Exhibit 10.19
CONSIGNMENT
CONTRACT
1
THIS AGREEMENT is made the First day of December, 1996.
between FERSAM INTERNATIONAL Ltd.
-------------------------
of Pa ▇▇▇▇▇▇▇▇▇▇▇ ▇▇-▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
(hereinafter called the "consignor")
and JET AVIATION TRADING Inc.
-------------------------
of ▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
(hereinafter called the "consignee")
1. IN THIS AGREEMENT
a) The expression "expendable items" shall mean item for which no
authorized repair procedure exists and the cost of repair of which would
normally be expected to exceed that of replacement.
b) The expression "rotable items" shall mean items which can be
economically restored to a serviceable condition and in the normal course of
operations is repeatedly rehabilitated to a fully serviceable condition over a
period approximating to the life of the flight equipment to which it relates.
c) The expression "material" shall include rotable and expendable items
listed in Appendix A hereto.
d) The expression "shelf life expired" shall mean that the length of
time for which an item can be stored under specified requirement has been
reached or exceeded.
e) The expression "net sales price" shall mean:
1) In respect of expendable items the selling price ex
consignee's warehouse.
2) In respect of rotable items the selling price or the loan
charges receivable or the exchange charges receivable or
the lease charges receivable, less any reconditioning,
overhaul or recertification charges incurred by the
consignee.
1
f) The expression "disposal" shall mean the sale, loan, lease or
exchange of any material.
2. AGREEMENT TO CONSIGN AND SELL
The consignor hereby appoints the consignee as its marketing and sales
organization for such materials the consignor may in its sole judgement decide
from time to time to consign to the consignee pursuant to the terms hereof and
the consignee agrees to accept the consigned material and to market and sell,
loan, lease or exchange such material on the terms and condition herein
contained.
3. PERIOD OF THE AGREEMENT
The period of this agreement shall supersede the current one on the
date hereof and shall remain in effect for an initial period of two years
subject to paragraph 12 below and will continue thereafter until determined by
no less than three months notice given by either party to the other on or after
the second anniversary of such date.
4. DELIVERY OF MATERIAL
The following procedure shall be followed when material is delivered by
the consignor to the consignee.
a) NOTICE
The consignor shall provide the consignee with written notice of its
intention to deliver material at least two working days before the
intended delivery date and accompanying such notice shall be a
duplicate copy of the delivery note for the material to be delivered.
b) IDENTIFICATION
To the extent reasonably possible and practical each unit of material
delivered will be tagged by the consignor at the time of delivery which
shall identify the unit as the property of the consignor stating to the
most current manufacturer's part number and its condition, together
with FAA certification.
c) INVENTORY STOCK LIST
Each delivery shall be accompanied by a delivery note identifying the
material.
2
d) RECEIPT
The consignee shall execute and deliver to the consignor at the time of
delivery of the material a receipt for-all such material delivered
subject to correction that might arise pursuant to paragraph 10 hereof
e) COST, PACKAGING, AND SHIPPING
Initially the consignor and consignee shall be responsible for all
costs of packaging and shipping the material to the consignee's store
and the consignor shall bear the risk of loss or damage prior to
delivery to the consignee's store.
f) DELIVERY POINT
The consignor shall deliver the material to the consignee's warehouse
facility at ▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, or such other
location as the consignor and the consignee might agree to in writing.
g) STORAGE
The consignee shall be responsible for storing the material in a
segregated area within its main store and for ensuring that at all
times all appropriate storage conditions and security requirements are
met.
5. SALES
Disposal of the material shall be by the consignee as undisclosed agent
and on behalf of the consignor. The sales prices shall be determined in the
following manner:
a) LOAN, LEASE OR EXCHANGE
The consignee agrees to use its best effort to loan, lease or exchange
the material promptly and for the best prices obtainable in the market
at that time and to be responsible for all amounts due pursuant to any
loan, lease or exchange hereunder.
b) OUTRIGHT SALE
The consignee agrees to use its best efforts to sell the material
promptly and for the best prices obtainable in the market at that time
and to be responsible for any and all amounts due pursuant to any sale
hereunder.
3
c) COSTS
The consignee shall be responsible for ( I ) all costs of disposal and
distribution including packaging, shipping documents and handling
charges and ( 11 ) the recovery of any and all amounts due pursuant to
any disposal of material hereunder.
d) TERMS OF SALE
With respect to the sale of any material by the consignee pursuant to
the terms hereof said material shall be sold either ex warehouse for
US-customer or FOB US- airport for overseas customers. All such sales
shall provide that title to material shall not pass until full payment
has been received.
e) SHELF LIFE EXPIRED MATERIAL
In respect to material which is shelf life expired, the consignee shall
ensure that all overhaul and/or recertification work required shall be
carried out by a party approved for that purpose by the FAA or any
other Aviation Authority.
6. PAYMENT
The consignee shall pay the consignor by standard accepted payment
methods, with telegraphic transfer preferred, from the proceeds of the disposal
of the material the amount set forth below on the following terms and
conditions:
a) REPORT
The consignee shall within 14 days after the last day of each calendar
month during the term of this Agreement report to the consignor all
disposals made during the said month which shall include an itemized
list of the items disposed, the items returned and the debits in
respect thereof pursuant to sub-paragraph ( c) of this paragraph, the
gross sale price, the net sales price and the amount payable to the
consignor. The consignor reserves the right to audit the consignee's
method of consigned inventory control during business hours.
b) PAYMENT
The consignee shall pay to the consignor a sum equal to 75% of the net
sales price of all material disposed of by the consignee as declared in
each report submitted under sub-paragraph ( a ) of this paragraph.
Invoices shall be submitted by the consignor for the payments due as
shown in the reports to in ( a) above and shall be payable within 30
days from date of invoice
4
c) RETURN OF MATERIAL
Should material be returned to consignee by third party purchaser
during a period of 14 days from the date of shipment of the material to
the consignee by reason of the material not complying with the
purchaser's purchase order then the consignee upon verifying the reason
for the return of the material shall, providing the net sales price of
the said item has been credited to the consignor's account, debit the
consignor's next monthly accounting report and reduce the payment to
the consignor's by amount of the previous credit for such material.
This procedure will be followed providing it does not create a
consignee cash-flow problem, and any amended between consignee /
consignor taking into account the vagaries of business.
d) BAD DEBTS.
Providing consignee is using all reasonable methods to obtain payment
from third party purchasers, consignee / consignor will have the option
to negotiate acceptable terms for sharing of burden when all reasonable
payment method have been exhausted, including the hiring of collectors
agencies. In the event that a dispute may not be resolved within 30
days then the local Legal Arbitrators shall resolve matters accordingly
and its findings shall be final and binding on both parties.
7. TITLE TO MATERIAL
Title to all material consigned hereunder shall be and remain with the
consignor and shall be clearly marked as such until such time as said material
is sold and shipped or transferred to a good faith purchaser and paid for at
which time the title to the material sold will transfer from the consignor to
the purchaser thereof.
8. LIENS AND ENCUMBRANCES
The consignor warrants that all material at the time of consignment and
thereafter until sold by the consignee shall be free of mortgages, liens,
conditional sales agreements or other encumbrances or charges.
9. CUSTODIANSHIP
The consignee shall store all material in its warehouse facilities at
▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇, and shall be responsible for the
insurance against all risks for the same, at no cost to the consignor.
5
10. INVENTORY CONTROL
Upon receipt of the material from the consignor, the consignee shall
compile an inventory listing of the material to ascertain whether the Delivery
Note provided by the consignor is correct and the items are properly tagged. If
discrepancies are revealed the consignee will notify the consignor in writing
within 10 working days after the discovery of the particular discrepancies and
correct its inventory stocking list accordingly unless advised otherwise by the
consignor within 10 working days of the consignee's written notification. The
consignee shall keep at all times a full and complete listing of the material in
its store which will be available to the consignor upon request and the
consignee shall have the responsibility to preserve the tagging and identity of
the material attached by consignor unless corrected as above. The consignor's
representatives shall have reasonable access to the material for the purpose of
verifying said lists or inspecting the condition of such material or for any
other reasonable purposes related to this Agreement.
11. RISK OF LOSS AND INSURANCE
The consignee assumes all risk of loss or damage to the material upon
receipt of the material from the consignor. In addition the consignee agrees to
maintain in effect at its expense "all risks' insurance on all material until
such material is received by purchaser, such insurance is to provide against all
risk of physical loss or damage in an amount as is mutually agreed between the
parties.
12. LIEN
A breach shall arise upon the happening of one or more of the following
events which shall constitute an Event of Default namely:
a) Either party shall fail to perform or observe any of the terms
and conditions or agreements to be performed or observed by it
as herein contained and such failure shall continue unremedied
after written notice thereof has been given to the other
(I) for thirty days in the event of the beach relating to
non-payment by the consignee.
(II) for sixty days in the event of any other breach.
b) Either party shall generally not be paying its debts as they
become due or cease operations or have any action taken
against it for administration or liquidation under the
Insolvency Act (not being a voluntary liquidation for the
purpose of reconstruction or amalgamation) or have a receiver
appointed then and in any such event either party shall have
the right to terminate this
6
Agreement without prejudice to the rights and remedies of
either party against the other in respect of any antecedent
claim, or breach of this Agreement.
14. FORCE MAJEURE
The consignee shall not be liable for any damages and/or excess costs
or any other losses to the consignor to the extent that such damages costs or
losses arise through the failure by the consignee in observing the terms and
conditions and which could not with reasonable diligence have been anticipated
and was without its fault or neglect including acts of God or public enemy acts
of Government, fires, floods, epidemics, quarantine restrictions, strikes,
freight embargoes, unusually severe weather and delays and failures of
sub-contractors due to any of such causes as above provided the consignee
notifies the consignor in writing of the cause of such failure within 30 days.
15. TERMINATION
Upon the termination of this Agreement and upon written agreement of
termination procedure between the consignee and consignor all remaining material
will be made available for return, transportation, and/or disposal by the
consignee to the consignor. Consignee will co-operate fully with consignor's
authorized agents for removal of consignor's property.
16. LAW AND DISPUTE
The parties hereto agree that this Agreement shall be governed by and
construed and the performance thereof shall be determined in accordance with the
Laws of England. In event that a dispute may not be resolved within 30 days then
the local Legal Arbitrators shall resolve matters accordingly and its findings
shall be final and binding for both parties.
17. NOTICES
All notices and other communications hereunder shall be in writing (
including facsimile transmissions or telexes) and shall be duly given when
received by party to whom it is addressed at its address specified below or at
such other address as one party may notify to the other as being its address for
the receipt of such notices pursuant to this Agreement.
CONSIGNEE
JET AVIATION TRADING, Inc., ▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, U. S. A..
Phone ▇ ▇▇▇ ▇▇▇ ▇▇▇▇, Fax ▇ ▇▇▇ ▇▇▇ ▇▇▇▇.
7
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President & C.O.O., Jet Aviation Trading, Inc.
CONSIGNOR
FERSAM INTERNATIONAL, Ltd., Pa ▇▇▇▇▇▇▇▇▇▇▇ ▇▇-▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇. Phone ▇▇ ▇▇ ▇▇▇ ▇▇▇▇, Fax ▇▇ ▇▇ ▇▇▇ ▇▇▇▇ / ▇▇▇ ▇▇▇▇.
▇▇. ▇▇▇▇▇ ▇. EL MASRY, Managing Director, Fersam International, Ltd.
▇▇▇. ▇▇▇▇▇▇▇▇ ▇. EL MASRY, Financial Director, Fersam International, Ltd.
8
APPENDIX TO CONSIGNMENT AGREEMENT, BROKERAGE
There will arise such time that the consignee and consignor will face a
situation to improve the sale of the consignment stock and "BROKERING' is
involved i.e. the purchase of items separate from the consignment.
As each brokered deal has it's own particular characteristics, there
will be some deals where consignee purchased items outside vendor and consignor
invoices the end user. Equally possible, there will be some cases where the
consignor purchases the goods and the consignee invoices the end user. In either
case, the party purchasing the goods is responsible for invoicing the other
party in a timely manner with their percentage of the agreed upon margin
included.
The division of the proceeds/profits margin will be determined as
follows: After removal of the acquisition cost and repair costs (if applicable),
profit will be defined as that amount left from invoice to end user divided into
two equal parts and split evenly.
Any freight charges not billable to the end user will be divided
equally between the two parties and invoiced accordingly.
Monthly sales of "BROKERED" items will be on a separate monthly sales
return independent from the sales return of consignment stock.
In certain pre-arranged instances, the consignee or consignor will both
purchase part from an outside vendor and invoice end user. In such a case all
brokering criteria referenced above applies and monies due either party will be
included on "BROKERED" items statement as above.
Any notice hereunder shall be deemed received at the time of its
despatch in the case of a facsimile transmission or at the time of its delivery
in the case of a delivery by hand or recorded delivery post.
9
AS WITNESS the hands of the parties the day and year first before written.
SIGNED on behalf of the CONSIGNOR BY (Mr. N.A. EL MASRY)
Company Seal
Being duly authorized
/s/ N. El Masry
---------------------
SIGNED on behalf of the CONSIGNEE BY (▇▇. ▇. ▇. ▇▇▇▇▇▇)
Company Seal
Being duly authorized
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
10