Document:

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                                                                  Exhibit 10.118

                                   AMENDED AND
                                RESTATED GUARANTY

         This AMENDED AND RESTATED GUARANTY ("GUARANTY") is made as of March 31,
2004, by TMAS/ASI, INC. (formerly known as Aerocell Structures, Inc.), an
Arkansas corporation, TRIAD INTERNATIONAL MAINTENANCE CORPORATION, a Delaware
corporation, AIRCRAFT INTERIOR DESIGN, INC., a Florida corporation, TIMCO ENGINE
CENTER, INC., a Delaware corporation, AVIATION SALES PROPERTY MANAGEMENT CORP.,
a Delaware corporation, HYDROSCIENCE, INC., a Texas corporation, AVSRE, L.P., a
Delaware limited partnership, TIMCO ENGINEERED SYSTEMS, INC., a Delaware
corporation, AVS/M-1, INC., a Delaware corporation, AVS/M-2, INC., a Delaware
corporation, AVS/M-3, INC., an Arizona corporation, AVIATION SALES LEASING
COMPANY, a Delaware corporation, AVIATION SALES DISTRIBUTION SERVICES COMPANY, a
Delaware corporation, WHITEHALL CORPORATION, a Delaware corporation, AVS/CAI,
INC., a Florida corporation, and BRICE MANUFACTURING COMPANY, INC., a California
corporation (each a "GUARANTOR" and, collectively, the "GUARANTORS"), in favor
of LJH, LTD., a Texas limited partnership (the "LENDER"). Unless otherwise
defined herein, capitalized terms used herein shall have the meanings ascribed
to them in the Term Note (as defined below).

                                   WITNESSETH:

         WHEREAS, TIMCO Aviation Services, Inc., a Delaware corporation
("BORROWER"), has executed and delivered to the Lender that certain Amended and
Restated Consolidated Term Promissory Note dated of even date herewith, in the
principal amount of $14,411,704.00, which amount may be increased pursuant to
the provisions thereof regarding compounding of interest (the "TERM NOTE"), and
incurred certain indebtedness thereunder; and

         WHEREAS, each Guarantor acknowledges that it has and will continue to
benefit from the loans made to the Borrower by the Lender under the Term Note;

         WHEREAS, as a condition to extending the loans evidenced by the Term
Note to the Borrower, the Lender has required that the Guarantors execute and
deliver this Guaranty for the benefit of the Lender on the terms and conditions
hereinafter set forth;

         NOW, THEREFORE, in consideration of the premises set forth above, the
terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

         1.       Guaranty.

                  (i)      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 Borrower by the Lender under the Term
Note, the Guarantors, jointly and severally, unconditionally guarantee the full
and prompt payment when due, whether at maturity or earlier, by reason of
acceleration or otherwise, and at all times thereafter, of all of the
indebtedness evidenced by the Term Note, as the same may be increased from time
to time pursuant to the provisions regarding compounding of interest thereunder
(including, without limitation, interest accruing following the

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filing of a bankruptcy petition by or against the Borrower, at the applicable
rate specified in the Term Note, whether or not such interest is allowed or
allowable as a claim in bankruptcy) (the "OBLIGATIONS").

                  (ii)     At any time after the occurrence of an Event of
Default, the Guarantors, jointly and severally, agree to pay to the Lender, on
demand and in immediately available funds, the full amount of the Obligations
(including any portion thereof which is not yet due and payable). The
Guarantors, jointly and severally, further agree to pay to the Lender and
reimburse the Lender for, on demand and in immediately available funds, (a) all
losses (including, without limitation, lost profits), fees, costs and expenses
(including, without limitation, all court costs and attorneys' and paralegals'
fees, costs and expenses) paid or incurred by the Lender in: (1) endeavoring to
collect all or any part of the Obligations from, or in prosecuting any action
against, the Borrower or any Guarantor relating to the Term Note, this Guaranty,
any other agreements or documents executed and delivered in connection with the
Term Note or this Guaranty (collectively, the "Loan Documents"), or the
transactions contemplated thereby, (2) taking any action with respect to any
security or collateral securing the Obligations or any Guarantor's obligations
hereunder and under the other Loan Documents to which a Guarantor is a party;
and (3) preserving, protecting or defending the enforceability of, or enforcing,
this Guaranty or its respective rights hereunder (all such costs and expenses
are hereinafter referred to as the "EXPENSES") and (b) interest on (1) the
Obligations which do not constitute interest, (2) to the extent permitted by
applicable law, the Obligations which constitute interest, and (3) the Expenses,
from the date of demand under this Guaranty until paid in full at the per annum
rate of interest described as the default rate of interest in the Term Note (the
"INTEREST RATE"). Each Guarantor hereby agrees that this Guaranty is an absolute
guaranty of payment and is not a guaranty of collection.

         2.       Obligations Unconditional. Each Guarantor hereby agrees that
its obligations under this Guaranty shall be unconditional, irrespective of:

                  (i)      the validity, enforceability, avoidance or
subordination of any of the Obligations or any of the Loan Documents;

                  (ii)     the absence of any attempt by, or on behalf of, the
Lender to collect, or to take any other action to enforce, all or any part of
the Obligations whether from or against the Borrower, any other guarantor of the
Obligations or any other person;

                  (iii)    the election of any remedy by, or on behalf of, the
Lender with respect to all or any part of the Obligations;

                  (iv)     the waiver, consent, extension, forbearance or
granting of any indulgence by, or on behalf of, the Lender with respect to any
provision of any of the Loan Documents;

                  (v)      the failure of the Lender or any person acting for
the benefit of the Lender to take any steps to perfect and maintain its security
interest in, or to preserve its rights to, any security or collateral for the
Obligations;

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                  (vi)     the election by, or on behalf of, the Lender, in any
proceeding instituted under Chapter 11 of Title 11 of the United States Code (11
U.S.C. 101 et seq.) (the "BANKRUPTCY CODE"), of the application of Section
1111(b)(2) of the Bankruptcy Code;

                  (vii)    any borrowing or grant of a security interest by the
Borrower, as debtor-in-possession, under Section 364 of the Bankruptcy Code;

                  (viii)   the disallowance, under Section 502 of the Bankruptcy
Code, of all or any portion of the claims of the Lender for repayment of all or
any part of the Obligations or any Expenses; or

                  (ix)     any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of the Borrower or any
Guarantor.

         3.       Limitation of Obligation. Notwithstanding anything contained
in this Guaranty to the contrary, the obligations of each Guarantor hereunder
shall in no event exceed, at any time, the greater of (i) the aggregate amount
of proceeds theretofore received by or for the account of the Guarantor from the
proceeds of the loans, advances or other financial accommodations from time to
time made by the Lender to or for the account of the Borrower minus the
aggregate of all prior payments made by such Guarantor pursuant to this Guaranty
and (ii) ninety-five percent (95%) of the lowest amount sufficient to (1) render
such Guarantor "insolvent", as that term is defined in Section 101(31) of the
Bankruptcy Code, Section 4 of the Uniform Fraudulent Conveyance Act ("UFCA"),
Section 2 of the Uniform Fraudulent Transfer Act ("UFTX") or any other similar
fraudulent conveyance or transfer law or statute, (2) leave such Guarantor with
"unreasonably small capital", as that term is defined in Section 548(a)(2)(ii)
of the Bankruptcy Code or used in Section 5 of the UFCA or any other similar
fraudulent conveyance or transfer law or statute, (3) leave such Guarantor with
"unreasonably small" assets "in relation to the business or transaction" as
provided in Section 4(a)(2)(i) of the UFTA or (4) leave such Guarantor unable to
pay its debts as they mature within the meaning of Section 548(a)(2)(iii) of the
Bankruptcy Code, Section 6 of the UFCA, Section 4(a)(2)(ii) of the UFTA or any
other similar fraudulent conveyance or transfer law or statute.

         4.       Subordination; Ranking. The obligations evidenced by this
Guaranty shall be subordinate and inferior in right of payment to (i) the
Obligations evidenced by and as defined in the Financing Agreement dated of even
date herewith among Borrower, certain affiliates of Borrower, (the "CIT Credit
Agreement"); (ii) all obligations and liabilities evidenced by and as defined in
the Financing Agreement dated of even date herewith among Borrower, certain
affiliates of Borrower, and Hilco Capital, LP (the "Hilco Credit Agreement");
and (iii) all obligations and liabilities evidenced by that certain Lease
Agreement between the Borrower and Wells Fargo Bank, National Association, f/k/a
First Security Bank, National Association, as Owner Trustee, and under all of
the operative documents related thereto to which any of the Guarantors are a
party. The obligations evidenced by this Guaranty, and the rights and remedies
of Lender are subject in all respects to that certain Intercreditor Agreement of
even date herewith between CIT, Hilco and Lender (the "CIT/Hilco Intercreditor
Agreement"), and the Lender shall not take any actions against the Guarantors or
any of their property in contravention of the terms of the CIT/Hilco
Intercreditor Agreement. The obligations evidenced by this Guaranty, and the
rights and remedies of the Lender, are subject in all respects to the TROL
Intercreditor Agreement (as defined in the Term Note), and

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shall not take any actions against Borrower or any of its property in
contravention of the terms of the TROL Intercreditor Agreement.

         The obligations evidenced by this Guaranty shall be pari passu, and
otherwise equal in right of payment and on parity with, the indebtedness
evidenced by (i) that certain Indenture dated February 28, 2002, as may be
amended, among the Borrower, certain subsidiaries of the Borrower, and HSBC Bank
USA, as Trustee, and (ii) senior in right of payment to (x) the indebtedness
evidenced by that certain Indenture dated as of February 17, 1998, as amended,
among the Borrower, certain subsidiaries of the Borrower, and SunTrust Bank, as
Trustee and (y) the indebtedness evidenced by that certain Indenture dated as of
September 20, 2002, as amended, among the Borrower, certain subsidiaries of the
Borrower, and HSBC Bank USA, as Trustee.

         5.       Enforcement, Application of Payment. Upon the occurrence of an
Event of Default, the Lender may proceed directly and at once, without notice,
against the Guarantors to obtain performance of and to collect and recover the
full amount, or any portion, of the Obligations, without first proceeding
against the Borrower or any other person, or against any security or collateral
for the Obligations. Subject only to the terms and provisions of the Term Note,
the Lender shall have the exclusive right to determine the application of
payments and credits, if any, from the Guarantors, the Borrower or from any
other person on account of the Obligations or any other liability of the
Guarantors to the Lender.

         6.       Waivers.

                  (i)      Each Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of receivership or
bankruptcy of the Borrower, protest or notice with respect to the Obligations,
all setoffs and counterclaims and all presentments, demands for performance,
notices of nonperformance, protests, notices of protest, notices of dishonor and
notices of acceptance of this Guaranty, the benefits of all statutes of
limitation, and all other demands whatsoever (and shall not require that the
same be made on the Borrower as a condition precedent to such Guarantor's
obligations hereunder), and covenants that this Guaranty will not be discharged,
except by complete payment (in cash) and performance of the Obligations and any
other obligations contained herein. Each Guarantor further waives all notices of
the existence, creation or incurrence of new or additional indebtedness, arising
either from additional loans extended to the Borrower or otherwise, and also
waives all notices that the principal amount, or any portion thereof, and/or any
interest on any instrument or document evidencing all or any part of the
Obligations is due, notices of any and all proceedings to collect from the
maker, any endorser or any other guarantor of all or any part of the
Obligations, or from any other person, and, to the extent permitted by law,
notices of exchange, sale, surrender or other handling of any security or
collateral given to or for the benefit of the Lender to secure payment of all or
any part of the Obligations.

                  (ii)     Each Guarantor understands that if all or any part of
the Obligations is secured by real property, the Guarantors shall be liable for
the full amount of their liability under this Guaranty, notwithstanding
foreclosure of such real property by trustee sale or any other reason impairing
the right of the Guarantors or the Lender to proceed against the Borrower or the
Borrower's property. Each Guarantor hereby waives, to the fullest extent
permitted by law, all rights and benefits under Section 2809 of the California
Civil Code (or any similar law in any other jurisdiction) purporting to reduce a
guarantor's obligation in proportion to the principal obligation.

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Each Guarantor hereby waives, to the fullest extent permitted by law, all rights
and benefits under: (a) Section 580a of the California Code of Civil Procedure
(or any similar law in any other jurisdiction) purporting to limit the amount of
any deficiency judgment which might be recoverable following the occurrence of a
trustee's sale under a deed of trust, (b) Section 580b of the California Code of
Civil Procedure (or any similar law in any other jurisdiction) providing that no
deficiency may be recovered on a real property purchase money obligation, (c)
Section 580d of the California Code of Civil Procedure (or any similar law in
any other jurisdiction) providing that no deficiency may be recovered on a note
secured by a deed of trust on real property in case such real property is sold
under the power of sale contained in such deed of trust, and (d) Section 726 of
the California Code of Civil Procedure (or any similar law in any other
jurisdiction) providing that only one form of action may be maintained to
enforce a mortgage on real property or indebtedness secured by a mortgage on
real property, if such sections, or any of them, have any application hereto or
any application to the Guarantors. In addition, each Guarantor hereby waives, to
the fullest extent permitted by law, without limiting the generality of the
foregoing or any other provision hereof, all rights and benefits under
California Civil Code Sections 2810, 2819, 2839, 2845, 2849, 2850, 2899, and
3433 (or any similar law in any other jurisdiction). Each Guarantor waives all
rights and defenses arising out of an election of remedies by the Lender, even
though that election of remedies, such as a nonjudicial foreclosure with respect
to security for a guaranteed obligation, has destroyed such Guarantor's rights
of subrogation and reimbursement against the Borrower by the operation of
Section 580d of the California Code of Civil Procedure or otherwise.

                  (iii)    The Lender, either itself or acting through any of
its agents or representatives, is hereby authorized, without notice or demand
and without affecting the liability of the Guarantors hereunder, from time to
time, (a) to renew, extend, accelerate or otherwise change the time for payment
of, or other terms relating to, all or any part of the Obligations, or to
otherwise modify, amend, change, restate or supplement the terms of any of the
Loan Documents; (b) to accept partial payments on all or any part of the
Obligations, (c) to take and hold security or collateral for the payment of all
or any part of the Obligations, this Guaranty, or any other guaranties of all or
any part of the Obligations or other liabilities of the Borrower, (d) to
exchange, enforce, waive and release any such security or collateral, (e) to
apply such security or collateral and direct the order or manner of sale thereof
as in their discretion they may determine; (f) to settle, release, exchange,
enforce, waive, compromise or collect or otherwise liquidate all or any part of
the Obligations, this Guaranty, any other guaranty of all or any part of the
Obligations, and any security or collateral for the Obligations or for any such
guaranty. Any of the foregoing may be done in any manner, without affecting or
impairing the obligations of any Guarantor hereunder.

         7.       Setoff. At any time after all or any part of the Obligations
have become due and payable (by acceleration or otherwise), the Lender may,
without notice to any Guarantor and regardless of the acceptance of any security
or collateral for the payment hereof, appropriate and apply toward the payment
of all or any part of the Obligations (i) any indebtedness due or to become due
from the Lender to any Guarantor, and (ii) any moneys, credits or other property
belonging to any Guarantor, at any time held by or coming into the possession of
the Lender or any of their respective affiliates.

         8.       Financial Information. Each Guarantor hereby assumes
responsibility for keeping itself informed of the financial condition of the
Borrower and any and all endorsers and/or other guarantors of all or any part of
the Obligations, and of all other circumstances bearing upon the risk

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of nonpayment of the Obligations, or any part thereof, that diligent inquiry
would reveal, and each Guarantor hereby agrees that the Lender shall have no
duty to advise the Guarantors or any of them of information known to the Lender
regarding such condition or any such circumstances. In the event the Lender, in
its sole discretion, undertakes at any time or from time to time to provide any
such information to any Guarantor, the Lender shall be under no obligation (i)
to undertake any investigation not a part of its regular business routine, (ii)
to disclose any information which the Lender, pursuant to accepted or reasonable
commercial finance or banking practices, wishes to maintain confidential or
(iii) to make any other or future disclosures of such information or any other
information to any Guarantor.

         9.       No Marshalling, Reinstatement. Each Guarantor consents and
agrees that neither the Lender nor any person acting for or on behalf of the
Lender shall be under any obligation to marshall any assets in favor of any
Guarantor or against or in payment of any or all of the Obligations. Each
Guarantor further agrees that, to the extent that the Borrower, any Guarantor or
any other guarantor of all or any part of the Obligations makes a payment or
payments to the Lender, or the Lender receives any proceeds of any collateral
for the Obligations, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to the Borrower, such Guarantor, such other
guarantor or any other person, or their respective estates, trustees, receivers
or any other party, including, without limitation, such Guarantor, under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or repayment, the part of the Obligations which has
been paid, reduced or satisfied by such amount shall be reinstated and continued
in full force and effect as of the time immediately preceding such initial
payment, reduction or satisfaction.

         10.      Subrogation. Until the Obligations have been paid in full, in
cash, (i) no Guarantor shall have any right of subrogation with respect to such
Obligations and (ii) each Guarantor waives any right to enforce any remedy which
the Lender now has or may hereafter have against the Borrower, any endorser or
any guarantor of all or any part of the Obligations or any other person, and
each Guarantor waives any benefit of, and any right to participate in, any
security or collateral given to or for the benefit of the Lender to secure the
payment or performance of all or any part of the Obligations.

         11.      Enforcement, Amendments, Waivers. No delay on the part of any
of the Lender in the exercise of any right or remedy arising under this
Guaranty, the Term Note, any of the other Loan Documents or otherwise with
respect to all or any part of the Obligations or any other guaranty of or
security for all or any part of the Obligations shall operate as a waiver
thereof, and no single or partial exercise by any such person of any such right
or remedy shall preclude any further exercise thereof. No modification or waiver
of any of the provisions of this Guaranty shall be binding upon the Lender,
except as expressly set forth in a writing duly signed and delivered by the
party making such modification or waiver. Failure by the Lender at any time or
times hereafter to require strict performance by the Borrower, any Guarantor,
any other guarantor of all or any part of the Obligations or any other person of
any of the provisions, warranties, terms and conditions contained in any of the
Loan Documents now or at any time or times hereafter executed by such persons
and delivered to the Lender shall not waive, affect or diminish any right of the
Lender at any time or times hereafter to demand strict performance thereof and
such right shall not be deemed to have been waived by any act or knowledge of
the Lender, or its agents, officers or employees, unless such waiver is
contained in an instrument in writing, directed and delivered to such Borrower
or such

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Guarantor, as applicable, specifying such waiver, and is signed by the party or
parties necessary to give such waiver under the Term Note. No waiver of any
Event of Default by the Lender shall operate as a waiver of any other Event of
Default or the same Event of Default on a future occasion, and no action by the
Lender permitted hereunder shall in any way affect or impair the Lender's rights
and remedies or the obligations of any Guarantor under this Guaranty. Any
determination by a court of competent jurisdiction of the amount of any
principal and/or interest owing by the Borrower to the Lender shall be
conclusive and binding on the Guarantors irrespective of whether any Guarantor
was a party to the suit or action in which such determination was made.

         12.      Effectiveness, Termination. This Guaranty shall become
effective upon its execution by the Guarantors. This Guaranty shall continue in
full force and effect and may not be terminated or otherwise revoked until the
Obligations shall have been fully paid (in cash) and discharged and the Term
Note cancelled. If, notwithstanding the foregoing, any Guarantor shall have any
right under applicable law to terminate or revoke this Guaranty, such Guarantor
agrees that such termination or revocation shall not be effective until a
written notice of such revocation or termination, specifically referring hereto,
signed by such Guarantor, is actually received by the Lender. Such notice shall
not affect the obligations of any other guarantor or any right or power of the
Lender to enforce rights against such Guarantor arising prior to receipt thereof
by the Lender. If the Lender grants loans or takes other action after any
Guarantor terminates or revokes this Guaranty as aforesaid, but before the
Lender receives such written notice, the rights of the Lender with respect
thereto shall be the same as if such termination or revocation had not occurred.

         13.      Successors and Assigns. This Guaranty shall be binding upon
each Guarantor and upon the successors and assigns of each Guarantor and shall
inure to the benefit of the Lender and its successors and assigns; all
references herein to the Borrower and any Guarantor shall be deemed to include
their respective successors and assigns. The successors and assigns of any
Guarantor and the Borrower shall include, without limitation, their respective
receivers, trustees and debtors-in-possession. All references to the singular
shall be deemed to include the plural where the context so requires.

         14.      Officer Authority. The undersigned hereby certifies that he
has all necessary authority to grant and execute this Guaranty on behalf of the
respective Guarantors.

         15.      Governing Law. THIS GUARANTY SHALL BE INTERPRETED, AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS.

         16.      Personal Jurisdiction.

                  (i)      EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF ANY TEXAS STATE COURT OR FEDERAL COURT SITTING IN TEXAS AND ANY
COURT HAVING JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH COURTS, IN ANY
ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS GUARANTY OR ANY
OTHER LOAN DOCUMENT, WHETHER ARISING IN CONTRACT, TORT, EQUITY OR

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OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT
OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES
HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. EACH GUARANTOR WAIVES IN ALL DISPUTES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.

                  (ii)     EACH GUARANTOR AGREES THAT THE LENDER SHALL HAVE THE
RIGHT TO PROCEED AGAINST SUCH GUARANTOR OR ITS PROPERTY IN A COURT IN ANY
LOCATION TO ENABLE THE AGENT TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY
FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN
FAVOR OF THE LENDER. EACH GUARANTOR AGREES THAT IT WILL NOT ASSERT ANY
PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE LENDER TO REALIZE ON
THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE LENDER. EACH GUARANTOR WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE LENDER MAY
COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.

         17.      Service of Process. EACH GUARANTOR IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE GUARANTORS' NOTICE ADDRESS SPECIFIED BELOW, SUCH SERVICE
TO BECOME EFFECTIVE UPON RECEIPT. EACH GUARANTOR IRREVOCABLY WAIVES ANY
OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED UPON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS
GUARANTY OR ANY OTHER LOAN DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR SHALL LIMIT THE RIGHT OF THE LENDER TO BRING PROCEEDINGS AGAINST THE
GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION.

         18.      Waiver of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY
OR ANY OTHER LOAN DOCUMENT. ANY OF THE PARTIES HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS GUARANTY WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF SUCH PARTY'S RIGHT TO TRIAL BY
JURY.

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         19.      Advice of Counsel. Each Guarantor confirms that it has
obtained its own counsel with respect to the terms of this Guaranty and
represents and warrants to the Lender that it has discussed this Guaranty with
its counsel.

         20.      Waiver of Bond. Each Guarantor waives the posting of any bond
otherwise required of the Lender in connection with any judicial process or
proceeding to realize on any collateral or other security for the Obligations,
to enforce any judgment or other court order entered in favor of the Lender, or
to enforce by specific performance, temporary restraining order, or preliminary
or permanent injunction, this Guaranty or any other agreement or document
between the Lender and any Guarantor.

         21.      Notices. Any notice or other communication herein required or
permitted to be given shall be in writing and may be personally served, sent by
facsimile transmission or courier service or United States certified mail and
shall be deemed to have been given when delivered in person or by courier
service, upon transmission thereof in the case of a facsimile transmission, or
four (4) business days after deposit in the United States mail with postage
prepaid and properly addressed. Notices to the Lender shall not be effective
until received by the Lender. For purposes hereof, the addresses of the parties
hereto shall be as set forth below, or at such other address as may be
designated by such party in a written notice to the Lender.

if to any Guarantor, at:

         c/o TIMCO Aviation Services, Inc.
         623 Radar Road
         Greensboro, North Carolina  27410
         Attention: Chief Financial Officer
         Telecopy: (336) 665-9011

with a copy to:

         Akerman Senterfitt
         One S.E. 3rd Avenue
         28th Floor
         Miami, Florida 33131-1704
         Attention: Philip B. Schwartz, Esq.
         Telecopy: (305) 374-5095

if to the Lender, at:

         LJH, Ltd.
         377 Neva Lane
         Denison, Texas 75020
         Attention: Mr. Lacy Harber
         Telecopy: 903-465-6514

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with a copy to:
         __________________________________
         __________________________________
         __________________________________
         Attention: _______________________
         Telecopy: ________________________

         22.      Severability. Wherever possible, each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.

         23.      Subordination. Each Guarantor agrees that any and all claims
of such Guarantor against the Borrower, any endorser or any other guarantor of
all or any part of the Obligations, or against any of their respective
properties, shall be subordinate and subject in right of payment to the prior
payment, in full and in cash, of all Obligations (including, without limitation,
interest accruing following the filing of a bankruptcy petition by or against
the Borrower, at the Interest Rate, whether or not such interest is allowed as a
claim in bankruptcy). Notwithstanding any right of any Guarantor to ask, demand,
sue for, take or receive any payment from the Borrower, all rights, liens and
security interests of such Guarantor, whether now or hereafter arising and
howsoever existing, in any assets of the Borrower (whether constituting part of
the collateral or other security given to secure payment of all or any part of
the Obligations or otherwise) shall be and hereby are subordinated to the rights
of the Lender in those assets. No Guarantor shall have any right to possession
of any such asset or to foreclose upon any such asset, whether by judicial
action or otherwise, unless and until all of the Obligations shall have been
fully paid and satisfied and all financing arrangements between the Borrower and
the Lender have been terminated. If all or any part of the assets of the
Borrower, or the proceeds thereof, are subject to any distribution, division or
application to the creditors of the Borrower, whether partial or complete,
voluntary or involuntary, and whether by reason of liquidation, bankruptcy,
arrangement, receivership, assignment for the benefit of creditors or any other
action or proceeding, or if the business of the Borrower is dissolved or if
substantially all of the assets of the Borrower are sold, then, and in any such
event, any payment or distribution of any kind or character, either in cash,
securities or other property, which shall be payable or deliverable upon or with
respect to any indebtedness of the Borrower to any Guarantor ("BORROWER
INDEBTEDNESS") shall be paid or delivered directly to the Lender for application
on any of the Obligations, due or to become due, until the Obligations shall
have first been fully paid and satisfied in cash. Each Guarantor irrevocably
authorizes and empowers the Lender to demand, sue for, collect and receive every
such payment or distribution and give acquittance therefor and to make and
present for and on behalf of such Guarantor such proofs of claim and take such
other action, in the Lender's own name or in the name of such Guarantor or
otherwise, as the Lender may deem necessary or advisable for the enforcement of
this Guaranty. The Lender may vote such proofs of claim in any such proceeding,
receive and collect any and all dividends or other payments or disbursements
made thereon in whatever form the same may be paid or issued and apply the same
on account of any of the Obligations. Should any payment, distribution, security
or instrument or proceeds thereof be received by any Guarantor upon or with
respect to the Borrower Indebtedness prior to the satisfaction of all of the
Obligations and the termination of all financing arrangements between the
Borrower and

                                       10

<PAGE>

the Lender, such Guarantor shall receive and hold the same in trust, as trustee,
for the benefit of the Lender and shall forthwith deliver the same to the
Lender, in precisely the form received (except for the endorsement or assignment
of such Guarantor where necessary), for application to the Obligations, due or
not due, and, until so delivered, the same shall be held in trust by such
Guarantor as the property of the Lender. If any Guarantor fails to make any such
endorsement or assignment to the Lender, the Lender or any of its officers or
employees are hereby irrevocably authorized to make the same. Each Guarantor
agrees that until the Obligations have been paid in full (in cash) and satisfied
and all financing arrangements between the Borrower and the Lender have been
terminated, no Guarantor will assign or transfer to any person any claim such
Guarantor has or may have against the Borrower.

         24.      Counterparts. This Guaranty may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute one and the same
agreement.

         25.      NO ORAL AGREEMENTS. THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND
INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY
AND MERGED INTO SUCH WRITINGS. THIS GUARANTY (AS AMENDED IN WRITING FROM TIME TO
TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY THE BORROWER, THE LENDER
OR THE GUARANTORS (OR BY THE BORROWER OR THE GUARANTORS FOR THE BENEFIT OF THE
LENDER) REPRESENT THE FINAL AGREEMENT BETWEEN THE BORROWER, THE GUARANTORS, AND
THE LENDER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

         26.      ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN THE GUARANTORS
AND THE LENDER INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO
THIS GUARANTY OR ANY OTHER LOAN DOCUMENT, INCLUDING ANY CLAIM BASED ON OR
ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN
ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE
APPLICABLE STATE LAW). THE RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION
OF COMMERCIAL DISPUTES OF JUDICIAL ARBITRATION AND MEDIATION SERVICES, INC.
(J.A.M.S.), AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF ANY
INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION
AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THE GUARANTORS OR THE
LENDER MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO
COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS GUARANTY APPLIES IN
ANY COURT HAVING JURISDICTION OVER SUCH ACTION.

                  (i)      SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN
THE CITY OF THE BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION OF THIS
GUARANTY AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN

                                       11

<PAGE>

ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE
ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL
ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60
DAYS.

                  (ii)     RESERVATION OF RIGHTS. NOTHING IN THIS SECTION 26
SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE
STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS GUARANTY; OR
(II) BE A WAIVER BY THE LENDER OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C.
SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF
THE LENDER (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO)
SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL; OR
(C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT
LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A
RECEIVER. THE LENDER MAY EXERCISE SUCH SELF-HELP RIGHTS, FORECLOSE UPON SUCH
PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR
AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS
GUARANTY. NEITHER THE EXERCISE OF SELF HELP REMEDIES, NOR THE INSTITUTION OR
MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES,
SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN
ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING
RESORT TO SUCH REMEDIES.

                            [SIGNATURE PAGES FOLLOW]

                                       12

<PAGE>

         IN WITNESS WHEREOF, this Guaranty has been duly executed by each
Guarantor as of the day and year first set forth above.

                                          TMAS/ASI, INC.

                                          By: /s/
                                              ----------------------------------
                                              Kevin Carter, Treasurer

                                          TRIAD INTERNATIONAL MAINTENANCE
                                          CORPORATION

                                          By: /s/
                                              ----------------------------------
                                              Kevin Carter, Treasurer

                                          AIRCRAFT INTERIOR DESIGN, INC.

                                          By: /s/
                                              ----------------------------------
                                              Kevin Carter, Treasurer

                                          TIMCO ENGINE CENTER, INC.

                                          By: /s/
                                              ----------------------------------
                                              Kevin Carter, Treasurer

                                          AVIATION SALES PROPERTY MANAGEMENT
                                          CORP.

                                          By: /s/
                                              ----------------------------------
                                              Kevin Carter, Treasurer

                                          HYDROSCIENCE, INC.

                                          By: /s/
                                              ----------------------------------
                                              Kevin Carter, Treasurer

                    Signature Page 1 of 3 Subsidiary Guaranty

<PAGE>

                                          AVSRE, L.P.

                                          By: AVIATION SALES PROPERTY
                                              MANAGEMENT CORP., as general
                                              partner

                                          By: /s/
                                              ----------------------------------
                                              Kevin Carter, Treasurer

                                          TIMCO ENGINEERED SYSTEMS, INC.

                                          By: /s/
                                              ----------------------------------
                                              Kevin Carter, Treasurer

                                          AVS/M-1, INC.

                                          By: /s/
                                              ----------------------------------
                                              Kevin Carter, Treasurer

                                          AVS/M-2, INC.

                                          By: /s/
                                              ----------------------------------
                                              Kevin Carter, Treasurer

                                          AVS/M-3, INC.

                                          By: /s/
                                              ----------------------------------
                                              Kevin Carter, Treasurer

                                          AVIATION SALES LEASING COMPANY

                                          By: /s/
                                              ----------------------------------
                                              Kevin Carter, Treasurer

                    Signature Page 2 of 3 Subsidiary Guaranty

<PAGE>

                                          AVIATION SALES DISTRIBUTION SERVICES
                                          COMPANY

                                          By: /s/
                                              ----------------------------------
                                              Kevin Carter, Treasurer

                                          WHITEHALL CORPORATION

                                          By: /s/
                                              ----------------------------------
                                              Kevin Carter, Treasurer

                                          AVS/CAI, INC.

                                          By: /s/
                                              ----------------------------------
                                              Kevin Carter, Treasurer

                                          BRICE MANUFACTURING COMPANY, INC.

                                          By: /s/
                                              ----------------------------------
                                              Kevin Carter, Treasurer

                   Signature Page 3 of 3 Subsidiary Guaranty<PAGE>

                                                                  EXHIBIT 10.119

                    INTERCREDITOR AND SUBORDINATION AGREEMENT

         THIS INTERCREDITOR AND SUBORDINATION AGREEMENT ("Agreement"), is made
this 5th day of April, 2004, between and among LJH, LTD., a Texas limited
partnership ("Junior Creditor"); THE CIT GROUP/BUSINESS CREDIT, INC., a New York
corporation, in its capacity as agent (in such capacity, together with its
successors and assigns, the "Agent") for the CIT Lenders under the CIT Financing
Agreement, as hereinafter further defined; and HILCO CAPITAL LP, a Delaware
limited partnership (together with its successors and assigns, "Hilco"; the CIT
Lenders and Hilco being collectively called the "Senior Creditors").

                                   WITNESSETH:

         WHEREAS, Aircraft Interior Design, Inc., a Florida corporation, Brice
Manufacturing Company, Inc., a California corporation, TIMCO Aviation Services,
Inc., a Delaware corporation (the "Parent"), TIMCO Engine Center, Inc., a
Delaware corporation, TIMCO Engineered Systems, Inc., a Delaware corporation,
and Triad International Maintenance Corporation, a Delaware corporation
(collectively, the "Borrowers" and, individually, a "Borrower"), and Aviation
Sales Distribution Services 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"), Agent, and other lenders and financial institutions (the "CIT Lenders")
which are parties from time to time, have each entered into a certain Financing
Agreement, dated of even date herewith (such Financing Agreement, as amended,
modified, supplemented or restated from time to time, being herein called
collectively the "CIT Financing Agreement" as hereinafter further defined),
pursuant to which the CIT Lenders have agreed to make or extend to the Borrowers
a $35.0 million revolving credit loan facility and a $7.0 million term loan
evidenced by the Borrowers' promissory notes, also dated of even date herewith,
in the aggregate original principal amount of up to $35.0 million (the "CIT
Revolving Notes") and in the aggregate original principal amount of $6.4 million
(the "CIT Term Notes"), upon the term and subject to the conditions set forth
therein (the CIT Financing Agreement, the CIT Revolving Notes, the CIT Term
Notes, and all related documentation as in effect from time to time, being
herein referred to as the "CIT Lender Documents");

         WHEREAS, the Credit Parties have each entered into a certain Financing
Agreement with Hilco, dated of even date herewith (such Financing Agreement, as
amended, modified, restated or supplemented from time to time, being herein
called the "Hilco Financing Agreement" as hereinafter further defined), pursuant
to which Hilco has agreed to make an $8.0 million term loan to the Borrowers
evidenced by the Borrowers' promissory note, also dated of even date herewith,
in the original principal amount of $8.0 million (the "Hilco Term Note"), upon
the terms and subject to the conditions set forth therein (the Hilco Financing
Agreement, the Hilco Term Note, and all related documentation as in effect from
time to time, being herein referred to as the "Hilco Documents");

<PAGE>

         WHEREAS, to induce the CIT Lenders and Hilco to enter into the CIT
Lender Documents and the Hilco Documents, respectively, and to make the loans
and extend the credit contemplated thereby, the Guarantors have executed
guaranties as part of the CIT Lender Documents and the Hilco Documents thereby
guaranteeing all of the indebtedness and other obligations owing by the
Borrowers to the Agent and the CIT Lenders and Hilco, respectively, thereunder;

                  WHEREAS, pursuant to the CIT Lender Documents and the Hilco
Documents, the Credit Parties have granted Liens in substantially all of their
property to the Agent for the benefit of the CIT Lenders and Hilco,
respectively; and

                  WHEREAS, the Senior Creditors, as a condition to entering into
the CIT Lender Documents and the Hilco Documents require the execution of this
Agreement by the Junior Creditor establishing the relative priorities of the
Senior Creditors' and the Junior Creditor's Liens upon the property of the
Credit Parties and the relative right of payment and claim of the indebtedness
of the Credit Parties owing to the Senior Creditors under the CIT Lender
Documents and the Hilco Documents and the Junior Creditor under the LJH
Documents (as hereinafter defined);

                  NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are expressly acknowledged, and in order to
induce the Senior Creditors to make loans and extend credit and other financial
accommodations to the Credit Parties from time to time and to better secure the
Senior Creditors in respect of the foregoing, the Agent on behalf of the CIT
Lenders, Hilco and Junior Creditor hereby agree as follows:

         1. DEFINED TERMS. In addition to the terms defined in the recitals
hereto, the following terms shall have the following meanings for the purposes
of this Agreement:

                  "Agreement" - shall mean this Intercreditor and Subordination
         Agreement, as the same may be modified, amended or supplemented from
         time to time.

                  "Blockage Notice" - shall mean a written notice from Agent or
         Hilco to the Junior Creditor that an Event of Default has occurred and
         is continuing.

                  "CIT Financing Agreement" - shall mean the Financing
         Agreement, dated of even date herewith, among the Credit Parties, the
         Agent and the CIT Lenders that are parties thereto, as in effect on the
         date hereof, and as the same may be amended, modified, supplemented or
         restated from time to time, and including any agreement with the same
         or other lenders extending the maturity of, or restructuring,
         refinancing or replacing all or any portion of the indebtedness and
         obligations owing to the Agent and the CIT Lenders thereunder.

                  "Event of Default" - shall mean an Event of Default as defined
         in any Senior Credit Document.

                  "Hilco Financing Agreement" - shall mean the Financing
         Agreement, dated of even date herewith, among the Credit Parties and
         Hilco, as in effect on the date hereof, and as the same may be amended,
         modified, supplemented or restated from

                                       2

<PAGE>

         time to time, and including any agreement with the same or other
         lenders extending the maturity of, or restructuring, refinancing or
         replacing all or any portion of the indebtedness and obligations owing
         to Hilco thereunder.

                  "Junior Debt" - shall mean all present and future indebtedness
         (whether principal, interest (including, without limitation, interest
         accruing after the commencement of a bankruptcy proceeding by or
         against any Credit Party), fees, collection costs, expenses,
         liabilities, obligations, indemnities and other amounts now or
         hereafter owed by any Credit Party to the Junior Creditor (including,
         without limitation, all of the indebtedness arising under or pursuant
         to the LJH Documents), whether direct or indirect, absolute or
         contingent, secured or unsecured, due or to become due, liquidated or
         unliquidated, whether now existing or hereafter arising, and all
         whether arising under contract, in tort, or otherwise.

                  "Lease Agreement" - shall mean that certain Equipment Lease,
         dated April 4, between the Parent, as lessee, and the Junior Creditor,
         as lessor.

                  "Leased Equipment" - shall mean the Equipment owned by LJH and
         leased to the Parent pursuant to the Lease Agreement, more particularly
         described on EXHIBIT A attached hereto and incorporated by reference.

                  "Liens" - shall mean the liens and security interests with
         respect to the Collateral or any portion thereof granted at any time by
         the Credit Parties or any of them to the Junior Creditor or the Agent
         for the benefit of the CIT Lenders, or to Hilco, respectively.

                  "LJH Documents" - shall mean and include the LJH Note, the
         Lease Agreement, that certain Amended and Restated Guaranty, dated
         March 31, 2004, and that certain Amended and Restated Security
         Agreement, dated March 31, 2004, each as amended, modified,
         supplemented or restated from time to time, and all other security
         agreements, assignments, instruments, documents and agreements now or
         hereafter evidencing or security the payment of all or any part of the
         Junior Debt.

                  "LJH Note" - shall mean the Amended and Restated Consolidated
         Term Promissory Note, dated March 31, 2004, in the original principal
         amount of $14,411,704.00.

                  "Payment in full" - shall mean, together with the phrase
         "prior payment in full", "paid in full", "fully paid" and any other
         similar terms or phrases when used herein with respect to any Senior
         Debt, the final indefeasible payment in full in cash of all such Senior
         Debt (other than contingent indemnity obligations of any Credit Party
         that survive payment in full).

                  "Permitted Junior Securities" - shall have the meaning
         ascribed to such term in Section 8 of this Agreement.

                                       3

<PAGE>

                  "Permitted Payments" - shall have the meaning ascribed to such
         term in Section 4 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 political subdivision
         thereof.

                  "Senior Creditor Collateral" - shall mean all of the assets,
         properties and interests in property of each Credit Party, whether now
         owned or hereafter acquired or arising, wherever located.

                  "Senior Creditor Documents" - shall collectively mean the CIT
         Lender Documents and the Hilco Documents.

                  "Senior Debt" - shall mean all present and future indebtedness
         (whether principal, interest (including, without limitation, interest
         accruing after the commencement of a bankruptcy proceeding by or
         against any Company), fees, collection costs, expenses, liabilities,
         obligations (including, without limitation, letter of credit
         reimbursement obligations), and other amounts now or hereafter owed by
         any Company to the Agent or to the CIT Lenders (including, without
         limitation, all of the indebtedness arising under or pursuant to the
         CIT Lender Documents), or to Hilco (including, without limitation, all
         of the indebtedness arising under or pursuant to the Hilco Documents)
         whether direct or indirect, absolute or contingent, secured or
         unsecured, due or to become due, liquidated or unliquidated, whether
         now existing or hereafter arising, and all whether arising under
         contract, in tort, or otherwise.

         2. PRIORITY OF SECURITY INTERESTS. The Senior Creditors and the Junior
Creditor agree that at all times, whether before, after or during the pendency
of any bankruptcy, reorganization or other insolvency proceeding with respect to
any Company, and notwithstanding the priorities which would ordinarily result
from the order of execution or granting of any security interest in any
Company's assets or the order of filing of any financing statements related to
the Senior Creditor Documents or the LJH Documents:

                  (a) Each Senior Creditor's Lien in the Senior Creditor
Collateral shall be a Lien in the Senior Creditor Collateral, superior to any
Lien of the Junior Creditor therein arising pursuant to the LJH Documents or
otherwise, and the Junior Creditor's Lien in the Senior Creditor Collateral
shall be subordinate to the Liens of the Secured Creditors therein.

                  (b) The Junior Creditor's interest in the Leased Equipment
shall be superior to any Lien of any Senior Creditor arising pursuant to the
Senior Creditor Documents in the Leased Equipment, and the Senior Creditors'
Liens in the Leased Equipment shall be subordinated to the Lien of the Junior
Creditor therein.

                  (c) The subordinations and priorities specified in this
Section 2 are expressly conditioned upon the validity, perfection and
non-avoidance of the Lien to which the other Lien is subordinated, and, if the
Lien to which the other Lien is subordinated is invalid, unperfected or is

                                       4

<PAGE>

avoided for any reason, then the subordination and relative priority agreements
provided for herein shall not be effective as to that portion of the Lien which
is the subject of the unperfected, invalid or avoided Lien.

         3. DEBT SUBORDINATION.

                  (a) The Junior Creditor hereby agrees that the Junior Debt is
subordinate, and the payment thereof, directly or indirectly, by any means
whatsoever, is deferred, to the prior payment in full of all of the Senior Debt,
to the extent and in the manner set forth in this Agreement.

                  (b) Except as set forth in Section 4 below, unless and until
the Senior Debt shall have been fully paid and the Senior Creditor Documents and
all outstanding commitments of each Senior Creditor for the incurring of
additional Senior Debt shall have been irrevocably terminated in writing, the
Junior Creditor will not:

                  (i) Accelerate, ask, demand, sue for, take or receive from or
         on behalf of any Company, by setoff or in any other manner, the whole
         or any part of any monies which may now or hereafter be owing to the
         Junior Creditor on the Junior Debt; or

                  (ii) Initiate or participate with others in any suit, action
         or proceeding against any Company, or otherwise take action against any
         Company or any of its assets, to enforce payment of or to collect the
         whole or any part of the Junior Debt; or

                  (iii) Commence any bankruptcy, arrangement, reorganization or
         insolvency proceeding against any Company; or

                  (iv) Ask, demand, take or receive any security for any of the
         Junior Debt other than that granted pursuant to the LJH Documents.

                  (c) The provisions of this Agreement shall apply with respect
to all of the Senior Debt, regardless of whether the Senior Debt has already
been incurred or may be incurred in the future by future advances or other
financial accommodations made or extended by a Senior Creditor to a Company
pursuant to the Senior Creditor Documents.

                  (d) If the Junior Creditor in violation of this Agreement
shall commence, prosecute or participate in any suit, action or proceeding
against any Company or shall attempt to enforce, foreclose or realize upon any
security for the Junior Debt, including, without limitation, the Senior Creditor
Collateral, such Company or any Senior Creditor may interpose as a defense or
plea the making of this Agreement and any Senior Creditor may intervene and
interpose such defense in its name or in the name of such Company, and such
Company or such Senior Creditor may by virtue of this Agreement restrain the
enforcement thereof in the name of such Company or such Senior Creditor.

         4. PERMITTED PAYMENTS.

                                       5

<PAGE>

         (a) Notwithstanding the provisions of Section 3 hereof, until the
giving of a Blockage Notice, the Companies may pay to the Junior Creditor, and
the Junior Creditor may demand, accept and retain from the Companies, (i)
periodic payments of interest accruing on the Junior Debt, as and when the same
become due under the terms of the LJH Note and (ii) monthly lease payments not
to exceed $74,076.67 under the Lease Agreement, so long as both immediately
before, and after giving effect to the payment of such interest, (i) no Default
or Event of Default exists, (ii) Availability (as defined in any Senior Credit
Document) is not less than $3,000,000 and (iii) such payment(s) are made in any
year only after Hilco has received payment in full of all Surplus Cash (as
defined in the Hilco Financing Agreement) required to be paid to Hilco for the
Fiscal Year (as defined in the Hilco Financing Agreement) just ended pursuant to
Section 4.3 of the Hilco Financing Agreement (the foregoing payments being
herein called the "Permitted Payments") and no other payments with respect to
the Junior Debt.

         (b) Upon the issuance of a Blockage Notice, the subordination
provisions of Section 3 shall govern and control until the earlier to occur of:

                  (i) The Event of Default giving rise to such Blockage Notice
         shall have been cured to the satisfaction of the Senior Creditors or
         waived in writing or shall have ceased to exist; or

                  (ii) All of the Senior Debt shall have been fully paid and the
         Senior Creditor Documents and all outstanding commitments of each
         Senior Creditor for the incurring of additional Senior Debt shall have
         been irrevocably terminated in writing.

         5. STANDBY AS TO ENFORCEMENT OF SECURITY INTERESTS. Notwithstanding any
provision of the LJH Documents to the contrary, until all of the Senior Debt
shall have been fully paid and the Senior Creditor Documents and all outstanding
commitments of each Senior Creditor for the incurring of additional Senior Debt
shall have been irrevocably terminated in writing, the Junior Creditor shall not
ask for, demand, sue for, take, receive, or repossess from any Company, by
setoff or in any other manner, the whole or any part of the Senior Creditor
Collateral, or foreclose or otherwise realize upon the whole or any part of the
Senior Creditor Collateral, whether by judicial action or under power of sale,
by self-help repossession or otherwise.

         6. USE OF LEASED EQUIPMENT. If the Senior Creditors desire to exercise
their respective rights and remedies with respect to any portion of the Senior
Creditor Collateral which is located in any premises in respect of which the
Junior Creditor has an ownership or leasehold interest, or in which the Junior
Creditor may have been granted a Lien or in which any Leaded Equipment may be
located, the Junior Creditor agrees that it will do nothing to impede or impair
the rights of the Senior Creditors to enter upon such premises without force or
process of law and without obligation to pay rent or other compensation of any
kind to the Junior Creditor. Junior Creditor further agrees to permit the Senior
Creditors, in the exercise of their rights and remedies under the Senior
Creditor Documents, to use any Leased Equipment, wherever located, without
charge, for a period starting with the date on which the Senior Creditors or
their agents commence using the Leased Equipment and ending one hundred eighty
(180) days thereafter.

                                       6

<PAGE>

         7. TURNOVER OF FUNDS. If any payment, distribution or security or the
proceeds thereof are received by the Junior Creditor with respect to the Senior
Creditor Collateral or in payment of the Junior Debt and such payment (excluding
Permitted Junior Securities) is not a Permitted Payment, then the Junior
Creditor shall hold the same in trust for the benefit of the Senior Creditors
and shall forthwith pay over and deliver the same to Agent or Hilco, as
applicable, in the same form received (except for the endorsement or assignment
of Junior Creditor when necessary for application to the Senior Debt).

         8. PRIORITY OF DISTRIBUTION. In the event of (a) any insolvency or
bankruptcy case or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding in connection therewith, relative to any
Company or its assets, or (b) any liquidation, dissolution or other winding up
of any Company, whether voluntary or involuntary, and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets or liabilities of any Company, then (i) in any
such event, the provisions of Section 2 of this Agreement shall continue to
apply, and (ii) in the case of the foregoing clauses (b) and (c) all of the
provisions of this Agreement shall continue to apply (excluding the payment to
Junior Creditor in securities of any Company provided for by a plan of
reorganization or readjustment that are equity securities or are subordinated in
right of payment to all indebtedness of each Company issued to each Senior
Creditor in such plan of reorganization or readjustment to substantially the
same extent as, or to a greater extent than, the Junior Debt is subordinated to
the Senior Debt as provided in this Agreement) (such equity securities or
subordinated securities being herein called the "Permitted Junior Securities").

         9. WAIVERS OF THE JUNIOR CREDITOR.

                  (a) The Junior Creditor waives any and all notice of the
creation, renewal, extension or accrual of any of the Senior Debt and notice of
or proof of reliance by the Agent or any Senior Creditor upon this Agreement.
The Senior Debt shall be deemed conclusively to have been created, contracted or
incurred in reliance upon this Agreement, and all dealings between any Company
and the Agent or any Senior Creditor shall be deemed to have been consummated in
reliance upon this Agreement. The Junior Creditor acknowledges and agrees that
the Agent and each Senior Creditor has relied upon the subordination provided
for herein in making financial accommodations available to the Companies under
the Senior Creditor Documents. The Junior Creditor waives notice of or proof of
reliance on this Agreement and protest, demand for payment and notice of
default.

                  (b) Neither the Agent nor any Senior Creditor shall have any
liability to the Junior Creditor for, and the Junior Creditor expressly waives
any claim which it may now or hereafter have against the Agent or any Senior
Creditor, arising out of or related to any actions which the Agent or a Senior
Creditor in good faith takes or omits to take with respect to the Senior
Creditor Collateral or the Senior Debt secured thereby, including, without
limitation, actions with respect to the creation, perfection or continuation of
the Liens in the Senior Creditor Collateral, actions with respect to the
occurrence of an Event of Default under the Senior Documents, actions with
respect to the foreclosure upon, sale, disposition, collection or failure to
realize upon, the Senior Creditor Collateral, and actions with respect to the
collection of the Senior Debt. Without limiting the generality of the foregoing,
the Agent and the Senior Creditors may, without regard to the existence

                                       7

<PAGE>

of any rights the Junior Creditor may now or hereafter have in and to the Senior
Creditor Collateral (other than the rights of the Junior Creditor to notices
under this Agreement or as may be required by applicable law), (i) compromise,
settle, adjust and in general deal in any manner with the Senior Creditor
Collateral, including, without limitation, the account debtors and other
obligors indebted thereon, as the Agent or Hilco may deem appropriate, upon such
terms and conditions (including the length of time incidental thereto) as the
Senior Creditors may deem appropriate, (ii) engage third parties to assist the
Agent or Hilco in the effectuation of the liquidation, collection or foreclosure
of the Senior Creditor Collateral, and (iii) incur such out-of-pocket costs and
expenses incidental thereto as the Agent or Hilco may deem appropriate,
including, without limitation, fees and disbursements of counsel to the Agent or
Hilco and any other third party professionals engaged by either of them. The
Junior Creditor irrevocably waives any right it may have, whether at law or in
equity, to assert any claim or bring any action, suit or proceeding against the
Agent or any of the Senior Creditors or to raise any affirmative defense, claim
or counterclaim in any action brought against it by the Agent or any of the
Senior Creditors, the effect of which is to contest the commercial
reasonableness of the decisions or actions of the Agent or any Senior Creditor
(whether made or taken alone or through any of its agents or representatives)
with respect to the Senior Creditor Collateral.

                  (c) The Junior Creditor expressly waives any right to require
the Agent or the Senior Creditors to marshal the Senior Creditor Collateral for
the Senior Debt or otherwise to compel the Agent or any of the Senior Creditors
to seek recourse against or satisfaction of the Senior Debt from one source
before seeking recourse or satisfaction from the Senior Creditor Collateral or
any other source.

                  (d) Nothing contained in this Agreement shall be deemed to
prohibit the Junior Creditor from intervening or participating in any judicial
proceeding to the extent necessary to establish or preserve its Liens in the
Senior Creditor Collateral, so long as such intervention or participation does
not interfere with the foregoing rights of the Agent and Hilco.

         10. SUBROGATION. After all of the Senior Debt shall have been fully
paid and the Senior Creditor Documents and all outstanding commitments of each
Senior Creditor for the incurring of additional Senior Debt shall have been
irrevocably terminated in writing and until all of the Junior Debt has been paid
in full, the Junior Creditor shall be subrogated to the rights of the Senior
Creditors to receive payments and distributions of assets with respect to the
Senior Debt, to the extent that distributions otherwise payable to the Junior
Creditor have been applied to the payment of Senior Debt in accordance with the
provisions of this Agreement. For purposes of such subrogation, no payments or
distributions to the Senior Creditors of any cash, property or securities to
which the Junior Creditor would be entitled except for the provisions of this
Agreement, and no payments over pursuant to the provisions of this Agreement to
the Senior Creditors by the Junior Creditor shall, as among the Credit Parties,
their respective creditors other than the Senior Creditors, and the Junior
Creditor, be deemed to be a payment or distribution to the Junior Creditor on
account of the Junior Debt. The provisions of this Agreement are and are
intended solely for the purpose of defining the relative rights of the Junior
Creditor, on the one hand, and the Senior Creditors, on the other hand. Nothing
contained in this Agreement is intended to or shall (a) impair, as between the
Credit Parties and the Junior Creditor, the obligations of the Credit Parties,
which are absolute and unconditional, to pay the Junior Creditor the Junior Debt
in accordance with the provisions of the LJH Documents

                                       8

<PAGE>

or (b) prevent the Junior Creditor from exercising all remedies otherwise
permitted by the LJH Documents or by applicable law, subject to the provisions
of this Agreement and the rights of the Senior Creditors to receive payments and
distributions otherwise payable to the Junior Creditor under the circumstances
set forth in this Agreement.

         11. ASSIGNMENT OF SUBORDINATED DEBT. The Junior Creditor agrees that
until the Senior Debt shall have been fully paid and the Senior Creditor
Documents and all outstanding commitments of each Senior Creditor for the
incurring of additional Senior Debt shall have been irrevocably terminated in
writing, the Junior Creditor will not assign, transfer or otherwise dispose of
the Junior Debt or any portion thereof unless such assignment, transfer or other
disposition is made expressly subject to this Agreement, and the assignee or
transferee expressly acknowledges in an instrument delivered to the Agent and
Hilco that the Junior Debt is being assigned or transferred subject to the terms
of this Agreement.

         12. NO WAIVER OF SUBORDINATION PROVISIONS.

                  (a) No right of the Agent and the Senior Creditors to enforce
the provisions of this Agreement shall at any time or in any way be prejudiced
or impaired by any act or failure to act on the part of the Credit Parties or by
any act or failure to act by the Agent or the Senior Creditors, or by any
non-compliance by the Credit Parties with the terms, provisions and covenants of
any of the LJH Documents, regardless of any knowledge thereof the Agent or any
Senior Creditor may have or be otherwise charged with.

                  (b) Without in any way limiting the generality of subsection
(a) of this Section 12, the Agent and the Senior Creditors may, at any time and
from time to time, without the consent of or notice to the Junior Creditor,
without incurring responsibility to the Junior Creditor and without impairing or
releasing the subordination provided hereunder or the obligations of the Junior
Creditor hereunder, do any one or more of the following:

                           (i) Amend, modify, waive or consent to any term or
                  provision set forth in any of the Senior Creditor Documents;

                           (ii) Change the manner, place or terms of payment or
                  extend the time of payment of, or refund or refinance, or
                  renew or alter, any of the Senior Debt;

                           (iii) Sell, exchange, release or otherwise deal with
                  any Senior Creditor Collateral or any other property pledged,
                  mortgaged or otherwise securing all or any portion of the
                  Senior Debt;

                           (iv) Release any Person liable in any manner for the
                  payment or collection of any of the Senior Debt;

                           (v) Exercise or refrain from exercising any rights
                  against the Credit Parties or any other Person; and

                                       9

<PAGE>

                          (vi) Take any other action which might otherwise
                  constitute a defense available to, or a discharge of, the
                  Junior Creditor in respect of its obligations under this
                  Agreement.

                  (c) The provisions of this Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time payment of any
Senior Debt is rescinded or must otherwise be returned by the Agent, the CIT
Lenders or Hilco upon the insolvency, bankruptcy or reorganization of any Credit
Party, or otherwise, all as though such payment had not been made.

                  (d) Neither the Junior Creditor nor any Credit Party shall
agree to amend or otherwise modify or alter (i) the payment provisions of any
LJH Document if the effect would be to increase the amount of such payments or
shorten the schedule of such payments, or (ii) any provisions other than those
specified in clause (i) if the effect of any such amendment, modification or
alteration shall be, in the Agent's and the Senior Creditors' reasonable
judgment, to make any provision of any LJH Loan Document more restrictive than
that in effect on the date of this Agreement or if such amendment, modification
or alteration shall in the Agent's or the Senior Creditors' reasonable judgment
be in any respect materially adverse to the interests of the Senior Creditors.

         13. POST BANKRUPTCY ISSUES.

                  (a) This Agreement shall continue in full force and effect
during the term set forth herein, notwithstanding the commencement by or against
any Credit Party of an insolvency or bankruptcy case or proceeding or any
receivership, liquidation, reorganization or other similar case or proceeding
during the pendency of which, so long as the Junior Debt has not been fully and
indefeasibly paid and satisfied, and the Senior Debt has not been fully paid and
the Senior Creditor Documents and all outstanding commitments of each Senior
Creditor for the incurring of additional Senior Debt shall not have been
irrevocably terminated in writing, all of the terms and provisions hereof shall
remain and continue in full force and effect.

                  (b) In an insolvency, bankruptcy case or proceeding, any
receivership, liquidation, reorganization or other similar case or proceeding,
the Junior Creditor shall not contest (or support any other party contesting)
any request of any Credit Party made with the consent of the Agent and Hilco for
use of cash collateral or for approval of any DIP financing to be provided in
good faith by the CIT Lenders or Hilco to such Credit Party, on the grounds of a
failure to provide "adequate protection" for the Liens of the Junior Creditor.

                  (c) Nothing contained in this Agreement shall in any way limit
the rights of or preclude the Agent, the CIT Lenders or Hilco from seeking to
obtain, in an insolvency, bankruptcy case or proceeding, any receivership,
liquidation, reorganization or other similar case or proceeding of a Credit
Party without the Junior Creditor's consent or over the Junior Creditor's
objection, replacement Liens or post-petition Liens upon any other terms,
including terms establishing that such replacement Liens or post-petition Liens
not be subject to the terms of this Agreement.

                  (d) Nothing contained in this Agreement shall in any way limit
the rights of or preclude the Junior Creditor from objecting to DIP financing or
use of cash collateral in an

                                       10

<PAGE>

insolvency, bankruptcy case or proceeding, any receivership, liquidation,
reorganization or other similar case or proceeding of a Credit Party on any
grounds other than the failure to provide "adequate protection" for the Liens of
the Junior Creditor, including, without limitation, objecting to any proposed
terms establishing that replacement Liens or post-petition Liens to be granted
to the Agent for the benefit of the CIT Lenders or to Hilco not be subject to
the terms of this Agreement.

         14. RELEASE OF LIEN OF THE JUNIOR CREDITOR. The Junior Creditor agrees,
whether or not a default has occurred under the Junior Debt, to release or
otherwise terminate its Lien in all or any portion of the Senior Creditor
Collateral upon written request of the Credit Parties, the Agent or Hilco to the
extent necessary to permit all or portion of the Senior Creditor Collateral to
be sold or otherwise disposed of by the Credit Parties, the Agent or Hilco,
whether or not in the ordinary course of a Credit Party's business.

         15. PROVISIONS CONCERNING INSURANCE. The Agent and the Senior Creditors
agree that the Junior Creditor shall be entitled to obtain loss payee
endorsements and/or additional insured status with respect to any and all
policies of insurance now or hereafter obtained by the Credit Parties insuring
casualty or other loss to any property of the Credit Parties in which the Junior
Creditor may have a Lien. The rights and priorities of any party to any
insurance proceeds shall be as provided this Agreement.

                                       11

<PAGE>

         16.      EXPENSES; INDEMNIFICATION.

                  (a) The Credit Parties shall pay (i) all reasonable out of
pocket expenses incurred by the Agent and the Senior Creditors, including the
reasonable fees, charges, and disbursements of counsel for the Agent and the
Senior Creditors, in connection with the preparation and administration of this
Agreement, and (ii) all reasonable out of pocket expenses incurred by the Agent
and the Senior Creditors, including the reasonable fees, charges and
disbursements of any counsel for the Agent and the Senior Creditors, in
connection with the enforcement or protection of any rights under this
Agreement.

                  (b) Without limiting the indemnity obligations of the Credit
Parties under the Senior Creditor Documents, the Credit Parties shall pay,
indemnify, and hold the Agent and the Senior Creditors (each such Person, an
"Indemnitee") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions (whether sounding in contract, tort, or on
any other ground), judgments, suits, costs, expenses, or disbursements of any
kind or nature whatsoever (including, without limitation, reasonable fees and
disbursements of any counsel for any Indemnitee) arising out of, in connection
with, or as a result of (i) the execution and delivery of this Agreement by the
Credit Parties, or (ii) any action taken or omitted to be taken by any Credit
Party with respect to this Agreement, provided that such indemnity under clauses
(i) and (ii) above shall not be available to the extent such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements are determined by a court of competent jurisdiction
by final and nonappealable judgment to have resulted from the gross negligence
or willful misconduct of such Indemnitee.

         17. NO THIRD PARTY BENEFICIARIES. This Agreement is solely for the
benefit of the Agent, the Senior Creditors and the Junior Creditor and their
respective successors, participants and assigns, and no other Person shall have
any right, benefit, priority or interest under, or because of the existence of,
this Agreement.

         18. NOTICES. All notices, requests and demands to or upon a party
hereto, to be effective, shall be in writing and shall be sent by certified or
registered mail, return receipt requested, by personal delivery against receipt,
by overnight courier or by facsimile transmission and, unless expressly provided
herein, shall be deemed to have been validly served, given or delivered
immediately when delivered against receipt, three (3) business days after
deposit in the mail, postage prepaid, or, in the case of facsimile transmission,
when received (if on a business day and, if not received on a business say, then
on the next business day after receipt), addressed as follows:

                                       12

<PAGE>

         (i)      If to the Agent or the CIT Lenders:

                  The CIT Group/Business Credit, Inc.
                  Two Wachovia Center
                  301 South Tryon Street, 23rd Floor
                  Charlotte, North Carolina 28202
                  Attention: TIMCO Account Manager
                  Facsimile No. 704-339-3053

                  With a copy to:

                  Carruthers & Roth, P.A.
                  235 North Edgeworth Street
                  Greensboro, North Carolina 27401
                  Attention:  Kenneth M. Greene, Esq.
                  Facsimile No. 336-273-7885

         (ii)     If to Hilco:

                  Hilco Capital, LP
                  One Northbrook Place
                  5 Revere Drive
                  Suite 510
                  Northbrook, Illinois 60062
                  Attention: Alex Franky, Vice President
                  Facsimile No. 847-559-9330

                  With a copy to:
                  Riemer & Braunstein LLP
                  3 Center Plaza
                  Boston, Massachusetts 022108
                  Attention:  Donald E. Rothman, Esq.
                  Facsimile No. 617-880-3456

         (iii)    If to Junior Creditor:

                  LJH, Ltd.
                  377 Neva Lane
                  Dennison, Texas  75020
                  Attention: Mr. Lacy Harber
                  Facsimile No. 903-465-6514

or to such other address as each party may designate for itself by notice given
in accordance with this Section 18. Any written notice or demand that is not
sent in conformity with the provisions hereof shall nevertheless be effective on
the date that such notice is actually received by the noticed party.

                                       13

<PAGE>

         19. GRANT OF AUTHORITY. Until all of the Senior Debt is paid in full
and all outstanding commitments of the Senior Creditors for the incurring of
Senior Debt are terminated in writing, the Junior Creditor hereby irrevocably
authorizes and empowers the Agent or Hilco, in the event any insolvency or
bankruptcy case or proceeding or any receivership, liquidation, reorganization
or other similar case or proceeding, any liquidation, dissolution or other
winding up of a Credit Party, whether voluntary or involuntary and whether or
not involving insolvency or bankruptcy, or any assignment for the benefit of
creditors or any other marshalling of any assets or liabilities of a Credit
Party is commenced by or against a Credit Party, to (a) collect and receive
every payment or distribution on the Senior Debt and the Junior Debt (other than
Permitted Junior Securities) and give acquittance therefor, and (b) file claims
and proofs of claim in any such proceeding in respect of the Junior Debt in the
name of the Agent, the Senior Creditors, Hilco, or in the name of the Junior
Creditor or otherwise, as the Agent or Hilco may deem reasonably necessary or
advisable for the exercise or enforcement of any other rights of the Agent and
the Senior Creditors hereunder, if the Junior Creditor has not filed a claim or
proof of claim necessary to enforce the obligations of such Credit Party in
respect of the Junior Debt at least thirty (30) days before the expiration of
the time to file the same.

         20. ADDITIONAL ASSURANCES. The Junior Creditor agrees to execute,
acknowledge and deliver to the Agent or Hilco all other and further documents or
assurances that the Agent or Hilco may reasonably request to give full force and
effect to the provisions of this Agreement.

         21. GOVERNING LAW. This Agreement shall be interpreted and the rights
and liabilities of the parties hereto determined, in accordance with the laws
and decisions (exclusive of choice of law provisions) of the State of North
Carolina.

         22. SECTION TITLES. The section titles contained in this Agreement are
and shall be without substantive meaning or content of any kind whatsoever and
are not a part of the agreement among the parties hereto.

         23. AUTHORITY. Each party represents and warrants to each other party
that it has all necessary right, power and authority to enter into this
Agreement and perform and observe all of its covenants and agreements herein
contained and that this Agreement is valid and binding upon it and enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency and
similar laws affecting enforcement rights generally.

         24. ENTIRE AGREEMENT. This Agreement constitutes and expresses the
entire understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, whether express or implied, oral or
written. Neither this Agreement nor any provision hereof may be changed, waived
or amended orally or in any other manner other than by an agreement in writing
signed by the Agent, Hilco and the Junior Creditor.

         25. SEVERABILITY. The provisions of this Agreement are independent of
and inseparable from each other. If any provision hereof shall for any reason be
held invalid or unenforceable, it is the intent of the parties that such
invalidity or unenforceability shall not affect the validity or

                                       14

<PAGE>

enforceability of any other provision hereof, and that this Agreement shall be
construed as if such invalid or unenforceable provision had never been contained
herein.

         26. COUNTERPARTS. This Agreement may be executed by the parties hereto
in one or more counterparts, each of which when so executed shall be an
original. When taken together, such counterparts shall constitute but one and
the same document.

         27. CONSENT TO FORUM. THE AGENT, HILCO AND THE JUNIOR CREDITOR EACH
HEREBY CONSENTS AND AGREES THAT THE SUPERIOR COURT OF MECKLENBURG COUNTY, NORTH
CAROLINA, OR THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH
CAROLINA, CHARLOTTE DIVISION, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG THE PARTIES HERETO PERTAINING
TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT.
EACH PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION, AND
HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS.

         28. WAIVERS OF TRIAL BY JURY. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE AGENT, HILCO AND THE JUNIOR CREDITOR EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY IT MAY HAVE IN
ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS
AGREEMENT.

                         (SIGNATURES BEGIN ON NEXT PAGE)

                                       15

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed under seal on the date first above written.

                                     AGENT:

                                     THE CIT GROUP/BUSINESS CREDIT, INC.,
                                     AS AGENT

                                     By: /s/
                                         -------------------------------------
                                         Title:
                                                ------------------------------

                                     HILCO:

                                     HILCO CAPITAL  LP

                                     By: /s/
                                         -------------------------------------
                                         Title:
                                                ------------------------------

                                     JUNIOR CREDITOR:

                                     LJH, LTD.

                                     By: DLH Management, L.L.C., a Texas limited
                                         liability company, its ______________

                                     By: /s/
                                         -------------------------------------
                                         Title:
                                                ------------------------------

                                       16

<PAGE>

                          ACKNOWLEDGMENT AND AGREEMENT
                              OF THE CREDIT PARTIES

         Each of the undersigned Credit Parties each does hereby accept, and
acknowledge receipt of a copy of, the foregoing Intercreditor and Subordination
Agreement, and each agrees that:

                  (a) It will not pay any of the Junior Debt except as the
         foregoing Intercreditor and Subordination Agreement provides;

                  (b) It will be bound by the subrogation provisions of Section
         10 of the foregoing Intercreditor and Subordination Agreement;

                  (c) Although the undersigned is signing this Acknowledgment
         and Agreement, it is not a party to the foregoing Intercreditor and
         Subordination Agreement and does not and will not receive any right,
         benefit, priority or interest under or because of the existence of the
         foregoing Intercreditor and Subordination Agreement;

                  (d) In the event of a breach by the undersigned or the Junior
         Creditor of any of the terms and provisions contained in the foregoing
         Intercreditor and Subordination Agreement, such a breach shall
         constitute an Event of Default under the CIT Lender Documents and the
         Hilco Documents; and

                  (e) It will execute and deliver such additional documents and
         take such additional action as may be deemed necessary or desirable by
         the Agent or Hilco to effectuate the provisions and purposes of the
         foregoing Intercreditor and Subordination Agreement.

         All capitalized terms used in this Acknowledgment and Agreement without
definition shall have the same meanings as set forth in the foregoing
Subordination Agreement.

         IN WITNESS WHEREOF, the undersigned have caused this Acknowledgment and
Agreement to be duly executed under seal as of the day and year first above
written.

                                   CREDIT PARTIES:

                                   AIRCRAFT INTERIOR DESIGN, INC.

                                   By: /s/
                                       ---------------------------------
                                   Title:
                                          ------------------------------

                                       17

<PAGE>

                                   BRICE MANUFACTURING COMPANY, INC.

                                   By: /s/
                                       ---------------------------------
                                   Title:
                                          ------------------------------

                                   TIMCO ENGINE CENTER, INC.

                                   By: /s/
                                       ---------------------------------
                                   Title:
                                          ------------------------------

                                   TIMCO ENGINEERED SYSTEMS, INC.

                                   By: /s/
                                       ---------------------------------
                                   Title:
                                          ------------------------------

                                   TRIAD INTERNATIONAL MAINTENANCE
                                            CORPORATION

                                   By: /s/
                                       ---------------------------------
                                   Title:
                                          ------------------------------

                                   TIMCO AVIATION SERVICES, INC.

                                   By: /s/
                                       ---------------------------------
                                   Title:
                                          ------------------------------

                                   AVIATION SALES LEASING COMPANY

                                   By: /s/
                                       ---------------------------------
                                   Title:
                                          ------------------------------

                                   AVIATION SALES PROPERTY
                                            MANAGEMENT  CORP.

                                   By: /s/
                                       ---------------------------------
                                   Title:
                                          ------------------------------

                                   AVS/CAI, INC.

                                       2

<PAGE>

                                   By: /s/
                                       ---------------------------------
                                   Title:
                                          ------------------------------

                                   AVS/M-1, INC.

                                   By: /s/
                                       ---------------------------------
                                   Title:
                                          ------------------------------

                                   AVS/M-2, INC.

                                   By: /s/
                                       ---------------------------------
                                   Title:
                                          ------------------------------

                                   AVS/M-3, INC.

                                   By: /s/
                                       ---------------------------------
                                   Title:
                                          ------------------------------

                                   AVSRE, L.P.

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

                                   By: /s/
                                       ---------------------------------
                                   Title:
                                          ------------------------------

                                   HYDROSCIENCE, INC.

                                   By: /s/
                                       ---------------------------------
                                   Title:
                                          ------------------------------

                                       3

<PAGE>

                                   TMAS/ASI, INC.

                                   By: /s/
                                       ---------------------------------
                                   Title:
                                          ------------------------------

                                   WHITEHALL CORPORATION

                                   By: /s/
                                       ---------------------------------
                                   Title:
                                          ------------------------------

                                       4

<PAGE>

                                    EXHIBIT A

                                Leased Equipment

                                       5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00065-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00065-of-00352.parquet"}]]