FIRST AMENDMENT TO INTERCREDITOR AGREEMENT

EXHIBIT 10.3

FIRST AMENDMENT TO INTERCREDITOR AGREEMENT

As of April 8, 2005

THIS FIRST AMENDMENT is made with respect to the INTERCREDITOR AGREEMENT (the “ Intercreditor Agreement ”), made as of April 5, 2004, 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 Lienholders under the Senior Lienholders Loan Agreement, as hereinafter further defined) and MONROE CAPITAL ADVISORS LLC , a Delaware limited liability company (herein referred to as the “ Subordinated Lienholder ”, as hereinafter further defined), successor to HILCO CAPITAL LP, a Delaware limited partnership (“ Hilco ”). Terms used and not otherwise defined herein shall have the meanings attributed thereto in the Intercreditor Agreement.

RECITALS

A.         Pursuant to that certain Financing Agreement, dated as of April 5, 2004 (as amended, the “ Existing Subordinated Lienholder Loan Agreement ”), among AIRCRAFT INTERIOR DESIGN, INC ., a Florida corporation (“ AID ”), BRICE MANUFACTURING COMPANY , INC ., a California corporation (“ Brice ”), TIMCO AVIATION SERVICES, INC ., a Delaware corporation (“ Parent ”), TIMCO ENGINE CENTER, INC. , a Delaware corporation (“ Engine ”), TIMCO ENGINEERED SYSTEMS, INC ., a Delaware corporation (“ Engineered Systems ”), and TRIAD INTERNATIONAL MAINTENANCE CORPORATION , a Delaware corporation (“ TIMCO ” AID, Brice, Parent, Engine, Engineered Systems and TIMCO being collectively called the “ Borrowers ” and individually, a “ Borrower ”), the payment and performance of which Term Loans were guaranteed by AVIATION SALES DISTRIBUTION SERVICES COMPANY , a Delaware corporation (“ Distribution Services ”), AVIATION SALES LEASING COMPANY , a Delaware corporation (“ Leasing ”), AVIATION SALES PROPERTY MANAGEMENT CORP ., a Delaware corporation (“ Property Management ”), AVS/CAI, INC. , a Florida corporation (“ AVS/CAI ”), AVS/M-1, INC. , a Delaware corporation (“ AVS/M-1 ”), AVS/M-2, INC. , a Delaware corporation (“ AVS/M-2 ”), AVS/M-3, INC. , an Arizona corporation (“ AVS/M-3 ”), AVSRE, L.P. , a Delaware limited partnership (“ AVSRE ”), HYDROSCIENCE, INC. , a Texas corporation (“ Hydroscience ”), TMAS/ASI, INC ., an Arkansas corporation (“ TMAS/ASI ”), and WHITEHALL CORPORATION , a Delaware corporation (“ Whitehall ” Distribution Services, Leasing, Property Management, AVS/CAI, AVS/M-1, AVS/M-2, AVS/M-3, AVSRE, Hydroscience, TMAS/ASI and Whitehall being collectively called the “ Guarantors ” and, individually, a “ Guarantor ” and the Borrowers and the Guarantors being collectively called the “ Companies ” and, individually, a “ Company ”), the Companies and Hilco, Hilco made available to the Borrowers a term loan in the original principal amount of $8,000,000 (the “ Existing Subordinated Lienholder Term Loan ”) which was evidenced by that certain Term Note dated as of April 5, 2004 made by the Borrowers to Hilco in the face amount of $8,000,000 (the “ Existing Subordinated Lienholder Term Note ”).

B.          Pursuant to that certain General Assignment Agreement dated as of the date hereof by Hilco in favor of Subordinated Lienholder, Hilco has assigned to Subordinated Lienholder all of Hilco’s rights and obligations under the Existing Subordinated Lienholder Loan Agreement and the Subordinated Lienholder Documents and has endorsed over and delivered to Subordinated Lienholder the Existing Subordinated Lienholder Term Note.

C.         The Companies and the Subordinated Lienholder intend to amend and restate the Existing Subordinated Lienholder Loan Agreement in its entirety (as so amended and restated and as the same may be further amended, modified or supplemented from time to time, the “ Subordinated

Lienholder Loan Agreement ”) to, among other things, have the Subordinated Lienholder make available a new term loan (“ Term Loan A-2”) to be used by the Borrowers to provide working capital to the Borrowers and a new term loan (“ Term Loan B ”) the proceeds of which shall be used by the Borrowers to finance capital expenditures.

D.         Subordinated Lienholder and Senior Lienholder desire to amend the Intercreditor Agreement in order to, among other things, provide that Subordinated Lienholder shall be the holder of a first and prior lien on all assets purchased with the proceeds of Term Loan B.

NOW THEREFORE , In consideration of the mutual covenants contained herein and benefits to be derived herefrom, the Senior Lienholder and Subordinated Lienholder agree as follows:

“Notwithstanding the foregoing, it is hereby agreed that (i) any Collateral (herein, “ Term Loan B Collateral ”) purchased by any Company at any time and from time to time with the proceeds of advances made by Subordinated Liendholder to Borrowers under Term Loan B (as defined in the Subordinated Lienholder Loan Agreement), shall be at all times subject to a first priority Lien in favor of Subordinated Liendholder, superior to the Liens of the Senior Lienholder in such Term Loan B Collateral arising pursuant to the Senior Lienholder Documents, and (ii) the Liens of the Senior Lienholder in the Term Loan B Collateral shall be junior and subordinate to the Liens of the Subordinated Lienholder therein as security for all of the Subordinated Lienholders Obligations. Promptly after the funding of a Term Loan B advance, Subordinated Lienholder shall deliver, or cause Borrowers to deliver, to Senior Liendholder a schedule or other applicable description of the relevant Term Loan B Collateral.”

1.2        Section 5 of the Intercreditor Agreement shall be deleted in its entirety and the following shall be substituted therefor:

“5.         Application of Proceeds of Collateral . All proceeds of the Collateral received by or for the account of the Lienholders (whether by sale, casualty, condemnation or other disposition of the Collateral), shall be distributed to the Lienholders 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 Lienholders Obligations, except for the Senior Lienholders Excluded Obligations, even if the total amount of the Senior Lienholders Obligations exceeds the amount of the Senior Secured Debt Cap;

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

Third , with respect to all Collateral other than Term Loan B Collateral, after all of the Senior Lienholders Obligations, other than the Senior Lienholders Excluded Obligations, have been paid and satisfied in full and the Agent and the Senior Lienholders shall have no further obligation for the incurring of

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additional Senior Lienholders Obligations, to the Subordinated Lienholder for application to the Subordinated Lienholder Obligations;

Fourth , with respect to all Term Loan B Collateral, after all of the Subordinated Lienholder Obligations have been paid and satisfied in full and Subordinated Lienholders shall have no further obligation for the incurring of additional Subordinated Lienholder Obligations, to the Agent for application to the Senior Li