**Exhibit 4.5.1**

 

(Face of Note)

 

THIS SECURITY MAY BE ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR THEPURPOSES OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.  HOLDERS THAT WISH TO OBTAIN INFORMATION ABOUTTHE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TOMATURITY OF THE INSTRUMENT FOR PURPOSES OF U.S. TAX LAW MAY DO SO BYCONTACTING: DeCrane Aircraft Holdings, Inc., 2361 Rosecrans Avenue, Suite 180El Segundo, California  90245, Attention:  Chief Financial Officer.

 

CUSIP 243662 AE3

 

17% Senior Discount Notes due 2008

 
| No. 1 |   | $127,771,000 |
|-------|--------|--------------|

 

DECRANE AIRCRAFTHOLDINGS, INC. (THE “ISSUER”)

 

promises to pay to CEDE& CO., or registered assigns, the principal sum of One Hundred and TwentySeven Million, Seven Hundred and Seventy-One Thousand Dollars ($127,771,000) onSeptember 30, 2008.

 
|   | Dated: July 23,  2004       |
|--------|----------------------------------|
|   |                             |
|   | DECRANE AIRCRAFT  HOLDINGS, INC. |
|   |                             |
|   |                             |
|   | By:                              | /s/  RICHARD J. KAPLAN |   |
|   |                             | Name:  Richard J. Kaplan |
|   |                             | Title:  Chief Financial Officer |

 

Thisis one of theNotes referred to in thewithin-mentioned Indenture:

 
| U.S.  BANK NATIONAL ASSOCIATION |
|---------------------------------|
| as  Trustee                     |
|                            |
| By:                             | /S/  CAUNA M. SILVA |   |
|                            | Name: | Cauna M. Silva |
|                            | Title: | Vice President |
|                                 |  |  |  |

 

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(Back of Note)

 

17% SeniorDiscount Notes due 2008

 

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTUREGOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THEBENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANYCIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAYBE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBALNOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a)OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FORCANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THISGLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTENCONSENT OF DECRANE AIRCRAFT HOLDINGS, INC.

 

THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITEDSTATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SETFORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIALINTEREST HEREIN, THE HOLDER: (1) REPRESENTS THAT (A) IT IS A “QUALIFIEDINSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A“QIB”), (B) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCEWITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL“ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A) (1), (2), (3) OR (7) ORREGULATION D UNDER THE SECURITIES ACT (AN “IAI”), (2) AGREES THAT IT WILL NOTRESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE ISSUERS OR ANY OF ITSSUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIBPURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTIONMEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THEREQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT, (D) IN A TRANSACTIONMEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN IAITHAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAININGCERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE(THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER ISIN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT AT MATURITY OF NOTES LESS THAN$250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS THAT SUCH TRANSFER ISIN COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTIONFROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON ANOPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS) OR (G) PURSUANT TO AN EFFECTIVEREGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLESECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLEJURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THISNOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECTOF THIS LEGEND.  AS USED HEREIN, THETERMS “OFFSHORE TRANSACTION” AND “UNITED STATES” HAVE THE MEANINGS GIVEN TOTHEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURECONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFEROF THIS NOTE IN VIOLATION OF THE FOREGOING.

 

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Capitalized termsused herein shall have the meanings assigned to them in the Indenture referredto below unless otherwise indicated.

 

1.                                       *INTEREST*.  No interestshall accrue on this Note.  Instead, theAccreted Value of the Note will accrete at a rate of 17% from the date ofissuance, compounded semiannually on each March 30 and September 30 (commencingSeptember 30, 2004), to an aggregate Accreted Value of $127,771,000, thefull principal amount at maturity, on September 30, 2008.  The Issuer shall pay interest (includingpost-petition interest in any proceeding under any Bankruptcy Law) on overdueprincipal and premium, if any, from time to time on demand at a rate of 18% perannum.

 

2.                                       *METHOD OF PAYMENT*.  The Notes will be payable as toprincipal, premium and interest on overdue principal, if any, at the office ofthe Paying Agent and Registrar.  Holdersof Notes must surrender their Notes to the Paying Agent to collect principalpayments, and the Issuer may pay principal, premium and interest on overdueprincipal, if any, by check and may mail checks to a Holder’s registeredaddress; *provided* that all payments with respectto Global Notes and Definitive Notes, the Holders of which have given wiretransfer instructions to the Issuer, will be required to be made by wiretransfer of immediately available funds to the accounts specified by the Holdersthereof.  Such payment shall be in suchcoin or currency of the United States of America as at the time of payment islegal tender for payment of public and private debts.

 

3.                                       *PAYING AGENT AND REGISTRAR*. Initially, U.S. Bank National Association, the Trustee under theIndenture, will act as Paying Agent and Registrar.  The Issuer may change any Paying Agent orRegistrar without notice to any Holder. The Issuer or any of its Subsidiaries may act in any such capacity.

 

4.                                       *INDENTURE*   TheIssuer issued the Notes under an Indenture dated as of July 23, 2004 (“*Indenture*”), among the Issuer, the Guarantors and theTrustee.  The terms of the Notes includethose stated in the Indenture and those made part of the Indenture by referenceto the Trust Indenture Act of 1939, as amended (15 U.S.Code §§ 77aaa-77bbbb).  TheNotes are subject to all such terms, and Holders are referred to the Indentureand such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisionsof the Indenture, the provisions of the Indenture shall govern and becontrolling.  The Notes are obligationsof the Issuer initially limited to $127,771,000 in aggregate principal amountat maturity.  Subject to limits in theIndenture, the Issuer may issue Additional Notes constituting the same seriesas the Initial Notes.

 

5.                                       *OPTIONAL REDEMPTION*.

 

Prior toSeptember 30, 2004, the Notes may be redeemed at any time at the option ofthe Issuer, in whole or in part, upon not less than 30 nor more than 60 days’notice, in cash at a redemption price equal to 106% of Accreted Value.  Thereafter, the Notes will be subject toredemption at any time at the option of the Issuer, in whole or in part, uponnot less than 30 nor more than 60 days’ notice, in cash at the redemptionprices (expressed as percentages of Accreted Value) set forth below, ifredeemed during the twelve month period beginning on September 30 of theyears indicated below, to the applicable redemption date:

 
| **Year**             | ** ** | **Percentage** | ** ** |
|----------------------|------------|----------------|------------|
|                 |       |           |       |
| 2004                 |       | 104.000        | %          |
|                 |       |           |       |
| 2005                 |       | 102.000        | %          |
|                 |       |           |       |
| 2006  and thereafter |       | 100.000        | %          |

 

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6.                                       *MANDATORY REDEMPTION*.

 

Except as setforth in paragraph 7 below, the Issuer is not required to make mandatoryredemption of, or sinking fund payments with respect to, the Notes.

 

7.                                       *REPURCHASE AT OPTION OF HOLDER*.

 

(a)                                  Uponthe occurrence of a Change of Control (such date being the *‘‘Change ofControl Payment’’*), each Holder of Notes shall have the right torequire the Issuer to purchase all or any part (equal to $1,000 or an integralmultiple thereof) of such Holder’s Notes pursuant to an offer at an offer pricein cash equal to 101% of the aggregate Accreted Value thereof.  Within 60 days following any Change ofControl, subject to the provisions of the Indenture, the Issuer shall mail anotice to each Holder of Notes at such Holder’s registered address settingforth the procedures governing the offer as required by the Indenture.

 

(b)                                 Whenthe aggregate amount of Excess Proceeds exceeds $10.0 million, the Issuer willbe required to make an offer to all Holders of Notes to purchase the maximumprincipal amount of Notes that may be purchased out of Excess Proceeds, at anoffer price in cash in an amount equal to 100% of the Accreted Value thereof inaccordance with the procedures set forth in the Indenture.  Holders of Notes that are subject to an offerto purchase will receive an Asset Sale Offer from the Issuer prior to anyrelated purchase date and may elect to have such Notes purchased by completingthe form entitled “Option of Holder to Elect Purchase” on the reverse side ofthis Note.

 

8.                                       *NOTICE OF REDEMPTION*.  Notice of any redemption or offer to purchase will be mailed at least 30days but not more than 60 days before the redemption or purchase date to eachHolder of Notes to be redeemed or purchased at such Holder’s registeredaddress.  Notes in denominations largerthan $1,000 principal amount at maturity may be redeemed in part but only inwhole multiples of $1,000 principal amount at maturity, unless all of the Notesheld by a Holder are to be redeemed.

 

9.                                       *DENOMINATIONS, TRANSFER, EXCHANGE*.  The Notes are inregistered form without coupons in denominations of $1,000 principal amount atmaturity and integral multiples thereof.  The transfer of Notes may beregistered and Notes may be exchanged as provided in the Indenture.  TheRegistrar and the Trustee may require a Holder, among other things, to furnishappropriate endorsements and transfer documents and the Issuer may require aHolder to pay any taxes and fees required by law or permitted by theIndenture.  The Issuer need not exchange or register the transfer of anyNote or portion of a Note selected for redemption, except for the unredeemedportion of any Note being redeemed in part.  Also, the Issuer need notexchange or register the transfer of any Notes for a period of 15 days before aselection of Notes to be redeemed.

 

10.                                 *PERSONS DEEMED OWNERS*. The registered Holder of a Note may be treated as its owner for allpurposes.

 

11.                                 *AMENDMENT, SUPPLEMENT AND WAIVER*. Subject to certainexceptions set forth in the Indenture, the Indenture, the Note Guarantees orthe Notes may be amended or supplemented with the consent of the Holders of atleast a majority in principal amount at maturity of the Notes then outstanding(including, without limitation, consents obtained in connection with a purchaseof, or tender offer or exchange offer for, Notes), and any existing default orcompliance with any provision of the Indenture or the Notes may be waived withthe consent of the Holders of a majority in principal amount at maturity of thethen outstanding Notes (including, without limitation, consents obtained inconnection with a purchase of, or tender offer or exchange offer for, Notes).  Notwithstanding the foregoing, without theconsent of any Holder of Notes, the Issuer, the Guarantors and the Trustee mayamend or supplement the

 

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Indenture, the Note Guarantees or the Notes to cure any ambiguity,defect or inconsistency, to provide for uncertificated Notes in addition to orin place of certificated Notes, to provide for the assumption of the Issuer’sobligations to Holders of Notes in the case of a merger or consolidation orsale of all or substantially all of the Issuer’s assets, to make any changethat would provide any additional rights or benefits to the Holders of Notes orthat does not materially adversely affect the legal rights under the Indentureof any such Holder, or to comply with requirements of the Commission in orderto effect or maintain the qualification of the Indenture under the TrustIndenture Act or to provide for additional Note Guarantees of the Notes.

 

12.                                 *DEFAULTS AND REMEDIES*.

 

(a) Events ofDefault include:(a) default in paymentwhen due of the principal of or premium, if any, on the Notes; (b) failure bythe Issuer or any of its Restricted Subsidiaries for 30 days after receipt ofnotice from the Trustee or Holders of at least 25% in principal amount atmaturity of the Notes then outstanding to comply with the provisions ofSections 4.07, 4.09, 4.10, 4.14 and Article 5 of the Indenture; (c)failure by the Issuer for 60 days after notice from the Trustee or the Holdersof at least 25% in principal amount at maturity of the Notes then outstandingto comply with any of their other agreements in the Indenture or the Notes; (d)default under any mortgage, indenture or instrument under which there may beissued or by which there may be secured or evidenced any Indebtedness for moneyborrowed by the Issuer or any of its Restricted Subsidiaries (or the payment ofwhich is guaranteed by the Issuer or any of its Restricted Subsidiaries),whether such Indebtedness or guarantee now exists, or is created after the dateof the Indenture, which default (i) is caused by a failure to pay Indebtednessat its stated final maturity (after giving effect to any applicable graceperiod provided in such Indebtedness) (a “Payment Default”) or (ii) results inthe acceleration of such Indebtedness prior to its stated final maturity and,in each case, the principal amount of any such Indebtedness, together with theprincipal amount of any other such Indebtedness under which there has been aPayment Default or the maturity of which has been so accelerated, aggregates$10.0 million or more; (e) failure by the Issuer or any of its RestrictedSubsidiaries to pay final judgments aggregating in excess of $10.0 million (netof any amounts with respect to which a reputable and creditworthy insurance companyhas acknowledged liability in writing), which judgments are not paid,discharged or stayed for a period of 60 days; (f) except as permitted by theIndenture, any Note Guarantee shall be held in any judicial proceeding to beunenforceable or invalid or shall cease for any reason to be in full force andeffect or any Guarantor, or any Person acting on behalf of any Guarantor, shalldeny or disaffirm its obligations under its Note Guarantee; and (g) certainevents of bankruptcy or insolvency with respect to the Issuer or any of itsRestricted Subsidiaries that is a Significant Subsidiary.  If any Event of Default occurs and iscontinuing, the Trustee or the Holders of at least 25% in principal amount ofthe then outstanding Notes may declare all the Notes to be due and payableimmediately.  Notwithstanding theforegoing, in the case of an Event of Default arising from certain events ofbankruptcy or insolvency with respect to the Issuer or any of its RestrictedSubsidiaries that is a Significant Subsidiary, all outstanding Notes willbecome due and payable without further action or notice.

 

(b) In the eventof a declaration of acceleration of the Notes because an Event of Default hasoccurred and is continuing as a result of the acceleration of any Indebtednessdescribed in clause (d) of the preceding paragraph, the declaration ofacceleration of the Notes shall be automatically annulled if the holders of anyIndebtedness described in clause (d) have rescinded the declaration ofacceleration in respect of such Indebtedness within 30 days of the date of suchdeclaration and if (i) the annulment of the acceleration of the Notes would notconflict with any judgment or decree of a court of competent jurisdiction and(ii) all existing Events of Default, except non-payment of principal orinterest on the Notes that became due solely because of the acceleration of theNotes, have been cured or waived.

 

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13.                                 *NOTE GUARANTEES.* The payment of principal of, premium, andinterest and Liquidated Damages, if any, on the Notes are unconditionallyguaranteed, jointly and severally, by the Guarantors.

 

14.                                 *ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES.*  In addition to the rights provided to Holdersof Notes under the Indenture, Holders of Restricted Global Notes shall have therights set forth in the Registration Rights Agreement dated as of July 23,2004, among the Issuer, the Guarantors and the parties named on the signaturepages thereof  (the “*RegistrationRights Agreement*”).

 

15.                                 *TRUSTEE DEALINGS WITH ISSUER*.  The Trustee, in its individual or any othercapacity, may make loans to, accept deposits from, and perform services for theIssuer or its Affiliates, and may otherwise deal with Issuer or its Affiliates,as if it were not the Trustee.

 

16.                                 *NO RECOURSE AGAINST OTHERS*.  A director, officer,employee, incorporator or stockholder, of the Issuer, as such, shall not haveany liability for any obligations of the Issuer under the Notes or theIndenture or for any claim based on, in respect of, or by reason of, suchobligations or their creation.  EachHolder by accepting a Note waives and releases all such liability.  Thewaiver and release are part of the consideration for the issuance of the Notes.

 

17.                                 *AUTHENTICATION*.  This Note shall not be valid untilauthenticated by the manual signature of the Trustee or an authenticatingagent.

 

18.                                 *ABBREVIATIONS*.  Customary abbreviations may be used inthe name of a Holder or an assignee, such as:  TEN COM (= tenants incommon), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants withright of survivorship and not as tenants in common), CUST (= Custodian), andU/G/M/A (= Uniform Gifts to Minors Act).

 

19.                                 *CUSIP NUMBERS*. Pursuant to a recommendation promulgated by the Committee on UniformSecurity Identification Procedures, the Issuer has caused CUSIP numbers to beprinted on the Notes and the Trustee may use CUSIP numbers in notices ofredemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either asprinted on the Notes or as contained in any notice of redemption and reliancemay be placed only on the other identification numbers placed thereon.

 

The Issuer willfurnish to any Holder upon written request and without charge a copy of theIndenture and/or the Registration Rights Agreement.  Requests may be made to:

 

DeCrane AircraftHoldings, Inc.2361 Rosecrans Avenue, Suite 180El Segundo, California  90245Attention: Chief Financial Officer

 

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**ASSIGNMENT FORM**

** **

To assign this Note, fillin the form below: (I) or (we) assign and transfer this Note to

 
|                                                                                                       |
|------------------------------------------------------------------------------------------------------------|
| (Insert  assignee’s soc. sec. or tax I.D. no.)                                                        |
|                                                                                                       |
|                                                                                                       |
|                                                                                                       |
| (Print or type  assignee’s name, address and zip code)                                                |
|                                                                                                       |
| and  irrevocably appoint                                                                                   |
| to  transfer this Note on the books of the Issuer.  The agent may substitute  another to act for him. |
|                                                                                                       |
|                                                                                                       |
| Date:                                                                                                      |   |   |   |
|                                                                                                       |   |
|                                                                                                       | Your Signature: |   |   |
|                                                                                                       |   |  (Sign exactly as your name |
|                                                                                                       |   | appears on the face of  this Note) |
|                                                                                                       |   |
|                                                                                                       | Signature Guarantee: |
|                                                                                                            |  |  |  |  |  |  |  |

 

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**OPTION OF HOLDER TO ELECT PURCHASE**

** **

If you want toelect to have this Note purchased by the Issuer pursuant to Section 4.10or 4.14 of the Indenture, check the box below:

 

oSection 4.10                                                           oSection 4.14

 

If you want to electto have only part of the Note purchased by the Issuer pursuant toSection 4.10 or Section 4.14 of the Indenture, state the principalamount at maturity you elect to have purchased:$           

 

 
| Date:  |                                             |   | Your Signature: |   |   |
|--------|--------------------------------------------------|--------|-----------------|--------|--------|
|   | (Sign  exactly as your name appears on the Note) |
|   |                                             |
|   | Tax Identification No:                           |   |            |
|   |                                             |
|   | Signature Guarantee:                             |
|        |                                                  |        |                 |        |        |  |  |

 

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**SCHEDULE OF EXCHANGES OF INTERESTS IN THEGLOBAL NOTE**

** **

The followingexchanges of a part of this Global Note for an interest in another Global Noteor for a Definitive Note, or exchanges of a part of another Global Note orDefinitive Note for an interest in this Global Note, have been made:

 
| **Date of Exchange** | ** ** | **Amount of decrease  in  Principal Amount  of this  Global Note** | ** ** | **Amount of  increase in  Principal  Amount of this  Global Note** | ** ** | **Principal Amount  of this Global Note  following such  decrease (or increase)** | ** ** | **Signature of  authorized officer  of Trustee or  Note Custodian** | ** ** |
|----------------------|------------|--------------------------------------------------------------------|------------|--------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------|------------|---------------------------------------------------------------------|------------|
|                 |       |                                                               |       |                                                               |       |                                                                              |       |                                                                |       |
|                 |       |                                                               |       |                                                               |       |                                                                              |       |                                                                |       |
|                 |       |                                                               |       |                                                               |       |                                                                              |       |                                                                |       |

 

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