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Consent, Waiver And Amendment Agreement

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Sectors: Transportation
Effective Date: November 27, 2001
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Consent, Waiver and Amendment Agreement No. 12 for
Lease Agreement and
Certain Other Operative Agreements


THIS CONSENT, WAIVER AND AMENDMENT AGREEMENT NO. 12 (this "Amendment") is made and entered into as of the 27 day of November, 2001, by and among AVIATION SALES COMPANY, a Delaware corporation ("Aviation Sales"), as Construction Agent (the "Construction Agent"); AVIATION SALES COMPANY, as Lessee (the "Lessee"); WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, f/k/a First Security Bank, National Association, not individually, except as expressly stated in the Operative Agreements, but solely as Owner Trustee under the Aviation Sales Trust 1998-1 (the "Owner Trustee"); BANK OF AMERICA, N.A., successor to NationsBank, National Association ("Bank of America"), as a Holder and as a Lender; BANK OF AMERICA, N.A., successor to NationsBank, National Association, as Administrative Agent (the "Agent"); each of the holders party to the Trust Agreement (defined below) (the "Holders"); each of the Lenders party to the Credit Agreement (defined below)(the "Lenders"); and each of the Guarantors party to the Guaranty Agreement (defined below).


W I T N E S S E T H:
-------------------


WHEREAS, the Construction Agent, the Lessee, the Owner Trustee, the Agent, the Lenders and the Holders have entered into the Participation Agreement dated as of December 17, 1998 (as amended, the "Participation Agreement"); and


WHEREAS, the Owner Trustee, the Lenders and the Agent have entered into the Credit Agreement dated as of December 17, 1998 (as amended, the "Credit Agreement"); and


WHEREAS, the Holders and the Owner Trustee have entered into the Amended and Restated Trust Agreement dated as of December 17, 1998 (as amended, the "Trust Agreement"); and


WHEREAS, the Owner Trustee and the Lessee have entered into the Lease Agreement dated as of December 17, 1998 (as amended, the "Lease" or "Lease Agreement"); and


WHEREAS, Aviation Sales, Subsidiaries of Aviation Sales, and the Agent have entered into the respective Guaranty Agreements (Series A Obligations) dated as of December 17, 1998, February 18, 2000, March 31, 2000 or May 31, 2000, as the case may be, (collectively, the "Series A Guaranty Agreement"); and the Subsidiaries of Aviation Sales and the Owner Trustee have entered into the respective Guaranty Agreements (Lessee Obligations) dated as of December 17, 1998, February 18, 2000, March 31, 2000 or May 31, 2000, as the case may be, (collectively, the "Lessee Guaranty Agreement", and collectively with the Series A Guaranty Agreement and any other Guaranty Agreement (as defined in the Participation Agreement), the "Guaranty Agreement" or "Guaranty"); and


WHEREAS, the Lessee has informed the Owner Trustee, the Holders, the Agent and the Lenders that certain Events of Default have occurred and are continuing; and


WHEREAS, the Lessee has requested that the Owner Trustee, the Holders, the Agent and the Lenders forbear from exercising their rights and remedies with respect to certain Events of Default as described herein and in the August 2001 Forbearance Letter (as defined herein); and


WHEREAS, the Lessee has requested that the Owner Trustee, the Holders, the Agent and the Lenders waive certain Events of Default as described herein; and


WHEREAS, the Lessee and its Subsidiaries have requested the consent of the Agent, the Owner Trustee, the Lenders and the Holders to (i) certain amendments to the Existing Aviation Sales Credit Agreement, (ii) certain modifications to the indentures and guaranties relating to the Senior Subordinated Notes, and (iii) certain transactions relating to the issuance by Aviation Sales of convertible PIK Notes and a rights offering by Aviation Sales, all as described below; and


WHEREAS, the parties hereto desire to amend the Participation Agreement, the Lease Agreement and certain other Operative Agreements in the manner herein set forth;


NOW, THEREFORE, the Construction Agent, the Lessee, the Owner Trustee, the Holders, the Agent and the Lenders do hereby agree as follows:


1. Definitions. The terms "Participation Agreement", "Lease" and "Lease
----------- Agreement" as used herein and in the Operative Agreements (as defined in the Participation Agreement) shall mean such agreements as hereby amended and modified, and as further amended, modified, supplemented or restated from time to time in accordance with the terms thereof. Unless the context otherwise requires, all terms used herein without definition shall have the definition provided therefore in the Participation Agreement.


2. Consents and Waivers. Effective upon the satisfaction of the
-------------------- conditions set forth in Section 5 hereof:
---------


(a) the Agent, the Owner Trustee, the Holders and the Lenders hereby
consent to the amendment of or supplement to (i) that certain Indenture
dated as of February 17, 1998 between Aviation Sales and SunTrust Bank,
Central Florida, National Association, as trustee, as heretofore amended or
supplemented, under which the Senior Subordinated Notes have heretofore
been issued and are outstanding and (ii) the Senior Subordinated Notes
Guaranties, in each instance, as applicable, on the terms and conditions
described and set forth in that certain Schedule 14A Preliminary Proxy
Statement filed by Aviation Sales with the Securities and Exchange
Commission under Section 14(a) of the Securities Exchange Act on September
28, 2001 and that certain Registration Statement on Form S-4, as amended by
Amendment No.1 filed on October 2, 2001, filed by Aviation Sales with the
Securities and Exchange Commission, subject only changes that are
nonsubstantive and nonmaterial, provided, however, that such consent is
-------- -------
conditioned upon and subject to the amendment or supplement including the
terms and changes


2


described in Exhibit F, such terms and changes to be in form and substance
---------
satisfactory to the Agent;


(b) the Agent, the Owner Trustee, the Lenders and the Holders hereby
consent to the issuance by Aviation Sales of 8% senior subordinated
convertible PIK notes due 2006 (the "PIK Notes") subject to the terms and
conditions of an indenture (the "PIK Indenture), senior subordinated notes
and guaranties by the obligors under the Senior Subordinated Notes
Guaranties as described and set forth in that certain Schedule 14A
Preliminary Proxy Statement filed by Aviation Sales with the Securities and
Exchange Commission under Section 14(a) of the Securities Exchange Act on
September 28, 2001, and that certain Registration Statement on Form S-4, as
amended by Amendment No. 1 filed on October 2, 2001 by Aviation Sales with
the Securities and Exchange Commission, subject only changes that are
nonsubstantive and nonmaterial, provided, however, that such consent is
-------- -------
conditioned upon and subject to the PIK Indenture including the terms and
changes described in Exhibit F, such terms and changes to be in form and
---------
substance satisfactory to the Agent;


(c) the Agent, the Owner Trustee, the Lenders and the Holders hereby
consent to the amendment of Aviation Sales's Organizational Documents to
accommodate and effect the rights offering on the terms and conditions set
forth in that certain Form S-1 Registration Statement filed by Aviation
Sales with the Securities and Exchange Commission under the Securities Act
on September 28, 2001, subject only to changes that are nonsubstantive and
nonmaterial;


(d) the Agent, the Owner Trustee, the Lenders and the Holders hereby
consent to the use by Aviation Sales of Net Cash Proceeds of Issuance of
Equity Securities (as such term is defined in the Existing Aviation Sales
Credit Agreement) obtained in connection with the rights offering
referenced in Section 2(c) above, to (i) make the payment required in
connection with the transaction referenced in Section 2(b) above, (ii) pay
transaction cost associated with the transactions referenced in Sections
2(a) above, and (iii) for working capital purposes of Aviation Sales and
its Subsidiaries, in lieu of making the mandatory prepayments required
under section 4.01(b) of the Existing Aviation Sales Credit Agreement and
reductions of Revolving Credit Commitments (as such term is defined in the
Existing Aviation Sales Credit Agreement) otherwise required under section
4.01(b) of the Existing Aviation Sales Credit Agreement;


(e) the Agent, the Owner Trustee, the Lenders and the Holders hereby
consent to the Change of Control, if any, occasioned by consummation of the
transactions referenced in Section 2(a) above;


(f) the Agent, the Owner Trustee, the Lenders and the Holders hereby
consent to the extension until March 31, 2002 (the "Extended Forbearance
Period") of the Forbearance Period (as defined in that certain letter dated
August 16, 2001 (the "August 2001 Forbearance Letter") with respect to the
forbearance of the Agent, the Owner Trustee, the Lenders and the Holders
from exercising rights and remedies with respect to the Events of Default
specifically identified in the August 2001 Forbearance Letter, such
extension subject to the conditions attached hereto as Exhibit C; provided,
---------- --------
however, that the existing Events of Default subject to the Extended
-------
Forbearance Period shall not be


3


deemed cured (i) as a result of any waiver by (x) the trustee for the
Senior Subordinated Notes, (y) the holders of the Senior Subordinated Notes
or (z) the lenders under the Citicorp Loan Documents or (ii) as a result of
the payment of interest which was due on August 15, 2001 with respect to
the Senior Subordinated Notes; and such Events of Default shall continue to
exist during and after the Forbearance Period and the Extended Forbearance
Period whether or not the underlying defaults (including payment of such
interest) under the Senior Subordinated Notes, Subordinated Debt Indenture
and related documents or the Citicorp Loan Documents have been waived or
cured;


(g) the Agent, the Owner Trustee, the Lenders and the Holders hereby
consent to the amendment of the Existing Aviation Sales Credit Agreement on
the terms and conditions referenced on or attached as Exhibit B and made a
---------
part hereof;


(h) the Agent, the Owner Trustee, the Holders and the Lenders hereby
(i) waive the Events of Default arising under Sections 28.3.1 and 28.3.5 of
--------------- ------
the Lease Agreement due to the incurrence by Aviation Sales of Indebtedness
under that certain Accommodation Obligation described in Exhibit D, and
---------
(ii) waive the rights and remedies of the Agent, the Owner Trustee, the
Lenders and the Holders arising due to the Event of Default described in
clause (i) above;


(i) the Owner Trustee, the Lenders and the Holders hereby (i) waive
the Events of Default arising under Section 17.1(a) of the Lease Agreement
---------------
due to the failure of Aviation Sales to make timely payments of the Basic
Rent that was due on September 17, 2001 (which was subsequently paid to the
Agent), the Basic Rent that was due on October 17, 2001 and the Basic Rent
that was due on November 17, 2001 and (ii) waive the rights and remedies of
the Agent, the Owner Trustee, the Lenders and the Holders arising due to
the Event of Default described in clause (i) above;


(j) the Agent, the Owner Trustee, the Lenders and the Holders hereby
(i) waive the Event of Default arising under Section 28.1.1(e) of the Lease
-----------------
Agreement due to the failure of Aviation Sales to deliver the management
letter from their independent accountants for the Fiscal Year ended in
2000, which delivery date had previously been extended to September 30,
2001, (ii) waive the Event of Default arising under Sections 17.1(g) and
--------------------
28.1.1(b) due to the failure of Aviation Sales to deliver the Financial
---------
Statements required for the Fiscal Quarter ended September 30, 2001;


provided that such Financial Statements are delivered to the Agent, the
-------- ----
Owner Trustee, the Lenders and the Holders by November 30, 2001, (iii)
waive the Event of Default arising under Sections 17.1(g) and 28.1.1(f) due
------------------------------
to the failure of Aviation Sales to deliver the financial projections
required for the Fiscal Quarter ended September 30, 2001; provided that
-------- ----
such projections are delivered to the Agent, the Owner Trustee, the Lenders
and the Holders by Novemb
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