Document:

<PAGE>

                                                                    EXHIBIT 10.3

August 16, 2001

Aviation Sales Company and Subsidiaries
3601 Flamingo Road
Miramar, Florida 33027
Attn: Chief Financial Officer

          Re:  Participation Agreement dated as of December 17, 1998 (as
               amended, the "Participation Agreement") 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, f/k/a First Security Bank, National
               Association, a national banking 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 (the
               "Holders"); each of the Lenders party to the Credit Agreement
               (the "Lenders"); and each of the Guarantors party to the Guaranty
               Agreement (the "Subsidiaries").

Gentlemen:

     All capitalized terms used herein without definition shall have the
definition provided therefor in the Participation Agreement.

     Events of Default have occurred pursuant to Sections 17.1(f) and 17.1(n) as
a result of the failure of Aviation Sales to make a scheduled interest payment
due with respect to the Senior Subordinated Notes on August 15, 2001.

     Aviation Sales and its Subsidiaries have requested that the Owner Trustee,
the Agent, the Lenders and the Holders forbear from exercising their rights and
remedies with respect to the aforesaid Events of Default until September 12,
2001.

     Aviation Sales and its Subsidiaries have further requested the consent of
the Agent, the Owner Trustee, the Lenders and the Holders that the due date for
the delivery of the management letter from their independent accountants as set
forth in Section 28.1.1(e) of the Lease Agreement be extended to September 30,
2001.

     1.   Forbearance. The Agent, the Owner Trustee, the Lenders and the Holders
          -----------
hereby agree, subject to the satisfaction of the conditions set forth below and
subject to
<PAGE>

the limitations set forth below, that none of the Agent, the Owner Trustee, the
Lenders or the Holders will, during the period commencing on the date hereof and
ending on September 12, 2001 (the "Forbearance Period"), exercise any rights and
remedies available to them under the Participation Agreement, the Credit
Agreement, the Lease Agreement, or other Operative Agreements arising from an
Event of Default under Section 17.1(f) or Section 17.1(n) of the Lease Agreement
with respect to the failure of Aviation Sales to make a scheduled interest
payment due on August 15, 2001 with respect to the Senior Subordinated Notes.

     2.   Consent.  The Agent, the Owner Trustee, the Lenders and the Holders
          -------
hereby consent to an extension of time to deliver the management letter from
their independent accountants, as required in Section 28.1.1(e) of the Lease
Agreement, until September 30, 2001.

     3.   Limitations.  The parties agree that:  (i) the consent and forbearance
          -----------
described in this forbearance and consent letter do not constitute a waiver of
any Default or Event of Default; (ii) all Operative Agreements are in full force
and effect as of the date hereof; (iii) the forbearance described in this
forbearance and consent letter shall terminate immediately if any noteholder
under the Senior Subordinated Notes, the trustee under the Subordinated Debt
Indenture, Citicorp as agent or any lender under the Citicorp Loan Documents, or
any other agent or lender under any credit facility for Aviation Sales or any
Subsidiary, commences to exercise any remedies with respect to any default or
event of default under such facility.

     Without limiting the generality of the foregoing, Aviation Sales and its
Subsidiaries acknowledge that, pursuant to the Lease Agreement, they may not
amend, modify or otherwise change any of the terms or provisions of the
Subordinated Debt Indenture, the Senior Subordinated Notes or any other
agreements or instruments executed in connection with the Senior Subordinated
Notes, and that (as a condition to granting any consent to any such amendment,
modification or change) the Agent, the Owner Trustee, the Lenders or the Holders
may require additional consideration, including without limitation, the payment
of a consent fee.

     4.   Conditions.  The aforesaid forbearance and consent are expressly
          ----------
conditioned upon satisfaction of the following conditions:

          a)   the requisite parties under the Existing Aviation Sales Credit
Agreement have executed that certain forbearance letter, dated as of the date
hereof (the "Citicorp Forbearance Letter") with respect to events of default
under sections 12.01(e)(i) and (ii) of the Existing Aviation Sales Credit
Agreement, which Citicorp Forbearance Letter is attached hereto as Exhibit A;
                                                                   ---------

          b)   the requisite parties under the Existing Aviation Sales Credit
Agreement have executed that certain consent, dated as of August 13, 2001 (the
"Citicorp Consent") with respect to a corresponding extension of time for the
delivery of such management letter, as required in section 8.01(e) of the
Existing Aviation Sales Credit Agreement, which Citicorp Consent is attached
hereto as Exhibit B;
          ---------
<PAGE>

          c)   all conditions to the effectiveness of the Citicorp Forbearance
Letter and the Citicorp Consent;

          d)   The Owner Trustee, the Lenders and the Holders shall have
executed and delivered this letter to the Agent;

          e)   Aviation Sales and its Subsidiaries shall have executed and
delivered this letter to the Agent; and

          f)   Aviation Sales shall have reimbursed the Agent for the expenses
identified on Exhibit C attached hereto.
              ---------

     5.   Release.  Aviation Sales and its Subsidiaries acknowledge that they
          -------
have no existing defense, counterclaim, offset, cross-complaint, claim or demand
of any kind or nature whatsoever that can be asserted to reduce or eliminate all
or any part of their or the Owner Trustee's respective liability to pay or
perform any obligations pursuant to any of the Operative Agreements or any other
documents which evidence or secure any obligations owed under any Operative
Agreement.  In consideration for the execution of this letter, each of Aviation
Sales and its Subsidiaries hereby releases and forever discharges, Bank of
America, the Agent, the Lenders, the Holders and the Owner Trustee and all of
their respective officers, directors, employees, Affiliates and agents
(collectively, the "Released Parties") from any and all actions, causes of
action, debts, dues, claims, demands, liabilities and obligations of every kind
and nature, both in law and in equity, known or unknown, whether heretofore or
now existing, liquidated or unliquidated, matured or unmatured, fixed or
contingent (collectively, the "Release Claims"), which might be asserted against
any of the Released Parties.  This Release applies to all matters arising out of
or relating to the Operative Agreements, any Property, any obligations due under
any of the Operative Agreements and this Consent Agreement, commitment letters
with respect to other loan facilities, and the lending and borrowing
relationships, and (to the extent any Release Claims relating to such deposit
relationships are now known to Aviation Sales or any of its Subsidiaries) the
deposit relationships, between Aviation Sales and its Subsidiaries, and Bank of
America, the Agent, the Lenders, the Holders and the Owner Trustee, including
the administration, collateralization and funding thereof.  Each of Aviation
Sales and its Subsidiaries further agrees not to bring any action in any
judicial, administrative or other proceeding against the Released Parties, or
any of them, alleging any such Release Claim or otherwise arising in connection
with any such Release Claim.

     It is the intent of the parties that except as otherwise set forth herein,
the foregoing release shall be effective as a full and final accord and
satisfaction of all claims hereby released and each of Aviation Sales and its
Subsidiaries hereby agrees, represents and warrants that the matters released
herein are not limited to matters which are known or disclosed.  In this
connection, each of Aviation Sales and its Subsidiaries hereby agrees,
represents and warrants that it realizes and acknowledges that factual matters
now existing and unknown to it may have given or may hereafter give rise to
Release Claims, which are presently unknown, unsuspected, unliquidated,
unmatured and/or contingent,
<PAGE>

and it further agrees, represents and warrants that this release has been
negotiated and agreed upon in view of that realization. Nevertheless, Aviation
Sales and its Subsidiaries hereby intend to release, discharge and acquit the
Released Parties of and from any such unknown, unsuspected, unliquidated,
unmatured and/or contingent Release Claims, which are in any way set forth in or
related to the matters identified above in this letter. Aviation Sales and its
Subsidiaries hereby explicitly waive the benefits of any common law or statutory
rule with respect to the release of such Release Claims.

     The acceptance and delivery of this letter by the Agent on behalf of the
Released Parties shall not be deemed or construed as an admission of liability
with respect to the Release Claims or otherwise by the Released Parties, or any
of them, and the Released Parties hereby expressly deny liability of any nature
whatsoever arising from or related to the subject of the release contained in
this letter.

     Each of Aviation Sales and its Subsidiaries hereby agrees, represents and
warrants that:  (i) such party has not voluntarily, by operation of law or
otherwise, assigned, conveyed, transferred or encumbered, either directly or
indirectly, in whole or in part, any right to or interest in any of the Release
Claims purported to be released by this letter; (ii) such party has had advice
of counsel of its own choosing in negotiations for and the preparation of this
forbearance and consent letter; and (iii) such party is fully aware of the
effect of releases such as that contained in this letter.

     6.   Counterparts.  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 documents. Delivery of any executed counterpart of
this letter by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.

     7.   GOVERNING LAW.  THIS LETTER SHALL BE GOVERNED BY AND CONSTRUED IN
          -------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO OTHERWISE
APPLICABLE PRINCIPLES OF CONFLICT OF LAWS.

                  [Signatures appear on the following pages]
<PAGE>

                         WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, f/k/a
                         First Security Bank, National Association
                         not individually, except as expressly stated under
                         the Operative Agreements, but solely as Owner
                         Trustee under the Aviation Sales Trust 1998-1

                         By: /s/ Nancy M. Dahl
                            --------------------------
                         Name: Nancy M. Dahl
                              ------------------------
                         Title: Vice President
                               -----------------------

                         BANK OF AMERICA, N.A., as a Holder and as
                         a Lender

                         By: /s/ Oscar A. Bruni, Jr.
                            --------------------------
                         Name: Oscar A. Bruni, Jr.
                              ------------------------
                         Title: Senior Vice President
                               -----------------------

                         BANK OF AMERICA, N.A., as Administrative
                         Agent

                         By: /s/ Oscar A. Bruni, Jr.
                            --------------------------
                         Name: Oscar A. Bruni, Jr.
                              ------------------------
                         Title: Senior Vice President
                               -----------------------
<PAGE>

The terms and conditions of the aforesaid letter are hereby acknowledged and
accepted by the following signatories, and each 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 Lease Agreement or any Operative
Agreement.

                         AVIATION SALES COMPANY,
                         as Construction Agent

                         By: /s/ Michael C. Brant
                            -----------------------------
                         Name: Michael C. Brant
                              ---------------------------
                         Title: Vice President
                               --------------------------

                         AVIATION SALES COMPANY,
                         as Lessee

                         By: /s/ Michael C. Brant
                            -----------------------------
                         Name: Michael C. Brant
                              ---------------------------
                         Title: Vice President
                               --------------------------

                         AVIATION SALES COMPANY
                         AVS/M-1, INC. (formerly known as AVIATION
                         SALES MANUFACTURING COMPANY)
                         AVIATION SALES PROPERTY
                          MANAGEMENT  CORP.
                         AVIATION SALES FINANCE COMPANY
                         TIMCO ENGINE CENTER, INC.
                         AVS/M-2, INC. (formerly known as AVS/KRATZ-WILDE
                         MACHINE COMPANY)
                         AVS/M-3, INC. (formerly known as APEX MANUFACTURING,
                         INC.)
                         AEROCELL STRUCTURES, INC.
                         AVIATION SALES DISTRIBUTION
                          SERVICES COMPANY
                         AVIATION SALES LEASING COMPANY
                         WHITEHALL CORPORATION
                         TRIAD INTERNATIONAL MAINTENANCE
                         CORPORATION (successor in interest to Aero
                          Corporation and Aero Corp Macon, Inc.)
                         AVIATION SALES MAINTENANCE, REPAIR &
                         OVERHAUL COMPANY
                         CARIBE AVIATION, INC.
                         AIRCRAFT INTERIOR DESIGN, INC.
                         AERO HUSHKIT CORPORATION
                         HYDROSCIENCE, INC.
                         TIMCO ENGINEERED SYSTEMS, INC.

<PAGE>

                         By: /s/ Michael C. Brant
                            ---------------------------------------------
                         Name: Michael C. Brant
                              -------------------------------------------
                         Title:  VP  of each of the foregoing Guarantors
                                ----

                         AVSRE, L.P.
                         By: Aviation Sales Property Management Corp.,
                             its general partner

                         By: /s/ Michael C. Brant
                            ---------------------------------------------
                         Name: Michael C. Brant
                              -------------------------------------------
                         Title: Vice President
                               ------------------------------------------

                         AVIATION SALES SPS I, INC.

                         By: /s/ Michael C. Brant
                            ---------------------------------------------
                         Name: Michael C. Brant
                              -------------------------------------------
                         Title: Vice President
                               ------------------------------------------<PAGE>

                                                                    EXHIBIT 10.4
                                                                            ----

                                   AGREEMENT

     This Agreement, dated as of August 14, 2001 ("Agreement"), is made and
entered to among Aviation Sales Company, a Delaware corporation ("AVS"), and
each of the subsidiaries of AVS listed on the signature pages hereof (the
"Guarantor Subsidiaries" and, together with AVS, the "AVS Group"), Lacy Harber
("Harber"), on behalf of a group of Investors which will invest $20 million into
AVS to fund the Restructuring (as hereinafter defined) in accordance with the
Term Sheet (as hereinafter defined) and the definitive documents reflecting such
investment ("Investors"), each holder of AVS' common stock that is a signatory
party hereto (individually a "Consenting Stockholder" and, collectively the
"Consenting Stockholders"), and each other signatory party hereto who is a
holder of AVS Notes (as hereinafter defined) (individually, a "Consenting
Noteholder" and, collectively, the "Consenting Noteholders"). Each member of the
AVS Group, the Investor(s), the Consenting Stockholders, and each of the
Consenting Noteholders is sometimes referred to individually as a "Party" and
they are collectively referred to as the "Parties."

     Whereas, AVS has issued and there remains outstanding $165 million in
principal amount of 8 1/8 % Senior Subordinated Notes due 2008 (the "AVS
Notes");

     Whereas, each of the Guarantor Subsidiaries has guaranteed the payment of
the AVS Notes pursuant to guarantees included in the indenture governing the AVS
Notes;

     Whereas, each of the Consenting Stockholders, including Harber, is the
beneficial owner (and/or agent, advisor, affiliate, manager or other authorized
representative of the beneficial owner(s)) of, and have voting and dispositive
power with respect to AVS' common stock, par value $.001 per share (the "AVS
Stock");

     Whereas, each of the Consenting Noteholders, including Harber, is a
beneficial owner (and/or agent, advisor, affiliate, manager or other authorized
representative of the beneficial owner(s)) of AVS Notes (the claims evidenced by
the AVS Notes owned by the Consenting Noteholders on the date of this Agreement
and any AVS Notes acquired by any Consenting Noteholder after the date of this
Agreement are referred to herein as the "AVS Note Claims");

     Whereas, the Consenting Noteholders have been represented by an unofficial
Ad Hoc Committee of Noteholders (the "Ad Hoc Committee");

     Whereas, the AVS Group, the Consenting Stockholders, the Investors and the
Consenting Noteholders have engaged in negotiations towards a consensual
restructuring/reorganization of the AVS Group's financial affairs, including a
restructuring of the AVS Notes, the material terms of which are set forth in the
term sheet (the "Term Sheet") annexed hereto as Exhibit A (the "Restructuring");

     Whereas, to implement the Restructuring, the AVS Group, and each of them,
intend to participate in a registered exchange offer (the "Exchange Offer"), a
registered rights offering (with a standby commitment from the Investors subject
to entering into definitive documentation with customary terms including, but
not limited to, the right to terminate if there is a material adverse change)
and a proxy solicitation;
<PAGE>

     Whereas, the Consenting Stockholders, including Harber, intend to support
and vote their respective AVS stock interest to accept the Restructuring and not
to oppose the Restructuring; and

     Whereas, the Consenting Noteholders, including Harber, intend to support
and vote in favor of and tender their respective AVS Note Claims to accept the
Restructuring;

     Now, therefore, in consideration of the foregoing, the Parties agree as
follows:

Section 1.  Agreement.

          AVS, the Investors, and each Consenting Noteholder and Consenting
     Stockholder to the extent permitted by applicable law agree to the terms of
     the Restructuring set forth in the Term Sheet and this Agreement.

Section 2.  Voting in Favor of the Restructuring and Tendering of AVS Note
Claims.

     (a)  So long as this Agreement has not been terminated by its terms, each
Consenting Noteholder and each Consenting Stockholder agrees (i) with each of
the other Consenting Noteholders and Consenting Stockholders, and (ii) severally
(but not jointly or jointly and severally) with AVS and the other members of the
AVS Group, as follows:

          (i)   unless such Consenting Noteholder and Consenting Stockholder
     shall have transferred its AVS Note Claims or AVS Stock in accordance with
     Section 3 hereof, each Consenting Noteholder (and any permitted transferee
     pursuant to this Agreement) and each Consenting Stockholder (and any
     permitted transferee pursuant to this Agreement), subject to the conditions
     that (i) any disclosure made in connection with the Restructuring is not
     materially inconsistent with the information heretofore provided by AVS to
     the Consenting Noteholders and (ii) the material terms of the Restructuring
     are the terms set forth in the Term Sheet, shall vote its AVS Note Claims
     and AVS Stock to accept the Restructuring and to effectuate its terms, and
     shall tender its AVS Note Claims as part of the Restructuring, including
     without limitation in any cases filed under Chapter 11, title 11 of the
     United States Code to effectuate the Restructuring ("Chapter 11 Cases");

          (ii)  each Consenting Noteholder and Consenting Stockholder shall not
     object to any disclosure in connection with the Restructuring to the effect
     that such Restructuring was negotiated with the Consenting Stockholders and
     an unofficial committee of Consenting Noteholders who intend to vote in
     favor of such Restructuring;

          (iii) each Consenting Noteholder and each Consenting Stockholder shall
     not object to or otherwise commence any proceeding to oppose or object to
     consummation of the Restructuring including, but not limited to, the filing
     of involuntary Chapter 11 cases; and

          (iv)  each Consenting Noteholder and each Consenting Stockholder shall
     not vote or tender its AVS Note Claims or vote its AVS Stock in favor of
     any Alternative Plan (as hereinafter defined).

                                       2
<PAGE>

     (b)  Notwithstanding the foregoing provisions, nothing in this Agreement
shall require the Consenting Stockholders or a Consenting Noteholder to take any
action prohibited by the United States Bankruptcy Code, the Securities Act of
1933, as amended (the "Securities Act"), the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), any rules or regulations thereunder or by other
applicable law or regulation or by any order or direction of any court or any
federal or state governmental authority.

     (c)  It is expressly agreed by and among the AVS Group, the Consenting
Noteholders and the Consenting Stockholders that the right of any and all of
them to enforce the rights and obligations arising under this Agreement between
and among the AVS Group, the Consenting Noteholders and the Consenting
Stockholders shall not be in any way abridged, modified or in any manner
affected by the commencement of one or more Chapter 11 Cases by any of the AVS
Group.

Section 3. Transfer of AVS Notes, AVS Note Claims and AVS Stock; No
Solicitation.

     (a)  Neither the Consenting Stockholders nor any Consenting Noteholder
shall, directly or indirectly, sell, assign, hypothecate, grant an option on, or
otherwise dispose of (collectively, "Transfer") any of the AVS Notes, AVS Note
Claims or AVS Stock, or any interest therein, held by it to any other person or
entity (a "Transferee"); provided, however, that each of the Consenting
Stockholders and each Consenting Noteholder shall be permitted to Transfer any
or all of its AVS Notes, AVS Note Claims or AVS Stock (to the extent otherwise
transferable), if (i) with respect to a Transfer of AVS Stock or AVS Note
Claims, such Transferee is a "qualified institutional buyer" within the meaning
of Rule 144A promulgated under the Securities Act or is an institutional
accredited investor within the meaning of Rule 501 of the Securities Act or is
an entity or affiliate controlled by the Consenting Noteholder, and (ii) with
respect to any Transfer, (A) such Transferee agrees in writing to be bound by
the terms of this Agreement to the same extent as the Consenting Stockholders or
the Consenting Noteholder, as the case may be, and the transferring Party
notifies Investors and the AVS Group of the Transfer within three (3) business
days of the Transfer or as soon as practicable thereafter; or (B) such Transfer
occurs after the termination of this Agreement.

     (b)  Neither the AVS Group, the Consenting Stockholders nor any Consenting
Noteholder shall, nor shall the AVS Group or any Consenting Noteholder and
Consenting Stockholder permit any of its subsidiaries to, nor shall any
Consenting Noteholder or Consenting Stockholder authorize or permit any
affiliate, officer, director, employee, subsidiary, investment banker, attorney,
advisor, agent or representative (collectively, any "Affiliate") of the AVS
Group or such Consenting Noteholder or Consenting Stockholder to, directly or
indirectly, (i) solicit, initiate or encourage the submission of any Alternative
Plan, (ii) enter into any agreement with respect to any Alternative Plan, or
(iii) participate in any discussions or negotiations regarding, or furnish to
any person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Alternative Plan. Notwithstanding
anything contained herein, AVS may discuss any bona fide unsolicited offers or
proposals from a third party as may be required under applicable law and may
further discuss such offers or proposals with the Ad Hoc Committee or, if the
AVS Group is operating its business under Chapter 11 of the United States
Bankruptcy Code, also with an official creditors' committee. Without limiting
the foregoing, it is understood

                                       3
<PAGE>

that any violation of the restrictions set forth in the preceding sentence by
any Affiliate of the AVS Group, a Consenting Noteholder or Consenting
Stockholder, whether or not such Affiliate is purporting to act on behalf of the
AVS Group or such Consenting Noteholder, Consenting Stockholder or otherwise,
shall be deemed to be a material breach of this Agreement by the AVS Group or
such Consenting Noteholder or Consenting Stockholder. For purposes of this
Agreement, "Alternative Plan" means (i) any plan of reorganization or debt
restructuring other than the Restructuring, (ii) any proposal or offer other
than the Restructuring or a proposal or offer by Investors or any of its
affiliates, for a merger, reorganization, share exchange, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving AVS or any of its subsidiaries or (iii) any proposal or
offer other than the Restructuring or a proposal or offer by Investors or any of
its affiliates, to acquire from the stockholders of AVS, by tender offer,
exchange offer or otherwise, more than 50% of any class of common stock of AVS
then outstanding.

     In addition to the obligations of the AVS Group and each Consenting
Noteholder and Consenting Stockholder set forth in the foregoing paragraph, each
Consenting Noteholder and the Consenting Stockholder shall promptly advise the
Investors orally and in writing of any Alternative Plan or any inquiry with
respect to or which could lead to any Alternative Plan, the material terms and
conditions of such inquiry or Alternative Plan (including any proposed financing
for such Alternative Plan and a copy of such documents conveying such
Alternative Plan), and the identity of the person proposing such Alternative
Plan. The AVS Group and such Consenting Noteholder and Consenting Stockholder
will keep the Investors fully informed of the status and details of any such
proposed Alternative Plan.

Section 4. Termination of Obligations.

     (a)  The obligations of the Consenting Stockholders and each Consenting
Noteholder hereunder shall terminate and be of no further force and effect if
(each a "Termination Event"):

          (i)   any of the AVS Group shall not have consummated the
     Restructuring on or before 5:00 p.m. New York time March 31, 2002 or such
     later date as the AVS Group, the Consenting Noteholders, the Investors and
     the Consenting Stockholders shall mutually agree;

          (ii)  a registration statement describing the Exchange Offer shall not
     have been filed with the Securities and Exchange Commission (the "SEC") by
     September 15, 2001;

          (iii) in the event that (x) AVS shall have commenced a Chapter 11
     Case, and the Chapter 11 Case shall have been dismissed or converted to a
     case under Chapter 7 of the United States Bankruptcy Code or a trustee
     shall have been appointed, (y) AVS shall have commenced a Chapter 11 Case
     and shall not have filed a plan of reorganization incorporating the terms
     of the Restructuring contemporaneously therewith, or (z) an involuntary
     case has been commenced against AVS and such involuntary case has not been
     dismissed or converted to a voluntary Chapter 11 Cases within 120 days;

          (iv)  AVS or any member of the AVS Group shall have withdrawn or
     modified the Restructuring; provided, however, that modifications to the
     Restructuring that do not

                                       4
<PAGE>

     materially adversely affect the Consenting Noteholders shall not be deemed
     to be a withdrawal. Any decrease in the amount or change in the form of the
     distributions to be made to the class of holders of AVS Note Claims under
     the Restructuring, and any increase in the amount or change in the form of
     the distributions to be made to the class of holders of equity interests
     under the Restructuring, shall be deemed a withdrawal of the Restructuring;
     or

          (v)  AVS breaches any material provision of this Agreement, including,
     but not limited to, ceasing to use its best efforts to obtain approval of
     the Restructuring.

     (b)  If any Termination Event occurs (and has not been waived) at the time
when permission of a bankruptcy court shall be required for a Consenting
Noteholder to change or withdraw (or cause to be changed or withdrawn) its vote
to accept the Restructuring, AVS shall not oppose any attempt by such Consenting
Noteholder to change or withdraw (or cause to be changed or withdrawn) such vote
at such time.

     (c)  The AVS Group and each Consenting Noteholder and Consenting
Stockholder hereby further covenants and agrees to negotiate the definitive
documents relating to the Restructuring in good faith.

Section 5.  Representations and Warranties.

     (a)  Each Consenting Stockholder and each Consenting Noteholder that
executes this Agreement represents and warrants that it is the beneficial owner
(and/or agent, advisor, affiliate, manager or other authorized representative of
the beneficial owner(s)) of the shares of common stock or principal amount of
the AVS Notes, as the case may be, listed adjacent to its signature to this
Agreement.

     (b)  Each Party that is not an individual represents and warrants that it
is duly organized, validly existing and in good standing under the laws of the
state of its organization, and has all requisite power and authority (corporate
or other) to execute this Agreement. Each Party represents and warrants that
this Agreement has been duly executed and delivered by such party .

     (c)  Each of the AVS Group and the Investors represents and warrants that
the execution and delivery of this Agreement does not conflict with, or result
in any violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of or a "put" right with respect to any obligation or to the loss
of a material benefit under, or result in the creation of any lien or
encumbrance upon any of its properties or assets under, any provision of (i) its
respective charter or bylaws, (ii) any loan or credit agreement, note, bond,
mortgage, indenture (other than, with respect to the AVS Group, the indenture
for the AVS Notes), lease, guaranty or other financial assurance agreement or
other agreement, instrument, permit, concession, franchise or license applicable
to it, and (iii) AVS's Stockholders' Rights Plan (as to which AVS's Board of
Directors shall take such action as is required to avoid a violation of the
Stockholder's Rights Plan).

     (d)  AVS represents and warrants that it has filed all reports and
documents required to be filed with the SEC since December 31, 1997. As of the
respective dates of their filing with

                                       5
<PAGE>

the SEC or, if any such SEC filings were amended, as of the date of the filing
of such amendment, the SEC filings of AVS complied, and as of the date of the
execution of this Agreement comply, in all material respects with the applicable
requirements of the Securities Act or the Exchange Act, as the case may be, and
the applicable rules and regulations of the SEC thereunder (other than the
failure by AVS to file its Form 10-K for 2000 by the applicable deadline or to
hold an annual meeting of stockholders during 2000), and did not and do not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading.

     (e)  In addition, each Consenting Noteholder and Consenting Stockholder
hereby represents and warrants that it has made no prior assignment, sale,
participation, grant conveyance or other transfer of, and has not entered into
any other agreement to assign, sell, participate, grant or otherwise transfer,
in whole or in part, any portion of its right, title or interest in the AVS
Notes and AVS Stock, and it has good title thereto, free and clear or all liens,
security interests and other encumbrances of any kind.

Section 6.  Amendments.

     No modification or amendment of the terms of this Agreement shall be valid
unless such modification or amendment, in writing, has been signed by each of
the Parties.

Section 7.  Governing Law.

     This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York, without regard to its conflict of laws
provisions, except Section 5-1401 of the New York General Obligations Law.

Section 8.  Counterparts.

     This Agreement may be executed by facsimile signature transmission in one
or more counterparts, any one of which need not contain the signature of more
than one party and all of which taken together shall constitute one and the same
agreement.

Section 9.  Headings.

     The Section headings of this Agreement are for convenience of reference
only and shall not, for any purpose, be deemed a part of this Agreement.

Section 10. Further Acquisition of Securities.

     This Agreement shall in no way be construed to preclude the Consenting
Noteholders from owning, acquiring or obtaining a beneficial interest or
participation with the right to vote and have dispositive powers with respect to
AVS Stock, the Credit Facilities (as defined in the Term Sheet) or additional
AVS Notes or any portion thereof; provided, however, the terms and conditions of
this Agreement shall apply to any AVS Stock, Credit Facilities or additional AVS
Note interest so acquired.

                                       6
<PAGE>

Section 11.  Successors and Assigns.

     This Agreement is intended to bind and inure to the benefit of the parties
and their respective successors, assigns, heirs, executors, administrators and
representatives. The agreements, representations and obligations of the
Consenting Noteholders and Consenting Stockholders under this Agreement are
several and neither joint nor joint and several in all respects. Except as set
forth herein, no party may assign any of its rights or obligations hereunder
without the prior consent of all other parties.

Section 12.  Prior Negotiations.

     This Agreement supersedes all prior negotiations, understandings and
agreements with respect to the subject matter hereof.

Section 13.  No Third-Party Beneficiaries.

     Unless expressly stated herein, this Agreement shall be solely for the
benefit of the parties hereto and no other person or entity shall be a third-
party beneficiary hereof.

Section 14.  Consideration.

     It is hereby acknowledged by the parties that no consideration shall be due
or paid to the Consenting Noteholders or Consenting Stockholders for their
agreements hereunder, other than the AVS Group's agreement to work toward the
Restructuring.

Section 15.  Notices.

     All notices and communications in connection with this Agreement shall be
in writing and shall be delivered by hand, overnight courier, certified mail,
return receipt requested, or facsimile transmission as follows:

     If to the Consenting Noteholders: Jeffrey D. Saferstein, Esq., Paul, Weiss,
Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New York, New York
10019-6064, (Telephone (212) 343-3347, Fax (212) 492-0347).

     If to AVS: Roy T. Rimmer, Jr., Chairman of AVS, c/o Philip B. Schwartz,
Esq., One S.E. Third Avenue, 28th Floor, Miami, Florida (Fax: (305) 374-5095)
and Peter S. Goodman, Esq., Andrews & Kurth L.L.P., 805 Third Avenue, New York,
New York 10022, (Telephone: (212) 850-2849, Fax: (212) 850-2929).

     If to the Investors: Lacy J. Harber, c/o J. William Boyar, Esq., Boyar &
Miller, 4265 San Felipe, Suite 1200, Houston, Texas 77027, (Telephone (713) 850-
7766, Fax (713) 552-1758).

Section 16.  Specific Performance.

     It is understood and agreed by each of the parties hereto that money
damages would not be a sufficient remedy for any breach of this Agreement by any
Party and each non-breaching

                                       7
<PAGE>

Party shall be entitled to specific performance and injunctive or other
equitable relief as a remedy of any such breach.

Section 17.  Waiver of Defaults.

     In the event that the failure to pay the interest installment on the AVS
Notes that is due on August 15, 2001 results in an occurrence of an Event of
Default (as defined in the Indenture governing the AVS Notes) and an
acceleration is effected in accordance with Section 6.02 of such Indenture, each
Consenting Noteholder agrees to vote pursuant to Section 6.04 of such Indenture
to rescind such acceleration and its consequences. Furthermore, each Consenting
Noteholder agrees to vote to rescind all subsequent accelerations under such
Section 6.02 arising from the occurrence of such Event of Default, and that all
such rescissions of acceleration shall include instructions to the Trustee under
such Indenture to such effect.

Section 18.  Professional Fees.

     The Restructuring shall include a provision for the payment by AVS of the
reasonable and customary fees and expenses of counsel for the Ad Hoc Committee.

Section 19.  Severability.

     The illegality, invalidity, or unenforceability of any provision of this
Agreement under the law of any jurisdiction shall not affect its legality,
validity or enforceability under the law of any other jurisdiction nor the
legality, validity or enforceability of any other provision.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective duly authorized representatives as of
the date first set forth above.

                                       8
<PAGE>

AVIATION SALES COMPANY

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By:/s/ Michael C. Brant
   --------------------------------------
Name:  Michael C. Brant
     ------------------------------------
Title: Vice President
       ----------------------------------

AVIATION SALES MAINTENANCE, REPAIR &
OVERHAUL COMPANY

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By:/s/ Michael C. Brant
   --------------------------------------
Name:  Michael C. Brant
     ------------------------------------
Title: Vice President
       ----------------------------------

TRIAD INTERNATIONAL MAINTENANCE
CORPORATION

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By:/s/ Michael C. Brant
   --------------------------------------
Name:  Michael C. Brant
     ------------------------------------
Title: Vice President
       ----------------------------------

TIMCO ENGINEERED SYSTEMS, INC.

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By: /s/ Michael C. Brant
    -------------------------------------
<PAGE>

Name:/s/ Michael C. Brant
     ------------------------------------
Title: Vice President
       ----------------------------------

TIMCO ENGINE CENTER, INC.

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By:/s/ Michael C. Brant
   --------------------------------------
Name: Michael C. Brant
      -----------------------------------
Title: Vice President
       ----------------------------------

AVS/CAI, INC.
Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By:/s/ Michael C. Brant
   --------------------------------------
Name: Michael C. Brant
      -----------------------------------
Title: Vice President
       ----------------------------------

AIRCRAFT INTERIOR DESIGN, INC.

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By:/s/ Michael C. Brant
   --------------------------------------
Name: Michael C. Brant
      -----------------------------------
Title: Vice President
       ----------------------------------

WHITEHALL CORPORATION

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By:/s/ Michael C. Brant
   --------------------------------------
Name: Michael C. Brant
      -----------------------------------
Title: Vice President
       ----------------------------------

<PAGE>

HYDROSCIENCE, INC.

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By:/s/ Michael C. Brant
   --------------------------------------
Name: Michael C. Brant
      -----------------------------------
Title: Vice President
       ----------------------------------

AVIATION SALES PROPERTY MANAGEMENT CORP.

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By:/s/ Michael C. Brant
   --------------------------------------
Name: Michael C. Brant
      -----------------------------------
Title: Vice President
       ----------------------------------

AVSRE, L.P.

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By:/s/ Michael C. Brant
   --------------------------------------
Name: Michael C. Brant
      -----------------------------------
Title: Vice President
       ----------------------------------

AVIATION SALES DISTRIBUTION SERVICES
COMPANY

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By:/s/ Michael C. Brant
   --------------------------------------
Name: Michael C. Brant
      -----------------------------------
Title: Vice President
       ----------------------------------

<PAGE>

AVS/M-1, INC.

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By:/s/ Michael C. Brant
   --------------------------------------
Name: Michael C. Brant
      -----------------------------------
Title: Vice President
       ----------------------------------

AVIATION SALES SPSI, INC.

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By:/s/ Michael C. Brant
   --------------------------------------
Name: Michael C. Brant
      -----------------------------------
Title: Vice President
       ----------------------------------

AERO HUSHKIT CORPORATION

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By:/s/ Michael C. Brant
   --------------------------------------
Name: Michael C. Brant
      -----------------------------------
Title: Vice President
       ----------------------------------

AVIATION SALES LEASING COMPANY

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By:/s/ Michael C. Brant
   --------------------------------------
Name: Michael C. Brant
      -----------------------------------
Title: Vice President
       ----------------------------------

<PAGE>

AVIATION SALES FINANCE COMPANY

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By: /s/ Michael C. Brant
   --------------------------------------
Name: Michael C. Brant
     ------------------------------------
Title: Vice President
      -----------------------------------

AVS/M-2, INC.

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By: /s/ Michael C. Brant
   --------------------------------------
Name: Michael C. Brant
     ------------------------------------
Title: Vice President
      -----------------------------------

AEROCELL STRUCTURES, INC.

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By: /s/ Michael C. Brant
   --------------------------------------
Name: Michael C. Brant
     ------------------------------------
Title: Vice President
      -----------------------------------

AVS/M-3, INC.

Address:_________________________________
Attention:_______________________________
Facsimile:_______________________________

By: /s/ Michael C. Brant
   --------------------------------------
Name: Michael C. Brant
     ------------------------------------
Title: Vice President
      -----------------------------------

<PAGE>

LACY HARBER

By: /s/ Lacy Harber
    ----------------------------------------
Address:
         -----------------------------------
Telephone:
           ---------------------------------
Facsimile:
           ---------------------------------

STOCKHOLDER

Name:      LJH Corp.
      --------------------------------------
Amount of Stock:  4,000,000 + options
                 ---------------------------
Address:
         -----------------------------------
Telephone:
           ---------------------------------
Facsimile:
           ---------------------------------
By: /s/ Lacy J. Harber
    ----------------------------------------
Authorized
Officer/Principal:  President
                   -------------------------
<PAGE>

8-1/8% SENIOR SUBORDINATED NOTEHOLDER

Noteholder: LJH Corp
            -----------------------------------
Amount of 8-1/8% Notes: 11,750,000
                        -----------------------
Address:
         --------------------------------------
Telephone:
           ------------------------------------
Facsimile:
           ------------------------------------
By: /s/ Lacy J. Harber
    -------------------------------------------
Authorized
Officer/Principal: President
                   ----------------------------

8-1/8% SENIOR SUBORDINATED NOTEHOLDER

Noteholder: TCS European Investment, Inc.
            -----------------------------------
Amount of 8-1/8% Notes: 8,740,000
                        -----------------------
Address:
         --------------------------------------

         --------------------------------------
Telephone:
           ------------------------------------
Facsimile:
           ------------------------------------
By: /s/ John Pickett
    -------------------------------------------
Authorized
Officer/Principal: John Pickett
                   ----------------------------
                   Citibank International plc,
                   Special Situations Group, as
                   investment advisor to TCS
                   European Investments, Inc.

8-1/8% SENIOR SUBORDINATED NOTEHOLDER

Noteholder: Travelers European Investment LLC
            -----------------------------------
Amount of 8-1/8% Notes: 8,740,000
                        -----------------------
Address:
         --------------------------------------

         --------------------------------------
Telephone:
           ------------------------------------
Facsimile:
           ------------------------------------
By: /s/ John Pickett
    -------------------------------------------
Authorized
Officer/Principal: John Pickett, Citibank International
                   ----------------------------
                   plc, Special Situations Group,
                   as investment advisor to Travelers
                   European Investments LLC

8-1/8% SENIOR SUBORDINATED NOTEHOLDER

Noteholder: Eric Schwartz
            -----------------------------------
Amount of 8-1/8% Notes: 3,000,000
                        -----------------------
Address:
         --------------------------------------
Copy to:

Telephone:
           ------------------------------------
Facsimile:
           ------------------------------------
By: /s/ Eric Schwartz
    -------------------------------------------
Authorized
Officer/Principal: Eric Schwartz
                   ----------------------------
<PAGE>

8-1/8% SENIOR SUBORDINATED NOTEHOLDER

Noteholder: The Easton Group
           --------------------------------
Amount of 8-1/8% Notes: 290,000
                       --------------------
Address:
        -----------------------------------
Telephone:
          ---------------------------------
Facsimile:
          ---------------------------------
By: /s/ Edward W. Easton
   ----------------------------------------
Authorized
Officer/Principal: Edward W. Easton
                  -------------------------

8-1/8% SENIOR SUBORDINATED NOTEHOLDER

Noteholder: Edward W. Easton
           --------------------------------
Amount of 8-1/8% Notes: 6,182,000
                       --------------------
Address:
        -----------------------------------
Telephone:
          ---------------------------------
Facsimile:
          ---------------------------------
By: /s/ Edward W. Easton
   ----------------------------------------
Authorized
Officer/Principal: Edward W. Easton
                  -------------------------

8-1/8% SENIOR SUBORDINATED NOTEHOLDER

Noteholder: Edward W. Easton, TTEE
           --------------------------------
Amount of 8-1/8% Notes: 1,000,000
                       --------------------
Address:
        -----------------------------------
Telephone:
          ---------------------------------
Facsimile:
          ---------------------------------
By: /s/ Edward W. Easton
   ----------------------------------------
Authorized
Officer/Principal: Edward W. Easton
                  -------------------------

8-1/8% SENIOR SUBORDINATED NOTEHOLDER

Noteholder: Lizzie Easton
           --------------------------------
Amount of 8-1/8% Notes: 1,000,000
                       --------------------
Address:
        -----------------------------------
Telephone:
          ---------------------------------
Facsimile:
          ---------------------------------
By: /s/ Edward W. Easton
   ----------------------------------------
Authorized
Officer/Principal: Edward W. Easton
                  -------------------------

8-1/8% SENIOR SUBORDINATED NOTEHOLDER

Noteholder: William M.Easton
           --------------------------------
Amount of 8-1/8% Notes: 500,000
                       --------------------
Address: __________________________________
Telephone:_________________________________
Facsimile:_________________________________
By: /s/ Edward W. Easton
   ----------------------------------------
Authorized
Officer/Principal: Edward W. Easton
                  -------------------------

8-1/8% SENIOR SUBORDINATED NOTEHOLDER

Noteholder: Andy Nelson & Nancy Easton
           --------------------------------
Amount of 8-1/8% Notes: 250,000
                       --------------------
Address:___________________________________
Telephone: ________________________________
Facsimile: ________________________________
By: /s/ Edward W. Easton
   ----------------------------------------
Authorized
Officer/Principal: Edward W. Easton
                  -------------------------

8-1/8% SENIOR SUBORDINATED NOTEHOLDER

Noteholder: Starwood Group L.P.
           --------------------------------
Amount of 8-1/8% Notes: 11,000,000
                       --------------------
Address:
        -----------------------------------

        -----------------------------------
Telephone:
          ---------------------------------
Facsimile:
          ---------------------------------
By: /s/ Robert Green
   ----------------------------------------
Authorized
Officer/Principal: General Partner
                  -------------------------

8-1/8% SENIOR SUBORDINATED NOTEHOLDER

Noteholder: Robert I. Green
           --------------------------------
Amount of 8-1/8% Notes: 1,600,000
                       --------------------
Address:___________________________________
Telephone: ________________________________
Facsimile: ________________________________
By: /s/ Robert I. Green
   ----------------------------------------
Authorized
Officer/Principal:_________________________

8-1/8% SENIOR SUBORDINATED NOTEHOLDER

Noteholder: Cypress Management Partnership
           --------------------------------
Amount of 8-1/8% Notes: 8,225,000
                       --------------------
Address:
        -----------------------------------

        -----------------------------------
Telephone:
          ---------------------------------
Facsimile:
          ---------------------------------
By: /s/ Jonathan A. Marcus
   ----------------------------------------
Authorized
Officer/Principal: Authorized Signatory
                  -------------------------

8-1/8% SENIOR SUBORDINATED NOTEHOLDER

Noteholder: Cincinnati Financial
           --------------------------------
            Corporation
           --------------------------------
Amount of 8-1/8% Notes: 8,000,000
                       --------------------
Address:
        -----------------------------------

        -----------------------------------
Telephone:
          ---------------------------------
Facsimile:
          ---------------------------------
By: /s/ Kenneth Miller
   ----------------------------------------
Authorized
Officer/Principal: Vice President
                  -------------------------

8-1/8% SENIOR SUBORDINATED NOTEHOLDER

Noteholder: Oaktree Capital Management
           --------------------------------
            LLC, as agent and on behalf of
           --------------------------------
            certain funds and accounts
           --------------------------------
Amount of 8-1/8% Notes: 50,202,000
                       --------------------
Address:
        -----------------------------------

        -----------------------------------

Telephone:
          ---------------------------------
Facsimile:
          ---------------------------------
By: /s/ Sheldon Stone
   ----------------------------------------
Authorized /s/ Timothy Andrews
          ---------------------------------
Officer/Principal: Sheldon Stone, Principal
                  -------------------------
                   Timothy Andrews, Sr. VP.
                  -------------------------

<PAGE>

                                   Exhibit A
                                   ---------

                            AVIATION SALES COMPANY

                       Proposed Restructuring Term Sheet

--------------------------------------------------------------------------------

The Restructuring                Aviation Sales Company ("AVS" or "the Company")
                                 intends to recapitalize the Company through an
                                 exchange offer or a pre-negotiated Chapter 11
                                 case and a concurrent investment in the Company
                                 by certain existing AVS shareholders or a third
                                 party on the terms set forth herein
                                 (collectively, the "Restructuring").

TREATMENT OF CAPITAL CLAIMS UNDER THE RESTRUCTURING

The Restructuring will classify and provide treatment of claims against and
interest in the Company generally described below. Claims in each such class
will be discharged in full in exchange for delivery of the consideration
described below on the effective date of the Restructuring (the "Effective
Date").

Credit Facilities                The Company's existing credit facilities (the
                                 "Credit Facilities") will be unimpaired or
                                 refinanced as part of the Restructuring.

Senior Subordinated Notes        The outstanding principal amount of the 8 1/8%
                                 Senior Subordinated Notes due 2008 ("Senior
                                 Notes"), including all accrued and unpaid
                                 interest thereon through and including the
                                 consummation of the Restructuring and all other
                                 claims held by holders of the Senior Notes
                                 against the Company or its past and present
                                 directors, officers, and employees arising out
                                 of or related to the Senior Notes or the
                                 purchase or sale of any other securities of the
                                 Company shall be exchanged for (i) cash or (ii)
                                 New Notes, New Common Stock and New Warrants as
                                 described below.

                                 Cash Option - $33.0 million of the principal
                                 -----------
                                 amount of Senior Notes will be exchanged for
                                 $10.0 million in cash (i.e., $303 per $1,000
                                 principal amount of Senior Notes); provided
                                 that principal amount of Senior Notes eligible
                                 for the Cash Option shall be reduced dollar for
                                 dollar by the principal amount of Senior Notes
                                 that do not tender into the Exchange Offer and
                                 the amount of cash allocated to the Cash Option
                                 shall be similarly reduced pro rata. For
                                 example, if $11 million principal amount of
                                 Senior Notes do not tender into the

                                       1
<PAGE>

                                 Exchange Offer, only $22 million of principal
                                 amount of Senior Notes will be eligible for the
                                 Cash Option, each $1,000 of principal amount
                                 shall continue to receive $303 and the
                                 aggregate amount of cash distributed by the
                                 Company shall be $6.666 million.

                                 New Notes and New Common Stock Option - $132
                                 -------------------------------------
                                 million principal amount of the Senior Notes
                                 will be exchanged for $100.0 million principal
                                 amount of new redeemable, convertible
                                 subordinated notes (the "New Notes") as
                                 described below, 15% of the new common stock of
                                 the Company after giving effect to the
                                 Restructuring (the "New Common Stock") and
                                 warrants to purchase additional New Common
                                 Stock representing 10% of all outstanding New
                                 Common Stock as of consummation of the
                                 Restructuring to be struck at an implied equity
                                 value of $155 million.

                                 Each Senior Noteholder shall be entitled to
                                 elect which option it prefers with respect to
                                 all or any portion of its Senior Notes;
                                 provided that if either option is over-
                                 subscribed, Senior Noteholders that elect the
                                 over-subscribed option will share pro rata and
                                 receive the balance of their consideration from
                                 the option that is not over-subscribed.

Features of the New Notes

   Issuer:                       Aviation Sales Company

   Principal Amount:             $100,000,000

   General Description:          New Convertible Senior Subordinated Notes

   Redemption Rights:            Redeemable at the Company's option: (i) in
                                 2002, at 70% of the sum of par plus interest
                                 through the date of redemption (approximately
                                 $75.7 million at the end of year one) plus 15%
                                 of the New Common Stock; (ii) in 2003, at 72.5%
                                 of the sum of par plus interest accrued through
                                 the date of redemption (approximately $84.8
                                 million at the end of year two) plus 15% of the
                                 New Common Stock; (iii) 2004, at 73% of the sum
                                 of par plus interest accrued through the date
                                 of redemption (approximately $92.4 million at
                                 the end of year three) plus 10% of the New
                                 Common Stock; (iv) in 2005, at 75.625% of the
                                 sum of par plus interest accrued through the
                                 date of redemption (approximately $103.5
                                 million at the end of year 4) plus 10% of the
                                 New Common Stock; and (v) in 2006 to maturity,
                                 at 77.5% of the sum of par plus interest
                                 accrued

                                       2
<PAGE>

                                 through the date of redemption (approximately
                                 $114.7 million at the end of year 5) plus 10%
                                 of the New Common Stock.

   Conversion:                   If not previously redeemed, on December 31,
                                 2006, the New Notes shall automatically convert
                                 into shares of New Common Stock representing
                                 90% of the New Common Stock outstanding as of
                                 the consummation of the Restructuring

   Change of Control:            Mandatory repurchase at the then applicable
                                 redemption rate upon a change of control

   Maturity:                     December 31, 2006

   Interest:                     8% paid-in-kind accruing semi-annually.

   Security:                     None

   Ranking:                      Subordinated to senior debt, senior to
                                 remaining Senior Notes.

   Covenants:                    Substantially similar to existing Senior Notes,
                                 but the New Notes shall be modified to permit
                                 senior indebtedness equal to the greater of (i)
                                 $95.0 million at any time outstanding and (ii)
                                 an amount that satisfies a fixed charge
                                 coverage ratio equal to 2.25/1 (same ratio as
                                 in current indenture).

   Guarantors:                   Unconditionally guaranteed, on a senior
                                 subordinated basis, by substantially all of the
                                 Company's existing and future subsidiaries.

Accounts Payable                 Accounts payable shall be left unimpaired.

New Investors                    The Investors, in consideration of their $20.0
                                 million investment (the "Equity Infusion"),
                                 shall receive 80% of New Common Stock of the
                                 Reorganized Company as of consummation of the
                                 Restructuring.

Existing Shareholders            Shall continue to own 5% of New Common Stock of
                                 the reorganized Company and shall be afforded
                                 the opportunity to participate pro rata in the
                                 Equity Infusion and shall receive warrants to
                                 purchase additional New Common Stock
                                 representing 10% of all outstanding New Common
                                 Stock as of consummation of the Restructuring
                                 to be struck at an implied equity value of $155
                                 million

Management                       Up to a 8% phantom stock program that will
                                 dilute all equityholders. The program will be
                                 designed and implemented

                                       3
<PAGE>

                                 by AVS' board of directors following the
                                 Restructuring.

Means of Execution

   Investment                    Subject to entering into definitive
                                 documentation with customary terms, including,
                                 but not limited to, the right to terminate if
                                 there is a material adverse change, the
                                 existing shareholders or third parties would
                                 make a $20.0 million infusion of cash into the
                                 Company as described herein, and would receive
                                 80% of the common stock (the "New Common
                                 Stock") of the reorganized Company.

   Exchange Offer                The Company shall seek to effectuate the
                                 Restructuring by a registered exchange offer,
                                 rights offering and proxy solicitation. Subject
                                 to entering into definitive documentation with
                                 customary terms, including, but not limited to,
                                 the right to terminate if there is a material
                                 adverse change, a group of investors led by
                                 Lacy Harber will commit to purchase the unsold
                                 allotment of such rights offering.

   Chapter 11 Plan Option        At the Company's option, the exchange offer set
                                 forth in this Term Sheet will be effectuated
                                 through confirmation by AVS of a Chapter 11
                                 plan ("Plan") that, among other things:

                                     (a)  will provide for the treatment of the
                                 Senior Notes as described in this Term Sheet;
                                     (b)  leave any or all allowed claims other
                                 than Note Claims and securities Litigation
                                 Claims unimpaired; and
                                     (c)  shall provide for necessary amendments
                                 to the Company's Certificate of Incorporation.

Conditions to Consummation of    Consummation of the exchange offer described in
 Exchange Offer                  this Term Sheet is subject to (1) effective
                                 registration of the exchange offer, (2) receipt
                                 by the Company of $20 million from existing
                                 stockholders or third parties, (3) tender of no
                                 less than $132 million principal amount of the
                                 Senior Notes and the approval by the requisite
                                 holders of the Company's common stock as
                                 required under applicable state law or at the
                                 Company's election confirmation of a plan of
                                 reorganization, and entry of the Confirmation
                                 Order which are, in each instance, wholly
                                 consistent with this Term Sheet, and (4)
                                 approval by the Company's senior lenders or new
                                 lenders which replace the Company's existing
                                 senior lenders in the future.

                                       4
<PAGE>

Additional Terms                 .    The Ad Hoc Committee of Senior Noteholders
                                      will be entitled to nominate one member of
                                      the Company's initial post-Restructuring
                                      Board of Directors. The size of the Board
                                      of Directors shall range from five to
                                      seven members at the sole discretion of
                                      the Company.

                                 .    The Consenting Noteholders, pursuant to
                                      Section 9.02 of the 8-1/8% Senior
                                      Subordinated Notes Indenture dated
                                      February 17, 1998 (the "Indenture"), agree
                                      to provide exit consents so that upon
                                      consummation of the Restructuring the
                                      Indenture shall be amended so as to delete
                                      all covenants (to the extent permitted
                                      under the Indenture) including, but not
                                      limited to, Articles 3.09 and 4.07 through
                                      4.18 and further agree as part of the
                                      Restructuring to consent to and approve
                                      any supplemental indenture which deletes
                                      such Articles.

                                 .    The Investors shall have the right, but
                                      not the obligation, to loan short-term
                                      working capital to AVS prior to completion
                                      of the Restructuring, and such short term
                                      loans shall constitute Senior Debt and be
                                      repaid from the proceeds of the
                                      Restructuring.

                                 .    All equity and warrants issued in
                                      connection with the Restructuring or
                                      pursuant to the New Notes shall be subject
                                      to dilution by future equity issuances,
                                      but shall be protected by standard anti-
                                      dilution rights with respect to below-
                                      market equity issuances and provisions to
                                      be agreed upon protecting against the sale
                                      of equity to Company affiliates (even if
                                      at market prices) during the first year
                                      following consummation of the
                                      Restructuring.

                                 .    Maximum holdouts shall not exceed $33
                                      million par value of the existing Senior
                                      Notes. Every dollar of Senior Note claims
                                      that is not tendered shall reduce the face
                                      value of Senior Notes eligible for the
                                      cash option on a pro rata basis.

                                 .    By executing the prefixed Agreement dated
                                      August 14, 2001 (the "Agreement") each
                                      Consenting Noteholder agrees that the
                                      terms of the Confidentiality Agreement
                                      regarding 8-1/8 Senior Subordinated Notes
                                      due 2008 of Aviation Sales Company shall
                                      remain in full force and effect through
                                      and including the Termination Event as
                                      that term is defined in the Agreement.

                                 .    $10 million of the Equity Infusion shall
                                      remain in the

                                       5
<PAGE>

                                      Company to fund restructuring expenses and
                                      working capital.

                                       6

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