<PAGE> 1
U.S. Securities and Exchange Commission, Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 2-87778A
THE FLIGHT INTERNATIONAL GROUP, INC.
(Exact name of small business issuer as specified in its charter)
Georgia 58-1476225
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
Newport News/Williamsburg International Airport, Newport News, VA 23602
(Address of principal executive offices)
(804) 886-5500
Issuer's telephone number
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) has 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 No X
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's class of
common equity, as of the latest practicable date: As of December 4, 1996, there
were 998,976 shares of the issuer's New Common Stock, par value $.01 per share,
issued and outstanding.
Transitional Small Business Disclosure Format [check one]: Yes No X
--- ---
<PAGE> 2
PART 1
FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS
The Flight International Group, Inc. (the "Company") files herewith
condensed consolidated balance sheets of the Company and its subsidiaries as of
October 31, 1996 (unaudited) and April 30, 1996 (the Company's most recent
fiscal year), unaudited condensed consolidated statements of operations for the
three and six months ended October 31, 1996 and 1995, and unaudited condensed
consolidated statements of cash flows for the six months ended October 31, 1996
and 1995, together with unaudited condensed notes thereto. In the opinion of
management of the Company, the financial statements reflect all adjustments, all
of which are normal recurring adjustments, necessary to fairly present the
financial condition of the Company for the interim periods presented. Operating
results for any quarter are not necessarily indicative of results for any future
period. The financial statements included in this report on Form 10-QSB should
be read in conjunction with the audited financial statements of the Company and
the notes thereto included in the annual report of the Company on Form 10-KSB
for the year ended April 30, 1996.
<PAGE> 3
THE FLIGHT INTERNATIONAL GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
October 31, 1996 April 30 ,1996
(Unaudited)
---------------- --------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 319,641 $ 1,178,779
Accounts Receivable, net 3,098,893 1,380,803
Inventories 2,010,108 1,729,503
Prepaid expenses, deposits and other 1,081,264 786,985
----------- -----------
Total current assets 6,509,906 5,076,070
PROPERTY AND EQUIPMENT, NET 4,464,277 4,532,658
OTHER ASSETS 36,966 31,116
----------- -----------
$11,011,149 $ 9,639,844
=========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE> 4
THE FLIGHT INTERNATIONAL GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
October 31, 1996 April 30 ,1996
(Unaudited)
---------------- --------------
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 678,683 $ 174,286
Deferred revenue 663,646 598,145
Accrued expenses and other liabilities 1,952,553 1,580,820
Notes Payable 261,849 --
Long-term debt due currently 556,608 599,533
------------ ------------
Total current liabilities 4,113,339 2,952,784
OTHER NON-CURRENT LIABILITIES 1,451,632 1,659,855
LONG-TERM DEBT, LESS CURRENT MATURITIES 3,721,515 4,034,355
------------ ------------
Total liabilities 9,286,486 8,646,994
------------ ------------
STOCKHOLDERS' EQUITY
Common stock, $.01 par value, 1,000,000 shares
authorized, 998,976 issued and outstanding 9,990 9,990
Additional paid in capital 988,986 988,986
Treasury stock (1,769) (1,769)
Retained Earnings 727,456 (4,357)
------------ ------------
Total stockholders' equity 1,724,663 992,850
$ 11,011,149 $ 9,639,844
============ ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE> 5
THE FLIGHT INTERNATIONAL GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
October 31, 1996 October 31, 1995 October 31, 1996 October 31, 1995
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
REVENUES $4,321,631 $3,758,098 $9,066,457 $7,044,735
OPERATING COSTS AND EXPENSES
Costs of services 3,390,007 2,673,369 6,858,107 5,024,235
Depreciation and amortization 155,410 220,412 300,784 425,872
General, corporate and administrative 486,261 476,948 980,699 972,269
---------- ---------- ---------- ----------
Total operating costs and expenses 4,031,678 3,370,729 8,139,590 6,422,376
INCOME (LOSS) BEFORE OTHER (INCOME) 289,953 387,369 926,867 622,359
EXPENSES
OTHER (INCOME) EXPENSES
Interest expense 98,838 151,841 194,787 313,459
Income tax 267 800 267 1,890
---------- ---------- ---------- ----------
Total other expenses 99,105 152,641 195,054 315,349
NET INCOME (LOSS) $ 190,848 $ 234,728 $ 731,813 $ 307,010
========== ========== ========== ==========
NET INCOME (LOSS) PER COMMON SHARE $ 0.19 $ 0.24 $ 0.73 $ 0.31
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF SHARES 998,976 998,976 998,976 998,976
========== ========== ========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE> 6
THE FLIGHT INTERNATIONAL GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six Months Ended
October 31, 1996 October 31, 1995
---------------- ----------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 731,813 $ 307,010
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating
activities
Depreciation and amortization 300,784 425,872
Engine reserve 93,763 123,247
Changes in operating assets and liabilities
Accounts receivable (1,718,090) (576,574)
Inventories (280,605) 44,314
Prepaid expenses (294,279) (282,998)
Accounts payable 504,397 100,829
Accrued expenses and other liabilities 277,970 (75,680)
Deferred revenue (142,722) 515,451
----------- -----------
Net cash provided by (used in) operating activities (526,969) 581,471
INVESTING ACTIVITIES
Sale (Purchase) of property and equipment (232,403) (75,795)
Net (increase) decrease in other assets (5,850) (37,245)
----------- -----------
Net cash provided by (used in) investing activities (238,253) (113,040)
FINANCING ACTIVITIES
Short Term Borrowing 261,849 0
Repayment of long-term debt (355,765) (502,074)
----------- -----------
Net cash provided by (used in) financing activities (93,916) (502,074)
NET (DECREASE) INCREASE IN CASH AND (859,138) (33,643)
CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,178,779 601,744
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 319,641 $ 568,101
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid 191,723 314,138
Income taxes paid 267 1,890
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE> 7
THE FLIGHT INTERNATIONAL GROUP, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Flight International Group, Inc. (the "Company") is an aviation
services company that performs military training services using
specially modified commercial aircraft, principally under contracts
with the United States Department of Defense, other government agencies
and foreign countries. In addition, the Company has established a
market for training and testing in the aerospace industry. The Company
also operates a fixed base operation ("FBO") at the Newport
News/Williamsburg International Airport.
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All significant intercompany
transactions and balances have been eliminated.
Net income/loss per common share is computed by dividing the net
income/loss by the weighted average number of shares of common stock
outstanding during the period.
2. REORGANIZATION AND EMERGENCE FROM CHAPTER 11
On February 4, 1994, the Company and three of its affiliates, Flight
International, Inc. ("FII"), Flight International of Florida, Inc.
("FIF"), and Flight International Aviation, Inc. ("FIA") filed
voluntary petitions in the United States Bankruptcy Court in the
Eastern District of Virginia (the "Bankruptcy Court") for
reorganization under Chapter 11 of the United States Bankruptcy Code
(the "Code"). On December 8, 1994, the Bankruptcy Court entered an
order confirming the Company's joint plan of reorganization (the
"Plan"), and the Plan became effective on December 28, 1994 (the
"Effective Date"). For accounting purposes, the effective date is
deemed to be December 31, 1994.
Pursuant to the Plan, a total of 1,000,000 shares of new common stock
were authorized and 998,976 shares were issued. The 9,899,713 shares of
common stock previously outstanding were canceled. The shares of new
common stock were distributed as follows:
(i) 510,000 shares were issued to holders of allowed general unsecured
claims;
(ii) 290,000 shares were issued to members of Flight's management in
exchange for an equity investment of $290,000 in the reorganized
company;
(iii) 100,000 shares were issued to the Company's management as
compensation; and
<PAGE> 8
(iv) 98,976 were issued to shareholders of record on December 20, 1994.
Of the 510,000 shares to be issued to holders of allowed general
unsecured claims, approximately 51,000 shares are being held by the
Company to satisfy remaining disputed claims of unsecured creditors. As
of the date of filing this quarterly report, no claims remain in
dispute. Certain resolved claims are awaiting final distribution of
shares. The Company anticipates that a final distribution of the
remaining shares will be completed by December 31, 1996.
3. FRESH START ACCOUNTING
The Company has accounted for the reorganization by using the
principles of fresh start accounting, as required by SOP 90-7. The
Company was required to adopt fresh start reporting because holders of
the existing voting shares immediately prior to filing and confirmation
of the Plan received less than 50% of the voting shares of the emerging
entity, and its reorganization value was less than the total of its
post-petition liabilities and allowed claims. Under the principles of
fresh start accounting, the Company's total assets were recorded at
their assumed reorganization value, with the reorganization value
allocated to identifiable tangible assets on the basis of their
estimated fair value.
The Company's net reorganization value was determined to be
approximately $1,000,000. The net reorganization value was based
principally on cash infusions received for the issuance of new common
stock and was approved by the Bankruptcy Court.
As a result of the implementation of fresh start accounting, the
financial statements of the Company after consummation of the plan are
not comparable to the Company's financial statements of prior periods.
4. INCOME TAXES
No provision for federal income taxes has been made by the Company, as
it has substantial Net Operating Loss carry forwards available to
offset against current income.
5. NOTES PAYABLE
On October 16, 1996 the Company entered into a Factoring Agreement (the
"Agreement") with Heller Small Business Finance, a division of Heller
Financial, Inc. ("Heller"). The Agreement granted Heller an assignment
of the CAS-MOS contract accounts receivable and proceeds thereon as
collateral for a line of credit which is expected not to exceed
$2,000,000. The term of the Agreement is two years with an option for
FII to terminate the Agreement after one year if the Company is able to
obtain traditional bank financing. Heller charges a discount fee of .8%
of the invoice amount purchased and an interest rate of prime plus 1%
until the invoice is paid. The Agreement includes a minimum fee to
Heller, inclusive of all interest charges, of $60,000 per annum. The
October 31, 1996 balance due Heller of $261,849 is shown in the balance
sheet as a Notes Payable under Current Liabilities.
<PAGE> 9
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BACKGROUND AND GENERAL INFORMATION
On February 4, 1994 (the "Petition Date"), the Company and certain of
its subsidiaries (the "Chapter 11 Entities") filed a petition for relief under
Chapter 11 of the Federal Bankruptcy Code (the "Code") in the United States
Bankruptcy Court for the Eastern District of Virginia, Newport News Division
(the "Bankruptcy Court").
On December 28, 1994, a Joint Plan of Reorganization dated August 31,
1994, as amended, confirmed and decreed by order of the Bankruptcy Court (the
"Plan"), became effective. The Plan restructured and satisfied the claims of the
creditors of the Chapter 11 Entities and the interests of shareholders of the
Company.
The Company accounted for the reorganization effected by the Plan
through the principles of "fresh start" accounting, as required by Statement of
Position ("SOP") 90-7, "Financial Reporting by Entities in Reorganization Under
the Bankruptcy Code", issued by the American Institute of Certified Public
Accountants. As a result, the financial statements of the Company for the post
bankruptcy period are not comparable in all respects to the Company's financial
statements of prior periods.
In August 1996, the Company was awarded a major government contract.
The Commercial Air Services-Military Operations Support (CAS-MOS) contract is a
derivative of the original government contract won by the Company in 1980 and
operated by the Company until September 1993. The new one year contract, which
can be extended by the government for an additional four years, began October 1,
1996. Annual revenues from this contract are anticipated to be $12 to $22
million; however, CAS-MOS replaces $4.5 million in existing business from the
Sentel and Pax River contracts, which expired September 30, 1996. Therefore, the
net increase in revenue from this contract is estimated to be $7.5 to $17.5
million, or an increase of 60% to 140% over fiscal year 1996 actual revenue, and
is expected to constitute a substantial portion of the Company's revenues. The
large range of revenues from this contract is a result of options available to
the United States Navy. The Company does not anticipate any significant problems
in obtaining the resources necessary to service this contract, although there
can be no assurance thereof. Similarly, there can be no assurance that the
Government will exercise its options on the CAS-MOS contract.
RESULTS OF OPERATIONS
Revenues
Total revenues for the three months ended October 31, 1996 and 1995
were $4,321,631 and $3,758,098, respectively. For the six months ended October
31, 1996 and 1995, total revenues were $9,066,457 and $7,044,735, respectively.
<PAGE> 10
The 15% increase in revenue for the three months ended October 31, 1996
over the comparable prior year period is primarily a result of the first month
of operations under the new CAS-MOS contract. Revenue increased 29% for the six
months ended October 31, 1996, due principally to customer aircraft
modifications completed in the first quarter, and the start of the CAS-MOS
contract in October, 1996.
Cost of Services
Cost of services for the three months ended October 31, 1996 and 1995
were $3,390,007 and $2,673,369, respectively. For the six months ended October
31, 1996 and 1995, the cost of services was $6,858,105 and $5,024,236,
respectively.
The 27% increase for the three months and the 37% increase for the six
months are principally due to the increased revenue as mentioned above. Aircraft
leasing costs also increased for both periods due to the sale and subsequent
lease back of three planes in April 1996. The leasing cost is offset by
decreases in depreciation and interest as discussed below.
Depreciation and Amortization
Depreciation and amortization for the three months ended October 31,
1996 and 1995 were $155,410 and $220,412, respectively. For the six months ended
October 31, 1996 and 1995, depreciation and amortization were $300,784 and
$425,872, respectively. The 29% decrease in depreciation for both the three and
six months ended October 31, 1996 over the comparable prior year period is a
result of the sale and subsequent lease back of three planes with a total cost
basis of approximately $2,694,000 in April 1996.
General Corporate and Administrative
General corporate and administrative expenses for the three months
ended October 31, 1996 and 1995 were $486,261 and $476,948, respectively. For
the six months ended October 31, 1996 and 1995, general corporate and
administrative expenses were $980,699 and $972,269, respectively. Management
believes that the relative stability of these expenses indicates the Company's
success during this year in containing overhead costs in spite of increasing
revenues.
Interest
Interest expense for the three months ended October 31, 1996 and 1995
was $98,838 and $151,841, respectively. For the six months ended October 31,
1996 and 1995, interest expense was $194,787 and $313,459, respectively. The 35%
and 38% decreases in interest expense for the three and six month periods ended
October 31, 1996 over the comparable prior year periods is principally due to
the sale and subsequent lease back of three planes and the related payoff of
approximately $2,164,000 in long term debt in April 1996.
<PAGE> 11
Net Income (Loss)
As a result of the foregoing, the Company's net income for the three
months ended October 31, 1996 was $190,848, or $.19 per share of the Company's
common stock, compared with net income of $234,728, or $.24 per share for the
three months ended October 31, 1995. For the six months ended October 1996, the
Company's net income was $731,813, or $.73 per share, compared to $307,010 or
$.31 per share for the six months ended October 31, 1995. The weighted average
number of shares used in computing per share earnings for all periods was
998,976.
Liquidity and Capital Resources
The Company has funded its operations primarily through cash flow from
operations, bank indebtedness and a sale-leaseback of certain aircraft effected
in April 1996. The Company's operating activities used cash of $526,969 for the
six months ended October 31, 1996, while providing $581,471 in the comparable
prior year period. The decrease in cash provided by operating activities is
primarily due to an increase in accounts receivable of approximately $1,700,000.
Accounts payable increased $504,397, primarily due to increased cost to service
new contracts. Overall, the decrease in cash for the six months ended October
31, 1996 is due to the increase in accounts receivable, deposits and other costs
needed to start up the new business the Company has experienced since the start
of this fiscal year.
On October 16, 1996 the Company entered into a Factoring Agreement (the
"Agreement") with Heller Small Business Finance, a division of Heller Financial,
Inc. ("Heller"). The Agreement granted Heller an assignment of the CAS-MOS
contract accounts receivable and proceeds thereon as collateral for a line of
credit which is expected not to exceed $2,000,000. The term of the Agreement is
two years with an option for FII to terminate the Agreement after one year if
the Company is able to obtain traditional bank financing. Heller charges a
discount fee of .8% of the invoice amount purchased and an interest rate of
prime plus 1% until the invoice is paid. The Agreement includes a minimum fee to
Heller, inclusive of all interest charges, of $60,000 per annum. The October 31,
1996 balance due Heller of $261,849 is shown in the balance sheet as a Notes
Payable under Current Liabilities.
The Company operates in a capital intensive industry. Typically, major
costs are incurred in connection with the initiation of a new contract. These
costs can be reduced through leasing arrangements and advance payments from
customers, if these are obtainable. The Company believes that it will be able to
arrange through available means the financing of these initial contract costs
when necessary, although no assurance can be given.
<PAGE> 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. To the best knowledge of the officers and
directors, neither the Company nor any of its officers and
directors are party to any legal proceeding or litigation. The
officers and directors know of no such litigation being
threatened or contemplated.
Item 2. Changes in Securities. None.
Item 3. Defaults Upon Senior Securities. None.
Item 4. Submission of Matters to a Vote of Security Holders. None.
Item 5. Other Information. None.
Item 6. (a) Exhibits.
Exhibit Number and Description
10.1 Agreement between Heller and FII
27.1 Financial Data Schedule
(b) Reports on Form 8-K. None.
<PAGE> 13
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Dated: December 10, 1996 THE FLIGHT INTERNATIONAL GROUP, INC.
By: /s/ David E. Sandlin
--------------------------------
David E. Sandlin
Principal Executive Officer
By: /s/ Wayne M. Richmon
--------------------------------
Wayne M. Richmon
Principal Financial Officer
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description Page
------- ----------- ----
<S> <C> <C>
10.1 Agreement between Heller and FII
27 Financial Data Schedule
</TABLE>
<PAGE> 1
HELLER SMALL BUSINESS FINANCE
A DIVISION OF
HELLER FINANCIAL, INC.
Flight International, Inc.
Newport News/Williamsburg International Airport
Newport News, VA
Ladies and Gentlemen:
The following shall constitute the terms upon which Heller Financial, Inc.
("Heller") shall act as your sole factor:
SECTION 1. DEFINITIONS
1.1 "Accounts" - All presently existing and hereafter created accounts,
contract rights and general intangibles relating thereto, notes, drafts
and other forms of obligations owed to or owned by Client arising or
resulting from the sale of goods or the rendering of services, all
proceeds thereof, all guaranties and security therefor, and all goods
and rights represented thereby or arising therefrom including, but not
limited to, the right of stoppage in transit, replevin and reclamation.
1.2 "Account Debtor" - the person, firm, corporation or other entity that
is obligated to make payment on an Account.
1.3 "Client" - the addressee of this letter agreement.
1.4 "Collection Date" - one (1) business day after Heller receives notice
of receipt of payment of the Account into the Heller lockbox.
1.5 "Dispute" - A dispute or claim, bona fide or otherwise, as to price,
terms, quantity, quality or any cause or defense to payment whatsoever.
1.6 "Funding Date" - the date that Heller remits funds to Client against a
purchased Account.
1.7 "Interest Rate" - A rate per annum equal to the rate of interest
publicly announced from time to time by First National Bank of Chicago
as its prime, base or equivalent rate plus the interest add-on set
forth on Schedule I.
1.8 "Obligations" - All advances, debts, liabilities, obligations, covenants
and duties owing by Client to Heller, direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising,
including, without limitation, invoices for goods or services purchased
by Client from any company whose accounts are factored or financed by
Heller and indebtedness arising under any guaranty made by Client or
issued by Heller on Client's behalf.
1.9 "Reserve" - the unpaid portion of the purchase price.
SECTION 2. PURCHASE AND PAYMENT
2.1 Client may, from time to time, sell, assign and transfer to Heller and
Heller shall purchase from Client certain of Client's Accounts which are
acceptable to Heller in its sole discretion. Heller shall have no obligation to
purchase any Account and all purchases shall be on a full recourse basis. In
the event Heller does not purchase certain of Client's otherwise eligible
Accounts relating to US Government Contract No. N00019-96-D-2047 in its sole
discretion, then (i) Client shall not be liable for
Client's Initials: /s/ DS Page 1 of 8 Heller's Initials: /s/ KA
------- ------
<PAGE> 2
the unpaid balance of the Minimum Fee referenced in Schedule 1 attached
hereto, and (ii) without diminishing Heller's rights herein, Client
shall have the right thereupon to terminate this Agreement upon payment
in full of all Obligations owing to Heller and upon which all collateral
security provided to Heller shall be released.
2.2 All Accounts sold to Heller hereunder shall be delivered to Heller
together with a form of assignment acceptable to Heller.
2.3 Heller will pay to Client as the purchase price thereof an amount equal
to the face amount of the Account less any applicable discount, fees and
interest due to Heller as set forth in this Agreement and Schedule I.
2.4 At the time Heller purchases each Account or thereafter Heller may,
upon Client's request and at Heller's sole discretion, advance to Client
up to the Advance Percentage set forth on Schedule I of the face amount
of such Account. The balance of the purchase price will, subject to
the Reserve requirements set forth herein, be available to Client one
business day after the Collection Date.
SECTION 3. FEES AND CHARGES
3.1 The computation of the discount fee and/or interest due pursuant to
Schedule I shall be based on the number of days from Funding Date to
Collection Date.
3.2 Client will pay to Heller all fees and interest listed on Schedule I
and Client will reimburse Heller for exchanges on checks, charges for
returned items and all other bank charges. Client will also pay all
miscellaneous charges incurred by Heller as a result of Client requests.
Heller may, at its option, charge Client's account for all amounts
owing by Client to Heller under this Agreement and all other
Obligations.
3.3 In the event that Heller receives payment with respect to an Account
that (i) was not purchased by Heller hereunder or (ii) purchased but
not funded by Heller hereunder, Heller may endorse and deposit such
payment and the amount collected, less an account administration fee
as set forth on Schedule I, will be made available to Client one
business day after the Collection Date. Heller reserves its right to
defer the availability of such payments until Heller receives notice of
check clearance. Client acknowledges and agrees that Heller shall have
no obligation or liability with respect to such collections or the
underlying Accounts other than a duty to turn over to Client the amount
collected.
3.4 Heller shall have the right to apply all monies received by Heller in
satisfaction of Client's Obligations to Heller, including collections
received on Accounts not purchased or purchased but not funded
hereunder.
3.5 Client will pay interest on the daily balance of all monies remitted,
paid or otherwise advanced to Client or for Client's account, net of
all payments received. Interest will be calculated daily at a rate per
annum equal to the rate in Schedule I and will be charged to Client's
account monthly, in arrears, on the last business day of the month. The
Interest Rate listed in Schedule I will also be charged to Client on all
other indebtedness due by Client to Heller under this Agreement and on
all Obligations, except those specifying a different rate, from the date
incurred through the date paid. Any publicly announced decrease or
increase in Prime Rate shall result in an adjustment to the Interest
Rate on the next business day. Interest shall be calculated on the basis
of a 360-day year for the actual number of days elapsed. In no event
shall the Interest Rate exceed the maximum rate permitted by applicable
law and in the event excess interest is paid, it shall be considered a
repayment of the principal.
Client's Initials: /s/ DS Page 2 of 8 Heller's Initials: /s/ KA
---- ----
<PAGE> 3
SECTION 4. Representations, Warranties and Covenants
4.1 Client represents, warrants and covenants as to each Account sold and
assigned hereunder that, at the time of its assignment, the Account is a
valid, bona fide account, representing an undisputed indebtedness
incurred by the named account debtor for goods actually sold and
delivered or for services completely rendered; there are no setoffs,
offsets or counterclaims, genuine or otherwise, against the Account; the
Account does not represent a sale to a parent, subsidiary or affiliate
or a consignment, sale or return or a bill and hold transaction; no
agreement exists permitting any deduction or discount (other than the
discount stated on the invoice); Client is the lawful owner of the
Account and has the right to sell and assign the same to Heller; the
Account is free of all security interests, liens and encumbrances other
than those in Heller's favor, and the Account is due and payable in
accordance with its terms which shall in no event exceed net 30 days
from invoice date; to the best knowledge of Client, the Account Debtor
is solvent and will be able to pay the Account in accordance with its
terms.
4.2 Client represents, warrants and covenants that all information conveyed
to Heller or a broker, consultant, accountant or other person or entity
who referred Client to Heller, is true and accurate as of the date such
information was conveyed, including all information in any credit
application. Client agrees that it will immediately notify Heller of any
material change in any such information, financial or otherwise.
4.3 Client shall not grant or suffer to exist any lien upon or security
interest in its inventory in favor of any party other than Heller
without Heller's prior written consent.
4.4 Client is duly incorporated and in good standing under the laws of the
State set forth on Schedule I and qualified in all States where such
qualification is required; the execution, delivery and performance of
this Agreement have been duly authorized and are not in contravention of
any applicable law, its corporate charter or by-laws or any agreement or
order by which it is bound.
4.5 Client shall not change its corporate name or the location of its office
or open any new offices without giving Heller at least thirty (30) days
prior written notice. At the present time, Client carries on business
only at the above address and the addresses set forth on Schedule I.
4.6 All books and records pertaining to the Accounts or to any inventory
owned by Client shall be maintained solely and exclusively at the above
address or the addresses set forth on Schedule I and no such books and
records shall be moved or transferred without giving Heller thirty (30)
days prior written notice.
4.7 Client shall not sell, lease, transfer or otherwise dispose of all or
substantially all of its property or assets, or consolidate with or
merge into or with any corporation or entity without Heller's prior
written consent.
4.8 After Heller's request, Client shall hold all returned, replevined or
reclaimed goods coming into Client's possession in trust for Heller and
all such goods shall be segregated and identified as held in trust for
Heller's benefit and Client shall, at Heller's request, and at Client's
expense, deliver such goods to such place or places as Heller may
designate.
4.9 The tradenames or styles set forth on Schedule I are the only tradenames
or styles under which Client transacts business; Accounts sold to Heller
hereunder and represented by invoices bearing such tradenames or styles
are wholly owned by Client; the undertakings, representations and
warranties made in connection
Client's Initials: /s/ DS Heller's Initials: /s/ KA
---- ----
Page 3 of 8
<PAGE> 4
therewith shall be identical to and of the same force and effect as
those made with respect to invoices bearing Client's corporate name.
4.10 Client may issue, grant or allow discounts, credits and allowances and
Client may accept returns in Client's ordinary course of business until
Heller notifies Client to the contrary. Discounts, credits or allowances
once issued may be claimed only by the Account Debtor.
SECTION 5. DISPUTES, CHARGEBACKS AND RESERVES
5.1 With respect to any Account, upon (i) the occurrence of a breach of any
of the representations or warranties contained in Section 4.1; (ii) the
assertion by an Account Debtor of a Dispute; (iii) the Account becoming
90 days past invoice date or (iv) the Account becoming unacceptable to
Heller for credit reasons, Heller may charge back such Account to Client
and Client shall repay to Heller the face amount of such Account;
Client's repayment shall be deemed a collection for the purpose of the
Reserve.
5.2 Client shall notify Heller immediately in the event that a customer
alleges any Dispute, or returns or desires to return any goods purchased
from Client.
5.3 Heller shall have the right to charge back to Client any payment which
Heller receives with respect to an Account if such payment is (i)
subsequently disgorged by Heller, whether as a result of any proceeding
in bankruptcy or otherwise or (ii) returned due to non-sufficient funds
or otherwise. Upon the charge back of a payment, the Account may be
reinstated as of the original purchase date.
5.4 A charge back shall not constitute a resale to Client of said Account;
however, upon payment by Client to Heller of all monies due with respect
to such charged back Account, title thereto shall revert to Client,
subject, however, to Heller's security interest therein. Client agrees
to indemnify and save Heller harmless from and against any and all loss,
costs and expenses caused by or arising out of Accounts and the proceeds
thereof, including, but not limited to, collection expenses and
attorney's fees incurred with respect thereto.
5.5 The aggregate of all Reserves held by Heller shall, at all times, equal
or exceed the Required Percentage Reserve set forth on Schedule I of
Accounts outstanding. If the amount of the Reserves falls below such
amount, Heller may augment the Reserves by withholding payments that
would otherwise be made to Client under Section 2.4 hereof.
SECTION 6. ADMINISTRATION
6.1 (a) At the time Client sells an Account to Heller, Client shall execute
and deliver to Heller an assignment schedule together with (i) the
original and one copy of each invoice, (ii) acceptable evidence of
shipment and/or services fully performed and (iii) upon Heller's
request, such other documentation and proofs of delivery as Heller may
require. Each invoice shall bear a notice, in form satisfactory to
Heller, that it has been sold and assigned to and is payable only to
Heller. Heller will mail the original invoice to the Account Debtor.
Client agrees to execute and deliver to Heller such further instruments
of assignment, financing statements and instruments of further assurance
as Heller may reasonably require. Client authorizes Heller to execute on
Client's behalf and file such UCC financing statements as Heller may
deem necessary in order to perfect and maintain the security interests
granted by Client in accordance with this and any other agreement
between Client and Heller, and Client further agrees that Heller may
file this Agreement or a copy thereof as such UCC financing statement.
Client's Initials: /s/ DS Page 4 of 8 Heller's Initials: /s/ KA
------ ------
<PAGE> 5
(b) Client and/or Heller will notify each Account Debtor of an
Account purchased by Heller that all payments thereon must be made only
to Heller. Heller may also contact an Account Debtor from time to time
to verify receipt of such notice and/or to verify delivery of goods or
performance of services. If any remittances are made directly to Client,
its employees or agents, Client shall act as trustee of an express trust
for Heller's benefit, hold the same as Heller's property and deliver the
same to Heller forthwith in kind. If Client should come into possession
of any remittance which applies to both purchased and unpurchased
Accounts, the provisions set forth above shall apply and Client shall
turn over possession thereof to Heller and upon collection thereof,
Heller shall turn over to Client its portion thereof.
(c) Heller and/or such designee as Heller may from time to time
appoint, are hereby appointed Client's attorney-in-fact to (i) endorse
Client's name on any and all checks or other forms of remittances
received by Heller where such endorsement is required to affect
collection; (ii) receive, open and dispose of all mail addressed to
Client and delivered to or received by Heller and (iii) do any and all
things necessary and proper to carry out the purpose intended by the
Agreement. These powers, being coupled with an interest, are
irrevocable.
(d) Heller may, at all times, have access to, inspect and make
extracts from all of Client's records, files and books of account.
Client will promptly furnish Heller with all statements prepared by or
for Client showing its financial condition and the results of its
operations and such other statements as Heller may reasonably require.
Client authorizes Heller to communicate directly with its independent
certified public accountants and authorizes such accountants to discuss
Client's financial condition and statements directly with Heller.
(e) Client shall promptly deliver to Heller each quarter or sooner
upon Heller's request, copies of all completed tax forms required to be
filed with any Federal, State or Local agency or department together
with copies of all tax payments made by Client.
6.2 Heller shall render a monthly Statement of Account to Client within
twenty (20) days after the end of each month. Such Statement of
Account shall constitute an account stated unless Client makes written
objection thereto within thirty (30) days from the date such statement
is mailed to Client.
6.3 Client authorizes Heller to disclose such information as Heller deems
appropriate to persons making credit inquiries about Client.
SECTION 7. Collateral Security
As collateral security for all Obligations, Client hereby assigns and
grants to Heller a continuing security interest in: (i) all of Client's
presently existing and hereafter created Accounts and general
intangibles and the proceeds thereof arising from or relating to U.S.
Government Contract #N00019-96-D-2047; (ii) all monies, securities and
other property now or hereafter held or received by, or in transit to
Heller from or for Client, whether for safekeeping, pledge, custody,
transmission, collection or otherwise, and all of Client's deposits,
Reserves, and credit balances in Heller's possession; (iii) all
returned, reclaimed or repossessed goods and the documents evidencing or
relating to such goods; (iv) all books, records and other property at
any time evidencing or relating to any of the foregoing; and (v) the
proceeds of any of the foregoing, including without limitation, the
proceeds of any insurance policies covering any of the foregoing.
Recourse to the collateral security herein provided shall not be
required, and Client shall at all times remain liable for the payment
and performance of all Obligations upon demand by Heller.
Client's Initials: /s/ DS Page 5 of 8 Heller's Initials: /s/ KA
------- -------
<PAGE> 6
SECTION 8. EVENTS OF DEFAULT
The occurrence of any of the following acts or events shall constitute
an Event of Default: (a) if Client fails to make payment of any of its
Obligations when due, (b) if Client fails to make any remittance required by
this Agreement, (c) if Client commits any breach of any of the terms,
representations, warranties, covenants, conditions or provisions of this
Agreement, or of any present or future supplement or amendment hereto or of any
other agreement between us, (d) if Client becomes insolvent, unable or fails to
meet any its debts to third parties as they mature, (e) if Client delivers to
Heller a false financial statement, (f) if Client calls, or has called by a
third party, a meeting of creditors, (g) if Client has commenced by or against
it any bankruptcy proceeding, insolvency, arrangement or similar proceeding,
(h) if Client suspends or discontinues doing business for any reasons, (i) if a
receiver or trustee of any kind is appointed for Client or any of its property,
(j) if any guarantor of Client's Obligations shall become insolvent or have
commenced by or against such guarantor any bankruptcy proceeding, insolvency,
arrangement or similar proceeding, (k) if any guaranty of Client's Obligations
is terminated, (l) if, without Heller's consent, any change of ownership occurs
with respect to more than forty (40%) percent of Client's capital stock; (m)
any liens, levies of attachments, executions, tax assessments or similar
process shall be filed or issued, or notice thereof, against any collateral
granted to Heller; and (n) Heller shall not have received an executed Corporate
Guaranty from Client's parent company, Flight International Group, Inc. on or
before December 15, 1996.
Upon the occurrence of an Event of Default, Heller shall have the right to (i)
terminate this Agreement and all other arrangements existing between Heller
forthwith and without notice, and all of Client's Obligations shall mature and
become immediately due and payable; (ii) withhold any further payments to
Client until all Obligations have been paid in full; (iii) remove from Client's
premises all records, files and books relating to Accounts; (iv) notify all
Account Debtors of Heller's security interest in Accounts and instruct them to
make all payments only to Heller; (v) settle, compromise, adjust or litigate
all Disputes on such terms as Heller deems advisable; and (vi) notify the
Postal Authority to redirect Client's mail to Heller's offices. In addition,
Heller shall have all of the rights of a secured party under the Uniform
Commercial Code, including, without limitation, the right to take possession of
any collateral in which Heller has a security interest and to dispose of same
at public or private sale and Client will be liable for any deficiency. Heller
shall not be required to proceed against any collateral but may proceed against
Client directly. In the event Heller institutes suit against Client or seeks to
enforce any of Heller's rights against the collateral, Client agrees to pay all
of Heller's costs and reasonable attorney's fees.
SECTION 9. TERM AND TERMINATION
This Agreement shall continue in full force and effect for an initial period of
twenty four (24) months, subject to the Minimum Fee provision contained in
Schedule I attached hereto, and shall automatically renew thereafter for like
periods of time unless terminated by Client giving Heller not less than thirty
(30) days written notice prior to any renewal date; provided, however, that
absent an Event of Default, Heller may terminate this Agreement at any time upon
thirty (30) days prior written notice. Notice of termination shall be given by
messenger, registered or certified mail or commercial delivery service,
provided, however, that Client shall not terminate this Agreement so long as
Client is indebted or obligated to Heller in connection with any other financing
arrangements. Notwithstanding such notice of termination, our respective rights
and Client's obligations hereunder shall not be affected by such termination and
all terms, provisions and conditions hereof, including, but not limited to, the
security interest hereinabove granted to Heller,
Client's Initials: /s/ DS Page 6 of 8 Heller's Initials: /s/ KA
------ ------
<PAGE> 7
shall continue in full force and effect and Heller shall have no
obligation to release any Reserves or otherwise turn over any funds
collected until all Obligations have been paid in full. All of the
representations, warranties and covenants made herein shall survive the
termination of this Agreement.
SECTION 10. MODIFICATIONS
This Agreement cannot be changed or terminated orally; it constitutes
the entire agreement between us and shall be binding upon our respective
successors and assigns, but may not be assigned by Client without
Heller's prior written consent. No delay or failure on Heller's part in
exercising any right, privilege, or option hereunder shall operate as a
waiver thereof or of any other right, privilege or option. No waiver
whatsoever shall be valid unless in writing, signed by Heller, and then
only to the extent therein set forth. If any term or provision of this
Agreement is held invalid under any statute, rule or regulation of any
jurisdiction competent to make such a decision, the remaining terms and
provisions shall not be affected, but shall remain in full force and
effect.
SECTION 11. GOVERNING LAW, VENUE AND WAIVER OF JURY
THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF ILLINOIS. CLIENT HEREBY CONSENTS TO THE
JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN THE
STATE OF ILLINOIS. IF CLIENT PRESENTLY IS, OR IN THE FUTURE BECOMES, A
NON-RESIDENT OF THE STATE OF ILLINOIS, CLIENT HEREBY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED TO CLIENT, AT ITS ADDRESS APPEARING IN HELLER'S
RECORDS AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE
SAME HAS BEEN POSTED AS AFORESAID. ANY CLAIM BY CLIENT AGAINST HELLER
SHALL BE BROUGHT IN THE STATE OF ILLINOIS ONLY. CLIENT HEREBY WAIVES ITS
RIGHT TO TRIAL BY JURY IN ANY SUIT OR PROCEEDING ARISING UNDER OR
RELATING TO THIS AGREEMENT.
SECTION 12. ACCEPTANCE
This proposal is submitted to Client unsigned and shall become
effective only when signed by Heller.
Very truly yours,
HELLER FINANCIAL, INC.
By: /s/ Kim A. Anderson
----------------------------
Name: Kim A. Anderson
--------------------------
Title: Vice President
--------------------------
Accepted and agreed to: Effective Date: October 16, 1996
-----------------
FLIGHT INTERNATIONAL, INC.
By: /s/ David E. Sandlin
----------------------------
Name: David E. Sandlin
--------------------------
Title: President
-------------------------
Client's Initials: /s/ DS Page 7 of 8 Heller's Initials: /s/ KA
------------- --------
<PAGE> 8
SCHEDULE 1
TO THE FACTORING AGREEMENT BETWEEN
HELLER FINANCIAL, INC. AND
FLIGHT INTERNATIONAL, INC.
1. ADVANCE PERCENTAGE: Eighty (80) percent
2. DISCOUNT FEE SCHEDULE:
DAYS (FROM FUNDING DATE DISCOUNT FEE
TO COLLECTION DATE) (PERCENTAGE OF ACCOUNT)
1 to 90 days .8%
** In the event Heller is unable to charge-back an Account pursuant to the
terms herein, Discount Fees will continue to accrue at the rate of one (1%)
percent for each 10 day period or part thereof until Client re-purchases said
Account from Heller or the Account is actually charged-back.
3. INTEREST RATE: Prime + 1%
4. CLOSING FEE: N/A
5. APPLICATION/AUDIT FEE: $1,000.00
6. WIRE TRANSFER FEE: $10 per wire.
7. ACCOUNT ADMINISTRATION FEE: N/A
8. MINIMUM FEE: Client agrees to pay to Heller minimum earned fees (fees
earned by the collection of an Account), inclusive of all interest
charges, of $60,000.00 per annum ("Minimum Fee"). The difference, if
any, between the Minimum Fee and the actual fees earned by Heller during
such period shall be payable on the last business day of the month at
the expiration of such period. For purposes hereof, the Minimum Fee
shall be pro-rated during the first month of the effective date hereof
and thereafter be calculated on an annual basis. Notwithstanding the
foregoing, Heller agrees to waive the minimum fee during the second
twelve month period only if Client obtains traditional bank financing
and only if Heller is paid in full from the proceeds of such financing.
Client remains liable on a pro-rata basis for the minimum fee during the
second twelve month period for each month, or part thereof, the
Agreement remains in effect prior to Client obtaining such traditional
bank financing.
9. REQUIRED RESERVE PERCENTAGE: Twenty (20) percent
10. WIRE TRANSFER DIRECTIONS: BANK NAME ___________________________
ACCOUNT NAME ___________________________
ACCOUNT NO. ___________________________
ROUTING NO. ___________________________
11. STATE OF INCORPORATION: Georgia
12. BUSINESS LOCATION(S): Arizona, California, Virginia
_____________________________
OTHER THAN LISTED ABOVE _____________________________
13. TRADENAMES AND STYLES: Smart Crow
_____________________________
Client's Initials: /s/ DS Page 8 of 8 Heller's Initials: /s/ KA
______ ______
<PAGE> 9
CERTIFICATE OF VALIDITY
FOR VALUE RECEIVED, and to induce HELLER FINANCIAL, INC. ("Heller") to
enter into a Factoring Agreement with FLIGHT INTERNATIONAL, INC., a Georgia
corporation ("Client"), effective as of October 16, 1996, (the "Factoring
Agreement"), and to induce Heller to factor and to make advances pursuant to
the Factoring Agreement, the undersigned hereby unconditionally certifies to
Heller, its successors and assigns, for as long as the undersigned shall
remain an officer of Client, as follows:
1. All Accounts, as such term is defined in the Factoring
Agreement, are and will be subsisting, valid, genuine and authentic.
2. Each and every Account listed in a Schedule of Accounts, except
as otherwise clearly set forth in such Schedule, shall represent the obligation
of a bona fide buyer in the ordinary course of business which will be due and
owing in accordance with the terms set forth on the assigned invoice.
3. Any proceeds of Accounts required by the terms of the Factoring
Agreement to be held by Client in trust as property of Heller will be so held
and will be delivered to Heller in the identical form as received by Client
and/or as requested by Heller. No payments will knowingly be directed to third
parties without Heller's prior written consent. Written consent by Heller shall
be valid only to the extent therein set forth and shall not in any way operate
as a waiver of any right, privilege or option hereunder or under the Factoring
Agreement.
4. All reports, statements and schedules of Client submitted
pursuant to the Factoring Agreement shall be true and accurate in all respects,
including, but not limited to, quantities, identification of items, date,
delivery and sales price thereof.
5. The undersigned will, at all reasonable times, and at the
request of Heller, assist Heller in the collection and liquidation of the
Accounts.
IN WITNESS WHEREOF, this Certificate has been duly sealed, executed and
delivered by the undersigned this 8th day of October, 1996.
/s/ Wayne M. Richmon
------------------------------------------
Wayne M. Richmon, Executive Vice
President/Chief Financial Officer/Director
SUBSCRIBED and SWORN to before me
this 8 day of October, 1996
/s/ Ann P. Campbell
- -----------------------------------
NOTARY PUBLIC
My Commission Expires: 7/31/98
<PAGE> 10
CERTIFICATE OF VALIDITY
FOR VALUE RECEIVED, and to induce HELLER FINANCIAL, INC. ("Heller") to
enter into a Factoring Agreement with FLIGHT INTERNATIONAL, INC., a Georgia
corporation ("Client"), effective as of October 16, 1996, (the "Factoring
Agreement"), and to induce Heller to factor and to make advances pursuant to
the Factoring Agreement, the undersigned hereby unconditionally certifies to
Heller, its successors and assigns, for as long as the undersigned shall remain
an officer of Client, as follows:
1. All Accounts, as such term is defined in the Factoring
Agreement, are and will be subsisting, valid, genuine and authentic.
2. Each and every Account listed in a Schedule of Accounts, except
as otherwise clearly set forth in such Schedule, shall represent the obligation
of a bona fide buyer in the ordinary course of business which will be due and
owing in accordance with the terms set forth on the assigned invoice.
3. Any proceeds of Accounts required by the terms of the Factoring
Agreement to be held by Client in trust as property of Heller will be so held
and will be delivered to Heller in the identical form as received by Client
and/or as requested by Heller. No payments will knowingly be directed to third
parties without Heller's prior written consent. Written consent by Heller shall
be valid only to the extent therein set forth and shall not in any way operate
as a waiver of any right, privilege or option hereunder or under the Factoring
Agreement.
4. All reports, statements and schedules of Client submitted
pursuant to the Factoring Agreement shall be true and accurate in all respects,
including, but not limited to, quantities, identification of items, date,
delivery and sales price thereof.
5. The undersigned will, at all reasonable times, and at the
request of Heller, assist Heller in the collection and liquidation of the
Accounts.
IN WITNESS WHEREOF, this Certificate has been duly sealed, executed and
delivered by the undersigned this 8th day of October, 1996.
/s/ David E. Sandlin
--------------------------------------------
David E. Sandlin, Chairman and President
SUBSCRIBED and SWORN to before me
this 8th day of October, 1996
/s/ Ann P. Campbell
- ---------------------------------
NOTARY PUBLIC
My Commission Expires: 7/31/98
<PAGE> 11
RESOLUTION
RESOLVED, that the action of David E. Sandlin, President, in entering
into on behalf of FLIGHT INTERNATIONAL, INC. (the "Corporation") that certain
Factoring Agreement effective as of October 16, 1996, with HELLER FINANCIAL,
INC. ("Heller") relating to the factoring of the Corporation's sales and the
assignment of accounts, be and the same is hereby ratified and approved and
declared binding on this Corporation, and the President, any Vice President,
Secretary, Treasurer or any other officer or agent of this Corporation be and
they are hereby severally authorized and empowered to carry out and/or from
time to time to modify said agreement or the terms and provisions thereof and
from time to time to sell, assign, deliver, endorse, negotiate, or otherwise
transfer to Heller and its assigns any and all sales, accounts and receivables
now or hereafter belonging to or acquired by this Corporation, and for said
purposes to execute and deliver any and all assignments, schedules, contracts,
agreements or other instruments in respect thereof, and to do and perform all
such other acts and things deemed by such officer or agent necessary,
convenient or proper to carry out or modify any such agreement and arrangements
with Heller hereby ratifying, approving and confirming all that any said
officers or agents have done or may do in the premises.
I, Ann P. Campbell, do hereby certify that I am the Secretary of Flight
International, Inc., a corporation organized and existing under and by virtue
of the laws of the State of Georgia, having its principal place of business in
the City of Newport News, State of Virginia; that I am the keeper of the
corporate records and the seal of said Corporation; that the foregoing is a
true and correct copy of a resolution duly adopted and ratified at a special
meeting of the Board of Directors of said Corporation duly convened and held in
accordance with its bylaws and the laws of said State at the office of said
Corporation in the City of Newport News, State of Virginia, on the 8th day of
October, 1996, as taken and transcribed by me from the minutes of said meeting
and compared by me with the original of said resolution recorded in said
minutes, and that the same has not in any way been modified, repealed or
rescinded but is in full force and effect; that the within and foregoing
agreement is the agreement referred to in said resolution and was duly
executed pursuant thereto.
I do further certify that the following are the officers of said
corporation, and their signatures, namely:
David E. Sandlin By: /s/ DAVID E. SANDLIN
- ---------------------------------------- --------------------------------
Chairman and President, David E. Sandlin
Wayne M. Richmon By: /s/ WAYNE M. RICHMON
- ---------------------------------------- --------------------------------
Executive Vice President and
Chief Financial Officer, Wayne M. Richmon
Ann P. Campbell By: /s/ ANN P. CAMPBELL
- ---------------------------------------- --------------------------------
Secretary
Wayne M. Richmon By: /s/ WAYNE M. RICHMON
- ---------------------------------------- --------------------------------
Treasurer
Witness my hand and seal of said Corporation this 8th day of October,
1996.
By: /s/ ANN P. CAMPBELL
--------------------------------
Secretary
(Attach Corporate Seal here)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FLIGHT
INTERNATIONAL GROUP, INC.'S UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 1996 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-START> AUG-01-1996
<PERIOD-END> OCT-31-1996
<CASH> 319,641
<SECURITIES> 0
<RECEIVABLES> 3,146,465
<ALLOWANCES> 47,572
<INVENTORY> 2,010,108
<CURRENT-ASSETS> 6,509,906
<PP&E> 5,525,093
<DEPRECIATION> 1,060,816
<TOTAL-ASSETS> 11,011,149
<CURRENT-LIABILITIES> 4,113,339
<BONDS> 0
0
0
<COMMON> 9,990
<OTHER-SE> 1,714,673
<TOTAL-LIABILITY-AND-EQUITY> 11,011,149
<SALES> 4,321,631
<TOTAL-REVENUES> 4,321,631
<CGS> 3,390,007
<TOTAL-COSTS> 4,031,678
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 98,838
<INCOME-PRETAX> 191,115
<INCOME-TAX> 267
<INCOME-CONTINUING> 190,848
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 190,848
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
