to this Agreement,
no waiver of compliance with any provision or condition hereof,
and no consent provided for herein will be effective unless
evidenced by an instrument in writing executed by the
appropriate party or parties. No waiver by any party of any
condition or other breach of any term, covenant, representation,
or warranty contained in this Agreement in any one or more
instances shall be deemed to be or construed as a waiver of any
other condition or of the breach of any other term,
representation, covenant, or warranty contained in this
Agreement.

17.4. Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties
hereto and their successors and assigns. Neither party may
assign its right or delegate its obligations hereunder without
the prior written consent of the other party, which consent
shall not be unreasonably withheld. The foregoing
notwithstanding, Seller may assign the Notes, and its right to
receive payment thereunder, together with the security therefor,
without the prior written consent of Purchaser.

17.5. Notices. Any notice or other communication
required or permitted to be given to the parties hereto shall be
in writing and shall be deemed to have been given if hand-
delivered, or mailed by certified or registered mail, return
receipt requested, first class postage prepaid, or by telephone
facsimile addressed as follows:

if to Seller:

Aero Services International, Inc.
660 Newtown-Yardley Road
Newtown, Pennsylvania 18940
Attn: Mr. James Affleck
FAX (215) 968-6010

with copy to:

Eckert Seamans Cherin & Mellott
213 Market Street
Harrisburg, Pennsylvania 17101
Attn: Christopher M. Cicconi, Esq.
FAX (717) 237-6019

if to Purchaser:

Jason IV Aviation, Inc.
4700 Airport Road
Cincinnati, Ohio 45226
Attn: Mr. Ken Allison
FAX (513) 871-1464

with copy to:

Simon, Peragine, Smith & Redfearn, L.L.P.
30th Floor Energy Centre
1100 Poydras Street
New Orleans, Louisiana 70163-3000
Attn: Guy W. Smith, Esq.
FAX (504) 569-2999

or at such other address or FAX number as the parties hereto may
from time to time designate in writing.

17.6. Expense of Sale. Each of Seller and
Purchaser shall each bear its own expenses in connection with
the negotiation and consummation of this Agreement.

17.7. Risk of Loss of Undelivered Assets. If and
to the extent that any of the Purchased Assets have not been
delivered to Purchaser prior to the Closing, the risk of
ownership and loss of such undelivered assets, if any, and only
those assets, shall belong to Seller through Closing.

17.8. Senior Debt; Effect of Default with Respect
to Senior Lender, Gulf Coast Bank, or Otherwise. Purchaser
shall assure, and the Senior Loan Documents shall require, that
the Senior Lender provide Seller with copies of any and all
notices of default by Purchaser under or with respect to the
Senior Debt. Purchaser's default under any of its obligations
to Senior Lender, Gulf Coast Bank (other than a covenant default
to Gulf Coast Bank that may be occasioned exclusively by the
granting of the security interest to Seller under Section 2.4 or
Section 2.5 hereof), or otherwise with respect to monies owed,
or under the then current lease with the Levee Board shall
constitute a default by Purchaser under this Agreement.

17.9. Captions. Captions and section headings
contained in this Agreement are for convenience only, do not
form a part of this Agreement, and do not define, restrict, or
expand the text to which they refer.

17.10. Governing Law. This Agreement shall be
governed by and constructed and enforced in accordance with the
internal laws of the State of Louisiana.

17.11. Consent to Jurisdiction. For the purposes
of any action or proceeding arising out of or based on this
Agreement, the other documents and instruments executed in
connection herewith, and/or transactions contemplated herein,
Purchaser and Seller hereby irrevocably submit to the
jurisdiction of the courts of the State of Louisiana and of the
United States District Court for the Eastern District of
Louisiana.

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

17.13. Recitals Incorporated. The recitals
appearing before Section 1 of this Agreement constitute a
material part of this Agreement, and are expressly incorporated
herein by reference.

17.14. Allocation of Purchase Price. The Purchase
Price shall be allocated among the Purchased Assets as set forth
in Schedule 17.14 hereto, and Purchaser shall file the
appropriate documents or forms with the United States Internal
Revenue Service reflecting the same.

17.15. Non-Monetary Default. On the failure of
either party hereto to observe, perform or keep any of its
covenants or obligations under this Agreement (other than a
payment default hereunder or under the Notes, which payment
default shall be subject to the applicable cure provisions of
this Agreement and the Notes), or should any representation or
warranty of such party prove to be untrue (collectively a "Non-
Monetary Default"), which Non-Monetary Default is not cured
within thirty (30) days after written notice thereof from the
non-breaching party, the breaching party shall be in default
hereunder. The foregoing notwithstanding, if a Non-Monetary
Default cannot be cured within the said thirty (30) day cure
period, but the breaching party demonstrates to the reasonable
satisfaction of the non-breaching party that the breaching party
is using its best efforts to cure such Non-Monetary Default, the
cure period for such Non-Monetary Default shall be extended for
an additional thirty (30) days.

IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have executed this Agreement on the day, month,
and year first above written.

Witness/Attest: AERO SERVICES INTERNATIONAL, INC.

B. R. Adkins By: R. T. Brant

Its: Chairman & CEO

JASON IV AVIATION, INC.

Kerry Wilt By: Orlando E. Panfile

Its: President

Kerry Wilt Orlando E. Panfile

Orlando E. Panfile
Sole Stockholder of Jason IV Aviation, Inc.

(10.72) Promissory Note from Jason IV Aviation, Inc. to the
Company dated April 1, 1996.

PROMISSORY NOTE

$100,000 April 1, 1996

FOR VALUE RECEIVED, Jason IV Aviation, Inc., a Louisiana
corporation (the "Maker"), promises to pay to the order of Aero
Services International, Inc. a Louisiana corporation (together
with its successors and assigns and any other transferee or
successor then becoming holder of this Note, "Payee"), in lawful
money of the United States of America at the principal office of
Payee at 660 Newtown-Yardley Road, Newtown, Pennsylvania 18940,
or at such other place as Payee may from time to time designate
by written notice to Maker, One Hundred Thousand Dollars
($100,000) together with all interest, fees, costs and penalties
thereon, as follows:

1. Agreement. This Note is the A Note issued pursuant
to, and is payable in accordance with, that certain Asset
Purchase Agreement by and among Maker and Payee dated May 7,
1996, with an effective date as of February 1, 1996 (the
"Agreement"). Any capitalized term used in this Note but not
defined herein shall have the meaning ascribed to such term in
the Agreement. The terms, covenants, conditions, provisions,
stipulations and agreements of the Agreement are incorporated
herein by reference, and are hereby made a part of this Note to
the same extent and with the same effect as if they were fully
set forth herein, and Maker hereby covenants to abide by and to
comply with each and every term, covenant, provision,
stipulation, promise, agreement and condition set forth in this
Note and in the Agreement. The holder of this Note is entitled
to the benefits of the Agreement to which reference is hereby
made for a statement of the terms and conditions under which
this Note is issued and may enforce the agreements of Maker
contained therein and exercise remedies provided for thereby or
otherwise available in respect thereof.

2. Interest. Commencing as of the date hereof and
continuing until repayment in full of all sums due hereunder,
the unpaid principal sum of this Note shall bear interest at the
rate of eight percent (8%) per annum (the "Interest Rate").
Interest shall accrue daily. All computations of interest
hereunder shall be made on the basis of a year of 360 days, for
the actual number of days occurring in the period for which such
interest is payable (including the first day but excluding the
last day).

3. Payments and Maturity. The entire outstanding
principal sum under this Note, together with accrued but unpaid
interest, fees, costs and expenses, shall be due and payable on
the earliest to occur of (a) April 30, 1997, (b) Maker's sale,
transfer, assignment or disposal, in whole or in part, of the
Consolidated Operations (as defined in the Agreement) except in
accordance with Section 11.2 or the Agreement, or (c) the
issuance, sale, transfer or assignment of shares of Maker's
stock resulting in a transfer of ownership or change in control
of Maker, unless otherwise accelerated by Payee (the "Maturity
Date"). Accrued interest on the outstanding principal sum of
this Note shall be payable monthly in arrears, and shall be due
and payable on the first (1st) day of each month, commencing on
May 1, 1996. All unpaid principal, accumulated interest and any
fees or charges owed to Payee shall be payable in full on the
Maturity Date.

4. Prepayment. Maker shall have the right, at any time,
to prepay the outstanding principal amount of this Note, in
whole or in part from time to time (without premium or penalty).

5. Late Charges and Default Interest. Any payment of
principal or interest not paid when due, which default is not
cured within ten (10) days after written notice thereof from
Payee, shall result in a late charge in the amount of five
percent (5%) of the payment so due. The assessment or
collection of such charge shall not be construed as a waiver by
Payee of any default occasioned by the failure of Maker to make
such payment when due. During the continuance of an Event of
Default (as hereinafter defined), interest shall accrue on the
outstanding principal sum of this Note at the rate of twelve
percent (12%) per annum (the "Default Interest Rate").

6. Application of Payments. Each and all of the payments
made hereunder shall be applied first to expenses and costs
incurred by Payee and for which Maker is responsible; second, to
any accrued and unpaid fees; third, to accrued and unpaid
interest hereunder, if any; and, fourth, to the principal
balance of this Note.

7. Security. Payment of this Note is secured in
accordance with the Agreement, including the security interests
and liens granted pursuant thereto or otherwise in connection
therewith and any other assignments and conveyances made from
time to time pursuant to the Agreement.

8. Event of Default. If Maker fails in any way to
perform its obligations or covenants under this Note, the B Note
(as defined in the Agreement), the Agreement, or any other
instrument, document or agreement executed by Maker pursuant to
or in otherwise in connection with the Agreement, or fails to
make any payment when due under this Note or the B Note, which
default is not cured within twenty (20) days after written
notice thereof from Payee (an "Event of Default"), then, Payee,
at its option and without further notice to Maker, may declare
immediately due and payable the entire unpaid principal sum due
hereunder (with interest to accrue thereafter at the Default
Interest Rate), and all other charges and sums due by Maker
under this Note of the Agreement; and payment thereof may be
enforced and recovered in whole or in part at any time by one or
more of the remedies provided to Payee in the Agreement, or at
law or equity. In such case Payee may also recover all costs of
suit and other expenses in connection therewith, together with
an attorneys' commission, for collection, of five percent (5%)
of the total amount then due by Maker to Payee, together with
interest on any judgment obtained by Payee at the Default Inter-
est Rate. Payee may exercise this option to accelerate during
any default by Maker regardless of any prior forbearance.

9. Confession of Judgment. MAKER DOES HEREBY IRREVOCABLY
AUTHORIZE AND EMPOWER ANY ATTORNEY OF COURT OF RECORD OF PENNSYLVANIA
OR ELSEWHERE TO, ON THE OCCURRENCE OF AN EVENT OF DEFAULT UNDER THIS NOTE,
APPEAR FOR AND ENTER JUDGMENT AGAINST IT FOR THE UNPAID PRINCIPAL SUM DUE
HEREUNDER, TOGETHER WITH ALL ACCRUED AND UNPAID INTEREST, IF ANY, AND ALL
OTHER CHARGES OR SUMS DUE HEREUNDER, TOGETHER WITH ATTORNEYS' COMMIS-
SION OF FIVE PERCENT (5%) FOR COLLECTION, WITH OR WITHOUT DECLARATION, WITH
COSTS OF SUIT, RELEASE OF ERRORS, WITHOUT STAY OF EXECUTION; AND MAKER ALSO
WAIVES THE RIGHT OF INQUISITION ON ANY REAL ESTATE THAT MAY BE LEVIED UPON
TO COLLECT THE NOTE, AND DOES HEREBY VOLUNTARILY CONDEMN THE SAME, AND
AUTHORIZE THE PROTHONOTARY TO ENTER UPON THE WRIT OF EXECUTION SAID
VOLUNTARY CONDEMNATION; AND FURTHER AGREES THAT SAID REAL ESTATE MAY BE
SOLD ON A WRIT OF EXECUTION, AND MAKER HEREBY WAIVES AND RELEASES ALL
RELIEF FROM ANY AND ALL APPRAISEMENT, STAY OF EXEMPTION LAWS OF ANY STATE
NOW IN FORCE OR HEREINAFTER TO BE PASSED. IF COPIES OF THIS NOTE, VERIFIED BY
AFFIDAVIT OF THE HOLDER HEREOF OR SOMEONE ON THE HOLDER'S BEHALF, HAS BEEN
FILED IN SUCH ACTION, IT WILL NOT BE NECESSARY TO FILE THE ORIGINAL OF THIS
NOTE AS A WARRANT OF ATTORNEY. THE AUTHORITY AND POWER TO APPEAR FOR AND
ENTER JUDGMENT AGAINST MAKER WILL NOT BE EXHAUSTED BY THE INITIAL EXERCISE
OF THE AUTHORIZED POWER, AND THE POWER MAY BE EXERCISED FROM TIME TO TIME
AS OFTEN AS THE HOLDER DEEMS NECESSARY OR DESIRABLE; AND THIS INSTRUMENT
WILL BE A SUFFICIENT WARRANT.

MAKER HEREBY KNOWINGLY AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE, OR OTHERWISE INVOLVING, THIS NOTE. FOR
THE PURPOSES OF A CONFESSED JUDGMENT UNDER THIS NOTE, MAKER FURTHER
IRREVOCABLY CONSENTS TO THE JURISDICTION AND VENUE OF ANY STATE
OR FEDERAL COURT SITTING IN OR FOR BUCKS COUNTY, PENNSYLVANIA.

10. Cumulation of Remedies. The remedies of Payee as
provided hereunder and under the Agreement and any other
document, instrument or agreement executed by Maker in
connection herewith or therewith, together with all other
remedies provided at law or equity, shall be cumulative and
concurrent, and may be pursued singly, successively or together
at the sole discretion of Payee, and may be exercised as often
as occasion therefor shall occur; and the failure to exercise
any such right or remedy shall in no event be construed as a
waiver or release thereof.

11. Waiver and Release. To the extent permitted by law,
Maker hereby waives and releases all errors, defects and
imperfections in any proceedings instituted by Payee under the
terms hereof or of the Loan Agreement, as well as all benefit
that might accrue to Maker by virtue of any present or future
laws exempting any property, or any part of the proceeds arising
from any sale of any property, from attachment, levy or sale
under execution, or providing for any stay of execution, exemp-
tion from civil process, or extension of time for payment; and
maker agrees that any property that may be levied against
pursuant to a judgment obtained by virtue hereof, on any writ of
execution issued thereon, may be sold on any such writ in whole
or in part in any order desired by Payee.

Payee shall not be deemed, by any act of omission or
commission, to have waived any of its rights or remedies
hereunder unless such waiver is in writing and signed by Payee,
and then only to the extent specifically set forth in the
writing. A waiver on one event shall not be construed as
continuing or as a bar to or waiver of any right or remedy to a
subsequent event.

12. Governing Law. This instrument shall be governed by
and construed according to the laws of the Commonwealth of
Pennsylvania, including its statutes or limitation but without
regard to its rules governing conflict of laws.

13. Jurisdiction and Venue. Maker consents to the juris-
diction and venue of the Federal and State Courts sitting in or
for Bucks County, Pennsylvania in any action on, related to, or
mentioning this Note.

14. Captions. The captions or headings used herein are
for the convenience of reference only and shall not be deemed to
define, limit or describe the scope or intent of this Note.

15. Partial Invalidity. In the event that any provision
of this Note (or any part of any provision) is held by a court
of competent jurisdiction to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provisions (or
remaining parts of the affected provision) of this Note; but
this Note shall be construed as if such invalid, illegal, or
unenforceable provision had not been contained herein, but only
to the extent it is invalid, illegal, or unenforceable.

16. Maximum Rate of Interest. It is not intended by this
Note to charge interest at a rate in excess of the maximum rate
of interest permitted to be charged to Maker under applicable
law, but if, notwithstanding, interest in excess of the maximum
rate shall be paid under this Note, the excess shall be retained
by Payee and applied to reduce the principal sum outstanding, or
returned to Maker.

17. Pronouns and Form. Whenever used, the singular number
shall include the plural, the plural the singular, and the use
of any gender shall be applicable to all genders, and words
"Payee" and "Maker" shall be deemed to include their respective
successors and assigns.

IN WITNESS WHEREOF, intending to be legally bound Maker has
caused this Note to be executed and delivered on the date first
above written.

JASON IV AVIATION, INC.

Kerry Wilt By: Orlando E. Panfile
Secretary Orlando E. Panfile
Its: President

(10.73) Promissory Note from Jason IV Aviation, Inc. to the
Company dated April 1, 1996.

PROMISSORY NOTE

$500,000 April 1, 1996

FOR VALUE RECEIVED, Jason IV Aviation, Inc., a Louisiana
corporation (the "Maker"), promises to pay to the order of Aero
Services International, Inc. a Louisiana corporation (together
with its successors and assigns and any other transferee or
successor then becoming holder of this Note, "Payee"), in lawful
money of the United States of America at the principal office of
Payee at 660 Newtown-Yardley Road, Newtown, Pennsylvania 18940,
or at such other place as Payee may from time to time designate
by written notice to Maker, Five Hundred Thousand Dollars
($500,000) together with all interest, fees, costs and penalties
thereon, as follows:

1. Agreement. This Note is the B Note issued pursuant
to, and is payable in accordance with, that certain Asset
Purchase Agreement by and among Maker and Payee dated May 7,
1996, with an effective date as of February 1, 1996 (the
"Agreement"). Any capitalized term used in this Note but not
defined herein shall have the meaning ascribed to such term in
the Agreement. The terms, covenants, conditions, provisions,
stipulations and agreements of the Agreement are incorporated
herein by reference, and are hereby made a part of this Note to
the same extent and with the same effect as if they were fully
set forth herein, and Maker hereby covenants to abide by and to
comply with each and every term, covenant, provision,
stipulation, promise, agreement and condition set forth in this
Note and in the Agreement. The holder of this Note is entitled
to the benefits of the Agreement to which reference is hereby
made for a statement of the terms and conditions under which
this Note is issued and may enforce the agreements of Maker
contained therein and exercise remedies provided for thereby or
otherwise available in respect thereof.

2. Interest. Commencing as of the date hereof and
continuing until repayment in full of all sums due hereunder,
the unpaid principal sum of this Note shall bear interest at the
rate of nine percent (9%) per annum (the "Interest Rate").
Interest shall accrue daily. All computations of interest
hereunder shall be made on the basis of a year of 360 days, for
the actual number of days occurring in the period for which such
interest is payable (including the first day but excluding the
last day).

3. Payments and Maturity. The entire outstanding
principal sum under this Note, together with accrued but unpaid
interest, fees, costs and expenses, shall be due and payable on
the earliest to occur of (a) March 31, 1999, (b) Maker's sale,
transfer, assignment or disposal, in whole or in part, of the
Consolidated Operations (as defined in the Agreement) except in
accordance with Section 11.2 or the Agreement, or (c) the
issuance, sale, transfer or assignment of shares of Maker's
stock resulting in a transfer of ownership or change in control
of Maker, unless otherwise accelerated by Payee (the "Maturity
Date"). Accrued interest on the outstanding principal sum of
this Note shall be payable monthly in arrears, and shall be due
and payable on the first (1st) day of each month, commencing on
May 1, 1996. All unpaid principal, accumulated interest and any
fees or charges owed to Payee shall be payable in full on the
Maturity Date.

4. Prepayment. Maker shall have the right, at any time,
to prepay the outstanding principal amount of this Note, in
whole or in part from time to time (without premium or penalty).

6. Application of Payments. Each and all of the payments
made hereunder shall be applied first to expenses and costs
incurred by Payee and for which Maker is responsible; second, to
any accrued and unpaid fees; third, to accrued and unpaid
interest hereunder, if any; and, fourth, to the principal
balance of this Note.

8. Event of Default. If Maker fails in any way to
perform its obligations or covenants under this Note, the A Note
(as defined in the Agreement), the Agreement, or any other
instrument, document or agreement executed by Maker pursuant to
or in otherwise in connection with the Agreement, or fails to
make any payment when due under this Note or the A Note, which
default is not cured within twenty (20) days after written
notice thereof from Payee (an "Event of Default"), then, Payee,
at its option and without further notice to Maker, may declare
immediately due and payable the entire unpaid principal sum due
hereunder (with interest to accrue thereafter at the Default
Interest Rate), and all other charges and sums due by Maker
under this Note of the Agreement; and payment thereof may be
enforced and recovered in whole or in part at any time by one or
more of the remedies provided to Payee in the Agreement, or at
law or equity. In such case Payee may also recover all costs of
suit and other expenses in connection therewith, together with
an attorneys' commission, for collection, of five percent (5%)
of the total amount then due by Maker to Payee, together with
interest on any judgment obtained by Payee at the Default Inter-
est Rate. Payee may exercise this option to accelerate during
any default by Maker regardless of any prior forbearance.

MAKER HEREBY KNOWINGLY AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE, OR OTHERWISE INVOLVING, THIS NOTE. FOR
THE PURPOSES OF A CONFESSED JUDGMENT UNDER THIS NOTE, MAKER FURTHER
IRREVOCABLY CONSENTS TO THE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL
COURT SITTING IN OR FOR BUCKS COUNTY, PENNSYLVANIA.

14. Captions. The captions or headings used herein are
for the convenience of reference only and shall not be deemed to
define, limit or describe the scope or intent of this Note.

IN WITNESS WHEREOF, intending to be legally bound Maker has
caused this Note to be executed and delivered on the date first
above written.

JASON IV AVIATION, INC.

Kerry Wilt By: Orlando E. Panfile
Secretary Orlando E. Panfile
Its: President

(10.74) Security Agreement between Aero Services
International, Inc. and Jason IV Aviation, Inc. dated
May 10, 1996.

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this "Security Agreement") is made
and entered into as of this 10th day of May, 1996, by and
between JASON IV AVIATION, INC., a Louisiana corporation
("Debtor") and AERO SERVICES INTERNATIONAL, INC., a Louisiana
corporation (the "Secured Party").

W I T N E S S E T H:

WHEREAS, as of even date herewith, Debtor, the Secured
Party and Orlando E. Panfile have entered into that certain
Asset Purchase Agreement (the "Agreement"), pursuant to which
the Secured Party has agreed to sell, transfer and assign
certain rights and assets to Debtor, as more particularly
described in the Agreement; and

WHEREAS, in accordance with the Agreement, Debtor has
executed and delivered to the Secured Party (i) that certain
promissory note, dated April 1, 1996, in the original principal
amount of One Hundred Thousand Dollars ($100,000) (the "A
Note"), and (ii) that certain promissory note, dated April 1,
1996, in the original principal amount of Five Hundred Thousand
Dollars ($500,000) (the "B Note"); and

WHEREAS, the A Note and the B Note, each of which is more
particularly described in the Agreement, may, hereinafter, be
referred to as the "Notes"; and

WHEREAS, as a condition for entering into the Agreement and
accepting the Notes in accordance therewith, the Secured Party
has required that Debtor execute and deliver this Security
Agreement;

1. Definitions. Capitalized terms used in this Security
Agreement but not otherwise defined herein shall have the
meanings ascribed thereto in the Agreement. In addition, the
following terms shall have the meanings set forth below:

"Accounts" means any right to payment for goods sold
or leased or for services rendered which is not evidenced by an
Instrument or Chattel Paper, whether or not it has been earned
by performance, including but not limited to accounts receivable
and contract rights. Without limiting the foregoing, Accounts
shall include all "accounts" as defined in the Uniform
Commercial Code as in effect from time to time in the State of
Louisiana ("UCC").

"Accounts Receivable" means all Debtors present or
future Accounts, accounts receivable, other receivables,
contract rights, Chattel Paper, notes, cash, cash equivalents,
rights under letters of credit, Instruments and Documents, and
all proceeds thereof, together with all Instruments, all
Documents representing any of the foregoing, all rights in any
merchandise or goods which any of the same may represent, and
all right, title, security and guaranties with respect to each
Account Receivable, including any right of stoppage in transit.

"Chattel Paper" means any writing or writings which
evidence both a monetary obligation and a security interest in
or a lease of specific goods. Without limiting the foregoing,
Chattel Paper shall include all "chattel paper" as defined in
the UCC.

"Documents" means "documents of title" as defined in
Section 1-201 of the UCC, and receipts of the kind described in
Subsection (2) of Section 7-201 of the UCC.

"Equipment" means all now owned or hereafter acquired
goods which are used or bought for use by the Debtor in its
business, including but not limited to equipment, tools,
tooling, machinery, furniture and fixtures, vehicles and trade
fixtures and all parts, instruments, accessories, alterations,
modifications, replacements, additions, tools, supplies,
operating manuals and improvements intended to be used on or in
connection with the foregoing. Without limiting the foregoing,
Equipment shall include all "equipment" as defined in the UCC.

"Fixtures" means all present and future fixtures,
goods, inventory, machinery and Equipment, including but not
limited to fittings, appliances, furniture, apparatus, chattels,
building materials and articles of personal property of every
kind and character, together with any renewals, replacements and
substitutions thereof, and additions and accessions thereto,
which now or in the future become affixed to or attached to or
placed upon or used in any way in connection with the New
Orleans FBO (as defined in the Agreement), together with all
right, title and interest of the Secured Party in and to any and
all deposits made under any conditional bill of sale, chattel
mortgage or security interest to which any Fixtures are or shall
be subject, and all deposits made thereunder, together with the
benefit of any payments now or hereafter made thereon. In
addition, the term "Fixtures" includes all right, title and
interest of Debtor as lessee under any and all leases relating
to any Fixtures, together with any options to purchase the
Fixtures which are subject to such leases and together with the
benefit of any payments at any time made on such leases.

"General Intangibles" means any present or future
personal property of Debtor (including things in action) other
than tangible personal property, goods, Accounts, Accounts
Receivable, Chattel Paper, Documents, Equipment, Instruments,
and money, including but not limited to leases, rents generated
from all real property owned or leased by Debtor, tax refunds
and rights to receive tax refunds, certificates and policies of
insurance and insurance proceeds, patents and patent
applications, copyrights, licenses, federal and state
trademarks, and goodwill associated therewith, trade names,
service marks and names, logos, goodwill, customer lists, causes
of action, judgments, rights of indemnification, contribution
and subrogation, rights against suppliers or manufacturers,
royalties, computer programs, tapes and software, designs,
blueprints, plans and know how. Without limiting the foregoing,
General Intangibles shall include all "general intangibles" as
defined in the UCC.

"Instruments" means negotiable instruments (as defined
in Section 3-104 of the UCC) or certificated securities (as
defined in Section 8-102 of the UCC) or any other writings which
evidence a right to the payment of money and are not themselves
security agreements or leases and are of the type which are in
the ordinary course of business transferred by delivery with any
necessary endorsement or assignment. Without limiting the
foregoing, Instruments shall include all "instruments" as
defined in the UCC.

"Inventory" means any and all present and future
goods, merchandise and other personal property, including,
without limitation, goods in transit, of Debtor, which are or
may at any time be held for sale or lease, furnished or to be
furnished under any contract of service, or held as raw
materials, work in process, finished goods, supplies or
materials which are used or consumed in connection with Debtor's
business, and any present and future property of Debtor, the
sale or other disposition of which has given rise to an Account
Receivable and which has been returned to or repossessed or
stopped in transit by Debtor, and the products of any such
goods, merchandise and other personal property. Without
limiting the foregoing, Inventory shall include all "inventory"
as defined in the UCC.

"Proceeds" means all proceeds of Accounts, Accounts
Receivable, Chattel Paper, Documents, Equipment, General
Intangibles, Instruments and Inventory, including but not
limited to the following:

a. All returned or repossessed goods arising from,
or relating to, any sale or other disposition of
any of the foregoing;

b. All components, accessories, additions,
attachments, appurtenances and improvements,
pertaining or attached to any of the foregoing;

c. All substitutions, renewals, and replacements of
or to any of the foregoing;

d. All books, records, computer software, disks or
tapes of or relating to any of the foregoing;
and

e. All cash and non-cash proceeds and products,
whether immediate or remote, of or relating to
any of the foregoing.

Without limiting the above, Proceeds shall include all
"proceeds" as defined in the UCC.

2. Effectiveness and Priority. This Security Agreement
shall be effective on the first to occur of (i) the date on
which a Senior Lender has provided financing to Purchaser as
contemplated in the Agreement, (ii) the date on which Gulf Coast
Bank has consented to the granting by Debtor to the Secured
Party of a second priority security interest in all of Debtor's
tangible and intangible personal property, or (iii) the one
hundred twentieth (120th) day after the Closing (as defined in
the Agreement). On the effectiveness of this Security
Agreement, pursuant to the security interest granted hereunder,
the Secured Party shall have a security interest in all of
Debtor's tangible and intangible personal property subordinate
only to the security interest therein of the Senior Lender or
Gulf Coast Bank, as the case may be; provided, however that the
security interest of the Secured Party in the Purchased Assets
(as defined in the Agreement) shall, at all times, be superior
to the security interest therein of Gulf Coast Bank, and under
no circumstances shall Gulf Coast Bank be granted, and under no
circumstances shall there be deemed to exist in favor of Gulf
Coast Bank, a security interest in the Purchased Assets senior
in priority to the Secured Party's security interest in the
Purchased Assets.

3. Grant of Security Interest. To secure the prompt
repayment of all amounts due under the Agreement and the Notes
and the observance and performance by Debtor of all of the
conditions, obligations, covenants, promises and agreements
contained in the Agreement, the Notes, and any other instruments
or documents executed and delivered to the Secured Party in
connection with the transactions contemplated by the Agreement,
Debtor hereby grants to the Secured Party a lien and continuing
security interest in and to all of its now owned and hereafter
acquired present and future personal property and Fixtures of
every kind, nature and description, wherever located, to the
full extent of Debtor's interest therein, including but not
limited to Accounts, Accounts Receivable, Chattel Paper,
Documents, Equipment, Fixtures, General Intangibles,
Instruments, Inventory, and Proceeds of any of the foregoing,
and all books and records (including, without limitation,
customer lists, credit files, computer programs, print-outs and
other computer materials and records) of Debtor pertaining to
any of the foregoing (hereinafter, collectively, the
"Collateral"). Secured Party's security interest in the
Collateral shall at all times be subordinate only to the
security interest of the Senior Lender (as defined in the
Agreement) for indebtedness to the Senior Lender (the "Senior
Debt") not to exceed $1,500,000.00 as more particularly
described in the Agreement (the "Senior Security Interest"), or
to the Security Interest of Gulf Coast Bank (but only to the
extent provided in Section 2 hereof and Section 2.4 of the
Agreement (the "Gulf Coast Security Interest").

4. Additional Documentation. At the Secured Party's
request, Debtor shall execute and deliver to the Secured Party,
at any time hereafter, all supplemental documentation that the
Secured Party may reasonably request to perfect the security
interests granted the Secured Party hereby, in form and
substance acceptable to the Secured Party, and pay the costs of
any recording or filing of the same. Debtor agrees that a
carbon, photographic, or other reproduction of this Security
Agreement or of a financing statement is sufficient as a
financing statement. Debtor, immediately on acquiring property
for which separate perfection is necessary, shall deliver to the
Secured Party any and all evidence of ownership of any such
property (including, without limitation, properly endorsed
certificates of title and applications for title and assignments
of Interstate Commerce Commission licenses) and shall take all
such action as may be necessary to perfect the Secured Party's
security interest in such property.

5. Inspections. After reasonable prior notice, the
Secured Party (by any of its officers, employees or agents)
shall have the right, at any time, and from time to time during
Debtor's usual business hours, to inspect the Collateral, all
records related thereto (and to make extracts from such records)
and the premises upon which any of the Collateral is located, to
discuss Debtor's affairs and finances with any accountant,
account debtor or creditor of Debtor and to verify the amount,
quality, quantity, value and condition of, or any other matter
relating to, the Collateral.

6. Financing Statements. Debtor will take all necessary
action to permit the Secured Party immediately to perfect its
lien and security in the Collateral, subject only to the Senior
Security Interest or the Gulf Coast Security Interest, as the
case may be, whether by filing UCC-1 financing statements, by
filing financing statements required by motor vehicle titling
authorities to perfect the Secured Party's security interest in
any motor vehicles which may be included in the Equipment or, at
the Secured Party's request, by showing the Secured Party as
holder of such security interest on the certificate of title for
such Equipment. Such filings shall be in form and substance
reasonably required by the Secured Party, and Debtor will pay
all costs of recording and filing any financing, continuation or
termination statements with respect to the security interest
created by this Security Agreement, together with costs and
expenses of any lien search required by the Secured Party.

7. Insurance. Debtor will maintain insurance coverage on
the Collateral in accordance with the applicable provisions of
the Agreement.

8. Representations and Warranties. Debtor hereby
represents and warrants unto the Secured Party that, at the
execution hereof and during the term of this Security Agreement,
and as long as any of the Indebtedness under the Transactional
Documents remains unpaid, unless otherwise consented to in
writing by the Secured Party:

a. All of the representations and warranties
contained in the Transactional Documents are
true and correct.

b. The security interest granted to the Secured
Party in the Collateral shall constitute a lien
subject only to the Senior Security Interest or
the Gulf Coast Security Interest, as the case
may be, and Debtor is and shall be lawfully
possessed and the sole owner of the Collateral,
and are authorized to pledge, sell, consign,
assign, transfer and create a security interest
in the same.

c. Subject to the Senior Security Interest or the
Gulf Coast Security Interest, as the case may
be, the Collateral shall continue to be free
from all pledges, liens, encumbrances and
security interests or other claims in favor of
others, of any kind or character, legal or
equitable, except the lien and security interest
in favor of the Secured Party created by this
Security Agreement, and that Debtor will
warrant, and, at the Secured Party's request,
defend the same from all claims and demands of
all other persons.

d. The Collateral will only be used by Debtor in
the operation of its fixed base operations at
the New Orleans Lakefront Airport ("Debtor's
FBO"), and will not be held for sale or leased
to others, or otherwise disposed of by Debtor
except in accordance with Section 11.2 of the
Agreement.

e. Any guarantee, security, property or right
received by Debtor in connection with the
Collateral shall be received by it as an agent
of, and on behalf of, the Secured Party and will
be kept separate from other property of Debtor,
capable of identification, and will be delivered
and paid immediately by Debtor to the Secured
Party as additional security.

f. The offices or locations where Debtor keeps or
will keep the Collateral and books and records
concerning the Collateral are located only at
Debtor's FBO which location is Debtor's
principal place of business. Debtor shall not
establish any other such office or location
without the Secured Party's prior written
consent, which consent shall not be unreasonably
withheld or delayed; provided, however, that in
no event shall any such office or location be
outside the United States of America or in any
jurisdiction which has not adopted Article 9 of
the Uniform Commercial Code; and provided,
further, that in connection with any move
permitted hereunder Debtor shall provide the
Secured Party with reasonable written notice of
such move (in no event later than thirty (30)
days before such move), along with a list of all
Uniform Commercial Code filings and other
filings or recordings which are necessary to
perfect a security interest in the Collateral,
and a reasonable opportunity (in no event fewer
than thirty (30) days) to perfect such interests
in the jurisdiction to which the office or
location is moved, such interests to be
perfected at Debtor's cost and expense.

g. Except for the due and proper filing of
financing statements on form UCC-1, and filings
with motor vehicle lien recording authorities,
no further action is required to establish and
perfect the lien and security interest of the
Secured Party in and to the Collateral.

9. Affirmative Covenants. Debtor hereby covenants and
warrants unto the Secured Party that at the execution hereof and
during the term of this Security Agreement, and as long as any
of the Indebtedness under the Transactional Documents remains
unpaid, unless otherwise consented to in writing by the Secured
Party:

a. Debtor will comply with all of the affirmative
covenants set forth in the Transactional
Documents.

b. Debtor will, not later than thirty (30) days
after acquiring additional Collateral, promptly
advise the Secured Party of the type,
description, nature, cost and quantity thereof.
Should Debtor at any time fail to advise the
Secured Party of any such acquisition, such
failure shall not affect, diminish, modify or
limit the Secured Party's lien or security
interest in all Collateral which Debtor may
acquire from time to time hereafter.

c. Debtor will, at its own cost and expense, keep
the Collateral in as good and substantial repair
as the same is when acquired, reasonable wear
and tear excepted.

d. Debtor will comply with all of the requirements
of law in order to preserve and perfect the
Secured Party's security interest in the
Collateral.

e. Debtor will promptly (and in no event later than
two (2) Business Days) advise the Secured Party,
after discovery of any new facts which, under
applicable law, would affect the priority of the
security interest granted to the Secured Party
by this Security Agreement.

f. Debtor will provide the Secured Party, promptly
following request therefor, timely evidence of
the existence of all policies of insurance
required by the Secured Party to be maintained
as provided for herein and evidence that the
Secured Party is named thereon as a loss payee,
as its interest may appear.

g. Debtor will notify the Secured Party immediately
of any information which Debtor have or may
receive with regard to the Collateral which
might in any way materially and adversely affect
the value of same or the rights or remedies of
the Secured Party in respect thereof.

h. Debtor will provide to Secured Party (i) any
notice of default by Debtor under or with
respect to the Senior Debt; or (ii) any notice
or action on the part of the Senior Lender of
its intent to exercise any of its rights or
remedies as a secured party with respect to any
of the Collateral.

10. Negative Covenants. Debtor hereby covenants and
warrants unto the Secured Party that, at the execution hereof
and during the term of this Security Agreement, and as long as
any of the Indebtedness under the Transactional Documents
remains unpaid, Debtor shall not, without the prior written
consent of the Secured Party:

a. Fail to comply with any of the negative
covenants set forth in the Transactional
Documents.

b. Except for the Senior Security Interest or the
Gulf Coast Security Interest, as the case may
be, pledge, assign or encumber the Collateral to
any entity other than the Secured Party, or
create, suffer or permit to be created any lien
thereon, whether such lien is superior or
inferior to that of the Secured Party.

c. Sell, lease or have removed from Debtor's FBO
any Collateral or other assets except in the
ordinary course of business.

d. Allow, permit, suffer or create any lien to the
Senior Lender which secures indebtedness
exceeding $1,500,000.

e. Allow, permit, suffer or create any lien to Gulf
Coast Bank which secures indebtedness exceeding
Debtor's indebtedness to Gulf Coast Bank as of
the Closing Date.

11. Event of Default. Any Event of Default under the
Notes or a default under the Agreements or any other
Transactional Documents, shall constitute an Event of Default
hereunder.

12. Remedies. On an Event of Default, and at any time
thereafter prior to its cure, Secured Party may declare all
obligations secured hereby, although otherwise unmatured and
contingent, to be immediately due and payable, without notice or
demand whatsoever. Secured Party shall have, in addition to any
other rights and remedies contained in the Agreement and any
other document executed in connection with the Agreement, all
the rights and remedies of a secured party under the applicable
Uniform Commercial Code or other applicable law, all of which
rights and remedies shall be cumulative and nonexclusive, to the
extent permitted by law.

On an Event of Default, and at any time thereafter prior to
its cure, Secured Party has the right (i) to lease, sell or
otherwise dispose of all or any Collateral in its then
condition, or after any further manufacturing or processing
thereof, at public or private sale or sales, with such notice as
may be required by law (it being agreed by Debtor that, in the
absence of any contrary requirement of law, five (5) days' prior
notice of a public or private sale of Collateral shall be deemed
reasonable notice), in lots or in bulk, for cash or on credit,
all as Secured Party, in its sole discretion, may deem
advisable; (ii) to adjourn such sales from time to time with or
without notice; and (iii) to conduct such sales on Debtor's
premises or elsewhere and use Debtor's premises without charge
for such sales for such time or times as Secured Party may see
fit. Secured Party is hereby granted a license or other right
to use, without charge, Debtor's labels, patents, copyrights,
rights of use of any name, trade secrets, trade names,
trademarks and advertising matter, or any property of a similar
nature, as it pertains to the Collateral, in advertising for
sale and selling any Collateral, and Debtor's rights under all
licenses and all franchise agreements shall inure to Secured
Party's benefit. Secured Party shall have the right to sell,
lease or otherwise dispose of any Collateral, or any part
thereof, for cash, credit or any combination thereof, and
Secured Party may purchase all or any part of the Collateral at
public or, to the extent permitted by law, private, sale and, in
lieu of actual payment of such purchase price, may set off the
amount of such price against Debtor's obligations to Secured
Party. Subject to the Senior Security Interest or the Gulf
Coast Security Interest, as the case may be, the proceeds
realized from the sale of any Collateral shall be applied,
first, to the reasonable costs, expenses and attorneys' fees
incurred by Secured Party for collection and for acquisition,
completion, protection, removal, storage, sale and delivery of
the Collateral; second, to interest due upon any of Debtor's
obligations to Secured Party; and, third, to the principal of
Debtor's obligations to Secured Party. If any deficiency shall
arise, Debtor shall remain liable to Secured Party therefor.

All remedies hereunder are cumulative and not alternative.
The remedies set forth herein are in addition to all other
remedies available to Secured Party at law and in equity.

13. Attorney-in-Fact. Debtor hereby appoints the Secured
Party as Debtor's attorney-in-fact to do any and every act which
Debtor is obligated by this Security Agreement to do, and
exercise all rights of Debtor in the Collateral and to do all
other things necessary or desirable to preserve and protect the
Collateral and to protect the Secured Party's interest in said
Collateral. Anyone to whom the Secured Party represents its
authority and capacity to act as attorney-in-fact for Debtor
shall be entitled to rely on the Secured Party's sole
representation of such authority (without any further evidence
thereof), and Debtor agrees to hold harmless anyone taking any
action in reliance on the Secured Party's authority as Debtor's
attorney-in-fact.

14. Termination. On the payment in full of all of
Debtor's Indebtedness under the Transactional Documents, this
Security Agreement shall terminate, except that all
representations and warranties of Debtor contained herein shall
survive.

15. Notices. All notices, requests, demands, directions
and other communications required or permitted under the provi-
sions of this Security Agreement, or otherwise with respect
hereto, shall be in writing and shall be: (i) mailed by first
class registered or certified mail, return receipt requested,
postage prepaid; or (ii) sent by next day business courier (such
as Federal Express or the like); or (iii) personally delivered;
or (iv) transmitted by fax, telegram or telex (with a hard copy
to follow within twenty-four (24) hours by first class
registered or certified mail, return receipt requested, postage
prepaid, or by next day business courier [such as Federal
Express or the like], or by personal delivery), as follows:

if to the Debtor, to:

Jason IV Aviation, Inc.
4700 Airport Road
Cincinnati, Ohio 45226
Attn: Mr. Ken Allison
FAX (513) 871-1464

with copy to:

Simon, Peragine, Smith & Redfearn, L.L.P.
30th Floor Energy Centre
1100 Poydras Street
New Orleans, Louisiana 70163-3000
Attn: Guy W. Smith, Esq.
FAX (504) 569-2999

if to the Secured Party, to:

Aero Services International, Inc.
660 Newtown-Yardley Road
Newtown, Pennsylvania 18940
Attention: James Affleck
Facsimile: (215) 968-6010

with a copy to:

Eckert Seamans Cherin & Mellott
One South Market Square Building
213 Market Street, P. O. Box 1248
Harrisburg, Pennsylvania 17108-1248
Attention: Christopher M. Cicconi, Esquire
Facsimile: (717) 237-6019

16. Modification or Amendment. This Security Agreement
may not be changed, amended or modified in any way nor may any
right or remedy with respect hereto be waived or released,
except by an agreement in writing signed by the party against
whom enforcement of any change, amendment, modification, waiver
or release is sought.

17. Rights, Remedies and Powers. Each and every right,
remedy and power granted to the Secured Party hereunder (i)
shall be cumulative and in addition to any other right, remedy
or power held by the Secured Party or now or hereafter existing
in equity, at law, by statute or otherwise, or available to the
Secured Party under the Transactional Documents or any other
document executed in connection with the Indebtedness under the
Transactional Documents, and (ii) may be exercised independently
and as often and in such order as the Secured Party may deem
expedient. No failure on the part of the Secured Party to
exercise, and no delay in exercising, any right hereunder shall
operate as a waiver of such right; nor shall any single or
partial exercise of any right hereunder, or under the
Transactional Documents preclude any other or further exercise
of such right or the exercise of any other right.

18. Successors and Assigns. This Security Agreement shall
be binding on and inure to the benefit of the Secured Party and
Debtor and its successors and assigns, except that Debtor may
not assign or transfer any of its rights under this Security
Agreement without the prior written consent of the Secured
Party.

19. Illegality. In the event that any one or more of the
provisions contained in this Security Agreement should be
invalid, illegal or unenforceable in any respect, then the
validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby.

20. Controlling Law. This Security Agreement shall be
construed in accordance with and governed by the substantive law
of the State of Louisiana, including its statutes of limitation
but without regard to its rules governing conflict of laws.

21. Consent to Jurisdiction. Debtor hereby consents to
the jurisdiction and venue of the federal and state courts
located in, or having jurisdiction over, New Orleans, Louisiana,
in any action brought by or against Debtor, on, mentioning,
related to or connected with this Security Agreement.

22. Waiver of Jury Trial. Debtor hereby knowingly waives
the right to any jury trial in any action, proceeding, or
counterclaim arising out of or in any way connected with this
Security Agreement.

23. Section Headings. Section headings are inserted for
convenience only and shall not affect any construction or
interpretation of this Security Agreement.

24. Counterparts. This Security Agreement may be executed
in several counterparts, each of which will be deemed to be an
original, and in each case such counterparts will constitute one
and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this
Security Agreement to be
executed in their respective names as of the date hereinabove
written.

DEBTOR:
JASON IV AVIATION, INC.

Kennett L. Allison By: OrlandoE Panfile

Secretary Its: President

SECURED PARTY:
AERO SERVICES INTERNATIONAL, INC.

B. R. Adkins By: R. T. Brant

Assistant Secretary Its: Chairman & CEO

(10.75) Guaranty and Suretyship Agreement between Orlando E.
Panfile and Aero Services International, Inc. dated
May 10, 1996.

GUARANTY AND SURETYSHIP AGREEMENT

THIS GUARANTY AND SURETYSHIP AGREEMENT (this "Guaranty") is
made and entered into as of the 10th day of May, 1996, by and
between ORLANDO E. PANFILE ("Panfile") and AERO SERVICES
INTERNATIONAL, INC., a Louisiana corporation ("Aero").

WHEREAS, as of even date herewith, Panfile, Aero, and Jason
IV Aviation, Inc., a Louisiana corporation controlled by Panfile
("Jason IV"), have entered into that certain Transfer Agreement
(the "Asset Purchase Agreement"), pursuant to which Aero has
agreed to sell, transfer and assign certain rights and assets,
as more particularly described in the Asset Purchase Agreement,
to Jason IV; and

WHEREAS, as of even date herewith, in accordance with the
Asset Purchase Agreement, Jason IV has executed and delivered to
Aero (i) that certain promissory note in the original principal
amount of One Hundred Thousand Dollars ($100,000) (the "A Note")
and (ii) that certain promissory note in the original principal
amount of Five Hundred Thousand Dollars ($500,000) (the "B
Note"); and

WHEREAS, the A Note and the B Note, each of which is more
particularly described in the Asset Purchase Agreement, may,
hereinafter, be referred to, collectively as the "Notes"; and

WHEREAS, the execution, delivery and performance under the
Asset Purchase Agreement will be to the economic benefit of
Panfile; and

WHEREAS, as a condition for entering into the Asset
Purchase Agreement and accepting the Notes in accordance
therewith, Aero has required that Panfile execute and deliver
this Guaranty, pursuant to which Panfile guarantees and becomes
surety for the full and prompt payment of all amounts due and
payable or that may become due and payable by Jason IV to Aero
under the Notes and/or the indemnification provisions set forth
in Section 14.2 of the Asset Purchase Agreement; and

WHEREAS, as a further condition for entering into the Asset
Purchase Agreement and accepting the Notes in accordance
therewith, and as security for the full and complete performance
of his obligations under this Guaranty, Aero has required that
Panfile execute and deliver that certain pledge agreement of
even date herewith (the "Panfile Pledge Agreement"), pursuant to
which Panfile pledges all of the issued and outstanding stock in
Jason IV to Aero;

1. Recitals Incorporated. The parties hereto acknowledge
and agree that the foregoing recitals constitute a material part
of this Guaranty, and the same are expressly incorporated herein
by this reference.

2. Definitions. In addition to the terms defined
elsewhere in this Guaranty, unless otherwise stated in this
Guaranty, the following terms will have the meanings set forth
below. Capitalized terms not defined herein shall have the
meanings ascribed to such terms in the Asset Purchase Agreement.

3. Material Inducement. Panfile acknowledges and agrees
that Aero would not enter into the Asset Purchase Agreement or
accept the Notes thereunder without the execution of this
Guaranty Agreement by Panfile, and, further, that this Guaranty
constitutes a material inducement to Aero in respect of the
foregoing.

4. Guaranty and Suretyship.

(a) Panfile hereby agrees to absolutely,
unconditionally and irrevocably guaranty, and by these presents
does hereby absolutely, unconditionally and irrevocably
guarantee and become surety for (i) the full, prompt and
punctual payment (and not merely the collectibility) of the
Notes, and all amounts to come due under the Notes (and any note
or other instrument given in renewal, extension, modification,
increase or substitution of or for the Notes, or either of
them), whether at stated maturity, by extension, acceleration,
or otherwise, all according to the terms of the Notes and the
Asset Purchase Agreement, and (ii) the full, prompt and punctual
payment of Jason IV's obligations under the indemnification
provisions set forth in Section 14.2 of the Asset Purchase
Agreement, which guaranty and suretyship, subject only to the
provisions of Section 7 hereof, is unlimited in amount, scope
and recourse.

(b) This Guaranty shall be fully enforceable,
notwithstanding any right or power of Jason IV or anyone else,
to assert any claim or defense as to the validity or
enforceability of the Notes and/or the Asset Purchase Agreement,
or with respect to any amounts due, thereunder, and no such
claim or defense shall impair or affect the obligations of
Panfile hereunder. All sums payable by Panfile hereunder,
whether of principal, interest, fees, penalties, expenses or
other charges, shall be paid in full, without set off or
counterclaim or any deduction or withholding whatsoever.

(c) This Guaranty shall survive, and Panfile's
obligations and liabilities hereunder shall remain unaffected
by, (i) the dissolution of Jason IV, whether voluntary or
involuntary, and/or (ii) any changes in ownership of Jason IV.

5. Continuing Guaranty and Suretyship. THIS IS A CONTINUING
GUARANTY AND SURETYSHIP UNDER WHICH PANFILE GUARANTEES PAYMENT (AND NOT
MERELY THE COLLECTIBILITY) OF JASON IV'S PRESENT AND FUTURE OBLIGATIONS AND
INDEBTEDNESS UNDER THE NOTES AND THE INDEMNIFICATION PROVISIONS SET FORTH
IN SECTION 14.2 OF THE ASSET PURCHASE AGREEMENT IN FAVOR OF AERO ON A
CONTINUING BASIS. Panfile's obligations and liability under this
Guaranty shall be open and continuous in effect. Panfile
intends to, and does hereby guarantee, at all times the prompt
and punctual payment (and not merely the collectibility),
performance and satisfaction of the Notes and the Asset Purchase
Agreement (including the payment of all amounts to come due
thereunder) in favor of Aero. Notwithstanding any provisions to
the contrary contained in this Guaranty or elsewhere, this
Guaranty shall be of no further force or effect when all amounts
due under, or on account of, the Notes and the Asset Purchase
Agreement, have been fully paid.

6. Direct Guaranty and Suretyship. The liability of
Panfile under this Guaranty, shall be primary, direct and
immediate and not conditional or contingent on pursuit by Aero
of any remedies it may have against Jason IV, its successors or
assigns, with respect to the Notes and/or the Asset Purchase
Agreement, whether pursuant to the terms thereof or by law.
Without limiting the generality of the foregoing, Aero shall not
be required to make any demand on Jason IV, or otherwise pursue
or exhaust its remedies against Jason IV, before, simultaneously
with, or after enforcing its rights and remedies hereunder
against Panfile. Any one or more successive and/or concurrent
actions may be brought hereon against Panfile either in the same
action, if any, brought against Jason IV, or in a separate
action, as often as Aero may deem advisable.

7. Effect of Pledge Agreement. Until such time as Aero
shall have (i) a perfected first priority security interest in
the Pledged Shares (as defined in the Asset Purchase Agreement),
or (ii) a perfected security interest in the Pledged Shares
subordinate only to the interest of either the Senior Lender (as
defined in the Asset Purchase Agreement), or Gulf Coast Bank (as
defined in the Asset Purchase Agreement), this Guaranty,
Panfile's obligations hereunder, and Aero's recourse and
remedies hereunder and with respect hereto, shall be unlimited
in scope and effect. At such time as Aero shall have (i) a
perfected first priority security interest in the Pledged
Shares, or (ii) a perfected security interest in the Pledged
Shares subordinate only to the interest of either the Senior
Lender or Gulf Coast Bank, Aero's remedies and recourse
hereunder shall be limited to Aero's recourse and remedies under
the Panfile Pledge Agreement. The foregoing provisions of this
Section 7 notwithstanding, the limitations set forth in this
Section 7 are not intended to limit, reduce, qualify, diminish
or otherwise affect (and shall not be construed or deemed to
limit, reduce, qualify, diminish or otherwise affect) Aero's
rights, remedies or recourse against Purchaser and/or Panfile
under the Asset Purchase Agreement, or any of the other
documents or instruments executed by Purchaser and/or Panfile,
as the case may be, in conjunction therewith.

8. Default. Should, for any reason whatsoever, any non-
payment, or other default or failure to perform by Jason IV
under the Notes or the Asset Purchase Agreement occur or exist,
Panfile shall immediately pay or perform, or cause to be paid or
performed the each and all such obligations.

9. Panfile's Waivers. Panfile hereby unconditionally and
irrevocably waives each and all of the following:

(a) Notice of Aero's acceptance of this Guaranty;

(b) Notice of the existence or creation of the Notes
and the Asset Purchase Agreement;

(d) Presentment and demand for payment of the Notes,
or with respect to any amounts due under Notes
and/or the Asset Purchase Agreement, notice of
dishonor, and all other notices whatsoever,
including notice of nonpayment, notice of
intention to accelerate, notice of acceleration,
protest and notice of protest, notice of
collection or institution of any suit or other
action by Aero in collection of the Notes, or
any amounts due under the Notes and/or the Asset
Purchase Agreement, including any notice of
default in payment of the Notes, or any amounts
due under the Notes and/or the Asset Purchase
Agreement, or other notice to, or demand for
payment thereof;

(e) Any right to require Aero to notify Panfile of
any nonpayment relating to any collateral
directly or indirectly securing the Notes, or
any amounts due under the Notes and/or the
indemnification provisions set forth in Section
14.2 of the Asset Purchase Agreement, or notice
of any action or non-action on the part of Jason
IV, Aero or any other person, or other amounts
due under the Notes and/or the indemnification
provisions set forth in Section 14.2 of the
Asset Purchase Agreement, or notice of the
creation of any new or additional amounts
thereto subject to this Guaranty;

(f) Any rights to demand or require collateral
security from Jason IV or any other person as
provided under applicable law or otherwise;

(g) All diligence in collection or protection of or
realization on the Notes, or with respect to any
amounts due under the Notes and/or the Asset
Purchase Agreement, or any collateral or
enforcing any remedy available to Aero;

(h) Any present or future "one action" or
"antideficiency" law or any other law which may
prevent Aero from bringing any action, including
a claim for deficiency against Panfile, before
or after Aero's commencement or completion of
any foreclosure action or any action in lieu of
foreclosure;

(i) Any right of Panfile to discharge on Panfile's
giving notice to Aero to proceed against Jason
IV for collection on the failure of Jason IV to
make any required payment, and the failure or
refusal of Aero to thereupon commence an action
or foreclose on any collateral within any
specified time period or at any time;

(j) Any disability or other defense of Jason IV or
any other person;

(k) All procedural errors and defects in any
proceeding instituted or maintained by Aero in
connection with the Notes and/or the Asset
Purchase Agreement;

(l) Any and all present and future moratorium laws
and any and all present and future laws which
(i) exempt all or any part of the collateral
pledged or assigned to Aero pursuant to any
document executed in connection with the Notes
or the Asset Purchase Agreement, or other
amounts due under the Notes and/or the Asset
Purchase Agreement, from attachment, levy,
foreclosure or sale under execution; or (ii)
provide for any stay of execution, marshalling
of assets, exemption from civil process,
redemption, extension of time for payment, or
valuation or appraisement of any part of the
collateral referred to in the Notes, the Asset
Purchase Agreement or the other documents or
instruments referenced therein.

Panfile warrants and agrees that each of the waivers set
forth above is made with Panfile's full knowledge of its
significance and consequences and that, under the circumstances,
such waivers are reasonable and not contrary to public policy or
law. If any such waiver is determined to be contrary to any
applicable law or public policy, such waiver shall be effective
only to the extent permitted by law.

10. Panfile's Waiver of Certain Rights. Panfile hereby
waives any claim, remedy or other right Panfile may now possess
or hereafter acquire against Jason IV or any other person
arising from, or in any way related to, the existence or perfor-
mance under this Guaranty, including, without limitation, any
right of subrogation, reimbursement, exoneration, contribution,
or indemnification against Jason IV or any other person, or any
right to participate in any collateral securing Jason IV's
indebtedness or other obligations to Aero, regardless of whether
such claim, remedy, or right arises in equity, under contract,
statute, common law or otherwise.

11. Panfile's Receipt of Payments. If Panfile should for
any reason whatsoever receive any payments from Jason IV that
Jason IV may owe to Panfile, Panfile agrees to accept such
payments in trust for and on behalf of Aero, advising Jason IV
of such fact. Panfile further unconditionally agrees to
immediately deliver any such funds so received to Aero, with
such funds being held by Panfile, over any interim period, in
trust for Aero. In the event that Panfile should for any reason
whatsoever receive any such funds from Jason IV, and Panfile
should deposit such funds in one or more of Panfile's deposit
accounts, no matter where located, Aero shall have the right to
attach the amount of funds so received, in Panfile's deposit
accounts in which such funds were deposited, whether or not such
funds were commingled with other monies of Panfile, and whether
or not such funds then remain on deposit in such an account or
accounts.

12. Rights of Modification. Panfile expressly agrees,
consents to, and acknowledges that Aero may, at its sole option
and in its sole and absolute discretion, at any time, and from
time to time, without the consent of or notice to Panfile, or to
any other party, and without incurring any responsibility to
Panfile or to any other party, and without impairing or
releasing any of Panfile's obligations or liabilities under this
Guaranty:

(a) Waive compliance with, or any defaults under, or
grant any indulgences with respect to, the
Notes, the Asset Purchase Agreement or any
documents or instruments executed in connection
therewith;

(b) Sell, exchange, release (with or without
substitution), surrender, realize on, or
otherwise deal with, in any reasonable manner
and in any order, any collateral directly or
indirectly securing payment of the Notes, or any
amounts due under the Notes and/or the Asset
Purchase Agreement;

(c) Alter, renew, extend, accelerate, modify, amend
or otherwise change the manner, place, time
and/or other terms of payment or other terms of
the Notes, the Asset Purchase Agreement, or any
part thereof, including any increase or decrease
in the rate or rates of interest under the
Notes, or with respect to any amounts due under
the Notes and/or the Asset Purchase Agreement;

(d) Accept partial payments on account of the Notes,
or any amounts due under the Notes and/or the
Asset Purchase Agreement;

(e) Settle or compromise with respect to the Notes,
or any amounts due under the Notes and/or the
Asset Purchase Agreement;

(f) Demand, take or accept any other collateral
security or guaranty for the Notes, or any
amounts due under the Notes and/or the Asset
Purchase Agreement from any party;

(g) Enter into, deliver, modify, amend, or waive
compliance with (or any defaults under), the
Notes, or any instrument or arrangement
evidencing, securing or otherwise affecting all
or any part of the Notes, or any amounts due
under the Notes and/or the Asset Purchase
Agreement;

(h) Agree that additional makers, endorsers,
guarantors or sureties may become parties to the
Notes;

(i) Proceed directly against Panfile to collect all
amounts due under this Guaranty without
proceeding against or joining Jason IV or any
other person or entity, or proceeding first,
simultaneously or thereafter against any
collateral or marshalling assets with respect
thereto in collection of the Notes, or any
amounts due under the Notes and/or the Asset
Purchase Agreement;

(j) Assign or otherwise transfer the Notes, or this
Guaranty or any interest therein or herein;
and/or

(k) Deal in all respects with Jason IV as if this
Guaranty were not in effect.

13. No Impairment of Panfile's Obligations. No course of
dealing between Aero and Jason IV, nor any failure or delay on
the part of Aero to exercise any of Aero's rights and remedies
under the Notes, the Asset Purchase Agreement or the Security
Agreement, shall have the effect of impairing or releasing
Panfile's obligations and liabilities to Aero, or of waiving any
of Aero's rights and remedies under this Suretyship Agreement or
otherwise. Any partial exercise of any rights and remedies
granted to Aero shall, furthermore, not constitute a waiver of
any of Aero's other rights and remedies; it being Panfile's
intent and agreement that Aero's rights and remedies shall be
cumulative in nature. A waiver or forbearance on the part of
Aero as to one event of default shall not constitute a waiver or
forbearance as to any other default.

14. No Release of Panfile. Panfile's obligations and
liabilities under this Guaranty shall not be released, impaired,
reduced, or otherwise affected by, and shall continue in full
force and effect notwithstanding the occurrence of any event,
including, without limitation, any one or more of the following
events:

(a) The death, insolvency, bankruptcy, arrangement,
adjustment, composition, liquidation,
disability, dissolution, or lack of authority of
Jason IV (or any person acting on Jason IV's
behalf), of Panfile, or of any other party, as
the case may be;

(b) Any payment by Jason IV or any other party, to
Aero, that is held to constitute a preferential
transfer or a fraudulent conveyance under any
applicable law, or any such amounts or payment
which, for any reason, Aero is required to
refund or repay to Jason IV or to any other
person;

(d) The failure of Aero to properly obtain, perfect
or preserve any security interest in, or lien
on, any collateral securing the Notes;

(e) The failure of Aero to exercise diligence,
commercial reasonableness or reasonable care in
the preservation, enforcement or sale of any
collateral securing the Notes, or any amounts
due under the Notes and/or the Asset Purchase
Agreement;

(f) Any other act or omission of Aero or Jason IV
which would otherwise constitute or create a
legal or equitable defense in favor of Panfile.

The obligations of Panfile under this Guaranty shall be
absolute and unconditional, irrespective of the genuineness,
validity, regularity or enforceability of the Notes, or any
security given therefor or in connection therewith or any other
circumstances which might otherwise constitute a legal or
equitable discharge of a surety or guarantor.

15. Automatic Reinstatement. This Guaranty and Panfile's
obligations and liabilities hereunder shall continue to be
effective, and/or shall automatically and retroactively be
reinstated, if a release or discharge has occurred, or if at any
time, any payment or part thereof to Aero with respect to the
Notes or the Asset Purchase Agreement is rescinded or must
otherwise be restored by Aero pursuant to any insolvency,
bankruptcy, reorganization, receivership, or any other debt
relief granted to Jason IV. In the event that Aero must rescind
or restore any payment received in total or partial satisfaction
of the Notes, or with respect to any amounts due under the Notes
and/or the Asset Purchase Agreement, any prior release or dis-
charge from the terms of this Guaranty given to Panfile shall be
without effect, and this Guaranty and Panfile's obligations and
liabilities hereunder shall automatically and retroactively be
renewed and/or reinstated and shall remain in full force and
effect to the same degree and extent as if such a release or
discharge had never been granted. It is the intention of Aero
and Panfile that Panfile's obligations and liabilities hereunder
shall not be discharged except by Panfile's full and complete
performance and satisfaction of such obligations and
liabilities, and then only to the extent of such performance.

16. Representations and Warranties by Panfile. Panfile
represents and warrants to Aero, with the understanding that
Aero is relying thereon, that at the time of execution hereof,
and during the effectiveness of this Guaranty, and until Panfile
has received written notice of the cancellation of this Guaranty
from Aero:

(a) Panfile has a financial interest in Jason IV,
and in Jason IV's purchase of the Purchased
Assets (as defined in the Asset Purchase
Agreement);

(b) Panfile has examined the Asset Purchase
Agreement, the Notes and all other documents and
instruments executed in connection, and approves
the same;

(d) This Guaranty and Panfile's execution, delivery
and performance hereunder are not in violation
of any laws and will not result in a default
under any contract, agreement, or instrument to
which Panfile is a party, or by which Panfile or
Panfile's property may be bound;

(e) Panfile has agreed and consented to execute this
Guaranty and to guarantee payment (and not
merely the collectibility) of the Notes, at the
request of Jason IV, and not at the request of
Aero;

(f) All financial accommodations by Aero to Jason
IV, including but not limited to the Notes, or
any amounts due under the Notes and/or the Asset
Purchase Agreement, will be to the financial
interest and advantage of Panfile;

(g) This Guaranty, when executed and delivered to
Aero, will constitute a valid, legal and binding
obligation of Panfile, enforceable in accordance
with its terms;

(h) Panfile has established adequate means of ob-
taining information from Jason IV on a continu-
ing basis regarding Jason IV's financial
condition;

(i) Aero has made no representations to Panfile as
to the credit worthiness of Jason IV.

17. Additional Obligations of Panfile. So long as this
Guaranty remains in effect, and until such time as Aero shall
have a first priority security interest in the Pledged Shares
subordinate to the interest of no other party, or (i) a Senior
Lender is in place, (ii) Purchaser's indebtedness to Gulf Coast
Bank has been satisfied and retired, and (iii) pursuant to the
Panfile Pledge Agreement, Aero shall have a security interest in
the Pledged Shares second in priority only to the security
interest therein of the Senior Lender (if such Senior Lender
requires a pledge of the Pledged Shares), Panfile has not, and
will not, without Aero's prior written consent, sell, lease,
assign, pledge, hypothecate, encumber, transfer or otherwise
dispose of all or substantially all of Panfile's assets, which
consent shall not be unreasonably withheld. Panfile agrees to
keep adequately informed of any facts, events or circumstances
which might in any way affect Panfile's risks under this
Guaranty.

18. Additional Documents; Financial Statements. On the
reasonable request of Aero, Panfile will, at any time, and from
time to time, execute and deliver to Aero any and all such
financial instruments and documents, and shall supply such
additional information, as may be necessary or advisable in the
opinion of Aero to obtain the full benefits of this Guaranty.
Panfile further agrees to provide Aero with such financial
statements and other related information, including, without
limitation, personal financial statements and personal income
tax returns, at such frequencies and in such detail as Aero may
reasonably request.

19. Assignment of the Notes. This Guaranty is for the
benefit of Aero and for such other person or persons as may from
time to time become or be the holder(s) of the Notes. This
Guaranty shall be transferable and negotiable with the same
force and effect and to the same extent as the Notes, it being
understood, acknowledged and agreed to by Panfile that, on any
transfer or assignment of the Notes, the holder thereof shall
have all of the rights and remedies granted to Aero under this
Guaranty. Panfile further agrees that on any transfer of the
Notes, Aero may transfer and deliver any and all collateral
securing repayment thereof (including, but not limited to, any
collateral provided by Panfile) to the transferee, and such
collateral shall secure the Notes and any amounts due under the
Mortgage in favor of such a transferee. Panfile additionally
agrees that, after any such transfer or assignment has taken
place, Aero shall be fully discharged from any and all liability
and responsibility to Jason IV and Panfile with respect to such
collateral, and the transferee thereafter shall be vested with
all the powers, rights and responsibilities with respect to such
collateral.

20. Notices. All notices, requests, demands, directions
and other communications required or permitted under the provi-
sions of this Pledge Agreement, or otherwise with respect
hereto, shall be in writing and shall be: (i) mailed by first
class registered or certified mail, return receipt requested,
postage prepaid; or (ii) sent by next day business courier (such
as Federal Express or the like); or (iii) personally delivered;
or (iv) transmitted by fax, telegram or telex (with a hard copy
to follow within twenty-four (24) hours by first class
registered or certified mail, return receipt requested, postage
prepaid, or by next day business courier [such as Federal
Express or the like], or by personal delivery), as follows:

if to Aero, to:

Aero Services International, Inc.
660 Newton-Yardley Road
Newton, Pennsylvania 18940
Attention: James Affleck
Facsimile: (215) 968-6010

with a copy to:

Eckert Seamans Cherin & Mellott
One South Market Square Building
213 Market Street, P. O. Box 1248
Harrisburg, PA 17108-1248
Attention: Christopher M. Cicconi, Esquire
Facsimile: (717) 237-6019

if to Panfile, to:

Orlando E. Panfile
96 Buckhaven Hill
Upper Saddle River, New Jersey 07458
Facsimile:

with a copy to:

Simon, Peragine, Smith & Redfearn, L.L.P.
30th Floor Energy Centre
1100 Poydras Street
New Orleans, Louisiana 70163-3000
Attention: Guy W. Smith, Esq.
Facsimile: (504) 569-2999

21. Additional Guaranty or Surety. In the event Panfile
may, in the future, grant one or more additional guaranties of
the Notes, or with respect to any amounts due under the Notes
and/or the Asset Purchase Agreement, the execution of any
additional guaranties on the part of Panfile will not be
construed as a cancellation of this Guaranty; it being Panfile's
full intent and agreement that this Guaranty shall remain in
full force and effect and shall be cumulative in nature and
effect.

22. Waiver of Trial by Jury. Panfile hereby waives trial
by jury in any action or proceeding to enforce this Guaranty.
It is agreed and understood that this wavier constitutes a
waiver of trial by jury of all claims against all parties to
such actions or proceedings, including claims against parties
who are not parties to this Guaranty. This waiver is knowingly,
willingly and voluntarily made by Panfile, and Panfile hereby
acknowledges that no representations of fact or opinion have
been made by any individual to induce this waiver of trial by
jury or to in any way modify or nullify its effect.

23. Confession of Judgment. IF ANY DEFAULT UNDER THE
NOTES OR UNDER THE INDEMNIFICATION PROVISIONS SET FORTH IN
SECTION 14.2 OF THE ASSET PURCHASE AGREEMENT SHALL OCCUR, THEN
PANFILE WILL KEEP AND OBSERVE THE SAME WITHIN THE TIME AND ON
THE TERMS THAT JASON IV AGREED TO KEEP AND PERFORM SUCH TERMS OR
COVENANTS, AND ON PANFILE'S FAILURE TO SO KEEP AND PERFORM SUCH
TERMS OR COVENANTS, IN ADDITION TO ALL OTHER REMEDIES PROVIDED
HEREUNDER, UNDER THE NOTES, OR THE ASSET PURCHASE AGREEMENT, OR
ANY OTHER DOCUMENTS EVIDENCING OR SECURING INDEBTEDNESS OF JASON
IV TO AERO, OR, AT LAW OR EQUITY, AND WITHOUT PRIOR NOTICE,
PANFILE AUTHORIZES AND EMPOWERS THE PROTHONOTARY, CLERK OR ANY
ATTORNEY OF ANY COURT OF RECORD WITHIN THE COMMONWEALTH OF
PENNSYLVANIA, THE UNITED STATES OR ELSEWHERE TO APPEAR FOR AND
CONFESS JUDGMENT AGAINST HIM IN FAVOR OF AERO, ITS SUCCESSORS OR
ASSIGNS, FOR SUCH SUMS AS SHALL HAVE BECOME DUE UNDER THIS
GUARANTY, TOGETHER WITH ATTORNEYS' COMMISSION OF FIVE PERCENT
(5%) FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE
THOUSAND DOLLARS ($5,000.00), WITH OR WITHOUT DECLARATION FILED,
WITH INTEREST AND COSTS OF SUIT, RELEASE OF ERROR, WITHOUT STAY
OF EXECUTION ON WHICH REAL OR PERSONAL PROPERTY MAY BE SOLD
WITHOUT DELAY AS PROVIDED BY LAW OF THE RULES OF CIVIL PROCEDURE
GOVERNING THE ENFORCEMENT OF JUDGMENTS, AND PANFILE WAIVES THE
RIGHT OF INQUISITION OF ANY REAL ESTATE THAT MAY BE LEVIED ON TO
COLLECT THE AMOUNT DUE UNDER A JUDGMENT OBTAINED BY VIRTUE
HEREOF, AND DOES HEREBY VOLUNTARILY CONDEMN THE SAME, AND
AUTHORIZES THE PROTHONOTARY OR CLERK TO ENTER THE WRIT OF
EXECUTION OF SAID VOLUNTARY CONDEMNATION, AND AGREES THAT SAID
REAL ESTATE MAY BE SOLD ON A WRIT OF EXECUTION; AND ALSO WAIVES
AND RELEASES ALL RELIEF FROM ANY AND ALL APPRAISEMENT, STAY,
EXEMPTION OR HOMESTEAD LAWS OF ANY STATE, NOW IN FORCE OR
ENACTED IN THE FUTURE. IF A TRUE COPY OF THIS GUARANTY SHALL BE
FILED IN ANY SUCH ACTION, VERIFIED BY AFFIDAVIT OF THE HOLDER OF
THIS GUARANTY, OR SOMEONE ACTING ON THE HOLDER'S BEHALF, IT WILL
NOT BE NECESSARY TO FILE THE ORIGINAL GUARANTY AS A WARRANT OF
ATTORNEY, ANY RULE OF COURT TO THE CONTRARY NOTWITHSTANDING. NO
SINGLE EXERCISE OF THE FOREGOING WARRANT AND POWER TO CONFESS
JUDGMENT SHALL BE DEEMED TO EXHAUST THE POWER, BUT IT SHALL
CONTINUE UNDIMINISHED AND MAY BE EXERCISED FROM TIME TO TIME AS
OFTEN AS AERO SHALL ELECT, UNTIL ALL SUMS PAYABLE BY PANFILE
HAVE BEEN PAID IN FULL.

THE PRECEDING PARAGRAPH SETS FORTH A WARRANT OF AUTHORITY
FOR AN ATTORNEY, PROTHONOTARY OR CLERK TO CONFESS JUDGMENT
AGAINST PANFILE. IN GRANTING THIS WARRANT OF ATTORNEY TO
CONFESS JUDGMENT, PANFILE HEREBY KNOWINGLY, INTENTIONALLY AND
VOLUNTARILY, AND, AFTER CONSULTATION WITH LEGAL COUNSEL OF HIS
OWN CHOOSING, UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS HE HAS
OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY FOR HEARING UNDER
THE CONSTITUTIONS AND LAWS OF THE UNITED STATES OF AMERICA, THE
STATE OF LOUISIANA, AND ALL OTHER APPLICABLE JURISDICTIONS.

PANFILE UNDERSTANDS THE MEANING AND EFFECT OF THE WARRANT
OF ATTORNEY TO CONFESS JUDGMENT CONTAINED IN THE FOREGOING
PARAGRAPHS. SPECIFICALLY, PANFILE UNDERSTANDS, AMONG OTHER
THINGS, THAT (i) PANFILE IS RELINQUISHING THE RIGHT TO HAVE
NOTICE EXCEPT AS EXPRESSLY PROVIDED HEREIN, AN OPPORTUNITY TO BE
HEARD, AND THE RIGHT TO HAVE THE BURDEN OF PROOF OF DEFAULT REST
ON AERO PRIOR TO THE ENTRY OF JUDGMENT, (ii) THE ENTRY OF
JUDGMENT MAY RESULT IN A LIEN ON PANFILE'S PROPERTY, (iii)
PANFILE'S PROPERTY MAY BE TAKEN TO PAY THE PRINCIPAL AMOUNT,
INTEREST, LATE CHARGES, COSTS AND ATTORNEYS' FEES AS PROVIDED
ABOVE.

TO THE EXTENT PERMITTED BY LAW, ACTING UNDER REPRESENTATION
OF COUNSEL, PANFILE HEREBY IRREVOCABLY WAIVES ANY DUE PROCESS
RIGHTS TO PREJUDGMENT NOTICE AND HEARING AND/OR POST-SEIZURE
RELIEF ARISING IN CONNECTION WITH, OR IN ANY WAY RELATED TO,
AERO'S RIGHT TO CONFESS JUDGMENT AGAINST PANFILE AS HEREIN
PROVIDED, AND PANFILE ACKNOWLEDGES AND UNDERSTANDS THAT BY
WAIVING THESE RIGHTS, PANFILE HAS CONSENTED TO ALLOW AERO TO
ENTER A COURT JUDGMENT AGAINST PANFILE AND TO SEIZE PANFILE'S
PROPERTY WITHOUT PRIOR NOTICE OR HEARING IN ORDER TO SATISFY THE
OBLIGATIONS OWED BY PANFILE TO AERO.

PANFILE HEREBY KNOWINGLY AND IRREVOCABLY WAIVES TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE, OR OTHERWISE
INVOLVING, THIS GUARANTY. PANFILE FURTHER IRREVOCABLY CONSENTS
TO THE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT
SITTING IN OR FOR BUCKS COUNTY, PENNSYLVANIA.

24. Consent to Jurisdiction. Panfile hereby irrevocably
submits to the jurisdiction of the federal and state courts
sitting in or for Bucks County, Pennsylvania.

25. Panfile Represented by Counsel. Panfile has been
represented in the signing of this Guaranty, and in the making
of all waivers, consents, agreements and covenants herein
contained, by independent legal counsel, selected by Panfile.
Panfile has had the opportunity to discuss this Guaranty, and
all waivers, consents, agreements and covenants herein
contained, with such counsel, and Panfile understands the
significance and the consequences thereof, and acknowledges the
reasonableness of the same.

26. Cumulative Rights and Remedies. All rights and
remedies afforded to Aero by reason of this Guaranty, the Notes
and the Asset Purchase Agreement, or by law are separate and
cumulative and the exercise of one shall not in any way limit or
prejudice the exercise of any other such rights or remedies. No
delay or omission by Aero in exercising any such right or remedy
shall operate as a waiver thereof. No waiver of any rights and
remedies hereunder, and no modification or amendment hereof,
shall be deemed made by Aero unless in writing and duly signed
by an authorized officer of Aero. Any such written waiver shall
apply only to the particular instance specified therein and
shall not impair the further exercise of such right or remedy or
of any other right or remedy of Aero and no single or partial
exercise of any right or remedy hereunder shall preclude other
or further exercise thereof or any other right or remedy.

27. Miscellaneous Provisions. The following miscellaneous
provisions are a part of this Guaranty:

(a) Amendment. No amendment, modification, consent
or waiver of any provision of this Guaranty, and no consent to
any departure by Panfile therefrom, shall be effective unless
the same shall be in writing signed by Panfile and a duly autho-
rized officer of Aero, and then shall be effective only as to
the specific instance and for the specific purpose for which
given.

(b) Caption Headings. Caption headings of the sec-
tions of this Guaranty are for convenience purposes only and are
not to be used to interpret or to define the provisions hereof.

(c) Gender and Form. In this Guaranty, whenever the
context so requires, the reference to any gender applies to all
genders, and the singular includes the plural and the plural
includes the singular.

(d) Governing Law. This Guaranty shall be governed
and construed in accordance with the substantive law of the
Commonwealth of Pennsylvania, including its statutes of
limitation but without regard to its rules concerning conflict
of laws.

(e) Severability. If any provision of this Guaranty
is held to be illegal, invalid or unenforceable under present or
future laws during the effectiveness of this Guaranty, such
provision shall be fully severable; and, this Guaranty shall be
construed and enforceable as if the illegal, invalid or
unenforceable provision had never comprised a part of it, and
the remaining provisions of this Guaranty shall remain in full
force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom.
Further, in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as a part of this
Guaranty, a provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and legal,
valid and enforceable.

(f) Successors and Assigns. This Guaranty shall
inure to the benefit of, and be enforceable by, Aero and its
successors and assigns, and shall be binding on, and enforceable
against, Panfile and Panfile's successors and assigns.

PANFILE ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS AND TO HAVING BEEN REPRESENTED
BY COUNSEL IN THE REVIEW OF ITS TERMS. IN ADDITION, PANFILE
UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE ON PANFILE'S
EXECUTION AND DELIVERY OF THIS GUARANTY TO AERO AND THAT THIS
GUARANTY WILL CONTINUE UNTIL TERMINATED. NO FORMAL ACCEPTANCE
BY AERO IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE.

IN WITNESS WHEREOF, the undersigned Panfile, intending to
be legally bound hereby, has executed this Guaranty as of the
date first above written.

Kerry Wilt Orlando E. Panfile
Witness Orlando E. Panfile

(10.76) Pledge Agreement between Orlando E. Panfile and Aero
Services International Inc. dated May 10, 1996.

PLEDGE AGREEMENT

THIS PLEDGE AGREEMENT (this "Pledge Agreement") is made and
entered into as of the 10th day of May, 1995, by and between
ORLANDO E. PANFILE ("Panfile") and AERO SERVICES INTERNATIONAL,
INC., a Louisiana corporation ("Aero").

WHEREAS, the A Note and the B Note, each of which is more
particularly described in the Asset Purchase Agreement, may,
hereinafter, be referred to, collectively as the "Notes"; and

WHEREAS, the execution, delivery and performance under the
Asset Purchase Agreement will be to the economic benefit of
Panfile; and

WHEREAS, as a condition for entering into the Asset
Purchase Agreement and accepting the Notes in accordance
therewith, Aero has required that Panfile execute and deliver
that certain guaranty and suretyship agreement or even date
herewith (the Panfile Guaranty), pursuant to which Panfile
guarantees and becomes surety for the full and prompt payment of
all amounts due and payable or that may become due and payable
by Jason IV to Aero under the Notes and/or the indemnification
provisions set forth in Section 14.2 of the Asset Purchase
Agreement; and

WHEREAS, as a further condition for entering into the Asset
Purchase Agreement and accepting the Notes in accordance
therewith, and as security for the full and complete performance
of his obligations under this Panfile Guaranty, Aero has
required that Panfile execute and deliver this pledge agreement,
pursuant to which Panfile pledges all of the issued and
outstanding stock in Jason IV to Aero;

1. Recitals Incorporated. The parties hereto acknowledge
and agree that the foregoing recitals constitute a material part
of this Pledge Agreement, and the same are expressly
incorporated herein by this reference.

2. Definitions. In addition to the terms defined
elsewhere in this Pledge Agreement, unless otherwise stated in
this Pledge Agreement, the following terms will have the
meanings set forth below. Capitalized terms not defined herein
shall have the meanings ascribed to such terms in the Asset
Purchase Agreement.

3. Material Inducement. Panfile acknowledges and agrees
that Aero would not enter into the Asset Purchase Agreement or
accept the Notes thereunder without the execution of this Pledge
Agreement by Panfile, and, further, that this Pledge Agreement
constitutes a material inducement to Aero in respect of the
foregoing.

4. Effectiveness and Priority. Panfile has represented
to Aero that, as of the date hereof, the Pledged Shares are
subject to a prior pledge to Gulf Coast Bank (as defined in the
Asset Purchase Agreement). Panfile and Aero acknowledge and
agree that this Pledge Agreement shall be effective on the first
to occur of (i) the date on which a Senior Lender (as defined in
the Asset Purchase Agreement) has provided financing to
Purchaser as contemplated in the Asset Purchase Agreement, (ii)
the date on which Gulf Coast Bank has consented to Aero's second
priority security interest in the Pledged Shares, or (iii) the
one hundred twentieth (120th) day after the Closing Date. The
foregoing notwithstanding, unless Panfile shall demonstrate to
Aero's reasonable satisfaction, within ten (10) days from the
date hereof, that there exists a current, perfected security
interest in the Pledged Shares in favor of Gulf Coast Bank, this
Pledge Agreement shall be effective as of the date hereof. On
the effectiveness of this Pledge Agreement, Aero shall have a
security interest in the Pledged Shares which shall be
subordinate in priority only to (i) the Senior Lender (but only
if and to the extent that the Senior Lender requires a pledge of
the Pledged Shares) or (ii) Gulf Coast Bank (but only if and to
the extent that Gulf Coast Bank has a perfected security
interest in the Pledged Shares).

5. Pledge of Shares. Panfile hereby pledges and assigns
to Aero, and grants to Aero a continuing lien and security
interest in all of the issued and outstanding shares of Jason IV
stock now or hereafter registered in the name of Panfile, as
represented by the certificates specified on Exhibit A hereto,
as modified or amended from time to time (the "Pledged Shares"),
and any proceeds thereof and all dividends and other payments
and distributions hereafter made upon or with respect to the
Pledged Shares and any proceeds thereof (such amounts being
collectively called herein the "Proceeds," and the Pledged
Shares and the Proceeds are hereinafter referred to,
collectively, as the "Collateral"), as security for the due and
punctual payment of all amounts due and payable or that may
become due and payable by Jason IV to Aero under the Notes
and/or the indemnification provisions set forth in Section 14.2
of the Asset Purchase Agreement (collectively, the
"Obligations"). Panfile shall deliver, or cause to be
delivered, to Aero all of the original certificate(s) evidencing
ownership of the pledged shares, together with stock powers duly
executed in blank. If, during the term of this Pledge
Agreement, any new or additional shares of capital stock of
Jason IV, whether created in respect of the Pledged Shares, by
stock split, stock dividend, reclassification, readjustment, or
otherwise, are issued to Panfile, such new or additional shares
shall, without any further act or deed, become Pledged Shares
and shall be delivered to Aero to be held in the same manner and
on the same terms and conditions as the shares originally
deposited and pledged pursuant to this Pledge Agreement.
Panfile hereby appoints Aero as Panfile's attorney-in-fact to
arrange for the transfer of the Pledged Shares on the books of
Aero in accordance with the terms of this Pledge Agreement. The
aforesaid appointment constitutes a power coupled with an
interest and shall not be revocable until payment in full of the
Obligations.

6. Deposit and Holding of Pledged Shares. At such time
as this Pledge Agreement is effective in accordance with Section
4 hereof, Purchaser shall cause the Pledged Shares to (i) be
delivered to Aero to be held as security for the Obligations in
accordance with the provisions of this Agreement, or (ii) to be
held by the Senior Lender or Gulf Coast Bank, as the case may
be, in trust for Aero subject to such party's perfected security
interest therein. In furtherance of the foregoing, Panfile
shall direct the Senior Lender or Gulf Coast Bank, as the case
may be, that, so long as there is an outstanding balance under
the Notes, or the Panfile Guaranty, the Pledged Shares shall not
be released to Panfile or to any other party, but, on
satisfaction of the obligations of Panfile and/or Jason IV to
such secured party, the Pledged Shares shall be released to
Aero.

7. Ownership of Pledged Shares. So long as no Event of
Default (as defined in Section 11 hereof) has occurred and is
continuing, Panfile shall be entitled to all voting rights and
all other incidents of ownership with respect to the Pledged
Shares. On the occurrence and continuance of an Event of
Default, subject to the interest of the Senior Lender or Gulf
Coast Bank, as the case may be, Aero shall be entitled to
exercise all voting rights and privileges whatsoever with
respect to the Pledged Shares, and to that end Panfile hereby
constitutes Aero as Panfile's proxy and attorney-in-fact for
purposes of voting the Pledged Shares. The aforesaid
appointment constitutes a power coupled with an interest and
shall not be revocable until performance in full of the Obliga-
tions. All Persons shall be entitled to rely conclusively upon
Aero's written certification that it is entitled to vote the
Pledged Shares in accordance with this Section 7.

8. Covenants. To the extent required by law from time to
time to perfect or maintain Aero's security interest in the
Collateral, Panfile will, at Panfile's expense and in such
manner and form as Aero may request, execute, deliver, file and
record any financing statement, specific assignment or other
paper and take any other action that may be necessary or
advisable, or that Aero may reasonably request, in order to
create, preserve, perfect, maintain the perfection of or
validate any lien or security interest granted hereunder or to
enable Aero to exercise and enforce its rights hereunder with
respect to any of the Collateral. To the extent permitted by
law, Panfile hereby authorizes Aero to execute and file, in the
name of Panfile or otherwise, Uniform Commercial Code financing
statements which Aero in its sole discretion may deem necessary
or appropriate to further perfect or maintain the security
interest granted hereunder. If, for any reason, the
certificate(s) evidencing the Pledged Shares are delivered to
Panfile while there remains an outstanding balance under the
Notes, the Asset Purchase Agreement or the Panfile Guaranty,
Panfile shall immediately deliver such certificate(s) to Aero.
Panfile shall also direct the Senior Lender and Gulf Coast Bank,
as the case may be, on the release of the Pledged Shares by such
party, for any reason, the Pledged Shares shall be released and
delivered by such party to Aero so long as there is an
outstanding balance under the Notes, the Asset Purchase
Agreement or the Panfile Guaranty.

9. Representations and Warranties. Panfile represents
and warrants to Aero as follows:

9.1. Title. Panfile is the legal, beneficial and
record owner of the Pledged Shares, and Panfile owns the Pledged
Shares free and clear of any lien, encumbrance, security
interest, claim or restriction (collectively, "Liens" and
individually a "Lien"), other than the lien of Gulf Coast Bank
(which lien is as represented in Section 4 hereof and Section
2.5 of the Asset Purchase Agreement), and Panfile has the full
power and authority to pledge and grant a security interest in
the Pledged Shares to Aero pursuant to this Pledge Agreement,
except for the consent of Gulf Coast Bank.

9.2. Execution; Binding Obligation. This Pledge
Agreement has been duly executed and delivered by Panfile and
constitutes the legal, valid and binding obligation of Panfile.
The execution, delivery, performance and enforcement of this
Pledge Agreement do not and will not contravene, or constitute
a default under, any provision of applicable law or regulation
or any agreement, judgment, injunction, order, decree or other
instrument binding on Panfile or result in the creation or impo-
sition of any Lien (other than the pledge and security interest
granted hereunder) against any asset of Panfile. Panfile has
not taken and will not take any action which would prevent Aero
from enforcing any of the terms and conditions of this Pledge
Agreement.

10. Maintenance of Priority of Pledge. So long as the
Pledged Shares are held as security hereunder:
(i) Panfile shall pay and discharge all taxes, assessments and charges
imposed on the Pledged Shares by any federal, state or local
governmental authority, the Liens of which would or might be
prior to the rights of Aero in and to the Pledged Shares
hereunder; (ii) Panfile shall not sell, transfer, encumber or
otherwise dispose of all or any part of the Pledged Shares; and
(iii) Panfile shall execute and deliver such further documents
and take such further actions as may be reasonably required in
order to confirm the rights of Aero in and to the Pledged Shares
or otherwise to effectuate the intent of the parties to this
Agreement.

11. Events of Default. Each of the following shall
constitute an "Event of Default" hereunder:
(i) the failure on the part of Jason IV or Panfile to make any payment when due
under the Notes and/or the indemnification provisions set forth
in Section 14.2 of the Asset Purchase Agreement; (ii) any breach
by Panfile of any covenant contained in the Panfile Guaranty or
in this Pledge Agreement, or in any other document or agreement
executed by Panfile in connection with the Asset Purchase
Agreement or with respect to the transactions contemplated
therein; (iii) any representation or warranty made by Panfile in
the Asset Purchase Agreement or in this Pledge Agreement shall
prove to be untrue in any material respect; or (iv) the failure
on the part of Jason IV or Panfile to make any payment when due
to the Senior Lender or Gulf Coast Bank.

12. Remedies On Event of Default. On the occurrence of an
Event of Default, Aero shall have the following rights and
remedies, in addition to all other rights or remedies provided
herein or by law with respect to the Pledged Shares, all of
which shall be cumulative and may be exercised from time to time
either successively or concurrently:

(a) To declare this Agreement immediately in default
and, upon possession thereof, to sell the Pledged Shares or any
portion thereof, from time to time upon ten (10) days' prior
written notice to Panfile of the time and place of sale (which
notice Panfile hereby agrees is commercially reasonable), for
cash or upon credit or for future delivery (Panfile hereby
waives all rights, if any, of marshalling the Pledged Shares and
any other security), for the payment of the Obligations, and at
the option and in the complete discretion of Aero, either:
(i) at a public sale or sales; or (ii) at a private sale or
sales. From time to time Aero may, but shall not be obligated
to, postpone the time of any proposed sale of any of the Pledged
Shares, which has been the subject of a notice as provided
above, and also, upon ten (10) days' written notice to Panfile
(which notice Panfile agrees is commercially reasonable), may
change the time and place of such sale.

(b) To exercise all rights of a secured party under
the Uniform Commercial Code of the Commonwealth of Pennsylvania
(as amended from time to time) and all other applicable laws.

In the case of any sale by Aero of the Pledged Shares or
any portion thereof on credit or for future delivery, which may
be elected at the option and in the complete discretion of Aero,
the Pledged Shares so sold may, at Aero's option, either be
delivered to the purchaser with proper security retained
therefor reasonably satisfactory to Aero or retained by Aero
until the selling price is paid by the purchaser, but in either
event Aero shall incur no liability in case of failure of the
purchaser to take up and pay for the Pledged Shares so sold. In
case of any such failure, such Pledged Shares may again be sold
by Aero in the manner provided for in this Section 12.

After deducting all its reasonable costs set forth therein
and expenses of every kind, including, without limitation, legal
fees and registration fees and expenses, if any, in connection
with the sale of the Pledged Shares, Aero shall apply the
residue of the proceeds of any sale or sales of the Pledged
Shares to the Obligations. Aero shall not incur any liability
as a result of the sale of the Pledged Shares at any private
sale or sales, and Panfile hereby waives any claim arising by
reason of the fact that the price or prices for which the
Pledged Shares or any portion thereof is sold at such private
sale or sales is less than the price which would have been
obtained at a public sale or sales or is less than the Obliga-
tions, even if Aero accepts the first offer received and does
not offer the Pledged Shares or any portion thereof to more than
one offeree.

If Aero shall determine to exercise its right to sell all
or any of the Collateral, Panfile agrees to indemnify and hold
harmless Aero (and any person controlling the foregoing), such
indemnification to remain operative regardless of any
investigation made by or on behalf of Aero (or any person con-
trolling the foregoing), from and against any loss, liability,
claim, damage, expense (and reasonable counsel fees incurred in
connection therewith) insofar as such loss, liability, claim,
damage or expense arises out of or is based upon any untrue
statement of a material fact by Panfile or any omission by
Panfile of any material fact necessary in order to make any
statements made by Panfile not misleading in light of the
circumstances in which they were made, in each case in
connection with such sale (or any such statement or omission
made by any other person in reliance upon any such statement or
omission made by Panfile).

13. Expenses. Panfile will forthwith on demand pay to
Aero: (i) the amount of any taxes which Aero may have been
required to pay by reason of the granting of the security
interest hereunder (including any applicable transfer taxes) or
to free any of the Collateral from any Lien thereon; and (ii)
the amount of any and all out-of-pocket expenses, including the
fees and disbursements of counsel, which Aero may incur in
connection with (A) the collection, sale or other disposition of
any of the Collateral or (B) the exercise by Aero of any of the
rights conferred upon it hereunder.

14. Release of Pledged Shares. Aero, after taking
possession of the Pledged Shares as provided hereunder, shall
release the Pledged Shares to Panfile, as follows:

14.1. On full payment and performance of the
Obligations owing by Panfile to Aero on account of, or in
connection with, the Guaranty, this Pledge Agreement shall
terminate and Aero shall redeliver possession of the Pledged
Shares (to the extent of its possession thereof) as Panfile may
then direct.

14.2. Following an Event of Default, if Aero
elects to retain any portion of the Pledged Shares, then, Aero
shall deliver a stock certificate or certificates to Panfile
evidencing the balance of the Pledged Shares owned by Panfile,
if any such balance exists.

15. Reinstatement of Lien. If at any time, payment,
satisfaction or performance of the Obligations is rescinded or
must otherwise be restored or returned upon the insolvency,
bankruptcy, or reorganization of Aero or Panfile, or either of
them, or otherwise, the obligations of Panfile hereunder with
respect to the Collateral shall be reinstated at such time as
though payment, satisfaction or performance had been due but had
not been made or performed.

16. Resignation of Panfile. In connection with this
Pledge Agreement, Panfile has executed and delivered to Aero
Panfile's undated resignation as a director and officer of Jason
IV, which resignation shall be effective, without any further
action by Panfile, on the occurrence of an Event of Default
hereunder.

17. Panfile's Obligations Not Affected; No Waiver, Etc.
The undertakings of Panfile hereunder shall remain in full force
and effect without regard to, and shall not be impaired by, any
of the following:

(a) any exercise or failure to exercise, or any
waiver, by Aero of any right, remedy, power or privilege under
or in respect of any of the Obligations;

(b) any amendment to or modification of any
agreement, instrument or document evidencing any of the Obliga-
tions;

(c) any amendment to or modification of any in-
strument securing any of the Obligations or the release or
discharge or termination of any security or guarantee for any of
the Obligations, whether or not Panfile shall have notice or
knowledge of any of the foregoing;

(d) any extension, renewal, settlement, compromise,
waiver or release in respect of any obligation of any party with
respect to the Notes;

(e) any release, nonperfection or invalidity of any
direct or indirect security for any obligation of any party
under the Asset Purchase Agreement or the Notes;

(f) any change in the corporate existence, structure
or ownership of Aero or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting such party
or its assets;

(g) the existence of any claim, setoff or other
rights which any person may have against any other person, whe-
ther in connection herewith or under the Asset Purchase
Agreement or the Notes;

(h) any invalidity or unenforceability relating to or
against any party for any reason of (to the extent applicable)
this Pledge Agreement, the Asset Purchase Agreement or the Notes
or any provision of applicable law or regulation purporting to
prohibit any payment under the Notes; or

(i) any other act (other than the payment, satisfac-
tion and performance of the Obligations) or omission to act or
delay of any kind by any person or any other circumstances what-
soever which might, but for the provisions of this Section 12,
constitute a legal or equitable discharge of Aero under the
Notes.

If at any time, payment, satisfaction or performance
of the Obligations is rescinded or must otherwise be restored or
returned upon the insolvency, bankruptcy, or reorganization of
Aero, Panfile, or Jason IV, or any of them, or otherwise, the
obligations of Panfile hereunder with respect to the Collateral
shall be reinstated at such time as though payment, satisfaction
or performance had been due but had not been made or performed.

Aero's prior recourse to any part or all of any colla-
teral securing the Obligations shall not constitute a condition
of any demand, suit or proceeding for payment or collection of
the obligations of Panfile hereunder. No act, failure or delay
by Aero shall constitute a waiver of its rights and remedies
hereunder or otherwise. No single or partial waiver by Aero of
any default or right or remedy which it may have shall operate
as a waiver of any other default, right or remedy or of the same
default, right or remedy on a future occasion. Panfile hereby
waives presentment, notice of dishonor and protest of all
instruments included in or evidencing any of the Obligations of
Panfile or the collateral securing such Obligations, and any and
all other notices and demands whatsoever (except as otherwise
expressly provided herein).

18. Miscellaneous Provisions.

18.1. Severability. Any invalidity, in whole or
in part, of any provision of this Pledge Agreement shall not
affect the validity or enforceability of any other provisions
hereof.

18.2. Cumulation of Remedies. All remedies
available to either party hereunder, at law or in equity, for
breach or violation of this Pledge Agreement are cumulative and
may be exercised concurrently or separately, and the exercise of
any one remedy shall not be deemed an election of such remedy to
the exclusion of other remedies.

18.3. Waiver. A waiver, express or implied, by
either party of any default by the other in the observance and
performance of any of the conditions, covenants or duties set
forth herein shall not constitute or be construed as a waiver of
any subsequent default.

18.4. Assignment. Neither party shall assign the
whole or any part of this Pledge Agreement without the prior
written consent of the other party.

18.5. Notices. All notices, requests, demands,
directions and other communications required or permitted under
the provisions of this Pledge Agreement, or otherwise with
respect hereto, shall be in writing and shall be: (i) mailed by
first class registered or certified mail, return receipt
requested, postage prepaid; or (ii) sent by next day business
courier (such as Federal Express or the like); or (iii)
personally delivered; or (iv) transmitted by fax, telegram or
telex (with a hard copy to follow within twenty-four (24) hours
by first class registered or certified mail, return receipt
requested, postage prepaid, or by next day business courier
[such as Federal Express or the like], or by personal delivery),
as follows:

if to Aero, to:

Aero Services International, Inc.
660 Newtown-Yardley Road
Newtown, Pennsylvania 18940
Attention: James Affleck
Facsimile: (215) 968-6010

with a copy to:

Eckert Seamans Cherin & Mellott
One South Market Square Building
213 Market Street, P. O. Box 1248
Harrisburg, PA 17108-1248
Attention: Christopher M. Cicconi, Esquire
Facsimile: (717) 237-6019

if to Panfile, to:

Orlando E. Panfile
96 Buckhaven Hill
Upper Saddle River, New Jersey 07458
Facsimile:

with a copy to:

Simon, Peragine, Smith & Redfearn, L.L.P.
30th Floor Energy Centre
1100 Poydras Street
New Orleans, Louisiana 70163-3000
Attention: Guy W. Smith, Esq.
Facsimile: (504) 569-2999

18.6. Headings. The headings contained herein are
for convenience of reference only and shall not control the
interpretation of any terms or provisions hereof.

18.7. Entire Agreement. This Pledge Agreement,
together with the Asset Purchase Agreement and the Panfile
Guaranty, constitutes the entire agreement between the parties
and supersedes all prior written and oral and all
contemporaneous oral agreements or understandings between the
parties with respect to the subject matter hereof.

18.8. Amendments. This Pledge Agreement may not
be modified or amended, except by a writing signed by both
parties hereto.

18.9. Governing Law. This Pledge Agreement shall
be governed by and construed and interpreted in accordance with
the laws of the Commonwealth of Pennsylvania, including its
statutes of limitations but without regard to its rules
regarding conflict of laws.

18.10. Recitals Incorporated. The recitals
appearing before Section 1 hereof constitute a material part of
this Pledge Agreement, and are expressly incorporated herein by
reference.

18.11. Counterparts. This Pledge Agreement may be
executed in one (1) or more counterparts. Each full counterpart
shall be deemed an original, but all such counterparts, taken
together, shall constitute one and the same instrument.

IN WITNESS WHEREOF, and intending to be legally bound, the
parties hereto have executed and delivered this Pledge Agreement
as of the day and year first above written.

AERO SERVICES INTERNATIONAL, INC.
Witness/Attest:

B. R. Adkins By: R. T. Brant

Its: Chairman & CEO

Kerry Wilt Orlando E. Panfile

Orlando E. Panfile

xhibit A
to
Stock Pledge Agreement

Number of Common Stock and Certificate Nos.

1,000 shares - certificate no. 2
STOCK TRANSFER POWER

KNOW ALL MEN BY THESE PRESENTS, for value received, the
undersigned hereby sells, assigns and transfers unto Aero
Services International, Inc., a Louisiana corporation (the
"Secured Party"), 1,000 shares of the common stock of Jason IV
Aviation, Inc., a Louisiana corporation ("Jason IV"), standing
in his name on the books of Jason IV and represented by
Certificate number 2, and does hereby irrevocably constitute and
appoint James Affleck as my attorney-in-fact to transfer the
said stock on the books of Jason IV with full power of
substitution in the premises.

INTENDING TO BE LEGALLY BOUND, the undersigned has executed
this Stock Transfer Power as of May 10, 1996.

Kerry Wilt Orlando E. Panfile

Witness Orlando E. Panfile

(10.77) Bill of Sale, Assignment and Assumption Agreement
between Aero Services International, Inc. and Jason IV
Aviation, Inc. dated May 7, 1996.

BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT is
made and entered into pursuant to the terms of that certain
Asset Purchase Agreement (the "Agreement"), dated May 7, 1996,
by and between Aero Services International, Inc., a Louisiana
corporation ("Seller"), and Jason IV Aviation, Inc., a Louisiana
corporation ("Purchaser"). Capitalized terms used herein, but
not otherwise defined herein, shall have the meanings ascribed
to such terms in the Agreement.

1. For good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Seller does hereby
sell, transfer, assign, and deliver to Purchaser, its successors
and assigns, on the terms and subject to the conditions set
forth in the Agreement, all of Seller's rights, title and
interest in and to the Purchased Assets, including fuel and oil
inventory.

2. Purchaser does hereby accept the foregoing sale,
transfer and assignment of all Seller's rights, title and
interest in and to the Purchased Assets and the fuel and oil
inventory, and does hereby assume and agree to pay, perform and
discharge, when lawfully due, the Assumed Obligations.

Each of Seller and Purchaser hereby covenants that, from
time to time, after delivery of this instrument, at the other's
request and without further consideration, such party shall do,
execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, any and all such further acts,
instruments and other things or writings reasonably requested by
the other party in order to evidence and effectuate the
consummation of any of the transactions contemplated by this
Bill of Sale, Assignment and Assumption Agreement or by the
Agreement.

IN WITNESS WHEREOF, each of Seller and Purchaser has caused
this Bill of Sale, Assignment and Assumption Agreement to be
executed on its behalf this 7th day of May, 1996.

SELLER:

AERO SERVICES INTERNATIONAL, INC.

By: R. T. Brant

Name: R. T. Brant

Title: Chairman, CEO

PURCHASER:

JASON IV AVIATION, INC.

By: Orlando E. Panfile

Name: Orlando E. Panfile

Title: President

(10.78) Lease Agreement between the City of Morgantown and
Mountain State Flight Services dated September 1,
1996.

LEASE AGREEMENT

GENERAL AVIATION TERMINAL FACILITY

THIS LEASE AGREEMENT made and entered into this 1st day of
September 1996, by and between the City of Morgantown, a
municipal corporation, (hereinafter called "City"), and Mountain
State Flight Services, d.b.a. Piedmont Aviation Services, Inc.
(hereinafter called "Lessee").

WITNESSETH:

WHEREAS, the "City" owns, controls and operates the
Morgantown Municipal Airport; and

WHEREAS, the "City" has determined certain services at the
airport terminal building are necessary for proper accommodation
of General Aviation aircrew members and passengers arriving and
departing from the Morgantown Municipal Airport, and

WHEREAS, the "Lessee" is desirous of operating a General
Aviation Terminal Facility in the terminal building and
furnishing certain hereinafter mentioned services in connection
therewith.

NOW, THEREFORE, for and in consideration of the mutual
covenants and agreements herein contained to be kept and
performed, and intending to be legally bound hereby, the parties
hereto covenant and agree as follows:

ARTICLE I, DEFINITIONS

The following words and phrases, wherever used in the
Agreement shall, for the purpose of this Agreement, have the
following meanings:

(a) "Airport" refers to the Morgantown Municipal Airport.

(b) "Airport Customer" shall mean any person who arrives
at or departs from the airport.

(c) "Airport terminal building" means the Terminal
Building situate at the Morgantown Municipal Airport, City of
Morgantown, Monongalia County, West Virginia.

(d) "FAA" means the Federal Aviation Administration of the
Untied States, or any federal agencies succeeding to its
jurisdiction.

(e) "General Aviation" means all aircraft other than
scheduled air carrier and Federal/military aircraft.

(f) "General Aviation Terminal Facility" shall include
allocated space located in the southern end of the Airport's
Main Terminal building. This area will be designated for use by
General Aviation pilots, aircrew members, and their passengers.
As a minimum, this area will incorporate a line/refuel service
office, a business office, a passenger lounge, a flight planning
area, and a conference room.

(g) "Leased area" or "Leased premises" means the space
used solely by the "Lessee" for the conduct of the "Lessee's"
business.

(h) "Property" shall include anything of material value
that is real, personal, tangible, or intangible.

(i) "Renovation/Improvements" shall include walls,
partitions, dividers, flooring, and ceilings; heating,
ventilation and air conditioning equipment, ducts, and controls;
lighting and electrical systems; plumbing systems; wall and
floor coverings or finishes.

(j) "Rules and Regulations" means those lawful and
reasonable rules and regulations which are not in conflict with
this Agreement, promulgated by the "City" for the orderly use of
the airport by both the airlines and other operators and users
of the airport as the same may be amended, modified or
supplemented from time to time.

ARTICLE II, LEASED PREMISES

2.1 The "City" hereby grants to the "Lessee", subject to
the terms and conditions hereinafter contained, the nonexclusive
right to operate a General Aviation Terminal Facility at the
Morgantown Municipal Airport terminal. It is understood and
agreed that nothing herein contained shall be construed to grant
or authorize the granting of an exclusive right within the
meaning of Section 308 of the Federal Aviation Act of 1958 as
amended.

2.2 The "City" hereby agrees to provide an area of
approximately 4000 square feet in the Terminal Building (see
Exhibit A attached) for the "Lessee's" exclusive use. The
assigned area shall be used by the "Lessee" for the purpose of
operating a General Aviation Terminal Facility.

2.3 The "City" grants to the "Lessee", its employees,
guests, patrons and invites, in common with others, the rights
of ingress and egress to and from the airport terminal building,
over airport roadways, including the use, without charge, of
common use roadways and vehicle parking areas, with such rights
and license subject only to such reasonable rules and regulation
as may be established by the "City" and subject to law.

2.4 The "City" grants to the "Lessee" the full
unrestricted and exclusive use of a certain tract of space on
the Terminal Building roof, the precise location to be agreed
upon by the parties, for the erection, maintenance and operation
of antennae and equipment necessary for the operation of
"Lessee's" television and radio transmitting and receiving
equipment.

ARTICLE III, TERM OF AGREEMENT

3.1 The term of this Agreement shall be for a period of
eleven years and three months commencing on September 1, 1996
and ending on December 31, 2007, unless terminated at an earlier
date for any reason as set forth herein.

3.2 "Lessee" shall have the right and option to extend
this Lease Agreement for two (2) additional five (5) year
periods, the first commencing January 1, 2008, and ending
December 31, 2012, and the second commencing January 1, 2013 and
ending December 31, 2017, provided "Lessee" is not in default in
any provisions of this Agreement and; provided further the
"Lessee" shall notify the "City", in writing, not later than one
hundred eighty (180) days, but not more than three hundred
sixty-five (365) days, prior to the commencement of each of the
two (2) additional five (5) year periods of "Lessee's" intention
to exercise this option.

ARTICLE IV, LEASE PAYMENTS

4.1 The "Lessee" agrees to pay the "City" the sum of
$36,000.00 per year for approximately 4000 square feet of space
within the airport terminal building (see Exhibit A attached).
Payment will be made in equal monthly increments of $3,000.00,
in advance and without demand, on or before the first business
day of each calendar month. For any period of less than one
calendar month this Agreement shall be in effect, said sum shall
be calculated on a pro rata basis. This rental fee shall be
adjusted upwards annually for "Cost of Living" increases by a
factor equal to the change in the Consumer Price Index for All
Commodities as reported by the Bureau of Labor Statistics on May
31st of each year. This adjustment applies to years 2-11 of
this Agreement.

4.2 It is agreed that a finance charge of one and one half
(1.5%) percent per month shall be added to any balance unpaid
within thirty (30) days after the last day of the month to which
it applies.

4.3 All sums, statements, and reports due hereunder shall
be paid or made by delivery to the Airport Director, Morgantown
Municipal Airport, 100 Hart Field Road, Morgantown, WV 26505.

ARTICLE V, AREA RENOVATION/IMPROVEMENTS

5.1 In order to ensure full service to its General
Aviation customers, the "Lessee" agrees, at no cost to the
"City", to undertake a complete renovation of its assigned area.
This renovation will include, but is not limited to, the
construction/remodeling of a general business office, a
fuel/line service office, a pilots lounge, a flight planning
area, and a conference room. Each area will be designed and
furnished in a manner suitable to the purpose or function of
that area. The "Lessee" shall submit professionally
accomplished plans, construction drawings, and specifications
for all renovations to the "City" for approval. Renovation work
may not begin without the express written consent of the "City",
which consent will not be unreasonably withheld.

5.1.1 Fuel/Line Service Office: This will be a
specified area where pilots may place orders for fuel, oil,
other aircraft services, or aircraft repair. This office will
also maintain, for retail sale, a limited supply of items most
often purchased by aircrew members. This office, or the
business office, must contain functioning radio equipment which
will permit two-way radio communication between the General
Aviation Terminal and arriving or departing aircraft.

5.1.2 Pilots Lounge: This will be an area specified
for use by transient General Aviation aircrew members and their
passengers. It must be furnished with soft, comfortable
chairs/couches and a table and chairs for use as a work station.
The area will be equipped with a standard voice telephone line,
a telephone line for use with personal/laptop computers, and a
television connected to local cable or direct satellite service.

5.1.3 Flight Planning Area: This will be a specified
area where aircrew members can complete all pre-flight planning
activities. The area will contain, as a minimum, FAA flight
planning documents/charts, an automated weather data system that
will provide "real time" weather information, and either a
telephonic or automated system for filing flight plans with a
Federal Aviation Administration Flight Services Facility.

5.1.4 Conference Room: This will be a specified area
where business meetings may be conducted. The area must be
capable of comfortably seating 15-20 people and must provide
some audio/visual support. The audio/visual support must
include those items normally used for this function.

5.2 The "Lessee" agrees to begin renovations, as specified
in paragraph 5.1 above, by October 1, 1996. All renovations
must be complete by December 31, 1997. Failure to meet this
date will result in the "City's" assessment of liquidated
damages in the amount of one hundred dollars ($100.00) per day
(Saturday/Sunday excepted) until required renovations are
completed.

5.3 The "Lessee" shall have the right, at its sole
expense, to install and maintain approved signs advertising its
business. Any signs identifying the "Lessee's" operation must
have the prior written approval of the "City" both as to size
and location.

5.4 The "Lessee" shall not suffer or permit any mechanics
or other liens to be levied or filed against the "City". All
improvements, equipment, fixtures, and interior decor
constructed or installed by the "Lessee", its agents, or
contractors, shall conform in all respects to all applicable
statutes, ordinances, building codes, and rules and regulation.
Any approval given by the "City" shall not constitute a
representation or warranty as to such conformity; responsibility
therefor shall at all times remain with the "Lessee".

5.5 All structural improvements and alterations shall,
upon termination of this Agreement become the property of the
"City".

5.6 The "Lessee" may place such furniture, property and
equipment into the assigned premises as is necessary for the
conduct of its business. The "Lessee" shall have the right to
remove the same upon termination of this Agreement, providing
the premises are repaired to the satisfaction of the "City" or
restored to their original condition after such removal.

5.7 The "Lessee" shall not remove or demolish, in whole or
in part, any improvements within the airport terminal building
without the express prior written consent of the "City", which
consent may be conditioned upon the obligation of the "Lessee"
to replace the same by an improvement specified in such consent.
However, the "City" shall not withhold consent unreasonably and
shall not impose unreasonable conditions upon its consent.

ARTICLE VI, PERFORMANCE AND SERVICE STANDARDS

6.1 The "Lessee" hereby covenants and agrees that it will
furnish prompt and efficient service adequate to meet all
reasonable demands by General Aviation aircrew members and their
passengers on a fair, reasonable and nondiscriminatory basis,
and to charge fair, reasonable and nondiscriminatory prices for
each unit or sale of service on a basis substantially similar to
that charged by it for similar services at airports of
comparable size within the same general area. The "Lessee" may
make reasonable discounts, rebates and other similar types of
price reductions to purchasers on a nondiscriminatory basis.

6.2 The "Lessee" hereby covenants and agrees its General
Aviation Terminal Facility at the airport shall remain open for
such periods during each day and such days each week as may be
necessary to meet reasonable demands for said services.

6.3 The "Lessee" shall conduct its operations in a safe
and orderly manner, and in accordance with the standards of the
industry. The "Lessee" covenants and agrees it will keep and
maintain any area used by or assigned to it in good order and
repair and in a safe and clean condition, and return the same to
the "City" at the expiration of this Agreement in good order,
condition and repair, reasonable wear and tear and damage by
fire and casualty only excepted. The "Lessee" shall repair and
pay for any physical damage to the terminal or the "City's"
property caused by the use, negligence, or wrongful conduct of
the "Lessee" and the "Lessee's" agents, customers, and
employees. The "Lessee" shall keep its assigned counter area in
a neat, clean, safe, sanitary and orderly condition at all
times.

6.4 The "Lessee's" employees shall be clean, neat in
appearance, courteous and polite. The "Lessee" shall not employ
any person or persons in or about the premises who shall conduct
themselves in a loud, boisterous or otherwise improper manner.
The "Lessee" shall take all steps to remove, from airport
employment, employees who participate in criminal acts on
airport premises including, but not limited to, gambling,
prostitution, possession or sale of illegal controlled
substances, or acts of fraud or theft.

6.5 The "Lessee" shall abide by and be subject to all
reasonable rules and regulations which are now, or may from time
to time be promulgated by the "City" concerning management,
operation or use of the terminal facilities, or the safety of
those using the same, and it shall abide by and be subject to
all reasonable rules and regulations which are now, or may from
time to time be promulgated by the FAA or the airport operator.
The "Lessee" further agrees to maintain, use, and operate the
assigned area in compliance with any and all present and future
laws, ordinances, rules and regulations relating to public
health, safety or welfare adopted by federal, state, local or
other governmental bodies, or agencies, departments or officers
thereof, and obtain all permits, at its sole expense, which may
be necessary for the operation of its business.

6.6 The "Lessee" covenants and agrees it will meet all
expenses in connection with the use of its assigned area and be
responsible for any taxes, permit fees, usage fees, license fees
or assessments lawfully levied or assessed by any taxing
authority against the business owned and operated by the
"Lessee", the assigned premises, or as a result of the
"Lessee's" use and occupancy of airport premises or its
operation at the airport.

6.7 The "Lessee" does hereby covenant and agree that:

(a) no person on the grounds of race, color, creed,
age, sex, religion, national origin or handicap shall be
excluded from participation in, denied the benefits of, or be
otherwise subjected to discrimination in the use of said service
or facilities.

(b) in the construction of any improvements on the
assigned premises and the furnishing of services thereon, no
person on the grounds of race, color, creed, age, sex, religion,
national origin or handicap shall be excluded from participation
in, denied the benefits of, or otherwise be subject to
discrimination.

(c) the "Lessee" shall use the premises in compliance with
all requirements imposed by or pursuant to Title 49, Code of
Federal Regulations, Department of Transportation, Subtitle A,
Office of the Secretary, Part 21, Nondiscrimination in
Federally-assisted programs of the Department of Transportation
- - Effectuation of Title VI of the Civil Rights Act of 1964, and
as said Regulations may be amended.

(d) it is the policy of the United States Department of
Transportation that minority business enterprises, as defined in
49 CFR Part 23.5, shall have the maximum opportunity to
participate in the performance of contracts such as covered by
this Agreement. Therefore, the "Lessee" hereby assures no
person shall be excluded from the participation in, be denied
the benefits of, or otherwise be discriminated against in
connection with the award of any contract covered by 49 CFR Part
23 on the grounds of race, color, national origin, sex or
handicap. The "Lessee" hereby assures it will include the
foregoing clauses of this Section in all subcontracts and will
cause subcontractors similarly to include these clauses in
further subcontracts.

In the event of breach of any of the above
nondiscrimination covenants, the "City" shall have the right to
terminate this Agreement and to immediately re-enter and
repossess the assigned premises and the facilities thereon, and
hold the same as if this Agreement had never been made or
issued, or, at the election of the "City" or the United States,
either or both shall have the right to enforce the provisions of
the Article.

6.8 The "Lessee" agrees to issue a duplicate, serially
numbered sales slip or contract with each sale or transaction,
whether for cash or credit, separately showing the "Lessee's"
receipts or extension of credit. A copy of each sales slip will
be maintained on the premises and shall, upon written request,
be available for the "City's" review.

6.9 The "Lessee" agrees the "City", its duly authorized
representatives or agents, may, with 24 hours written advanced
notice and at a reasonable time, enter into the assigned
premises for the purpose of making any visual inspection deemed
necessary in order to determine whether federal, state, or
municipal rules and regulations and/or the covenants of this
Agreement are being complied with, and to do any and all things
which the "City" is obligated to do as set forth herein, or
which may be deemed necessary for the general conduct and safe
operation of the airport terminal building.

6.10 Upon the expiration or other termination of this
Agreement, the "Lessee" shall forthwith surrender the assigned
premises as altered or improved under the terms of this
Agreement, reasonable wear and tear only excepted. The "City"
shall not be required to give any notice to quit possession
under the Landlord and Tenant Act of 1951.

ARTICLE VII, ASSIGNMENT

7.1 The "Lessee" shall not have the right to assign or
transfer this Agreement or any rights hereunder without the
prior written consent of the "City" which approval shall not be
unreasonably withheld.

ARTICLE VIII, INSURANCE AND LIMITATION OF LIABILITY

8.1 The "Lessee" covenants and agrees to secure and
maintain during the term of this Agreement, comprehensive
general public liability insurance covering its operations at
the airport and its serving of airport customers with a combined
single limit coverage of One Million ($1,000,000.00) Dollars,
naming the "City" as additional insured. Such policy shall
contain a provision requiring at least thirty (30) days notice
of cancellation which notice shall be given in writing to the
"City". The "Lessee" shall also maintain Worker's Compensation
Insurance sufficient to comply with all statutory requirements
now or hereafter enacted. The "Lessee" shall furnish the "City"
with a certificate evidencing such insurance coverage, within
thirty (30) days from the date of this Agreement.

8.2 The "Lessee" agrees to indemnify and hold the "City",
its agents, officers, representatives, and employees forever
harmless from and against any and all claims, damages,
judgements, attorneys fees, compensation, demands, or liability
for injuries to persons or property caused by, arising from or
in connection with the use or occupancy by the "Lessee", its
agents and employees of the assigned premises or arising from,
out of, or in connection with the "Lessee's" operations at the
airport, or arising directly or indirectly out of any acts of
the "Lessee", its agents, servants, guests, or business invites,
or by reason of any act or omission of any such person;
provided, however the "Lessee" shall not be liable for any
injury, damage or loss occasioned by the negligence of the
"City", its agents or employees. The "City" shall give to the
"Lessee" prompt and timely notice of any claim made or suit
filed which in any way directly or indirectly, contingently or
otherwise, affects or might affect the "Lessee". Except for
losses due to the negligent acts or omissions of the "City", its
agents or employees, the "Lessee" further covenants and agrees
it will not hold the "City" or any of its agents or employees
responsible for any loss or damage occasioned by fire, theft,
rain, flood, windstorm, hail, vandalism or from any other cause
whatsoever, whether said cause be the direct, indirect, or
merely a contributing factor in producing the loss or damage to
any property of the "Lessee" that may be located or stored on
the assigned premises or any other location at the airport, and
the "Lessee" agrees that storage of all property on the assigned
premises or elsewhere at the airport shall be at the "Lessee's"
risk. The "Lessee" shall be responsible for all damage to
persons or property caused by carelessness, negligence, or
neglect on the "Lessee's" part. The "City" shall not be liable
for any loss or damage suffered by the "Lessee" arising out of
the interruption of cessation of the business conducted by the
"Lessee" under this Agreement.

ARTICLE IX, UTILITIES

9.1 Utility (water, gas, electricity, sewage) and refuse
removal fees are included in the lease payment outlined in
paragraph 4.1 of this agreement. However, should the "Lessee"
require any additional service, the "Lessee" agrees to bear all
costs associated with providing that service. Additionally,
should the "City" be required to add to or alter the existing
level of utility service in a fashion that results in a
significant increase in utility rates, the "Lessee" agrees to
pay a proportionate share of the increase based on the ratio of
square footage of terminal space occupied by the "Lessee" to the
total square footage available for use by all tenants and
Concessionaires. Further, the "Lessee" agrees to pay any
increased costs in the "City's" premiums for fire and casualty
insurance directly resulting from the "Lessee's" operation of
its business. Charges for additional costs will be assessed
annually and shall be paid in monthly installments on the same
day the minimum guaranteed monthly payment is due.

ARTICLE X, OBLIGATIONS OF THE CITY

10.1 The "City" shall bear the expenses of water and sewage
services, electrical services, and refuse removal, subject to
the provisions of Article IX., supra.

10.2 The "City" agrees to keep the terminal building of
which the assigned area is a part, in a good state of repair.

10.3 It is understood the "City" shall have the
responsibility for snow removal around the "Lessee's" leased
area, on a priority basis with other airport property.

ARTICLE XI, TERMINATION

11.1 It is understood and agreed in the event the airport
terminal were to permanently close, or if the Morgantown
Municipal Airport were to cease operating as an air
transportation facility, this Agreement would automatically
terminate. It is further understood and agreed in the event a
governmental order, court decree or other competent tribunal
having jurisdiction would require all commuter airline
operations at the airport cease, or if the United States
government or any of its agencies would assume control over the
airport in time of war or national emergency for military use,
then this Agreement would automatically abate during such
period. The "City" agrees to give the "Lessee" prior notice as
is feasible upon the occurrence of such an event.

11.2 The "City" may terminate this Agreement by giving the
"Lessee" 30 days advance written notice, to be served as
hereinafter provided, upon the happening of any one of the
following events:

(a) The making by the "Lessee" of a general assignment for
the benefit of creditors;

(b) The filing by the "Lessee" of a voluntary petition in
bankruptcy, or the institution of proceedings in bankruptcy
against the "Lessee" and the adjudication of the "Lessee" as a
bankrupt pursuant to such proceedings;

(d) The death (if an individual) or dissolution of the
"Lessee" or the divestiture of the "Lessee's" estate herein by
other operation of law;

(e) The failure of the "Lessee" to comply with and meet
all the laws or rules and regulations issued by the Federal
Aviation Administration or other governmental agency having
jurisdiction;

(f) The failure of the "Lessee" to keep and perform any of
the covenants or agreements herein contained on the part of the
"Lessee" to be kept and performed, provided the "City" shall
first give the "Lessee" written notice to remedy such failure,
and if the "Lessee" does not discontinue such failure within
thirty (30) days from receipt of such notice, the "City" may
terminate this Agreement and the right to operate the
concession.

11.3 If the "Lessee" shall fail to pay the fees and charges
specified in this Agreement, or if any part thereof at any time
be in arrears and unpaid, or if the "Lessee" shall fail to keep
and perform and observe any of the covenants, agreements or
conditions of this Agreement on the part of said "Lessee" to be
kept, performed and observed, and if any of the aforesaid
defaults are not remedied within ten (10) days after the same
become due or if the "Lessee" shall die (if an individual),
dissolve, cease doing business, abandon the premises, become
insolvent or file a petition in bankruptcy, then it shall be
lawful for the "City", its successors or assigns to enter into
the assigned premises, and thereupon this Agreement shall cease,
terminate and be utterly void, without prejudice, however, to
the right of the "City" to recover from the "Lessee" all minimum
monthly payments due up to the time of such termination and all
damages for breach of this Agreement. In the event of default
by the "Lessee" of any of the terms of this Agreement, the
"Lessee" shall pay to the "City" any costs and expenses,
including reasonable attorneys fees, incurred by the "City" to
enforce its rights under this Agreement or to recover damages
for its breach.

11.4 No waiver of default by the "City" of any of the
terms, covenants, or conditions hereof to be performed, kept and
observed by the "Lessee" shall be construed to be or act as a
waiver of any subsequent default of any of the terms, covenants,
and conditions herein contained to be performed, kept and
observed by the "Lessee". The acceptance of payment by the
"City" for any period or periods after default of any one of the
terms, covenants and conditions herein contained to be
performed, kept, and observed by the "Lessee" shall not be
deemed a waiver of any right on the part of the "City" to
terminate this Agreement due to failure by the "Lessee" to so
perform, keep or observe any of the terms or conditions of this
Agreement.

11.5 Should the assigned area be totally or partially
destroyed by fire or other casualty, either party at its option,
may terminate this Agreement by giving the other party written
notice of the termination within fifteen (15) days after such
destruction. In the event of termination, any payments made in
advance by the "Lessee" shall be prorated on a daily basis and
the portion attributable to the period subsequent to the
destruction shall be refunded. Should the parties elect not to
terminate following total or partial destruction, the "Lessee"
shall restore the assigned area to a condition similar to that
immediately prior to the destruction, at its sole expense. Any
such restoration of the assigned area shall begin as soon as
reasonably possible. The "City" reserves the right to enter
into the assigned area whenever necessary to repair damage
caused by fire or other casualty to the building of which the
area is part even though the effect of such entry be to render
the assigned area or a part thereof temporarily unsuitable for
the "Lessee's" operation.

ARTICLE XII, MISCELLANEOUS

12.1 The covenants, conditions and agreement made and
entered into by the parties hereto are declared binding on their
respective heirs, executors, administrators, successors and
assigns.

12.2 Any notice required to be made hereunder shall be
delivered as follows: To the "City": Airport Director,
Morgantown Municipal Airport, 100 Hart Field Road, Morgantown,
West Virginia 26505 or such place as may be designated from time
to time by the "City". To the "Lessee": Mountain State Flight
Services, d.b.a. Piedmont Aviation Services, Inc., in care of,
Aero Services International, Inc., 600 Newtown-Yardley Road,
Newtown, PA 18940 or such place as may be designated from time
to time by the "Lessee".

12.3 This Agreement is subject and subordinate to the
provisions of any agreement made between the "City" and the
United States Government relative to the operation, maintenance,
or expansion of the airport or the airport terminal building,
the execution of which has been or may be required as a
condition precedent to the transfer of federal rights or
property to the "City" for airport or airport terminal building
purposes, or the expenditure of federal funds for the
improvement or development of the airport or the airport
terminal building in accordance with the provisions of the
Federal Aviation Act of 1958, the Airport and Airways
Improvement Act of 1982, the Airport and Airway Development Act
of 1970, the Airport and Airway Safety and Capacity Act of 1987,
the Airport Safety and Capacity Expansion Act of 1990, and the
Aviation Noise and Capacity Act of 1990 as they have been
amended from time to time.

In the event the Federal Aviation Administration or its
successors requires modifications or changes in this Agreement
as a condition precedent to the granting of funds for the
improvement or expansion of the airport or the airport terminal
building, the "Lessee" agrees to consent to such amendments,
modifications, revisions, supplements, or deletions of any of
the terms, conditions, or requirements of this Agreement as may
be reasonably required to obtain such funds.

12.4 The parties do hereby covenant and warrant this
Agreement contains the entire agreement between the "City" and
the "Lessee" for the purposes set forth in the preamble
hereinabove; that there are no claims, promises, representations
or conditions not herein contained, either oral or written,
which shall or may be charged or enforced or enforceable unless
reduced to writing and signed by both of the parties hereto.

12.5 The Agreement shall be governed by the laws of the
State of West Virginia.

IN WITNESS WHEREOF, the parties hereunto have caused this
Agreement to be executed by their proper officers the day and
year first above written.

CITY OF MORGANTOWN

BY: Dan Boroff

City Manager

ATTEST:

Linda L. Little
City Clerk

Mountain State
Flight Services, Inc.

By: R. T. Brant

President

ATTEST:

B. R. Adkins
Secretary