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                                                                    Exhibit 10.3



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                             CONSIGNMENT AGREEMENT

                                    BETWEEN

                           KELLSTROM INDUSTRIES, INC.

                                      AND

                               KAV INVENTORY, LLC

                                December 1, 2000



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                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----
SECTION 1     Definitions.....................................................1
SECTION 2     Appointment and Acceptance of Agency............................7
SECTION 3     Representations and Warranties..................................7
SECTION 4     Suggested Sales Price...........................................9
SECTION 5     Certain Responsibilities of the Consignee......................10
SECTION 6     Certain Responsibilities of the Consignor......................13
SECTION 7     Commissions and Payments.......................................14
SECTION 8     Inspection and Reporting.......................................15
SECTION 9     Insurance and Events of Loss...................................18
SECTION 10    Passage of Title Upon Sale; Warranties and Disclaimer by the
              Consignor; No Authority as to Warranties, Etc..................20
SECTION 11    Liens..........................................................21
SECTION 12    Indemnification................................................22
SECTION 13    Termination....................................................23
SECTION 14    Events of Default..............................................24
SECTION 15    Agreed Upon Standard...........................................26
SECTION 16    Miscellaneous..................................................27



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                              CONSIGNMENT AGREEMENT

         This Consignment Agreement (this "Agreement") is entered into as of
________, 2000 (the "Effective Date") between KAV Inventory, LLC, a Delaware
limited liability company (the "Consignor") and Kellstrom Industries, Inc., a
Delaware corporation (the "Consignee").

                                    RECITALS

         Consignee is engaged in the redistribution of aircraft engines,
aircraft parts and aircraft engine parts through sale, lease and exchange
transactions. Contemporaneous with the execution of this Agreement, Consignor is
purchasing the inventory being consigned hereunder pursuant to that certain
Inventory Purchase Agreement (the "Inventory Purchase Agreement") entered into
as of September ______, 2000 among Consignor, Aviation Sales Company, a Delaware
corporation ("AVS") and Aviation Sales Distribution Services Company, a Delaware
corporation ("AVSD"). In connection therewith, Consignor desires to engage
Consignee to act as its agent, and Consignee desires to serve as Consignor's
agent, in connection with the sale of such inventory on the terms and subject to
the conditions contained in this Agreement.

                               TERMS OF AGREEMENT

         In consideration of the mutual agreements, covenants and promises
hereinafter contained, the Parties hereto agree as follows:

                                    SECTION 1

         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 Exhibits and 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 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:

         "AGENT" means Bank of America, N.A., as agent for the Lenders under the
Loan Agreement, and any successor thereto.


         "AGREED UPON STANDARD" means the standard of care set forth in SECTION
15.

         "AIRFRAME" means an aircraft without the engines but including the QEC
Parts and APU.

         "APPROVED VENDOR" has the meaning given such term in SECTION 5(e).

         "APU" means an auxiliary power unit.

         "AVS COMPANIES" means AVS, its Subsidiaries, successors and assigns.


<PAGE>   4

         "BANKRUPTCY CODE" means Chapter 11 of 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.

         "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.

         "CONFIRMED INVENTORY" means (i) all Verified Parts, and (ii) all
Non-Verified Parts that Consignee's records generated after the Effective Date
reflect as having been in the possession or control of Consignee on or after the
Effective Date.

         "COOPERATION AGREEMENT" means the Cooperation Agreement of even date
herewith among Consignee, AVS and AVSD.

         "DESIGNATED LOCATION" means (i) each location specified under the
heading "Designated Location" on SCHEDULE I, (ii) subject to any restrictions or
requirements contained in the Loan Agreement, each other location that Consignor
hereafter consents upon written request of Consignee to designate as a
Designated Location (which consent shall not be unreasonably withheld or delayed
and which consent shall be deemed given should Consignor not respond within
three (3) Business Days after receipt of written request from Consignee), and
(iii) with respect to a Part that is sent to an Approved Vendor, the location of
such Approved Vendor for the duration of such Part's presence at such Approved
Vendor.

         "DUPLICATE PARTS" means aircraft or engine parts which exist in the KAV
Inventory and the Kellstrom Inventory which are identical in part number and
condition (serviceable, unserviceable, overhauled or new).

         "EXCHANGE FEE" means the price (including, without limitation, any late
fees) charged by the Consignee to a third party in connection with an exchange
transaction (but excluding any amount charged to the third party for repairing
the part exchanged by such third party).

         "EVENT OF DEFAULT" has the meaning given such term in SECTION 14.

         "EVENT OF LOSS" means with respect to any Part following transfer
thereof to the Consignee hereunder and prior to any sale thereof to a third
party or return thereof to the Consignor, (i) in the case of any Confirmed
Inventory, any loss of such property or use thereof due to theft, disappearance,
destruction or damage beyond economic repair, (ii) in the case of any KAV
Inventory other than Confirmed Inventory, any loss of such property or use
thereof due to theft, disappearance, destruction or damage beyond economic
repair to the extent that payment is made on account of a claim therefor under
the Property Insurance, (iii) any damage to such property which results in an
insurance settlement with respect to such property under the Property Insurance
on the basis of a total loss or a compromised or constructive total loss, (iv)
the condemnation, confiscation, appropriation or seizure of or requisition of
title to such property or the use of such property by or on authority of any
government or governmental authority to the extent that such loss is a covered
loss under the provisions of the Property Insurance, or compensation is paid by
any government or governmental authority, or (v) ten (10) days following receipt
by Consignee of written notice from the Consignor or the Agent of the removal



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of such property to any location other than a Designated Location (other than in
connection with a sale, lease or exchange transaction) (a "Prohibited
Relocation").

         "FAIR MARKET VALUE" means with respect to any Part, the 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, shall have been invoiced for sale by the
Consignee, in arm's length transactions to purchasers who are not affiliated
with, do not control or are not controlled by, or under common control with, the
Consignee during the period commencing three (3) months prior to the sale and
ending on the date of the sale (or such longer period as may be necessary to
have at least three relevant transactions within the relevant period); and, if
no such invoiced prices are available for a Part, the applicable fair market
value shall be the price established by the mutual agreement of Consignor and
Consignee, or in the absence of an agreement, the price determined to be the
fair market value of such Part by a mutually acceptable third-party appraiser.

         "FEDERAL AVIATION ACT" means those chapters of Title 49 of the United
States Code known as the United States Federal Aviation Act of 1958, as amended,
and all regulations, rulings, interpretations and guidelines published
thereunder and from time to time in effect.

         "FAA" means the Federal Aviation Administration of the United States
and its successors.

         "GROSS SALES PRICE" means, the total invoice price in the case of the
sale of any Parts, the Lease Fee in the case of the lease of any Parts, and the
Exchange Fee in the case of the exchange of any Parts, in each such case, minus
the sum of (a) any insurance, freight, shipping or handling charges charged to a
customer; (b) any Sales Taxes; (c) any customs and duties applicable to such
sales; and (d) any rebates, discounts or allowances.

         "INSURED VALUE" means with respect to any Part, an amount equal to the
Consignor's cost with respect to such Part, at the time in question (which
aggregate Insured Value may decrease as Parts are sold or otherwise disposed of
as permitted herein).

         "INVENTORY PURCHASE AGREEMENT" has the meaning given to such term in
the Recitals hereto.

         "KAV INVENTORY" means all of the Parts consigned by the Consignor to
the Consignee pursuant to this Agreement.

         "KAV PAYABLES" means all amounts payable by the Consignor hereunder
other than (a) any Consignee Commission, (b) any Reimbursable Expenses, (c) any
amounts payable for purchases of Parts by the Consignor pursuant to SECTION
7(d), and (d) any amounts payable to the Consignee pursuant to SECTION 9(E).

         "KELLSTROM INVENTORY" means the inventory of aircraft engines, aircraft
parts and aircraft engine parts owned by Consignee and its Subsidiaries from
time to time.



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         "LABOR COSTS" means the cost of any third-party labor charges paid by
the Consignee which are incurred in the repair, maintenance, overhaul,
refurbishment, certification or modification of any Part in accordance with the
terms of this Agreement.

         "LEASE FEE" means the rent (including, without limitation, any late
fees) charged by the Consignee to a third party in connection with a lease
transaction (but excluding any amount charged to the third party for repairing
the part leased to such third party) (provided, however, if the rent payable in
connection with any lease transaction is due less frequently than monthly, then
the Lease Fee shall mean the effective monthly rental charged by the Consignee
to the lessee thereunder).

         "LEASING" or "LEASE" means the lease or leasing of inventory to the
extent not prohibited by the Loan Agreement or as otherwise consented to by the
Agent, it being acknowledged that the Loan Agreement currently provides that
neither the Consignor nor the Consignee may, without the prior consent of the
Agent: (a) lease any Parts contained in the KAV Inventory other than engines,
(b) lease engines contained in the KAV Inventory for a duration exceeding three
(3) months, or (c) lease engines contained in the KAV Inventory if the number of
engines subject to leases at any one time exceeds twenty-five percent (25%) of
the aggregate number of engines contained in the KAV Inventory at such time.

         "LENDER" means each Person that makes one or more loans to the
Consignor under the Loan Agreement.

         "LOAN AGREEMENT" means that certain Loan and Security Agreement of even
date herewith among the Consignor, the Agent, and the Lenders party thereto, as
amended from time to time, and any loan agreement entered into by Consignor in
connection with any refinancing of the loan contemplated thereby.

         "LOSS VALUE" means, with respect to any Part suffering an Event of
Loss, the 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 suffering the Event of
Loss (if any) shall have been invoiced for sale by the Consignee, in arms length
transactions to purchasers who are not affiliated with, do not control or are
not controlled by, or under common control with, the Consignee during the period
commencing three (3) months prior to the discovery of such Event of Loss and
ending on the date of the discovery of such Event of Loss (or such longer period
as may be necessary to have at least three relevant transactions within the
relevant period); and, if no such invoiced prices are available for a Part, the
applicable Loss Value shall be the price established by the mutual agreement of
Consignor and Consignee, or in the absence of an agreement, the price determined
to be the fair market value of such Part by a mutually acceptable third-party
appraiser.

         "MATERIAL COSTS" means the cost charged to Consignee by a third-party
maintenance provider in accordance with the terms of this Agreement for any
material used in the repair, maintenance, overhaul, refurbishment, certification
or modification of any Part.



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         "NET SALES PRICE" means with respect to any Part or Parts sold, leased
or exchanged by the Consignee, the Gross Sales Price therefor minus the
unreimbursed Reimbursable Expenses with respect to such Part or Parts upon such
sale, lease or exchange.

         "NET SALES REVENUE" with respect to the sale, exchange or lease of any
Part means the Net Sales Price less applicable Consignee Commission.

         "NON-REIMBURSABLE EXPENSES" means all costs and expenses incurred by
the Consignee which are not Reimbursable Expenses, including, without
limitation, all Consignee employee salaries, overhead and costs and expenses
incurred by Consignee in connection with (i) supervision by Consignee employees
of the repair, maintenance, overhaul, refurbishment, certification or
modification of any Parts, (ii) sale, lease or exchange of Parts, (iii) Parts
tracking and accountability, (iv) Parts warehousing, (v) liability insurance on
Parts, (vi) extensions of credit for sales, (vii) except as otherwise set forth
herein, shipping of sold, leased or exchanged Parts, unless such costs have been
previously approved by the Consignor (which approval shall not be unreasonably
withheld or delayed), (viii) provision of the Reports, (ix) records review and
records tracing, (x) payment to the Consignor of amounts owed to it under this
Agreement on a monthly basis, (xi) provision of marketing guidance, and (xii)
other responsibilities as contained in this Agreement, including without
limitation, the Consignee's obligation to pay certain taxes.

         "NON-VERIFIED PARTS" means all Parts other than Verified Parts.

         "ORDERLY LIQUIDATION VALUE" has the meaning given such term in the Loan
Agreement.

         "PART" means each aircraft engine, each aircraft part and each aircraft
engine part, component, or other item of property, and the Records therefor,
purchased by the Consignor under the Inventory Purchase Agreement and held by
the Consignee hereunder in accordance with the terms hereof, including any
aircraft engine, aircraft part or aircraft engine part, component or other item
of property that is installed in or attached or affixed to any Part in
connection with its repair, maintenance, overhaul, modification, refurbishment,
certification or otherwise, in each case, for so long as such Part shall remain
unsold and subject to this Agreement; PROVIDED, HOWEVER, that (i) any such Part,
component or other item of property sold by the Consignee pursuant to this
Agreement, but entitled to be returned by the purchaser thereof to the Consignee
shall, upon such return to such Consignee as provided herein, automatically and
without further act be deemed to constitute a Part hereunder, (ii) any Part
returned to the Consignor as provided in SECTION 5(l) shall upon such return or
other disposition automatically and without further act cease to be a Part, and
(iii) any part received by Consignee in an exchange transaction pursuant to
SECTION 7(f).

         "PAYMENT DATE" has the meaning given such term in SECTION 7(c).

         "PERSON" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint stock company, trust,
unincorporated organization, governmental body, instrumentality or agency or
other entity.

         "PROPERTY INSURANCE" has the meaning given such term in SECTION 9.



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         "PROPERTY TAXES" means all property, excise, inventory and/or use taxes
assessed with respect to the Parts.

         "QEC PARTS" means the Parts which make up a Quick Engine Change Kit.

         "QUICK ENGINE CHANGE KIT" means those Parts which allow an engine to be
connected to an aircraft.

         "RECORDS" means documentation and other records relating to the
maintenance, repair, traceability and/or life limited status of the Parts, and
any other documentation required to be maintained with respect to the Parts by
the Federal Aviation Act and standard industry practices.

         "REIMBURSABLE EXPENSES" means with respect to any Part, all (i) Labor
Costs, (ii) Material Costs, (iii) any insurance, freight, shipping and handling
charges which are not charged to customers (including, without limitation, any
such charges incurred in connection with the shipment of a Part to or return of
a Part from an Approved Vendor), which in the case of internal costs of
Consignee must be either (A) associated with preparation for shipment and upon
terms no less favorable than could have been obtained from a third party, or (B)
in any other case, approved by Consignor in writing, (iv) amounts assumed or
paid by the Consignee on account of Existing Repair Orders (as defined at
SECTION 5(e)), and (v) reasonable and competitive in-house engine and airframe
disassembly costs incurred by the Consignee with respect to such Part and not
charged to the purchaser, lessee or exchange recipient of such Part.

         "REPORTS" means the reports listed on SCHEDULE II, and any other
reports required by the Loan Agreement.

         "SALES TAXES" means any and all sales, use, stamp, value-added,
transfer, recording or other similar taxes and any transfer or other similar
charges incurred or assessed in respect of a sale, lease or exchange of a Part.

         "SENIOR CREDIT FACILITY" means that certain credit facility made
available to Consignor pursuant to the Loan Agreement.

         "SAMPLE PRICE" means with respect to any Part (in a serviceable or
overhauled condition) the sample price for such Part in the applicable condition
as determined pursuant to SECTION 4(a) hereof.

         "SHRINKAGE AMOUNT" means shrinkage after the Effective Date of the
Non-Verified Parts included in the Confirmed Inventory of up to $750,000.

         "SUBSIDIARY" means any Person in which a party hereto or any Subsidiary
of a party hereto (i) directly or indirectly owns (beneficially or of record) or
has the power to vote fifty percent (50%) or more of the outstanding voting
stock or other equity interests, or (ii) otherwise controls the management or
operation.

         "TERM" means the period commencing on the Effective Date and ending on
the Termination Date.



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         "TERMINATION DATE" has the meaning given such term in SECTION 13(b).

         "TERMINATION EVENT" has the meaning given such term in SECTION 13(a).

         "VERIFIED PARTS" means those parts listed on SCHEDULE III and verified
pursuant to the physical inventory completed in accordance with SECTION 2(c).

                                    SECTION 2

         APPOINTMENT AND ACCEPTANCE OF AGENCY.

         (a) Subject to the terms and conditions hereof, the Consignor hereby
appoints the Consignee as its agent for the Term and grants Consignee the
exclusive right to market the Parts through sale, lease and exchange
transactions in accordance with the terms and conditions hereof. The Consignee
hereby accepts the above appointment and agrees to market the Parts through
sale, lease and exchange transactions for the Consignor in accordance with the
Agreed Upon Standard. In this regard, the Consignee will acknowledge receipt of
the Verified Parts upon completion of the physical inventory contemplated in
SECTION 2(c) below. The Consignee agrees to hold the Parts subject to the terms
and conditions of this Agreement.

         (b) Notwithstanding any provision of this Agreement to the contrary,
the Consignee acknowledges and agrees that the Consignee shall not sell,
exchange, lease or otherwise transfer any Parts to the Consignee or any
Subsidiary of the Consignee without the prior written consent of the Consignor,
which consent will not be unreasonably withheld or delayed.

         (c) Consignee and Consignor shall jointly within sixty (60) days after
the Effective Date complete an inventory of the Verified Parts to verify the
physical existence of the Verified Parts. Additionally, Consignee and Consignor
during such period shall jointly establish a "Sample Price" for the sale of
Verified Parts in accordance with SECTION 4(a). Consignee and Consignor agree to
provide adequate and knowledgeable personnel to complete such inventory within
the time frame established. Until such time as any Verified Part is inventoried
and a Sample Price established for such Verified Part, Consignee may sell such
Verified Part based on Consignee's reasonable determination of then current fair
market value. Consignee will be responsible for any Event of Loss of the
Confirmed Inventory, PROVIDED, HOWEVER, that Consignee shall not be responsible
for losses to the Non-Verified Parts included in the Confirmed Inventory until
the aggregate Loss Value of such losses exceeds the Shrinkage Amount.

         (d) Additionally, sales of Parts by the Consignee will be on an
individual item or lot basis and on such terms and conditions and at such prices
as the Consignee in good faith deems appropriate based on the Consignee's
reasonable determination of then current fair market value of the Parts;
PROVIDED, THAT, for any calendar quarter, if the aggregate Gross Sales Price for
all Verified Parts sold by Consignee during such quarter is less than 90% of the
aggregate applicable Sample Prices for such Verified Parts, then Consignor shall
have the right, exercisable by written notice to Consignee, to require Consignee
to receive the prior consent of Consignor to sell any Verified Part for less
than 90% of the then applicable Sample Price ("Sale Consent"). In the event
Consignee seeks the consent of Consignor (which consent shall not be
unreasonably withheld or delayed), it shall request the consent of Consignor on
any Business Day by speaking



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by telephone or in person with each of Benito Quevedo and Michael Brant (or if
either of them shall leave the employ of AVS, the then current Managers of
Consignor designated by AVS), or either one of them that the Company can reach,
at the telephone numbers set forth in SCHEDULE IV and simultaneously confirming
such request by e-mail to each such person at the e-mail addresses set forth on
SCHEDULE IV. In the event that none of the foregoing representatives of
Consignor respond to such request within four (4) hours after such e-mail is
sent, such request for consent shall be deemed granted. In the event that the
foregoing representatives of Consignor shall respond to any such request either
approving or disapproving a proposed sale transaction, it shall thereafter
confirm its response by return e-mail to the sender of the e-mail request. The
obligation of Consignee to obtain the consent of Consignor with respect to the
sale of Verified Parts shall terminate automatically upon the results of a
succeeding quarter reflecting an aggregate Gross Sales Price for Verified Parts
sold in such quarter greater than or equal to 90% of the aggregate Sample Prices
for such Verified Parts. Such obligation of Consignee to obtain the consent of
Consignor may be reinstated upon a subsequent calendar quarter reflecting that
the aggregate Gross Sales Price for all Verified Parts sold by Consignee during
such quarter is less than 90% of the aggregate applicable Sample Prices for such
Verified Parts upon written notice from Consignor as provided above.

         (e) It is the intent of the Consignee to sell each Part in "AS-IS",
"WHERE-IS" condition without any representations or warranties, express or
implied, except (i) a warranty of good title, and (ii) such representations and
warranties as the Consignee may customarily provide in respect of any repair,
maintenance, overhaul, modification, refurbishment or other work (including,
without limitation, any re-tagging) done on such Part, including, without
limitation, any assignable warranties of the manufacturers of such Part or of
any Person that has overhauled or maintained such Part; PROVIDED that the
Consignee shall not make or purport to make on behalf of the Consignor any such
representation or warranty.

                                    SECTION 3

         REPRESENTATIONS AND WARRANTIES.

         (a) The Consignor hereby represents and warrants to the Consignee that:

                  (i) the Consignor is a Delaware limited liability company duly
         organized and existing in good standing under the laws of the State of
         Delaware and has the power and authority to perform its obligations
         under this Agreement;

                  (ii) each Part is free and clear of all liens, security
         interests or other encumbrances, except as explicitly permitted by
         SECTION 11(a) hereof;

                  (iii) this Agreement has been duly executed and delivered by
         the Consignor and, assuming the due authorization, execution and
         delivery by the Consignee and that the Consignee has full power,
         authority and legal right to enter into this Agreement, as of the
         Effective Date, this Agreement constitutes the legal, valid, binding
         and enforceable obligation of the Consignor, subject to applicable
         bankruptcy, insolvency, reorganization, moratorium or similar laws
         affecting the rights of creditors generally, and subject, as to
         enforceability, to general principles



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         of equity (regardless of whether enforcement is sought in a proceeding
         in equity or at law).

         (b) The Consignee hereby represents and warrants to the Consignor that:

                  (i) the Consignee is a corporation duly organized and existing
         in good standing under the laws of the State of Delaware and has the
         corporate power and authority to perform its obligations under this
         Agreement;

                  (ii) the Parts will on the Effective Date be free and clear of
         all liens, security interests or other encumbrances arising by or
         through the Consignee or any of its agents (other than liens of repair
         shops while Parts are undergoing repair, overhaul, modification, and
         maintenance or pursuant to SECTION 11(d) hereof);

                  (iii) this Agreement has been duly executed and delivered by
         the Consignee and, assuming the due authorization, execution and
         delivery by the Consignor and that the Consignor has full power,
         authority and legal right to enter into this Agreement, as of the
         Effective Date, this Agreement constitutes the legal, valid, binding
         and enforceable obligation of the Consignee, subject to applicable
         bankruptcy, insolvency, reorganization, moratorium or similar laws
         affecting the rights of creditors generally, and subject, as to
         enforceability, to general principles of equity (regardless of whether
         enforcement is sought in a proceeding in equity or at law); and

                  (iv) the chief executive office (as such term is used in
         Article 9 of the Uniform Commercial Code) of the Consignee is located
         in Sunrise, Florida and each location where any Parts will initially be
         kept and maintained by the Consignee is a Designated Location.

                                    SECTION 4

         SAMPLE SALES PRICE.

         (a) Within sixty (60) days after the Effective Date, the Consignor and
the Consignee shall jointly agree in writing as to the Sample Price for each
Verified Part (in each case, the applicable "Sample Price"). Consignor and
Consignee agree to provide adequate and knowledgeable personnel (with the
necessary experience and expertise) to establish the Sample Prices within the
established time frame.

         (b) Consignor and Consignee shall meet (the "Review Meeting") on the
last Business Day of each month (or such other day of each month as agreed by
the parties) during the first three months after the Effective Date (or such
longer period as the parties agree) and quarterly thereafter to review
Consignee's standard and ongoing business practices and procedures for the
storage, marketing, repair, overhaul, refurbishment, sale, lease, exchange and
modification of Parts and, in the case of any Parts that the Consignee has
determined are non-saleable due to obsolescence, a condition beyond economic
repair or for other reasons, the sale or other disposition of such Parts as
scrap. At each Review Meeting the parties will also review the Reports. At any
time, the Consignor may object to Consignee's standard practices and



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procedures by giving the Consignee written notice of such objection. The
Consignee will meet with the Consignor to discuss and consider such objections,
promptly following its receipt of such notice.

                                    SECTION 5

         CERTAIN RESPONSIBILITIES OF THE CONSIGNEE.

         (a) ALL PARTS AND RECORDS DELIVERED TO THE CONSIGNEE HEREUNDER AND HELD
BY THE CONSIGNEE PURSUANT TO THIS AGREEMENT SHALL BE HELD BY THE CONSIGNEE AS A
BAILEE-FOR-HIRE, SUBJECT TO THE TERMS AND CONDITIONS HEREOF, AND THE CONSIGNOR
SHALL AT ALL TIMES RETAIN TITLE TO ALL PARTS AND RECORDS WHEREVER LOCATED
(UNLESS AND UNTIL TITLE TO ANY PART SHALL PASS FROM THE CONSIGNOR TO THE
CONSIGNEE AS PROVIDED IN SECTION 10(a)).

         (b) Without limiting any other provision of this Agreement, the
Consignee shall exercise its commercially reasonable efforts to comply with the
Agreed Upon Standard in the disassembly, storage, warehousing (including
providing appropriate climate control), security, maintenance, shipment,
transportation, insurance, packing or other handling of the Parts and Records.

         (c) Without the prior written consent of the Consignor, the Consignee
shall not, except as otherwise expressly provided herein, locate or maintain any
Part at any location other than a Designated Location or transfer any Part to
any Person (other than in a sale, lease or exchange transaction contemplated
hereunder). The Consignee shall give the Consignor ten (10) days prior written
notice of any change in the location where the Records are located or any
records of the Consignee relating to any Parts are regularly maintained.

         (d) The Consignee shall act on the Agreed Upon Standard to sell, lease
or exchange the Parts, including, without limitation, by listing the Parts for
sale with computerized on-line services in use within the aviation industry,
such as the Inventory Locator Service.

         (e) The Consignee will use its commercially reasonable efforts to
identify Parts for repair, overhaul, refurbishment or modification to enhance
the marketability, salability, leasability or exchangeability of the Parts. The
Consignee will maintain a list of its approved vendors (the "Approved Vendors"),
which Approved Vendors have been and hereafter will be approved by the Consignee
according to an approval process consistent with its quality manual then in
effect. Any Part identified for repair under this Section 5(e) will only be sent
to Approved Vendors. The Approved Vendor listing will be made available to
Consignor at Consignor's request. The Consignee will repair, overhaul, refurbish
or modify, or cause to be repaired, overhauled, refurbished or modified, each
Part which it elects to repair, overhaul, refurbish or modify hereunder in
accordance with this Agreement and with all FAA rules, regulations and standards
then applicable.

         Subject to any of the AVS Companies being an Approved Vendor, any
repairs, overhauls, refurbishments or modifications of a Part for which the AVS
Companies have the capability to repair, overhaul, refurbish and/or modify under
applicable FAA regulations will be sent to the



                                       10
<PAGE>   13

appropriate AVS Company for such repair, overhaul, refurbishment or modification
in accordance with the terms and conditions of the Cooperation Agreement.

         Consignee acknowledges that certain of the AVS Companies are, as of the
Effective Date, Approved Vendors (the "Approved AVS Vendors"), and agrees that
Consignee will not remove any AVS Approved Vendor from Consignee's list of
Approved Vendors after the Effective Date unless such AVS Approved Vendor fails
to meet the Consignee's quality control or other requirements as in effect from
time to time which are applicable to repair vendors generally. Further, other
AVS Companies may become Approved Vendors upon the satisfaction of Consignee's
quality control requirements which are applicable to repair vendors generally.

         The Consignor and the Consignee acknowledge that, in connection with
the acquisition of the Parts by the Consignor, the Consignee has agreed to
assume the payment of certain outstanding liabilities relating to Parts which
were sent out for repair, refurbishment, overhaul or modification prior to and
as of the Effective Date and which will not be returned until after the
Effective Date (the "Existing Repair Orders"). In this regard, the Consignor and
the Consignee agree that (i) the amounts so assumed and paid by the Consignee on
account of Existing Repair Orders shall become Reimbursable Expenses incurred by
the Consignee for purposes of this Agreement, and (ii) the Consignee shall be
entitled to obtain reimbursement of such Reimbursable Expenses upon the sale of
any such Part or termination of this Agreement in accordance with the terms of
this Agreement.

         (f) The Consignee shall issue an invoice for each sale or exchange by
it of any Parts hereunder in accordance with its customary practices.

         (g) The Consignee shall (1) collect from the purchaser, lessee or
exchange recipient thereof any and all Sales Taxes, (2) pay all Sales Taxes to
the taxing authorities entitled thereto, (3) file any and all tax returns in
respect of the Sales Taxes in accordance with applicable law, and (4) maintain
records of the foregoing in accordance with all applicable laws and consistent
with its customary business practices. The Consignee shall as reasonably
requested by Consignor provide the Consignor with copies of all receipts,
returns and other records which the Consignee creates and/or receives under this
Section 5(g).

         (h) The Consignee shall physically inspect each Part returned by a
purchaser thereof to the Consignee and shall verify the serial number thereof
(or, if such Part shall have been delivered by the Consignor to the Consignee
hereunder without a serial number, the Consignee shall otherwise identify to its
reasonable satisfaction the property returned as such Part). No Part shall be
accepted for return by the Consignee other than under circumstances customarily
accepted by the Consignee with respect to the part owned and sold by the
Consignee out of the Kellstrom Inventory.

         (i) The Consignee shall provide warehousing and storage facilities for
the Parts delivered to the Consignee (including the Records therefor) consistent
with the facilities used by Consignee for the warehousing and storage of the
Kellstrom Inventory. The Consignee shall locate and store such Parts (including
the Records therefor) as shall from time to time be in the possession of the
Consignee and shall segregate by pallet position the Parts and identify the
Parts as the Consignor's property with prominent signage and appropriate
computer coding unless and



                                       11
<PAGE>   14

until sold and shipped to a purchaser or returned to, or otherwise disposed of
at the direction of the Consignor, pursuant to Section 5(l). The Consignee will
maintain the security of all Parts (including the Records) in accordance with
the Agreed Upon Standard.

         (j) The Consignee shall maintain accurate and complete records for all
Verified Parts and shall continue to maintain records for all Non-Verified Parts
based upon the records provided to Consignee by the Consignor (and not by an
inventory) including, without limitation, inventory records, and maintenance and
repair records, and update the Records in connection with the repair or overhaul
of Parts hereunder in accordance with all applicable FAA rules, regulations and
standards and with the Agreed Upon Standard. The Consignee shall (i) maintain
all licenses and permits as may be required by the FAA or other regulatory
authority to perform the undertakings contemplated by this Agreement, and (ii)
use only third-party maintenance providers that it reasonably believes to have
all licenses and permits necessary to perform the repairs for which the
Consignee has contracted with such maintenance providers.

         (k) As soon as practicable after the Effective Date and during the Term
of this Agreement, Consignee shall provide to Consignor complete and correct
copies of such records and Reports in computer readable form reasonably
acceptable to Consignor and consistent with industry standards.

         (l) On any Termination Date arising from (i) a Termination Event
described in SECTION 13(a)(i), (1) the agency of the Consignee hereunder shall
cease; (2) the Consignor shall have the right to enter the premises of the
Consignee, or any Designated Location or any other location where any Part may
then be located, and repossess any such Part (and related Records) then subject
to this Agreement; and (3) the Consignee shall continue to hold and make
available to the Consignor for repossession all Parts (and related Records) then
in the possession and control of the Consignee in accordance with and subject to
the terms and conditions of this Agreement until such Parts have been so
repossessed but in no event longer than three (3) calendar months after the end
of the Term; (ii) a Termination Event described in SECTION 13(a)(iv), (1) the
agency of the Consignee hereunder shall cease; (2) the Agent shall have the
right to enter the premises of the Consignee, or any Designated Location or any
other location where any Part may then be located, and repossess any such Part
(and related Records) then subject to this Agreement; and (3) the Consignee
shall continue to hold and make available to the Agent for repossession all
Parts (and related Records) then in the possession and control of the Consignee
in accordance with and subject to the terms and conditions of this Agreement
until such Parts have been so repossessed, but in no event longer than three (3)
calendar months after the end of the Term; or (iii) any other Termination Event,
or to the extent that the Consignor and/or the Agent have not exercised their
right to enter the premises as described in clauses (i) and (ii) above, (1) the
agency of the Consignee hereunder shall cease; (2) the Consignee shall continue
to hold all Parts (and related Records) then in the possession and control of
the Consignee in accordance with and subject to the terms and conditions of this
Agreement for a period of up to three (3) calendar months after the end of the
Term; (3) during such three-month period, the Consignee shall return to the
Consignor, or at the Consignor's request dispose of, the Parts remaining subject
to this Agreement as of the date on which the Term shall end (together with all
Records and any and all records of the Consignee relating to such Parts
described in SECTION 5(j)) in such manner and at such locations in the United
States of America as the Consignor shall direct from time to time; and (4) prior
to the end of such three-month period, the



                                       12
<PAGE>   15

Consignee and the Consignor shall conduct a final accounting of all proceeds
payable pursuant hereto. Notwithstanding the foregoing, the Consignor and
Consignee may mutually elect to extend the Term and the agency hereunder with
respect to any Part and, if so extended, all of the provisions of this Agreement
will continue with respect to such Part until it is sold and the rights and
provisions of SECTION 7 are satisfied hereunder. From and after any Termination
Date, all reasonable and documented out-of-pocket, third-party costs incurred in
connection with the return, disposal or other disposition of any Parts, Records
or other records pursuant to this SECTION 5(l) shall be paid by the Consignor,
including shipping costs and such costs and expenses as are directly allocable
to relocation or disposal of the Parts.

         Upon the sale, disposal or return of all Parts to the Consignor
pursuant to this SECTION 5(l), the Consignor shall promptly pay to the Consignee
all Reimbursable Expenses for which the Consignee has not received reimbursement
from the Consignor under Section 7 hereof. For the avoidance of doubt, it is
hereby agreed that the Consignor shall have no responsibility for, and the
Consignee shall have no right to reimbursement with respect to, Non-Reimbursable
Expenses.

         (m) The Consignee shall not take title to any Part in any jurisdiction
other than Florida, Oklahoma and Texas or other Designated Location in which a
sale would be exempt from Sales Tax without either: (i) obtaining the
Consignor's written consent, or (ii) providing a certificate of resale or
analogous document for such jurisdiction, in form and substance reasonably
satisfactory to the Consignor.

         (n) On a quarterly basis, the Consignee shall furnish to the Consignor,
for its approval, a list of Parts that the Consignee has determined to be ready
for breakdown for scrap or are non-saleable due to obsolescence or being beyond
economic repair (other than as a result of an Event of Loss) or for other
reasons and, to the extent that the Consignor consents (which consent shall not
be unreasonably withheld or delayed), such Parts shall be sold or otherwise
disposed of for scrap.

                                    SECTION 6

         CERTAIN RESPONSIBILITIES OF CONSIGNOR.

         (a) The Consignor shall (i) reimburse Consignee for any and all
Property Taxes required to be paid to any taxing authorities on or in connection
with the KAV Inventory, (ii) file any and all tax returns in respect of Property
Taxes in accordance with applicable law, and (iii) maintain records of the
foregoing in accordance with all applicable laws and prudent business practice.
The Consignor shall, as reasonably requested by Consignee, provide the Consignee
with copies of all receipts, returns and other records which the Consignor
creates and/or receives under this SECTION 6(a).



                                       13
<PAGE>   16

                                    SECTION 7

         COMMISSIONS AND PAYMENTS.

         (a) The Consignee shall be entitled to payment from the Consignor of a
commission in accordance with the terms of this Agreement for any and all Parts
sold, exchanged or leased (the "Consignee Commission"). The Consignee shall pay
to the Consignor an amount equal to the Net Sales Revenue (until payment in full
of all amounts outstanding under the Loan Agreement and the termination of
commitments to extend credit thereunder, without deduction or set off for any
amounts which are or may be due the Consignee hereunder or otherwise, other than
the Consignee Commission) by wire transfer of immediately available funds to one
or more bank accounts designated from time to time by the Consignor by written
notice to the Consignee. Until payment in full of all amounts outstanding under
the Loan Agreement and the termination of all commitments to extend credit
thereunder, the Consignee's obligation to pay the Net Sales Revenue and all
rights of the Consignor therein and thereto, shall be absolute, unconditional
and irrevocable and shall not be affected by any circumstance whatsoever.

         (b) The Net Sales Price for each Part sold, exchanged or leased by the
Consignee hereunder shall be distributed as follows:

                  (i) initially, eighty percent (80%) of the Net Sales Price to
         Consignor and twenty percent (20%) of the Net Sales Price (the "Initial
         Sales Commission Rate") to Consignee (as its Consignee Commission),
         until such time as Consignor shall have paid all amounts outstanding
         under (A) the Loan Agreement, together with all accrued interest
         thereon and all other amounts due thereunder, in full, and (B) the KAV
         Senior Subordinated Note A and the KAV Senior Subordinated Note - B
         (each as defined in the Inventory Purchase Agreement), together with
         all accrued interest thereon and all amounts due thereon in full; and

                  (ii) Thereafter, sixty-five percent (65%) of the Net Sales
         Price to Consignor and thirty-five (35%) of the Net Sales Price (the
         "Second Sales Commission Rate") to Consignee (as its Consignee
         Commission).

         (c) Consignee shall be responsible for all invoicing procedures and
accounts receivable collections for the sale, exchange or lease of the Parts.
The Consignor's distributive share of such Net Sales Price shall be remitted
monthly to Consignor no later than the fifteenth (15th) day of the month
following the month in which, (a) in the case of sales, the Part is shipped, (b)
in the case of leases, the date that is thirty (30) days after the date on which
the Part is shipped, and each successive monthly anniversary thereof (for a
number of months equal to the duration of the respective lease), and (c) in the
case of exchanges, the date the exchanged Part is shipped to the customer (each
such date being referred to herein as a "Payment Date"), whether or not
Consignee has been paid for such Part by the purchaser, lessee or exchange
recipient thereof.

         (d) No later than the relevant Payment Date, the Consignor will pay to
the Consignee (without deduction or set off for any amounts which are or may be
due the Consignor hereunder or otherwise): (i) any amounts previously remitted
to the Consignor for any Parts sold by the



                                       14
<PAGE>   17

Consignee and returned by the purchaser thereof in accordance with the terms of
the sale during the calendar month to which such Payment Date relates, (ii) any
amounts incurred by Consignee in connection with the Property Insurance provided
at SECTION 9(a)(i), and (iii) other amounts due to Consignee under this
Agreement.

          (e) Notwithstanding any other provision of this Agreement to the
contrary, if at any time any Part is sold by Consignee to Consignor or
Consignee, or any Subsidiary of the Consignor or Consignee, the Part so sold
shall be deemed to have been sold by the Consignee for a Net Sales Price equal
to the Fair Market Value of such Part. The Consignor shall make payments to the
Consignee in respect of any Part deemed sold to the Consignor pursuant to this
SECTION 7(e) in the amount and manner specified in SECTION 7(a).

         (f) The Consignee may enter into exchange transactions with third-party
customers. Upon an exchange of a Part for another part or parts, title to the
Part being exchanged shall pass to the Consignee pursuant to SECTION 10(a)
hereof and title to the part or parts received by the Consignee shall
automatically pass to the Consignor (and the Consignee shall provide all
documentation the Consignor may reasonably request to evidence such title
passage) and thereafter each such part shall be considered a "Part" for all
purposes of this Agreement. The Consignee shall repair and overhaul each such
Part so received so that it is in the same as or better condition than the Part
so exchanged and no portion of the cost thereof shall be deemed a Reimbursable
Expense hereunder. Each such part so received shall have attributed to it the
amount of the Reimbursable Expenses allocable to the Part exchanged by the
Consignee. If the Consignee receives an Exchange Fee in addition to another
part, then such Exchange Fee shall be treated as Net Sales Price to be allocated
and distributed pursuant to Section 7(a) and 7(b) hereof. If the Consignee
scraps any part received in an exchange and treats the same as a sale of the
exchanged Part to the exchange customer, such sale shall be treated as a sale of
such Part hereunder and the proceeds of such sale shall be allocated pursuant to
Section 7(a) hereof.

                                    SECTION 8

         REVIEW AND REPORTING.

         Consignee recognizes the obligations of the Consignor to maintain
active control of the KAV Inventory.

         (a) On every Payment Date, the Consignee shall provide to the Consignor
and the Agent the report described in Item 1 of SCHEDULE II hereto relating to
the month immediately preceding such Payment Date. The Consignee shall use its
commercially reasonable best efforts to provide to the Consignor and the Agent
all other Reports by the twentieth (20th) day of the month, but in no event
later than the earlier of (i) three (3) Business Days before the applicable
Review Meeting, or (ii) the last day of the month. Consignor, and until the
payment in full of all amounts outstanding under the Loan Agreement and the
termination of all commitments to extend credit thereunder, the Agent, shall
have the right to inspect KAV Inventory from time to time, upon prior written
notice, during Consignee's normal business hours, such inspections to be
arranged so as not to interfere with the operations of Consignee, but with
respect to the Consignor in no event more than four (4) times per calendar year
(unless there shall have occurred an Event of Default).



                                       15
<PAGE>   18

         (b) The Consignee agrees to use its commercially reasonable best
efforts to provide the Consignor with on-line computer access to the following
information relating to the KAV Inventory: (i) the repair, maintenance,
overhaul, refurbishment or modification of any Parts, (ii) sales, leases and
exchanges of any KAV Inventory, and (iii) returns of any Parts. If Consignee is
unable to provide Consignor using commercially reasonable efforts on-line access
to such information, the Consignee shall upon request of Consignor provide
Consignor with daily or weekly batch reports setting forth such information.

         (c) The Consignee will periodically review with Consignor its standard
operating procedures for the disassembly, repair, maintenance, overhaul,
refurbishment and modification of Parts, any proposed modifications or
amendments thereto and the status of the sales, leases and exchanges of KAV
Inventory and the Kellstrom Inventory that are determined to be Duplicate Parts,
taking into account any customer preference (which such preference may be
evidenced by a notation on the applicable purchase order), to ensure that the
aggregate Duplicate Parts sales, lease and exchange revenue from the Kellstrom
Inventory and the KAV Inventory are managed such that the aggregate sales, lease
and exchange revenue on account of sales, leases and exchanges of Duplicate
Parts during any calendar quarter is substantially equal, subject to any
requirements relating to any other consignment inventories managed by the
Consignee as of the Effective Date of this Agreement. If the aggregate sales,
lease and exchange revenue of the KAV Inventory and the Kellstrom Inventory
during any calendar quarter is not substantially equal, the Consignee shall in
the next ensuing calendar quarter manage the sales, lease and exchange process
by emphasizing sales, leases and exchanges from the deficient party's inventory
on an ongoing basis to obtain and maintain the substantially equal revenue
status from Duplicate Parts. For purposes of this section, the sales, lease and
exchange revenue arising from the sales, lease and exchange of Kellstrom
Inventory and KAV Inventory shall mean the Gross Sales Price of such inventory.

         (d) The Consignor shall review the Reports and, no later than ten (10)
Business Days after receiving each Report, notify the Consignee of any
objections to the Reports thereto in writing including, without limitation, the
Consignee's failure to abide by Section 15 hereof for the preceding reporting
period, specifying in reasonable detail the grounds for such objection, (the
"Objection"). The Consignee shall no later than five (5) Business Days after
receipt by it of any Objection, by written notice to the Consignor, accept or
reject such Objection, specifying in reasonable detail the grounds for any
rejection thereof. If the Consignee accepts any Objection, the net amounts
payable to the Consignor hereunder in respect of the reporting period shall be
adjusted giving effect to such Objection, and the Consignee shall promptly pay
the Consignor such additional amounts as shall be required to be paid the
Consignor as a result of such adjustments. If the Consignee rejects any
Objection, the parties will meet within five (5) Business Days after the
Consignee notifies the Consignor of such rejection to discuss any such
Objection.

         If the parties fail to reach agreement on an Objection at such meeting,
or at any mutually agreed postponements and adjournments thereof, the Consignor
may at its option, by written notice to the Consignee, either (i) withdraw such
Objection (in which case no adjustments in respect of such withdrawn objections
shall be made to such report), or (ii) pursue the Objection by requiring the
Reports delivered during the preceding monthly or quarterly reporting period to
be examined and verified by the Independent Accountants (as defined in the
Inventory Purchase



                                       16
<PAGE>   19

Agreement) which shall review and resolve the Objection. The Consignor and the
Consignee shall cooperate fully with such accountants and shall provide such
accountants (if reasonably necessary to address the Objection) such records,
invoices, accounts, documents and other information relating to this Agreement
and the Parts as such accountants shall request in connection with their
examination and verification of such Reports. The Consignee shall provide such
accountants all information related to the KAV Inventory reasonably necessary to
allow accountants to verify, if applicable to the Objection, the following with
respect to the most recent quarterly period: (A) the frequency of sales, leases
and exchanges of Parts meeting the Agreed Upon Standard; (B) that the Labor
Costs and Material Costs assessed as Reimbursable Expenses are (i) accurately
reflected in the Reports, and (ii) if such Labor Costs and Material Costs were
incurred by an AVS Company or the Consignee or a Subsidiary of Consignee, that
they are equal to or less than the prices charged to independent third parties
for similar work; (C) the repaired Parts are selling, leasing or exchanging for
prices that reflect the added value of the Reimbursable Expenses incurred with
respect to such repairs and rebuilds; (D) the data in the invoices covering the
most recent quarterly period is accurately reflected in the applicable Reports;
and (E) the sales prices, Lease Fees and Exchange Fees of Parts have been
charged on the Agreed Upon Standard when compared with sales, leases and
exchanges of similar parts sold, leased or exchanged by the Consignee during the
most recent quarterly period (or, in the absence of sales, leases or exchanges
of similar parts sold, leased or exchanged in such three (3) month period, a
price determined by an appraiser acceptable to both Consignor and Consignee).
The criteria set forth in the foregoing clauses (A) through (E) are hereinafter
referred to as the "Accounting Criteria". The accountants shall review the
Accounting Criteria taking into account the Consignee's commercially reasonable
business discretion, operational parameters and contract commitments. The
resolution of the Objection and the amounts so calculated by such accountants
shall be accepted by the Consignee and the Consignor as final and conclusive for
the purpose of determining all amounts payable hereunder in respect of all Parts
sold, leased or exchanged or deemed sold, leased or exchanged during the
reporting period subject to the Objection. The Consignee and the Consignor agree
that they shall, within five (5) Business Days following receipt by the
Consignee and the Consignor of the final report by such independent accounts,
make such payments, if any, as shall be required to be made by the Consignee or
the Consignor, as the case may be, as a result of such final report.

         (e) If, as a result of the examination and verification by any such
independent accountants of any Report, the Consignee shall be required to pay
the Consignor an amount in excess of 5% of the amount originally payable by the
Consignee to the Consignor in respect of the period covered by such Report, all
such fees and expenses shall be paid solely by the Consignee. If, the results of
the examination and verification by any such independent accountants of any
report reflect that the amount paid by Consignee to Consignor was accurate, or
was inaccurate by 5% or less of the amount originally payable by the Consignee
to the Consignor in respect of the period covered by such report, all such fees
and expenses shall be paid solely by AVS.

         (f) In addition to any examination and verification provided for in
SECTION 8(d) herein, on or prior to each anniversary of the Effective Date, the
Consignee, at the Consignor's prior written request and cost, shall permit the
Consignor or the Agent to jointly verify any of the Accounting Criteria
specified by the Consignor with respect to the Parts during the preceding twelve
months, using the same standard of evaluation specified in SECTION 8(d) hereof.
The



                                       17
<PAGE>   20

Consignor and the Consignee shall cooperate fully with the Consignor and the
Agent, and the Consignee shall provide the Consignor and the Agent on demand
with such records, invoices, accounts, documents and other information relating
to this Agreement and the Parts as they shall request in connection with their
examination. Any unreconciled differences between the Confirmed Inventory and
the inventory of Confirmed Inventory conducted by the Consignor and the Agent
shall be treated as Events of Loss hereunder.

         (g) The Consignor and the Consignee hereby agree that all Reports and
all other information provided by and relating to this Agreement, the Parts or
any of the transactions contemplated hereby shall be treated as confidential,
shall be used solely for the purpose of performing their respective obligations
hereunder and shall not be disclosed to any third party, except to prospective
and permitted transferees of the Consignor or the Consignee, or the Consignor's
or the Consignee's or the aforementioned transferee's counsel, accountants,
lenders, the Agent, Lenders, insurance brokers or other agents who agree to keep
such information confidential or the extent required to be disclosed by
judicial, regulatory or administrative process in connection with any action,
suit, proceeding or claim or otherwise by applicable law.

                                    SECTION 9

         INSURANCE AND EVENTS OF LOSS.

         (a) The Consignee shall keep in full force and effect for the term of
this Agreement, and any extensions hereto, the following insurance coverages
with insurers used by Kellstrom or other insurers of recognized reputation and
responsibility:

                  (i) All risk property, including in-transit insurance with
         respect to the Parts in an amount equal to the Insured Value (the
         "Property Insurance"). Insofar as the relevant policies cover Parts
         delivered hereunder, the Consignor shall be named as additional insured
         and, until the payment in full of all amounts outstanding under the
         Loan Agreement and the termination of all commitments to extend credit
         thereunder, the Lenders (or the Agent for the benefit of the Lenders)
         shall be named as sole loss payee as their interests may appear, under
         the policy without imposing any obligation on the Consignor or the
         Lenders to pay the premiums thereof, and the insurer shall waive all
         rights of subrogation with respect to the Consignor and the Lenders.

                  (ii) Comprehensive general liability insurance in an amount
         not less than $100,000,000 and products liability insurance in an
         amount not less than $500,000,000, in each case combined single limit
         bodily injury and property damage per occurrence/aggregate. The
         Consignor and, until the payment in full of all amounts outstanding
         under the Loan Agreement and the termination of all commitments to
         extend credit thereunder, the Lenders (or the Agent for the benefit of
         the Lenders) shall be named as additional insureds, under the policy
         without imposing any obligation on the Consignor or the Lenders to pay
         the premiums thereof. This policy will include broad-form contractual
         liability subject to the terms and conditions of the policy. This
         policy shall operate with respect to each additional insured as though
         a separate policy were issued to each,



                                       18
<PAGE>   21

         provided that such provisions shall not operate to increase the
         insurer's limit of liability.

                  (iii) Workers Compensation and Employers Liability required by
         all applicable laws, regulations and statutes.

                  (iv) Nothing in this SECTION 9 shall prohibit the Consignor,
         or until the payment in full of all amounts outstanding under the Loan
         Agreement and the termination of all commitments to extend credit
         thereunder, the Agent for the benefit of the Lenders, from obtaining
         (A) the insurance coverages of SECTIONS 9(a) (i), (ii) and (iii) should
         the Consignee fail to do so, or (B) additional insurance in respect of
         any Parts consigned hereunder so long as such additional insurance
         shall in no manner invalidate any insurance maintained by the Consignee
         in accordance with the provisions of this Section 9.

         (b) Policies described in SECTIONS 9(a)(i) and 9(a)(ii) shall be
endorsed to include breach of warranty protection in favor of the Consignor and,
until the payment in full of all amounts outstanding under the Loan Agreement
and the termination of all commitments to extend credit thereunder, the Agent
for the benefit of the Lenders, and said insurance shall be primary insurance
over any such insurance carried by the Consignor or, until the payment in full
of all amounts outstanding under the Loan Agreement and the termination of all
commitments to extend credit thereunder, the Agent for the benefit of the
Lenders.

         (c) The Consignee shall provide certificates of insurance from its
independent insurance broker or underwriters to the Consignor and, until the
payment in full of all amounts outstanding under the Loan Agreement and the
termination of all commitments to extend credit thereunder, the Agent evidencing
the coverages in this Section upon execution of this Agreement, upon any
increase in coverage or amount of any insurance required by this Agreement, and
upon policy renewal thereafter for the term of this Agreement. The certificate
shall provide for a thirty (30) day notice to the Consignor and, until the
payment in full of all amounts outstanding under the Loan Agreement and the
termination of all commitments to extend credit thereunder, to the Agent for the
benefit of the Lenders of cancellation or material change to the insurances
required hereby.

         (d) Consignor shall be responsible for and shall reimburse Consignee
for the cost of the Property Insurance allocable to the incremental costs
incurred to insure the KAV Inventory to the extent in excess of the cost to
Consignee to insure the Kellstrom Inventory generally. Consignee shall be
responsible for and shall pay the costs of insurance provided at SECTION
9(a)(ii) and (iii). Any deductible for Property Insurance shall be the sole
responsibility of the Consignor. Any deductibles required by the insurance
described in SECTIONS 9(a)(ii) and (iii) shall be the sole responsibility of the
Consignee.

         (e) Within ten (10) Business Days of the discovery of an Event of Loss
with respect to a Part, the Consignee shall give the Consignor and until the
payment in full of all amounts outstanding under the Loan Agreement and the
termination of all commitments to extend credit thereunder, the Agent for the
benefit of the Lenders, written notice of such occurrence. Upon receipt by
Consignee of any insurance proceeds or condemnation awards relating to any Event
of



                                       19
<PAGE>   22

Loss, the Consignee shall pay the amount of such insurance proceeds or
condemnation awards net of Reimbursable Expenses and Consignee Commission, to
the Agent, or upon the payment in full of all amounts outstanding under the Loan
Agreement and the termination of all commitments to extend credit thereunder, to
the Consignor, as appropriate, by wire transfer of immediately available funds
to one or more bank accounts designated by the Consignor or the Agent, as
applicable, by notices to the Consignee. Upon the occurrence of a Prohibited
Relocation of any Part, the Consignee shall pay an amount equal to the Loss
Value of such Part, net of Reimbursable Expenses and Consignee Commission, to
the Agent, or upon payment in full of all amounts outstanding under the Loan
Agreement and the termination of all commitments to extend credit thereunder to
the Consignor, as appropriate, by wire transfer of immediately available funds
to one or more bank accounts designated by the Consignor or the Agent, as
applicable, by notices to the Consignee. Such payments shall be treated
identically to a payment by the Consignee to the Consignor of the Net Sales
Price with respect to the Part suffering such Event of Loss, and accordingly
such payment shall be allocated pursuant to SECTION 7(a) hereof. In the event
that any insurance proceeds or condemnation awards on account of any Event of
Loss with respect to any Part shall be paid directly to the Agent or the
Consignor, then the Agent or the Consignor, as applicable, shall promptly remit
to Consignee the Reimbursable Expenses and Consignee Commission with respect to
such Part upon the submission of a request therefor accompanied by reasonable
evidence thereof.

                                   SECTION 10

         PASSAGE OF TITLE UPON SALE; WARRANTIES AND DISCLAIMER BY THE CONSIGNOR;
         NO AUTHORITY AS TO WARRANTIES, ETC.

         (a) Title to each Part (and its related Records) will automatically
pass from the Consignor to the Consignee, free and clear of all liens and
encumbrances, upon shipment of such Part by such Consignee to the purchaser or
exchange recipient thereof, as provided herein. Prior to shipment, title to each
Part (and its related Records) shall remain in Consignor.

         (b) All Parts delivered to the Consignee hereunder are delivered by the
Consignor AS-IS WHERE-IS WITH ALL FAULTS. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
IN THIS AGREEMENT, THE CONSIGNOR HAS NOT AND SHALL NOT BE DEEMED TO HAVE MADE AT
ANY TIME (WHETHER BY VIRTUE OF HAVING ACQUIRED OR DELIVERED THE PARTS, OR HAVING
TRANSFERRED TITLE TO ANY PART AS PROVIDED IN THIS SECTION 10 OR OTHERWISE OR
HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY
STATUS UNDER OR IN RELATION TO THIS AGREEMENT OR OTHERWISE), AND THE CONSIGNOR
HEREBY SPECIFICALLY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AS TO THE VALUE, AIRWORTHINESS, CONDITION, MANUFACTURE, DESIGN,
OPERATION, MERCHANTABILITY, FREEDOM FROM CLAIMS OF INFRINGEMENT OR THE LIKE, OR
FITNESS FOR USE FOR ANY PURPOSE OF THE PARTS, OR AS TO THE QUALITY OF THE
MATERIAL OR WORKMANSHIP OF THE PARTS, THE ABSENCE THEREFROM OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, OR THE ACCURACY OR COMPLETENESS OF THE
RECORDS OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED
(INCLUDING ANY IMPLIED



                                       20
<PAGE>   23

WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OF TRADE),
WITH RESPECT TO THE PARTS; AND THE CONSIGNEE HEREBY WAIVES, RELEASES, RENOUNCES
AND DISCLAIMS EXPECTATION OF OR RELIANCE UPON ANY SUCH REPRESENTATION OR
WARRANTY OR ANY OTHER REPRESENTATION AND WARRANTY WHATSOEVER.

         (c) Except as otherwise expressly set forth herein, (a) the Consignee
shall not make or purport to make on behalf of the Consignor any representation
or warranty of any nature whatsoever, express or implied, regarding any Part
sold by the Consignee pursuant to this Agreement, and (b) the Consignee shall
not assume or purport to assume on behalf of the Consignor any other obligation
or liability in connection with any sale or return of any Part.

                                   SECTION 11

         LIENS.

         (a) From time to time, the Consignor may secure any obligation with
security interests, liens, assignments, and other encumbrances encumbering the
Parts, any accessions thereto, and any interests therein or under this Agreement
(including any proceeds payable hereunder), including, but not limited to liens
securing obligations owed by the Consignor to the Lenders, and upon doing so,
the Consignor will give the Consignee notice thereof; provided, however, that so
long as no Event of Default has occurred, the holder of any such security
interest, lien, assignment or other encumbrance will not have the right to
interfere unreasonably with the rights of the Consignee under this Agreement,
including (without limitation) the right to possess, sell, and exchange the
Parts in accordance with this Agreement. Neither the Agent nor any Lender will
assume, or be deemed to have assumed, any obligation of the Consignor hereunder,
absent the Agent's or such Lender's express written assumption of such
obligation. Upon the request of the Consignor, the Consignee will promptly take
all actions reasonably requested by the Consignor with respect to effectuating,
evidencing, or perfecting any such security interest, lien, assignment, or other
encumbrance or as otherwise requested by Consignor with respect thereto,
including (without limitation) by signing and delivering subordination
agreements subordinating any right, title, or interest that the Consignee may
have in such Parts; financing statements; estoppel certificates; consents;
notices to persons having security interests in and other encumbrances on any
property of (or in the possession of) the Consignee; terminations and
disclaimers by secured creditors of the Consignee or other entrustors of the
Consignee with respect to any rights, titles, and interests in, or encumbrances
on, the Parts, and any proceeds therefrom; insurance policy endorsements and
certificates; and other documents, in forms and of contents as are acceptable to
the Consignors and the holders of such obligations.

         (b) The Consignee shall at all times keep all Parts subject to this
Agreement free and clear of all liens, security interests or other encumbrances
arising by or through the Consignee or with respect to any obligations that are
to be paid or discharged by the Consignee pursuant to this Agreement, except any
inchoate materialmen's, mechanics', repairmen's or other like liens arising in
the ordinary course of business and for amounts the payment of which is not yet
delinquent, PROVIDED that the Consignee removes any such lien not later than the
date on which payment is due with respect to the underlying obligation that is
the basis for the lien, unless the payment of



                                       21
<PAGE>   24

         such amounts are being contested in good faith, and FURTHER PROVIDED,
         that such liens do not involve a material danger of the sale,
         forfeiture or loss of any Part.

         (c) The Consignee shall give the Consignor thirty (30) days prior
written notice of any proposed change in the location of its chief executive
office (as such term is used in Article 9 of the Uniform Commercial Code).

         (d) To secure the Consignor's obligations hereunder, the Consignor
hereby mortgages, pledges and assigns all of its right, title and interest in
and to the KAV Inventory to Consignee, and grants to Consignee a continuing
security interest in and a continuing lien upon all of its right, title and
interest in and to the KAV Inventory. The security interest granted herein shall
be subordinate and subject to the prior rights of the Agent and the Lenders
party to the Loan Agreement.

                                   SECTION 12

         INDEMNIFICATION.

         (a) The Consignee hereby agrees to indemnify, defend and hold harmless
the Consignor, the Lenders, their officers, employees, agents and
representatives (each a "Consignor Indemnitee") from and against any and all
claims, damages, losses, liabilities, obligations, demands, actions, suits,
judgments, causes of action (including without limitation, reasonable costs,
legal fees and expenses) imposed on, incurred by, or asserted against any
Consignor Indemnitee by any Person (including the Consignee), whether or not
such Consignor Indemnitee shall also be indemnified by any Person other than the
Consignee, arising out of or resulting from: (i) any breach of the
representations and warranties made by Consignee in this Agreement, (ii) any
breach of the covenants and agreements made by Consignee in this Agreement,
(iii) an Event of Default hereunder, or (iv) any liability for Sales Taxes
(collectively "Indemnifiable Damages") (PROVIDED, HOWEVER, that the Consignee
shall have no obligations hereunder to a Consignor Indemnitee with respect to
Indemnifiable Damages arising out of the gross negligence or willful misconduct
of such Consignor Indemnitee). The Consignee's obligation to defend hereunder
shall include third party claims or lawsuits against Consignor Indemnitees for
losses, damages or liabilities to the extent, in whole or in part, alleged
therein by the third party to be caused by acts or omissions of the Consignee
(or any subcontractor thereof) for which Consignor Indemnitees would be
indemnified hereunder assuming such allegations were true.

         (b) The Consignor hereby agrees to indemnify, defend and hold harmless
the Consignee, its officers, employees, agents and representatives (each a
"Consignee Indemnitee") from and against any and all claims, damages, losses,
liabilities, obligations, demands, actions, suits, judgments, causes of action
(including without limitation, reasonable costs, legal fees and expenses)
imposed on, incurred by, or asserted against any Consignee Indemnitee by any
Person (including the Consignor), whether or not such Consignee Indemnitee shall
also be indemnified by any Person other than the Consignor, arising out of or
resulting from (i) any breach of the representations and warranties made by
Consignor in this Agreement, (ii) any breach of the covenants and agreements
made by the Consignor in this Agreement, or (iii) any liability for Property
Taxes (also, collectively "Indemnifiable Damages") (PROVIDED, HOWEVER, that the
Consignor shall have no obligations hereunder to a Consignee Indemnitee with
respect to



                                       22
<PAGE>   25

Indemnifiable Damages arising out of the gross negligence or willful misconduct
of such Consignee Indemnitee). The Consignor's obligation to defend hereunder
shall include third party claims or lawsuits against Consignee Indemnitees for
losses, damages or liabilities to the extent, in whole or in part, alleged
therein by the third party to be caused by acts or omissions of the Consignor
(or any subcontractor thereof) for which Consignee Indemnities would be
indemnified hereunder assuming such allegations were true.

         (c) NOTWITHSTANDING ANY PROVISION IN THIS AGREEMENT TO THE CONTRARY,
NEITHER THE CONSIGNEE NOR THE CONSIGNOR SHALL BE LIABLE FOR SPECIAL, INCIDENTAL
OR CONSEQUENTIAL DAMAGES WHICH MAY RESULT FROM PERFORMANCE OR FAILURE TO PERFORM
UNDER THIS AGREEMENT.

         (d) All the obligations of the Consignee and Consignor under this
SECTION 12 are expressly undertaken by the Consignee and Consignor for the
benefit of, and shall be enforceable by, each of the Consignor Indemnitees and
Consignee Indemnitees.

                                   SECTION 13

         TERMINATION.

         (a) The term "Termination Event," wherever used herein, means any of
the following events or conditions (whatever the reason for such Termination
Event and whether it shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any
governmental rule or government action):

                  (i) the occurrence of an Event of Default;


                  (ii) the sale or other disposition by the Consignee of all
         Parts hereunder;

                  (iii) the later of the fifth (5th) anniversary of the
         Effective Date or the date which (A) the Senior Credit Facility and (B)
         KAV Senior Subordinated Note - A and the KAV Senior Subordinated Note -
         B are paid in full and all commitments to extend credit thereunder have
         been terminated; or

                  (iv) the payment of all principal amount of and interest
         accrued under the Loan Agreement shall have been accelerated following
         the occurrence of an Event of Default (as such term is defined in the
         Loan Agreement).

         (b) Upon the occurrence of any Termination Event described in (a)(i)
above, the Consignor shall have the right at any time upon written notice to the
Consignee to terminate the Term. Upon the occurrence of any Termination Event
described in (a)(ii) or (a)(iii) above, the Consignor and the Consignee shall
each have the right at any time upon ninety (90) days prior written notice to
the other to terminate the Term. Upon the occurrence of any Termination Event
described in (a)(iv) above, the Agent shall have the right upon written notice
to the Consignor and the Consignee to terminate the Term in accordance with the
terms of the Loan Agreement. Until the payment in full of all amounts
outstanding under the Loan Agreement and the termination of all commitments to
extend credit thereunder, neither the Consignor nor the Consignee shall exercise
its right to terminate the Term pursuant to this SECTION 13 unless


                                       23
<PAGE>   26

and until the Agent shall have consented thereto in writing. The date on which
the Term shall be terminated hereunder shall be referred to herein as the
"Termination Date". On the Termination Date, the Term shall end and the
provisions of SECTION 5(l) shall apply.

         (c) At any time that the Orderly Liquidation Value of the then
remaining KAV Inventory is at or below 15% of the Orderly Liquidation Value of
the KAV Inventory existing as of the Effective Date and (i) the Senior Credit
Facility is paid in full and all commitments to extend credit thereunder have
been terminated, or (ii) the proceeds from the purchase hereinafter described in
this SECTION 13(c) shall equal or exceed all amounts outstanding under the
Senior Credit Facility, Consignee shall have the right and the option to
purchase the Parts then in the KAV Inventory, for a purchase price equal to 75%
of the Fair Market Value of such Parts, as defined below, by delivery of written
notice to Consignor. In the event Consignee elects to purchase the KAV
Inventory, it shall deliver to Consignor written notice of such election, which
notice shall advise Consignor of such election, and which shall specify a
closing date and time, which closing shall occur no later than ninety (90) days
after the date of such notice (unless more time is required by law). The closing
shall be held at offices of Consignee's counsel or at any other location
designated by the parties hereto. "Fair Market Value" of the KAV Inventory for
purposes of this SECTION 13 shall be as mutually agreed by the parties. Failing
such agreement, the parties shall mutually agree on a valuation expert,
knowledgeable in the valuation of inventories similar to the KAV Inventory, to
determine its Fair Market Value. If the parties cannot agree on a valuation
expert, such expert shall be selected pursuant to the mutual agreement of the
respective independent public accountants of the Consignee and Consignor. Such
expert shall determine the Fair Market Value of the KAV Inventory assuming the
orderly sale of the KAV Inventory over a two (2) year time period. No Consignee
Commission shall be payable pursuant to a purchase pursuant to this SECTION
13(c).

         (d) The Agent shall be deemed to be an intended third-party beneficiary
of this SECTION 13.

                                   SECTION 14

         EVENTS OF DEFAULT.

         (a) The term "Event of Default," wherever used herein, means any of the
following events or conditions (whatever the reason for such Event of Default
and whether it shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any governmental rule or
governmental action):

                  (i) The Consignee shall fail to make any payment not in
         dispute (any and all undisputed portions shall be timely paid) when due
         under this Agreement and such payment shall remain overdue for a period
         of three (3) Business Days after receipt of written notice from
         Consignor of such failure to pay;

                  (ii) The Consignee shall fail to obtain or maintain in full
         force any insurance required under the provisions of SECTION 9 ten (10)
         days after receipt of written notice from Consignor;



                                       24
<PAGE>   27

                  (iii) The failure by the Consignee to reasonably satisfy the
         Consignor's written objections to the manner in which the Consignee
         markets, offers, sells, leases and exchanges Parts pursuant to SECTION
         2(d) and 4(b) which failure could reasonably be expected to have a
         material adverse effect upon Consignor and the Consignor giving the
         Consignee written notice of such failure and Consignor and Consignee
         being unable to resolve Consignor's objections within sixty (60) days,
         PROVIDED, HOWEVER, that such cure period shall be extended if Consignee
         shall have made good faith efforts during such cure period to cure the
         default but shall not have completed the cure, provided that the
         Consignee is reasonably capable of completing such cure and continues
         to make good faith efforts to cure such default, but in no event shall
         such additional cure period extend for greater than thirty (30) days;

                  (iv) The Consignee shall fail to perform or observe any other
         material covenant, condition or agreement to be performed or observed
         by it pursuant to or in connection with this Agreement (including,
         without limitation, the Consignee's obligation to provide the Reports
         and to maintain accurate and complete records for the Parts under
         SECTION 5(j) hereof) and such failure shall continue for a period of
         thirty (30) days after written notice and thereof is given by the
         Consignor to the Consignee, provided, HOWEVER, that such cure period
         shall be extended if Consignee shall have made good faith efforts
         during such cure period to cure the default but shall not have
         completed the cure, provided that the Consignee is reasonably capable
         of completing such cure and continues to make good faith efforts to
         cure such default, but in no event shall such additional cure period
         extend for greater than thirty (30) days;

                  (v) The Consignee shall make or permit any unauthorized
         assignment or transfer of this Agreement or any interest therein or
         intentionally use or permit the use of any Part for an illegal purpose;

                  (vi) A petition against the Consignee shall be filed in a
         proceeding or case under the Federal bankruptcy laws or other Federal
         insolvency laws as now or hereafter constituted, or any other
         applicable Federal bankruptcy, insolvency or other similar law, or a
         case is commenced under any such Federal law to appoint a receiver,
         liquidator, assignee, custodian, trustee, sequestrator (or similar
         official) of the Consignee or for all or substantially all of its
         property, or to wind-up or liquidate its affairs, and in any of such
         cases, such petition or case shall not be withdrawn or dismissed within
         sixty (60) days thereafter;

                  (vii) Any judgment, decree or order for relief shall be
         entered by a court having jurisdiction in respect of the Consignee in
         an involuntary case under any applicable state bankruptcy, insolvency
         or other similar law, or appointing a sequestrator (or similar
         official) of the Consignee or for all or substantially all of its
         property, or ordering the winding-up or liquidation of its affairs and
         any such judgment, decree or order shall continue unstayed and in
         effect for a period of thirty (30) days after the entry thereof;



                                       25
<PAGE>   28

                  (viii) The Consignee shall commence a voluntary case under the
         Federal bankruptcy laws, as now constituted or hereafter amended, or
         any other applicable Federal or State bankruptcy, insolvency, corporate
         winding up or reorganization provisions or other similar law, or the
         Consignee shall consent to the appointment of or taking possession by a
         receiver, liquidator, assignee, trustee, custodian, sequestrator (or
         other similar official) of the Consignee or for all or substantially
         all of its property, or the Consignee shall make any assignment for the
         benefit of creditors; or

                  (ix) The Consignee suspends all or a substantial portion of
         its operations related to the redistribution of aircraft parts and
         engine parts.

         (b) Upon the occurrence and continuance of any Event of Default, and
without limiting the terms of Section 13, the Consignor may exercise any and all
rights it may now or hereafter have under applicable law, whether existing at
law or in equity, including, without limitation, the right to enter the premises
of the Consignee, or any Designated Location or any other location where any
Part may then be located, and repossess any such Part then subject to this
Agreement and to proceed by appropriate court action to enforce the terms hereof
and, subject to the provisions of Section 12 to recover damages for the breach
hereof. No remedy referred to herein is intended to be exclusive, but each shall
be cumulative and in addition to any other remedy referred to herein or
otherwise available to the Consignor at law or in equity; and the exercise or
beginning of exercise by the Consignor of any one or more such remedies shall
not preclude the simultaneous or later exercise by the Consignor of any or all
such other remedies. No express or implied waiver by the Consignor of any Event
of Default hereunder shall in any way be, or be construed to be, a waiver of any
future or subsequent Event of Default.

                                   SECTION 15

         AGREED UPON STANDARD.

         (a) The Consignee shall in good faith use its commercially reasonable
efforts to give the Parts the Consignee's equal priority in marketing, sales,
leasing and exchanges, such that the Consignee, in each potential transaction,
will sell, lease or exchange a Part, if available and appropriate for such
transaction and taking into account any customer preference (which such
preference may be evidenced by a notation on the applicable purchase order), on
an equal basis with any other part in the Kellstrom Inventory or any other
consignment inventories managed by the Consignee, subject to the requirements of
any such consignment agreement in effect as of the Effective Date of this
Agreement. Consignee further agrees that upon acquiring any parts that are
Duplicate Parts during the term of this Agreement, such part may not be sold,
leased or exchanged until the Parts that are the Duplicate Parts are sold
(unless such Parts that are Duplicate Parts are unavailable for sale because
such Parts are subject to a pending lease or exchange transaction), leased or
exchanged. Should the Consignee sell a part that is acquired after the Effective
Date that is also a Duplicate Part, then Consignee shall immediately purchase an
equal Part from the KAV Inventory and remit to Consignor the higher of (i) the
Consignee's Gross Sales Price for such Part sold by Consignee, or (ii) an amount
equal to the Fair Market Value for such Part sold by Consignee, in each such
case, less the applicable Consignee Commission.



                                       26
<PAGE>   29

         (b) The Consignee shall perform all of its obligations under this
Agreement, including, without limitation, supervision of Consignee employees,
Part overhauls and rebuilds (including speculative Part overhauls and rebuilds),
inventory tracking and accountability, Part warehousing and storage (including
by location); retention of property and liability insurance on Parts; extensions
of credit for sales; application of rebates, discounts, returns, credits and
allowances; shipping of sold Parts; and provision of marketing guidance, in the
same manner (which shall, at a minimum, be a commercially reasonable manner) as
the Consignee acts with respect to all other aircraft engines, aircraft parts
and aircraft engine parts, components and other items of property from time to
time in the Consignee's possession (whether as part of the Kellstrom Inventory,
as consignment goods from another consignor or otherwise) such that, during any
calendar quarter, there shall have been no pattern of discrimination (or, in the
case of sales, leases and exchanges, any deviation from the Consignee's equal
priority commitment) in which the Parts hereunder are (i) sold, leased or
exchanged equally with similar parts in the Consignee's possession, (ii) sold,
leased or exchanged for less consideration than similar parts in the Consignee's
possession, (iii) repaired in a different manner, or at higher prices, than
other parts in the Consignee's possession, or (iv) in any other manner treated
less favorably than other parts in the Consignee's possession.

                                   SECTION 16

         MISCELLANEOUS.

         (a) All indemnities, representations and warranties contained in this
Agreement or any document, report, certificate or other instrument delivered
pursuant hereto or in connection herewith, the obligations of the Consignee to
dispose of the Parts upon termination to the extent provided herein and the
obligations of the Consignor, Consignee and AVS set forth in SECTIONS 5(l), 6,
7, 8, 11, 12 AND 14, shall survive the expiration or termination of the Term and
any cancellation or termination of this Agreement.

         (b) Each party shall promptly and duly execute and deliver such further
documents and assurances and take such further action as the other party may
from time to time reasonably request or deem proper or advisable in order to
more effectively carry out the intent and purpose of this Agreement and to
establish and protect the rights and remedies created or intended to be created
in favor of such party hereunder, including, without limitation, the execution
and delivery of supplements or amendments hereto in recordable form and the
recording or filing of counterparts hereof and of financing statements and
continuation statements relating hereto, in accordance with the laws of any
appropriate jurisdiction, and the obtaining or effecting of any governmental
consents, licenses, authorizations, approvals, declarations, filings or
registrations as may be necessary for the performance of any of the terms and
conditions of this Agreement.

         (c) Except as otherwise specifically provided herein, all notices,
reports and other communications hereunder must be in English and in writing and
shall be deemed given if delivered personally, mailed by registered, certified
mail (return receipt requested), or overnight courier or sent by facsimile to
the parties at the following addresses (or at such other address for a party as
may be specified by like notice):



                                       27
<PAGE>   30

                  If to the Consignee:

                           Kellstrom Industries, Inc.
                           1100 International Parkway
                           Sunrise, Florida 33323
                           Attention:       President
                           Facsimile:       (954) 858-2449

                  If to the Consignor:

                           Kellstrom Industries, Inc.
                           1100 International Parkway
                           Sunrise, Florida 33323
                           Attention:       President
                           Facsimile:       (954) 858-2449


                  and to:

                           Aviation Sales Company
                           3601 Flamingo Road
                           Miramar, Florida 33027
                           Attention:       President
                           Facsimile:       (954) 538-6610

         (d) Each of the Consignor and the Consignee shall bear its own costs
and expenses (including, without limitation, the fees and disbursements of its
counsel) incurred by it in connection with the preparation, negotiation,
execution and delivery of this Agreement and (except as otherwise provided
herein) the performance by it of all conditions, covenants or agreements to be
performed by it hereunder.

         (e) Each of the Consignee and AVS acknowledges that while the Consignor
is obligated to make certain payments hereunder on account of KAV Payables, the
ability of the Consignor to make such payments is limited by certain covenants
contained in the Loan Agreement.

         (f) This Agreement constitutes the entire agreement and understanding
of the parties hereto with respect to the transactions contemplated hereby and
supersedes any and all prior agreements and understandings related to the
subject matter hereof and thereof. This Agreement may not be modified or amended
except by written instrument signed by each of the parties hereto. The Schedules
to this Agreement form an integral part of this Agreement.

         (g) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF FLORIDA.

         (h) This Agreement will inure to the benefit of, and be binding upon,
the respective successors and the permitted assigns of the parties hereto.
Neither party may assign any right, title, or interest hereunder without the
prior written consent of the other; PROVIDED, HOWEVER, that notwithstanding
anything to the contrary contained in this Agreement, (1) either party may




                                       28
<PAGE>   31

assign any or all of its rights and privileges under this Agreement to its
lenders (or any agent on behalf thereof) from time to time, without the consent
of the other party, provided that any such assignee shall take such assignment
subject to all of the terms, conditions and limitations set forth in the
Agreement, and (2) Consignee may assign its rights and delegate its obligations
under this Agreement to any direct or indirect wholly owned subsidiary of
Consignee, and upon such assignment, such subsidiary shall have full rights and
obligations under this Agreement as if it were a party hereto. Such subsidiary
shall be a third-party beneficiary with respect to all rights and remedies
provided hereunder or otherwise provided at law or in equity. In the case of any
assignment by Consignee, Consignee shall remain fully responsible and liable for
all of its obligations hereunder.

         (i) This Agreement may be executed in any number of separate
counterparts, each of which will be deemed to be an original, but all of which
together shall constitute one and the same instrument. A facsimile signature on
any counterpart hereto will be deemed an original for all purposes hereof.

         (j) The section numbering and headings contained in this Agreement are
inserted for convenience of reference only and will not affect the meaning or
interpretation of this Agreement.

         (k) If any term, clause or provision contained herein is declared or
held invalid by any court of competent jurisdiction, such declaration or holding
shall not affect the validity of any other term, clause or provision herein
contained.

         (l) The Consignor and the Consignee will comply with all applicable
laws, rules and regulations with respect to the performance of their respective
obligations hereunder.

         (m) The relationship between the Consignor and the Consignee is solely
that of principal and agent. Except as specifically set forth herein, neither
party will have the authority to enter into contracts on behalf of or to bind
the other party in any respect.

                   [REST OF PAGE IS INTENTIONALLY LEFT BLANK]




                                       29
<PAGE>   32
         IN WITNESS WHEREOF, each party hereto has caused its duly authorized
officer to execute and deliver this Agreement on its behalf as of the day and
year first above written.

                                                 CONSIGNEE:

                                                 KELLSTROM INDUSTRIES, INC., a
                                                 Delaware corporation




                                                 By: /s/ Zivi R. Nedivi
                                                     ---------------------------
                                                       Zivi R. Nedivi
                                                       President




                                                 CONSIGNOR:

                                                 KAV INVENTORY, LLC, a Delaware
                                                 limited liability company



                                                 By: /s/ Zivi R. Nedivi
                                                     ---------------------------
                                                       Zivi R. Nedivi, Manager


                                                 By: /s/ Oscar Torres
                                                     ---------------------------
                                                       Oscar Torres, Manager


                                                 By: /s/ Michael C. Brant
                                                     ---------------------------
                                                       Michael C. Brant, Manager


                                                 By: /s/ Benito Quevedo
                                                     ---------------------------
                                                       Benito Quevedo, Manager




                                       30
<PAGE>   33



                                     JOINDER

Aviation Sales Company hereby joins in the foregoing Consignment Agreement
solely for purposes of agreeing to be bound by the provisions expressly
applicable to it and agrees that its consent shall not be required for any
amendment of the Consignment Agreement unless such amendment affects any
provision expressly applicable to it.

                                        AVIATION SALES COMPANY, a
                                        Delaware corporation



                                        By: /s/ Dale Baker
                                            ------------------------------------
                                            Dale Baker
                                            Chairman and Chief Executive Officer





                                       31