Consignment Agreement among KAV Inventory, LLC, KIAC, Inc., and Bank of America, N.A.
Summary
This agreement is between KAV Inventory, LLC (the consignor), KIAC, Inc. (the consignee or successful bidder for Kellstrom Industries' assets), and Bank of America, N.A. It sets out how sales proceeds from KAV's inventory will be split over three years, with specific percentages allocated to KAV (for the benefit of Bank of America) and the consignee, depending on sales milestones. The agreement also covers payment terms, sales price requirements, and conditions for termination. Payments to KAV are due 60 days after month-end, and the agreement includes rules for prioritizing inventory sales.
EX-10.4 6 dex104.txt CONSIGNMENT AGREEMENT Exhibit 10.4 EXHIBIT O KAV Term Sheet -------------- Consignment Agreement --------------------- Consignor: KAV Inventory, LLC, a Delaware limited liability company ("KAV") Consignee: KIAC, Inc., or such other party that is the successful bidder for the assets of Kellstrom Industries, Inc., as debtor-in-possession (such party, "Consignee") Lender: Bank of America, N.A. ("BofA") Parties to Agreement: Consignee KAV BofA Terms of New Consignment Agreement: Collection/Disbursement of Proceeds: Year 1: First $15 million of sales from KAV's inventory (net of ------- Reimbursable Expenses) (the "Net Proceeds") shall be distributed 75% to KAV (for the benefit of BofA) and 25% to Consignee. Next $15 million of sales from KAV's inventory (net of Reimbursable Expenses) (the "Net Proceeds") shall be distributed 70% to KAV (for the benefit of BofA) and 30% to Consignee. Next $15 million of sales from KAV's inventory (net of Reimbursable Expenses) (the "Net Proceeds") shall be distributed 60% to KAV (for the benefit of BofA) and 40% to Consignee). Year 2: First $10 million of sales from KAV's inventory (net of ------- Reimbursable Expenses) (the "Net Proceeds") shall be distributed 75% to KAV (for the benefit of BofA) and 25% to Consignee). Next $10 million of sales from KAV's inventory (net of Reimbursable Expenses) (the "Net Proceeds") shall be distributed 70% to KAV (for the benefit of BofA) and 30% to Consignee). Next $10 million of sales from KAV's inventory (net of Reimbursable Expenses) (the "Net Proceeds") shall be distributed 60% to KAV (for the benefit of BofA) and 40% to Consignee). Year 3: First $6 million of sales from KAV's inventory (net of ------- Reimbursable Expenses) (the "Net Proceeds") shall be distributed 75% to KAV (for the benefit of BofA) and 25% Consignee). Next $6 million of sales from KAV's inventory (net of Reimbursable Expenses) (the "Net Proceeds") shall be distributed 70% to KAV (for the benefit of BofA) and 30% Consignee). Next $6 million of sales from KAV's inventory (net of Reimbursable Expenses) (the "Net Proceeds") shall be distributed 60% to KAV (for the benefit of BofA) and 40% Consignee). Other Terms: ------------ 1. Gross selling price should be equal to or greater than 90% of mutually pre-agreed market values. 2. No minimum required yearly sales levels apply other than the levels as described above to effect the consignment fee structure. Any party is allowed to terminate the agreement only in case of breach of a material term of the agreement. 3. At the closing of the transaction pursuant to which Consignee has acquired the assets of Kellstrom, Consignee will pay to KAV (for the benefit of BofA) any balance owing to KAV from sales of KAV inventory made by Kellstrom between the date of execution of the related asset purchase agreement and the closing of such transaction. 4. Payment terms to KAV will be sixty (60) days from month-end for sales occurring during the month. 5. The agreement will provide a mechanism for prioritizing sales of KAV inventory and overlapping inventory either owned by, or consigned with, Consignee.
