Document:

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                                                                     EXHIBIT 4.1

          AMENDED AND RESTATED CERTIFICATE OF DESIGNATIONS OF SERIES D
        SENIOR CONVERTIBLE PARTICIPATING PREFERRED STOCK OF AVIALL, INC.

         Pursuant to the provisions of Section 151(g) of the Delaware General
Corporation Law, Aviall, Inc., a Delaware corporation (the "Corporation"),
submits the following for the purpose of amending and restating the
Corporation's Certificate of Designations of Series D Senior Convertible
Participating Preferred Stock (the "Series D Certificate of Designations") filed
on December 21, 2001 with the Secretary of State of the State of Delaware to
adjust certain of the terms of the Corporation's Series D Senior Convertible
Participating Preferred Stock, par value $0.01 per share (the "Series D
Preferred Stock"):

         1. The name of the corporation is Aviall, Inc., a Delaware corporation
(the "Corporation").

         2. No shares of the Series D Preferred Stock have been issued.

         3. The Series D Certificate of Designations of the Corporation filed on
December 21, 2001 with the Secretary of State of the State of Delaware is hereby
amended and restated in its entirety as set forth on Exhibit A attached hereto
and incorporated herein by this reference (the "Amended and Restated Series D
Certificate of Designations").

         4. The Board of Directors of the Corporation duly adopted the following
resolutions amending and restating the Series D Certificate of Designations:

         "WHEREAS, pursuant to Section 151(g) of the Delaware General
Corporation Law the Board of Directors of Aviall, Inc., a Delaware corporation
(the "Corporation"), desires to amend and restate the Corporation's Certificate
of Designations of Series D Senior Convertible Participating Preferred Stock
(the "Series D Preferred Stock") as set forth on Exhibit A attached hereto; and

         WHEREAS, none of the authorized shares of the Corporation's Series D
Preferred Stock have been issued; now, therefore, be it

                  RESOLVED, that the Board of Directors of the Corporation
         hereby authorizes, adopts and approves the Amended and Restated
         Certificate of Designations of Series D Preferred Stock in the form
         attached hereto as Exhibit A; and, be it

                  FURTHER RESOLVED, that the executive officers of the
         Corporation be, and each of them hereby is, authorized and empowered to
         prepare, execute, attest and file with the Secretary of State of the
         State of Delaware the Amended

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         and Restated Certificate of Designations of Series D Preferred Stock in
         accordance with the applicable provisions of the Delaware General
         Corporation Law, subject to the approval of the holders of the
         Corporation's Series B Senior Convertible Participating Preferred
         Stock, and to take all actions that such executive officers deem
         necessary to amend and restate the Certificate of Designations of the
         Series D Preferred Stock as set forth in these resolutions."

5. The Amended and Restated Series D Certificate of Designations was duly
adopted in accordance with the provisions of Section 151(g) of the Delaware
General Corporation Law.

                                    * * * * *

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         IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by a duly authorized officer of the Corporation this 31st day of January,
2002.

                            Aviall, Inc.

                            By:    /s/ Jeffrey J. Murphy
                                   ---------------------------------------------
                            Name:  Jeffrey J. Murphy
                            Title: Senior Vice President, Law & Human Resources,
                                   Secretary & General Counsel

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                                    EXHIBIT A

                AMENDED AND RESTATED CERTIFICATE OF DESIGNATIONS

                                       OF

                    SERIES D SENIOR CONVERTIBLE PARTICIPATING
                                 PREFERRED STOCK

                                       OF

                                  AVIALL, INC.

                                   ----------

                         Pursuant to Section 151 of the
                General Corporation Law of the State of Delaware

                                   ----------

1. Certain Definitions.

                  Unless the context otherwise requires, the terms defined in
this paragraph 1 shall have, for all purposes of this resolution, the meanings
herein specified (with terms defined in the singular having comparable meanings
when used in the plural).

                  "Affiliate" means (i) with respect to any Person, any other
Person that directly or indirectly controls or manages, is controlled or managed
by, or is under common control or management with such Person, whether through
the ownership of equity interests, by contract or otherwise; and (ii) with
respect to an individual, in addition to any Person specified in clause (i), the
spouse, any parent or any child of such individual and any trust for the benefit
of such individual's spouse, parent or child.

                  "Annual Operating Plan" means the annual operating plan of the
Corporation established by the Corporation for each fiscal year, which shall
include, without limitation, the annual capital expenditure and other budgets of
the Corporation for such fiscal year.

                  "Beneficial Owner" has the meaning assigned to such term in
Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "Beneficially Owns" and "Beneficially Owned" shall have a
corresponding meaning.

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                  "Board of Directors" means the Board of Directors of the
Corporation.

                  "Business Day" means a day other than a Saturday or Sunday or
a day on which commercial banks in the City of New York are authorized or
obligated by law or executive order to close.

                  "Cash Dividends" shall have the meaning set forth in
subparagraph 3(b) below.

                  "Change of Control" means the occurrence of any of the
following:

                           (1) the direct or indirect sale, transfer, conveyance
                  or other disposition (other than by way of merger,
                  consolidation or transfer of the Company Voting Stock), in one
                  or a series of related transactions, of all or substantially
                  all of the properties or assets of the Corporation and its
                  Subsidiaries, taken as a whole, to any "person" (as that terms
                  is used in Section 13(d)(3) of the Exchange Act) other than
                  the Corporation or a wholly-owned Subsidiary of the
                  Corporation;

                           (2) the consummation of any transaction or series of
                  related transactions (including, without limitation, any
                  merger or consolidation) the result of which is that any
                  "person" (as defined above), other than the holders of the
                  Convertible Preferred Stock, becomes the Beneficial Owner,
                  directly or indirectly, of more than 30% of the Voting Stock
                  of the Corporation, measured by voting power rather than
                  number of shares;

                           (3) a "change of control" or other similar event
                  shall occur under any issue of Indebtedness with an aggregate
                  principal amount in excess of $10,000,000 of the Corporation
                  or its Subsidiaries; or

                           (4) during any period of twelve (12) consecutive
                  months after the Initial Issue Date, the individuals who at
                  the beginning of any such 12-month period constituted the
                  Board of Directors (the "Incumbent Board") cease for any
                  reason to constitute at least a majority of such Board;
                  provided that (i) any individual becoming a director whose
                  election, or nomination for election by the Corporation's
                  stockholders, was approved by a vote of the stockholders
                  having the specific right to designate such director
                  (including, without limitation, the exercise by the holders of
                  Convertible Preferred Stock of their right to elect directors)
                  and (ii) any director whose election to the Board of Directors
                  or whose nomination for election by the stockholders of the
                  Corporation was approved by majority vote of the Board of
                  Directors, shall, in each such case, be considered as though
                  such individual were a member of the Incumbent Board, but
                  excluding, as a member of the Incumbent Board, any such
                  individual whose initial assumption of office is in connection
                  with an actual or threatened election contest relating to the
                  election of the directors of the Corporation (as such terms
                  are used in Rule 14a-11 of Regulation 14A promulgated under
                  the Exchange Act) and further excluding any person who is an
                  affiliate or associate (as those terms are defined in the
                  General Rules and Regulations under the Exchange Act) of any
                  Person having

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                  or proposing to acquire beneficial ownership of twenty-five
                  percent (25%) or more of the Voting Stock of the Corporation;
                  or

                           (5) the approval by the stockholders of the
                  Corporation of a reorganization, merger or consolidation, in
                  each case, with respect to which all or substantially all of
                  the individuals and entities who were the respective
                  Beneficial Owners of the Voting Stock immediately prior to
                  such reorganization, merger or consolidation do not, following
                  such reorganization, merger or consolidation, Beneficially
                  Own, directly or indirectly, more than fifty percent (50%) of
                  the Voting Stock resulting from such reorganization, merger or
                  consolidation;

provided that the occurrence of any event identified in subparagraphs (1)
through (5) above that would otherwise be treated as a Change of Control shall
not constitute a Change of Control hereunder if (i) the Board of Directors, by
vote duly taken, and (ii) the holders of a majority of the outstanding shares of
Convertible Preferred Stock, by written consent, shall so determine.

                  "Change of Control Payment" shall have the meaning set forth
in paragraph 8 below.

                  "Closing Date" means December 21, 2001.

                  "Commission" means the United States Securities and Exchange
Commission.

                  "Common Equity" means all shares now or hereafter authorized
of any class of common stock of the Corporation, including the Common Stock, and
any other stock of the Corporation, howsoever designated, authorized after the
Initial Issue Date, which has the right (subject always to prior rights of any
class or series of preferred stock) to participate in the distribution of the
assets and earnings of the Corporation without limit as to per share amount.

                  "Common Stock" means the common stock, $0.01 par value per
share, of the Corporation.

                  "Conversion Date" shall have the meaning set forth in
subparagraph 5(b) below.

                  "Conversion Price" shall initially mean $5.80 and thereafter
shall be subject to adjustment from time to time pursuant to the terms of
paragraph 5 below.

                  "Convertible Preferred Stock" has the meaning set forth in
paragraph 2 below.

                  "Current Market Price" means, for a share of Common Stock on
any date, the average of Quoted Prices for ten (10) consecutive Trading Days
commencing fifteen (15) Trading Days before the date in question.

                  "Default Event" means the occurrence of any of the following
events: (i) the failure of the Corporation to declare and pay PIK Dividends for
any Dividend Period for which the Corporation is required to pay PIK Dividends
on the respective Dividend Payment Date; (ii) the failure of the Corporation to
redeem, on the Redemption Date, all shares of Convertible Preferred Stock, (iii)
the failure of the Corporation to purchase any shares of Convertible

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Preferred Stock that it is required to purchase pursuant to paragraph 8 hereof
on the Change of Control Payment Date or (iv) the material breach of the
provisions of paragraph 7 hereof; provided, that any Default Event referred to
in clause (iv) shall be deemed to have been cured in the event that the
Corporation rescinds the transaction or other occurrence giving rise to such
Default Event such that the economic, legal and/or other effect of such
transaction on the holders of the Convertible Preferred Stock on the rights of,
privileges and preferences of the Convertible Preferred Stock has been removed
or rescinded.

                  "Director" means a member of the Corporation's Board of
Directors.

                  "Dividend Payment Date" has the meaning set forth in
subparagraph 3(c) below.

                  "Dividend Period" means the period from, and including, the
Initial Issue Date to, but not including, the first Dividend Payment Date and
thereafter, each quarterly period from, and including, each Dividend Payment
Date to, but not including, the next Dividend Payment Date.

                  "Dividend Rate" means nine percent (9%) per annum of
Liquidation Preference; provided, however, that, in the event that a Default
Event shall have occurred and shall be continuing, the Dividend Rate shall
increase by 2% of the Liquidation Preference per annum (up to a maximum rate of
19%) for each full 30 day period during which such Default Event is continuing
until such Default Event shall have been cured.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

                  "Indebtedness" of any Person means (a) all liabilities and
obligations of such Person, contingent or otherwise (i) in respect of borrowed
money, (ii) evidenced by bonds, notes, debentures or similar instruments, (iii)
representing the balance deferred and unpaid of the purchase price of any
property or services, except those incurred in the ordinary course of business
that would constitute ordinarily a trade payable to trade creditors, (iv)
evidenced by bankers' acceptances, (v) for payment of money relating to leases
that are required to be capitalized for financial reporting purposes under
generally accepted accounting principles or (vi) evidenced by a letter of credit
or reimbursement obligation of such Person with respect to any letter of credit,
(b) all liabilities and obligations of others of the kind described in the
preceding clause (a) that such Person has guaranteed or that is otherwise its
legal liability or which are secured by the assets or property of such Person
and (c) all obligations of such Person to purchase, redeem or acquire any
capital stock (other than the Convertible Preferred Stock) arising at any time
prior to the date that is one hundred eighty (180) days after the Redemption
Date.

                  "Initial Issue Date" means the date that shares of Convertible
Preferred Stock are first issued by the Corporation.

                  "Junior Stock" means, for the purposes of paragraph 3 below,
Common Equity, and any class or series of stock of the Corporation which is not
entitled to receive any dividends in any Dividend Period unless all dividends
required to have been paid or declared and set apart for payment on the
Convertible Preferred Stock and any other Parity Stock shall have been so paid
or declared and set apart for payment, and for purposes of paragraph 4 below,
shall mean

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Common Equity and any class or series of stock of the Corporation which is not
entitled to receive any assets upon liquidation, dissolution or winding up of
the affairs of the Corporation until the Convertible Preferred Stock and any
other Parity Stock shall have received the entire amount to which such stock is
entitled upon such liquidation, dissolution or winding up.

                  "Liquidation Preference" shall mean $1,000 per share of
Convertible Preferred Stock.

                  "Parity Stock" means, for purposes of paragraph 3 below, and
any class or series of stock of the Corporation authorized after the Initial
Issue Date which is entitled to receive payment of dividends on a parity with
the Convertible Preferred Stock without preference or priority of one over the
other and, for purposes of paragraph 4 below, shall mean any class or series of
stock of the Corporation authorized after the Initial Issue Date which is
entitled to receive assets upon liquidation, dissolution or winding up of the
affairs of the Corporation on a parity with the Convertible Preferred Stock
without preference or priority of one over the other.

                  "Person" means any individual, corporation, association,
partnership, joint venture, limited liability company, trust, estate or other
entity.

                  "PIK Dividends" has the meaning set forth in subparagraph 3(b)
below.

                  "Pre-existing Debt" has the meaning set forth in subparagraph
7(c)(xiii) below.

                  "Preferred Stock Director" has the meaning set forth in
paragraph 7(d) below.

                  "Pricing Change" has the meaning set forth in subparagraph
5(g) below.

                  "Quoted Price" means, with respect to Common Stock, (i) the
last reported sales price of the Common Stock on the New York Stock Exchange or
(ii) if not listed on the New York Stock Exchange, the last reported sales price
of the Common Stock on such other principal exchange on which the Common Stock
is listed or admitted for trading or (iii) if not listed or admitted for trading
on a securities exchange, the last reported sales price for Common Stock as
reported by the National Association of Securities Dealers, Inc. Automatic
Quotations Systems - National Market System, or (iv) if not so reported or
listed or admitted for trading, the last reported bid price of the applicable
security in the over-the-counter market. In the event that the Quoted Price
cannot be determined as aforesaid, the Board of Directors of the Corporation
shall determine the Quoted Price on the basis of such quotations as it in good
faith considers appropriate. Such determination may be challenged in good faith
by holders of a majority of the shares of Convertible Preferred Stock then
outstanding, and any dispute shall be resolved at the prevailing party's cost,
by the determination of an investment banking firm of recognized national
standing selected by the Corporation and acceptable to such holders of a
majority of the shares of Convertible Preferred Stock, which determination shall
be made in good faith and be conclusive absent manifest error.

                  "Record Date" means the date designated by the Board of
Directors of the Corporation at the time a dividend is declared; provided,
however, that such Record Date shall not be more than sixty (60) days nor less
than ten (10) days prior to the respective Dividend

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Payment Date or such other date designated by the Board of Directors for the
payment of dividends.

                  "Redemption Date" means June 21, 2008, or such other later
date approved by the holders of a majority of the Convertible Preferred Stock.

                  "Redemption Price" means a price per share equal to the
Liquidation Preference per share, plus an amount equal to all cumulative
dividends accrued and unpaid on such share to the Redemption Date.

                  "Senior Debt" means the obligations of the Corporation and its
Subsidiaries in respect of all Indebtedness incurred under the Credit Agreement,
dated as of December 17, 2001, among Aviall Services, Inc., Aviall, Inc., the
lenders and issuers party thereto, and Citicorp USA, Inc., as amended, amended
and restated, extended, supplemental, refinanced or otherwise modified from time
to time, including any agreement extending the maturity of, refinancing or
replacing or otherwise restructuring all or any portion of the Indebtedness of
such agreement.

                  "Senior Note Purchase Agreement" means that certain Securities
Purchase Agreement dated as of December 17, 2001 by and among the Corporation,
Aviall Services, Inc., J. H. Whitney Mezzanine Fund, L.P. and the other
purchasers named therein.

                  "Series A Junior Preferred Stock" means the Series A Junior
Participating Preferred Stock, $0.01 par value per share, of the Corporation.

                  "Subsidiary" means, with respect to any specified Person:

                           (1) any corporation, association or other business
                  entity of which more than 50% of the total voting power of
                  shares of Voting Stock entitled (without regard to the
                  occurrence of any contingency) to vote in the election of
                  directors, managers or trustees thereof is at the time owned
                  or controlled, directly or indirectly, by such Person or one
                  or more of the other Subsidiaries of that Person (or a
                  combination thereof); and

                           (2) any partnership (a) the sole general partner or
                  the managing general partner of which is such Person or a
                  Subsidiary of such Person or (b) the only general partners of
                  which are such Person or one or more Subsidiaries of such
                  Person (or any combination thereof).

                  "Target Price" as of any date means the lesser of (i) the
Conversion Price as in effect on such date and (ii) the Current Market Price per
share of Common Stock on such date.

                  "Trading Day" means, with respect to any security, any day on
which any market in which the applicable security is then traded and in which a
Quoted Price may be ascertained is open for business.

                  "Voting Stock" as of any date means the capital stock of the
Corporation that is at the time entitled to vote in the election of the Board of
Directors of the Corporation.

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2. Number of Shares and Designation. One Hundred Sixty Thousand (160,000) shares
of the preferred stock, $0.01 par value per share, of the Corporation are hereby
constituted as a series of the preferred stock designated as Series D Senior
Convertible Participating Preferred Stock (the "Convertible Preferred Stock").

3. Dividends.

                  (a) The record holders of Convertible Preferred Stock shall be
entitled to receive dividends payable by the Corporation at the Dividend Rate.
Such dividends shall be cumulative from the Initial Issue Date and shall be
payable in arrears.

                  (b) Dividends on the Convertible Preferred Stock (other than
dividends payable pursuant to the second to last sentence of subparagraph 3(d))
payable during the period beginning on the first Dividend Payment Date and
ending on the first Dividend Payment Date on or following the fourth anniversary
of the Closing Date, shall be paid in fully paid and nonassessable shares of
Convertible Preferred Stock valued at $1,000 per share (such dividends paid in
kind (including any dividends payable in kind pursuant to the proviso in the
following sentence) being herein called "PIK Dividends"). Dividends on the
Convertible Preferred Stock payable thereafter shall be paid in cash (such
dividends being referred to as the "Cash Dividends"); provided, however, that,
to the extent that the Company fails to pay Cash Dividends for any Dividend
Period occurring after the first Dividend Payment Date following the fourth
anniversary of the Closing Date, the Company shall be required to pay in lieu
thereof dividends for such Dividend Period in additional fully paid and
nonassessable shares of Convertible Preferred Stock. Dividends of additional
shares of Convertible Preferred Stock shall be paid by delivering to the record
holders of Convertible Preferred Stock a number of shares of Convertible
Preferred Stock determined by dividing the total amount of the aggregate dollar
amount of dividends accrued and unpaid with respect to such record holder of
shares during the applicable Dividend Payment Period (rounded to the nearest
whole cent) by the Liquidation Preference. The Corporation shall not issue
fractional shares of Convertible Preferred Stock to which holders may become
entitled pursuant to this subparagraph, but in lieu thereof, the Corporation
shall deliver its check in an amount equal to the applicable fraction of the
Liquidation Preference. Any additional shares of Convertible Preferred Stock
issued pursuant to this paragraph shall be governed by this resolution and shall
be subject in all respects, except as to the date of issuance and date from
which dividends accrue and cumulate as set forth below, to the same terms as the
shares of Convertible Preferred Stock originally issued hereunder.

                  (c) Dividends on shares of Convertible Preferred Stock shall
accrue and be cumulative from and including the Initial Issue Date to and
including the date on which such shares shall have been converted into Common
Stock or redeemed pursuant to paragraph 6 hereof or repurchased pursuant to
paragraph 8 hereof. Such dividends shall accrue whether or not there shall be
(at the time such dividend becomes payable or at any other time) profits,
surplus or other funds of the Corporation legally available for the payment of
dividends. The PIK Dividends shall be paid whether or not declared and whether
or not there are profits, surplus or other funds of the Corporation legally
available for payment of dividends. The Cash Dividends shall be payable when, as
and if declared by the Board of Directors of the Corporation out of funds
legally available for the payment of dividends. Dividends shall be payable
quarterly in arrears on March 31, June 30, September 30, and December 31 of each
year (a "Dividend Payment Date"), commencing on the last day of the first
Dividend Payment Date following the Initial Issue Date, and for shares paid as

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PIK Dividends, commencing on the first Dividend Payment Date after such shares
are issued. If any Dividend Payment Date occurs on a day that is not a Business
Day, any accrued dividends otherwise payable on such Dividend Payment Date shall
be paid on the next succeeding Business Day. The amount of dividends payable on
Convertible Preferred Stock for each full Dividend Period shall be computed by
dividing by four (4) the annual dividend at the Dividend Rate set forth in
subparagraph 3(a) above. Dividends shall be paid to the holders of record of the
Convertible Preferred Stock as their names shall appear on the share register of
the Corporation on the Record Date for such dividend. Dividends payable in any
Dividend Period which is less than a full Dividend Period in length will be
computed on the basis of a ninety (90) day quarterly period and actual days
elapsed in such Dividend Period. Dividends on account of arrears for any past
Dividend Periods may be declared and paid at any time to holders of record on
the Record Date therefore. For any Dividend Period in which dividends are not
paid in full on the Dividend Payment Date first succeeding the end of such
Dividend Period, then on such Dividend Payment Date such accrued and unpaid
dividends shall be added to the Liquidation Preference of the Convertible
Preferred Stock effective at the beginning of the Dividend Period succeeding the
Dividend Period as to which such dividends were not paid and shall thereafter
accrue additional dividends in respect thereof at the rate set forth in
subparagraph 3(a) above until such accrued and unpaid dividends have been paid
in full.

                  (d) So long as ten percent (10%) of the shares of Convertible
Preferred Stock outstanding on the Initial Issue Date (after giving effect to
the issuance of all shares of Convertible Preferred Stock issued on the Initial
Issue Date) shall be outstanding, the Corporation shall not declare, pay or set
apart for payment on any Junior Stock any dividends whatsoever, whether in cash,
property or otherwise (other than dividends payable in shares of the class or
series upon which such dividends are declared or paid, or payable in shares of
Common Stock with respect to Junior Stock other than Common Stock, together with
cash in lieu of fractional shares), nor shall the Corporation make any
distribution on any Junior Stock, nor shall any Junior Stock be purchased,
redeemed or otherwise acquired by the Corporation or any of its Subsidiaries of
which it owns not less than a majority of the outstanding voting power nor shall
any monies be paid or made available for a sinking fund for the purchase or
redemption of any Junior Stock, unless all dividends to which the holders of
Convertible Preferred Stock shall have been entitled for all previous Dividend
Periods shall have been paid or declared and a sum of money or PIK Dividends, as
applicable (as provided in subparagraph 3(b)), sufficient for the payment
thereof has been set apart. In addition, in the event that the Corporation
declares and/or pays any dividend or other distribution on the Common Stock
(other than a dividend payable solely in shares of Common Stock), the
Corporation shall, at the time of such declaration and payment, declare and pay
a dividend or other distribution on the Convertible Preferred Stock consisting
of the dividend or distribution that would have been payable on the shares of
Common Stock had the Convertible Preferred Stock been converted into Common
Stock immediately prior to the record date for such dividend or distribution,
or, if no such record was taken, the date as of which the record holders of
Common Stock entitled to such dividend or distribution were determined. Any
dividend or distribution declared, or required to be declared or to be paid, on
the Convertible Preferred Stock shall be deemed to have "accrued" on the
Convertible Preferred Stock for all purposes of this Paragraph 3 and shall
remain an "accrued dividend" on the Convertible Preferred Stock for all purposes
of this Section until paid.

                  (e) In the event that full Cash Dividends are not paid or made
available to the holders of all outstanding shares of Convertible Preferred
Stock and of any Parity Stock on

<PAGE>

the applicable Dividend Payment Date and funds available for payment of Cash
Dividends shall be insufficient to permit payment in full to holders of all such
stock of the full preferential amounts to which they are then entitled, then the
entire amount available for payment of Cash Dividends shall be distributed
ratably among all such holders of Convertible Preferred Stock and of any Parity
Stock in proportion to the full amount to which they would otherwise be
respectively entitled.

4. Distributions Upon Liquidation, Dissolution or Winding Up.

                  (a) In the event of any voluntary or involuntary liquidation,
dissolution or other winding up of the affairs of the Corporation (in connection
with the bankruptcy or insolvency of the Corporation or otherwise), before any
payment or distribution of the assets of the Corporation (whether capital or
surplus) shall be made to or set apart for the holders of Junior Stock, the
holders of Convertible Preferred Stock shall be entitled to be paid out of the
assets of the Corporation in cash or property at its fair market value as
determined by the Board of Directors of the Corporation an amount per share
equal to the Liquidation Preference plus an amount equal to all dividends
accrued and unpaid thereon to the date of such liquidation or dissolution or
such other winding up.

                  (b) If, upon any such liquidation, dissolution or other
winding up of the affairs of the Corporation, the assets of the Corporation
shall be insufficient to permit the payment in full of the Liquidation
Preference per share plus an amount equal to all dividends accrued and unpaid on
the Convertible Preferred Stock and the full liquidating payments on all Parity
Stock, then the assets of the Corporation or the proceeds thereof shall be
ratably distributed among the holders of Convertible Preferred Stock and of any
Parity Stock in proportion to the full amounts to which they would otherwise be
entitled if all amounts payable thereon were paid in full.

                  (c) In the event of any voluntary or involuntary liquidation,
dissolution or other winding up of the affairs of the Corporation upon
completion of the distributions and payments required by subparagraph 4(a) and
any other distributions and payments that may be required with respect to any
other series of preferred stock that may be authorized after the Initial Issue
Date, the remaining assets of the Corporation shall be distributed among the
holders of the then outstanding shares of Common Stock and Convertible Preferred
Stock, pro rata based on the number of shares of Common Stock held by each such
holder (where, for this purpose, the holders of the Convertible Preferred Stock
shall be deemed to hold the number of shares of Common Stock then issuable upon
conversion in full of such shares of Convertible Preferred Stock).

                  (d) Written notice of any liquidation, dissolution or winding
up of the Corporation, stating the payment date or dates when and the place
where the amounts distributable in such circumstances shall be payable, shall be
given by first class mail, postage prepaid, not less than 30 days prior to any
payment date stated therein, to the holders of record of the shares of
Convertible Preferred stock at their address as the same shall appear in the
records of the Corporation.

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5. Conversion Rights.

                  (a) A holder of shares of Convertible Preferred Stock shall
have the right, at such holder's option, to convert all or any portion of its
shares of Convertible Preferred Stock into Common Stock at any time before the
close of business on the Business Day preceding the Redemption Date (unless the
Corporation shall default in payment of the Redemption Price, in which case, the
right of conversion shall be reinstated). For the purposes of conversion, each
share of Convertible Preferred Stock shall be valued at the Liquidation
Preference plus all accrued and unpaid dividends thereon through the Conversion
Date, which shall be divided by the Conversion Price in effect on the Conversion
Date to determine the number of shares issuable upon conversion. Immediately
following such conversion, the rights of the holders of converted Convertible
Preferred Stock shall cease and the persons entitled to receive the Common Stock
upon the conversion of Convertible Stock shall be treated for all purposes as
having become the owners of such Common Stock.

                  (b) To convert Convertible Preferred Stock, a holder must (i)
surrender the certificate or certificates evidencing the shares of Convertible
Preferred Stock to be converted, duly endorsed at the principal office of the
Corporation or transfer agent for the Convertible Preferred Stock, if any, (ii)
notify the Corporation at such office that such holder elects to convert
Convertible Preferred Stock, and the number of shares such holder wishes to
convert, (iii) state in writing the name or names in which such holder wishes
the certificate or certificates for shares of Common Stock to be issued, and
(iv) pay any transfer or similar tax if required (provided, however, that no
such payment shall be required if the Common Stock issuable upon conversion is
to be issued in the name of the converting holder of Convertible Preferred
Stock). In the case of lost or destroyed certificates evidencing ownership of
shares of Convertible Preferred Stock to be surrendered for conversion, the
holder shall submit such proof of loss or destruction and, if requested by the
Corporation, an appropriate indemnity, reasonably required by the Corporation.
In the event that a holder fails to notify the Corporation of the number of
shares of Convertible Preferred Stock which such holder wishes to convert, such
holder shall be deemed to have elected to convert all shares represented by the
certificate or certificates surrendered for conversion. The date on which the
holder satisfies all those requirements is the "Conversion Date." As soon as
practicable after the Conversion Date, the Corporation shall deliver or shall
deliver through its transfer agent a certificate for the number of full shares
of Common Stock issuable upon the conversion, a check for any fractional share
and a new certificate representing the unconverted portion, if any, of the
shares of Convertible Preferred Stock represented by the certificate or
certificates surrendered for conversion. The person in whose name the Common
Stock certificate is registered shall be treated as the stockholder of record on
and after the Conversion Date until such time as record ownership is
transferred. All shares of Common Stock issuable upon conversion of the
Convertible Preferred Stock shall be fully paid and nonassessable. In the case
of Convertible Preferred Stock that has been converted after any Record Date but
before the next succeeding Dividend Payment Date, dividends that are payable on
such Dividend Payment Date shall be payable on such Dividend Payment Date in an
amount equal to the pro rata portion of the Dividend for the portion of the
Dividend Period that such Convertible Preferred Stock was outstanding, and such
dividends shall be paid to the Person who was the holder of such Convertible
Preferred Stock on such Record Date (and shall not constitute "accrued and
unpaid dividends" for purposes of paragraph 5(a)). No other payment or
adjustment for dividends, or for any dividends in respect of shares of Common
Stock shall be made upon conversion. Holders of Common Stock issued upon

<PAGE>

conversion shall not be entitled to receive any dividend payable to holders of
Common Stock as of any record time before the close of business on the
Conversion Date. If a holder of Convertible Preferred Stock converts more than
one share at a time the number of full shares of Common Stock issuable upon
conversion shall be based on the total number of all shares of Convertible
Preferred Stock converted.

                  (c) The Corporation shall not issue a fractional share of
Common Stock upon conversion of Convertible Preferred Stock. Instead, the
Corporation shall deliver a check for an amount equal to the value of the
fractional share. The value of a fraction of a share is determined by
multiplying the Current Market Price of the Common Stock as of the Conversion
Date by the fraction, rounded to the nearest cent.

                  (d) A holder delivering Convertible Preferred Stock for
conversion will not be required to pay any taxes or duties in respect of the
issue or delivery of Common Stock on conversion but will be required to pay any
tax or duty that may be payable in respect of any transfer involved in the issue
or delivery of the shares of Common Stock. Certificates representing shares of
Common Stock will not be issued or delivered unless all taxes and duties, if
any, payable by the holder have been paid.

                  (e) The Corporation has reserved and shall continue to reserve
out of its authorized but unissued Common Stock or its Common Stock held in
treasury enough shares of Common Stock to permit the conversion of the
Convertible Preferred Stock in full. All shares of Common Stock which may be
issued upon conversion of Convertible Preferred Stock shall be fully paid and
nonassessable. The Corporation will comply with all securities laws regulating
the offer and delivery of shares of Common Stock upon conversion of Convertible
Preferred Stock and will list such shares on each national securities exchange
on which the Common Stock is listed.

                  (f) If the Corporation, after the Closing Date:

                           (i) pays a dividend or makes a distribution on its
Common Stock in shares of its Common Stock;

                           (ii) subdivides its outstanding shares of Common
Stock into a greater number of shares;

                           (iii) combines its outstanding shares of Common Stock
into a smaller number of shares; or

                           (iv) issues by reclassification of its Common Stock
any shares of its capital stock;

then the Conversion Price (as in effect immediately prior to such action) shall
be proportionately adjusted so that the holder of Convertible Preferred Stock
thereafter converted may receive for the same aggregate Conversion Price the
aggregate number and kind of shares of capital stock of the Corporation that
such holder would have owned immediately following such action if such holder
had converted Convertible Preferred Stock immediately prior to such action. The
adjustment shall become effective immediately after the record date in the case
of dividend or distribution and immediately after the effective date of a
subdivision, combination or reclassification. Such

<PAGE>

adjustment shall be made successively whenever any event listed above shall
occur. If, after an adjustment referred to in clauses (i) through (iv) above, a
holder of Convertible Preferred Stock upon conversion of it may receive shares
of two or more classes of capital stock of the Corporation, the Corporation
shall determine the allocation of the Conversion Price between the classes of
capital stock. After such allocation, the conversion rights and the Conversion
Price with respect to each class of capital stock shall thereafter be subject to
adjustment on terms comparable to those applicable to Common Stock in this
subparagraph 5(f).

                  (g) If at any time or from time to time after the Closing Date
but on or before the first anniversary of the Closing Date, the Corporation
issues or sells, or is deemed by the provisions of this subparagraph 5(g) to
have issued or sold, Additional Shares of Common Stock, otherwise than in
connection with a transaction described in subparagraph 5(f), for an Effective
Price (as hereinafter defined) that is less than the Conversion Price in effect
immediately prior to such issue or sale, then, and in each such case, the
Conversion Price shall be reduced, as of the close of business on the date of
such issue or sale, to the Effective Price at which such Additional Shares of
Common Stock are so issued or sold. If, at any time or from time to time after
the first anniversary of the Closing Date, the Corporation issues or sells, or
is deemed by the provisions of this subparagraph 5(g) to have issued or sold
Additional Shares of Common Stock, otherwise than in connection with a
transaction described in subparagraph 5(f), for an Effective Price that is less
than the Target Price in effect prior to such issue or sale, then, and in each
such case, the Conversion Price shall be reduced, as of the close of business on
the date of such issue or sale, to the price obtained by multiplying such
Conversion Price by a fraction:

                           (i) The numerator of which shall be the sum of (A)
the number of shares of Common Stock outstanding immediately prior to such issue
or sale of Additional Shares of Common Stock plus (B) the quotient obtained by
dividing the Aggregate Consideration Received (as hereinafter defined) by the
Company for the total number of Additional Shares of Common Stock so issued or
sold (or deemed so issued and sold) by the Target Price in effect immediately
prior to such issue or sale; and

                           (ii) The denominator of which shall be the sum of (A)
the number of shares of Common Stock outstanding immediately prior to such issue
or sale plus (B) the number of Additional Shares of Common Stock so issued or
sold (or deemed so issued and sold).

                  For the purpose of making any adjustment required under this
subparagraph 5(g):

                  "Additional Shares of Common Stock" shall mean all shares of
Common Stock issued by the Corporation, whether or not subsequently reacquired
or retired by the Company, other than (i) shares of Common Stock issued or
issuable upon conversion of Convertible Preferred Stock (including without
limitation the issuance of any securities as part of any anti-dilution
adjustment made with respect to any securities issued pursuant to the Senior
Note Purchase Agreement), (ii) shares of Common Stock issuable upon conversion
of Convertible Securities outstanding as of the Closing Date or upon exercise of
Rights or Options either outstanding on the Closing Date or pursuant to Options
described in clauses (i), (ii) or (iii) of the definition of Rights or Options,
and (iii) shares of capital stock issued pursuant to the terms and conditions of
the Senior Note Purchase Agreement.

<PAGE>

                  The "Aggregate Consideration Received" by the Corporation for
any issue or sale (or deemed issue or sale) of securities shall (A) to the
extent it consists of cash, be computed at the amount of cash received by the
Corporation in connection with such issuance or sale; (B) to the extent it
consists of property other than cash, be computed at the fair market value of
that property; (C) if Additional Shares of Common Stock, Convertible Securities
or Rights or Options to purchase either Additional Shares of Common Stock or
Convertible Securities are issued or sold together with other stock or
securities or other assets of the Corporation for a consideration which covers
both, be computed as the portion of the consideration so received that may be
reasonably determined in good faith by the Board of Directors to be allocable to
such Additional Shares of Common Stock, Convertible Securities or Rights or
Options; and (D) if Additional Shares of Common Stock are issued or sold in a
public offering or private placement, the consideration shall be deemed to be
the amount of cash paid therefor before deducting therefrom any discounts,
commissions or placement fees payable by the Corporation to any underwriter or
placement agent in connection with the issuance and sale thereof.

                  "Convertible Securities" shall mean stock or other securities
convertible into or exchangeable for shares of Common Stock.

                  The "Effective Price" of Additional Shares of Common Stock
shall mean the quotient determined by dividing the Aggregate Consideration
Received, or deemed to have been received, by the Corporation under this
subparagraph 5(g), for the issue of such Additional Shares of Common Stock by
the total number of Additional Shares of Common Stock issued or sold, or deemed
to have been issued or sold, by the Corporation under this subparagraph 5(g).

                  "Rights or Options" shall mean warrants, options or other
rights to purchase or acquire shares of Common Stock or Convertible Securities,
other than (i) options to purchase up to 100,000 shares of Common Stock (and the
issuance of shares of Common Stock issuable upon exercise of such Options)
issued pursuant to the Corporation's Amended and Restated 1998 Directors Stock
Plan, the Corporation's 1998 Stock Incentive Plan, the Corporation's
Non-Qualified Stock Option Agreement, or the Corporation's Stock Incentive Plan
to current employees of the Corporation or its Subsidiaries with a per share
exercise price equal to or greater than the fair market value of one share of
Common Stock on the date of grant, (ii) Options to purchase up to 100,000 shares
of Common Stock (and the issuance of shares of Common Stock issuable upon
exercise of such Options) issued pursuant to the Corporation's Amended and
Restated 1998 Directors Stock Plan, the Corporation's 1998 Stock Incentive Plan,
the Corporation's Non-Qualified Stock Option Agreement, or the Corporation's
Stock Incentive Plan to employees of the Corporation or its Subsidiaries hired
after the Closing Date with an exercise price per share equal to or greater than
the fair market value of one share of Common Stock on the date of grant and
(iii) warrants to purchase up to 1,750,000 shares of Common Stock issued in lieu
of the issuance of Common Stock pursuant to the terms of the Senior Note
Purchase Agreement (the "Note Purchase Warrants").

                  For the purpose of making any adjustment to the Conversion
Price required under this subparagraph 5(g), if after the Closing Date, the
Corporation issues or sells any Rights or Options or Convertible Securities and
if the Effective Price of the shares of Common Stock issuable upon exercise of
such Rights or Options and/or the conversion or exchange of Convertible
Securities (computed without reference to any additional or similar protective
or

<PAGE>

antidilution clauses) is less than the Conversion Price, then the Corporation
shall be deemed to have issued, at the time of the issuance of such Rights,
Options or Convertible Securities, that number of Additional Shares of Common
Stock that is equal to the maximum number of shares of Common Stock issuable
upon exercise or conversion of such Rights, Options or Convertible Securities
upon their issuance and to have received, as the Aggregate Consideration
Received for the issuance of such shares, an amount equal to the total amount of
the consideration, if any, received by the Corporation for the issuance of such
Rights or Options or Convertible Securities, plus, in the case of such Rights or
Options, the minimum amounts of consideration, if any, payable to the
Corporation upon the exercise in full of such Rights or Options, plus, in the
case of Convertible Securities, the minimum amounts of consideration, if any,
payable to the Corporation (other than by cancellation of liabilities or
obligations evidenced by such Convertible Securities) upon the conversion or
exchange thereof; provided that (i) if the minimum amounts of such consideration
cannot be ascertained, but are a function of antidilution or similar protective
clauses, then the Corporation shall be deemed to have received the minimum
amounts of consideration without reference to such clauses, and (ii) if the
minimum amount of consideration payable to the Corporation upon the exercise of
Rights or Options or the conversion or exchange of Convertible Securities is
reduced over time or upon the occurrence or non-occurrence of specified events
other than by reason of antidilution or similar protective adjustments, then the
Effective Price shall be recalculated using the figure to which such minimum
amount of consideration is reduced. On any change ("Pricing Change") in the
number of shares of Common Stock deliverable upon exercise of any Rights or
Options or the conversion or exchange of any Convertible Securities or any
change in the consideration to be received by the Corporation upon such
exercise, conversion or exchange, including, but not limited to, a change
resulting from the antidilution provisions thereof, the Conversion Price as then
in effect shall forthwith be readjusted to such Conversion Price as would have
been obtained had the unexercised portion of such Rights or Options or
Convertible Securities been originally issued with the exercise or conversion
price in effect following such Pricing Change. On the expiration or cancellation
of any Rights or Options that are unexercised, or the termination of the right
to convert or exchange any such Convertible Securities, if the Conversion Price
shall have been adjusted upon the issuance thereof, the Conversion Price shall
forthwith be readjusted to such Conversion Price as would have been obtained had
an adjustment been made upon the issuance of such Rights or Options or such
Convertible Securities on the basis of the issuance of only the number of shares
of Common Stock actually issued upon the exercise of such Rights or Options or
upon the conversion or exchange of such Convertible Securities. No adjustment of
the Conversion Price shall be made as a result of the actual issuance of shares
of Common Stock on the exercise of any such Rights or Options or the conversion
or exchange of any such Convertible Securities. Notwithstanding any provision
hereof to the contrary, in the event that the number of shares of Common Stock
issuable upon exercise of the Note Purchase Warrants is increased as a result of
any adjustment to the Conversion Price pursuant to this subparagraph 5(g) (a
"Note Purchase Warrant Adjustment"), the Note Purchase Warrant Adjustment shall
be deemed to constitute an issuance by the Corporation without consideration of
a number of shares of Common Stock equal to such increase in the number of
shares of Common Stock issuable upon exercise of the Note Purchase Warrants.

                  (h) In case of any consolidation, amalgamation, arrangement or
merger of the Corporation with or into another Person or any merger of another
Person with or into the Corporation (other than a transaction to which paragraph
5(f) applies), or in case of any sale or

<PAGE>

transfer of all or substantially all of the assets of the Corporation, each
share of Convertible Preferred Stock then outstanding shall, without the consent
of the holder of any Convertible Preferred Stock, become convertible only into
the kind and amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by a holder of the number of shares of
Common Stock (and other securities, if applicable) into which such Convertible
Preferred Stock was convertible immediately prior thereto (assuming such holder
of Common Stock (and other securities, if applicable) failed to exercise any
rights of election and that such Convertible Preferred Stock was then
convertible). Concurrently with the consummation of such transaction, the
corporation formed by or surviving any such consolidation or merger if other
than the Company, or the person to which such sale or conveyance shall have been
made, shall enter into a supplemental agreement so providing and further
providing for adjustments which shall be as equivalent as may be practicable to
the adjustments provided for in this Section.

                  (i) For purposes of any computation respecting consideration
received pursuant to a transaction described or contemplated by this paragraph
5, whenever this Certificate of Designation calls for the determination of "fair
market value," such fair market value shall be determined in good faith by the
Board of Directors as evidenced by a written resolution thereof, and subject to
the provisions of subparagraph 5(o) below; and

                  (j) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Conversion Price. Any adjustments which by reason of this subparagraph 5(j)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this paragraph 5 shall be made
to the nearest cent or to the nearest 1/100th of a share, as the case may be.

                  (k) The Corporation shall take no action that would cause any
adjustment under this paragraph 5 that would reduce the Conversion Price below
the par value of the Common Stock.

                  (l) Whenever the Conversion Price is adjusted, the Corporation
shall promptly mail to holders of Convertible Preferred Stock, first class,
postage prepaid, a notice of the adjustment and a certificate from the
Corporation's independent public accountants briefly stating the facts requiring
the adjustment and the manner of computing it. Subject to subparagraph 5(o)
below, the certificate shall be conclusive evidence that the adjustment is
correct.

                  (m) The Corporation from time to time may, by a vote of
two-thirds of the Board of Directors reduce the Conversion Price by any amount
for any period of time if the period is at least twenty (20) Business Days and
if the reduction is irrevocable during the period, but in no event may the
Conversion Price be less than the par value of a share of Common Stock. Whenever
the Conversion Price is so reduced, the Corporation shall mail to holders of
Convertible Preferred Stock a notice of the reduction. The Corporation shall
mail the notice first class, postage prepaid, at least 20 days before the date
the reduction in the Conversion Price is to take effect. The notice shall state
the reduced Conversion Price and the period it will be in effect. A reduction of
the Conversion Price pursuant to this subparagraph 5(m) does not change or
adjust the Conversion Price otherwise in effect for purposes of subparagraphs
5(f) and 5(g) above.

<PAGE>

                  (n) If:

                           (i) the Corporation takes any action that would
require an adjustment in the Conversion Price pursuant to clause (iv) of
subparagraph 5(f) above;

                           (ii) the Corporation consolidates or merges with, or
transfers all or substantially all of its assets to, another corporation, and
stockholders of the Corporation must approve the transaction; or

                           (iii) there is a dissolution or liquidation of the
Corporation;

a holder of Convertible Preferred Stock may want to convert such stock into
shares of Common Stock prior to the record date for or the effective date of
such transaction. Therefore, the Corporation shall mail to such holders a
notice, first class, postage prepaid, stating the proposed record or effective
date, as the case may be. The Corporation shall mail such notice at least twenty
(20) days before such date.

                  (o) Except as provided in the immediately following sentence,
any determination that the Corporation or its Board of Directors must make
pursuant to this paragraph 5 shall be conclusive. Whenever the Corporation or
its Board of Directors shall be required to make a determination under this
paragraph 5, such determination shall be made in good faith and may be
challenged in good faith by the holders of a majority of the shares of
Convertible Preferred Stock then outstanding (with any shares held by the
Corporation or any of its Affiliates not being considered to be outstanding for
purposes of this Certificate of Designation), and any dispute shall be resolved,
at the prevailing party's expense, by an investment banking firm of recognized
national standing selected by the Corporation and acceptable to such holders of
a majority of the shares of Convertible Preferred Stock.

                  (p) All shares of Convertible Preferred Stock converted
pursuant to this paragraph 5 shall be retired and shall be restored to the
status of authorized and unissued shares of preferred stock, without designation
as to series and may thereafter be reissued as shares of any series of preferred
stock other than Convertible Preferred Stock.

                  (q) The Corporation shall not avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but shall at all times in good faith assist in
carrying out all such action as may be reasonably necessary or appropriate in
order to protect the conversion rights of the holders of the Convertible
Preferred Stock against impairment.

6. Redemption by the Corporation.

                  (a) The Corporation shall (subject to the legal availability
of funds therefore) be required to redeem, at the Redemption Price, all
outstanding shares of the Convertible Preferred Stock on the Redemption Date.

                  (b) Notice of such redemption shall be sent by or on behalf of
the Corporation not more than sixty (60) days nor less than thirty (30) days
prior to the Redemption Date, by first class mail, postage prepaid, to all
holders of record of the Convertible Preferred Stock at their respective last
addresses as they shall appear on the books of the Corporation; provided,
however, that no failure to give such notice or any defect therein or in the
mailing thereof shall

<PAGE>

(i) relieve the Corporation from its obligation to redeem the Convertible
Preferred Stock pursuant to this paragraph 6 or (ii) affect the validity of the
proceedings for the redemption of any shares of Convertible Preferred Stock;
provided that the Corporation shall be obligated in accordance with this
paragraph 6 to redeem shares of Convertible Preferred Stock held by any holder
to whom the Corporation has failed to give notice or as to whom notice was
defective. In addition to any information required by law or by the applicable
rules of any exchange upon which Convertible Preferred Stock may be listed or
admitted to trading, such notice shall state: (i) the Redemption Date; (ii) the
Redemption Price; (iii) the place or places in the United States where
certificates for such shares are to be surrendered for payment of the Redemption
Price; (iv) that dividends on the shares to be redeemed will cease to accrue on
the Redemption Date; (v) the Conversion Price; (vi) that Convertible Preferred
Stock called for redemption may be converted at any time before the close of
business on the Redemption Date; and (vii) that holders of Convertible Preferred
Stock must satisfy the requirements of paragraph 5 above if such holders desire
to convert such shares.

                  (c) On or prior to each Redemption Date, the Corporation shall
deposit the Redemption Price for all shares of Convertible Preferred Stock not
yet redeemed or converted with a bank or trust corporation having aggregate
capital and surplus in excess of $100,000,000 as a trust fund for the benefit of
the respective holders of the Convertible Preferred Stock, with irrevocable
instructions and authority to the bank or trust corporation to publish the
notice of redemption thereof and pay the Redemption Price for such shares to
their respective holders on or after the Redemption Date, upon receipt of
notification from the Corporation that such holder has surrendered his, her or
its share certificate to the Corporation pursuant to subparagraph 6(b) above.

                  (d) If notice has been mailed in accordance with subparagraph
6(b) above and provided that, on or before the Redemption Date, all funds
necessary for such redemption shall have been set aside by the Corporation,
separate and apart from its other funds in trust for the pro rata benefit of the
holders of the Convertible Preferred Stock, so as to be, and to continue to be
available therefor, then, from and after the Redemption Date, dividends on the
shares of the Convertible Preferred Stock shall cease to accrue, and said shares
shall no longer be deemed to be outstanding and shall not have the status of
shares of Convertible Preferred Stock, and all rights of the holders thereof as
shareholders of the Corporation (except the right to receive from the
Corporation the Redemption Price) shall cease. Upon surrender, in accordance
with said notice, of the certificates for any shares so redeemed (properly
endorsed or assigned for transfer, if the Corporation shall so require and the
notice shall so state), such shares shall be redeemed by the Corporation at the
Redemption Price.

                  (e) Any funds deposited with a bank or trust Corporation for
the purpose of redeeming Convertible Preferred Stock shall be irrevocable except
that:

                           (i) the Corporation shall be entitled to receive from
such bank or trust Corporation the interest or other earnings, if any, earned on
any money so deposited in trust, and the holders of any shares redeemed shall
have no claim to such interest or other earnings; and

                           (ii) any balance of monies so deposited by the
Corporation and unclaimed by the holders of the Convertible Preferred Stock
entitled thereto at the expiration of two (2) years from the applicable
Redemption Date shall be repaid, together with any interest or other earnings
earned thereon, to the Corporation, and after any such repayment, the holders of
the shares

<PAGE>

entitled to the funds so repaid to the Corporation shall look only to the
Corporation for payment without interest or other earnings.

                  (f) No Convertible Preferred Stock may be redeemed except with
funds legally available for the payment of the Redemption Price. If, upon the
Redemption Date, the assets of the Corporation legally available to redeem the
Convertible Preferred Stock shall be insufficient to redeem all outstanding
shares of Convertible Preferred Stock, (i) the Corporation shall redeem that
number of shares of Convertible Preferred Stock that may be redeemed with the
assets of the Corporation legally available to redeem the Convertible Preferred
Stock (pro rata among the holders of Convertible Preferred Stock based on the
relative number of shares of Convertible Preferred Stock held by such holders)
and (ii) any unredeemed shares shall be carried forward and shall be redeemed at
such time as funds are legally available to so redeem such shares. All shares of
Convertible Preferred Stock which are subject to redemption hereunder but which
have not been redeemed due to insufficient legally available funds and assets
shall continue to be outstanding and entitled to all dividends, liquidation,
conversion and other rights, preferences and privileges of the Convertible
Preferred Stock until such shares are converted or redeemed.

                  (g) All shares of Convertible Preferred Stock redeemed
pursuant to this paragraph 6 shall be retired and shall be restored to the
status of authorized and unissued shares of preferred stock, without designation
as to series and may thereafter be reissued as shares of any series of preferred
stock other than shares of Convertible Preferred Stock.

                  (h) Except as specifically provided in this paragraph 6, the
Convertible Preferred Stock shall not be redeemable.

7. Voting Rights.

           In addition to any voting rights provided by law, the holders of
shares of Convertible Preferred Stock shall have the following voting rights:

                  (a) So long as any shares of the Convertible Preferred Stock
remain outstanding, each share of Convertible Preferred Stock shall entitle the
holder thereof to vote on all matters voted on by holders of Common Stock,
voting together with the Common Stock as a single class (together with all other
classes and series of stock of the Corporation that are entitled to vote as a
single class with the Common Stock) at all meetings of the stockholders of the
Corporation, or by written consent of the minimum number of shares required to
take such action pursuant to Section 228 of the Delaware General Corporation
Law. In any vote with respect to which the Convertible Preferred Stock shall
vote with the holders of Common Stock as a single class together with all other
classes and series of stock of the Corporation that are entitled to vote as a
single class with the Common Stock, each share of Convertible Preferred Stock
shall entitle the holder thereof to cast the number of votes equal to the number
of votes which could be cast in such vote by a holder of the number of shares of
Common Stock into which such share of Convertible Preferred Stock is convertible
on the record date of such vote or, if no such record date is established, on
the date any written consent of the stockholders is solicited. Such voting right
of the holders of the Convertible Preferred Stock may be exercised at any annual
meeting of stockholders, any special meeting of stockholders, or by written
consent of the minimum number of shares required to take such action pursuant to
Section 228 of the Delaware General Corporation Law.

<PAGE>

                  (b) On any matter on which the holders of Convertible
Preferred Stock are entitled by law or under the Certificate of Incorporation to
vote separately as a class, each such holder shall be entitled to one vote for
each share held, and such matter shall be determined by a majority of the votes
cast unless the General Corporation Law of the State of Delaware or this
Certificate of Designations requires approval by a higher percentage.

                  (c) During such time as ten percent (10%) of the shares of
Convertible Preferred Stock outstanding on the Initial Issue Date (after giving
effect to the issuance of all shares of Convertible Preferred Stock issued on
the Initial Issue Date) is outstanding, the Corporation will not, without the
affirmative vote or consent of the holders of at least a majority of the issued
and outstanding shares of Convertible Preferred Stock voting together as a
separate class:

                      (i) amend, modify, alter, repeal or waive the application
           of (including by way of merger, consolidation, combination or
           otherwise) any provision of the Certificate of Incorporation or
           by-laws of the Corporation or any of its Subsidiaries in any manner
           that adversely effects the powers, rights, preferences or privileges
           of the holders of the Convertible Preferred Stock or enter into any
           agreement or take any other corporate action (or permit any of its
           Subsidiaries to enter into any agreement or take any corporate
           action) which would in any way amend, modify, alter, repeal or waive
           the powers, rights, preferences or privileges of the Convertible
           Preferred Stock;

                      (ii) [RESERVED];

                      (iii) create, authorize or issue (including on conversion
           or exchange of any convertible or exchangeable securities or by
           reclassification) (A) any class or series of stock ranking senior to
           or on parity with the Convertible Preferred Stock as to payment of
           dividends or payments or distributions upon voluntary or involuntary
           liquidation, dissolution or winding-up of the Corporation or (B) any
           class or series of stock which the Corporation or any of its
           Subsidiaries is obligated to purchase, redeem, defease or otherwise
           retire for value (including, without limitation, any obligation to
           purchase any such stock upon the occurrence of a Change of Control or
           similar event), or with respect to which the Corporation or any of
           its Subsidiaries is required to make any other payment or
           distribution, at any time prior to the date that is 180 days after
           the Redemption Date;

                      (iv) permit any Subsidiary of the Corporation to create,
           authorize or issue (including on conversion or exchange of any
           convertible or exchangeable securities or by reclassification) (A)
           any class or series of stock ranking senior to the common stock or
           other common equity securities of such Subsidiary as to dividends or
           payments or distributions upon voluntary or involuntary liquidation,
           dissolution or winding-up of such Subsidiary or (B) any class or
           series of stock which the Corporation or any of its Subsidiaries is
           obligated to purchase, redeem, defease or otherwise retire for value
           (including, without limitation, any obligation to purchase any such
           stock upon the occurrence of a Change of Control or any similar
           event), or with respect to which the Corporation or any of its
           Subsidiaries is obligated to make any other payment or

<PAGE>

           distribution, at any time prior to the date that is 180 days after
           the Redemption Date;

                      (v) increase the authorized shares of Convertible
           Preferred Stock or issue any shares of Convertible Preferred Stock
           after the Initial Issue Date other than the issuance of shares of
           Convertible Preferred Stock as PIK Dividends pursuant to subparagraph
           3(b) hereof;

                      (vi) enter into (or permit any Subsidiary of the
           Corporation to enter into) any transaction involving (a) any payment
           to, or any sale, lease, transfer or other disposition of any
           properties or assets to, any Affiliate of the Corporation, (b) any
           purchase, acquisition or lease of property or assets from any
           Affiliate of the Corporation, or (c) any loan, guarantee or advance
           to or from or for the benefit of, or any contract, agreement or lease
           with, any Affiliate of the Corporation, other than (I) any employment
           agreement entered into by the Corporation or any of its Subsidiaries
           in the Corporation or any of its Subsidiaries in the ordinary course
           of business with any employee of the Corporation or any of its
           Subsidiaries; (II) any transaction between or among the Corporation
           and/or its Subsidiaries; (III) payment of directors' fees to Persons
           who are not otherwise Affiliates of the Corporation other than by
           reason of their position as an officer or director; (IV) compensation
           payable to or other benefits provided to, or any agreement to pay
           such compensation or benefits with, officers and employees of the
           Corporation; (V) transactions with holders of the Convertible
           Preferred Stock; and (VI) transactions contemplated by the Senior
           Note Purchase Agreement;

                      (vii) redeem, acquire, purchase, defease or otherwise
           retire for value or make any other payment or distribution in respect
           of any shares of capital stock of the Corporation or any Subsidiaries
           of the Corporation (including without limitation any payment or
           declaration of dividends on any shares of Junior Stock other than
           dividends on the Common Stock payable solely in cash or additional
           shares of Common Stock) other than (i) any such redemption,
           acquisition, purchase, retirement or other payment or distribution in
           respect of the Convertible Preferred Stock, (ii) any redemption,
           acquisition, purchase, retirement or other payment or distribution by
           any Subsidiary of the Corporation in respect of shares of capital
           stock of such Subsidiary held by the Corporation or another
           wholly-owned Subsidiary of the Corporation, (iii) the repurchase of
           shares of Common Stock or options to purchase Common Stock, in each
           case, issued under the Corporation's Amended and Restated 1998
           Directors Stock Plan, the Corporation's 1998 Stock Incentive Plan,
           the Corporation's Non-Qualified Stock Option Agreement, and the
           Corporation's Stock Incentive Plan from terminated or retired
           employees, to the extent permitted under the terms of the then
           outstanding Indebtedness of the Corporation and its Subsidiaries,
           (iv) the acquisition by the Corporation or Aviall Services, Inc. of
           two (2) outstanding shares of capital stock of Aviall S.A.R.L. from
           Ryder System, Inc. and (v) the cashless exercise of Rights or
           Options, the cashless exercise of warrants, if any, issued in lieu of
           Common Stock pursuant to the Senior Note Purchase Agreement and the
           surrender by holders of restricted shares of capital stock of the

<PAGE>

           Corporation in payment of any tax liabilities by such holders
           pursuant to the Corporation's Amended and Restated 1998 Directors
           Stock Plan, the Corporation's 1998 Stock Incentive Plan, the
           Corporation's Non-Qualified Stock Option Agreement, and the
           Corporation's Stock Incentive Plan;

                      (viii) effect any voluntary liquidation, dissolution or
           winding-up of the Corporation;

                      (ix) purchase, acquire or lease (or permit any Subsidiary
           of the Corporation to purchase, acquire or lease), in one transaction
           or series of related transactions, assets, properties, capital stock
           or other securities of any Person for consideration having a fair
           market value in excess of $50,000,000 (other than any (i) inventory
           purchases in the ordinary course of business pursuant to any contract
           in effect or executed on or before the Closing Date and (ii)
           inventory purchases in the ordinary course of business pursuant to
           any contract to be executed by the Corporation after the Closing
           Date, but not including initial payments or consideration for
           inventory, license fees, distribution rights or other similar
           payments which in the aggregate exceed $50,000,000);

                      (x) engage in, or permit any Subsidiary of the Corporation
           to engage in, any business other than the businesses in which the
           Corporation and any of its Subsidiaries are engaged in as of the date
           hereof and any businesses reasonably related, incidental or ancillary
           to such businesses.

                      (xi) take any action (or permit any Subsidiary of the
           Corporation to take any action) that would cause a dividend or other
           distribution to be received by the holders of Convertible Preferred
           Stock for federal income tax purposes unless such dividend or other
           distributions is actually received by such holders in cash; or

                      (xii) amend in any respect the Rights Plan or the terms of
           the Series A Junior Preferred Stock, or adopt any rights plan,
           "poison pill" or other plan or arrangements (other than the Rights
           Plan as currently in effect), or issue any Rights or other securities
           to the holders of its Common Stock (other than the Rights Plan as
           currently in effect), intended to result in the dilution of any
           Person's ownership of Common Stock as a result of such Person
           becoming the Beneficial Owner of a specified percentage of the Common
           Stock or other Voting Stock of the Corporation;

                      (xiii) incur or guarantee or permit any Subsidiary of the
           Corporation to incur or guarantee any Indebtedness if, after giving
           effect to such incurrence or guarantee, the aggregate principal
           amount of Indebtedness incurred or guaranteed by the Corporation
           and/or its Subsidiaries on a consolidated basis during the preceding
           twelve calendar month period ending on the date of such guarantee or
           incurrence would exceed $50,000,000, other than Indebtedness incurred
           (A) pursuant to the Corporation's revolving credit facility in place
           as of the Initial Issue Date and pursuant to the Senior Note Purchase
           Agreement on the

<PAGE>

           Initial Issue Date, and (B) pursuant to any future refinancings of
           the Corporation's outstanding Indebtedness on the Closing Date and
           future refinancings of any other Indebtedness described in clause (A)
           above (such Indebtedness being refinanced being referred to as the
           "Pre-existing Debt"), not to exceed the principal amount of the
           Pre-existing Debt of the Corporation and its Subsidiaries on the date
           of such refinancing; or

                      (xiv) adopt and/or implement an Annual Operating Plan for
           any fiscal year unless such Annual Operating Plan has been adopted
           and approved by a majority of the members of the Board of Directors
           and a majority of the Preferred Stock Directors.

provided, however, that nothing herein shall prohibit the Corporation from
distributing rights pursuant to the terms of that certain Rights Agreement,
dated as of December 7, 1993, as amended, between the Corporation and
BankBoston, N.A. (as successor to the First National Bank of Boston), as Rights
Agent, as such Rights Agreement is in effect on the Closing Date.

                  (d) So long as ten percent (10%) of the shares of Convertible
Preferred Stock outstanding on the Initial Issue Date (after giving effect to
the issuance of all shares of Convertible Preferred Stock issued on the Initial
Issue Date) remains outstanding, (i) except as provided in subparagraph 7(f) or
in clause (ii) of this sentence, the number of Directors comprising the Board of
Directors shall not exceed eight (8) and (ii) the holders of Convertible
Preferred Stock, voting separately as a class, shall have the exclusive right to
elect two (2) Directors (each such Director, a "Preferred Stock Director") at
any special meeting of stockholders called for such purpose, at each annual
meeting of stockholders and in any written consent of stockholders pursuant to
Section 228 of the Delaware General Corporation Law; provided, however, that the
number of Preferred Stock Directors shall be increased to three (3) Directors
(and the total number of Directors shall be increased to nine (9)) in the event
that the number of shares of Common Stock issuable upon conversion of the
outstanding shares Convertible Preferred Stock at any time exceeds the product
of (x) 0.4 and (y) the sum of the number of issued and outstanding shares of
Common Stock and the number of shares of Common Stock issuable upon conversion
of all outstanding shares of Convertible Preferred Stock. So long as ten percent
(10%) of the shares of Convertible Preferred Stock outstanding on the Initial
Issue Date (after giving effect to the issuance of all shares of Convertible
Preferred Stock issued on the Initial Issue Date) remain outstanding, (i) the
Board of Directors shall maintain an Executive Committee and Compensation
Committee Board of Directors and (ii) at least one of the Preferred Stock
Directors shall serve as a member of such Executive Committee and such
Compensation Committee.

                  (e) The Preferred Stock Directors elected as provided herein
shall serve until the next annual meeting or until their respective successors
shall be elected and shall qualify. Any Preferred Stock Director may be removed
with or without cause by, and shall not be removed other than by, the vote of
the holders of a majority of the outstanding shares of Convertible Preferred
Stock, voting separately as a class, at a meeting called for such purpose or by
written consent in accordance with Section 228 of the Delaware General Corporate
Law. If the office of any Preferred Stock Director becomes vacant by reason of
death, resignation, retirement, disqualification or removal from office or
otherwise, the remaining Preferred Stock Directors may

<PAGE>

elect a successor, or, alternatively, the holders of a majority of the
outstanding shares of Convertible Preferred Stock, voting separately as a class,
at a meeting called for such purpose or by written consent in accordance with
Section 228 of the Delaware General Corporation Law may elect a successor. Any
such successor shall hold office for the unexpired term in respect of which such
vacancy occurred. Upon any termination of the right of the holders of
Convertible Preferred Stock to vote for and elect Preferred Stock Directors as
herein provided, the Preferred Stock Directors then serving on the Board of
Directors may continue to hold their office for the remainder of their term.

                  (f) (i) Upon the occurrence and during the continuation of any
Default Event, the holders of Convertible Preferred Stock shall have the
exclusive right, voting separately as a class, to elect, in addition to the
Preferred Stock Directors, two Directors at the Corporation's next annual
meeting of stockholders and at each subsequent annual meeting of stockholders;
provided, however, that if such voting rights shall become vested more than 90
days or less than 20 days before the date prescribed for the annual meeting of
stockholders, thereupon the holders of the shares of Convertible Preferred Stock
shall be entitled to exercise their voting rights at a special meeting of the
holders of shares of Convertible Preferred Stock as set forth in clauses (ii)
and (iii) of this subparagraph 7(f). At elections for such Directors, each
holder of Convertible Preferred Stock shall be entitled to one vote for each
share held. Upon the vesting of such right of the holders of Convertible
Preferred Stock, the maximum authorized number of members of the Board of
Directors shall automatically be increased by two and the two vacancies so
created shall be filled by vote of the holders of outstanding Convertible
Preferred Stock as hereinafter set forth. The right of holders of Convertible
Preferred Stock, voting separately as a class without regard to series, to elect
members of the Board of Directors as aforesaid shall continue until such time as
such Default Event has been cured, at which time such right shall terminate,
except as herein or by law expressly provided, subject to revesting in the event
of each and every subsequent Default Event.

                  (ii) Whenever such voting right shall have vested, such right
may be exercised initially either at a special meeting of the holders of shares
of Convertible Preferred Stock called as hereinafter provided, or at any annual
meeting of stockholders held for the purpose of electing Directors, and
thereafter at such meetings or by the written consent of such holders pursuant
to Section 228 of the General Corporation Law of the State of Delaware.

                  (iii) At any time when such voting right shall have vested in
the holders of shares of Convertible Preferred Stock entitled to vote thereon,
and if such right shall not already have been initially exercised, an officer of
the Corporation shall, upon the written request of holders of record of 10% of
the voting power represented by the shares of such Convertible Preferred Stock
then outstanding, addressed to the Treasurer of the Corporation, call a special
meeting of holders of shares of such Convertible Preferred Stock. Such meeting
shall be held at the earliest practicable date upon the notice required for
annual meetings of stockholders at the place for holding annual meetings of
stockholders of the Corporation or, if none, at a place designated by the
Treasurer of the Corporation. If such meeting shall not be called by the proper
officers of the Corporation within 30 days after the personal service of such
written request upon the Treasurer of the Corporation, or within 30 days after
mailing the same within the United States, by registered mail, addressed to the
Treasurer of the Corporation at its principal office (such mailing to be
evidenced by the registry receipt issued by the postal authorities), then the
holders of record of 10% of the voting power represented by the shares of
Convertible Preferred

<PAGE>

Stock then outstanding may designate in writing any person to call such meeting
at the expense of the Corporation, and such meeting may be called by such person
so designated upon the notice required for annual meetings of stockholders and
shall be held at the same place as is elsewhere provided in this paragraph. Any
holder of shares of Convertible Preferred Stock then outstanding that would be
entitled to vote at such meeting shall have access to the stock books of the
Corporation for the purpose of causing a meeting of stockholders to be called
pursuant to the provisions of this paragraph. Notwithstanding the provisions of
this paragraph, however, no such special meeting shall be called or held during
a period within 45 days immediately preceding the date fixed for the next annual
meeting of stockholders.

                  (iv) The directors elected pursuant to this subparagraph 7(f)
shall serve until the earlier of (i) the next annual meeting or until their
respective successors shall be elected and shall qualify or (ii) until the right
of the holders of Convertible Preferred Stock to elect such additional Directors
pursuant to this subparagraph 7(f) shall terminate; any Director elected by the
holders of Convertible Preferred Stock pursuant to this subparagraph 7(f) may be
removed by, and shall not be removed otherwise than by, the vote of the holders
of a majority of the voting power of the outstanding shares of the Convertible
Preferred Stock who were entitled to participate in such election of directors,
voting as a separate class, at a meeting called for such purpose or by written
consent as permitted by law and the Certificate of Incorporation and Bylaws of
the Corporation. If the office of any Director elected by the holders of
Convertible Preferred Stock pursuant to this subparagraph 7(f), voting as a
class, becomes vacant by reason of death, resignation, retirement,
disqualification or removal from office or otherwise, the remaining Director
elected by the holders of Convertible Preferred Stock, voting as a class, may
choose a successor who shall hold office for the unexpired term in respect of
which such vacancy occurred. Upon any termination of the right of the holders of
Convertible Preferred Stock to vote for directors as provided in this
subparagraph 7(f), the term of office of all Directors then in office elected by
the holders of Convertible Preferred Stock, voting as a class, shall terminate
immediately. Whenever the terms of office of the Directors elected by the
holders of Convertible Preferred Stock, voting as a class, shall so terminate
and the special voting powers vested in the holders of Convertible Preferred
Stock shall have expired, the number of Directors shall be such number as may be
provided for in the Bylaws or Certificate of Incorporation irrespective of any
increase made pursuant to the provisions of this subparagraph 7(f).

8. Repurchase Upon Change of Control. To the extent permitted by the terms of
the Senior Debt and the Senior Note Purchase Agreement, if a Change of Control
occurs, each holder of the Convertible Preferred Stock shall have the right to
require the Corporation to repurchase all or any part of that holder's
Convertible Preferred Stock pursuant to the offer described below (the "Change
of Control Offer"). In the Change of Control Offer, the Corporation shall offer
a payment in cash for each outstanding share of Convertible Preferred Stock
equal to the greater of (i) 101% of the Liquidation Preference per share of
Convertible Preferred Stock repurchased plus accrued and unpaid dividends, if
any, thereon, to the date of repurchase and (ii) the aggregate Current Market
Price of all shares of Common Stock issuable upon conversion a share of
Convertible Preferred Stock so repurchased, determined as of the date of such
Change of Control (the "Change of Control Payment"). Within 30 days following
any Change of Control, the Corporation shall mail a notice to each holder of
shares of Convertible Preferred Stock describing the transaction or transactions
that constitute the Change of Control and offering to repurchase the Convertible
Preferred Stock on the date specified in such notice, which date shall be no
earlier than 30 days and no later than 60 days

<PAGE>

from the date such notice is mailed (the "Change of Control Payment Date"),
pursuant to the procedures required by this Certificate of Designation and
described in such notice.

                  The Corporation shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of the Convertible Preferred Stock as a result of a Change
of Control.

                  On the Change of Control Payment Date, the Corporation shall,
to the extent lawful:

                           (1) accept for payment all shares of Convertible
                  Preferred Stock or portions thereof properly tendered pursuant
                  to the Change of Control Offer;

                           (2) promptly mail to each holder of Convertible
                  Preferred Stock so tendered the Change of Control Payment for
                  each share of Convertible Preferred Stock so tendered and
                  promptly authenticate and mail to each such holder a new
                  certificate representing the shares of Convertible Preferred
                  Stock equal in Liquidation Preference to any unpurchased
                  portion of the Convertible Preferred Stock surrendered, if
                  any.

                  This paragraph shall be applicable regardless of whether any
other provisions of this Certificate of Designation are applicable.

<PAGE>

9. Financial Statements; Information Right.

                  (a) Unless such financial statements or reports have been
filed with the Commission, whether or not required by the rules and regulations
of the Commission, so long as ten percent (10%) of the shares of Convertible
Preferred Stock outstanding on the Initial Issue Date (after giving effect to
the issuance of all shares of Convertible Preferred Stock issued on the Initial
Issue Date) is outstanding, the Corporation shall furnish to the holders of
Convertible Preferred Stock (i) all quarterly and annual financial information
that would be required to be contained in a filing with the Commission on Forms
10-Q and 10-K if the Corporation were required to file such Forms, including
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report thereon
by the Corporation's certified independent accountants, (ii) all monthly
financial statements required to be prepared and submitted pursuant to the terms
and conditions of the Senior Note Purchase Agreement and (iii) all current
reports that would be required to be filed with the Commission on Form 8-K if
the Corporation were required to file such reports. In addition, whether or not
required by the rules and regulations of the Commission, the Corporation shall
file a copy of all such information and reports with the Commission for public
availability (unless the Commission will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. In addition, for so long as ten percent (10%) of the shares of
Convertible Preferred Stock outstanding on the Initial Issue Date (after giving
effect to the issuance of all shares of Convertible Preferred Stock issued on
the Initial Issue Date) remains outstanding, the Corporation shall furnish to
the holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.

                  (b) The Corporation shall, so long as ten percent (10%) of the
shares of Convertible Preferred Stock outstanding on the Initial Issue Date
(after giving effect to the issuance of all shares of Convertible Preferred
Stock issued on the Initial Issue Date) is outstanding, deliver to the holders
of Convertible Preferred Stock, forthwith upon any Executive Officer of the
Corporation becoming aware of any default under this Certificate of Designation,
an Officers' Certificate specifying such default and what action the Corporation
is taking or proposes to take with respect thereto.

                  (c) The Corporation shall provide to any holder of Convertible
Preferred Stock, upon written request of such holder to the Corporation, such
financial and other information concerning the Corporation and its Subsidiaries
as may from time to time be reasonably requested by such holder.

10. Modification and Waiver. Except as otherwise provided above, the terms of
this Certificate of Designation may be amended and the rights hereunder may be
waived only with the consent of holders of a majority of the shares of the
Convertible Preferred Stock then outstanding, provided, that if any such
modification or waiver has a material adverse effect on the holders' rights with
respect to dividends or conversion, then the consent of each holder of
Convertible Preferred Stock shall be required.

11. Headings of Subdivisions. The headings of the various subdivisions hereof
are for convenience of reference only and shall not affect the interpretation of
any of the provisions hereof.

<PAGE>

12. Severability of Provisions. If any voting powers, preferences and relative,
participating, optional and other special rights of the Convertible Preferred
Stock and qualifications, limitations and restrictions thereof set forth in this
resolution (as such resolution may be amended from time to time) is invalid,
unlawful or incapable of being enforced by reason of any rule of law or public
policy, all other voting powers, preferences and relative, participating,
optional and other special rights of the Convertible Preferred Stock and any
qualifications, limitations and restrictions thereof set forth in this
resolution (as so amended) which can be given effect without the invalid,
unlawful or unenforceable voting powers, preferences and relative,
participating, optional and other special rights of the Convertible Preferred
Stock or qualifications, limitations and restrictions thereof shall,
nevertheless, remain in full force and effect, and no voting powers, preferences
and relative, participating, optional or other special rights of the Convertible
Preferred Stock or qualifications, limitations and restrictions thereof herein
set forth shall be deemed dependent upon any other such voting powers,
preferences and relative, participating, optional or other special rights of
Convertible Preferred Stock or qualifications, limitations and restrictions
thereof unless so expressed herein.

13. Record Holders. The Corporation and the transfer agent for the Convertible
Preferred Stock may deem and treat the record holder of any shares of
Convertible Preferred Stock as the true and lawful owner thereof for all
purposes, and neither the Company nor the transfer agent shall be affected by
any notice to the contrary.

14. Notice. Except as may otherwise be provided for herein, all notices referred
to herein shall be in writing, and all notices hereunder shall be deemed to have
been given upon receipt, in the case of a notice of conversion given to the
Corporation as contemplated in Section 5(b) hereof, or, in all other cases, upon
the earlier of receipt of such notice or three Business Days after the mailing
of such notice if sent by registered mail (unless first-class mail shall be
specifically permitted for such notice under the terms of this Certificate of
Designation) with postage prepaid, addressed: if to the Corporation, to its
offices at 2750 Regent Blvd., DFW Airport, Texas 75214, Attention: Secretary or
to an agent of the Corporation designated as permitted by this Certificate, or,
if to any holder of the Convertible Preferred Stock, to such holder at the
address of such holder of the Convertible Preferred Stock as listed in the stock
record books of the Corporation (which may include the records of any transfer
agent for the Convertible Preferred Stock); or to such other address as the
Company or holder, as the case may be, shall have designated by notice similarly
given.

15. Merger or Consolidation of the Corporation. The Corporation shall not merge
or consolidate with any other Person, or enter into or effect any
reorganization, unless the surviving corporation or other entity resulting from
such merger, consolidation or reorganization shall make appropriate provision in
connection with such merger, consolidation or reorganization such that (i) the
shares of Convertible Preferred Stock outstanding immediately prior to the
effective time of such merger, consolidation or reorganization remain
outstanding immediately following such merger, consolidation or reorganization
or (ii) the shares of Convertible Preferred Stock outstanding immediately prior
to the effective time of such merger, consolidation or reorganization shall be
converted into an equivalent number of shares of convertible preferred stock of
such surviving Corporation or other entity having terms identical to the terms
of the Convertible Preferred Stock, except that such shares of convertible
preferred stock of such

<PAGE>

surviving corporation or other entity shall be convertible into securities, cash
for other property as provided in subparagraph 5(h).<PAGE>
                                                                     EXHIBIT 4.3

<Table>
<S>                               <C>                                                                             <C>
                                                 SEE REVERSE SIDE FOR RESTRICTIONS

                                                   INCORPORATED UNDER THE LAWS OF

                                                              DELAWARE

          NUMBER                                                                                                       SHARES
         [      ]                                                                                                     [      ]

                                                            AVIALL, INC.

         THE CORPORATION IS AUTHORIZED TO ISSUE 160,000 SHARES OF SERIES D SENIOR CONVERTIBLE PARTICIPATING PREFERRED STOCK
                                                     PAR VALUE $0.01 PER SHARE

                                                             [SPECIMEN]

               THIS CERTIFIES THAT __________________________________________________________________________ is the

               registered holder of _________________________________________________________________________ Shares

             OF SERIES D SENIOR CONVERTIBLE PARTICIPATING PREFERRED STOCK, PAR VALUE $0.01 PER SHARE, OF AVIALL, INC.

                             transferable only on the books of the Corporation by the holder hereof in
                             person or by Attorney upon surrender of this Certificate properly endorsed

                         IN WITNESS WHEREOF, the said Corporation has caused this Certificate to be signed
                           by its duly authorized officers and its Corporate Seal to be hereto affixed
                               this ________________________ day of _______________________ A.D. 2002

                                                          [SEAL]

------------------------------------------                                        -------------------------------------------------
              PRESIDENT                                                                              SECRETARY
</Table>

<PAGE>
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAW, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER SET FORTH IN THAT CERTAIN SECURITIES PURCHASE
AGREEMENT, DATED AS OF DECEMBER 17, 2001, A COPY OF WHICH IS ON FILE AT THE
OFFICES OF THE COMPANY.

THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS
THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR
OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF OF THE
CORPORATION, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH
PREFERENCES AND/OR RIGHTS. A STOCKHOLDER MAY MAKE THE REQUEST TO THE
CORPORATION AT ITS PRINCIPAL EXECUTIVE OFFICES.

                            [CERTIFICATE FOR SHARES]

     For Value Received, ____________ hereby sell, assign and transfer unto
______________________________________________________________________________
__________________________________ Shares represented by the within Certificate,
and do hereby irrevocably constitute and appoint ______________________________
Attorney to transfer the said Shares on the books of the within named
Corporation with full power of substitution in the premises.

     Dated
           ---------------------------------------
           In presence of

NOTICE. THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.

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