Forbearance Agreement Regarding Credit Agreement Defaults – Aviation Sales Company and Lenders (August 16, 2001)

Summary

Aviation Sales Company and its subsidiaries entered into this agreement with their lenders, including Citicorp USA, Inc., after defaulting on a scheduled interest payment under their credit agreement. The lenders agree not to exercise their rights or remedies for these specific defaults until September 12, 2001, provided certain conditions are met, such as execution of related documents and no further defaults. This temporary forbearance does not waive any other rights or future actions by the lenders. The agreement is governed by New York law.

EX-10.1 3 dex101.txt FORBEARANCE LETTER MAY 31, 2000 EXHIBIT 10.1 August 16, 2001 Aviation Sales Company and Subsidiaries 3601 Flamingo Road Miramar, Florida 33027 Attn: Chief Financial Officer Re: Fourth Amended and Restated Credit Agreement dated as of May 31, 2000, as amended (the "Credit Agreement") Gentlemen: Reference is made to the Credit Agreement and all capitalized terms used herein which are defined in the Credit Agreement shall have the meanings herein as therein assigned. Pursuant to the terms of the Credit Agreement, an Event of Default has occurred pursuant to Section 12.01(e)(i) as a result of the Parent's failure to make the scheduled interest payment due with respect to the Senior Subordinated Notes on the due date therefor, August 15, 2001, and pursuant to Section 12.01(e)(ii) with respect to the resultant cross-default occurring under the TROL Documents arising due to such failure to make such scheduled interest payment. The Parent and Borrowers have requested that the Lenders and Citicorp USA, Inc., as holder of the Supplemental Term Loan Note (the "Term Note Holder"), waive or forbear from exercising their rights and remedies with respect to the aforesaid Events of Default. The Term Note Holder, the Lenders signatory hereto constituting at least the Requisite Lenders, and the Issuing Bank hereby agree, subject to the satisfaction of the conditions set forth below, that none of the Term Note Holder, Lenders or Issuing Bank will, during the period commencing on the date hereof and ending on September 12, 2001 (the "Forebearance Period"), exercise any rights and remedies available to them under the Supplemental Term Loan Note, the Credit Agreement or other Loan Documents arising due to the occurrence of the two Events of Default identified above; provided, however, that (i) in the -------- ------- event the interest payment due on August 15, 2001 with respect to the Senior Subordinated Notes is to be made on the date hereof or any date thereafter, the provisions of Section 12.01(q) of the Credit Agreement shall be effective with respect to such payment and the terms of this letter shall not be deemed to have waived any requirement thereunder with respect to any such payment and (ii) the right of the Lenders and/or Term Note Holder to issue a "Payment Blockage Notice" under the terms of the Indenture pursuant to which the Senior Subordinated Notes have been issued, whether as a result of the occurrence of the above-referenced Events of Default or otherwise, shall not be affected by this letter. The aforesaid agreement is expressly conditioned upon satisfaction of the following conditions: (1) obligees under the TROL Documents shall have either agreed not to exercise their rights and remedies under the TROL Documents with respect to like defaults occurring under the TROL Documents during the Forebearance Period or waived the same on terms satisfactory to the Agent and no other consents, approvals or waivers with respect to the agreements entered into in connection with the above-described Events of Default, which have not been obtained, shall be required under the terms of the Borrowers' and Guarantors' respective material Contractual Obligations; (2) the Term Note Holder, the Lenders constituting at least the Requisite Lenders, the Issuing Bank, the Borrowers and Guarantors shall have executed and delivered this letter to the Agent; (3) the Borrowers shall have reimbursed the Agent for the expenses identified on Exhibit A attached hereto and made a part hereof; (4) the Borrowers and Guarantors shall have executed and delivered to the Agent, for the benefit of the Term Note Holder, the Lenders, Issuing Bank and other Holders, a release agreement in the form attached hereto as Exhibit B; and (5) no other Event of Default or Potential Event of Default shall have occurred of which the Agent, any Lender or the Issuing Bank shall become aware during the Forbearance Period or shall occur during the Forbearance Period and no holder of the Senior Subordinated Notes, the trustee under the Indenture under which the Senior Subordinated Notes were issued, any obligee under the TROL Documents (or Person acting on any such obligee's behalf) or any other agent or lender under any credit facility for the Borrowers or Guarantors shall have commenced the exercise of any remedies with respect to any default or event of default with respect thereto. Except as expressly set forth above, (a) the execution and delivery of this letter shall in no way affect any right, power or remedy of (i) the Agent, Lenders or Issuing Banks with respect to any Event of Default or Potential Event of Default or constitute a waiver of any provision of the Credit Agreement or any of the other Loan Documents or (ii) the Term Note Holder, with respect to any Event of Default or Potential Event of Default or constitute a waiver of any provision of the Supplemental Term Loan Note, and (b) the Credit Agreement, the other Loan Documents, the Supplemental Term Loan Note, and, in each instance, all other documents, instructions, and agreements executed and/or delivered pursuant thereto and in connection therewith shall remain in full force and effect and are hereby ratified and confirmed. This letter may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same document. Delivery of an executed counterpart of this letter by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. THIS LETTER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Remainder of Page Intentionally Left Blank 2 IN WITNESS WHEREOF, this letter has been duly executed and delivered as of the day and year first written above. CITICORP USA, INC. HELLER FINANCIAL, INC. By /s/ Miles D. McManus By /s/ Albert J. Forzano ------------------------------ ---------------------------- Name: Miles D. McManus Name: Albert J. Forzano Title: Vice President Title: Vice President NATIONAL CITY COMMERCIAL SALOMON BROTHERS HOLDING FINANCE, INC. COMPANY INC. By /s/ Kathryn C. Ellero By /s/ ------------------------------ ---------------------------- Name: Kathryn C. Ellero Name: Title: Vice President Title: FIRST UNION COMMERCIAL BANK OF AMERICA, N.A. CORPORATION By /s/ Ron R. Ferguson By ------------------------------ ---------------------------- Name: Ron R. Ferguson Name: Title: Senior Vice President Title: FIRSTAR BANK, N.A. ARK CLO 2000-I, LIMITED By: Patriarch Partners, LLC, as Collateral Manager By /s/ Steven C. Gonzalez By /s/ Lynn Tilton ------------------------------ ---------------------------- Name: Steven C. Gonzalez Name: Lynn Tilton Title: Vice President Title: Authorized Signatory Signature Page 1 THE INTERNATIONAL BANK OF TCS EUROPEAN INVESTMENTS INC. MIAMI, N.A. By /s/ Caridad C. Errazquin By /s/ John Pickett ----------------------------- ---------------------------------- Name: Caridad C. Errazquin Name John Pickett Title: Vice President Title: Citibank International plc Special Situations Group as investment advisor to TCS European Investments AMSOUTH BANK CITIZENS BUSINESS CREDIT COMPANY By /s/ Barry S. Renow By /s/ Lawrence E. Jacobs ----------------------------- ---------------------------------- Name: Barry S. Renow Name: Lawrence E. Jacobs Title: Attorney-in-Fact Title: Vice President PNC BANK NATIONAL ASSOCIATION CITIBANK, N.A., as Issuing Bank By /s/ Meredith Fitz By /s/ Miles D. McManus ----------------------------- ---------------------------------- Name: Meredith Fitz Name: Miles D. McManus Title: Asst Vice President Title: Vice President GOLDEN TREE HIGH YIELD PARTNERS TRAVELERS EUROPEAN INVESTORS L.P. LLC By /s/ Thomas H. Shondell By /s/ John Pickett ----------------------------- ---------------------------------- Name: Thomas H. Shondell Name: John Pickett Title: Partner Title: Citibank International plc Special Situations Group as investment advisor to Travelers European Investments LLC CITICORP USA, INC., as holder of the Supplemental Term Loan By /s/ Miles D. McManus ---------------------------------- Name: Miles D. McManus Title: Vice President Signature Page 2 The terms and conditions of the aforesaid letter are hereby acknowledged and accepted by each of the Borrowers and Guarantors and each Borrower and Guarantor hereby represents and warrants that no consents, approvals or waivers with respect to the agreements entered into in connection with the above-referenced matters, which have not been obtained, are required under the terms of the Borrowers' and Guarantors' respective material Contractual Obligations. AVIATION SALES DISTRIBUTION AEROCELL STRUCTURES, INC. SERVICES COMPANY By /s/ Michael C. Brant By /s/ Michael C. Brant --------------------------- --------------------------- Name: Michael C. Brant Name Michael C. Brant Title: Vice President Title: Vice President AVS/M-2, INC. WHITEHALL CORPORATION (formerly Aviation/Kratz-Wilde Machine Company) By /s/ Michael C. Brant By /s/ Michael C. Brant --------------------------- --------------------------- Name: Michael C. Brant Name Michael C. Brant Title: Vice President Title: Vice President TRIAD INTERNATIONAL MAINTENANCE AVS/M-3, INC. CORPORATION (formerly Apex Manufacturing, Inc.) By /s/ Michael C. Brant By /s/ Michael C. Brant --------------------------- --------------------------- Name: Michael C. Brant Name Michael C. Brant Title: Vice President Title: Vice President AIRCRAFT INTERIOR DESIGN, INC. CAI/AVI, INC. (formerly Caribe Aviation, Inc.) By /s/ Michael C. Brant By /s/ Michael C. Brant --------------------------- --------------------------- Name: Michael C. Brant Name Michael C. Brant Title: Vice President Title: Vice President Signature Page 3 AVIATION SALES COMPANY AVIATION SALES LEASING COMPANY By /s/ Michael C. Brant By /s/ Michael C. Brant ----------------------------- ----------------------------- Name: Michael C. Brant Name Michael C. Brant Title: Vice President Title: Vice President TIMCO ENGINE CENTER, INC. AVS/M-1, INC. (formerly Aviation Sales Manufacturing Company) By /s/ Michael C. Brant By /s/ Michael C. Brant ----------------------------- ----------------------------- Name: Michael C. Brant Name Michael C. Brant Title: Vice President Title: Vice President AERO HUSHKIT CORPORATION AVIATION SALES PROPERTY MANAGEMENT CORP. By /s/ Michael C. Brant By /s/ Michael C. Brant ----------------------------- ----------------------------- Name: Michael C. Brant Name Michael C. Brant Title: Vice President Title: Vice President AVIATION SALES FINANCE COMPANY HYDROSCIENCE, INC. By /s/ Michael C. Brant By /s/ Michael C. Brant ----------------------------- ----------------------------- Name: Michael C. Brant Name Michael C. Brant Title: Vice President Title: Vice President TIMCO ENGINEERED SYSTEMS, INC. AVIATION SALES SPS I, INC. By /s/ Michael C. Brant By /s/ Michael C. Brant ----------------------------- ----------------------------- Name: Michael C. Brant Name Michael C. Brant Title: Vice President Title: Vice President Signature Page 4 AVIATION SALES MAINTENANCE, REPAIR & OVERHAUL COMPANY By /s/ Michael C. Brant -------------------------- Name: Michael C. Brant Title: Vice President cc: Sidley Austin Brown & Wood Akerman, Senterfitt & Eidson, P.A. Signature Page 5