**EXHIBIT 10.138****INTERCREDITOR AND SUBORDINATION AGREEMENT**     **THIS INTERCREDITOR AND SUBORDINATION AGREEMENT**(this “Agreement”), made as of the 20thday of April, 2006, by and between **THE CIT GROUP/BUSINESS CREDIT, INC.**, a New York corporation(“CITBC”), individually and in its capacity as agent (in such capacity, the“Agent”) for the Senior Lenders under the Senior Lenders Loan Agreement, as hereinafterfurther defined; and **LJH, LTD.**, a Texas limited partnership (herein referred to as the“Subordinated Lender”, as hereinafter further defined);WITNESSETH:     WHEREAS, Aircraft Interior Design, Inc., a Florida corporation, Brice Manufacturing Company,Inc., a California corporation, TIMCO Aviation Services, Inc., a Delaware corporation, TIMCO EngineCenter, Inc., a Delaware corporation, TIMCO Engineered Systems, Inc., a Delaware corporation, andTriad International Maintenance Corporation, a Delaware corporation (collectively, the“Borrowers” and, individually, a “Borrower”); and Aviation Sales DistributionServices Company, Aviation Sales Leasing Company, Aviation Sales Property Management Corp.,AVS/M-1, Inc., AVS/M-2, Inc., AVS/M-3, Inc. and Whitehall Corporation, each a Delaware corporation,AVS/CAI, Inc., a Florida corporation, AVSRE, L.P., a Delaware limited partnership, Hydroscience,Inc., a Texas corporation, and TMAS/ASI, Inc., an Arkansas corporation, (collectively, the“Guarantors” and, individually, a “Guarantor” and, together with the Borrowers,collectively, the “Credit Parties” and, individually, a “Credit Party”), CITBC andother lenders and financial institutions (the “Senior Lenders”, as hereinafter furtherdefined), and the Agent have each entered into a certain Financing Agreement, dated April 4, 2005,as amended (such Financing Agreement, as amended, modified, supplemented or restated from time totime, being herein called collectively the “Senior Lenders Loan Agreement” as hereinafterfurther defined), pursuant to which the Senior Lenders have agreed to make or extend to theBorrowers a $30.0 million revolving credit loan evidenced by the Borrowers’ promissory note, datedof even date herewith, in the aggregate original principal amount of up to $30.0 million (the“Senior Lenders Revolving Note”), upon the term and subject to the conditions set forththerein (the Senior Lenders Loan Agreement, the Senior Lenders Revolving Note, and all related loanand collateral documentation as in effect from time to time, being herein referred to as the“Senior Lenders Documents”);     WHEREAS, the Credit Parties and the Subordinated Lender (as successor by assignment fromFortress Credit Opportunities I LP, Monroe Capital Advisors LLC and Monroe Investments, Inc.) haveeach entered into a certain Amended and Restated Financing Agreement, dated as of April 8, 2005, asamended by the First Amendment thereto, dated September 28, 2005, and by the Second Amendmentthereto, dated as of April 10, 2006 (such Amended and Restated Financing Agreement, as amended,modified, restated or supplemented from time to time in accordance with the terms hereof, beingherein called the “Subordinated Lender Loan Agreement”), pursuant to which the SubordinatedLender has (a) made a $8,190,294.32 term loan to the Borrowers (the “Subordinated Lender TermLoan A-1”) evidenced by the Borrowers’ Amended and Restated Term Note A-1, dated April 10, 2006 (the“Subordinated Lender Term Note A-1”), (b) made a $7,166,489.67 term loan to the Borrowers(the “Subordinated Lender Term Loan A-2”) evidenced by the Borrowers’ Amended and RestatedTerm Note A-1, dated
 

 
April 10, 2006 (the “Subordinated Lender Term Note A-2”), (c) made$2,956,471.09 term loan to the Borrowers (the “Subordinated Lender Term Loan B”) evidencedby the Borrowers’ Amended and Restated Term Note A-1, dated April 10, 2006 (the “SubordinatedLender Term Note B”), and (d) agreed to make a $6.0 million term loan to the Borrowers (the“Subordinated Lender Term Loan C”) evidenced by the Borrowers’ Term Note C, dated April 10,2006 (the “Subordinated Lender Term Note C”), upon the terms and subject to the conditionsset forth therein (the Subordinated Lender Loan Agreement, the Subordinated Lender Term Note A-1,the Subordinated Lender Term Note A-2, the Subordinated Lender Term Note B, the Subordinated LenderTerm Note C, and all related loan and collateral documentation as in effect from time to time,being herein referred to as the “Subordinated Lender Documents”);     WHEREAS, to induce the Subordinated Lender and the Senior Lenders to enter into theSubordinated Lender Documents and the Senior Lenders Documents, respectively, and to make theloans and extend the credit contemplated thereby, the Guarantors have executed guaranties as partof the Subordinated Lender Documents and the Senior Lenders Documents thereby guaranteeing all ofthe indebtedness and other obligations owing by the Borrowers to the Subordinated Lender and theAgent and the Senior Lenders, respectively, thereunder;     WHEREAS, pursuant to the Subordinated Lender Documents and the Senior Lenders Documents, theCredit Parties have granted Liens in substantially all of their property to the Subordinated Lenderand the Agent for the benefit of the Senior Lenders, respectively; and     WHEREAS, the Subordinated Lender and the Agent wish to enter into this Agreement for thepurpose of establishing the priorities of their respective Liens (as hereinafter defined) in theproperty of the Credit Parties, and for the purpose of setting forth certain other agreementsbetween them with respect to their respective agreements with the Credit Parties;     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which arehereby acknowledged, the parties hereto agree as follows:     1. Certain Definitions. All capitalized terms used in this Agreement withoutdefinition shall have the meanings ascribed to such terms in the Senior Lenders Loan Agreement. Inaddition to the terms defined elsewhere in this Agreement, the following terms shall have thefollowing meanings for the purposes of this Agreement:     “Blockage Notice” shall mean a written notice from the Agent to the SubordinatedLender that a Senior Lenders Event of Default has occurred and is continuing and specifying suchSenior Lenders Event of Default.     “Credit Parties” shall mean the Borrowers and the Guarantors and “CreditParty” shall mean any of them.     “Collateral” shall mean all of the assets, properties and interests in property of theCredit Parties, whether now owned or hereafter acquired or arising, wherever located.
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     “Default” shall mean an event or condition the occurrence of which would, with thegiving of notice or the passage of time or both, become a Senior Lenders Event of Default.     “Deposit Account Collateral” shall mean that portion of the Collateral consisting of“deposit accounts” (as such term is defined in the UCC) and the proceeds thereof.     “Documents” shall mean the Subordinated Lender Documents and the Senior LendersDocuments or any or all of them as the context may require.     “Enforcement Action” shall mean the commencement by the Agent of a liquidation orforeclosure of the Collateral.     “Exercise Notice” shall have the meaning ascribed to such term in Section 10.1 of thisAgreement.     “Insolvency Proceeding” shall mean any insolvency or bankruptcy case or proceeding orany receivership, liquidation, reorganization or other similar case or proceeding in connectiontherewith.     “Insurance and Condemnation Proceeds” shall mean proceeds or payments payable to theCredit Parties with respect to any loss, casualty or damage to, or condemnation of, the Collateralor any part thereof.     “Landlord Agreement” shall mean the Landlord’s Agreement executed by each landlord ofa facility or warehouse leased to a Credit Party constituting one of the Documents pursuant towhich such landlord grants certain assurances to each Lender with respect to its respective Lienin such Credit Party’s leasehold estate in such facility or warehouse and the Collateral locatedthereon.     “Lenders” shall mean the Subordinated Lender, on the one hand, and the Agent for thebenefit of the Senior Lenders, on the other hand, and “Lender” shall mean either of them.     “Liens” shall mean the liens and security interests granted by the Credit Parties orany of them to each Lender under the Documents and a “Lien” shall refer to the liens andsecurity interests granted by the Credit Parties or any of them to one of the Lenders.     “Obligations” shall mean the Senior Lenders Obligations and the Subordinated LenderObligations or any or all of them as the context may require.     “Option Period” shall have the meaning ascribed to such term in Section 10.1 of thisAgreement.     “Option Triggering Event” shall have the meaning ascribed to such term in Section 10.1of this Agreement.
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     “Permitted Junior Securities” shall have the meaning ascribed to such term in Section19.3 of this Agreement.     “Person” shall mean an individual, partnership, corporation, joint stock company,land trust, business or unincorporated organization, or a government or agency or politicalsubdivision thereof.     “Possessory Collateral” shall mean any Collateral in which the Agent’s Lien isperfected by the Agent’s taking of possession of such Collateral pursuant to the provisions of theUCC and other applicable law.     “Second Amendment to LJH Financing Agreement” shall mean that certain Second Amendmentto Amended and Restated Financing Agreement, dated as of April 10, 2006, among the Credit Partiesand Subordinated Lender.     “Senior Lenders” shall mean CITBC and the other lenders and financial institutionsthat are parties to the Senior Lenders Loan Agreement from time to time, and any other lender orlenders refinancing or refunding all or any portion of the Senior Lenders Obligations.     “Senior Lenders Early Termination Fee” shall mean the “Early Termination Fee” asdefined in the Fee Agreement.     “Senior Lenders Event of Default” shall mean an “Event of Default” as defined in theSenior Lenders Loan Agreement as in effect on the date of this Agreement.     “Senior Lenders Loan Agreement” shall mean the Financing Agreement, dated April 4,2005, among the Credit Parties, the Agent and the Senior Lenders that are parties thereto, as ineffect on the date hereof, and as the same may be amended, restated, supplemented or otherwisemodified from time to time, and including any agreement with the same or other lenders extendingthe maturity of, or restructuring, refinancing or replacing all or any portion of the indebtednessand obligations owing to the Agent and the Senior Lenders thereunder.     “Senior Lenders Obligations” shall mean all indebtedness, liabilities and obligationsof any and every kind now or hereafter owing by the Credit Parties to the Agent and the SeniorLenders under the Senior Lenders Documents.     “Subordinated Lender” shall mean LJH, Ltd., a Texas limited partnership, and itssuccessors and assigns, and any subsequent holder or holders of any of the Subordinated LenderObligations.     “Subordinated Lender Obligations” shall mean all indebtedness, liabilities andobligations of any and every kind now or hereafter owing by the Credit Parties to the SubordinatedLender under the Subordinated Lender Documents.     “Term Loan B Collateral” shall have the meaning ascribed to such term in Section 2.1of this Agreement.
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     “Term Loan C Exchange” means the exchange of the portion of the Subordinated LenderObligations consisting of the Subordinated Lender Term Loan C for common stock issued by Parent,whether accomplished by exchange, conversion, exercise of rights or otherwise.     “Term Loan C Obligations” means the portion of the Subordinated Lender Obligationsevidenced by the Subordinated Lender Term Note C.     “Term Loan Exchange” means the exchange of the portion of the Subordinated LenderObligations for any common stock, partnership interests, limited liability company membershipinterests, or other equity securities or equity interests of any Credit Party, whether accomplishedby exchange, conversion, exercise of rights or otherwise.     “UCC” shall mean the Uniform Commercial Code as in effect from time to time in theState of North Carolina.     2. Lien Subordination.          2.1 Collateral. The Lenders agree that at all times, whether before, after or duringthe pendency of any Insolvency Proceeding, and notwithstanding the priorities which wouldordinarily result from the order of execution or granting of any Lien in the Collateral or theorder of filing of any financing statements or recording of any deeds of trust, mortgages or anyother security documents now or hereafter constituting part of the Subordinated Lender Documents orthe Senior Lenders Documents with respect to the Collateral, or any provision of the UCC or anyother applicable law to the contrary, the Liens of the Agent in the Collateral arising pursuant tothe Senior Lenders Documents as security for all of the Senior Lenders Obligations shall be at alltimes first priority Liens in the Collateral, superior to the Liens of the Subordinated Lender inthe Collateral arising pursuant to the Subordinated Lender Documents, and the Liens of theSubordinated Lender in the Collateral shall be junior and subordinate to the Liens of the Agenttherein as security for all of the Senior Lenders Obligations. All proceeds of the Collateralshall be applied to the Obligations in accordance with the provisions of Section 5 hereof.Notwithstanding the foregoing provisions of this Section 2.1, it is hereby agreed that (a) anyCollateral (herein, “Term Loan B Collateral”) purchased by any Borrower prior to the date of the Second Amendment to LJH Financing Agreementwith the proceeds of the Term Loan B (as defined in the Subordinated Lender Loan Agreement), shallbe at all times subject to a first priority Lien in favor of Subordinated Lender, superior to theLiens of the Senior Lenders in such Term Loan B Collateral arising pursuant to the Senior LendersDocuments, and (b) the Liens of the Senior Lenders in the Term Loan B Collateral shall be juniorand subordinate to the Liens of the Subordinated Lender therein as security for all of theSubordinated Lender Obligations.          2.2 No Waiver of Subordination Provisions.          (a) No right of the Agent to enforce the provisions of this Agreement shall at any time or inany way be prejudiced or impaired by any act or failure to act on the part of the Credit Parties orby any act or failure to act by the Agent or the Senior Lenders, or by any non-
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compliance by theCredit Parties with the terms, provisions and covenants of any of the Subordinated LenderDocuments, regardless of any knowledge thereof the Agent or any Senior Lender may have or beotherwise charged with.          (b) No right of the Subordinated Lender to enforce the provisions of this Agreement as to theTerm Loan B Collateral shall at any time or in any way be prejudiced or impaired by any act orfailure to act on the part of the Credit Parties or by any act or failure to act by theSubordinated Lender, or by any non-compliance by the Credit Parties with the terms, provisions andcovenants of any of the Senior Lenders Documents, regardless of any knowledge thereof theSubordinated Lender may have or be otherwise charged with.          (c) Without in any way limiting the generality of subsection (a) of this Section 2.2, theLenders may, at any time and from time to time, without the consent of or notice to the otherLender, without incurring responsibility to the other Lender and without impairing or releasing thelien subordination provided hereunder, do any one or more of the following:     (i) Amend, modify, waive or consent to any term or provision set forth in anyof the Documents;     (ii) Change the manner, place or terms of payment or extend the time of paymentof, or refund or refinance, or renew or alter, any of the Obligations;     (iii) Sell, exchange, release or otherwise deal with any property pledged,mortgaged or otherwise securing all or any portion of the Obligations in which suchLender has a first priority;     (iv) Release any Person liable in any manner for the payment or collection ofany of the Obligations owed to such Lender;     (v) Exercise or refrain from exercising any rights against the Credit Partiesor any other Person; and     (vi) Take any other action which might otherwise constitute a defense availableto, or a discharge of, such Lender in respect of its lien subordination as providedpursuant to the terms of this Agreement.          (c) The provisions of this Agreement shall continue to be effective or be reinstated, as thecase may be, if at any time payment of any Obligations is rescinded or must otherwise be returnedby a Lender upon the insolvency, bankruptcy or reorganization of a Credit Party, or otherwise, allas though such payment had not been made.     3. Appointment of the Agent as Collateral Agent. The Subordinated Lender herebyappoints and designates the Agent, and the Agent agrees to act, as the Subordinated Lender’scollateral agent within the meaning of the term “secured party” under Section 9-102(75) of the UCCfor the sole and limited purpose of perfecting the Liens granted to the Subordinated Lender in anyDeposit Account Collateral to the extent that the Agent is a party to, and the Subordinated
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Lender is not a party to, a control agreement contemplated by Section 9-105(a)(2) of the UCC perfectingthe Liens of the Agent in such Deposit Account Collateral, and in any Possessory Collateral. Inconnection with the Agent’s acting as such collateral agent for the Subordinated Lender hereunder,the parties further agree as follows:          3.1 No Liability of the Agent. All Liens held by the Agent in the PossessoryCollateral and the Deposit Account Collateral in its capacity as collateral agent for theSubordinated Lender shall be subject to, and any proceeds of the Possessory Collateral and theDeposit Account Collateral shall be distributed to the Lenders in accordance with, the provisionsof this Agreement. In its capacity as collateral agent, the Agent shall have no duties orresponsibilities of any kind or nature and it shall not be liable to the Subordinated Lender forany action taken or omitted to be taken under or in connection with this Agreement or any of theDocuments.          3.2 No Warranties or Representations. Except as otherwise specifically set forth inthis Agreement, the Agent does not make to the Subordinated Lender any express or implied warranty,representation or guarantee with respect to the Obligations, the Collateral, the Documents or anyCredit Party. The Agent shall not be responsible to the Subordinated Lender for (i) the execution,validity, genuineness, effectiveness or enforceability of, any of the Documents; (ii) the validity,genuineness, enforceability, collectibility, value, sufficiency or existence of any Collateral, orthe perfection or priority of any Lien therein; or (iii) the assets, liabilities, financialcondition, results of operations, business, creditworthiness or legal status of any Credit Party.          3.3 Indemnity. The Subordinated Lender agrees to indemnify and defend the Agent (tothe extent not reimbursed by the Credit Parties, but without limiting the indemnificationobligations of the Credit Parties under the Documents), and to hold the Agent harmless from and against, any and all claims, demands, liabilities, obligations, losses,damages, penalties, actions, judgments, suits, proceedings, costs, expenses or disbursements of anykind or nature whatsoever (including reasonable attorneys’ fees and expenses) which may be imposedon, incurred by or asserted or initiated against the Agent in any way arising out of its acting ascollateral agent for the Subordinated Lender with respect to any of the Possessory Collateral andthe Deposit Account Collateral (and not arising out of the Agent’s acting in any other capacity)**,**provided that the Subordinated Lender shall not be liable to the Agent for any of the foregoing tothe extent that they result solely from the willful misconduct or gross negligence of the Agent.          3.4 Exclusive Control Agreement Instructions of Subordinated Lender. After all ofthe Senior Lenders Obligations have been paid and satisfied in full and the Agent’s and the SeniorLenders’ commitments for the incurring of additional Senior Lenders Obligations have expired orbeen irrevocably terminated in writing, the Agent shall (a) send to each bank that is a party toany control agreement among the Agent, the Subordinated Lender and such bank, a notice or otherinstruction as permitted by such control agreement that the bank is authorized to honorinstructions originated by the Subordinated Lender directing disposition of the funds in suchdeposit account, and (b) execute an amendment to such control agreement, in form and substancesatisfactory to the Agent, the Subordinated Lender and such bank, as may be reasonably requested bythe Subordinated Lender to give effect to such notice or instruction.
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     4. Notices of Default. The Agent shall give the Subordinated Lender notice ofdefault, termination, demand, acceleration, exercise of remedies and any other notice which is of alike nature or required to be given under the Senior Lenders Documents or by law, and theSubordinated Lender shall give the Agent notice of any default, termination, demand, acceleration,exercise of remedies and any other notice which is of a like nature or required to be given underthe Subordinated Lender Documents or by law, in each case concurrently with the giving of suchnotice to the Borrowers or any of the other Credit Parties; provided, however, thatno failure of either party to give such notice shall (a) affect the validity of such notice as tothe Credit Parties or affect the relative priorities of the Liens established in Section 2 hereofor (b) create the basis for any liability of one Lender to the other Lender or the Agent to theSubordinated Lender.     5. Application of Proceeds of Collateral. All proceeds of the Collateral received byor for the account of the Lenders (whether by sale, casualty, condemnation or other disposition ofthe Collateral), shall be distributed to the Lenders and applied as follows:     First, with respect to all Collateral other than Term Loan B Collateral, tothe Agent for application to all of the Senior Lenders Obligations;     Second, with respect to all Term Loan B Collateral, to the Subordinated Lenderfor application to the Subordinated Lender Obligations;     Third, with respect to all Collateral other than Term Loan B Collateral, afterall of the Senior Lenders Obligations have been paid and satisfied in full and thecommitments of the Agent and the Senior Lenders under the Senior Lenders Documentshave expired or been irrevocably terminated in writing, to the Subordinated Lenderfor application to the Subordinated Lender Obligations; and     Fourth, with respect to all Term Loan B Collateral after all of theSubordinated Lender Obligations have been paid and satisfied in full, to the Agentfor application to the Senior Lenders Obligations.     6. Enforcement of Liens; Release of Liens.          6.1 Enforcement of Liens in Favor of Senior Lenders. The Subordinated Lender agreesthat, except as expressly provided in this Agreement, unless and until all of the Senior LendersObligations have been paid and satisfied in full and the and the commitments of the Agent and theSenior Lenders under the Senior Lenders Documents have expired or been irrevocably terminated inwriting, without the prior written consent of the Agent, the Subordinated Lender will not take anyaction with respect to the Collateral other than the Term Loan B Collateral, whether by judicial ornon-judicial foreclosure, notification to account debtors or other obligors on the Collateral otherthan the Term Loan B Collateral, taking or obtaining possession of any of the Collateral other thanthe Term Loan B Collateral, or otherwise realizing upon the whole or any part of the Collateralother than the Term Loan B Collateral.
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          6.2 Enforcement of Liens in Favor of Subordinated Lender. The Senior Lenders agreethat, unless and until all of the Subordinated Lender Obligations have been paid and satisfied infull, without the prior written consent of the Subordinated Lender, neither the Agent nor theSenior Lenders will take any action with respect to the Term Loan B Collateral, whether by judicialor non-judicial foreclosure, taking or obtaining possession of any of the Term Loan B Collateral,or otherwise realizing upon the whole or any part of the Term Loan B Collateral.          6.3 Release of Liens by Subordinated Lender. If the Agent or the Senior Lenders shalldetermine, in connection with any sale of Collateral other than the Term Loan B Collateral, thatthe release of the lien of any Subordinated Lender Document on such Collateral in connection withsuch sale is necessary or advisable, the Subordinated Lender shall execute such release documentsand instruments and shall take such further actions as the Agent or the Senior Lenders shallrequest. If the Subordinated Lender fails or refuses to take the action requested by the Agent orthe Senior Lenders within ten (10) days of the receipt of a written request given in accordancewith Section 11 below, the Subordinated Lender hereby irrevocably constitutes and appoints theAgent and any officer of Agent, with full power of substitution, as its true and lawfulattorney-in-fact with full irrevocable power and authority in the place and stead of the Subordinated Lender and in the name of the Subordinated Lender or in theAgent’s own name, from time to time in the Agent’s discretion, for the purpose of carrying out theterms of this section, to take any and all appropriate action and to execute any and all documentsand instruments which may be necessary or desirable to accomplish the purposes of this section,including, without limitation, any financing statements, endorsements, assignments or otherinstruments of transfer or release. The Subordinated Lender hereby ratifies all that saidattorneys shall lawfully do or cause to be done pursuant to the power of attorney granted in thisparagraph.          6.4 Release of Liens by Agent on behalf of Senior Lenders. If the Subordinated Lendershall determine, in connection with any sale of the Term Loan B Collateral, that the release of thelien of any Senior Lenders Document on such Term Loan B Collateral in connection with such sale isnecessary or advisable, the Agent on behalf of the Senior Lenders shall execute such releasedocuments and instruments and shall take such further actions as the Subordinated Lender shallrequest. If the Agent fails or refuses to take the action requested by the Subordinated Lenderwithin ten (10) days of the receipt of a written request given in accordance with Section 11 below,the Senior Lenders each hereby irrevocably constitutes and appoints the Subordinated Lender and anyofficer of Subordinated Lender, with full power of substitution, as its true and lawfulattorney-in-fact with full irrevocable power and authority in the place and stead of such SeniorLender and in the name of the Agent or such Senior Lender or in the Subordinated Lender’s own name,from time to time in the Subordinated Lender’s discretion, for the purpose of carrying out theterms of this section, to take any and all appropriate action and to execute any and all documentsand instruments which may be necessary or desirable to accomplish the purposes of this section,including, without limitation, any financing statements, endorsements, assignments or otherinstruments of transfer or release. The Agent and each Senior Lender hereby ratifies all that saidattorneys shall lawfully do or cause to be done pursuant to the power of attorney granted in thisparagraph.
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     7. Debt Subordination and Permitted Payments.          7.1 Subordination of Subordinated Lender Obligations. The Subordinated Lender herebyagrees that the Subordinated Lender Obligations are subordinate, and the payment thereof, directlyor indirectly, by any means whatsoever, is deferred, to the prior payment in full of all of theSenior Lenders Obligations, to the extent and in the manner set forth in this Agreement.          7.2 Prohibited Collection Actions. Except as set forth in Section 7.5 below, unlessand until the Senior Lenders Obligations shall have been fully paid and the Senior LendersDocuments and all outstanding commitments of each Senior Lender for the incurring of additionalSenior Lenders Obligations shall have expired or been irrevocably terminated in writing, theSubordinated Lender will not, without the prior written consent of the Senior Lenders, whichconsent may be granted or withheld in the Senior Lenders’ sole discretion:          (a) Accelerate (except in the event of an Insolvency Proceeding), ask, demand, sue for, takeor receive from or on behalf of any Credit Party, by setoff or in any other manner, the whole orany part of any monies which may now or hereafter be owing to the Subordinated Lender on theSubordinated Lender Obligations; or          (b) Except as expressly provided in this Agreement, initiate or participate with others inany suit, action or proceeding against any Credit Party, or otherwise take action against anyCredit Party or any of its assets, to enforce payment of or to collect the whole or any part ofthe Subordinated Lender Obligations; or          (c) Commence any bankruptcy, arrangement, reorganization or any other Insolvency Proceedingagainst any Credit Party; or          (d) Ask, demand, take or receive any additional security for any of the Subordinated LenderObligations other than that granted pursuant to the Subordinated Lender Documents other thanadditional security provided to the Agent and the Senior Lenders;provided, however, nothing herein shall be deemed to prohibit the SubordinatedLender from (1) filing a proof of claim in any Insolvency Proceeding of a Credit Party or (2)voting any claim or otherwise participating in any Insolvency Proceeding involving a CreditParty, in each case subject to the other provisions of this Agreement.          7.3 Incurring of Additional Senior Lender Obligations. The provisions of thisAgreement shall apply with respect to all of the Senior Lenders Obligations, regardless of whetherthe Senior Lenders Obligations have already been incurred or may be incurred in the future byfuture advances or other financial accommodations made or extended by one or more Senior Lenders toa Credit Party pursuant to the Senior Lenders Documents.          7.4 Actions in Violation of Agreement. If the Subordinated Lender in violation ofthis Agreement shall commence, prosecute or participate in any suit, action or proceeding againstany Credit Party or shall attempt to enforce, foreclose or realize upon any
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security for theSubordinated Lender Obligations, including, without limitation, the Collateral, such Credit Party,Agent or any Senior Lender may interpose as a defense or plea the making of this Agreement andAgent or any Senior Lender may intervene and interpose such defense in its name or in the name ofsuch Credit Party, and such Credit Party, Agent or such Senior Lender may by virtue of thisAgreement restrain the enforcement thereof in the name of such Credit Party, Agent or such SeniorLender.          7.5 Permitted Payments. Notwithstanding the provisions of Section 7.2 hereof, untilthe giving by the Agent of a Blockage Notice to the Subordinated Lender, the Borrowers may pay tothe Subordinated Lender, and the Subordinated Lender may demand, accept and retain from theBorrowers, the following permitted payments on the Subordinated Lender Obligations and no otherpayments:          (a) periodic payments of non-cash interest accruing on the Subordinated Lender Obligations atthe interest rates applicable thereto (which rate may include the “Default Rate of Interest” assuch term is defined in the Subordinated Lender Loan Agreement), as and when the same become dueunder the terms of the Subordinated Lender Documents, which shall be paid in kind and added to theoutstanding principal amount of the notes evidencing the Subordinated Lender Obligations but whichshall not be payable in cash (which, for the avoidance of doubt, may be made irrespective ofwhether a Senior Lenders Event of Default shall exist or whether a Blockage Notice shall have beengiven by the Agent);          (b) periodic payments of cash interest on the Subordinated Lender Obligations other than theTerm Loan C Obligations at the interest rates applicable thereto (which rate may include the“Default Rate of Interest” as such term is defined in the Subordinated Lender Loan Agreement) madeat any time after the Agent shall have received the Credit Parties’ audited Consolidated BalanceSheet, statements of profit and loss, cash flow and reconciliation of surplus for the Fiscal Yearending December 31, 2006, together with the officer’s certificate with respect thereto, each asrequired to be delivered to the Agent pursuant to Section 7.8 of the Senior Lenders Loan Agreement;provided that each of the following conditions shall have first been satisfied with respect to eachsuch payment of cash interest: (1) both immediately before, and immediately after giving effect tosuch cash interest payment, no Default and no Senior Lenders Event of Default has occurred and isthen continuing or will immediately result therefrom; and (2) the Subordinated Lender shall nothave received a Blockage Notice from the Agent. Upon the delivery by the Subordinated Lender of aBlockage Notice to the Subordinated Lender, the subordination provisions of Section 7.2 shallgovern and control, and no payments of cash interest on the Subordinated Lender Documents (otherthan as permitted by Section 7.5(a) hereof by a non-cash payment in kind) and no payments in cashof fees, costs, expenses, indemnification amounts and other amounts (other than interest) (otherthan as permitted by Section 7.5(c) hereof by a non-cash payment in kind) shall be made by theBorrowers, or demanded, accepted or retained by the Subordinated Lender, until the earlier to occurof the following:          (i) The Senior Lenders Event of Default giving rise to such Blockage Noticeshall have been cured to the reasonable satisfaction of the Agent and the SeniorLenders, or waived in writing or shall have ceased to exist, and
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the Agent onbehalf of the Senior Lenders shall have delivered to the Subordinated Lender arescission of the Blockage Notice; or     (ii) All of the Senior Lenders Obligations shall have been paid and satisfiedin full and the Agent and the Senior Lenders have no further obligation for theincurring of additional Senior Lenders Obligations;          (c) non-cash payment of fees, costs, expenses, indemnification amounts and other amounts(other than interest and principal) payable by a Credit Party pursuant to the Subordinated LenderDocuments, payments of non-cash interest accruing on the Subordinated Lender Obligations, whichshall be paid in kind and added to the outstanding principal amountof the Subordinated Lender Term Note B and which shall not be payable in cash (which, for theavoidance of doubt, may be made irrespective of whether a Senior Lenders Event of Default shallexist or whether a Blockage Notice shall have been given by the Agent); provided,however, the foregoing prohibition of the payment of fees, costs and expenses shall notapply to the payment in cash of the reasonable fees, costs and expenses (including reasonableattorneys’ fees and expenses) incurred by the Subordinated Lender in connection with the SecondAmendment to LJH Financing Agreement and the assignment and assumption of the Subordinated LoanDocuments by Subordinated Lender.     8. Exercise of Remedies. In the event of commencement of foreclosure under the SeniorLenders Documents, the following provisions shall apply:          8.1 Collateral. The Agent shall have the exclusive right to sell, transfer orotherwise dispose of the Collateral (other than the Term Loan B Collateral) or exercise any otherright or remedy with respect to such Collateral as provided in the Senior Lenders Documents or byapplicable law in the manner deemed appropriate by the Agent without regard to the SubordinatedLender’s Liens therein, and the Subordinated Lender will not hinder the Agent’s actions inenforcing its remedies with respect to such Collateral.          8.2 No Liability of the Agent, Senior Lenders or Subordinated Lender.          (a) The Agent and the Senior Lenders shall have no liability to the Subordinated Lender for,and the Subordinated Lender waives any claim which it may have at any time against the Agent andthe Senior Lenders, arising out of or related to any actions which the Agent or the Senior Lenderstake or omit to take with respect to the Collateral (other than the Term Loan B Collateral) or theSenior Lenders Obligations secured thereby, except for such actions taken or omitted to be taken bythe Agent or the Senior Lenders in violation of this Agreement or through willful misconduct orgross negligence of the Agent, any Senior Lender or their respective agents or employees. Withoutlimiting the generality of the foregoing, the Agent and the Senior Lenders may, without regard tothe existence of any rights the Subordinated Lender may now or hereafter have in and to any of theCollateral (other than the Term Loan B Collateral and other than the rights of the SubordinatedLender to notices under this Agreement or as may be required by applicable law): (a) compromise,settle, adjust and in general deal in any manner with the Collateral, other than the Term Loan BCollateral, including, without limitation, the account debtors and other obligors indebted thereon,as the Agent may deem
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appropriate, upon such terms and conditions (including the length of timeincidental thereto) as the Agent may deem appropriate, (b) engage third parties to assist the Agentand the Senior Lenders in the effectuation of the liquidation, collection or foreclosure of theCollateral, other than the Term Loan B Collateral, and (c) incur such reasonable out-of-pocketcosts and expenses incidental thereto as the Agent and/or the Senior Lenders may deem appropriate,including, without limitation, reasonable fees and disbursements of counsel to the Agent and theSenior Lenders and any other third party professionals engaged by any of them. The SubordinatedLender irrevocably waives any right it may have, whether at law or in equity, to assert any claimor bring any action, suit or proceeding against the Agent or theSenior Lenders or to raise any affirmative defense, claim or counterclaim in any action broughtagainst it by the Agent or the Senior Lenders, the effect of which is to contest the commercialreasonableness of the decisions or actions of the Agent or the Senior Lenders (whether made ortaken alone or through any of its agents or representatives) with respect to the Collateral.          (b) The Subordinated Lender shall have no liability to the Agent and the Senior Lenders for,and the Agent and the Senior Lenders waive any claim which they may have at any time against theSubordinated Lender, arising out of or related to any actions which the Subordinated Lender take oromit to take with respect to the Term Loan B Collateral or the Subordinated Lender Obligationssecured thereby, except for such actions taken or omitted to be taken by the Subordinated Lender inviolation of this Agreement or arising from through willful misconduct or gross negligence of theSubordinated Lender or any of its agents or employees. Without limiting the generality of theforegoing, the Subordinated Lender may, without regard to the existence of any rights the Agent andthe Senior Lenders may now or hereafter have in and to any of the Term Loan B Collateral (otherthan the rights of the Agent and the Senior Lenders to notices under this Agreement or as may berequired by applicable law): (a) compromise, settle, adjust and in general deal in any manner withthe Term Loan B Collateral, including, without limitation, the account debtors and other obligorsindebted thereon, as the Agent may deem appropriate, upon such terms and conditions (including thelength of time incidental thereto) as the Agent may deem appropriate, (b) engage third parties toassist the Subordinated Lender in the effectuation of the liquidation, collection or foreclosure ofthe Term Loan B Collateral, and (c) incur such reasonable out-of-pocket costs and expensesincidental thereto as the Subordinated Lender may deem appropriate, including, without limitation,reasonable fees and disbursements of counsel to the Subordinated Lender and any other third partyprofessionals engaged by any of them. The Agent and the Senior Lenders irrevocably waive any rightany of them may have, whether at law or in equity, to assert any claim or bring any action, suit orproceeding against the Subordinated Lender or to raise any affirmative defense, claim orcounterclaim in any action brought against it by the Subordinated Lender, the effect of which is tocontest the commercial reasonableness of the decisions or actions of the Subordinated Lender(whether made or taken alone or through any of its agents or representatives) with respect to theTerm Loan B Collateral.          8.3 Preservation of Liens. Nothing contained in this Agreement shall be deemed toprohibit the Subordinated Lender from intervening or participating in any judicial proceeding tothe extent necessary to establish, protect or preserve its Liens in the Collateral, so long as suchintervention or participation does not interfere with the foregoing rights of the Agent and theSenior Lenders, or from bidding or being the buyer of any Collateral at any private or publicforeclosure sale conducted by the Agent under the Senior Lenders Documents.
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     9. Receipt of Monies.          9.1 By the Subordinated Lender. The Subordinated Lender agrees that should it receivecontrary to the provisions of this Agreement any monies from the sale, liquidation,casualty or other disposition of or as a result of its Lien in the Collateral (other than the TermLoan B Collateral), it will (unless otherwise restricted by law) hold the same for the SeniorLenders and promptly pay over the same to the Agent for application to the Senior LendersObligations in accordance with the provisions of Section 5 of this Agreement.          9.2 By the Agent. The Agent agrees that should it receive contrary to the provisionsof this Agreement any monies from the sale, liquidation, casualty or other disposition of or as aresult of its Lien in the Collateral, it will (unless otherwise restricted by law) hold the samefor the Subordinated Lender and promptly pay over the same to the Subordinated Lender forapplication to the Subordinated Lender Obligations in accordance with the provisions of Section 5of this Agreement.     10. Option to Purchase Senor Lenders Obligations.          10.1 Purchase of Senior Lenders Obligations. If (a) there shall occur a Senior LendersEvent of Default and, in consequence thereof, the Agent shall accelerate and declare immediatelydue and owing the Senior Lender Obligations and commence an Enforcement Action, or (b) there shalloccur a Senior Lenders Event of Default arising from an Insolvency Proceeding, or (c) the Agentshall deliver a Blockage Notice to the Subordinated Lender pursuant to the provisions of Section7.5(b) hereof (each of the foregoing, an “Option Triggering Event”), then the SubordinatedLender shall have the option, exercisable by a written notice (an “Exercise Notice”) givenby the Subordinate Lender to the Agent no later than thirty (30) days after the occurrence of suchOption Triggering Event (such thirty (30) day period, the “Option Period”), to purchase all(but not less than all) of the Senior Lenders Obligations which are owing by the Credit Parties tothe Agent and the Senior Lenders and the Senior Lenders Documents. Once given, an Exercise Noticeshall be irrevocable. The option granted hereby to the Subordinated Lender shall lapse and be of nofurther force and effect unless exercised by the Subordinated Lender before the expiration of theOption Period.          10.2 Sale of Senior Lenders Obligations. On a closing date (the “ClosingDate”) specified in the Exercise Notice (which shall be no earlier than five (5) Business Daysnor more than thirty (30) days after the giving by the Subordinated Lender of the Exercise Notice,the Agent and the Senior Lenders shall sell, and the Subordinated Lender shall purchase, for apurchase price and otherwise on terms and conditions as set forth in this Section 10, all (but notless than all) of the Senior Lenders Obligations then owing to the Agent and the Senior Lenders andthe Senior Lenders Documents.          10.3 Closing of Purchase of Senior Lenders Obligations. On the Closing Date, theSubordinated Lender shall (i) pay to the Agent and the Senior Lenders as the purchase price thefull amount of all the Senior Lenders Obligations owing to the Agent and the Senior Lenders whichare then outstanding and unpaid (including principal, reimbursement obligations, interest,
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any applicable Senior Lenders Early Termination Fee, fees, and expenses, including reasonableattorneys’ fees and legal expenses, (ii) either (1) furnish cash collateral to the Agent and theSenior Lenders in such amounts as the Agent determines isreasonably necessary to secure the Agent and the Senior Lenders in connection with any issuedand outstanding letter of credit accommodations provided by the Agent and the Senior Lenders to orfor the account of the Credit Parties (but not in any event in an amount greater than 105% of theaggregate undrawn face amount of such letters of credit), or (2) cause all issued and outstandingletters of credit and letters of credit guaranties to be cancelled and terminated, and (iii) agreeto reimburse the Agent and the Senior Lenders for any loss, cost, damage, or expense (includingreasonable attorneys’ fees and legal expenses) in connection with any commissions, fees, costs, orexpenses related to any issued and outstanding letters of credit as described above and any checksor other payments provisionally credited to the Senior Lenders Obligations owing to the Agent andthe Senior Lenders, and/or as to which the Agent and the Senior Lenders have not yet received finalpayment. Such purchase price and cash collateral shall be remitted by wire transfer in federalfunds to such bank account of the Agent, as the Agent may designate in writing to the SubordinatedLender for such purpose. Interest shall be calculated to, but excluding, the Business Day on whichsuch purchase and sale shall occur if the amounts so paid by the Subordinated Lender to the bankaccount designated by the Agent are received in such bank account prior to 1:00 p.m., Eastern time,and interest shall be calculated to, and including, such Business Day if the amounts so paid by theSubordinated Lender to the account designated by the Agent are received in such bank account laterthan 1:00 p.m., Eastern time. On the Closing Date, the Agent and the Senior Lenders shall alsoexecute and deliver such assignments, documents or other instruments, each in form reasonablysatisfactory to the Agent and the Subordinated Lender, that are necessary or reasonably requestedby the Subordinated Lender to evidence or confirm the sale, assignment and transfer to theSubordinated Lender of the Senior Lenders Obligations owing to the Agent and the Senior Lenders andthe Senior Lenders Documents.          10.4 Limited Representations and Warranties. Such purchase shall be expressly madewithout representation or warranty of any kind by the Agent and the Senior Lenders as to the SeniorLenders Obligations owing to the Agent and the Senior Lender, the Senior Lenders Documents, orotherwise, and without recourse to the Agent and the Senior Lenders, except for representations andwarranties as to the following: (i) the amount of the Senior Lenders Obligations being purchased(including, without limitation, as to the principal of and accrued and unpaid interest on suchSenior Lenders Obligations, fees and expenses thereof), (ii) that the transfer of the SeniorLenders Obligations and the Senior Lenders Documents is free and clear of any Liens, and (iii) theAgent and the Senior Lenders have the full right and power to assign the Senior LendersObligations, such assignment has been duly authorized, and no approval of any governmentalauthority, other regulatory body, or other Person is required in connection with such assignment.          10.5 No Approval Required. The Agent hereby represents and warrants to theSubordinated Lender that, as of the date hereof, no approval of any governmental authority, otherregulatory body, or other person is required for sale made by it pursuant to the provisions of thisSection 10.
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     11. Notices. All notices, requests and demands to or upon a Lender, to be effective,shall be in writing and shall be sent by certified or registered mail, return receipt requested, byovernight air courier or by facsimile, and shall be deemed to have been received by the otherLender when sent during customary business hours by facsimile, transmission confirmed (or, if sentafter 5:00 p.m., eastern standard time or eastern daylight savings time, as the case may be, on thefollowing Business Day), when delivered against a receipt, if sent by overnight air courier, andthree (3) Business Days after mailing, if sent by certified or registered mail. Notices shall beaddressed as follows:   If to Subordinated Lender: LJH, Ltd.