Waiver and Consent Agreement dated April 19, 2002 among TIMCO Aviation Services, Inc., Lenders, and Citicorp USA, Inc.

Summary

This agreement, dated April 19, 2002, is between TIMCO Aviation Services, Inc. and its subsidiaries, various lenders, and Citicorp USA, Inc. It provides a waiver for certain defaults under a prior credit agreement, including missed interest payments and late financial reporting. The lenders also consent to an amendment of related loan documents, subject to specific conditions such as payment of fees, delivery of financial statements, and legal opinions. The agreement does not waive any other rights or defaults except as expressly stated and reaffirms the validity of the original loan documents.

EX-10.85 5 dex1085.txt WAIVER AND CONSENT DATED APRIL 19, 2002 EXHIBIT 10.85 WAIVER AND CONSENT April 19, 2002 TIMCO Aviation Services, Inc. and Subsidiaries 623 Radar Road Greensboro, North Carolina 27410 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. Waiver Pursuant to the terms of the Credit Agreement, Events of Default have occurred (i) under Sections 12.01 (e)(ii) and (q) in connection with the payment of the Parent's obligations for interest payments under the Senior Subordinated Notes having due dates of August 15, 2001 and February 15, 2002 and (ii) resulting from the failure to deliver (a) the Financial Statements for the Fiscal Year ended December 31, 2001, together with related certificates, accountants' statements and reports and other documents required under the Credit Agreement as and when required pursuant to the terms thereof, including, without limitation, an unqualified opinion of Parent's independent accountants and (b) notice of delay of filing of Parent's annual report with the Commission within 90 days after December 31, 2001, and good faith estimate of the required information within 105 days after December 31, 2001. The Borrowers have requested a waiver from the Requisite Lenders, the Issuing Bank, and Citicorp USA, Inc., as holder of the Supplemental Term Loan Note (the "Term Note Holder"), in connection with the foregoing. Consent Parent and the Borrowers have further requested the consent of the Requisite Lenders to an amendment of the TROL Documents on the terms and conditions attached hereto as Exhibit A (the "TROL Amendment"). The Lenders signatory hereto, comprising at least the Requisite Lenders, the Issuing Bank, and the Term Note Holder hereby waive the rights and remedies with respect to the aforesaid Events of Default otherwise available to them under the Credit Agreement and Supplemental Term Loan Note, and such Lenders hereby consent to the TROL Amendment, in each instance, expressly subject to the satisfaction of the following conditions: (1) obligees under the TROL Documents shall have waived their rights and remedies under the TROL Documents with respect to defaults comparable to those identified above occurring under the TROL Documents and a copy of such waiver shall have been delivered to the Agent; (2) 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; (3) 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; (4) the Borrowers shall have paid to the Agent, for the account of the Lenders executing this Waiver and Consent on or before April 19, 2002, a fee in the amount of $93,750, which fee shall be fully earned upon this Waiver becoming effective and shall be for the account of such Lenders in accordance with their Pro Rata Shares, with the remaining balance, if any, being for the account of the Agent; (5) 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; (6) an opinion of counsel to the Borrowers and Guarantors shall have been delivered to the Agent, Lenders and Term Note Holder with respect to non-contravention of the TROL Documents, the BofA Note, and agreements under which the Senior Subordinated Notes and Parent's 8% senior subordinated convertible PIK notes due 2006 have been issued, this Waiver and Consent letter, such release agreement and all instruments and documents executed by the Borrowers and Guarantors in connection herewith; (7) the Borrowers shall have delivered to the Agent corporate resolutions of the Parent, Borrowers and Guarantors authorizing the execution and delivery of this Waiver and Consent, such release agreement, and all instruments and documents required to be executed and delivered in connection herewith; (8) the Financial Statements of Parent and its Subsidiaries for the Fiscal Year ending December 31, 2001 and accompanying certificates, accountants' statements and other documents required under the Credit Agreement with respect thereto shall have been delivered to the Agent and Lenders by April 22, 2002, subject to qualification only with respect to the "going concern" status of the Parent and its Subsidiaries; and (9) the Borrowers shall have reimbursed the Agent for attorneys' fees and expenses incurred under statements dated March 27, 2002 and April 17, 2002 aggregating $23,956.79. 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 2 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 3 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 By ---------------------------------- -------------------------------- Name: Name: Title: Title: NATIONAL CITY COMMERCIAL SALOMON BROTHERS HOLDING FINANCE, INC. COMPANY INC. By By ---------------------------------- -------------------------------- Name: Name: Title: Title: FIRST UNION COMMERCIAL BANK OF AMERICA, N.A. CORPORATION By By ---------------------------------- -------------------------------- Name: Name: Title: Title: FIRSTAR BANK, N.A. ARK CLO 2000-I, LIMITED By: Patriarch Partners, LLC, as Collateral Manager By By ---------------------------------- -------------------------------- Name: Name: Title: Title: THE INTERNATIONAL BANK OF TCS EUROPEAN INVESTMENTS INC. MIAMI, N.A. By By ---------------------------------- -------------------------------- Name: Name: Title: Title: AMSOUTH BANK CITIZENS BUSINESS CREDIT COMPANY By By ---------------------------------- -------------------------------- Name: Name: Title: Title: PNC BANK, NATIONAL ASSOCIATION CITIBANK, N.A., as Issuing Bank By By ---------------------------------- -------------------------------- Name: Name: Title: Title: GOLDEN TREE HIGH YIELD PARTNERS TRAVELERS EUROPEAN INVESTORS LLC L.P. By By ---------------------------------- -------------------------------- Name: Name: Title: Title: CITICORP USA, INC., as NOMURA SPECIAL SITUATIONS holder of the Supplemental Term Loan INVESTMENT TRUST By Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee By By ---------------------------------- -------------------------------- Name: Name: Title: Title: 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 By ---------------------------------- -------------------------------- Name: Name: Title: Title: AVS/M-2, INC. WHITEHALL CORPORATION (formerly Aviation/Kratz-Wilde Machine Company) By By ---------------------------------- -------------------------------- Name: Name: Title: Title: TRIAD INTERNATIONAL MAINTENANCE AVS/M-3, INC. CORPORATION (formerly Apex Manufacturing, Inc.) By By ---------------------------------- -------------------------------- Name: Name: Title: Title: AIRCRAFT INTERIOR DESIGN, INC. AVS/CAI, INC. (formerly Caribe Aviation, Inc.) By By ---------------------------------- -------------------------------- Name: Name: Title: Title: TIMCO AVIATION SERVICES, INC. AVIATION SALES LEASING COMPANY (formerly Aviation Sales Company) By By ---------------------------------- -------------------------------- Name: Name: Title: Title: TIMCO ENGINE CENTER, INC. AVS/M-1, INC. (formerly Aviation Sales Manufacturing Company) By By ---------------------------------- -------------------------------- Name: Name: Title: Title: AERO HUSHKIT CORPORATION AVIATION SALES PROPERTY MANAGEMENT CORP. By By ---------------------------------- -------------------------------- Name: Name: Title: Title: AVIATION SALES FINANCE COMPANY HYDROSCIENCE, INC. By By ---------------------------------- -------------------------------- Name: Name: Title: Title: TIMCO ENGINEERED SYSTEMS, INC. AVIATION SALES SPS I, INC. By By ---------------------------------- -------------------------------- Name: Name: Title: Title: AVIATION SALES MAINTENANCE, REPAIR & OVERHAUL COMPANY By ---------------------------------- Name: Title: cc: Sidley Austin Brown & Wood Akerman, Senterfitt & Eidson, P.A.