**Exhibit 4.5.2**

 

**CERTIFICATE OF AMENDMENTTO**CERTIFICATE OF DESIGNATIONS, PREFERENCESAND RIGHTS OF 14% SENIOR REDEEMABLE EXCHANGEABLEPREFERRED STOCK DUE 2009**(NOW DESIGNATED AS SENIOR REDEEMABLE EXCHANGEABLEPREFERRED STOCK DUE 2009)**

 

of

 

**DECRANE HOLDINGS CO.**

 

Pursuant to Section 242 of the General Corporation Lawof the State of Delaware

 

DeCrane Holdings Co., a Delaware corporation (the “**Corporation**”),hereby certifies as follows:

 

A.                          Theundersigned, R. Jack DeCrane, is the duly elected Chief Executive Officer ofthe Corporation.

 

B.                            Pursuant to Article Fourthof the Corporation’s Certificate of Incorporation, as amended (the “**Certificate of Incorporation**”), the Boardof Directors of the Corporation (the “**Board**”)is authorized to fix the powers, designations, preferences and relative,participating, optional and other special rights, and the qualifications,limitations and restrictions (collectively, “**Rightsand Preferences**”) of a series of the Corporation’s 2,500,000 sharesof preferred stock, $0.01 par value per share (the “**Preferred Stock**”).

 

C.                            Pursuant to aCertificate of Designations, Preferences and Rights of 14% Senior RedeemableExchangeable Preferred Stock Due 2008 of the Corporation, as amended by thefiling of that certain Certificate of Amendment of Certificate of Incorporationof the Corporation and that certain Certificate of Amendment of Certificate of Designations,Preferences and Rights of 14% Senior Redeemable Exchangeable Preferred StockDue 2009 of the Corporation (the “**SeniorPreferred Stock Certificate of Designations**”), the Board fixed theRights and Preferences of the Corporation’s 14% Senior Redeemable ExchangeablePreferred Stock Due 2009.

 

D.                           The Board, inaccordance with the provisions of Section 141(f) and Section 242 ofthe General Corporation Law of the State of Delaware, has (a) declaredadvisable that the Senior Preferred Stock Certificate of Designations beamended and restated as set forth in this Certificate of Amendment toCertificate of Designations (the “**Certificateof Amendment**”), (b) recommended that this

 

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Certificateof Amendment be approved and adopted by the Corporation’s stockholders,including the holders of the Corporation’s 14% Senior Redeemable ExchangeablePreferred Stock Due 2009, and (c) submitted the Certificate of Amendment tosuch stockholders for approval and adoption.

 

E.                             The Corporation’sstockholders have duly approved and adopted this Certificate of Amendment inaccordance with the provisions of Section 228 and Section 242 of theGeneral Corporation Law of the State of Delaware, to amend and restate theprovisions of the Senior Preferred Stock Certificate of Designations as setforth herein.

 

F.                             Pursuantto the foregoing resolutions of the Board and the Corporation’s stockholders,in accordance with Sections 103 and 242 of the General Corporation Law of theState of Delaware, the Corporation hereby amends and restates the SeniorPreferred Stock Certificate of Designations in its entirety, with the effectthat, effective immediately upon the filing of this Certificate of Amendmentwith the Secretary of State of Delaware, each outstanding share of 14% SeniorRedeemable Exchangeable Preferred Stock Due 2009 of the Corporation shall havethe powers, designations, preferences and relative, participating, optional andother special rights, and the qualifications, limitations and restrictions, ofa share of Senior Redeemable Exchangeable Preferred Stock Due 2009 as set forthbelow:

 

**(1)****                        *Number and Designation.*** 1,360,000 shares of the Preferred Stock of the Corporation shall bedesignated as Senior Redeemable Exchangeable Preferred Stock Due 2009 (the “**Senior Preferred Stock**”).

 

**(2)****                        *Rank.***  The SeniorPreferred Stock shall, with respect to dividend rights, if any, and rights onliquidation, dissolution and winding up, rank prior to all classes of or seriesof common stock of the Corporation, including the Corporation’s common stock,par value $0.01 per share (“**Common Stock**”),and each other class of capital stock of the Corporation, the terms of whichprovide that such class shall rank junior to the Senior Preferred Stock or theterms of which do not specify any rank relative to the Senior PreferredStock.  All equity securities of theCorporation to which the Senior Preferred Stock ranks prior (whether with respectto dividends or upon liquidation, dissolution, winding up or otherwise),including the Common Stock, are collectively referred to herein as the “**Junior Securities**.” All equity securities of the Corporationwith which the Senior Preferred Stock ranks on a parity(whether with respect to dividends or upon liquidation, dissolution, winding upor otherwise) are collectively referred to herein as the “**ParitySecurities**.”  The respectivedefinitions of Junior Securities and Parity Securities shall also include anyrights or options exercisable for or convertible into any of the JuniorSecurities and Parity Securities, as the case may be.  The Senior Preferred Stock shall be subjectto the creation of Junior Securities and Parity Securities.

 

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**(3)****                        *Dividends.*** (a)  Dividends on each share ofSenior Preferred Stock shall accrue from and after July 23, 2004 (the “**Amendment Date**”), but shall not be payable (except to theextent accrued dividends increase the Liquidation Value (as defined below)payable hereunder), for each period beginning on the day after each QuarterlyDate (as defined below) (or, in the case of the Quarterly Period (as definedbelow) ending on September 30, 2004, beginning on the Amendment Date andending on the next Quarterly Date at a rate equal to:

 

(A) except asprovided in clause (C) below, 0% per annum if the Consolidated EBITDA Ratio (asdefined below) as of the Quarterly Date immediately prior to the beginning ofsuch period is greater than or equal to 6.0;

 

(B) except asprovided in clause (C) below, 3.5% per annum (computed on the basis of a 360day year) of the Liquidation Value if the Consolidated EBITDA Ratio as of theQuarterly Date immediately prior to the beginning of such period is less than6.0 but greater than or equal to 5.0; or

 

(C) 14% perannum (computed on the basis of a 360 day year) of the Liquidation Value (i) ifthe Consolidated EBITDA Ratio as of such first Quarterly Date is less than 5.0or (ii) if and for so long as a Triggering Event (as defined below) shall haveoccurred and be continuing.

 

Such 0%, 3.5% or 14% rate, as applicable, is referred to herein as the “**Dividend Rate**”.  Ifthe Corporation is unable or shall fail to discharge its obligation to redeemall outstanding shares of Senior Preferred Stock pursuant to Section 5(b)or 5(c) hereof, the Dividend Rate, if any, shall increase by .25 percent perquarter (each, a “**Default Dividend**”)for each quarter or portion thereof following the date on which such redemptionwas required to be made until cured; *provided* thatthe aggregate increase shall not exceed 5%. Such dividends, if any, shall accrue in the manner set forth abovequarterly from and after the Amendment Date on March 31, June 30, September 30and December 31 of each year (unless such day is not a business day, inwhich event on the next succeeding business day) (each of such dates being a “**Quarterly Date**” and each such quarterly period being a “**Quarterly Period**”). Such dividends shall be cumulative from the date of issue, whether ornot in any Quarterly Period or Periods there shall be funds of the Corporationlegally available for the payment of such dividends.

 

As used herein, (A) “**Consolidated EBITDA Ratio**”means, on any Quarterly Date, the ratio of (a) Consolidated Total Debt plus theaggregate Liquidation Value of all outstanding shares of Senior Preferred Stockof DeCrane Aircraft Holdings, Inc. as of such Quarterly Date to (b)Consolidated Cash Flow (as defined in the Indenture referenced below) for thefour consecutive Quarterly Periods ending on such Quarterly Date; (B) “**Consolidated Total Debt**” means, as at any date ofdetermination, the total amount of Indebtedness (as defined in

 

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the Indenture referenced below) of DeCrane Aircraft Holdings, Inc. andits subsidiaries, determined on a consolidated basis in accordance withgenerally accepted accounting principles; (C) “**ConsolidatedCash Flow**” has the meaning set forth in the Indenture; (D) “**Indenture**” means the Indenture dated as of July 23,2004 among DeCrane Aircraft Holdings, Inc., as issuer, each of the guarantorsparty thereto and U.S. Bank National Association, as trustee, as in effect on theAmendment Date; and (E) “**Triggering Event**”means the Corporation is unable or shall fail to discharge any MandatoryRedemption Obligation (as defined below).

 

(b)                        Holdersof shares of Senior Preferred Stock shall not be entitled to any dividends,whether payable in cash, property or stock, in excess of the cumulativedividends, as herein provided, on the Senior Preferred Stock.  Except as provided in this Section 3,no interest, or sum of money in lieu of interest, shall be payable in respectof any dividend payment or payments on the Senior Preferred Stock that accrue.

 

(c)                         Solong as any shares of the Senior Preferred Stock are outstanding, no dividendsshall be declared or paid or set apart for payment on Parity Securities for anyperiod.

 

(d)                        Solong as any shares of the Senior Preferred Stock are outstanding, no dividends(other than dividends or distributions paid in shares of, or options, warrantsor rights to subscribe for or purchase shares of, Junior Securities) shall bedeclared or paid or set apart for payment or other distribution declared or madeupon Junior Securities, nor shall any Junior Securities be redeemed, purchasedor otherwise acquired (other than a redemption, purchase or other acquisitionof shares of Common Stock made for purposes of an employee incentive or benefitplan of the Corporation or any subsidiary) (all such dividends, distributions,redemptions or purchases being hereinafter referred to as a “**Junior Securities Distribution**”) for any consideration (orany moneys be paid to or made available for a sinking fund for the redemptionof any shares of any such stock) by the Corporation, directly or indirectly(except by conversion into or exchange for Junior Securities), without thewritten consent of a majority of the outstanding shares of Senior PreferredStock or the vote of holders of a majority of the outstanding shares of SeniorPreferred Stock.

 

**(4)****                        *Liquidation Preference.*** (a)  In the event of anyliquidation, dissolution or winding up of the Corporation, whether voluntary orinvoluntary, before any payment or distribution of the assets of theCorporation (whether capital or surplus) shall be made to or set apart for theholders of Junior Securities, each holder of a share of Senior Preferred Stockshall be entitled to receive an amount equal to the Liquidation Value of suchshare.  “**LiquidationValue**” on any date means, with respect to (x) any share of SeniorPreferred Stock other than any Additional Shares, the sum of (1) $225.37 pershare and (2) all dividends, if any, accrued but unpaid on such share from andafter the Amendment Date to such date in accordance with Section 3; *provided* that in the

 

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event of an actual liquidation, dissolution or winding up of theCorporation or the redemption of any shares of Senior Preferred Stock pursuantto Section 5 hereunder, the amount referred to in (2) shall be calculatedby including dividends accreting to the actual date of such liquidation,dissolution or winding up or the redemption date, as the case may be, ratherthan the Quarterly Date referred to above. Except as provided in the preceding sentences, holders of shares ofSenior Preferred Stock shall not be entitled to any distribution in the eventof liquidation, dissolution or winding up of the affairs of theCorporation.  If, upon any liquidation,dissolution or winding up of the Corporation, the assets of the Corporation, orproceeds thereof, distributable among the holders of the shares of SeniorPreferred Stock shall be insufficient to pay in full the preferential amountaforesaid and liquidating payments on any Parity Securities, then such assets,or the proceeds thereof, shall be distributed among the holders of shares ofSenior Preferred Stock and any such other Parity Securities ratably inaccordance with the respective amounts that would be payable on such shares ofSenior Preferred Stock and any such other stock if all amounts payable thereonwere paid in full. For the purposes of this Section (4), (i) aconsolidation or merger of the Corporation with one or more corporations, or(ii) a sale or transfer of all or substantially all of the Corporation’sassets, shall not be deemed to be a liquidation, dissolution or winding up,voluntary or involuntary, of the Corporation.

 

(b)                        Subjectto the rights of the holders of any Parity Securities, after payment shall havebeen made in full to the holders of the Senior Preferred Stock, as provided inthis Section (4), any other series or class or classes of JuniorSecurities shall, subject to the respective terms and provisions (if any)applying thereto, be entitled to receive any and all assets remaining to bepaid or distributed, and the holders of the Senior Preferred Stock shall not beentitled to share therein.

 

**(5)****                        *Redemption.***  (a) *Redemption At the Option of the Corporation*.To the extent the Corporation shall have funds legally available for suchpayment, the Corporation may, at its option, redeem shares of Senior PreferredStock, at any time in whole but not in part, at redemption prices per share incash set forth in the table below:

 
| **Year Beginning September 30*,*** | *** *** | **Percentage of Liquidation Value on  Date of Redemption** | *** *** |
|-----------------------------------------|--------------|------------------------------------------------------------|--------------|
| 2003                                    |         | 107.000%                                                   | ** **   |
| 2004                                    |         | 104.667%                                                   |         |
| 2005                                    |         | 102.333%                                                   |         |
| 2006 and thereafter                |         | 100.000%                                                   |         |

 

(b)                        *Redemption In the Event of a Change of Control*. In the eventof a Change of Control, the Corporation shall, to the extent it shall havefunds legally available for such payment, offer to redeem all of the shares ofSenior Preferred

 

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Stock then outstanding, and shall redeem the shares of Senior PreferredStock of any holder of such shares that shall consent to such redemption, upona date no later than 30 days following the Change in Control, at a redemptionprice per share equal to 101% of the Liquidation Value, in cash, to the date ofredemption, without interest.

 

“**Change of Control**” means such time as:(a) a “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) ofthe Securities Exchange Act of 1934, as amended), other than any person orgroup comprised solely of the Initial Investors, has become the beneficialowner, by way of merger, consolidation or otherwise, of 30% or more of thevoting power of all classes of voting securities of the Corporation, and suchperson or group has become the beneficial owner of a greater percentage of thevoting power of all classes of voting securities of the Corporation than thatbeneficially owned by the Initial Investors; or (b) a sale or transfer of allor substantially all of the assets of the Corporation to any person or group(other than any group consisting solely of the Initial Investors or theiraffiliates) has been consummated; or (c) during any period of two consecutiveyears, individuals who at the beginning of such period constituted the Board ofDirectors of the Corporation (together with any new directors whose electionwas approved by a vote of a majority of the directors then still in office, whoeither were directors at the beginning of such period or whose election ornomination for the election was previously so approved) cease for any reason toconstitute a majority of the directors of the Corporation, then in office.

 

“**Initial Investors**” means theStockholders (determined as of the issuance of the Preferred Stock) and theirPermitted Transferees, each as defined in the Investors’ Agreement (as definedbelow).

 

“**Investors’ Agreement**” means the Amendedand Restated Investors’ Agreement dated as of October 6, 2000 amongDeCrane Holdings Co., DeCrane Aircraft Holdings, Inc., DLJ Merchant BankingPartners II, L.P., DLJ Merchant Banking Partners II-A, L.P., DLJ OffshorePartners II, C.V., DLJ Diversified Partners, L.P., DLJ Diversified Partners-A,L.P., DLJ Millennium Partners, L.P., DLJ Millennium Partners-A, L.P., DLJMBFunding II, Inc., UK Investment Plan 1997 Partners, DLJ EAB Partners, L.P., DLJFirst ESC L.P., DLJ ESC II L.P., DLJ Investment Partners, L.P., DLJ InvestmentPartners II, L.P., DLJ Investment Funding II, Inc. and certain otherstockholders named therein, as the same may be amended from time to time.

 

(c)                         *Mandatory Redemption*. To the extent the Corporation shallhave funds legally available for such payment, on September 30, 2009, ifany shares of the Senior Preferred Stock shall be outstanding, the Corporationshall redeem all outstanding shares of the Senior Preferred Stock, at aredemption price per share equal to the aggregate Liquidation Value, in cash,to the date of redemption, without interest.

 

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(d)                        *Status of Redeemed Shares*. Shares of Senior Preferred Stockwhich have been issued and reacquired in any manner, including shares purchasedor redeemed, shall (upon compliance with any applicable provisions of the lawsof the State of Delaware) have the status of authorized and unissued shares ofthe class of Preferred Stock undesignated as to series and may be redesignatedand reissued as part of any series of the Preferred Stock; *provided*that no such issued and reacquired shares of Senior Preferred Stock shall bereissued or sold as Senior Preferred Stock.

 

(e)                         *Failure to Redeem*. If the Corporation is unable or shallfail to discharge its obligation to redeem all outstanding shares of SeniorPreferred Stock pursuant to Section (5)(b) or 5(c) (each, a “**Mandatory Redemption Obligation**”), such Mandatory RedemptionObligation shall be discharged as soon as the Corporation is able to dischargesuch Mandatory Redemption Obligation.  Ifand so long as any Mandatory Redemption Obligation with respect to the SeniorPreferred Stock shall not be fully discharged, the Corporation shall not (i)directly or indirectly, redeem, purchase, or otherwise acquire any ParitySecurity or discharge any mandatory or optional redemption, sinking fund orother similar obligation in respect of any Parity Securities (except in connectionwith a redemption, sinking fund or other similar obligation to be satisfied prorata with the Senior Preferred Stock) or (ii) notwithstanding Section 3(d),declare or make any Junior Securities Distribution, or, directly or indirectly,discharge any mandatory or optional redemption, sinking fund or other similarobligation in respect of the Junior Securities.

 

(f)                           *Failure to Pay Dividends*. Notwithstanding the foregoingprovisions of this Section (5), none of the shares of Senior PreferredStock shall be redeemed, and no sum shall be set aside for such redemption,unless shares of Senior Preferred Stock are redeemed pro rata.

 

**(6)****                        *Procedure for Redemption*.**  (a) In the event the Corporation shall redeemshares of Senior Preferred Stock pursuant to Sections 5(a) or (c) hereof,notice of such redemption shall be given by first class mail, postage prepaid,mailed not less than 30 days nor more than 60 days prior to the redemptiondate, to each holder of record of the shares to be redeemed at such holder’saddress as the same appears on the stock register of the Corporation; *provided* that neither the failure to give such notice norany defect therein shall affect the validity of the giving of notice for theredemption of any share of Senior Preferred Stock to be redeemed except as tothe holder to whom the Corporation has failed to give said notice or except asto the holder whose notice was defective. Each such notice shall state: (i) theredemption date; (ii) the number of shares of Senior Preferred Stock to beredeemed; (iii) the redemption price; (iv) the place or places wherecertificates for such shares are to be surrendered for payment of theredemption price; and (v) that dividends, if any, on the shares to be redeemedwill cease to accrue on such redemption date.

 

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(b)                        Inthe case of any redemption pursuant to Sections 5(a) or (c) hereof, noticehaving been mailed as provided in Section 6(a) hereof, from and after theredemption date (unless default shall be made by the Corporation in providingmoney for the payment of the redemption price of the shares called forredemption), dividends, if any, on the shares of Senior Preferred Stock socalled for redemption shall cease to accrue, and all rights of the holdersthereof as stockholders of the Corporation (except the right to receive fromthe Corporation the redemption price) shall cease. Upon surrender in accordancewith said notice of the certificates for any shares so redeemed (properlyendorsed or assigned for transfer, if the Board of Directors of the Corporationshall so require and the notice shall so state), such share shall be redeemedby the Corporation at the redemption price aforesaid. In case fewer than allthe shares represented by any such certificate are redeemed, a new certificateshall be issued representing the unredeemed shares without cost to the holderthereof.

 

(c)                         Inthe case of a redemption pursuant to Section 5(b) hereof, notice of suchredemption shall be given by first class mail, postage prepaid, mailed not morethan 10 days following the occurrence of the Change of Control and not lessthan 20 days prior to the redemption date, to each holder of record of theshares to be redeemed at such holder’s address as the same appears on the stockregister of the Corporation; *provided* thatneither the failure to give such notice nor any defect therein shall affect thevalidity of the giving of notice for the redemption of any share of SeniorPreferred Stock to be redeemed except as to the holder to whom the Corporationhas failed to give said notice or except as to the holder whose notice wasdefective. Each such notice shall state: (i) that a Change of Control hasoccurred; (ii) the redemption date; (iii) the redemption price; (iv) that suchholder may elect to cause the Corporation to redeem all or any of the shares ofSenior Preferred Stock held by such holder; (v) the place or places wherecertificates for such shares are to be surrendered for payment of theredemption price; and (vi) that dividends, if any, on the shares the holderelects to cause the Corporation to redeem will cease to accrue on suchredemption date.

 

Upon receipt of such notice, the holder shall, within 20 days ofreceipt thereof, return such notice to the Corporation indicating the number ofshares of Senior Preferred Stock such holder shall elect to cause theCorporation to redeem, if any.

 

(d)                        Inthe case of a redemption pursuant to Section 5(b) hereof, notice havingbeen mailed as provided in Section 6(c) hereof, from and after theredemption date (unless default shall be made by the Corporation in providingmoney for the payment of the redemption price of the shares called forredemption), dividends, if any, on such shares of Senior Preferred Stock as theholder elects to cause the Corporation to redeem shall cease to accrue, and allrights of the holders thereof as stockholders of the Corporation (except theright to receive from the Corporation the redemption price) shall cease. Uponsurrender in accordance with said notice of the certificates for any shares soredeemed (properly endorsed or assigned for transfer, if the Board of Directorsof the

 

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Corporation shall so require and the notice shall so state), such shareshall be redeemed by the Corporation at the redemption price aforesaid. In casefewer than all the shares represented by any such certificate are redeemed, anew certificate shall be issued representing the unredeemed shares without costto the holder thereof.

 

**(7)****                        *Exchange*.**  (a)Subject to the provisions of this Section (7) the Corporation may, at itsoption, at any time and from time to time on any Quarterly Date, exchange, tothe extent it is legally permitted to do so, all, but not less than all, outstandingshares (and fractional shares) of Senior Preferred Stock, for ExchangeDebentures; *provided* that (i) no event of defaultunder the indenture (as defined in such indenture) governing the ExchangeDebentures shall have occurred and be continuing; and (ii) no shares of SeniorPreferred Stock are held on such date by the DLJMB Funds (as defined in theInvestors’ Agreement) or any of their Affiliates, or any of their PermittedTransferees.  The principal amount ofExchange Debentures deliverable upon exchange of a share of Senior PreferredStock, adjusted as hereinafter provided, shall be determined in accordance withthe Exchange Ratio (as defined below).

 

In no event shall the Corporation issue Exchange Debentures indenominations other than $1,000 or in an integral multiple thereof. Cash willbe paid in lieu of any such fraction of an Exchange Debenture which wouldotherwise have been issued (which shall be determined with respect to theaggregate principal amount of Exchange Debentures to be issued to a holder uponany such exchange). Interest will accrue on the Exchange Debentures from thedate of exchange.

 

Prior to effecting any exchange hereunder, theCorporation shall appoint a trustee to serve in the capacity contemplated by anindenture between the Corporation and such trustee, containing customary termsand conditions.

 

The Exchange Ratio shall be, as of any Quarterly Date, $1.00 (orfraction thereof) of principal amount of Exchange Debenture for each $1.00 ofLiquidation Value per share of Senior Preferred Stock held by a holder on theapplicable exchange date.

 

“**Affiliates**” shall have the meaningascribed to such term in the Investors’ Agreement.

 

“**Exchange Debentures**” means SeniorSubordinated Exchange Debentures due 2009 of the Corporation, accruing interestat the rates established for dividends as provided herein but providing thatsuch interest shall not be payable in cash until the maturity date on September 30,2009, to be issued pursuant to an indenture between the Corporation and a trustee,containing customary terms and conditions approved by the Board of Directors.

 

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“**Permitted Transferees**” shall have themeaning ascribed to such term in the Investors’ Agreement.

 

(b)                        *Procedure for Exchange*. (i) In the event the Corporationshall exchange shares of Senior Preferred Stock, notice of such exchange shallbe given by first class mail, postage prepaid, mailed not less than 30 days normore than 60 days prior to the exchange date, to each holder of record of theshares to be exchanged at such holder’s address as the same appears on thestock register of the Corporation; *provided* thatneither the failure to give such notice nor any defect therein shall affect thevalidity of the giving of notice for the exchange of any share of SeniorPreferred Stock to be exchanged except as to the holder to whom the Corporationhas failed to give said notice or except as to the holder whose notice wasdefective. Each such notice shall state: (A) the exchange date; (B) the numberof shares of Senior Preferred Stock to be exchanged and, if fewer than all theshares held by such holder are to be exchanged, the number of shares to beexchanged from such holder; (C) the Exchange Ratio; (D) the place or placeswhere certificates for such shares are to be exchanged for notes evidencing theExchange Debentures to be received by the exchanging holder; and (E) thatdividends, if any, on the shares to be exchanged will cease to accrue on suchexchange date.

 

(ii)                                   Priorto giving notice of intention to exchange, the Corporation shall execute anddeliver with a bank or trust company selected by the Corporation an indenturecontaining customary terms and conditions. The Corporation will cause theExchange Debentures to be authenticated on the Quarterly Date on which theexchange is effective, and will pay interest on the Exchange Debentures at therate and on the dates specified in such indenture from the exchange date.

 

The Corporation will not give notice of itsintention to exchange under Section 7(b)(i) hereof unless it shall file atthe place or places (including a place in the Borough of Manhattan, The City ofNew York) maintained for such purpose an opinion of counsel (who may be anemployee of the Corporation) to the effect that (i) the indenture has been dulyauthorized, executed and delivered by the Corporation, has been duly qualifiedunder the Trust Indenture Act of 1939 (or that such qualification is notnecessary) and constitutes a valid and binding instrument enforceable againstthe Corporation in accordance with its terms (subject, as to enforcement, tobankruptcy, insolvency, reorganization and other laws of general applicabilityrelating to or affecting creditors’ rights and to general equity principles,and subject to such other qualifications as are then customarily contained inopinions of counsel experienced in such matters), (ii) the Exchange Debentureshave been duly authorized and, when executed and authenticated in accordancewith the provisions of the indenture and delivered in exchange for the sharesof Senior Preferred Stock, will constitute valid and binding obligations of theCorporation entitled to the benefits of the indenture (subject as aforesaid),(iii) neither

 

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the execution nor delivery of the indentureor the Exchange Debentures nor compliance with the terms, conditions orprovisions of such instruments will result in a breach or violation of any ofthe terms or provisions of, or constitute a default under, any indenture,mortgage, deed of trust or agreement or instrument, known to such counsel, towhich the Corporation or any of its subsidiaries is a party or by which it orany of them is bound, or any decree, judgment, order, rule or regulation, knownto such counsel, of any court or governmental agency or body havingjurisdiction over the Corporation and such subsidiaries or any of theirproperties, (iv) the Exchange Debentures have been duly registered for suchexchange with the Securities and Exchange Commission under a registrationstatement that has become effective under the Securities Act of 1933 (the “**Act**”) or that the exchange of the Exchange Debentures forthe shares of Senior Preferred Stock is exempt from registration under the Act,and (v) the Corporation has sufficient legally available funds for suchexchange such that such exchange is permitted under applicable law.

 

(iii)                                Notice having beenmailed as aforesaid, from and after the exchange date (unless default shall bemade by the Corporation in issuing Exchange Debentures in exchange for theshares called for exchange), dividends, if any, on the shares of SeniorPreferred Stock so called for exchange shall cease to accrue, and all rights ofthe holders thereof as stockholders of the Corporation (except the right toreceive from the Corporation the Exchange Debentures and any rights suchholder, upon the exchange, may have as a holder of the Exchange Debenture)shall cease. Upon surrender in accordance with said notice of the certificatesfor any shares so exchanged (properly endorsed or assigned for transfer, if theBoard of Directors of the Corporation shall so require and the notice shall sostate), such share shall be exchanged by the Corporation for the ExchangeDebentures at the Exchange Ratio. In case fewer than all the shares representedby any such certificate are exchanged, a new certificate shall be issuedrepresenting the unexchanged shares without cost to the holder thereof.

 

(iv)                               Each exchange shall bedeemed to have been effected immediately after the close of business on therelevant Quarterly Date, and the person in whose name or names any ExchangeDebentures shall be issuable upon such exchange shall be deemed to have becomethe holder of record of the Exchange Debentures represented thereby at suchtime on such Quarterly Date.

 

(v)                                  Prior to the deliveryof any securities which the Corporation shall be obligated to deliver uponexchange of the Senior Preferred Stock, the Corporation shall comply with allapplicable federal and state laws and regulations which require action to betaken by the Corporation.

 

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(c)                         TheCorporation will pay any and all documentary stamp or similar issue or transfertaxes payable in respect of the issue or delivery of notes evidencing ExchangeDebentures on exchange of the Senior Preferred Stock pursuant hereto; *provided* that the Corporation shall not be required to payany tax which may be payable in respect of any transfer involved in the issueor delivery of Exchange Debentures in a name other than that of the holder ofthe Senior Preferred Stock to be exchanged and no such issue or delivery shallbe made unless and until the person requesting such issue or delivery has paidto the Corporation the amount of any such tax or has established, to thesatisfaction of the Corporation, that such tax has been paid.

 

**(8)****                        *Voting Rights*.** (a) The holders of record of shares of Senior Preferred Stock shall notbe entitled to any voting rights except as hereinafter provided in this Section (8),as otherwise provided by law or as provided in the Investors’ Agreement.

 

(b)                        Ifand whenever (i) for any reason (including the reason that funds are notlegally available for a redemption), the Corporation shall have failed todischarge any Mandatory Redemption Obligation (including a redemption in theEvent of a Change of Control pursuant to Section 5(b) hereof), (ii) theCorporation shall have failed to provide the notice required by Section 6(c)hereof within the time period specified in such section or (iii) theCorporation shall have failed to comply with Sections 3(c), 3(d) or 8(c)hereof, the number of directors then constituting the Board of Directors shallbe increased by two and the holders of a majority of the outstanding shares ofSenior Preferred Stock, together with the holders of shares of every otherseries of preferred stock upon which like rights have been conferred and areexercisable (resulting from either the failure to pay dividends or the failureto redeem) (any such series is referred to as the “**PreferredShares**”), voting as a single class regardless of series, shall beentitled to elect the two additional directors to serve on the Board ofDirectors at any annual meeting of stockholders or special meeting held inplace thereof, or at a special meeting of the holders of the Senior PreferredStock and the Preferred Shares called as hereinafter provided. Whenever (i) theCorporation shall have fulfilled its Mandatory Redemption Obligation, (ii) theCorporation shall have fulfilled its obligation to provide notice as specifiedin Section 6(c) hereof, or (iii) the Corporation shall have complied withSections 3(c), 3(d), or 8(c) hereof, as the case may be, then the right of theholders of the Senior Preferred Stock to elect such additional two directorsshall cease (but subject always to the same provisions for the vesting of suchvoting rights in the case of any similar future (i) failure to fulfill anyMandatory Redemption Obligation, (ii) failure to fulfill the obligation toprovide the notice required by Section 6(d) hereof within the time period specifiedin such section or (iii) failure to comply with Sections 3(c), 3(d), or8(c)) and the terms of office of all persons elected as directors by theholders of the Senior Preferred Stock shall forthwith terminate and the numberof the Board of Directors shall be reduced accordingly. At any time after suchvoting power shall have been so vested in the holders of shares of SeniorPreferred Stock and

 

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the Preferred Shares, the secretary of the Corporation may, and uponthe written request of any holder of Senior Preferred Stock (addressed to thesecretary at the principal office of the Corporation) shall, call a specialmeeting of the holders of the Senior Preferred Stock and of the PreferredShares for the election of the two directors to be elected by them as hereinprovided, such call to be made by notice similar to that provided in the Bylawsof the Corporation for a special meeting of the stockholders or as required bylaw. If any such special meeting required to be called as above provided shallnot be called by the secretary within 20 days after receipt of any suchrequest, then any holder of shares of Senior Preferred Stock may call suchmeeting, upon the notice above provided, and for that purpose shall have accessto the stock books of the Corporation. The directors elected at any suchspecial meeting shall hold office until the next annual meeting of thestockholders or special meeting held in lieu thereof if such office shall nothave previously terminated as above provided. If any vacancy shall occur amongthe directors elected by the holders of the Senior Preferred Stock and thePreferred Shares, a successor shall be elected by the Board of Directors, uponthe nomination of the then-remaining director elected by the holders of theSenior Preferred Stock and the Preferred Shares or the successor of suchremaining director, to serve until the next annual meeting of the stockholdersor special meeting held in place thereof if such office shall not havepreviously terminated as provided above.

 

(c)                         Withoutthe written consent of a majority of the outstanding shares of Senior PreferredStock or the vote of holders of a majority of the outstanding shares of SeniorPreferred Stock at a meeting of the holders of Senior Preferred Stock calledfor such purpose, the Corporation will not (i) amend, alter or repeal anyprovision of the Certificate of Incorporation (by merger or otherwise) so as toadversely affect the preferences, rights or powers of the Senior PreferredStock; *provided* that any such amendment thatdecreases the dividend payable on or the Liquidation Value of the SeniorPreferred Stock shall require the affirmative vote of holders of each share ofSenior Preferred Stock at a meeting of holders of Senior Preferred Stock calledfor such purpose or written consent of the holder of each share of SeniorPreferred Stock; or (ii) create, authorize or issue any class of stock rankingprior to, or on a parity with, the Senior Preferred Stock with respect todividends or upon liquidation, dissolution, winding up or otherwise, orincrease the authorized number of shares of any such class or series, or reclassifyany authorized stock of the Corporation into any such prior or parity shares orcreate, authorize or issue any obligation or security convertible into orevidencing the right to purchase any such prior or parity shares, except thatthe Corporation may, without such approval, create authorize and issue ParitySecurities for the purpose of utilizing the proceeds from the issuance of suchParity Securities for the redemption or repurchase of all outstanding shares ofSenior Preferred Stock in accordance with the terms hereof or of the Investors’Agreement.

 

(d)                        Inexercising the voting rights set forth in this Section (8), each share ofSenior Preferred Stock shall have one vote per share, except that when

 

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any other seriesof preferred stock shall have the right to vote with the Senior Preferred Stockas a single class on any matter, then the Senior Preferred Stock and such otherseries shall have with respect to such matters one vote per $100 of LiquidationValue or other liquidation preference. Except as otherwise required byapplicable law or as set forth herein, the shares of Senior Preferred Stockshall not have any relative, participating, optional or other special votingrights and powers and the consent of the holders thereof shall not be requiredfor the taking of any corporate action.

 

**(9)****                        *Reports*.**  So longas any of the Senior Preferred Stock is outstanding, the Corporation willfurnish the holders thereof with the quarterly and annual financial reportsthat the Corporation is required to file with the Securities and ExchangeCommission pursuant to Section 13 or Section 15(d) of the SecuritiesExchange Act of 1934 or, in the event the Corporation is not required to filesuch reports, reports containing the same information as would be required insuch reports.

 

**(10)****                 *General Provisions*.** (a) The term “**Person**” as usedherein means any corporation, limited liability company, partnership, trust,organization, association, other entity or individual.

 

(b)                        Theterm “**outstanding**”, when used with referenceto shares of stock, shall mean issued shares, excluding shares held by theCorporation or a subsidiary.

 

(c)                         Theheadings of the Sections, subsections, clauses and subclauses used herein arefor convenience of reference only and shall not define, limit or affect any ofthe provisions hereof.

 

(d)                        Eachholder of Senior Preferred Stock, by acceptance thereof, acknowledges andagrees that payments of dividends, interest, premium and principal on, andexchange, redemption and repurchase of, such securities by the Corporation aresubject to restrictions on the Corporation contained in certain credit andfinancing agreements.

 

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IN WITNESS WHEREOF, DeCrane Holdings Co. has caused this Certificate ofAmendment to Certificate of Designations to be signed and attested by theundersigned this 23 day of July, 2004.

 
|   | DECRANE HOLDINGS CO. |
|--------|----------------------|
|   |                 |
|   |                 |
|   | By:                  | /s/ R. JACK DECRANE |   |
|   |                 | Name: | R. Jack DeCrane |
|   |                 | Title: | Chief Executive Officer |
|        |                      |  |  |  |

 

 
| ATTEST: |                  |
|---------|-----------------------|
|    |                  |
|    |                  |
| By:     | /s/ RICHARD J. KAPLAN |   |   |
|    | Name:                 | Richard J. Kaplan |   |
|    | Title:                | Chief Financial Officer and  Assistant Secretary |   |
|         |                       |  |  |  |

 

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