Document:

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                                                                    Exhibit 10.7

                      Second AMENDMENT TO LIMITED GUARANTY

                               As of July 12, 2002

Bank of America, N.A.
Private Bank
700 Louisiana, 6th Floor
Houston, Texas 77002
Attn: Samantha Kennedy

         Re:      Limited Guaranty

Ladies and Gentlemen:

         Reference is made to that certain Limited Guaranty dated as of February
14, 2001 (the "Guaranty) executed by JAMES INVESTMENTS, INC., a Texas
corporation ("Guarantor") in favor of BANK OF AMERICA, N.A., a national banking
association (the "Lender"), as amended by that certain First Amendment to
Limited Guaranty dated as of May 24, 2001 executed by Guarantor in favor of
Lender. Unless otherwise indicated, all capitalized terms herein are used as
defined in the Guaranty, as amended.

         For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, Guarantor and Lender agree as follows:

         1.   Certain Definitions.  As used in the Guaranty, as amended, the
following term hereafter has the amended meaning indicated as follows:

              "Term Note" shall mean that certain Replacement Term Loan Note
         dated as of July 12, 2002, in the principal amount of $2,500,000 and
         executed by AEROCELL STRUCTURES, INC., an Arkansas corporation, TRIAD
         INTERNATIONAL MAINTENANCE CORPORATION, a Delaware corporation, AIRCRAFT
         INTERIOR DESIGN, INC., a Florida corporation, and TIMCO ENGINE CENTER,
         INC., a Delaware corporation, and payable to the order of Lender (as
         further amended, modified, restated or replaced from time to time).

         2.   Other Amendments.  Section 1(i) of the Guaranty, as amended, is
hereby amended and restated to read in its entirety as follows:

         For value received and in consideration of any loan, advance or
         financial accommodation of any kind whatsoever heretofore, now or
         hereafter made, given or granted to the Borrowers by the Lender under
         the Term Note, the Guarantor unconditionally guarantees the full and
         prompt payment when due, whether at maturity or earlier, by reason of
         acceleration or otherwise, and at all times thereafter, the
         indebtedness evidenced by the Term Note (such guaranteed portion being
         referred to herein as the "Obligations") (including, without
         limitation, interest accruing following the filing of a bankruptcy
         petition by or against any Borrower, at the applicable rate specified
         in the Term Note, whether or not such interest is allowed or allowable
         as a claim in bankruptcy, but excluding any

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         increase in the principal amount of the Term Note, whether by amendment
         or otherwise, which is not consented to in writing by the Guarantor).

         3.   Guaranty and Letter of Credit; Effect. Except as amended in this
instrument, each of the Guaranty and the Irrevocable Standby Letter of Credit
No. S24979T issued by Compass Bank on February 15, 2001 for the benefit of
Lender in the amount of $2,500,000 which secures the Guaranty is and shall be
unchanged and shall remain in full force and effect.

         4.   Multiple Counterparts. This instrument may be executed in more
than one counterpart, each of which shall be deemed an original, and all of
which constitute, collectively, one instrument; but, in making proof of this
instrument, it shall not be necessary to produce or account for more than one
such counterpart. It shall not be necessary for Guarantor and Lender to execute
the same counterpart hereof so long as Guarantor and Lender execute a
counterpart hereof.

         5.   Final Agreement.  THE GUARANTY, AS AMENDED HEREBY, REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO ORAL AGREEMENTS BETWEEN THE PARTIES.

         If the foregoing terms and conditions are acceptable to Guarantor,
Guarantor should indicate its acceptance by signing in the space provided below,
whereupon this letter shall become an agreement binding upon and inuring to the
benefit of Lender and Guarantor and their respective successors and assigns.

                                       JAMES INVESTMENTS, INC.,
                                       a Texas corporation

                                       By: /s/ Robert Alpert
                                           -------------------------------------
                                           Robert Alpert, President

                                                                               2<PAGE>

                                                                    Exhibit 10.8

                                    AGREEMENT

                            (Loan Parties Agreement)

         This Agreement (the "Agreement") dated as of July 12, 2002 is entered
into among AEROCELL STRUCTURES, INC., an Arkansas corporation ("AeroCell"),
AIRCRAFT INTERIOR DESIGN, INC., a Florida corporation ("Design"), TRIAD
INTERNATIONAL MAINTENANCE CORPORATION, a Delaware corporation ("TIMCO"), TIMCO
ENGINE CENTER, INC., a Delaware corporation ("TIMCO Engine"), TIMCO AVIATION
SERVICES, INC., a Delaware corporation formerly known as Aviation Sales Company
(the "Parent"), AVS/M-1, INC., a Delaware corporation ("Manufacturing"),
AVIATION SALES PROPERTY MANAGEMENT CORP., a Delaware corporation ("Property
Management"), AVIATION SALES DISTRIBUTION SERVICES COMPANY, a Delaware
corporation ("Distribution"), AVS/M-2, INC., a Delaware corporation
("Kratz-Wilde"), WHITEHALL CORPORATION, a Delaware corporation ("Whitehall"),
AVIATION SALES LEASING COMPANY, a Delaware corporation ("Leasing"), AVS/M-3,
INC., an Arizona corporation ("Apex"), AVS/CAI, INC., a Florida corporation
("Caribe"), HYDROSCIENCE, INC., a Texas corporation ("Hydroscience"), TIMCO
ENGINEERED SYSTEMS, INC., a Delaware corporation ("TIMCO Engineered Systems"),
and AVSRE, L.P., a Delaware limited partnership ("AVSRE") (AeroCell, Design,
TIMCO, TIMCO Engine, Parent, Manufacturing, Property Management, Distribution,
Kratz-Wilde, Whitehall, Leasing, Apex, Caribe, Hydroscience, TIMCO Engineered
Systems and AVSRE being hereinafter referred to, collectively, as "Loan Parties"
and, individually, as a "Loan Party"), and BANK OF AMERICA, N.A., as "Lender"
(as defined in the Term Notes referenced and defined below) ("Lender").
Capitalized terms not otherwise defined herein are used as defined in the Credit
Agreement described below.

                             PRELIMINARY STATEMENT:

         WHEREAS, Lender has extended to certain of the Loan Parties (namely,
AeroCell, Design, TIMCO and TIMCO Engine (hereinafter referred to collectively
as the "Borrowers")) (i) a term loan in the principal amount of $2,500,000
pursuant to the terms of that certain Replacement Term Loan Note of even date
herewith executed by the Borrowers and payable to the order of Lender (the
"$2,500,000 Term Note"), and (ii) a term loan in the principal amount of
$5,000,000 pursuant to the terms of that certain Replacement Term Loan Note of
even date herewith executed by the Borrowers and payable to the order of Lender
(the "$5,000,000 Term Note," and collectively with the $2,500,000 Term Note, the
"Term Notes"); and

         WHEREAS, the indebtedness evidenced by the Term Notes has been
guaranteed by certain other of the Loan Parties (namely, Parent, Manufacturing,
Property Management, Distribution, Kratz-Wilde, Whitehall, Leasing, Apex,
Caribe, Hydroscience, TIMCO Engineered Systems and AVSRE (hereinafter referred
to collectively as the "Guarantors")), pursuant to the terms of that certain
Guaranty of even date herewith executed by the Guarantors in favor of Lender
(the "Guaranty"); and

         WHEREAS, Lender has required that the Loan Parties make certain
covenants and representations to Lender as more particularly stated in this
Agreement.

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         NOW, THEREFORE, the parties hereto hereby agree as follows:

         SECTION 1.  Representations and Warranties; Covenants. The Loan Parties
hereby represent and warrant as follows:

               1.1   Binding Obligations. This Agreement, the Term Notes, the
Guaranty and the documents evidencing and securing its obligations evidenced by
the Term Notes and the Guaranty (collectively "Loan Documents") as previously
executed and delivered and as amended hereby constitute legal, valid and binding
obligations of the Loan Parties and are enforceable against the Loan Parties in
accordance with their terms.

               1.2   Representations and Warranties of Loan Parties. The
representations and warranties of the Loan Parties contained in the Loan
Documents, and all certificates and other documents delivered to the Lender
pursuant to the terms thereof, do not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they were
made, not misleading. No Loan Party has intentionally withheld any fact from the
Lender in regard to any matter which will, or is reasonably likely to, result in
a "Material Adverse Effect" as defined in that certain Fifth Amended and
Restated Credit Agreement dated as of July 12, 2002, as amended, by and among
Parent, certain subsidiaries of Parent, as Co-Borrowers, the lenders party
thereto, and Citicorp USA, Inc., as Agent (the "Credit Agreement").

               1.3   Future Pledges of Equity Securities, Other Collateral
Documents.

                     (i)    Each Loan Party shall execute and deliver to the
Lender concurrently with the issuance of any equity securities to such Loan
Party in connection with any investment made by the Loan Party, or formation or
acquisition of a Subsidiary of the Loan Party, a pledge of (A) all of the equity
securities issued to or acquired by such Loan Party, if the person formed,
acquired or in which an investment is made is not domiciled outside of the
United States of America and its states, districts or possessions, and (B) 65%
of the equity securities of any such person domiciled outside of the United
States of America and its states, districts or possessions.

                     (ii)   Each Loan Party shall execute and deliver to the
Lender an aircraft mortgage and security agreement concurrently with its
acquisition of any aircraft or aircraft engines registered with the Federal
Aviation Administration.

                     (iii)  Each Loan Party shall execute and deliver to the
Lender such other security agreements, pledges, mortgages, assignments or any
other documents or instruments reasonably requested by the Lender with respect
to other property and interests in property of such Loan Party not otherwise
covered by the documents delivered to or for the benefit of the Lender as of the
date hereof or with respect to other property and interests in property of such
Loan Party acquired after the date hereof.

         Delivery of such instruments required by this Section 1.3 to Citicorp
USA, Inc., as Agent for the benefit of Lender and the Lenders and Issuing Banks
party to the Credit Agreement will constitute compliance with this section.

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               1.4   Further Assurances. Each Loan Party agrees that from time
to time, at the expense of such Loan Party, such Loan Party will promptly
execute and deliver all further instruments and documents, and take all further
action which may be necessary or desirable in the opinion of the Lender or its
counsel, or that the Lender may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted for the benefit
of the Lender by the Loan Parties, and enable the Lender to exercise and enforce
its rights and remedies with respect to any collateral. Without limiting the
generality of the foregoing, each Loan Party shall execute such further
instruments and documents as may be reasonably requested by the Lender in
connection with any lien granted by the Loan Parties with respect to real
property or interests in real property.

               1.5   Solvency. Each Loan Party is Solvent (as such term is
defined in the Credit Agreement).

               1.6   Authority.

                     (i)   The execution, delivery, performance and filing or
recording, as the case may be, of each of the agreements or documents which are
required to be executed, filed or recorded by or on behalf of the Loan Parties
in connection with or as required by the Term Notes on or prior to the date
hereof and to which any Loan Party is party and the consummation of the
transactions contemplated thereby are within such person's, as applicable,
corporate powers, have been duly authorized by all necessary corporate action
and such authorization has not been rescinded. No other corporate action or
proceedings on the part of any Loan Party are necessary to consummate such
transactions.

                     (ii)  Each of the Term Notes, the Guaranty and the Loan
Documents to which any Loan Party is a party (A) has been duly executed,
delivered, filed or recorded, as the case may be, on behalf of such person, as
applicable, (B) where applicable, creates valid and perfected liens in the
Collateral covered thereby (except for Customary Permitted Liens (as defined in
the Credit Agreement) which might be senior to the liens granted under such
documents) securing the payment of all of the obligations purported to be
secured thereby, (C) constitutes such person's, as applicable, legal, valid and
binding obligation, enforceable against such person, as applicable, in
accordance with its terms, and (D) is in full force and effect. All filings and
recordings and other actions which are necessary or desirable to perfect and
protect the liens granted pursuant to the Loan Documents (as defined in the
Credit Agreement) and preserve their required priority have been duly taken, and
no Event of Default (as defined in the Term Notes) or breach of any covenant by
any such party exists thereunder.

               1.7   Inspection of Property, Books and Records, Discussions.

                     (i)   Each Loan Party shall permit any authorized
representative(s) designated by the Lender to visit and inspect, whether by
access to such Loan Party's MIS or otherwise, any of such Loan Party's property,
to examine, audit, check and make copies of such Loan Party's financial and
accounting records, books, journals, orders, receipts and any correspondence
(other than privileged correspondence with legal counsel) and other data
relating to their respective businesses or the transactions contemplated hereby
or referenced herein (including, without limitation, in connection with
environmental compliance, hazard or liability), and to discuss their

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affairs, finances and accounts with their management personnel and independent
certified public accountants, all upon reasonable written notice and at such
reasonable times during normal business hours, as often as may be reasonably
requested. If an Event of Default (as defined in the Term Notes) has occurred
and is continuing and the obligations have been accelerated pursuant to the Term
Notes, each Loan Party, upon the Lender's request in connection with efforts to
enforce the rights and remedies of the Lender under the Term Notes and the
documents securing the Term Notes, shall turn over copies of any such records
requested by the Lender to the Lender or its representatives.

                     (ii)   All information obtained by Lender hereunder or
otherwise in connection with the loans evidenced by the Term Notes except
information which (a) is or becomes generally available to the public; (b) is or
becomes available to Lender or its Representatives (as defined below) from a
source other than Parent and its subsidiaries or its Representatives, provided
such source is not known by Lender or its Representatives to be bound by a
confidentiality agreement with Parent and its subsidiaries or is not otherwise
prohibited from transmitting the information by a contractual, legal or
fiduciary obligation; or (c) is disclosed on the order of any court of competent
jurisdiction, shall be deemed "Confidential Information."

         Unless otherwise agreed to in writing by Parent, Lender agrees (a)
except as required by law, to keep all Confidential Information confidential and
not to disclose or reveal any Confidential Information to any person other than
those employed by Lender or acting on its behalf who are actively and directly
participating in matters related to the Term Notes or who otherwise need to know
the Confidential Information (including, without limitation, accountants,
attorneys, or advisors) ("Representatives") and (b) not to use Confidential
Information for any purposes other than in connection with the Term Notes.
Lender shall inform its Representatives of the existence and terms of this
Agreement and shall take all such steps as are used by Lender in protecting its
own confidential information to assure adherence to this Agreement by its
Representatives, who shall be considered agents of Lender for all purposes of
this Agreement. In the event that Lender is requested pursuant to, or required
by, applicable law or regulation or by legal process to disclose any
Confidential Information, Lender agrees that it will provide Parent with prompt
notice of such request(s) to enable Parent to seek an appropriate protective
order and/or waive compliance by it with the provisions of this Agreement.

         SECTION 2.  Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument. Delivery of an executed counterpart of this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.

         SECTION 3.  Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.

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         SECTION 4.  Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.

                            [Signature Pages Follow]

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         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.

AEROCELL STRUCTURES, INC.

By: /s/ Timothy D. Nolan
   -----------------------------------
Name: Timothy D. Nolan
     ---------------------------------
Title: Treasurer
      --------------------------------

AIRCRAFT INTERIOR DESIGN, INC.

By: /s/ Timothy D. Nolan
   -----------------------------------
Name: Timothy D. Nolan
     ---------------------------------
Title: Treasurer
      --------------------------------

TRIAD INTERNATIONAL MAINTENANCE CORPORATION

By: /s/ Timothy D. Nolan
   -----------------------------------
Name: Timothy D. Nolan
     ---------------------------------
Title: Treasurer
      --------------------------------

TIMCO ENGINE CENTER, INC.

By: /s/ Timothy D. Nolan
   -----------------------------------
Name: Timothy D. Nolan
     ---------------------------------
Title: Treasurer
      --------------------------------

TIMCO AVIATION SERVICES, INC.

By: /s/ Timothy D. Nolan
   -----------------------------------
Name: Timothy D. Nolan
     ---------------------------------
Title: Treasurer
      --------------------------------

AVS/M-1, INC.

By: /s/ Timothy D. Nolan
   -----------------------------------
Name: Timothy D. Nolan
     ---------------------------------
Title: Treasurer
      --------------------------------

AVIATION SALES PROPERTY MANAGEMENT CORP.

By: /s/ Timothy D. Nolan
   -----------------------------------
Name: Timothy D. Nolan
     ---------------------------------
Title: Treasurer
      --------------------------------

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<PAGE>

AVIATION SALES DISTRIBUTION SERVICES COMPANY

By: /s/ Timothy D. Nolan
   -----------------------------------
Name: Timothy D. Nolan
     ---------------------------------
Title: Treasurer
      --------------------------------

AVS/M-2, INC.

By: /s/ Timothy D. Nolan
   -----------------------------------
Name: Timothy D. Nolan
     ---------------------------------
Title: Treasurer
      --------------------------------

WHITEHALL CORPORATION

By: /s/ Timothy D. Nolan
   -----------------------------------
Name: Timothy D. Nolan
     ---------------------------------
Title: Treasurer
      --------------------------------

AVIATION SALES LEASING COMPANY

By: /s/ Timothy D. Nolan
   -----------------------------------
Name: Timothy D. Nolan
     ---------------------------------
Title: Treasurer
      --------------------------------

AVS/M-3, INC.

By: /s/ Timothy D. Nolan
   -----------------------------------
Name: Timothy D. Nolan
     ---------------------------------
Title: Treasurer
      --------------------------------

AVS/CAI, INC.

By: /s/ Timothy D. Nolan
   -----------------------------------
Name: Timothy D. Nolan
     ---------------------------------
Title: Treasurer
      --------------------------------

HYDROSCIENCE, INC.

By: /s/ Timothy D. Nolan
   -----------------------------------
Name: Timothy D. Nolan
     ---------------------------------
Title: Treasurer
      --------------------------------

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<PAGE>

TIMCO ENGINEERED SYSTEMS, INC.

By: /s/ Timothy D. Nolan
   -----------------------------------
Name: Timothy D. Nolan
     ---------------------------------
Title: Treasurer
      --------------------------------

AVSRE, L.P.

By:      Aviation Sales Property Management Corp.,
         its General Partner

         By: /s/ Timothy D. Nolan
             -----------------------------------
         Name: Timothy D. Nolan
               ---------------------------------
         Title: Treasurer
                --------------------------------

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