Cooperation Agreement (54K)
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COOPERATION AGREEMENT
among
KELLSTROM INDUSTRIES, INC.,
AVIATION SALES COMPANY
and
AVIATION SALES DISTRIBUTION SERVICES COMPANY
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December 1, 2000
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COOPERATION AGREEMENT
This Cooperation Agreement (this "Agreement") is entered into as of
December 1, 2000 (the "Effective Date") among Kellstrom Industries, Inc., a
Delaware corporation ("Kellstrom"), Aviation Sales Company, a Delaware
corporation ("AVS") and Aviation Sales Distribution Services Company, a Delaware
corporation ("AVSDS").
RECITALS
The AVS Companies (as hereinafter defined) are engaged in, among other
things, the redistribution of aircraft engines, aircraft parts and aircraft
engine parts through sale, lease and exchange transactions (the "Business").
Contemporaneous with the execution of this Agreement, Kellstrom is purchasing
certain assets of the Business pursuant to that certain Asset Purchase Agreement
dated as of September 20, 2000 among Kellstrom, AVS and AVSDS (the "Asset
Purchase Agreement"), and KAV Inventory, LLC, a Delaware limited liability
company ("KAV") is purchasing certain inventory of the Business pursuant to that
certain Inventory Purchase Agreement dated as of September 20, 2000, among KAV,
AVS and AVSDS (the "Inventory Purchase Agreement"). As a material inducement to
Kellstrom to enter into the Asset Purchase Agreement and to join in the
Inventory Purchase Agreement and to consummate the transactions contemplated
thereby, and as an inducement to AVS and AVSDS to enter into the Asset Purchase
Agreement and the Inventory Purchase Agreement and to consummate the
transactions contemplated thereby, the parties hereto agree to make the
covenants and agreements contained herein on the terms and subject to the
conditions contained in this Agreement.
TERMS OF AGREEMENT
In consideration of the mutual representations, warranties, covenants
and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. As used herein, the following terms shall have the
following meanings:
"Affiliate" shall have the meaning ascribed to it in Rule
12b-2 of the General Rules and Regulations promulgated under
the Exchange Act (as hereinafter defined), as in effect on the
date hereof.
"AVS Approved Vendor" means a vendor that meets the criteria
of an acceptable vendor under the provisions of the AVS
quality manual then in effect.
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"AVS Companies" means AVS and each of its Subsidiaries and
each of their respective successors and assigns.
"BER" with respect to any Part means a part that is beyond
economic repair.
"Business Day" means any day other than a Saturday or Sunday
or a day on which commercial banks are required or authorized
to close in Miami, Florida.
"Consignment Agreement" means that certain Consignment
Agreement between KAV and Kellstrom of even date herewith.
"Contract" means any agreement, contract, lease, note,
mortgage, indenture, loan agreement, franchise agreement,
covenant, employment agreement, lease agreement, exchange
agreement, license agreement, instrument, purchase or sales
order, commitment, undertaking or obligation, in each case,
whether written or oral, express or implied.
"Designated Locations" means (i) each location specified as a
"Designated Location" on Schedule 1.1, and (ii) subject to any
restrictions or requirements contained in the Kellstrom Credit
Facility (as defined in the Asset Purchase Agreement) and the
Senior Credit Facility (as defined in the Inventory Purchase
Agreement), each other location to which Kellstrom hereafter
consents upon written request of AVS Companies to designate as
a Designated Location (which consent shall not be unreasonably
withheld or delayed).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor thereto, and any rules and
regulations promulgated thereunder.
"Exchange Pool" means a pool of Parts made available to the
AVS Companies for use by them in exchange arrangements with
third parties.
"Fair Market Value" means, with respect to any Part, an amount
equal to the arithmetic mean of the prices in United States
dollars at which Parts of the same type and quality as, or of
a type and quality similar to or reasonably interchangeable
with, the Part so used (if any), shall, during the three-month
period ending on the date such Part is so used
2
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(or such longer period as may be necessary to have at least
three (3) relevant transactions within the relevant period),
have been invoiced for sale by Kellstrom, in arm's length
transactions to purchasers who are not affiliated with, do not
control or are not controlled by, or under common control
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