INTERCREDITOR AND SUBORDINATION AGREEMENT

EXHIBIT 10.138

INTERCREDITOR AND SUBORDINATION AGREEMENT

      THIS INTERCREDITOR AND SUBORDINATION AGREEMENT (this “ Agreement ”), made as of the 20th day of April, 2006, by and between THE CIT GROUP/BUSINESS CREDIT, INC. , a New York corporation (“ CITBC ”), individually and in its capacity as agent (in such capacity, the “ Agent ”) for the Senior Lenders under the Senior Lenders Loan Agreement, as hereinafter further defined; and LJH, LTD. , a Texas limited partnership (herein referred to as the “ Subordinated Lender ”, as hereinafter further defined);

WITNESSETH :

     WHEREAS, Aircraft Interior Design, Inc., a Florida corporation, Brice Manufacturing Company, Inc., a California corporation, TIMCO Aviation Services, Inc., a Delaware corporation, TIMCO 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 ”), CITBC and other lenders and financial institutions (the “ Senior Lenders ”, as hereinafter further defined), and the Agent have each entered into a certain Financing Agreement, dated April 4, 2005, as amended (such Financing Agreement, as amended, modified, supplemented or restated from time to time, being herein called collectively the “ Senior Lenders Loan Agreement ” as hereinafter further defined), pursuant to which the Senior Lenders have agreed to make or extend to the Borrowers a $30.0 million revolving credit loan evidenced by the Borrowers’ promissory note, dated of even date herewith, in the aggregate original principal amount of up to $30.0 million (the “ Senior Lenders Revolving Note ”), upon the term and subject to the conditions set forth therein (the Senior Lenders Loan Agreement, the Senior Lenders Revolving Note, and all related loan and collateral documentation as in effect from time to time, being herein referred to as the “ Senior Lenders Documents ”);

     WHEREAS, the Credit Parties and the Subordinated Lender (as successor by assignment from Fortress Credit Opportunities I LP, Monroe Capital Advisors LLC and Monroe Investments, Inc.) have each entered into a certain Amended and Restated Financing Agreement, dated as of April 8, 2005, as amended by the First Amendment thereto, dated September 28, 2005, and by the Second Amendment thereto, dated as of April 10, 2006 (such Amended and Restated Financing Agreement, as amended, modified, restated or supplemented from time to time in accordance with the terms hereof, being herein called the “ Subordinated Lender Loan Agreement ”), pursuant to which the Subordinated Lender has (a) made a $8,190,294.32 term loan to the Borrowers (the “ Subordinated Lender Term Loan A-1 ”) evidenced by the Borrowers’ Amended and Restated Term Note A-1, dated April 10, 2006 (the “ Subordinated Lender Term Note A-1 ”), (b) made a $7,166,489.67 term loan to the Borrowers (the “ Subordinated Lender Term Loan A-2 ”) evidenced by the Borrowers’ Amended and Restated Term Note A-1, dated

April 10, 2006 (the “ Subordinated Lender Term Note A-2 ”), (c) made $2,956,471.09 term loan to the Borrowers (the “ Subordinated Lender Term Loan B ”) evidenced by the Borrowers’ Amended and Restated Term Note A-1, dated April 10, 2006 (the “ Subordinated Lender Term Note B ”), and (d) agreed to make a $6.0 million term loan to the Borrowers (the “ Subordinated Lender Term Loan C ”) evidenced by the Borrowers’ Term Note C, dated April 10, 2006 (the “ Subordinated Lender Term Note C ”), upon the terms and subject to the conditions set forth therein (the Subordinated Lender Loan Agreement, the Subordinated Lender Term Note A-1, the Subordinated Lender Term Note A-2, the Subordinated Lender Term Note B, the Subordinated Lender Term Note C, and all related loan and collateral documentation as in effect from time to time, being herein referred to as the “ Subordinated Lender Documents ”);

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

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

     WHEREAS, the Subordinated Lender and the Agent wish to enter into this Agreement for the purpose of establishing the priorities of their respective Liens (as hereinafter defined) in the property of the Credit Parties, and for the purpose of setting forth certain other agreements between them with respect to their respective agreements with the Credit Parties;

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

     1.  Certain Definitions . All capitalized terms used in this Agreement without definition shall have the meanings ascribed to such terms in the Senior Lenders Loan Agreement. In addition to the terms defined elsewhere in this Agreement, the following terms shall have the following meanings for the purposes of this Agreement:

     “ Blockage Notice ” shall mean a written notice from the Agent to the Subordinated Lender that a Senior Lenders Event of Default has occurred and is continuing and specifying such Senior Lenders Event of Default.

     “ Credit Parties ” shall mean the Borrowers and the Guarantors and “ Credit Party ” shall mean any of them.

     “ Collateral ” shall mean all of the assets, properties and interests in property of the Credit Parties, whether now owned or hereafter acquired or arising, wherever located.

     “ Default ” shall mean an event or condition the occurrence of which would, with the giving of notice or the passage of time or both, become a Senior Lenders Event of Default.

     “ Deposit Account Collateral ” shall mean that portion of the Collateral consisting of “deposit accounts” (as such term is defined in the UCC) and the proceeds thereof.

     “ Documents ” shall mean the Subordinated Lender Documents and the Senior Lenders Documents or any or all of them as the context may require.

     “ Enforcement Action ” shall mean the commencement by the Agent of a liquidation or foreclosure of the Collateral.

     “ Exercise Notice ” shall have the meaning ascribed to such term in Section 10.1 of this Agreement.

     “ Insolvency Proceeding ” shall mean any insolvency or bankruptcy case or proceeding or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith.

     “ Insurance and Condemnation Proceeds ” shall mean proceeds or payments payable to the Credit Parties with respect to any loss, casualty or damage to, or condemnation of, the Collateral or any part thereof.

     “ Landlord Agreement ” shall mean the Landlord’s Agreement executed by each landlord of a facility or warehouse leased to a Credit Party constituting one of the Documents pursuant to which such landlord grants certain assurances to each Lender with respect to its respective Lien in such Credit Party’s leasehold estate in such facility or warehouse and the Collateral located thereon.

     “ Lenders ” shall mean the Subordinated Lender, on the one hand, and the Agent for the benefit of the Senior Lenders, on the other hand, and “ Lender ” shall mean either of them.

     “ Liens ” shall mean the liens and security interests granted by the Credit Parties or any of them to each Lender under the Documents and a “ Lien ” shall refer to the liens and security interests granted by the Credit Parties or any of them to one of the Lenders.

     “ Obligations ” shall mean the Senior Lenders Obligations and the Subordinated Lender Obligations or any or all of them as the context may require.

     “ Option Period ” shall have the meaning ascribed to such term in Section 10.1 of this Agreement.

     “ Option Triggering Event ” shall have the meaning ascribed to such term in Section 10.1 of this Agreement.

     “ Permitted Junior Securities ” shall have the meaning ascribed to such term in Section 19.3 of this Agreement.

     “ Person ” shall mean an individual, partnership, corporation, joint stock company, land trust, business or unincorporated organization, or a government or agency or political subdivision thereof.

     “ Possessory Collateral ” shall mean any Collateral in which the Agent’s Lien is perfected by the Agent’s taking of possession of such Collateral pursuant to the provisions of the UCC and other applicable law.

     “ Second Amendment to LJH Financing Agreement ” shall mean that certain Second Amendment to Amended and Restated Financing Agreement, dated as of April 10, 2006, among the Credit Parties and Subordinated Lender.

     “ Senior Lenders ” shall mean CITBC and the other lenders and financial institutions that are parties to the Senior Lenders Loan Agreement from time to time, and any other lender or lenders refinancing or refunding all or any portion of the Senior Lenders Obligations.

     “ Senior Lenders Early Termination Fee ” shall mean the “Early Termination Fee” as defined in the Fee Agreement.

     “ Senior Lenders Event of Default ” shall mean an “Event of Default” as defined in the Senior Lenders Loan Agreement as in effect on the date of this Agreement.

     “ Senior Lenders Loan Agreement ” shall mean the Financing Agreement, dated April 4, 2005, among the Credit Parties, the Agent and the Senior Lenders that are parties thereto, as in effect on the date hereof, and as the same may be amended, restated, supplemented or otherwise modified 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 Senior Lenders thereunder.

     “ Senior Lenders Obligations ” shall mean all indebtedness, liabilities and obligations of any and every kind now or hereafter owing by the Credit Parties to the Agent and the Senior Lenders under the Senior Lenders Documents.

     “ Subordinated Lender ” shall mean LJH, Ltd., a Texas limited partnership, and its successors and assigns, and any subsequent holder or holders of any of the Subordinated Lender Obligations.

     “ Subordinated Lender Obligations ” shall mean all indebtedness, liabilities and obligations of any and every kind now or hereafter owing by the Credit Parties to the Subordinated Lender under the Subordinated Lender Documents.

     “ Term Loan B Collateral ” shall have the meaning ascribed to such term in Section 2.1 of this Agreement.

     “ Term Loan C Exchange ” means the exchange of the portion of the Subordinated Lender Obligations consisting of the Subordinated Lender Term Loan C for common stock issued by Parent, whether accomplished by exchange, conversion, exercise of rights or otherwise.

     “ Term Loan C Obligations ” means the portion of the Subordinated Lender Obligations evidenced by the Subordinated Lender Term Note C.

     “ Term Loan Exchange ” means the exchange of the portion of the Subordinated Lender Obligations for any common stock, partnership interests, limited liability company membership interests, or other equity securities or equity interests of any Credit Party, whether accomplished by exchange, conversion, exercise of rights or otherwise.

     “ UCC ” shall mean the Uniform Commercial Code as in effect from time to time in the State of North Carolina.

     2.  Lien Subordination .

          2.1 Collateral . The Lenders agree that at all times, whether before, after or during the pendency of any Insolvency Proceeding, and notwithstanding the priorities which would ordinarily result from the order of execution or granting of any Lien in the Collateral or the order of filing of any financing statements or recording of any deeds of trust, mortgages or any other security documents now or hereafter constituting part of the Subordinated Lender Documents or the Senior Lenders Documents with respect to the Collateral, or any provision of the UCC or any other applicable law to the contrary, the Liens of the Agent in the Collateral arising pursuant to the Senior Lenders Documents as security for all of the Senior Lenders Obligations shall be at all times first priority Liens in the Collateral, superior to the Liens of the Subordinated Lender in the Collateral arising pursuant to the Subordinated Lender Documents, and the Liens of the Subordinated Lender in the Collateral shall be junior and subordinate to the Liens of the Agent therein as security for all of the Senior Lenders Obligations. All proceeds of the Collateral shall be applied to the Obligations in accordance with the provisions of Section 5 hereof. Notwithstanding the foregoing provisions of this Section 2.1, it is hereby agreed that (a) any Collateral (herein, “ Term Loan B Collateral ”) purchased by any Borrower prior to the date of the Second Amendment to LJH Financing Agreement with the proceeds of the Term Loan B (as defined in the Subordinated Lender Loan Agreement), shall be at all times subject to a first priority Lien in favor of Subordinated Lender, superior to the Liens of the Senior Lenders in such Term Loan B Collateral arising pursuant to the Senior Lenders Documents, and (b) the Liens of the Senior Lenders in the Term Loan B Collateral shall be junior and subordinate to the Liens of the Subordinated Lender therein as security for all of the Subordinated Lender Obligations.

          2.2 No Waiver of Subordination Provisions .

          (a) No right of the Agent to enforce the provisions of this Agreement shall at any time or 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 Lenders, or by any non-

compliance by the Credit Parties with the terms, provisions and covenants of any of the Subordinated Lender Documents, regardless of any knowledge thereof the Agent or any Senior Lender may have or be otherwise charged with.

          (b) No right of the Subordinated Lender to enforce the provisions of this Agreement as to the Term Loan B Collateral 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 Subordinated Lender, or by any non-compliance by the Credit Parties with the terms, provisions and covenants of any of the Senior Lenders Documents, regardless of any knowledge thereof the Subordinated Lender may have or be otherwise charged with.

          (c) Without in any way limiting the generality of subsection (a) of this Section 2.2, the Lenders may, at any time and from time to time, without the consent of or notice to the other Lender, without incurring responsibility to the other Lender and without impairing or releasing the lien subordination provided hereunder, do any one or more of the following:

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

     (iii) Sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing all or any portion of the Obligations in which such Lender has a first priority;

     (iv) Release any Person liable in any manner for the payment or collection of any of the Obligations owed to such Lender;

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

     (vi) Take any other action which might otherwise constitute a defense available to, or a discharge of, such Lender in respect of its lien subordination as provided pursuant to the terms of 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 Obligations is rescinded or must otherwise be returned by a Lender upon the insolvency, bankruptcy or reorganization of a Credit Party, or otherwise, all as though such payment had not been made.

     3.  Appointment of the Agent as Collateral Agent . The Subordinated Lender hereby appoints and designates the Agent, and the Agent agrees to act, as the Subordinated Lender’s collateral agent within the meaning of the term “secured party” under Section 9-102(75) of the UCC for the sole and limited purpose of perfecting the Liens granted to the Subordinated Lender in any Deposit Account Collateral to the extent that the Agent is a party to, and the Subordinated

Lender is not a party to, a control agreement contemplated by Section 9-105(a)(2) of the UCC perfecting the Liens of the Agent in such Deposit Account Collateral, and in any Possessory Collateral. In connection with the Agent’s acting as such collateral agent for the Subordinated Lender hereunder, the parties further agree as follows:

          3.1 No Liability of the Agent . All Liens held by the Agent in the Possessory Collateral and the Deposit Account Collateral in its capacity as collateral agent for the Subordinated Lender shall be subject to, and any proceeds of the Possessory Collateral and the Deposit Account Collateral shall be distributed to the Lenders in accordance with, the provisions of this Agreement. In its capacity as collateral agent, the Agent shall have no duties or responsibilities of any kind or nature and it shall not be liable to the Subordinated Lender for any action taken or omitted to be taken under or in connection with this Agreement or any of the Documents.

          3.2 No Warranties or Representations. Except as otherwise specifically set forth in this Agreement, the Agent does not make to the Subordinated Lender any express or implied warranty, representation or guarantee with respect to the Obligations, the Collateral, the Documents or any Credit Party. The Agent shall not be responsible to the Subordinated Lender for (i) the execution, validity, genuineness, effectiveness or enforceability of, any of the Documents; (ii) the validity, genuineness, enforceability, collectibility, value, sufficiency or existence of any Collateral, or the perfection or priority of any Lien therein; or (iii) the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any Credit Party.

          3.3 Indemnity. The Subordinated Lender agrees to indemnify and defend the Agent (to the extent not reimbursed by the Credit Parties, but without limiting the indemnification obligations of the Credit Parties under the Documents), and to hold the Agent harmless from and against, any and all claims, demands, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, proceedings, costs, expenses or disbursements of any kind or nature whatsoever (including reasonable attorneys’ fees and expenses) which may be imposed on, incurred by or asserted or initiated against the Agent in any way arising out of its acting as collateral agent for the Subordinated Lender with respect to any of the Possessory Collateral and the Deposit Account Collateral (and not arising out of the Agent’s acting in any other capacity) , provided that the Subordinated Lender shall not be liable to the Agent for any of the foregoing to the extent that they result solely from the willful misconduct or gross negligence of the Agent.

          3.4 Exclusive Control Agreement Instructions of Subordinated Lender . After all of the Senior Lenders Obligations have been paid and satisfied in full and the Agent’s and the Senior Lenders’ commitments for the incurring of additional Senior Lenders Obligations have expired or been irrevocably terminated in writing, the Agent shall (a) send to each bank that is a party to any control agreement among the Agent, the Subordinated Lender and such bank, a notice or other instruction as permitted by such control agreement that the bank is authorized to honor instructions originated by the Subordinated Lender directing disposition of the funds in such deposit account, and (b) execute an amendment to such control agreement, in form and substance satisfactory to the Agent, the Subordinated Lender and such bank, as may be reasonably requested by the Subordinated Lender to give effect to such notice or instruction.

     4.  Notices of Default . The Agent shall give the Subordinated Lender notice of default, termination, demand, acceleration, exercise of remedies and any other notice which is of a like nature or required to be given under the Senior Lenders Documents or by law, and the Subordinated Lender shall give the Agent notice of any default, termination, demand, acceleration, exercise of remedies and any other notice which is of a like nature or required to be given under the Subordinated Lender Documents or by law, in each case concurrently with the giving of such notice to the Borrowers or any of the other Credit Parties; provided , however , that no failure of either party to give such notice shall (a) affect the validity of such notice as to the Credit Parties or affect the relative priorities of the Liens established in Section 2 hereof or (b) create the basis for any liability of one Lender to the other Lender or the Agent to the Subordinated Lender.

     5.  Application of Proceeds of Collateral . All proceeds of the Collateral received by or for the account of the Lenders (whether by sale, casualty, condemnation or other disposition of the Collateral), shall be distributed to the Lenders and applied as follows:

     First, with respect to all Collateral other than Term Loan B Collateral, to the Agent for application to all of the Senior Lenders Obligations;

     Second, with respect to all Term Loan B Collateral, to the Subordinated Lender for application to the Subordinated Lender Obligations;

     Third, with respect to all Collateral other than Term Loan B Collateral, after all of the Senior Lenders Obligations have been paid and satisfied in full and the commitments of the Agent and the Senior Lenders under the Senior Lenders Documents have expired or been irrevocably terminated in writing, to the Subordinated Lender for application to the Subordinated Lender Obligations; and

     Fourth, with respect to all Term Loan B Collateral after all of the Subordinated Lender Obligations have been paid and satisfied in full, to the Agent for application to the Senior Lenders Obligations.

     6.  Enforcement of Liens; Release of Liens .

          6.1 Enforcement of Liens in Favor of Senior Lenders . The Subordinated Lender agrees that, except as expressly provided in this Agreement, unless and until all of the Senior Lenders Obligations have been paid and satisfied in full and the and the commitments of the Agent and the Senior Lenders under the Senior Lenders Documents have expired or been irrevocably terminated in writing, without the prior written consent of the Agent, the Subordinated Lender will not take any action with respect to the Collateral other than the Term Loan B Collateral, whether by judicial or non-judicial foreclosure, notification to account debtors or other obligors on the Collateral other than the Term Loan B Collateral, taking or obtaining possession of any of the Collateral other than the Term Loan B Collateral, or otherwise realizing upon the whole or any part of the Collateral other than the Term Loan B Collateral.

          6.2 Enforcement of Liens in Favor of Subordinated Lender . The Senior Lenders agree that, unless and until all of the Subordinated Lender Obligations have been paid and satisfied in full, without the prior written consent of the Subordinated Lender, neither the Agent nor the Senior Lenders will take any action with respect to the Term Loan B Collateral, whether by judicial or non-judicial foreclosure, taking or obtaining possession of any of the Term Loan B Collateral, or otherwise realizing upon the whole or any part of the Term Loan B Collateral.

          6.3 Release of Liens by Subordinated Lender . If the Agent or the Senior Lenders shall determine, in connection with any sale of Collateral other than the Term Loan B Collateral, that the release of the lien of any Subordinated Lender Document on such Collateral in connection with such sale is necessary or advisable, the Subordinated Lender shall execute such release documents and instruments and shall take such further actions as the Agent or the Senior Lenders shall request. If the Subordinated Lender fails or refuses to take the action requested by the Agent or the Senior Lenders within ten (10) days of the receipt of a written request given in accordance with Section 11 below, the Subordinated Lender hereby irrevocably constitutes and appoints the Agent and any officer of Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Subordinated Lender and in the name of the Subordinated Lender or in the Agent’s own name, from time to time in the Agent’s discretion, for the purpose of carrying out the terms of this section, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this section, including, without limitation, any financing statements, endorsements, assignments or other instruments of transfer or release. The Subordinated Lender hereby ratifies all that said attorneys shall lawfully do or cause to be done pursuant to the power of attorney granted in this paragraph.

          6.4 Release of Liens by Agent on behalf of Senior Lenders . If the Subordinated Lender shall determine, in connection with any sale of the Term Loan B Collateral, that the release of the lien of any Senior Lenders Document on such Term Loan B Collateral in connection with such sale is necessary or advisable, the Agent on behalf of the Senior Lenders shall execute such release documents and instruments and shall take such further actions as the Subordinated Lender shall request. If the Agent fails or refuses to take the action requested by the Subordinated Lender within ten (10) days of the receipt of a written request given in accordance with Section 11 below, the Senior Lenders each hereby irrevocably constitutes and appoints the Subordinated Lender and any officer of Subordinated Lender, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Senior Lender and in the name of the Agent or such Senior Lender or in the Subordinated Lender’s own name, from time to time in the Subordinated Lender’