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CONSIGNMENT AGREEMENT BETWEEN
AMERICAN AIRCARRIERS SUPPORT, INCORPORATED AND
▇▇▇▇ ▇▇▇▇▇
THIS CONSIGNMENT AGREEMENT ("Agreement") is made on the ____ day of
October, 1998, by and between AMERICAN AIRCARRIERS SUPPORT, INCORPORATED, a
Delaware corporation ("AAS") and ▇▇▇▇ ▇▇▇▇▇, a Florida resident ("▇▇▇▇▇"). AAS
and ▇▇▇▇▇ referred together hereafter as the ("Parties").
RECITALS
1. The Parties desire to enter into an exclusive consignment
arrangement whereby ▇▇▇▇▇ will consign to AAS all of its JT-3/ASAP aircraft
parts inventory and/or aircraft parts inventory controlled by ▇▇▇▇▇ and/or other
aircraft parts inventory or equipment that may be made subject to this Agreement
at a later date ("Spare" or "Spares").
2. This Agreement sets forth the terms of the Consignment Agreement
between ▇▇▇▇▇ and AAS.
STATEMENT OF AGREEMENT
In consideration of the above recitals and mutual covenants and
benefits provided herein, the Parties agree as follows:
1. Definitions. The following definitions shall apply:
a) Addendum. The document approved by ▇▇▇▇▇ and AAS, which
identifies the Spares and sets forth the part number, quantity and
manufacturer's serial number, if known, and is subject to revisions
from time to time as both parties see fit.
b) Exchange. A transaction by which a third party requests
that a Spare held by AAS be shipped to the third party in order to
replace a part owned by the third party which is in need of repair. AAS
then sends the requested part to the third party and the third party
then sends the part needing repair to AAS. AAS has the part repaired
and retains it in AAS' inventory and bills the third party for the cost
of repair.
c) Exchange Fee. The amount billed to a third party and paid
to AAS pursuant to an exchange.
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d) Exchange Unit. The Spare originally consigned to AAS by
▇▇▇▇▇ which is shipped to a third party in an exchange.
e) Extended Price. The total price of all identical Spares
held by AAS.
f) Gross Profit. The total amount of the purchase price
received by AAS from a third party without the deduction of any costs
or expenses.
g) Net Profit. The profit remaining from a sale of a Spare
after AAS has subtracted any costs of repair, overhaul, recertification
and freight of the Spare from the Gross Profit.
h) Premises. The facility at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, at which AAS shall store the Spares consigned to
AAS by ▇▇▇▇▇. However, Spares may be stored at a location owned and
controlled by ▇▇▇▇▇ as the parties see fit.
i) Off Unit. The Spare received from a third party after an
exchange is completed.
j) Notice of Inspection. The written notice to be provided by
▇▇▇▇▇ not less than twenty-four (24) hours prior to any inspection to
be carried out by ▇▇▇▇▇ pursuant to paragraph 3. below.
k) Spares. The aircraft parts to be consigned by ▇▇▇▇▇ to AAS
under this Agreement, as provided in paragraph 2.
below.
2. Consignment.
a) For each shipment of Spares to be consigned by AAS, ▇▇▇▇▇
shall provide Notice of Consignment.
b) ▇▇▇▇▇ shall deliver to AAS on consignment such Spares as
the parties shall mutually approve and identify by execution of an
Addendum in the form described in Section 1(a). Each Addendum shall be
numbered sequentially beginning with ▇▇▇▇▇ Addendum No. 1. These
Addendum's may be in the form of inventory listings that both parties
agree are complete and accurate.
3. Storage.
a) AAS shall, at its own expense, provide for the warehousing,
storage, removal, maintenance, marketing, sale and shipment (to
customers) of the Spares consigned and delivered to AAS, and AAS shall
also provide for all
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management, operating, accounting, and billing in connection therewith.
b) AAS shall keep all Spares identified as the property of
▇▇▇▇▇ distinguishable from any other goods owned or in the possession
of AAS.
c) AAS shall store and maintain the Spares in accordance with
customary aircraft spare parts storage standards in order to prevent
any damage and/or deterioration of the Spares that may be avoided by
following such standards.
d) ▇▇▇▇▇ or its representatives shall have the right to
inspect all Spares consigned to AAS at reasonable times. To exercise
this right, ▇▇▇▇▇ shall provide to AAS a written Notice of Inspection
at least 24 hours prior to the actual inspection. In order to conduct
such inspection, AAS shall permit ▇▇▇▇▇ or its representatives to enter
the AAS premises.
4. Location. AAS shall store all Spares and any necessary records
concerning the Spares at the AAS premises.
5. Consideration for Consignment Rights. Upon execution of this
Agreement, AAS shall pay ▇▇▇▇▇ One Hundred Seventy-Five Dollars ($175,000.00)
for the consignment rights.
6. Distribution of Proceeds from Sale or Exchange of Spares. AAS shall
use its best efforts to sell the consigned Spares at the best competitive market
price, and in consideration of its efforts in selling the Spares, AAS shall be
entitled to receive fifty percent (50%) of the Net Profit. ▇▇▇▇▇ shall receive
the remaining fifty percent (50%) of the Net Profit. All sales from inventory
will be to a legitimate third party purchaser and an arms length transaction.
After ▇▇▇▇▇ receives a total of One Million Six Hundred Thousand Dollars
($1,600,000.00) of proceeds from the fifty percent (50%) portion of Net Profit
to be received by him, this Agreement shall terminate and AAS shall receive
legal ownership and title to all remaining Spares.
7. Reporting.
a) AAS shall furnish to ▇▇▇▇▇ once every sixty (60) days
during the term of this Agreement a written report listing all
transactions, including but not limited to any sales, exchanges, or
returns involving any Spare(s) within the sixty (60) days immediately
prior to the report. The report shall include:
i) The date of each transaction;
ii) The AAS invoice number of each transaction;
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iii) The part number and physical description of
each Spare involved;
iv) The general physical condition of the Spares
involved;
v) The quantity of the Spares involved;
vi) The Unit Price of each Spare involved;
vii) The Extended Price of Spares involved, if
applicable.
b) Beginning sixty (60) days after the date of the first sale,
and every sixty (60) days thereafter, AAS shall provide the report
described in Section 6(a). Any Net Profit due (as described in Section
5) in the sixty (60) day period will be submitted along with said
report, providing that AAS has been paid for such transaction. In the
event that AAS has not been paid within the sixty (60) day period for
such transaction, AAS will submit any Net Profit due ▇▇▇▇▇ on the 10th
day of the month immediately following payment to AAS for said
transaction.
8. Taxes.
a) Sales or use taxes imposed by federal, state or local
taxing authorities and payable as a result of the sale of any Spare
shall be paid by the third party purchaser and are to be collected by
AAS at the time of sale. AAS shall be responsible to pay such taxing
authorities and shall indemnify ▇▇▇▇▇ with respect to such taxes.
b) All property taxes on the Spares are the sole
responsibility of ▇▇▇▇▇ as the owner and title holder of the Spares.
c) All income taxes due (federal, state or local) from the Net
Profit paid to ▇▇▇▇▇ by AAS will be the sole responsibility of ▇▇▇▇▇
and ▇▇▇▇▇ agrees to indemnify AAS for the payment of such tax.
9. Warranty of Title.
a) ▇▇▇▇▇ shall, at all times prior to the consignment of any
Spare to AAS, have legal ownership and title thereto, free and clear of
all liens, claims, charges and encumbrances and shall indemnify AAS of
the same. ▇▇▇▇▇ represents, warrants and indemnifies that title to the
consigned inventory is solely in his name and no other entity.
b) AAS shall not assign, dispose of, or grant any security
interest in or execute any financing statement in favor of any person
other than ▇▇▇▇▇ covering any Spare.
10. Risk of Loss.
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a) AAS shall, at its expense, procure and maintain "risk"
insurance in form and amount satisfactory to ▇▇▇▇▇ covering the Spares
under AAS' possession.
b) AAS shall cooperate fully with ▇▇▇▇▇ to obtain the payment
to ▇▇▇▇▇ of any insurance proceeds owing ▇▇▇▇▇ as a result of damage to
any Spare covered by the insurance referenced in subsection (a) of this
paragraph.
11. Term of Agreement. This Agreement shall be for a term of five (5)
years and shall be automatically renewed for an additional five (5) year term,
unless either party gives written notice of its intent to terminate this
Agreement, which notice shall be given no later than six (6) months prior to the
end of the initial five (5) year term.
12. Termination of Agreement. Either party shall have the right to
terminate this Agreement at their sole option, upon thirty (30) days written
notice. Either party shall have the right to terminate without notice in the
event that:
a) Either party shall become insolvent, or if a petition in
bankruptcy shall be filed by or against either party.
b) Either party shall fail to make any payments required by
this Agreement.
This Agreement shall automatically terminate upon ▇▇▇▇▇ receiving One
Million Six Hundred Thousand Dollars ($1,600,000.00) of proceeds from the fifty
percent (50%) portion of Net Profit to be received by him. Upon said automatic
termination, AAS receives legal title and ownership of the Spares.
13. Forced Delay. Neither party shall be liable for or deemed in
default on account of failure to perform or for any delays in performance under
this Agreement due to any cause which is beyond their reasonable control or
without their fault or negligence.
14. Indemnity. ▇▇▇▇▇ agrees to assume and to release, indemnify,
protect, defend and hold harmless AAS and its named consignors, their assignees
and their directors, officers, agents and employees from and against any and all
claims, suits, actions, judgments, liabilities, and expenses of any nature,
including but not limited to those arising from death or injury to any person
and for loss of, or damage to or loss of use of any property whatsoever,
including but not limited to any Spare, in any manner arising out of, or
resulting from any actions or events taken or proximately caused from the sale,
delivery, ownership, installation, use or operation of any Spare, regardless of
whether such claims, suits, actions, judgments, liabilities or expense
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arise in tort, including strict liability. Except that such Indemnity shall not
apply to:
a) misrepresentation or gross negligence of AAS; or
b) any claims relating to off units.
15. Assignment. This Agreement shall inure to the benefit of and be
binding upon the Parties and their respective successors and assigns, but
neither the rights nor the duties of either AAS or ▇▇▇▇▇ under this Agreement
may be voluntarily assigned.
16. Complete Agreement. This Agreement and the agreements and documents
referred to herein contain the complete agreement between the Parties and
supersede any prior understandings, agreements, or representations by or between
the Parties, written or oral, which may have related to the subject matter
hereof in any way.
17. Notices. All notices, demands and other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be
given in writing and may be addressed as follows:
American Aircarriers Support, Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
Hollywood-▇. ▇▇▇▇▇ Airport
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
18. Governing Law. The laws of the State of South Carolina will govern
all questions concerning the construction, validity, interpretation and
enforcement of this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the day and year first above written.
AMERICAN AIRCARRIERS SUPPORT, INCORPORATED
By /s/ ▇▇▇▇ ▇▇▇▇▇
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Title President
/s/ ▇▇▇▇ ▇▇▇▇▇ (SEAL)
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