DISTRIBUTION SERVICES AGREEMENT

THIS DISTRIBUTION SERVICES AGREEMENT ("Agreement") is made as of December 17,
2001 by and between Rolls-Royce Corporation, a corporation with its principal
place of business in Indianapolis, Indiana (the "Company"), and Aviall Services,
Inc. (the "Service Provider").

                                    RECITALS

         A.       The Company is engaged in the business of designing,
                  manufacturing, distributing, marketing and selling the
                  Products (as herein defined).

         B.       The Service Provider has submitted Proposals dated March 12,
                  2001 and April 30, 2001 ("Proposals") to the Company to become
                  the exclusive Service Provider of the Company's Model T56
                  Products, as hereinafter defined.

         C.       The Company has relied upon Service Provider's proposals in
                  appointing the Service Provider under the terms and conditions
                  of the Agreement.

         D.       Service Provider has relied upon data and information supplied
                  by the Company in making its Proposals and entering into this
                  Agreement.

         E.       The Company therefore desires to appoint the Service Provider
                  as its Service Provider to sell, market and otherwise
                  distribute the Products in the Territory (as herein defined)
                  as of January 1, 2002 (the "Commencement Date"), and the
                  Service Provider desires to be so appointed by the Company,
                  all upon the terms and conditions set forth in this Agreement.

         F.       As used in this Agreement, "Products" mean all Rolls-Royce T56
                  and 501D parts, modules, and all related technical
                  publications, and all 501K parts that are common with the 501D
                  or T56 engines which, during the Term of this Agreement are
                  placed on the Company's price list, now or hereafter
                  manufactured, marketed, produced, re-manufactured or
                  refurbished by Company. The current list of Products is
                  identified on Exhibit A attached hereto.

         G.       As used in the Agreement, "Territory" means the entire world.

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DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
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                                   AGREEMENTS

NOW, THEREFORE, in consideration of the payment by check by Service Provider to
Company of Twenty Million ($20,000,000) dollars on or before December 28, 2001
and the mutual agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

         1.       Appointment of Service Provider. Subject to Section 2 hereof,
                  effective the "Commencement Date", the Company hereby appoints
                  the Service Provider as its exclusive Service Provider for
                  each of the Products in the Territory, and the Service
                  Provider hereby accepts such appointment, all upon the terms
                  and conditions set forth in this Agreement.

         2.       Reserved Rights.

                  (a)      Notwithstanding anything to the contrary contained
                           herein, the Company expressly reserves the right to
                           sell Products directly (i) to any airframe original
                           equipment manufacturer solely for installation on new
                           airframes, or (ii) to customers requesting normal
                           levels of spare modules and parts sold together with
                           new T56 engines.

                  (b)      The Company reserves the right to complement the
                           Service Provider's marketing efforts and will
                           maintain relationships with existing customers. In
                           order to fulfill certain contracting requirements of
                           governmental entities, the Company may be required to
                           directly negotiate sales terms with such customers.
                           In such circumstances, the Service Provider shall
                           honor the terms and conditions of such contracts as
                           required by the government customer and in accordance
                           with Exhibits G and N.

                  (c)      Notwithstanding anything herein to the contrary,
                           Company shall have the right to contract with a third
                           party to perform any marketing or promotional service
                           with respect to its business generally, including the
                           Products; provided that such activities do not
                           involve the sale or distribution of Products. In the
                           event the Company contracts with a third party to
                           perform any such service, Service Provider shall
                           cooperate in good faith with the Company and any such
                           third party, to the extent reasonably requested by
                           the Company; provided that Service Provider shall not
                           be required to undertake any duty to perform services
                           beyond those falling within its obligations under
                           this Agreement. Nothing herein shall restrict any
                           affiliate of the Company from performing any
                           aftermarket activities involving the T56 engine
                           except that Rolls-Royce Engine Services Oakland

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DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
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                           (RR ESO) shall sell repaired parts only to the
                           Service Provider and will not competitively market
                           repaired parts as part of its service and overhaul
                           functions.

                  (d)      The Company is participating in a program with the
                           United States Air Force in which the USAF turned over
                           numerous surplus power sections and complete engines
                           to Company. In exchange for this surplus material,
                           the Company is obligated to upgrade and deliver to
                           USAF twenty (20) engines. RR ESO is storing the
                           surplus material and providing the labor to upgrade
                           the engines. The Company is providing RR ESO, at no
                           charge, twenty upgrade kits and associated hardware,
                           for these engines. The Company retains the right to
                           ship this Product at no charge to RR ESO.

         3.       The Service Provider's Obligations. The Service Provider
                  shall:

                  (a)      use reasonable efforts to establish and maintain an
                           effective sales force and to promote sales of the
                           Products throughout the Territory. In addition,
                           Service Provider shall appoint a technically
                           qualified Product Manager and an experienced
                           Inventory Planner, each of whom shall be dedicated
                           exclusively to the Products, and shall maintain such
                           resources in place during the term. Recognizing that
                           adequate representation in the Territory is a vital
                           element of the Service Provider's obligations, the
                           Service Provider shall not significantly decrease its
                           commercial airline/military sales presence in any
                           region (North America, South and Latin America,
                           Europe, the Middle East, Far East/Pacific, and
                           Africa). Service Provider's presence may be
                           maintained by sales employees of Service Provider or
                           an affiliate located within a region or by the use of
                           third party sales representatives within the region.
                           Service Provider may change its current level and mix
                           of sales employees and/or third party sales
                           representatives within any region but it shall give
                           Company reasonable prior written notice of any
                           substantial change within any region and Service
                           Manager's Product Manager will consult with Company's
                           Product Manager regarding Service Provider's plans to
                           maintain adequate representation with such region
                           prior to the implementation of such substantial
                           change.

                  (b)      promptly after execution of this Agreement, place an
                           order to purchase all of those Products as provided
                           on Exhibit B-1. The initial inventory purchase will
                           be made in accordance with Exhibit B.

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DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 4

                  (c)      make no warranty or guaranty, orally or in writing,
                           concerning any of the Products, which might be
                           perceived by a customer as in any way binding the
                           Company, except for such warranties as are
                           customarily made by the Company to first retail
                           purchaser of the Products.

                  (d)      at its own cost and expense, procure and maintain in
                           full force and effect during the term of this
                           Agreement coverage for the Company as an additional
                           insured under customary policies of insurance
                           including, without limitation, commercial general
                           liability, business interruption, inventory
                           replacement (at replacement costs), and aircraft
                           product and completed operations insurance. The
                           Service Provider agrees to waive any right of
                           subrogation against the Company in this or any other
                           policy of insurance carried by Service Provider, but
                           only to the extent that Service Provider may be
                           obligated to indemnify the Company pursuant to
                           Section 15 of this Agreement.

                  (e)      administer the Company's warranty return program as
                           set forth on Exhibit C;

                  (f)      administer new engine production support and new
                           engine sales related parts and modules needs as set
                           forth on Exhibit D;

                  (g)      administer the Company's Product recall program as
                           set forth on Exhibit E;

                  (h)      on the effective date of this Agreement, the Service
                           Provider shall have the information technology
                           capabilities described in the Service Provider's
                           Proposal to perform all tasks associated with order
                           management, distribution and forecasting of spare
                           parts. Initially, the Service Provider shall also
                           take such actions as may be necessary or appropriate
                           to ensure that its information technology systems are
                           compatible with those of the Company's current
                           system. Thereafter, Service Provider shall ensure
                           that its IT system is kept in good working order and
                           remains compatible with that of the Company. In the
                           event that a change to the Service Provider's IT
                           system is necessary, the Service Provider shall bear
                           reasonable expenses of ensuring continual
                           compatibility.

                  (i)      assume the primary forecasting role of new and used
                           spare parts; provide the Company with detailed part
                           number level requirements for new parts per the
                           guidelines established in Exhibit F. The Service
                           Provider will

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DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 5


                           purchase and take physical possession of forecasted
                           inventory on terms and conditions established and in
                           accordance with the Agreement.

                  (j)      The parties agree that Company may engage in
                           advertising, name identification and quality image
                           programs regarding the Products independent of
                           Service Provider's programs. The Service Provider and
                           Company agree to market and advertise products in
                           accordance with Exhibit J.

                  (k)      maintain an inventory management and traceability
                           system equal to or better than the inventory
                           management and traceability system that adheres to
                           the provisions as identified in Exhibit Q. and as
                           described in Service Provider's Proposal, and provide
                           Company access to such system.

                  (l)      except as otherwise agreed in writing between the
                           parties, and except for contractual obligations
                           between the Service Provider and third parties in
                           effect on the date of this Agreement, from the date
                           of execution and during the term of this Agreement,
                           in order to promote, and efficiently distribute, the
                           Products, the Service Provider will not become a
                           Service Provider for any parts or engines (i) solely
                           or primarily relating to the Pratt & Whitney PW150,
                           the General Electric T64, or future engine
                           derivatives of such engines of the same or other
                           manufacturers which are clearly intended for
                           installation on air frames for which the T56 or 501D
                           engines are approved, (ii) of the 501K engine
                           industrial engine power class (3500 to 9000 Shaft
                           Horse Power - sea level static on a standard day)
                           which are used for industrial applications similar to
                           that of the 501K engine, (iii) interchangeable with
                           Products which are proprietary engine components for
                           the 501D and 501K engines manufactured by the
                           Company; (iv) interchangeable with parts which are
                           not proprietary parts currently manufactured by the
                           Company but which are, as of the date of execution of
                           the Agreement, purchased by the Company from third
                           parties and resold into the aftermarket by the
                           Company using a T56 part number, provided that
                           Service Provider may be a Service Provider for such
                           parts only if they are manufactured or sold by any
                           third party which, as of the date of this Agreement,
                           is currently a supplier to Service Provider and such
                           parts are not sold using an T56 part number or a
                           number confusingly similar to an T56 part number; or
                           (v) interchangeable with parts which are not
                           manufactured by the Company and are purchased by the
                           Company from a third party supplier at any time
                           during the term of the Agreement and such supplier
                           has an exclusive supply arrangement with the Company.

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DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 6


                  (m)      share in the expense of the Company's foreign sales
                           agents as set forth on Exhibit H

                  (n)      comply with all statutes, laws, ordinances, rules,
                           regulations, and any other governmental authority in
                           connection with its sale and distribution of the
                           Products, including but not limited to obtaining
                           export licenses and other authorizations in
                           accordance with the International Traffic in Arms
                           Regulation (ITAR) and Export Administration
                           Regulations (EAR) to export any Product from the
                           United States. The Service Provider has the ultimate
                           responsibility for ensuring that it complies with all
                           U.S. Government export control laws and regulations.

                  (o)      make available to the Company on-line or provide to
                           the Company on a periodic basis, as applicable, in a
                           form mutually agreed by the parties, the sales
                           reports and other information described in Exhibit I.
                           From time to time at the Company's request, Service
                           Provider shall provide such further reports and
                           information, including information concerning
                           marketing activities, sales prospects set forth on
                           Exhibit J and publicly available financial data
                           regarding Service Provider's parent company, as the
                           Company may reasonably request. In addition, the
                           Company shall have the right upon reasonable notice
                           and during normal business hours to examine sales
                           records and other data relating to the activities of
                           Service Provider contemplated under this Agreement;
                           provided however, that nothing herein shall be deemed
                           to authorize or permit the Company access to sales
                           records and data regarding sales of merchandise for
                           third parties for which Service Provider distributes
                           merchandise or to non-public financial data of
                           Service Provider involving sales other than sales of
                           the Products.

                  (p)      commencing on the date of this Agreement and
                           continuing for so long as the Company requires the
                           same for performance under this Agreement, Service
                           Provider shall provide to Company, at no charge to
                           Company, the following:

                           (1)      The use of the office space in Service
                                    Provider's premises that Company may from
                                    time to time reasonably require in
                                    connection with its performance under this
                                    Agreement, together with office support
                                    services (excluding computer equipment)
                                    reasonably required in connection with the
                                    performance of the activities contemplated
                                    hereunder. In its occupancy and use of such


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DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
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                                    resources, Company personnel shall at all
                                    times abide by and act in accordance with
                                    Service Provider's corporate policies
                                    applicable at such site; and

                           (2)      For use by personnel employed or managed by
                                    Company on Service Provider's premises, the
                                    reasonable use of Service Provider's
                                    existing telephone system solely in
                                    connection with such personnel's work on the
                                    Agreement, provided that the Company shall
                                    reimburse Service Provider for all charges
                                    and costs related to such use.

                  (q)      manage order administration efforts from receipt of
                           order through invoicing. The Service Provider will
                           adequately staff a call center and incorporate the
                           Product into the web site as identified in the
                           proposal. The Service Provider shall allow the
                           Company to maintain in a prominent place on its web
                           site, at no cost to the Company, a banner designed by
                           the Company which identifies the Company (and/or its
                           affiliates) and which provides linked connections to
                           one or more web sites maintained by the Company (or
                           its affiliates ) for the promotion of its business,
                           products and services.

                  (r)      evaluate availability and demand for, and procure as
                           necessary, serviceable, surplus and repaired T56
                           spare parts to complement new part sales. The Service
                           Provider will procure these parts only from sources
                           approved by the Company. In order to appropriately
                           compensate the Company for its technical and
                           engineering support in approving third parties for
                           use of the Company's name and logo in connection with
                           repairable, serviceable and surplus Products for
                           resale, the Service Provider will pay the Company a
                           percentage of sales price in royalty fees for
                           repairable, serviceable and surplus product obtained
                           other than from Company or its affiliates per Exhibit
                           P.

                           The Service Provider will be responsible for payment
                           of shipping between their facility and the repair or
                           procurement source.

         4.       The Company's Obligations. The Company shall:

                  (a)      produce, deliver, and sell the Products in the
                           quantities ordered by Service Provider at the
                           transfer rate established in Section 3 using
                           reasonable efforts to deliver such Products within
                           lead times agreed to by the parties

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DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 8
                           from time to time. The Company shall not deliver
                           orders more than five (5) business days prior to the
                           requested ship date without the Service Provider's
                           prior written approval;

                  (b)      refrain from selling Products to any person other
                           than the Service Provider, except as permitted in
                           Section 2 above.


                  (c)      promptly refer to Service Provider all leads,
                           prospects, and related information which are directed
                           to it or which it receives regarding potential
                           purchasers of the Products within the Territory;

                  (d)      maintain a suggested list price catalog for new and
                           repaired Products. The Company will compensate the
                           Service Provider for honoring governmental contract
                           pricing requirements below the agreed upon transfer
                           rate. The Company will pay the Service Provider a
                           handling fee equal to ***% of list price.

                  (e)      offer training and technical assistance to the
                           Service Provider and its personnel in the use and
                           operation of the Products. The Company will bear the
                           training expense of up to six people per calendar
                           year at the Company's training facility in
                           Indianapolis. All travel expenses will be assumed by
                           the Service Provider.

                  (f)      ensure that all Products sold to Service Provider for
                           resale or for delivery to third parties on behalf of
                           the Company have all appropriate governmental and
                           regulatory approvals such as FAA/PMA, TSO or STC as
                           required for installation on type certified aircraft
                           or engines, or on military aircraft or engines.
                           Additionally, the Company will provide Service
                           Provider with all certifications required from the
                           manufacturer of the Products for export oversees.

                  (g)      comply with all statutes, laws, ordinances, rules,
                           regulations and any other governmental authority in
                           connection with the manufacture of the Products. The
                           Company shall promptly notify the Service Provider
                           whenever it receives any notice addressed to it by
                           any governmental entity concerning the application of
                           any new rule, directive, regulation or other
                           governmental requirement concerning the sale of
                           Products in the Territory.

  ***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
  PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY
  WITH THE SECURITIES AND EXCHANGE COMMISSION.

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DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
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                  (h)      at its own cost and expense, procure and maintain in
                           full force and effect during the term of this
                           Agreement coverage for Service Provider as an
                           additional insured under a Broad Form Vendors
                           Endorsement to the Company's liability insurance
                           policy and the Company agrees to waive any right of
                           subrogation against Service Provider in this or any
                           other policy of insurance carried by Company, but
                           only to the extent that Company may be obligated to
                           indemnify Service Provider pursuant to Section 15 of
                           the Agreement.

                  (i)      give Service Provider not less than ninety (90) days
                           prior written notice if any Products will be
                           superceded or modified, except in cases involving
                           airworthiness or safety issues, in which case notice
                           shall be given as soon as reasonably possible.

                  (j)      Commencing on the date of this Agreement and
                           continuing for so long as Service Provider requires
                           the same for the performance under this Agreement,
                           the Company shall provide to Service Provider, at no
                           charge to Service Provider, the following:

                           (1)      The use of the office space in Company's
                                    premises that Service Provider may from time
                                    to time reasonably require in connection
                                    with its performance under this Agreement,
                                    together with office support services,
                                    excluding computer equipment, reasonably
                                    required in connection with the performance
                                    of the activities contemplated hereunder. In
                                    its occupancy and use of such resources,
                                    Service Provider personnel shall at all
                                    times abide by and act in accordance with
                                    Company's corporate policies applicable at
                                    such site; and

                           (2)      For use by personnel employed or managed by
                                    Service Provider on Company's premises, the
                                    reasonable use of Company's existing
                                    telephone system solely in connection with
                                    Service Provider's provision of the Services
                                    to Company; provided that Service Provider
                                    shall reimburse the Company for all charges
                                    and costs related to such use.

                  (k)      The Company shall insure that its IT system is kept
                           in good working order. In the event that a change to
                           the Company's IT system is necessary, the


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DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 10



                           Company shall bear the reasonable expense of ensuring
                           continual compatibility.

         5.       Terms of Sale.

                  (a)      The Company shall sell the Product to the Service
                           Provider at the discounts to published list prices
                           indicated on Exhibit K attached hereto based upon
                           prior year's sales. The current list prices for the
                           Products are shown on Exhibit L and the Company shall
                           maintain such list prices unless and until such
                           prices are changed in accordance with the provisions
                           hereof.

                           All such prices are F.O.B. Company's facility and
                           include packing in accordance with the Company's
                           standard commercial shipping practices in effect at
                           the time of shipment.

                           (1)      From time-to-time, the Company may increase
                                    the list prices for its Products but only if
                                    it first gives Service Provider written
                                    notice of any increase at least 90 days
                                    before the increase takes effect. The price
                                    to Service Provider for all items of Product
                                    ordered before receipt of notice by Service
                                    Provider and for all items of Product
                                    ordered after receipt of notice by Service
                                    Provider but which are deliverable by
                                    Company under established lead times before
                                    the date of the price increase, shall be at
                                    the price applicable prior to the price
                                    increase.

                           (2)      From time-to-time, the Cost of Product sold
                                    to Service Provider may be decreased upon
                                    mutual agreement between the Service
                                    Provider and the Company. Such agreement
                                    shall not be required in any instance
                                    involving airworthiness or flight safety
                                    issues, but in such cases, compensation to
                                    the Service Provider for any economic loss
                                    shall be considered and mutually agreed on a
                                    case by case basis.

                  (b)      Payment of the purchase price for the initial
                           purchase of Products as described on Exhibit B, shall
                           be payable by check on or before December 28, 2001.
                           In consideration of advance payment of the purchase
                           price referred to above, the Company will discount
                           the purchase price for the period of advance payment
                           at ***%.


***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
<PAGE>

DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 11


                  (c)      Payment of the purchase price for Products delivered
                           to Service Provider by the Company (except pursuant
                           to Section 5(b) above) shall be by check payable
                           thirty-five (35) days from the last to occur of
                           delivery of the Product or the date of invoice,
                           except as set forth on Exhibit R. If payment is not
                           received by the Company in accordance with this
                           Section, the Company shall be entitled to charge a
                           late payment fee at the rate of ***% per day, or the
                           maximum allowable by law, of any past due amount, on
                           any Purchase Order undisputed in good faith. All
                           payments hereunder shall be made in U.S. dollars or
                           such other currency which may be agreed upon.

                  (d)      If any portion of Service Provider's account is more
                           than sixty (60) calendar days past due pursuant to
                           Section (b) above, Company may, at its option, cease
                           all deliveries to Service Provider, ship completed
                           Products in place, refuse to accept new orders, or
                           divert Products already ordered, unless past due
                           amounts, including interest payments, are paid in
                           full, or Company is in receipt of an irrevocable
                           letter of credit sufficient to cover all outstanding
                           amounts due confirmed by a United States bank
                           acceptable to Company; or another method of payment
                           has been mutually agreed to by the parties.

                  (e)      Company may, at its option, change the payment terms
                           provided in this section to require letters of credit
                           or cash in advance or both in the case of a
                           significant change of occurrence in Service
                           Provider's business such as ownership change,
                           financial difficulty, failure to keep undisputed
                           accounts current (payments received more than 10 days
                           beyond terms for more than three consecutive months
                           will be considered delinquent), bankruptcy, or other
                           significant change.

                  (f)      Payment of any amounts due Service Provider by
                           Company under this Agreement will be by an immediate
                           deduction to current amounts due Company.

                  (g)      each of Service Provider and Company shall appoint an
                           individual to serve as its Product Manager, who shall
                           be its primary representative for matters pertaining
                           to the ongoing activities contemplated under this
                           Agreement. Each party's Product Manager shall

***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>


DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 12



                           (1)      have overall responsibility for managing and
                                    coordinating the performance of such party's
                                    obligations under this Agreement and

                           (2)      Be authorized to act for and on behalf of
                                    such party with respect to all matters
                                    relating to this Agreement (except for any
                                    amendment to this Agreement).

         6.       Delivery Terms.

                  (a)      Unless otherwise specified by the Company, all
                           deliveries of Products by the Company to Service
                           Provider under this Agreement must be made FOB the
                           Company's manufacturing location, at which point
                           title and risk of loss and damage pass from the
                           Company to Service Provider. Delivery is deemed to
                           occur upon the Company's tender of Products to the
                           common carrier selected by Service Provider for
                           shipment to Service Provider.

                  (b)      If the Company does not deliver Products within
                           thirty (30) days of the delivery date specified in a
                           Purchase Order accepted by the Company, Service
                           Provider has the right to (i) cancel the Purchase
                           Order or (ii) extend the delivery date to a later
                           date, subject however, to the right to cancel the
                           Purchase Order if delivery is not made by the
                           extended date.

                  (c)      Service Provider must, at its sole cost, arrange for
                           the transport and insurance of Products purchased
                           from the Company. If the Company agrees to arrange
                           for transport and insurance as agent for Service
                           Provider, Service Provider shall reimburse the
                           Company its full costs.

                  (d)      Service Provider is solely responsible to cause
                           shipments of Products to clear customs at the port of
                           entry or export, including the satisfaction of all
                           documentation requirements (including special
                           documentation requirements that may apply to
                           shipments made to certain foreign customers) and
                           shall pay any applicable customs, duties, import
                           taxes, export costs and the like that may apply.

         7.       Returns Provisions.

                  (a)      No Products will be eligible for return if they are
                           manufactured and/or procured by the Company for
                           purchase by the Service Provider based solely upon
                           Service Provider's marketing and sales data or are
                           part of the

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DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
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                           initial inventory procurement except for those part
                           numbers noted on Exhibit B.

                  (b)      Newly issued part numbers and/or parts involved in a
                           reliability campaign will be eligible for return
                           after 24 months of part number or campaign
                           introduction if and only if 1) Company has
                           unilaterally determined Service Provider's stocking
                           level and 2) remaining stock exceeds 24 month's
                           usage. If parts meet these requirements, Service
                           Provider may return all remaining inventory. No
                           restocking charges will apply to such returns.

                  (c)      Products rendered obsolete due to Company's redesign
                           with a must conform classification will be eligible
                           for return by the Service Provider.

                  (d)      Product defined above as eligible for return must be
                           in "new" condition in the original packaging as
                           supplied by the Company; such packaging may not be
                           damaged, broken or in any way tampered with except
                           for ordinary wear incurred in shipping.

                           The Company shall pay to Service Provider in U.S.
                           Dollars an amount equal to the average inventory cost
                           of the items returned under this section less
                           restocking charges not to exceed ***% of list price.

                  (e)      The Company has the right to market and sell any
                           products the Service Provider returns in accordance
                           with the above provisions.

         8.       Warranty Disclaimer.


                  (a)      Service Provider shall pass through the Company's
                           standard warranty to all parties that purchase
                           Products from Service Provider, without varying any
                           of its terms or provisions.

                  (b)      The Company may change the standard warranty on new
                           Products by giving Service Provider written notice of
                           such new warranty at least 60 days' prior to its
                           effective date.

                  (c)      THE COMPANY MAKES NO WARRANTIES OF MERCHANTABILITY OR
                           FITNESS FOR A PARTICULAR PURPOSE


***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


<PAGE>

DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 14


                           OR USE EVEN IF THAT PURPOSE IS KNOWN TO THE COMPANY,
                           NOR ANY OTHER EXPRESS OR IMPLIED WARRANTY.

         9.       Ownership of Company Data.


                  (a)      All Company Data is, or will be, and shall remain the
                           property of Company. Without Company's approval (in
                           its sole discretion), the Company Data shall not be:

                           (1)      used by Service Provider other than in
                                    connection with providing the services
                                    contemplated by this Agreement,

                           (2)      sold, assigned, leased or otherwise provided
                                    to third parties by Service Provider,

                           (3)      commercially exploited by or on behalf of
                                    Service Provider.

                  (b)      Service Provider hereby irrevocably assigns,
                           transfers and conveys to Company without further
                           consideration all of its right, title, and interest
                           in and to the Company Data. Upon request by Company,
                           Service Provider shall execute and deliver any
                           documents that may be necessary or desirable to
                           preserve, or enable Company to enforce, its rights
                           hereunder with respect to the Company Data. For
                           purposes hereof, "Company Data" shall include all
                           sales reports, forecasts and other information
                           pertaining to the distribution, marketing and sale of
                           the Products, whether prepared by Company or Service
                           Provider, and all sales and other reports pursuant to
                           Section 3(q) above, whether or not such information
                           is Confidential Information as defined in this
                           Agreement. (Company Data shall exclude information
                           that is not compiled and reported pursuant to Section
                           3(q), or is not segregated from data regarding other
                           products sold by Service Provider).

                  (c)      Upon request by Company upon expiration or
                           termination of this Agreement, Service Provider shall

                           (1)      promptly return to Company, all of the
                                    Company Data or

                           (2)      eradicate or destroy all or any part of the
                                    Company Data in Service Provider's
                                    possession, in each case to the extent so
                                    requested by Company.

<PAGE>

DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 15

                  (d)      Except as noted above, each party shall be the owner
                           of its own data customer lists, records, and
                           intellectual property.

         10.      Term.

                  (a)      Unless earlier terminated as herein provided, this
                           Agreement shall commence on the Commencement Date and
                           terminate on December 31, 2011 (the "Expiry Date");
                           provided, however, the parties may, before the Expiry
                           Date, renew or extend this Agreement or the business
                           relationship contemplated hereby on such terms and
                           conditions as shall be mutually agreed in writing
                           between the parties.

         11.      Termination.

                  (a)      Termination for Convenience. Company may terminate
                           this Agreement, for convenience, by giving Service
                           Provider notice of the termination at least 120 days
                           prior to the termination date specified in the
                           notice; provided, however, that no such notice of
                           termination for convenience shall be given prior to
                           five years after Commencement Date.

                  (b)      Termination for Change in Control of Company. In the
                           event of a Change in Control of the Company, the
                           Company may terminate this Agreement by giving
                           Service Provider notice of the termination. Such
                           termination will be effective as of the time
                           specified in the notice of termination, but the
                           effective date of the termination may not be any
                           earlier than 120 days following Service Provider's
                           receipt of the notice.

                  (c)      Termination for Change in Control of Service
                           Provider. In the event of a Change in Control of
                           Service Provider or an Affiliate (defined below) in
                           which control over Service Provider is acquired by a
                           Company Competitor or by a party which in the
                           Company's reasonable judgment does not have the
                           capability to perform the Service Provider's
                           obligations (see Section 3), Company or by a party
                           which in the Company's reasonable judgement does not
                           have the capability to perform the Service Provider's
                           obligations (see Section 3), Company may terminate
                           this Agreement by giving Service Provider notice of
                           the termination within 30 days of the occurrence of
                           such Change in Control and at least 120 days prior to
                           the termination date specified in the notice. At the
                           Company's option, Company may require

<PAGE>

DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 16

                           Service Provider to continue to operate under this
                           Agreement for up to six (6) months from the notice of
                           termination in order to permit an orderly transfer
                           from Service Provider to the Company providing
                           services to customers internally or to permit the
                           Company to put in place an agreement in which a third
                           party provides such services.

                           In the event of a Change in Control of Service
                           Provider or an Affiliate exercising control of
                           Service Provider by which the Service Provider or
                           such Affiliate, as the case may be, is acquired by a
                           third party not a Company Competitor which causes
                           Service Provider's or such Affiliate's credit rating,
                           as determined by either Standard and Poors or Moody's
                           to fall one notch below the Service Provider's or
                           such Affiliate's credit rating prior to the Change in
                           Control, then the Company shall have up to one year
                           after the Change in Control to terminate the
                           Agreement if it reasonably determines that the
                           benefits and services provided by Service Provider
                           have been adversely affected, and the Company
                           provides Service Provider with 120 days prior written
                           notice of termination.

                           For purposes of this Agreement "Change in Control"
                           shall mean

                           (1)      the consolidation or merger of a party with
                                    or into any other entity, other than a
                                    consolidation or merger

                                    (a)      in which the party is the surviving
                                             corporation or entity in the
                                             consolidation or merger,

                                    (b)      with or into an Affiliate or

                                    (c)      with or into an entity which,
                                             immediately after the consolidation
                                             or merger, is controlled by persons
                                             who, immediately prior to that
                                             consolidation or merger, controlled
                                             such party, or

                           (2)      sale, transfer or other disposition of all
                                    or substantially all of the assets of a
                                    party (other than to an Affiliate), or

                           (3)      acquisition by any entity, or group of
                                    entities (other than an Affiliate or
                                    Affiliates) acting in concert, of beneficial
                                    ownership of 30 percent or more of the
                                    outstanding voting securities or

<PAGE>
DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 17


                                    partnership interests of a party; provided
                                    however, that the acquisition by TCG
                                    Holdings, LLC or any of its affiliates of
                                    either convertible preferred stock of
                                    Service Provider's ultimate parent solely in
                                    connection with the initial raising of
                                    capital to fund Service Provider's
                                    consummation of this Agreement or the
                                    possible subsequent conversion of such
                                    preferred stock into common stock of Service
                                    Provider's ultimate parent, shall not be
                                    deemed to be or cause a "Change of Control".

                           (4)      The cessation of control (by virtue of their
                                    not constituting a majority of directors) of
                                    the Service Provider's ultimate parent's
                                    Board of Directors by the individuals who
                                    (x) at the date of this Agreement were
                                    directors or (y) become directors after the
                                    date of this Agreement and whose election or
                                    nomination for election by the ultimate
                                    parent's stockholders, was approved by a
                                    vote of at least two-thirds of the directors
                                    then in office who were directors at the
                                    date of this Agreement or whose election or
                                    nomination for election was previously so
                                    approved.

                           For purposes of this Agreement, "Company Competitor"
                           means any business involved in the design,
                           manufacture (including, without limitation, any [PMA]
                           or other parts manufacturer), sale or repair of gas
                           turbine engines, including any business that is an
                           [Affiliate] of any entity engaged in such activities,
                           where such design, manufacture, sale or repair
                           generates annual sales revenues exceed $100,000,000
                           in gross sales.

                           For purposes of this Agreement, "Affiliate" means any
                           person that directly or indirectly through one or
                           more intermediary's controls, is controlled by, or
                           under Common control with the Service Provider.

                  (d)      Termination for Cause. If either party defaults in
                           any material respect in the performance of any of its
                           material obligations (or repeatedly defaults during
                           any rolling eighteen month period in any material
                           respect in the performance of a material obligation
                           but cures such default within the cure period
                           provided) under this Agreement, and does not cure
                           such default (or provide adequate assurances that
                           such repeated defaults will not continue to occur)
                           within 45 days of receipt of a notice of default, or
                           if a party becomes Insolvent, then the non-defaulting
                           party may, by giving notice to


<PAGE>

DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 18


                           the defaulting party, terminate this Agreement as of
                           the termination date specified in the notice. For
                           purposes of the foregoing, a party shall be regarded
                           as "Insolvent" if it (i) institutes proceedings to be
                           adjudicated voluntarily bankrupt or consents to the
                           filing of bankruptcy proceedings against it, (ii)
                           files a petition seeking reorganization under any
                           bankruptcy or similar law for the protection of
                           creditors, or consents to the filing of such a
                           petition against it, (iii) consents to the
                           appointment of a receiver, liquidator or trustee in
                           bankruptcy, or makes any assignment of a substantial
                           portion of its assets for the benefit of creditors,
                           (iv) admits in writing its inability to pay its debts
                           generally as they become due, (v) is subject to the
                           filing of an involuntary petition in bankruptcy
                           (which is not waived or stayed within 60 days), (vi)
                           is subject to any court order or decree adjudicating
                           it as a bankrupt or insolvent person by a court of
                           competent jurisdiction, or (vii) publicly announces
                           that it may file a petition as a bankrupt or
                           insolvent person under any law now or hereafter
                           applicable to the discharge or restructuring of
                           debts.

                  (e)      Termination Fees. (1) Set forth in Exhibit S are the
                           termination fees that would be payable to Service
                           Provider and inventory repurchase obligations of
                           Company if Company terminates this Agreement pursuant
                           to Section 11.a or Section 11.b. Except as otherwise
                           specifically set forth in this Section, no
                           termination fee shall be payable by Company in
                           connection with the termination of this Agreement.
                           (2) If the Company terminates this Agreement pursuant
                           to Section 11.(c), the Service Provider shall pay for
                           the following: (i) the cost of moving Products
                           purchased by Company pursuant to Section 11.(f)(2);
                           the cost of novating any contracts to be transferred
                           to Company pursuant to Section 11.(f)(4), up to $***;
                           and Service Provider shall at Company's request host
                           a website for Company dealing with the Product's for
                           up to one year from the date of termination of the
                           Agreement.

                  (f)      Post Termination Obligations.

***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


<PAGE>

DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 19



                           (1)      Option to Repurchase Products. Upon the
                                    expiration or termination of this Agreement,
                                    except as otherwise provided in (f) above,
                                    the Company has the option, but not the
                                    obligation, to purchase from Service
                                    Provider all (but not less than all) of the
                                    Products remaining in Service Provider's
                                    stock at the Service Provider's average cost
                                    net of the Service Provider's excess and
                                    obsolescence reserves with respect to the
                                    Products (which shall be determined on the
                                    basis of Generally Accepted Accounting
                                    Principles consistently applied and on the
                                    same basis as reserves are established for
                                    other inventory of the Service Provider). To
                                    exercise such option, the Company must
                                    notify Service Provider within 45 days after
                                    the date of termination of this Agreement.
                                    Service Provider shall deliver Products to
                                    the Company within 10 business days after
                                    the Company has given Service Provider
                                    notice of its exercise of the option and the
                                    price shall be paid in cash or as a credit
                                    against any indebtedness then owing by
                                    Service Provider to the Company at the time
                                    of delivery.

                           (2)      Return of Documents. Upon the termination of
                                    this Agreement, Service Provider shall use
                                    its reasonable business efforts to promptly
                                    return to the Company all Company Data and
                                    Confidential Information of Company. Upon
                                    the request of the Company, Service Provider
                                    must furnish the Company with copies of all
                                    data, reports, documents, drawings and
                                    manuals made by Service Provider dealing
                                    with or relating solely to the Products,
                                    except those which are necessary to complete
                                    Service Provider's performance under any
                                    contract that was entered into prior to
                                    receiving the notice of termination.

                           (3)      Customer Lists, Product Lists and Contract
                                    Obligations. Upon the termination of this
                                    Agreement, Service Provider must furnish the
                                    Company with (i) a list of Service
                                    Provider's customers for the Products and
                                    their addresses, (ii) a list of the Products
                                    in stock, and (iii) copies of Service
                                    Provider's contracts relating to the sale of
                                    the Products that have not been fully
                                    performed by Service Provider.

                           (4)      Option to Be Assigned Contracts. Upon the
                                    termination of this Agreement, Service
                                    Provider shall, at the Company's request,
                                    use its reasonable business efforts to
                                    effect an assignment to the

<PAGE>

DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 20
                                    Company (or a person designated by the
                                    Company) of the Service Provider's then
                                    existing contracts relating to the sale of
                                    the Products specified by the Company in the
                                    request. In order to exercise this option,
                                    the Company must notify Service Provider
                                    within 30 days after the date of its receipt
                                    of the documents specified in (c) above.
                                    Service Provider agrees to use its
                                    reasonable business efforts to effect the
                                    assignment within 10 days after the Company
                                    has notified Service Provider of its
                                    exercise of the option.

                           (5)      Transition. Upon the expiration or
                                    termination of this Agreement and if the
                                    Company so requests, Service Provider agrees
                                    to use its reasonable business efforts to
                                    cooperate with the Company in the transition
                                    to its own internal distribution system, for
                                    the Territory, and shall provide such
                                    assistance to the Company as is reasonably
                                    requested by the Company; provided however,
                                    that Service Provider shall have no
                                    obligation to provide assistance to any
                                    subsequent third party chosen as a Service
                                    Provider of the Products.

                                    Likewise, the Company and the Service
                                    Provider shall establish reasonable
                                    procedures for the collection of outstanding
                                    accounts receivable from customers, which
                                    may include the Company collecting such
                                    receivables on behalf of the Service
                                    Provider, as its agent and in return for
                                    reasonable compensation for such service.

         12.      Service Standards.

                  (a)      Designated Service Levels. The Parties shall at all
                           times from and after perform their obligations
                           hereunder in accordance with service levels and
                           performance standards mutually agreed on from time to
                           time between Company and Service Provider ("Service
                           Standards"). The Service Standards shall be measured
                           and reported on a monthly basis and reviewed for
                           compliance by Product Managers on a quarterly basis.
                           Per Exhibit M, the Company and the Service Provider
                           have agreed that either party will not seek monetary
                           penalties for non-compliance to the standards.

                  (b)      Adjustment of Service. The Product Managers for
                           Company and Service Provider shall review the
                           performance against the Service Standards at least
                           quarterly during the term, and shall call attention
                           to any failures in

<PAGE>

DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 21

                           performance or opportunities to improve performance.
                           In addition, either party may, at any time upon
                           notice to the other party, initiate negotiations to
                           review and, upon agreement by the parties, adjust a
                           Service Standard which party in good faith believes
                           is inappropriate because of a fundamental change in
                           circumstances; provided that no such change shall
                           take effect unless and until agreed in writing.

                  (c)      Corrective Action. Upon becoming aware of a failure
                           to perform in accordance with an applicable Service
                           Standard, a party asserting a breach of Service
                           Standard shall send written notice to the Product
                           Manager of the party that has breached the Service
                           Standard which notice, (1) identifies the cause of
                           such failure, and (2) provides the other party with a
                           report detailing the cause of, and expected procedure
                           for correcting, such failure. The notice detailing
                           the cause and recommended correction of any
                           performance failure will be deemed Confidential
                           Information of the parties. The party against whom
                           the breach of Service Standard is asserted shall have
                           150 days from the date of receipt of the notice to
                           correct the deficiency. If, after the first 150 day
                           period, the Service Standard is not within the
                           acceptable range set forth in Exhibit M, the party
                           shall have an additional 150 days to bring the
                           Service Standard within acceptable range. Failure to
                           have brought the Service Standard within the
                           acceptable range shall then be a material breach of
                           the Agreement and be the basis for immediate
                           termination for cause (i.e. without any further
                           notice period under Section 11.e).

                  (d)      Continuous Improvement and Best Practices. Each party
                           shall, on a continuous basis, as part of its total
                           quality management process, identify ways to improve
                           its performance and apply best business practice
                           (including improvements in available technology) to
                           achieve such performance improvements.

         13.      Marks and Proprietary Rights.

                  (a)      The Service Provider acknowledges the Company's
                           exclusive ownership of the Company's trade names,
                           service marks and trademarks, and all logos and
                           derivations thereof, and all names and marks licensed
                           to the Company (collectively, the "Marks").

<PAGE>

DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 22

                  (b)      Any proposed use of the Marks in connection with the
                           activities contemplated under this Agreement shall
                           require the prior written authorization of
                           Rolls-Royce plc, which may be given or withheld on a
                           case by case basis in its discretion. If permission
                           to use the marks is granted, the Service Provider
                           shall strictly adhere to all instructions,
                           limitations and restrictions placed upon such use,
                           and shall take any necessary steps to protect the
                           Marks in each jurisdiction of use. The Service
                           Provider further agrees to cease use of the Marks or
                           otherwise restrict use of materials bearing the Marks
                           whenever so instructed by the Company or Rolls-Royce
                           plc. No action taken or approval given pursuant to
                           the foregoing shall in any way create any express or
                           implied rights in or license in favor of the Service
                           Provider with respect to the Marks.

                  (c)      Upon termination of this Agreement, the Service
                           Provider shall cease using all Marks and Mark-bearing
                           stationery, business cards, sales literature and the
                           like, except as necessary to dispose of Products then
                           in Service Provider's inventory and any reference in
                           Service Provider's previously published catalogues.
                           The Service Provider will have no obligation to
                           return such materials to the Company. Thereafter, the
                           Service Provider shall no longer use any of the
                           Marks, except as permitted by law.

         14.      Limitation of Damages; Indemnification.


                  (a)      WITH REGARD TO CLAIMS BETWEEN THE PARTIES, NEITHER
                           PARTY SHALL BE LIABLE TO THE OTHER FOR ANY
                           INCIDENTAL, SPECIAL, CONSEQUENTIAL, PUNITIVE OR
                           EXEMPLARY DAMAGES ARISING OUT OF ANY OBLIGATION,
                           BREACH ACT OR OMISSION IN CONNECTION WITH THE
                           PERFORMANCE OF THE AGREEMENT, REGARDLESS OF WHETHER
                           THE CLAIM IS FOR BREACH OF CONTRACT, BREACH WARRANTY,
                           TORT (INCLUDING NEGLIGENCE) STRICT LIABILITY, OR
                           OTHERWISE.

                  (b)      With regard to claims from third parties; the Company
                           shall hold Service Provider harmless and indemnify it
                           from and against any and all claims, losses, costs,
                           damages and expenses (including reasonable attorney's
                           fees) which Service Provider may suffer as a result
                           of any loss to the persons or property of a third
                           party arising directly or indirectly from use of a
                           Product; provided, however, that the Company shall
                           have no such obligation to indemnify or hold Service
                           Provider harmless from any matters covered by Service
                           Provider's indemnity below. Service Provider shall
                           hold the Company harmless and indemnify it from and
                           against any and all claims,

<PAGE>
DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 23

                           losses, costs, damages and expenses (including
                           reasonable attorney's fees) which Company may suffer
                           as a result of any loss to the person or property of
                           a third person arising directly or indirectly from
                           the wrongful or negligent action or inaction of
                           Service Provider, or any other third party acting on
                           its behalf or under its direction with regard to the
                           Products; provided however, that the Service Provider
                           shall have no such obligation to indemnify or hold
                           the Company harmless from any matters covered by
                           Company's indemnity above.

         15.      Propriety Rights Indemnification.

                  (a)      The Company shall, at its own expense, defend any
                           suit instituted against Service Provider which is
                           based on an allegation that any Product manufactured
                           by the Company and sold to Service Provider hereunder
                           constitute an infringement of any patent, copyright,
                           trade secret or other proprietary right of any third
                           party and shall indemnify Service Provider against
                           any award of damages and costs made against Service
                           Provider by a final judgment of a court of last
                           resort if it is determined therein that any such
                           Product constitutes an infringement of any patent,
                           copyright, trade secret or other proprietary right of
                           any third party, provided that Service Provider gives
                           the Company timely notice in writing of any notice or
                           claims of infringement and permits the Company
                           through the Company's counsel to defend the same and
                           gives the Company all available information,
                           assistance and authority to enable the Company to
                           assume such defense. The Company shall have control
                           of the defense of any such suit, including appeals
                           from any judgment therein and any negotiations for
                           the settlement or compromise thereof with full
                           authority to enter into a binding settlement or
                           compromise.

                  (b)      In the event that any Product is held to infringe and
                           its use is enjoined, the Company shall, at its option
                           and expense, (i) procure for Service Provider and its
                           customers the right to continue using such Product,
                           (ii) provide the necessary parts and documentation to
                           replace or modify such Product so that it no longer
                           infringes, or (iii) grant Service Provider a credit
                           for such Product upon its return to the Company,
                           allowing for reasonable depreciation for use, damage
                           and obsolescence.

                  (c)      Notwithstanding the above, the Company shall have no
                           liability whatsoever to Service Provider with respect
                           to any patent infringement or claim
<PAGE>



DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 24


                           thereof which is based upon or arises out of (i) the
                           use of any Product in combination with an apparatus
                           or device not manufactured or supplied by the
                           Company, if such combination causes the infringement,
                           (ii) the use of any Product in a manner for which it
                           was neither designed nor contemplated, or (iii) any
                           modification of any Product by Service Provider or
                           any third party which causes the Product to become
                           infringing.

         16.      Confidentiality.

                  (a)      General Obligations. All Confidential Information
                           relating to or obtained from Company or Service
                           Provider shall be held in confidence by the recipient
                           to the same extent and in at least the same manner as
                           the recipient protects its own confidential or
                           proprietary information. Neither Company nor Service
                           Provider shall disclose, publish, release, transfer
                           or otherwise make available Confidential Information
                           of, or obtained from, the other in any form to, or
                           for the use or benefit of, any person or entity
                           without the disclosing party's prior written consent.

                           Each of Company and Service Provider shall, however,
                           be permitted to disclose relevant aspects of the
                           other's Confidential Information to its officers,
                           directors, partners, agents, professional advisors,
                           contractors, subcontractors and employees and to the
                           officers, directors, partners, agents, professional
                           advisors, contractors, subcontractors and employees
                           of its affiliates, (to the extent that such
                           disclosure is not otherwise restricted under any
                           contract, license, consent, permit, approval or
                           authorization granted pursuant to applicable law,
                           rule or regulation, and only to the extent that such
                           disclosure is reasonably necessary for the
                           performance of its duties and obligations under this
                           Agreement (or the determination or preservation of
                           its rights under the Agreement); provided, however,
                           that the recipient shall take all reasonable measures
                           to ensure that Confidential Information of the
                           disclosing party is not disclosed or duplicated in
                           contravention of the provisions of this Agreement by
                           such officers, directors, partners, agents,
                           professional advisors, contractors, subcontractors
                           and employees.

<PAGE>

DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 25

                           If either party intends to disclose any Confidential
                           Information in connection with any claim or action to
                           determine or preserve its rights under this
                           Agreement, then that party will give prior notice to
                           the other party and take such reasonable actions as
                           may be specified by the other party to obtain a
                           protective order or cause the Confidential
                           Information to be filed under seal (or give the other
                           party an opportunity to obtain a protective order).

                           The obligations in this Section shall not restrict
                           any disclosure pursuant to any applicable law or by
                           order of any court or government agency (provided
                           that the recipient shall give prompt notice to the
                           disclosing party of such order, shall disclose only
                           such Confidential Information as the recipient is
                           required to disclose under the applicable law or
                           order, and shall take such reasonable actions as may
                           be specified by the disclosing party to resist
                           providing such access or to obtain a protective
                           order) and shall not apply with respect to
                           information that (1) is independently developed by
                           the recipient without violating the disclosing
                           party's proprietary rights, (2) is or becomes
                           publicly known (other than through unauthorized
                           disclosure by a party), (3) is already known by the
                           recipient at the time of disclosure without any
                           obligation of confidentiality to the disclosing
                           party, or (4) is disclosed to a party by a third
                           person which the recipient reasonably believes has
                           legitimate possession thereof and the unrestricted
                           right to make such disclosure.

                  (b)      Unauthorized Acts. Without limiting either party's
                           rights in respect of a breach of this Section, each
                           party shall:

                           (1)      promptly notify the other party of any
                                    unauthorized possession, use or knowledge,
                                    or attempt thereof, of the other party's
                                    Confidential Information by any person or
                                    entity that may become known to such party;

                           (2)      promptly furnish to the other party the
                                    details of the unauthorized possession, use
                                    or knowledge, or attempt thereof, known by
                                    such party and assist the other party in
                                    investigating or preventing the recurrence
                                    of any unauthorized possession, use or
                                    knowledge, or attempt thereof, of
                                    Confidential Information;

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DISTRIBUTION SERVICES AGREEMENT
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                           (3)      cooperate with the other party in any
                                    litigation and investigation against third
                                    parties deemed necessary by the other party
                                    to protect its proprietary rights; and

                           (4)      promptly use its commercially reasonable
                                    efforts to prevent a recurrence of any such
                                    unauthorized possession, use or knowledge,
                                    or attempt thereof, of Confidential
                                    Information.

                                    Each party shall bear the cost it incurs as
                                    a result of compliance with this Section.

                  (c)      Confidential Information. "Confidential Information"
                           of a party shall mean all information and
                           documentation of such party (or its affiliates),
                           whether disclosed to or accessed by the other party
                           (or its affiliates) in connection with the activities
                           contemplated by this Agreement that has been marked
                           as "Proprietary" or "Confidential" or bears some
                           other proprietary designation, or if disclosed
                           orally, has been designated by a party as
                           confidential in a letter or other written statement
                           made to the other party promptly following its
                           disclosure, and shall include, without limitation,

                           (1)      information concerning business plans,

                           (2)      financial information,

                           (3)      information concerning operations and the
                                    results of operations,

                           (4)      pricing information and marketing
                                    strategies,

                           (5)      information that a party is legally
                                    obligated not to disclose,

                           (6)      information that qualifies as a trade secret
                                    under applicable law,

                           (7)      patents, unpatented inventions and
                                    information regarding product development
                                    and improvements,

                           (8)      engine and parts specifications and
                                    drawings, and

                           (9)      material and performance specifications.

<PAGE>


DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 27


         17.      Foreign Corrupt Practices Act: Export Laws.

                  (a)      Service Provider represents and warrants that it will
                           comply with all laws applicable in the Territory
                           relating to the conduct of business practices,
                           including those that may prohibit gratuities,
                           inducements, or certain other payments. Service
                           Provider acknowledges that the Company may be subject
                           to certain United States laws, including the Foreign
                           Corrupt Practices Act of 1977 and any of its
                           amendments, which may apply to activities carried out
                           on the Company's behalf outside the United States of
                           America.

                           Service Provider agrees neither to take nor omit to
                           take any action if such act or omission might cause
                           the Company or the Service Provider to be in
                           violation of any such laws. Upon written notice from
                           the Company, Service Provider shall provide such
                           information as the Company may reasonably consider
                           necessary to verify compliance by Service Provider
                           with the provisions of this Section.

                  (b)      Service Provider may not enter into any contract or
                           other arrangement or sell any Products to any third
                           party if so doing would cause the Company to be in
                           violation of any applicable laws, including, without
                           limitation, U.S. laws and regulations prohibiting
                           exports to certain countries. The Company may not
                           enter into any contract or other arrangement or sell
                           any Product to any third party where Service Provider
                           shall be required to deliver Products on behalf of
                           the Company if so doing would cause the Service
                           Provider to be in violation of any applicable laws,
                           including without limitation, US laws and regulations
                           prohibiting export to certain countries.

                  (c)      Service Provider shall indemnify the Company against
                           any penalties, losses or damages (including legal
                           fees, penalties and costs of investigation) which the
                           Company may incur because of a breach of its
                           obligations under this Section.

                  (d)      In those circumstances where Service Provider is
                           providing goods or services without charge to third
                           parties or where Service Provider is compensated by
                           Company for providing such goods or services,
                           including but not limited to, support of Company's
                           new engine sales programs, warranty return, product
                           recall programs and support of the Company's foreign
                           agents, the Company agrees that:
<PAGE>

DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 28

                           (1)      the Service Provider may be subject to
                                    certain United States and foreign laws,
                                    including but not limited to the Foreign
                                    Corrupt Practices Act of 1977 and any of its
                                    amendments, which may apply to activities
                                    carried out by Service Provider outside the
                                    United States of America in connection with
                                    Service Provider's providing goods or
                                    services pursuant to the agreements
                                    described in Section (d) above. The Company
                                    agrees neither to take nor omit to take any
                                    action if such act or omission might cause
                                    the Service Provider or the Company to be in
                                    violation of any such laws. Upon written
                                    notice from Service Provider, Company shall
                                    provide such information as Service Provider
                                    may reasonably consider necessary to verify
                                    compliance by Company with the provisions of
                                    this Section; and

                           (2)      The Company shall indemnify the Service
                                    Provider against any penalties, losses or
                                    damages (including legal fees, penalties and
                                    costs of investigation) which the Service
                                    Provider may incur because of a breach of
                                    its obligations under this Section.

         18.      No Partnership or Joint Venture: Independent Contractor. The
                  parties hereto intend by this Agreement solely to effect the
                  appointment of the Service Provider as an independent
                  contractor with the Company for the marketing of the Products
                  as a Service Provider of the Company in the Territory. No
                  other relationship is intended to be created between the
                  parties hereto. Nothing in this Agreement shall be construed
                  as (a) giving the Service Provider any rights as a partner in
                  or owner of the business of the Company, (b) giving the
                  Company any rights as a partner in or owner of the business of
                  the Service Provider, (c) entitling the Service Provider to
                  control in any manner the conduct of the Company's business or
                  (d) entitling the Company to control in any manner the conduct
                  of the Service Provider's business. The Service Provider shall
                  not have, nor shall it represent itself as having, the power
                  to make any contracts or commitments in the name of or binding
                  upon the Company.

         19.      Expenses. Except as otherwise expressly provided in this
                  Agreement, each party to this Agreement shall bear its own
                  expenses including, without limitation, rent, travel,
                  entertainment, secretarial or other office expense, postage,
                  telephone and other communications costs.

<PAGE>


DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 29

         20.      Notices. All notices required or permitted to be given
                  hereunder shall be in writing and shall be deemed given (a)
                  when delivered in person at the time of such delivery or by
                  telecopy with confirmed receipt of transmission at the date
                  and time indicated on such receipt or (b) when received if
                  given by an internationally recognized express courier service
                  as follows:

                         If to the Company:

                         Rolls-Royce Corporation
                         P.O. Box 420
                         Indianapolis, IN 46206
                         Attention: Norm Britton, Speed Code U21
                         With copy to Director of Contracts, Speed Code U27

                         If to the Service Provider:
                         (need Aviall's point of contact for contractual issues,
                         address, etc.)

                  or at such other respective addresses or addressees as may be
                  designated by notice given in accordance with the provisions
                  of this Section 21.

         21.      Dispute Resolution.

                  (a)      Product Managers. Any dispute arising under this
                           Agreement (other than payment delinquencies and
                           matters for which injunctive relief may be sought
                           pursuant to (d) below) shall be considered at an in
                           person meeting of the Company's Product Manager and
                           the Service Provider's Product Manager within five
                           business days of receipt by either party of written
                           notice specifying the nature of the dispute, and
                           proposing a place for such meeting (which unless
                           otherwise agreed shall be the principal place of
                           business of the party receiving such notice). If the
                           Product Managers cannot resolve the dispute within 30
                           calendar days of such meeting, the dispute will be
                           escalated within the parties' respective
                           organizations as follows: to the Company's President,
                           Defense North America Customer Facing Business Unit,
                           and to the Service Provider's President. If such
                           dispute has not been resolved within 30 days of such
                           escalation, then either party may pursue arbitration
                           of such dispute pursuant to the terms of this
                           Agreement.

<PAGE>


DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 30

                  (b)      Conduct Pending Resolution. The parties acknowledge
                           that the timely performance of obligations pursuant
                           to this Agreement is critical to their business
                           operations. Accordingly, in the event of a dispute
                           between the parties, each party shall continue to
                           perform its obligations, but without prejudice to its
                           rights to pursue remedies in accordance with the
                           provisions hereof.

                  (c)      Arbitration. Except as provided in Section (d) below,
                           any dispute, breach, controversy or claim arising out
                           of or relating to this Agreement shall be finally
                           settled by arbitration in New York City in accordance
                           with the Commercial Arbitration Rules of the American
                           Arbitration Association in effect on the date of this
                           Agreement and judgment upon the award rendered by the
                           arbitrator(s) may be entered in any court having
                           jurisdiction thereof.

<PAGE>
DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 31

                  (d)      Other Remedies. Except as may be otherwise expressly
                           provided herein, the remedies set forth in this
                           Agreement shall not be exclusive of any others that
                           may be available under applicable law. In particular,
                           the parties agree that monetary damages alone are an
                           inadequate remedy for violations of Sections 9, 11,
                           13, 16 and 22 of this Agreement and, accordingly, a
                           party may seek equitable remedies, including
                           injunctive relief, in any court of competent
                           jurisdiction for a violation of such provisions.

                  (e)      The arbitration shall be conducted in the English
                           language. This Section 21 provides the sole recourse
                           for the settlement of any dispute or breach arising
                           under or in connection with this Agreement

                  (f)      In the event of any dispute, breach, controversy or
                           claim arising out of or relating to this Agreement,
                           the transactions contemplated hereby or the subject
                           matter hereof, resulting in arbitration hereunder,
                           the prevailing party shall, in addition to such other
                           relief as an arbitrator may award, be entitled to
                           recover reasonable attorneys' fees, costs and
                           expenses (including, without limitation, attorneys'
                           fees, costs and expenses in any arbitration
                           proceeding or any settlement prior to or during such
                           proceeding) from the breaching party.

         22.      Non Solicitation. Each party agrees that during the term of
                  this Agreement they will not directly or indirectly employ,
                  solicit for employment or assist any third party to employ or
                  solicit for employment, any employee of the other party, or
                  any employee of any affiliate of the other party. Nothing in
                  this provision will prohibit either party from placing
                  advertisements of open positions for employment in trade and
                  general circulation publications.

         23.      Force Majeure.

         (a)      Neither party hereto shall be responsible or liable in any way
                  for its failure to perform its obligations hereunder, other
                  than for payment of money, if such failure to perform is
                  beyond the control of the Company or the Service Provider,
                  whether caused by acts of God, unavailability or shortages of
                  raw materials from usual sources of supply or unavailability
                  or shortages of energy necessary to produce and/or deliver the
                  Products by usual modes of transportation, fire, flood, war,
                  embargo, strikes, labor disputes, explosions, riots, or laws,
                  rules, regulations, restrictions and orders of any
                  governmental authority to which such entity is subject, or any
                  cause, other than financial, beyond the reasonable control of
                  the affected party. Such failure shall not terminate this
                  Agreement, but the obligations

<PAGE>

DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 32


                  of the affected party shall be suspended during the period
                  when performance is so suspended, unless such period exists
                  beyond a period of one hundred and twenty (120) days, in which
                  event either party shall have the right at any time thereafter
                  during such force majeure to terminate this Agreement upon
                  written notice to the other party without further obligation
                  or liability. The party so prevented from complying with its
                  obligations hereunder shall immediately notify and keep the
                  other party from time to time apprised thereof, and such party
                  so prevented shall use reasonable efforts to remove or
                  overcome the cause of such inability to comply with its
                  obligations under this Agreement. Nothing herein shall be
                  construed to require the settlement of strikes, lockouts, or
                  other labor difficulty by the party involved contrary to its
                  wishes.

         24.      Effect of Termination. In the event of the termination of this
                  Agreement, and subject to recovery provided by an arbitrator
                  pursuant to Section 22, all rights and obligations of the
                  parties hereunder shall cease and terminate, except as to the
                  payment of any sum or sums owed to either party as of the date
                  of termination, except the Company's obligation to fill
                  Service Provider's purchase orders which the Company has
                  accepted and except as to the provisions of Sections 8, 9, 11,
                  13, 14, 15, 16, 17, 21, and 24 hereof, all of which shall
                  survive the termination of this Agreement.

         25.      ENTIRE AGREEMENT. THIS AGREEMENT, INCLUDING EXHIBITS A THROUGH
                  T ATTACHED HERETO AND INCORPORATED AS AN INTEGRAL PART OF THIS
                  AGREEMENT, CONSTITUTES THE ENTIRE AGREEMENT OF THE PARTIES
                  WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND SUPERSEDES ALL
                  PREVIOUS SERVICE PROVIDERSHIP AGREEMENTS BY AND BETWEEN
                  COMPANY AND SERVICE PROVIDER AS WELL AS ALL PROPOSALS, ORAL OR
                  WRITTEN, AND ALL NEGOTIATIONS, CONVERSATIONS OR DISCUSSIONS
                  HERETOFORE HAD BETWEEN THE PARTIES RELATED TO THIS AGREEMENT.

         26.      Applicable Law. This Agreement shall be governed and
                  controlled as to validity, enforcement, interpretation,
                  construction, effect and in all other respects by the internal
                  laws of the State of New York applicable therein, without
                  giving effect to the conflicts of laws principles thereof.

         27.      Amendments. This Agreement may not be amended, nor shall any
                  waiver, change, modification, consent or discharge be
                  effected, except by an instrument in writing

<PAGE>

DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 33


                  executed by or on behalf of the party against whom enforcement
                  of any such amendment, waiver, change, modification, consent
                  or discharge is sought.

         28.      Severability. The invalidity of any provision of this
                  Agreement, or portion thereof, shall not affect the validity
                  of the remainder of such provision or of the remaining
                  provisions of this Agreement.

         29.      Section Headings. The headings contained in this Agreement are
                  for reference purposes only and shall not in any way affect
                  the meaning or interpretation of this Agreement.

         30.      Assignability. This Agreement shall be binding upon, and inure
                  to the benefit of, the parties, their successors and their
                  permitted assigns. Neither this Agreement nor any interest
                  herein may be assigned by either party without the prior
                  written consent of the other party, except that either party
                  may assign its interests to an affiliate that is fully capable
                  of performing all obligations under this Agreement and, if
                  appropriate, such performance is guaranteed by its corporate
                  parent.

         31.      Non-Waiver. Failure, delay or forbearance of either party to
                  insist on strict performance of the terms and provisions of
                  this Agreement, or to exercise any and or remedy, shall not be
                  construed as a waiver thereof and shall not waive subsequent
                  strict performance by a party.

         32.      Counterparts. This Agreement may be executed in multiple
                  counterparts, each of which shall be deemed to be an original
                  and all such counterparts shall constitute but one instrument.

                                    * * * * *


<PAGE>

DISTRIBUTION SERVICES AGREEMENT
Rolls-Royce Corporation
Page 34




IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                          ROLLS-ROYCE CORPORATION


                                          By: /s/ Richard B. Lewis, II
                                             -------------------------------
                                          Name:    Richard B. Lewis, II
                                          Title:   Chief Operating Officer -
                                                   Indianapolis


                                          AVIALL SERVICES, INC.

                                          By: /s/ Paul E. Fulchino
                                             ----------------------------------
                                          Name:    Paul E. Fulchino
                                          Title:   Chairman, President and CEO

<PAGE>

LIST OF EXHIBITS

Exhibit A                     List of Products
Exhibit B                     On-Hand Inventory Purchase
Exhibit B-1                   List of Initial Inventory Purchase
Exhibit B-2                   Packaging Requirements
Exhibit B-3                   Schedule Exceptions
Exhibit C                     Warranty Return Program
Exhibit D                     Production Engine Support
Exhibit E                     Product Recall
Exhibit F                     Forecasting
Exhibit F-1                   Eighteen Month Schedule
Exhibit G                     Foreign Government Contracts and Agreements
Exhibit G-1                   Current Foreign Government Contracts
Exhibit H                     Foreign Sales Agents
Exhibit I                     Sales Reports/Metrics
Exhibit J                     Marketing and Supplier Support Services
Exhibit K                     Transfer Price
Exhibit L                     List Prices
Exhibit M                     Penalties and Late Delivery Fees
Exhibit N                     U.S. Military Sales
Exhibit O                     Sales to Industrial Customers
Exhibit P                     Serviceable, Surplus, and Repaired Parts Sales
Exhibit Q                     Quality Guidelines
Exhibit R                     Payment Terms
Exhibit S                     Termination Fees
Exhibit T                     AMCs and FMCs



<PAGE>


                                    EXHIBIT A

                    T56 SERVICE PROVIDER APPLICABLE PRODUCTS




<PAGE>



                                    EXHIBIT B

                           ON HAND INVENTORY PURCHASE

Service Provider will purchase all Company inventory of Products identified in
Exhibit B-1 for $*** under the following conditions:

    o    All Products to be purchased must be in new condition, properly marked
         and packaged and accompanied by the appropriate documentation (i.e.,
         packing list) set forth in Exhibit B-2.

    o    Transfer of material to the Service Provider's facilities must be
         completed by December 31, 2001.

    o    Thermocouples, part number 23067633, are the only Product in the
         initial inventory purchase eligible for return per section 7(b).

    o    The Service Provider and the Company understand that, due to sales and
         production in the last three months of the year (2001), the specific
         part number mix and quantities available for transfer will differ from
         the inventory identified in Exhibit B-1. In order to maintain value of
         transferred inventory (at 2001 prices), parts in same part family as
         identified in Exhibit B-1 may be substituted for undelivered parts
         provided that the quantity of substituted parts does not exceed one
         year's sales history.

    o    The Service Provider will take responsibility for the remaining 2001
         production schedule (October through December) and commits to purchase
         this inventory by December 31, 2002 at the negotiated transfer price
         but excluding items identified in Exhibit B-3. The Service Provider
         will not be required to procure these parts. The Company retains the
         right to competitively market these part numbers until the initial
         supply is exhausted.

***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.



<PAGE>


                                   EXHIBIT B-1

                    ON HAND INVENTORY AS OF SEPTEMBER 8, 2001

The following table identifies the value (at list price) of each part family as
of September 8, 2001.




                                          
TOTAL                                         $***
A PARTS                                       $***
B PARTS                                       $***
C PARTS                                       $***
NO SALES                                      $***


The attached Excel file includes the following information (by part number) in
regards to the September 8, 2001 inventory:

o   Part Description

o   List Price

o   Extended List Price

o   Part "Family" (A, B, C, or No Sales)

***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


<PAGE>


                                   EXHIBIT B-2

                             Packaging Requirements

Parts are to be packaged and shipped in accordance with the specific requirement
of contract between Company and specific customers. Packaging for the majority
of Products is done using commercial practices and in accordance with
ASTM-D-3951 (latest revision). Military packaging and marking is required for a
small amount of U.S. military contracts. This packaging and marking is done in
accordance with the following military specifications predominantly added in
boilerplate language:

     o   MIL-STD-2047 for packaging

     o   MIL-STD-129M for marking

Company will notify Service Provider in writing at least thirty (30) days in
advance if 1) it amends the packaging requirements of any contract or 2) it
enters into any new contract with packaging requirements other than those
identified above. Packaging setups for all T56 parts/contracts can be accessed
via the SAP link between the Service Provider and the Company.

<PAGE>


                                   EXHIBIT B-3

                               Schedule Exceptions


<Caption>

ITEM       PART NO                  DESCRIPTION      ITEM         PART NO          DESCRIPTION
----      --------                ---------------    ----         -------          ---------------
                                                                   
  1       23005861                SUPPORT ASSY -      45          23060837         LEAD ASSY, SPAR
  2       6895689                 EXCITER ASSY, I     46          6846368          GEAR, SPUR - OI
  3       23001194                HOUSING & DIAPH     47          6854398-38       GEAR
  4       23009793                WHEEL, TURBINE-     48          6724756          NUT - 3.188-24
  5       23031741                VANE SEGMENT AS     49          6792871          PLUNGER, THRUST
  6       6785232                 CAGE - TURBINE      50          6720633          CAGE, 2.1661 ID
  7       6786556                 COUPLING - RING     51          30865            GASKET
  8       23008864                WHEEL COMPRESSO     52          23003210         SEPARATOR, MAIN
  9       6731153-3               CAGE BRG 1.3779     53          6854945          SPACER, SLEEVE-
 10       6792068                 TUBE, BEARING L     54          6841728-037      STUD, P.003
 11       6845593                 WHEEL, TURB 3RD     55          AN100041         COVER, STARTER
 12       23031179                WHEEL, COMPR 9T     56          6823167P003      STUD
 13       6842683                 SPACER ASSY         57          23007462         INSERT, TURB. -
 14       6793049                 PUMP ASSY, OIL      58          8982160P003      SCREW
 15       23058588                BEARING, ROLLER     59          6844619          RETAINER, VANE
 16       23001196                HOUSING ASSY, R     60          6780820-5        FERRULE, STRAIG
 17       6827186                 UNIVERSAL JOINT     61          23063839-03      COVERPLATE ASSY
 18       23006660                PUMP AND FILTER     62          6815126          DISTRIBUTION BO
 19       23064888                BEARING, ROLLER     63          6842836          TUBE ASSY, OIL-
 20       6846567                 PUMP ASSY, OIL      64          23007588         INSERT, TURB.-F
 21       23031979                ACCELEROMETER,      65          6840383-14       BOLT
 22       6827812                 CONNECTOR, NO.      66          6846454-061140   SHAFT & GEAR AS
 23       23007553                COUPLING, TURBI     67          6877213          HOSE ASSY, TFE
 24       6792413                 BOLT                68          6823167P001      STUD
 25       6787344                 SHAFTGEAR, ACC      69          6846063          WASHER - FLAT .
 26       23062341                BEARING, ROLLER     70          6748072-775      RING, RETAINING
 27       6786386                 TUBE ASSY           71          6791530          STUD, .375-16 X
 28       6794094                 CLAMP ASSY, FIL     72          23032516-1       COVERPLATE, 2 S
 29       23052067                BEARING, ROLLER     73          AN151007         STUD
 30       23067603                BLADE COMPRESSO     74          6829473-1        PLUG
 31       6794716                 NUT, COMPR REAR     75          6723117          SPACER, GENERAT
 32       23007561                SUPPORT & SUMP      76          MS35202-70       SCREW


<PAGE>



<Caption>

ITEM       PART NO                  DESCRIPTION      ITEM         PART NO          DESCRIPTION
----      --------------          ---------------    ----         -------          ---------------
                                                                   
 33       6816172                 CONNECTOR, RECE     77          6877218          HOSE ASSY, TFE
 34       6723126-1               JOURNAL, OIL PU     78          6780746-3        NUT - HEX COUPL
 35       23007068                INSULATION BLAN     79          6827810          TUBE ASSY, FUEL
 36       6895554                 FILTER ELEMENT      80          6841974          BRACKET ASSY, F
 37       6814990                 DISTRIBUTION BO     81          23073646         PLATE, IDENTIFI
 38       23007557                KEY, TURBINE CA     82          AN804D10         TEE, .875-14
 39       6892375                 HARNESS ASSY, T     83          MS9696-04        BOLT, MACH 12 P
 40       6821491                 FILTER ASSY, HI     84          6842324-06       PIN
 41       6812283-420             NUT, SELF LOCKI     85          6785824          BRACKET
 42       6794092                 BRACKET ASSY, F     86          AN174-15         BOLT, .250-28 X
 43       6847935-219040          SLEEVING S/O
 44       6823166P002             STUD




<PAGE>


                                    EXHIBIT C

                             WARRANTY RETURN PROGRAM

Service Provider will administer the Company's warranty for Products in
accordance with its terms and in a manner consistent with the Company's general
directions and policies as advised to Service Provider in writing from time to
time. Such administration shall include:

     o   Receipt and processing of warranty claims

     o   Collection of Product subject to claims

     o   Tracking of Product subject to claims

     o   Shipment of Product subject to claims, at the Company's expense, to the
         Company

     o   Communication of warranty disposition to the customer

     o   Shipment of repaired warranty Product, at the Company's expense, to the
         customer when applicable

<PAGE>


                                    EXHIBIT D

                            PRODUCTION ENGINE SUPPORT

New Engine Production Support

Company may from time to time require Product be returned from Service Provider
to support Company's new engine production.

When such requests are made:

o   Company will place an order with Service Provider.

o   Service Provider will ship Product to Company's designated address.

o   Service Provider will issue an invoice or return order for credit to
    Company using Service Provider's *** plus an inventory "buy-back" fee of
    ***% of list price.

o   Company will be responsible for freight cost of such shipments.

o   Company will use reasonable efforts to minimize quantity of these
    occurrences.

o   Company agrees that inventory pulled back for production purposes will not
    exceed ***% of sales, at list price, in any given year.


***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.



<PAGE>



                                    EXHIBIT E

                                 PRODUCT RECALL

The Service Provider will be notified if Company determines that a product
recall is required.

Service Provider will follow its then current ISO 9002 procedures for recalls.
Service Provider will charge Company only the variable cost associated with any
recall, primarily labor cost related to communication, shipping, tracking and
inspection tasks. Also, Company will bear any freight cost or scrap cost
incurred by the recall.


<PAGE>


                                    EXHIBIT F

                                   FORECASTING

The Service Provider will provide a forecast to the Company. Service Provider
will maintain a rolling 36-month monthly forecast of Product purchases for the
Company's planning purpose.

Within two weeks of signing this Agreement, Service Provider will place a firm
order for that portion of the existing Model T56 spare parts
fabrication/procurement schedule for eighteen months as provided in attached
Exhibit F-1. The Service Provider also commits to purchase production backlog,
based upon the Company's production schedule titled "18 month schedule
revisions.xls 10/10/01" previously delivered to Service Provider. Service
Provider and Company will jointly evaluate that portion of the existing Model
T56 spare parts fabrication/procurement schedule at or within eighteen months to
minimize Service Provider's requirement to purchase excess inventory.
Consideration will be given to rescheduling parts outside of the planning time
fence provided overall volumes do not decline below the forecasted order board
within a given year. The Service Provider is not required to procure those parts
in the initial 18 month schedule within planning time fence if identified in
Exhibit B-3. The Company retains the right to market these parts.

Consideration may also be given to the Service Provider for T56-A-427 parts in
the existing 18 month schedule. Inventory for these parts will be assessed in
July 2002 to determine if T56-A-427 inventory levels are excessive. Inventory
will be considered excessive if remaining inventory is greater than annualized
sales based on January through June activity. For any part numbers deemed to
have excessive inventory, the Company shall re-purchase the inventory for
production requirements or by pay Service Provider an amount equal to ***%
of list price for all such Products per month until the quantity of Service
Provider's inventory of such Products, on a part number by part number basis, is
no longer "excessive" as defined above.

The first eighteen months of the 36-month monthly forecast, or that portion of
the schedule at or within the operations planning time fence, whichever is
greater, would be considered a firm fixed schedule/purchase order with a
provision for fill in orders at lead time. Service Provider may reschedule or
cancel previously scheduled Product outside of the planning time fence in
accordance with the Company's commitment acceptance process provided overall
dollar volumes do not decline below the forecasted order board within a given
year. The remaining portion of the 36-month monthly forecast will be utilized
for capacity planning by the Company.

In accordance with the Statement of Work and the Service Provider's proposal,
the Service Provider will forecast demand to level load the manufacturing
facilities. The Service Provider will work within the Company's SORB acceptance
process to schedule

***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>


deliveries and bears the responsibility to level pulse buys according to
manufacturing capacity. The Service Provider may be required to build inventory
in advance of major deliveries.

The Service Provider shall, at the Company's request, provide source data used
to compile forecasts. This data may include sales history, customer call
reports, customer orders, forecasting algorithms, etc...

<PAGE>


                                    EXHIBIT G

                   FOREIGN GOVERNMENT CONTRACTS AND AGREEMENTS

The Company has agreements and contracts with specific foreign government
customers (or contractors on behalf of such governments) (see below) pursuant to
which government customer purchase requirements are such that the government
chooses to contract directly with Company. Copies of these contracts will be
provided to the Service Provider on or before November 15, 2001 and are
summarized in Exhibit G-1. In order to preserve these relationships and fulfill
these government contracting requirements, the Service Provider agrees to honor
these agreements, including the terms of sale. In addition, the Company retains
the right to renew existing agreements with such government customers; provided,
however, that the Company will only commit to same or substantially similar
terms. In some instances, the Company may enter into an agreement with the same
or substantially similar terms with a commercial entity acting on the behalf of
a government customer then under contract with Company or under a government
contract.

Company may also enter into new agreements with other foreign government
customers (or their contractors) not set forth on Exhibit G-1 and Service
Provider agrees to honor these agreements, including the terms of sale; provided
however that the non financial terms of such new agreements are similar to those
set forth on Exhibit G-1. The Company recognizes that Service Provider profits
are predicated upon sales history for commercial and foreign government
customers with an average price of list minus ***%. If the Company negotiates
future agreements with foreign government customers, the Service Provider and
Company must mutually agree on terms.


***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


<PAGE>


                                   EXHIBIT G-1

                      CURRENT NON U.S. GOVERNMENT CONTRACTS

The types of the military agreements and contracts referenced in Exhibit G are
Basic Ordering Agreements (BOAs), Blanket Purchasing Agreements (BPAs),
Requirements Contracts, General Terms and Agreements (GTAs), and Authorized
Military Overhaul Facility (AMOF) agreements. The agreements are with foreign
government entities. Discount structures of current existing agreements with
such government customers follow.


<Caption>



              COMPANY NAME                           DISCOUNT                                             DOCUMENT
              ------------                           --------                                             --------
FMS
                                                                                                

        Ishikawajima-Harima Heavy Ind.              ***% Off List                                           GTA
        (IHI); expires 2012

        Safe Air Limited; expires April 6, 2006     ***% off List                                           BOA

        Turkish Air Force Command*                  ***% off List; ***% off list for
                                                    expedite orders                                         BOA

        Embassy of Singapore; expires               ***% off List to $***, then ***%                        BOA
        March 22, 2005

        Republic of Korea; expires                  ***% off List for new parts; ***% off
        December 31, 2003                           list for repaired or serviceable parts                  BOA

        Embassy of  Australia (RAAF);               ***% off List to $***, then ***%                        BOA
        expires June 30, 2002

AMOF

        Fiat Avio Inc. (Italian A/F)**              ***% off List (*** plus ***)                            AMOF AGREEMENT

*  Agreement with Turkish Air Force Command valid for one year with yearly
renewals. Either Company or Customer can terminate for convenience. All Turkish
Air Force Command sales go through a foreign sales agent (DORMAK).

** Agreement with Fiat Avio expires November 22, 2001. Renewal clause for three
years for one dollar provided no breach of contract.


***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>



                                    EXHIBIT H

                         FOREIGN SALES AGENCY AGREEMENTS

The Company currently is a party to agreements with certain foreign sales agents
or representatives (see below) for the sale of Products outside the United
States. The Company will continue to administer agreements for these foreign
sales agents; however, the Service Provider agrees to share in commission
expenses. The Service Provider is only responsible for ***% of commission
payments to the following foreign sales agents:


<Caption>
COMMENCE       EXPIRATION      COMPANY                                   COUNTRY       POINT OF           COMMISSIONS
DATE           DATE            NAME                                      CONTACT                          % OF NET SELLING PRICE
                                                                                          
5/31/2001      5/31/2002       United Aviation Engine Company, Ltd.      Thailand      Joomnanond         ***%

10/15/1999     10/16/2001      Inter-State Enterprises Corporation       Korea         Limb               ***%

5/15/2001      5/15/2002       Megamas Sdn Bhd                           Malaysia      Ravi               ***%

8/14/2001      8/31/2002       LAI FU Luxembourg SA                      Taiwan        Rehfeldt           ***% new
                                                                                                          ***% repaired

11/16/1999     11/16/2001      DORMAK (Turkish Air Force Command)        Turkey        Dora               ***%

7/3/2001       10/30/2001      ETEL 88 (Spanish Air force)               Spain         Vazquez            ***%

10/10/1994     10/10/2009      Shintoa                                   Japan         Fukui              ***% (list price)



The Company retains the right to renew agreements with foreign sales agents
provided, however the Company will only commit to same or substantially similar
terms. The Company will make full payment of the commissions due the foreign
sales agents and issue an invoice to the Service Provider for ***% of amount
paid.

The Company will retain order management responsibility for Shintoa
International. All orders received from Shintoa will be forwarded to the Service
Provider for forecasting requirements and order fulfillment, including shipping
Product to Shintoa. If Shintoa requires that parts be shipped directly from the
Company, the Service Provider will return parts to the Company. The Service
Provider will pay the Company a ***% handling fee for parts that are shipped to
Shintoa from the Company. For parts sold to Shintoa, the Service Provider will
take an immediate deduction from amounts due Company for the list



***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.



<PAGE>


price of the Products less associated fees due Company. The fees due Company are
equal to the Service Provider's share of the commission payments and when
applicable, a ***% shipping handling fee.

The Company and the Service Provider will work together in the first year to
gain Shintoa's acceptance of the Service Provider. It is the intention of the
Company and the Service Provider, with Shintoa' approval, to transition all
business functions concerning Shintoa to the Service Provider at the end of the
first year. Upon this transition, Shintoa sales and commission payments will be
handled as any other foreign sales agent.







***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


<PAGE>



                                    EXHIBIT I

                              SALES REPORTS/METRICS

Service Provider will provide the Company all reports currently available online
through the "supplier services" section of Service Provider's Aviall.com web
site. These reports include:

         1.       Daily inventory by part number

         2.       Daily sales by part number

         3.       Open purchase orders

         4.       Payment status by invoice number

Service Provider will provide monthly reports as follows through e-mail file
transmission in Microsoft Excel format:

         1.       Unit sales by part number by customer

         2.       Dollar sales by part number by customer

         3.       Order intake by geographical region

Other sales reports will be provided during the term of the Agreement as
mutually agreed by both parties.

Additionally, Service Provider will provide metrics reports monthly for:

         1.       Error free shipping rates

         2.       Expedite rates

         3.       Shipping timeliness




<PAGE>


                                    EXHIBIT J

                     MARKETING AND SUPPLIER SUPPORT SERVICES

MARKETING AND SUPPLIER SUPPORT SERVICES

The implementation, timing and applicability of each service set forth below
will be determined by mutual agreement of both parties, based on customer and
market requirements.

A.          Company Marketing Rights and Obligations

o     The Company will lead the development of a marketing plan for new,
      repaired, and serviceable parts. This plan will be updated at least
      annually. The marketing plan will include a summary of each key product
      category, customer targets, technical support requirements, and
      advertising methods to be used. The Service Provider will work with
      Company personnel to effectively execute the plan through the Service
      Provider's organization.

o     The Company will make regular calls and visits to select customers,
      including U.S. Military and select foreign military customers, to identify
      opportunities and address problems. The results of these calls will be
      documented in an agreed upon database for the Service Provider's and
      Company's review.

B.          Service Provider Marketing Rights and Obligations

o     The Service Provider will make regular calls and visits to all customers.
      For those customers noted above, the Service Provider will provide a draft
      agenda to the Company whenever possible. The results of routine sales
      calls by area sales personnel will be documented in an agreed upon
      database and reviewed by the product line manager assigned to Company and
      by the T56 project manager on an ongoing basis. Summaries of important
      findings will be reported to Company regularly.

o     Area sales personnel will request monthly forecasts of operating hours,
      engine overhauls, and parts replacement from key customers. They will also
      request information on Product performance. The information will be
      accumulated and documented in an agreed upon database.

o     The product line manager will evaluate warranty claims, product returns
      and other customer activity for indications of developing problems. Where
      appropriate, the manager will conduct additional research to determine the
      nature of the problems and will communicate findings to Company.

o     The product line manager will work closely with Company data analysis and
      procurement personnel to evaluate customer buying activity and product
      stock levels. The product line manager will communicate findings to
      Company.



<PAGE>

o     The product line and program managers will attend trade shows and other
      industry events to remain up-to-date. They will visit Company production
      and technical support operations from time to time for training and
      sharing of market intelligence.

C.          Advertising and product promotion:

o     The Service Provider will work with Company personnel to produce and place
      technical articles in appropriate publications. Service Provider's
      marketing communications manager will be an important resource in this
      effort.

o     Service Provider will generate timely news releases for significant events
      such as trade shows.

o     The Service Provider sales team will actively distribute Company product
      literature.

o     Service Provider's online electronic catalog will be updated to
      incorporate Company Products, including illustrations where appropriate.

o     Customers ordering online or browsing Service Provider's electronic
      catalog can be prompted on aviall.com to take certain actions, such as
      ordering a related Product.

o     "What's New" announcements can be placed on the aviall.com home page to
      promote new products or services related to Company. Since aviall.com is
      accessed over 600,000 times per month, this is an important communications
      vehicle for our mutual customers.

o     Service Provider's worldwide email system will be used to communicate
      promotions, technical data, and selling opportunities to its global sales
      team.

o     A special Customer web page or link can be incorporated into aviall.com,
      if desired, to allow Service Provider personnel and customers to obtain
      manuals, technical data, product information and details of promotions.

o     Service Provider will incorporate a T56 Parts web page that is accessible
      by T56 customers and linked to Rolls-Royce.com.

<PAGE>



                                    EXHIBIT K

                                 TRANSFER PRICES

Company agrees that it will sell Product to Service Provider at a discount of
not more than ***% and not less than ***% off then current list price. The
discount for year *** will be ***% off list. Beginning with the *** full
calendar year, the discount to the Service Provider will be based on sales
growth.

Joint Company and Service Provider sales, at list price, in 2001 (excluding
sales by Company to Service Provider) are estimated at $*** (based on actual
sales through September and an estimate for the remainder of the year). Using
actual Company and Service Provider 2001 sales data (excluding sales by Company
to Service Provider) as the initial baseline, if year over year sales increase
more than ***% (inclusive of inflation and list price changes), the discount
from list will be increased on a sliding scale to no more than ***% in the
subsequent year as set forth below. If sales increase less than ***% (inclusive
of inflation and list price changes) the discount will be reduced to no lower
than ***% off list as set forth below. Delinquent customer orders from 2001 that
are delivered in 2002 will be included in the Service Provider's 2002 sales. All
delinquent customer orders outstanding on 12-31-2001 shall automatically be
assigned by the Company to Service Provider.




<Caption>
Sales Performance         Service Provider        Sales Performance        Service Provider
% of target               Discount                % of target              Discount
                                                                 
***                       ***%                    ***                      ***%





***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.



<PAGE>


                                    EXHIBIT L

                                   List Prices


The following represents the current list prices as of September, 2001.
Historically, list prices have been revised annually. List prices for the
following calendar year will be provided to the Service Provider by September
30th of any given calendar year after 2001.

The Company has initiated an analysis concerning market based pricing in an
effort to recapture market share. Part numbers targeted for price reduction in
2002 have been identified to the Service Provider as Specials in Exhibit B-1.
Year 2002 schedules have been increased in preparation for increased demand of
these part numbers. The Service Provider and the Company will work together to
identify further part numbers to apply market based pricing.

Inventory for all Specials, except those listed in Exhibit B-3, will be assessed
in January 2003 to determine if inventory levels are beyond requirement.
Inventory will be considered beyond requirements if remaining inventory is
greater than 6 month average month sales, with average monthly sales defined as
one half of 2002 sales. For any inventory of Specials greater than 6 months of
average month sales Company will pay the Service Provider for carrying costs
associated with inventory at the rate of ***% of list price per month until the
inventory level is no longer greater than 6 months of average month sales.





***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


<PAGE>



                                    EXHIBIT M

                        Penalties and Late Delivery Fees


Penalties and Late Delivery Fees

The Company and Service Provider are both incentivized to grow the T56 new parts
business. Meeting customer requirements is a mutual concern. Penalties between
those parties would create friction and result in an effort which does not focus
on the joint goal of maximizing new part sales.

The Company will make every effort to accommodate the Service Provider's
requested expedites through the Sales and Operation Review Board commitment
acceptance process with no penalty to the Service Provider. Service Provider
will make every effort to minimize expedites.

The Company will accept no penalties for late deliveries from the Service
Provider unless they are documented as a pass through penalty from the end user.
The Service Provider will not agree to end user penalties for the Company's
delivery performance unless prior agreement with the Company is obtained.



<PAGE>





                                    EXHIBIT N

                               U.S. Military Sales

Service provider will fill orders for U.S. Military customers (or their
contractors) per the terms and conditions of the contracts and agreements held
by the Company. Contracts for U.S. military T56 parts include U.S. military
sales to foreign Governments. Discounts to current contracts with U.S. military
customers follow:



US MILITARY
                                            
       NAVICP Electronic P.O.                   Negotiated price based on quote. All Military
       N00383-01-P-021M (active)                pack/mark per boilerplate MIL-STD-2047/MIL-STD-129M

       DISC Phil. P.O.                          Negotiated price based on quote.  All Military
       SP0560-01-M-Y745 (active)                pack/mark per boilerplate MIL-STD-2047/MIL-STD-129M

       DSCR Contract                            Negotiated price based on quote.  All Military
       SP0480-01-C-1392 (active)                pack/mark per boilerplate MIL-STD-2047/MIL-STD-129M

       DSCC P.O./Contracts                      Negotiated price based on quote.  All Military
       SPO740-01-M-3224 (active)                pack/mark per boilerplate MIL-STD-2047/MIL-STD-129M
       SP0740-01-C-5027 (active)
       SP0740-01-C-5028(active)

       BOA (NAVICP) only user                   NAVICP Delivery Orders negotiated price based on quote.
       N00383-01-G-019M (active)                Pack/mark MIL-STD-2047/MIL-STD-129M (boilerplate)

       BOA (Tinker AFB, OK)                     Open orders. Delivery Orders negotiated price based on
       F34601-98-G-0011 (expired)               quote. Pack/mark MIL-STD-2047/MIL-STD-129M (boilerplate)
       Used by OC, DLA, NAVICP                  Replaced by F34601-01-D-0155 below. Once open orders
                                                complete almost all pack/mark will be commercial.

       Standard Aero San Antonio Inc.           Discount Average of ***% off List
       (Kelly AFB, TX)                          Commercial Direct Government Support, Commercial Pack,
       Agreement # A01-560 (active)             No Government Acceptance Required.

       Blanket Purchase Agreement               Discount of ***% off List
       (Tinker AFB, OK)                         Blanket Purchase Agreement, Commercial Pack/Invoice
       F41608-97-A-0001 (expired)

       Engine Services Oakland                  Discount of ***% off List
       (T56-A-427 Engine Requirements           Commercial Pack/Invoice
       Repair Contract)
       N00019-00-D-0267 (active)

       Commercial Corporate Contract            Prices were negotiated on a part number by part number
       (Tinker AFB, OK)                         basis forming a unique military price list.  Requirements
       F34601-01-D-0155 (active)                Contract, Commercial Pack/Invoice



The Service Provider will arrange for Government inspection to the level
required and obtain the Government acceptance signatures at Service Provider's
facility. The Company






***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


<PAGE>


will provide Service Provider with the capability to generate invoices and
DD-250's at Service Provider's facility. The Company's IT system will provide
the other detail as entered by the Company in order for Service Provider to
package and ship to the correct customer location which may be different than
order issuing offices.

Service Provider will have ink stamps available (a sample will be provided by
Company) to apply to the Company commercial invoice to obtain the Government
acceptance signature and Company hereby grants Service Provider the authority to
apply such stamps as it deems necessary. DD-250's and commercial invoices used
in lieu of DD-250's will be sent to the Company accounts receivable designated
point of contact. The Company will provide Service Provider with the Technical
Data required for use by The Government Quality Assurance Representative to
perform inspection and acceptance of Product.

All U.S. military customer (or their contractors) orders for T56 engines and
parts are rated in accordance with the provisions of the Defense Priority
Allocation System (DPAS). Service Provider will treat all military orders with
the preference required by DPAS. Information as to the requirements of DPAS can
be found in Part 700 of Title 15 of the Code of Federal Regulations (15CFR 700)
and the Federal Acquisition Regulations (FAR), FAR Part 11.6.

In filling contracts and other agreements with U.S. military customers (or their
contractors), the Service Provider will be required to fill part orders at a
price below the transfer price. For the parts shipped in fulfillment of the
these contracts, the Service Provider will take an immediate deduction for its
*** of such Products plus a handling fee of ***% of list price against current
amounts due Company. The following calculation is provided as an example:

List price                                         $***
Transfer price (Service Provider's ***)            $***
Handling Fee (***% of list price)                  $***
Deduction from amounts due Company                 $***




***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
<PAGE>
                                    EXHIBIT O

                          SALES TO INDUSTRIAL CUSTOMERS

The Company will retain order management responsibility for Industrial
customers. All orders received for part numbers that are common with the T56
engines will be forwarded to the Service Provider. The Service Provider will use
this information for forecasting requirements and will be responsible for order
fulfillment, invoicing, and accounts receivable.

The Company has agreements and contracts with specific industrial customers. In
order to preserve these relationships and fulfill these contracting
requirements, the Service Provider agrees to honor these agreements, including
the terms of sale. In addition, the Company retains the right to renew existing
agreements with such customers; provided, however, that the Company will only
commit to same or substantially similar terms. The Company will provide copies
of these contracts to the Service Provider on or before Dec 1, 2001. The
following table summarizes discount structures per existing agreements:


<Caption>

                                                               *being negotiated
AMC / DISTRIBUTOR                                DISCOUNT
-----------------                                --------
                                             
Bath Iron Works                                  ***% OFF List
Centrax                                          ***% OFF List; ***% embodiment
Hitachi Zosen                                    ***% OFF List; ***% embodiment
IHI & Niasco (JDA; K34 engines)                  ***% OFF List
IHI & Niasco (501K engines)                      ***% OFF List; ***% embodiment
Ingalls Shipbuilding                             ***% OFF List
Kawasaki Heavy Industries                        ***% OFF List; ***% embodiment
Kobe Steel                                       ***% OFF List; ***% embodiment
Rolls Wood Group                                 ***% OFF List; ***% embodiment*
RR Australia                                     ***% OFF List
RRESI Maineville                                 ***% OFF List
RRESI Mount Vernon                               ***% OFF List; ***% embodiment
RRESO-Oakland                                    ***% OFF List; ***% embodiment
Shintoa                                          ***% OFF List; ***% embodiment
Sigma                                            ***% OFF List; ***% embodiment
Standard Aero                                    ***% OFF List; ***% embodiment
Turbomeca                                        ***% OFF List; ***% embodiment
Tominaga                                         ***% OFF List
RR Propulsion Systems                            ***% OFF List
RR Power Engineering                             ***% OFF List*
Samsung                                          ***% OFF List; ***% embodiment
ITP                                              ***% OFF List
Turbomeca                                        ***% OFF List; ***% embodiment
AIDC                                             ***% OFF List
Military                                         ***



***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.



<PAGE>


                                    EXHIBIT P

                 Serviceable, Surplus, and Repaired Parts Sales

The Service Provider will procure serviceable, surplus and repaired parts to
complement new part sales. The Service Provider, in most instances, is required
to pay Company a royalty fee for sales of these parts in accordance with
existing payment terms (Exhibit R).

Surplus Parts

The Service Provider will procure surplus parts together with appropriate
documentation concerning part origin from approved sources. Company will provide
quality certification, verify the traceability of surplus parts, provide all
necessary documentation required for the sale of the part, and permit Service
Provider to use the Rolls-Royce logo and name in connection with the sale of
such part which will then be added to the Service Provider's inventory. Upon
sale of a surplus part, obtained from a source other than the Company or another
affiliate, the Service Provider will pay Company a royalty fee of ***% of
selling price.

Repaired and Serviceable Parts

The Service Provider will procure used parts and cores. Company will provide
quality certification, verify the traceability of the such parts, provide all
necessary documentation required for the sale of the part, and permit Service
Provider to use the Rolls-Royce logo and name in connection with the sale of the
part which will then be added to the Service Provider's inventory. Upon sale of
such part, obtained from a source other than the Company or an affiliate, the
Service Provider will pay Company a royalty fee of ***% of selling price.

***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


<PAGE>



                                    EXHIBIT Q

                               QUALITY GUIDELINES

In accordance with this agreement, the Service Provider must be ISO 9002
certified; certification to AS7103/AS7104 is preferred. Certification to the FAA
distributor accreditation program (AC 00-56) is acceptable.

The Service Provider must comply with the Company's approved FAA production
system unless the Service Provider has its own FAA production or maintenance
approval.

If mutually agreed between the Company and Service Provider for the Service
Provider to source from third parties, approval for these sources must comply
with the Company guidelines and it will be the T56 Service Provider's
responsibility to ensure compliance.



<PAGE>


                                    EXHIBIT R

                                  PAYMENT TERMS


Initial payment terms from the Service Provider due the Company are 35 days from
receipt of Product or date of invoice, whichever is later, payable by check.

The Company and United States Air Force are planning to transition from a
Government Furnished Material (GFM) contract to a Contractor Furnished Material
(CFM) contract. Upon successful transition, as set forth below, to a CFM
contract with the Air Force, payment terms will be 30 days payable by check.

The plan for the GFM to CFM transition includes several component packages. Each
component package identifies a unique set of part numbers. Transition of the
component packages is expected to occur in stages. For the purposes of this
agreement, transition from GFM to CFM will be considered sufficient when
component packages which have been changed from GFM to CFM and revenue under
such CFM components meets or exceeds an aggregate value of $*** per year at
Company's invoice price to the customers, but no earlier than June 30, 2002. At
this point, payment terms will change to 30 days from receipt of Product or date
of invoice, whichever is later, payable by check.



***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.


<PAGE>


                                    EXHIBIT S

                                TERMINATION FEES

In the event that the Agreement is terminated by Company pursuant to Sections
11.(a) or 11.(b), as a condition to the effectiveness of such termination,
Company shall pay Service Provider according to the following formula and
amounts:

(A)    An amount which equals [$*** + (the product of *** times Excess Sales
       Value times ***) times Pro Rata Term Percentage].

For the purpose of the above calculation, the following definitions shall apply:

       1.  Excess Sales Value shall mean the amount by which the Distributor's
           total sales in the previous 12 calendar months preceding notice of
           termination exceeds the actual amount of 2001 sales as calculated
           pursuant to Exhibit K adjusted by the ***% annual compound growth,
           prorated for the month of termination (the Index) calculated for such
           previous 12 calendar months.

       2.  Pro Rata Term Percentage shall be the percentage that results by
           taking the number of full calendar months that would remain from the
           date of termination of the Agreement to December 31, 2011 and
           dividing that number by 120.

The parties agree that the following examples shall serve as instruction to
application of the formula:

Example 1:  Termination after 36 months, total sales in preceding 12 months of
$**  with adjustment for the Index.

       Excess Sales Value: = $***
       Full Calendar Months Remaining to December 31, 2011=  84
       Pro Rata Term Percentage 84/120= .70
       So the calculation is as follows:

                                      ***;

and

(B)    The Company shall purchase all of Service Provider's inventory of
       Products existing on the termination date at Service Provider's average
       cost.

***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>


                                    EXHIBIT T

                                  AMCS AND FMCS

The Company has agreements with Rolls-Royce Authorized Maintenance Centers
(AMCs) and Factory Maintenance Centers (FMCs). These organizations support the
route of the Company's Product to the marketplace. The Service Provider will
sell Products to the existing AMCs/FMCs at a price which is not more than ***%
off of the Company's then current published list prices. The T56 AMCs are as
follows:

Hellenic Aerospace Industry Ltd. (HAI), Greece
Israel Aircraft Industries Ltd (IAI), Israel
OGMA - Industria Aeronautica De Portugal, Portugal
Samsung Aerospace Industry, Korea
Sigma Aerospace, England
Snecma Services, France
ST Aerospace Engines Pte Ltd., Singapore
Standard Aero Limited, Canada
Wood Group Turbopower Inc., Florida

The Company has two Factory Maintenance Center (FMC) agreements; however, there
is the possibility that additional FMCs will be identified. The two FMCs are
Rolls-Royce Engine Services Oakland (RRESO) and Rolls-Royce Brazil.

Nothing contained herein shall preclude Service Provider from selling Products
to all other customers at such prices and on such terms, including the prices
and terms at which it sells to AMCs, that Service Provider, in its sole
discretion, shall determine.


***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AVIALL, INC. FOR CERTAIN
PORTIONS OF THIS DOCUMENT. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.

Source: OneCLE Business Contracts.