Consignment Agreement (91K)
Doc #361478: Click preview link for longer preview.
CONSIGNMENT AGREEMENT
This Consignment Agreement (this "Agreement"), dated as of July 17,
2002 (the "Effective Date") among KAV Inventory, LLC, a Delaware limited
liability company ("Consignor"), Kellstrom Commercial Aerospace, Inc, a Delaware
corporation ("Consignee") and Bank of America, N.A., a national banking
association, ("Agent").
RECITALS
WHEREAS, Consignee is engaged in the redistribution of aircraft
engines, aircraft parts and aircraft engine parts through sale and exchange
transactions.
WHEREAS, Consignor heretofore purchased the inventory being consigned
hereunder pursuant to that certain Inventory Purchase Agreement (the "Inventory
Purchase Agreement") entered into as of September 20, 2000 among Consignor,
Aviation Sales Company, a Delaware corporation ("AVS"), and Aviation Sales
Distribution Services Company, a Delaware corporation ("AVSD").
WHEREAS, Consignor heretofore consigned such inventory to Kellstrom
Industries, Inc., a Delaware corporation ("Kellstrom") pursuant to that certain
Consignment Agreement (the "Original Consignment Agreement") entered into as of
December 1, 2000 between Consignor and Kellstrom.
WHEREAS, the Original Consignment Agreement was terminated on or about
October 15, 2001, pursuant to certain rights granted to Agent pursuant to the
terms of the Original Consignment Agreement.
WHEREAS, Consignor desires to engage Consignee to act as its exclusive
agent, and Consignee desires to serve as Consignor's exclusive agent, in
connection with the sale and exchange of such inventory on the terms and subject
to the conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements, covenants
and promises hereinafter contained, the Parties hereto agree as follows:
AGREEMENTS
ARTICLE I
DEFINITIONS
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires, the terms "herein," "hereof" and
"hereunder" and other words of similar import shall refer to this Agreement as a
whole (including, without limitation, all Schedules attached to this Agreement)
and not to any particular Section or other subdivision, and references to
Sections and Schedules refer to Sections and Schedules of this Agreement unless
otherwise indicated. The following terms have the
1
{PAGE}
following meanings for purposes of this Agreement and such meanings shall be
equally applicable to both the singular and plural forms of the terms defined
herein:
"Accounting Criteria" shall have the meaning set forth in Section
6.1(c)(ii).
"Affiliate" shall mean, with respect to any Person, any other person
that, directly or indirectly, controls, is controlled by, or is under common
control with that Person.
"Agent" shall mean (i) Bank of America, N.A., a national banking
association, as agent and security trustee for the lenders under that certain
Loan and Security Agreement dated as of December 1, 2000, by and among
Consignor, Banc of America Securities LLC, Bank of America, N.A. and the
financial institutions named therein and (ii) any successor agent appointed
pursuant to such agreement.
"Approved Vendor" shall have the meaning set forth in Section 2.3(d)
hereof.
"Bankruptcy Code" shall mean the United States Bankruptcy Code,
11 U.S.C. ss. 101 et seq., as amended, or any successor thereto, and any
rules and regulations promulgated thereunder.
"Bankruptcy Court" shall mean the United States Bankruptcy Court for
the District of Delaware.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in New York City, New York are authorized or
required by Law to close.
"Chapter 11 Cases" shall mean the jointly administered voluntary case
commenced by Kellstrom (including certain of its subsidiaries) under Chapter 11
of the Bankruptcy Code.
"Consignee Commission" shall mean the amounts distributed to Consignee
in accordance with Section 5.1(a) hereof.
"Consignee Insurance Commission" shall mean the amounts distributed to
Consignee in accordance with Section 5.1(d) hereof.
"Consigned Inventory" shall mean (i) all Parts identified as Consigned
Verified Parts in Schedule 1.1 to this Agreement, (ii) any Part which is
established by written evidence to have been consigned to, and to have been
within the dominion and control of, Consignee at any time following the
Effective Date, and (iii) immediately upon the expiration or other termination
of the related exchange period of National Airlines or any other existing
exchange or lease program, all Parts owned by Consignor that are the subject of
an exchange transaction between Consignor and a third party; provided, however,
that (a) any Part sold pursuant to this Agreement, but entitled to be returned
by the purchaser thereof shall, upon such return as provided herein,
automatically and without further act be deemed to constitute Consigned
Inventory hereunder, (b) any Part returned to Consignor as provided in Section
2.3(k) hereof shall upon such return or other
2
{PAGE}
disposition automatically and without further act cease to be deemed to
constitute Consigned Inventory hereunder, and (c) any Part received in an
exchange transaction pursuant to Section 5.1(h) hereof shall automatically and
without further act be deemed to constitute Consigned Inventory hereunder.
"Consigned Verified Parts" shall mean those Parts listed on Schedule
1.1 hereto and verified to exist pursuant to the physical inventory performed by
Consignee pursuant to, and in accordance with, Section 7.1(e) hereof and
consigned to Consignee pursuant hereto.
"Consignment Period" shall mean the period commencing on the Effective
Date and ending on the Consignment Termination Date.
"Consignment Report" shall have the meaning set forth in Section 6.1(a)
hereof.
361478