**Exhibit 4.6.2**

 

**CERTIFICATE OF AMENDMENTTOCERTIFICATE OF DESIGNATIONS, PREFERENCESAND RIGHTS OF 16% SENIOR REDEEMABLE EXCHANGEABLEPREFERRED STOCK DUE 2009(NOW DESIGNATED AS SENIOR REDEEMABLE EXCHANGEABLEPREFERRED STOCK DUE 2008)**

 

of

 

**DECRANE AIRCRAFT HOLDINGS, INC.**

 

Pursuant to Section 242 of the GeneralCorporation Lawof the State of Delaware

 

DeCrane Aircraft Holdings, Inc., 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 toArticle Fourth of the Corporation’s Certificate of Incorporation, asamended (the “**Certificate of Incorporation**”),the Board of Directors of the Corporation (the “**Board**”) is authorized to fix the powers, designations,preferences and relative, participating, optional and other special rights, andthe qualifications, limitations and restrictions (collectively, “**Rights and Preferences**”), of a series ofthe Corporation’s 700,000 shares of preferred stock, $0.01 par value per share(the “**Preferred Stock**”).

 

C.                                     Pursuant to aCertificate of Designations, Preferences and Rights of 16% Senior RedeemableExchangeable Preferred Stock Due 2009, as amended by the filing of that certainCertificate of Amendment to the Certificate of Designations, Preferences andRights of 16% Senior Redeemable Exchangeable Preferred Stock Due 2009 (the “**Senior Preferred Stock Certificate of Designations**”),the Board fixed the Rights and Preferences of the Corporation’s 16% SeniorRedeemable Exchangeable Preferred 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 the Certificate of Amendment beapproved and adopted by the Corporation’s stockholders, including the holdersof the

 

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Corporation’s16% Senior Redeemable Exchangeable Preferred Stock Due 2009, and (c) submittedthe Certificate of Amendment to such stockholders for approval and adoption.

 

E.                                      TheCorporation’s stockholders have duly approved and adopted this Certificate ofAmendment in accordance with the provisions of Section 228 andSection 242 of the General Corporation Law of the State of Delaware, toamend and restate the provisions of the Senior Preferred Stock Certificate ofDesignations as set forth 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 16% 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 2008 as set forthbelow:

 

1.                                          **Number and Designation**. 700,000 shares of the Preferred Stock of the Corporation shall bedesignated as Senior Redeemable Exchangeable Preferred Stock Due 2008 (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 future class of capital stock of the Corporation, the terms ofwhich provide that such class shall rank junior to the Senior Preferred Stockor the terms 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 withrespect to dividends or upon liquidation, dissolution, winding up orotherwise), including the Common Stock, are collectively referred to herein asthe “**Junior Securities**.”  All equity securities of the Corporation withwhich the Senior Preferred Stock ranks on a parity (whether with respect todividends or upon liquidation, dissolution, winding up or otherwise) arecollectively referred to herein as the “**Parity Securities**.”  The respective definitions of JuniorSecurities and Parity Securities shall also include any rights or optionsexercisable for or convertible into any of the Junior Securities and ParitySecurities, as the case may be (other than convertible debt securities).  The Senior Preferred Stock shall be subjectto the creation of Junior Securities and Parity Securities.

 

3.                                          **Dividends**.  (a)Dividends on each share of Senior Preferred Stock shall accrue from and afterJuly 23, 2004 (the “**Amendment Date**”),but shall not be payable (except to the extent accrued dividends increase theLiquidation Value (as defined below) payable hereunder), for each period beginningon the day after each Quarterly Date (as defined below) (or, in the case of theQuarterly Period (as defined below) ending on

 

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September 30, 2004, beginning on theAmendment Date and ending 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, 4% per annum (computed on the basis of a 360 dayyear) of the Liquidation Value if the Consolidated EBITDA Ratio (as definedbelow) as of the Quarterly Date immediately prior to the beginning of suchperiod is less than 6.0 but greater than or equal to 5.0;

 

(C) 16% 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 shall have occurred and becontinuing.

 

Such 0%, 4% or 16% rate, as applicable, isreferred to herein as the “**Dividend Rate**”.  If the Corporation is unable or shall fail todischarge its obligation to redeem all outstanding shares of Senior PreferredStock pursuant to Section 5(b) or 5(c) hereof (including by operation ofthe proviso to Section 5(b)) (each, a “**MandatoryRedemption Obligation**”), the Dividend Rate shall increase by .25percent per quarter (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 30 and December 31 of each year (unless such day is not abusiness day, in which event on the next succeeding business day) (each of suchdates being a “**Quarterly Date**” and each suchquarterly period being a “**Quarterly Period**”).  Such dividends shall be cumulative from thedate of issue, whether or not in any Quarterly Period or Periods there shall befunds of the Corporation legally available for the payment of such dividends.

 

As used herein, (i) “**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 Stockas of such Quarterly Date to (b) Consolidated Cash Flow (as defined in theIndenture referenced below) for the four consecutive Quarterly Periods endingon such Quarterly Date; (ii) “**Consolidated Total Debt**”means, as at any date of determination, the total amount of Indebtedness (asdefined in the Indenture) of the Corporation and its Restricted Subsidiaries(as defined in the Indenture), determined on a consolidated basis in accordancewith generally accepted accounting principles; (iii) “**ConsolidatedCash Flow**” has the meaning set forth in the Indenture; (iv) “**Indenture**” means the Indenture dated as of July 23,2004 among the Corporation, as issuer, each of the guarantors party thereto andU.S. Bank National Association, as trustee, as in effect on the AmendmentDate); and (v) “**Triggering Event**” means any of thefollowing events:  (i) the Corporation isunable or shall fail to discharge any Mandatory Redemption Obligation(including by operation of the proviso

 

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to Section 5(b)); (ii) the Corporation shall fail to comply withits obligations under Sections 3(c), 3(d), 8(c), 9, 10, 11 or 12 hereof; (iii)the consummation of any transaction (including, without limitation, any mergeror consolidation) the result of which is that either (A) any “person” or“group” (as such terms are used in Section 13(d) of the Exchange Act),other than the Principals (as defined in the Indenture) and their RelatedParties (as defined in the Indenture), becomes the “beneficial owner” (as suchterm is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directlyor indirectly through one or more intermediaries, of 20% or more of theoutstanding common stock of the Corporation or (B) the beneficial ownership ofthe Principals and their Related Parties immediately following the effectivedate of such transaction of securities of the Corporation represents less than80% of the percentage beneficial ownership of the Principals and their RelatedParties of the outstanding common stock of the Corporation on the AmendmentDate; or (iv) the consummation of an Initial Public Offering (as defined in theInvestors’ Agreement (as defined below) as such agreement is in effect on theAmendment Date) by DeCrane Holdings.

 

(b)         Holders of shares ofSenior Preferred Stock shall not be entitled to any dividends, whether payablein cash, property or stock, in excess of the cumulative dividends, as hereinprovided, on the Senior Preferred Stock. Except as provided in this Section 3, no interest, or sum of moneyin lieu of interest, shall be payable in respect of any dividend payment orpayments on the Senior Preferred Stock that accrue.

 

(c)          So long as any shares ofthe Senior Preferred Stock are outstanding, no dividends shall be declared orpaid or set apart for payment on Parity Securities for any period.

 

(d)         (i)  So long as any shares of the Senior PreferredStock are outstanding, no dividends (other than dividends or distributions paidin shares of, or options, warrants or rights to subscribe for or purchaseShares of, Junior Securities) shall be declared or paid or set apart forpayment or other distribution declared or made upon Junior Securities, norshall any Junior Securities be redeemed, purchased or otherwise acquired (allsuch dividends, distributions, redemptions or purchases being hereinafterreferred to as a “**Junior SecuritiesDistribution**”) for any consideration (or any moneys be paid to ormade available for a sinking fund for the redemption of any shares of any suchstock) by the Corporation, directly or indirectly (except by conversion into orexchange for Junior Securities).

 

(ii)                                  Section 3(d)(i)will not prohibit:

 

(A)                therepurchase, redemption or other acquisition or retirement for value of anycapital stock and all warrants or other rights to acquire capital stock(collectively, “**Equity Interests**”) of theCorporation or DeCrane Holdings Co. (“**Holdings**”) heldby any member of the Corporation’s or Holdings’ or any of the Corporation’ssubsidiaries’ management pursuant to any management equity subscriptionagreement or stock option agreement and any dividend to Holdings to fund anysuch

 

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repurchase,redemption, acquisition or retirement; *provided* thatthe aggregate price paid for all such repurchased, redeemed, acquired orretired Equity Interests shall not exceed:

 

(x)                                   $2.0 million in theaggregate; *plus*

 

(y)                                 the aggregate cashproceeds received by the Corporation since the Amendment Date from any issuanceof Junior Securities by the Corporation or capital stock by Holdings to membersof management of the Corporation and its subsidiaries;

 

(B)                  thepayment of dividends or the making of loans or advances by the Corporation toHoldings not to exceed $3.0 million in any fiscal year for costs and expensesincurred by Holdings in its capacity as a holding company or for servicesrendered by Holdings on behalf of the Corporation;

 

(C)                  paymentsor distributions to Holdings pursuant to any tax sharing agreement orarrangement between the Corporation and Holdings, as the same may be amendedfrom time to time; *provided* thatin no event shall the amount permitted to be paid pursuant to all suchagreements and/or arrangements exceed the amount the Corporation would berequired to pay for income taxes were it to file a consolidated tax return foritself and its consolidated subsidiaries as if it were a corporation that was aparent of a consolidated group; and

 

(D)                 theredemption, repurchase, retirement, defeasance or other acquisition of anyEquity Interests of the Corporation in exchange for, or out of the net cash proceedsof the substantially concurrent sale (other than to a subsidiary of theCorporation) of, other Equity Interests of the Corporation (other than anyDisqualified Stock).

 

4.                                         **Liquidation Preference**. (a) In the event of any liquidation, dissolution or winding up of theCorporation, whether voluntary or involuntary, before any payment ordistribution of the assets of the Corporation (whether capital or surplus)shall be made to or set apart for the holders of Junior Securities, each holderof a share of Senior Preferred Stock shall be entitled to receive an amountequal to the Liquidation Value of such share. “**Liquidation Value**” on any date means,with respect to any share of Senior Preferred Stock, the sum of (1) $189.21 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.  Except as provided in the precedingsentences, holders of shares of Senior Preferred Stock shall not be entitled toany distribution in the event of liquidation, dissolution or winding up of theaffairs of the Corporation.  If, upon anyliquidation, dissolution or winding up of the Corporation, the assets of theCorporation, or proceeds thereof, distributable among the holders of the sharesof Senior Preferred Stock shall be insufficient to pay in full the preferentialamount aforesaid and liquidating payments on

 

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any Parity Securities, then such assets, orthe 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 ofthis Section 4, (i) a consolidation or merger of the Corporation with oneor more corporations, or (ii) a sale or transfer of all or substantially all ofthe Corporation’s assets, shall not be deemed to be a liquidation, dissolutionor 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 Junior Securitiesshall, subject to the respective terms and provisions (if any) applyingthereto, be entitled to receive any and all assets remaining to be paid ordistributed, and the holders of the Senior Preferred Stock shall not beentitled to share therein.

 

5.                                         **Redemption**.

 

(a)                                  *Redemption at the Option of the Corporation*.  At any time, to the extent the Corporationshall have funds legally available for such payment, the Corporation may, atits option, redeem shares of Senior Preferred Stock, at any time in whole butnot in part, at redemption prices per share in cash set forth in the tablebelow:

 
| **Year  Beginning July 1,** | ** ** | **Percentage of Liquidation Value on  Date of Redemption** | ** ** |
|----------------------------------|------------|------------------------------------------------------------|------------|
| Prior to 2005                    |       | 116                                                        | %          |
| 2005                             |       | 108                                                        | %          |
| 2006                             |       | 106                                                        | %          |
| 2007                             |       | 104                                                        | %          |
| 2008                             |       | 102                                                        | %          |

 

(b)                                 *Redemption in the Event of a Change of Control*.  In the event of a Change of Control, theCorporation shall, to the extent it shall have funds legally available for suchpayment, offer to redeem all of the shares of Senior Preferred Stock thenoutstanding, and shall redeem the shares of Senior Preferred Stock of anyholder of such shares that shall consent to such redemption, upon a date nolater that 30 days following the Change of Control, at a redemption price pershare equal to 101% of Liquidation Value; *provided* thatthe Corporation shall not repurchase any Senior Preferred Stock pursuant tothis Section 5(b) to the extent that such repurchase is prohibited bySection 4.07 of the Indenture or Section 4.07 of the Indenture datedas of October 15, 1998 by and among the Corporation, the guarantors partythereto and State Street Bank and Trust Company, as trustee, as in effect onthe date hereof, but notwithstanding such prohibition, any such failure torepurchase any Senior Preferred Stock shall constitute a Triggering Event asdefined in Section 3 hereof for so long as such failure shall continue.

 

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“**Change of Control**” means the occurrenceof any of the following:  (a) thesale, lease, transfer, conveyance or other disposition (other than by way ofmerger or consolidation), in one or a series of related transactions, of all orsubstantially all of the assets of the Corporation and its subsidiaries, takenas a whole, to any “person” or “group” (as such terms are used inSection 13(d) of the Securities Exchange Act of 1934, as amended (the “**Exchange Act**”)), other than the Principals and their RelatedParties; (b) the adoption of a plan for the liquidation or dissolution of theCorporation; (c) the consummation of any transaction (including, withoutlimitation, any merger or consolidation) the result of which is that any“person” or “group” (as such terms are used in Section 13(d) of the ExchangeAct), other than the Principals and their Related Parties, becomes the“beneficial owner” (as such term is defined in Rule 13d-3 and Rule 13d-5 underthe Exchange Act), directly or indirectly through one or more intermediaries,of 50% or more of the voting power of the outstanding voting stock of theCorporation; or (d) the first day on which a majority of the members of theboard of directors of the Corporation are not Continuing Members.

 

“**Continuing Members**” means, as of anydate of determination, any member of the board of directors of the Corporationwho (a) was a member of such board of directors immediately after consummationof the acquisition of the Corporation by the Principals and their RelatedParties in August 1998 or (b) was nominated for election or elected tosuch board of directors with the approval of, or whose election to the board ofdirectors was ratified by, at least a majority of the Continuing Members whowere members of such board of directors at the time of such nomination or electionor any successor Continuing Members appointed by such Continuing Members (ortheir successors).

 

(c)                                  *Mandatory Redemption*. To the extent the Corporation shall have funds legally available forsuch payment, on December 31, 2008, if any shares of the Senior PreferredStock shall be outstanding, the Corporation shall redeem all outstanding sharesof the Senior Preferred Stock, at a redemption price equal to the aggregateLiquidation Value, in cash, to the date of redemption, without interest.

 

(d)                                 *Status of Redeemed Shares*. Shares of Senior Preferred Stock which have been issued and reacquiredin any manner, including shares purchased or redeemed, shall (upon compliancewith any applicable provisions of the laws of the State of Delaware) have thestatus of authorized and unissued shares of the Preferred Stock undesignated asto series and may be redesignated and reissued as part of any series of thePreferred Stock; *provided* that no such issued andreacquired shares of Senior Preferred Stock shall be reissued or sold as SeniorPreferred Stock.

 

(e)                                  *Failure to Redeem*.  Ifthe Corporation is unable or shall fail to discharge its Mandatory RedemptionObligation, the Corporation shall use commercially reasonable efforts to obtainfinancing for such purpose and such Mandatory Redemption Obligation shall bedischarged as soon as the Corporation is able to discharge such MandatoryRedemption Obligation.  If and so long asany Mandatory Redemption Obligation with respect to the Senior Preferred Stockshall not be fully discharged, the

 

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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 inconnection with a redemption, sinking fund or other similar obligation to besatisfied pro rata with the Senior Preferred Stock) or (ii) notwithstandingSection 3(d), declare or make any Junior Securities Distribution (exceptas permitted by Section 3(d)(ii)(C)), or, directly or indirectly,discharge any mandatory or optional redemption, sinking fund or other similarobligation in respect of the Junior Securities.

 

(f)                                    Allredemptions of Senior Preferred Stock shall be made on a pro rata basis.

 

6.                                         **Procedure for Redemption**. (a) In the event the Corporation shall redeem shares of Senior PreferredStock pursuant to Section 5(a) or 5(c), notice of such redemption shall begiven by first class mail, postage prepaid, mailed not less than 10 days normore than 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) the redemption date; (ii) the number of shares of Senior Preferred Stock tobe redeemed; (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.

 

(b)                                 Inthe case of any redemption pursuant to Sections 5(a) or 5(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 accordance with said noticeof the certificates for any shares so redeemed (properly endorsed or assignedfor transfer, if the Board of Directors of the Corporation shall so require andthe notice shall so state), such share shall be redeemed by the Corporation atthe 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.

 

(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 20 days following the occurrence of the Change of Control and not lessthan 10 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*

 

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that neither the failure to givesuch notice nor any defect therein shall affect the validity of the giving ofnotice for the redemption of any share of Senior Preferred Stock to be redeemedexcept as to the holder to whom the Corporation has failed to give said noticeor except as to the holder whose notice was defective.  Each such notice shall state: (i) that aChange of Control has occurred; (ii) the redemption date; (iii) the redemptionprice; (iv) that such holder may elect to cause the Corporation to redeem allor any of the shares of Senior Preferred Stock held by such holder; (v) theplace or places where certificates for such shares are to be surrendered forpayment of the redemption price; and (vi) that dividends, if any, on the sharesthe holder elects to cause the Corporation to redeem will cease to accrue onsuch redemption date.

 

Upon receipt of such notice, the holder shall, within 5 business daysof receipt thereof, return such notice to the Corporation indicating the numberof shares 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.  Upon surrender in accordance with said noticeof the certificates for any shares so redeemed (properly endorsed or assignedfor transfer, if the Board of Directors of the Corporation shall so require andthe notice shall so state), such share shall be redeemed by the Corporation atthe 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) Subjectto the provisions of this Section 7, the Corporation may, at its option,at any time and from time to time on any Quarterly Date, exchange, to theextent it is legally permitted to do so, all, but not less than all,outstanding shares (and fractional shares) of Senior Preferred Stock forExchange Debentures; *provided* that(i) no event of default under the indenture (as defined in such indenture)governing the Exchange Debentures shall have occurred and be continuing; (ii)no shares of Senior Preferred Stock are held on such date by the DLJIP Entities(as defined in the Investors’ Agreement), or any of their Affiliates, or any oftheir Permitted Transferees and (iii) such exchange is permitted by the termsof all debt instruments to which the Corporation is subject.  The principal amount of Exchange Debenturesdeliverable upon exchange of a share of Senior Preferred Stock, adjusted ashereinafter provided, shall be determined in accordance with the 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 will be paid in lieu of any suchfraction of an Exchange Debenture which would otherwise have been issued (whichshall be determined with respect to the aggregate principal amount of ExchangeDebentures to

 

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be issued to a holder upon any such exchange).  Interest will accrue on the ExchangeDebentures from the date of exchange.

 

Prior to effecting any exchange hereunder, the Corporation shallappoint a trustee to serve in the capacity contemplated by an indenture betweenthe Corporation and such trustee, containing customary terms and 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 JuniorSubordinated Exchange Debentures due 2008 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 onDecember 31, 2008, to be issued pursuant to an indenture between theCorporation and a trustee, containing customary terms and conditions approvedby the Board of Directors (which terms shall be substantially the same as inthe Indenture but shall provide that the Corporation shall not repurchase anyExchange Debentures pursuant to the asset sale or change of control provisionsthereof in violation of Section 4.07 of the Indenture and which shall besubordinated to all existing indebtedness except indebtedness expressly made *pari passu* to the Exchange Debentures).

 

“**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 DiversifiedPartners, L.P., DLJ Diversified Partners-A, L.P., DLJ Millennium Partners,L.P., DLJ Millennium Partners-A, L.P., DLJMB Funding II, Inc., UK InvestmentPlan 1997 Partners, DLJ EAB Partners, L.P., DLJ First ESC L.P., DLJ ESC IIL.P., DLJ Investment Partners, L.P., DLJ Investment Partners II, L.P., DLJInvestment Funding II, Inc. and certain other stockholders named therein, asthe same may be amended from time to time.

 

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

 

(b)                                 *Procedure for Exchange*. (i) In the event the Corporation shall exchange shares of SeniorPreferred Stock, notice of such exchange shall be given by first class mail,postage prepaid, mailed not less than 30 days nor more than 60 days prior tothe exchange date, to each holder of record of the shares to be exchanged atsuch holder’s address as the same appears on the stock register of theCorporation; *provided* that neither the failureto give such notice nor any defect therein shall affect the validity of thegiving of notice for the exchange of any share of Senior Preferred Stock to beexchanged except

 

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as to the holder to whom theCorporation has failed to give said notice or except as to the holder whosenotice was defective.

 

Each such notice shall state: (A) the exchange date; (B) the number of shares of Senior PreferredStock to be exchanged; (C) the Exchange Ratio; (D) the place or places wherecertificates 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 the Exchange Debentures to be authenticatedon the Quarterly Date on which the exchange is effective, and will pay intereston the Exchange Debentures at the rate and on the dates specified in suchindenture 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 ExchangeDebentures have been duly authorized and, when executed and authenticated inaccordance with the provisions of the indenture and delivered in exchange forthe shares of Senior Preferred Stock, will constitute valid and bindingobligations of the Corporation entitled to the benefits of the indenture(subject as aforesaid), (iii) neither the execution nor delivery of theindenture or the Exchange Debentures nor compliance with the terms, conditionsor provisions of such instruments will result in a breach or violation of anyof the 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 registration statementthat 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

 

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(v) the Corporation has sufficientlegally available funds for such exchange such that such exchange is permittedunder applicable law.

 

(iii)                               Noticehaving been mailed as aforesaid, from and after the exchange date (unlessdefault shall be made by the Corporation in issuing Exchange Debentures inexchange for the shares called for exchange), dividends, if any, on the sharesof Senior Preferred Stock so called for exchange shall cease to accrue, and allrights of the holders thereof as stockholders of the Corporation (except theright to receive from the Corporation the Exchange Debentures and any rightssuch holder, upon the exchange, may have as a holder of the Exchange Debenture)shall cease.  Upon surrender inaccordance with said notice of the certificates for any shares so exchanged(properly endorsed or assigned for transfer, if the Board of Directors of theCorporation shall so require and the notice shall so state), such share shallbe exchanged by the Corporation for the Exchange Debentures at the ExchangeRatio.  In case fewer than all the sharesrepresented by any such certificate are exchanged, a new certificate shall beissued representing the unexchanged shares without cost to the holder thereof.

 

(iv)                              Eachexchange shall be deemed to have been effected immediately after the close ofbusiness on the relevant Quarterly Date, and the person in whose name or namesany Exchange Debentures shall be issuable upon such exchange shall be deemed tohave become the holder of record of the Exchange Debentures represented therebyat such time on such Quarterly Date.

 

(v)                                 Priorto the delivery of any securities which the Corporation shall be obligated todeliver upon exchange of the Senior Preferred Stock, the Corporation shallcomply with all applicable federal and state laws and regulations which requireaction to be taken by the Corporation.

 

(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 not be entitledto any voting rights except as hereinafter provided in this Section 8 or asotherwise provided by law.

 

(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

 

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Control pursuant toSection 5(b) hereof), (ii) the Corporation shall have failed to providethe notice required by Section 6(c) hereof within the time periodspecified in such section or (iii) the Corporation shall have failed tocomply with Sections 3(c), 3(d), 8(c), 9, 10, 11 or 12 hereof, the number ofdirectors then constituting the Board of Directors shall be increased by twoand the holders of a majority of the outstanding shares of Senior PreferredStock, together with the holders of shares of every other series of preferredstock ranking prior to, or on parity with the Senior Preferred Stock and uponwhich like rights have been conferred and are exercisable (resulting fromeither the failure to pay dividends or the failure to redeem) (any such seriesis referred to as the “**Preferred Shares**”),voting as a single class regardless of series, shall be entitled to elect thetwo additional directors to serve on the Board of Directors at any annualmeeting of stockholders or special meeting held in place thereof, or at aspecial meeting of the holders of the Senior Preferred Stock and the PreferredShares called as hereinafter provided. Whenever (i) the Corporation shall have fulfilled its MandatoryRedemption Obligation, (ii) the Corporation shall have fulfilled its obligationto provide notice as specified in Section 6(c) hereof, or (iii) theCorporation shall have complied with Sections 3(c), 3(d), 8(c), 9, 10, 11 or 12hereof, as the case may be, then the right of the holders of the SeniorPreferred Stock to elect such additional two directors shall cease (but subjectalways to the same provisions for the vesting of such voting rights in the caseof any similar future (i) failure to fulfill any Mandatory RedemptionObligation, (ii) failure to fulfill the obligation to provide the noticerequired by Section 6(c) hereof within the time period specified in suchsection or (iii) failure to comply with Section 3(c), 3(d), 8(c), 9,10, 11 or 12) and the terms of office of all persons elected as directors bythe holders of the Senior Preferred Stock shall forthwith terminate and thenumber of the Board of Directors shall be reduced accordingly.  At any time after such voting power shallhave been so vested in the holders of shares of Senior Preferred Stock and thePreferred Shares, the secretary of the Corporation may, and upon the writtenrequest of any holder of Senior Preferred Stock (addressed to the secretary atthe principal office of the Corporation) shall, call a special meeting of theholders of the Senior Preferred Stock and of the Preferred Shares for theelection of the two directors to be elected by them as herein provided, suchcall to be made by notice similar to that provided in the Bylaws of theCorporation for a special meeting of the stockholders or as required bylaw.  If any such special meetingrequired to be called as above provided shall not be called by the secretarywithin 20 days after receipt of any such request, then any holder of shares ofSenior Preferred Stock may call such meeting, upon the notice above provided,and for that purpose shall have access to the stock books of theCorporation.  The directors elected at anysuch special 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 among the directors elected by the holders ofthe Senior Preferred Stock and the Preferred Shares, a successor shall beelected by the Board of Directors, upon the nomination of the then-remainingdirector elected by the holders of the Senior Preferred Stock and the PreferredShares or the successor of such remaining director, to serve until the nextannual meeting of the stockholders or special meeting held in place thereof ifsuch office shall not have previously terminated as provided above.

 

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(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 action thatdecreases the dividend payable on, redemption prices for or the LiquidationValue of or changes the mandatory redemption date of the Senior Preferred Stockprovided in Section 5(b) or 5(c) hereof shall require the affirmative voteof holders of each share of Senior Preferred Stock at a meeting of holders ofSenior Preferred Stock called for such purpose or written consent of theholders of each share of Senior Preferred Stock; or (ii) create, authorize orissue any class of stock ranking prior to, or on a parity with, the SeniorPreferred Stock with respect to dividends or upon liquidation, dissolution,winding up or otherwise, or increase the authorized number of shares of anysuch class or series, or reclassify any authorized stock of the Corporationinto any such prior or parity shares or create, authorize or issue anyobligation or security convertible into or evidencing the right to purchase anysuch prior or parity shares, except that the Corporation may, without suchapproval, create, authorize and issue Parity Securities for the purpose ofutilizing the proceeds from the issuance of such Parity Securities for theoption or repurchase of all outstanding shares of Senior Preferred Stock inaccordance with the terms hereof.

 

(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 anyother series of preferred stock shall have the right to vote with the SeniorPreferred Stock as a single class on any matter, then the Senior PreferredStock and such other series shall have with respect to such matters one voteper $100 of Liquidation Value or other liquidation preference.  Except as otherwise required by applicablelaw or as set forth herein, the shares of Senior Preferred Stock shall not haveany relative, participating, optional or other special voting rights and powersand the consent of the holders thereof shall not be required for the taking ofany corporate action.

 

9.                                         **Incurrence of Indebtedness**. Without the written consent of a majority of the outstanding shares ofSenior Preferred Stock or the vote of holders of a majority of the outstandingshares of Senior Preferred Stock at a meeting of the holders of SeniorPreferred Stock called for such purpose, the Corporation will not, and will notpermit any of its Restricted Subsidiaries (as defined in the Indenture) to,directly or indirectly, create, incur, issue, assume, guarantee or otherwisebecome directly or indirectly liable, contingently or otherwise, with respectto (collectively, “**incur**”) anyIndebtedness (including Acquired Indebtedness (as defined in the Indenture)),(b) the Corporation will not, and will not permit any of its RestrictedSubsidiaries to, issue any shares of Disqualified Stock (as defined in theIndenture) and (c) the Corporation will not permit any of its RestrictedSubsidiaries to issue any shares of preferred stock, in each case other thanPermitted Indebtedness (as defined in the Indenture).

 

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For purposes of determining compliance with this Section 9, in theevent that an item of Indebtedness meets the criteria of more than one of thecategories of Permitted Indebtedness described in clauses (i) through (xiii) ofthe definition thereof in the Indenture, the Corporation shall, in its solediscretion, classify such item of Indebtedness in any manner that complies withsuch definition and such item of Indebtedness will be treated as having beenincurred pursuant to only one of such clauses. In addition, the Corporation may, at any time, change the classificationof an item of Indebtedness (or any portion thereof) to any other clause; *provided* that the Corporation would be permitted to incursuch item of Indebtedness (or such portion thereof) pursuant to such otherclause at such time of reclassification. Accrual of interest, accretion or amortization of original issuediscount will not be deemed to be an incurrence of Indebtedness for purposes ofthis Section 9.

 

10.                                   **Asset Sales**.

 

(a)                                  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, and will not permit any of itsRestricted Subsidiaries to, consummate any Asset Sale unless:

 

(i)                                     theCorporation or such Restricted Subsidiary, as the case may be, receivesconsideration at the time of such Asset Sale at least equal to the fair marketvalue, evidenced by a resolution of the board of directors set forth in anofficers’ certificate delivered to holders of the Senior Preferred Stock, ofthe assets or Equity Interests issued or sold or otherwise disposed of, and

 

(ii)                                  atleast 75% of the consideration therefor received by the Corporation or suchRestricted Subsidiary is in the form of cash or Cash Equivalents (as defined inthe Indenture) or property or assets that are used or useful in a PermittedBusiness, or the capital stock of any person engaged in a Permitted Businessif, as a result of the acquisition by the Corporation or any RestrictedSubsidiary thereof, such Person becomes a Restricted Subsidiary.  The foregoing 75% requirement will not applyto any Asset Sale in which the cash or Cash Equivalents portion of theconsideration received therefrom, determined in accordance with the nextsucceeding sentence, is equal to or greater than what the after-tax proceedswould have been had such Asset Sale complied with that 75% rule.  The following types of assets will be deemedcash in applying that 75% test:

 

(1)                                  any liabilities asshown on the Corporation’s most recent consolidated balance sheet that areassumed by the transferee of any such assets pursuant to a customary novationagreement that releases the Corporation or such Restricted Subsidiary of theCorporation from further liability;

 

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(2)                                  any securities, notesor other obligations received by the Corporation or any such RestrictedSubsidiary from such transferee that are contemporaneously converted by theCorporation or such Restricted Subsidiary into cash or cash equivalents, to theextent of the cash or cash equivalents received; and

 

(3)                                  any DesignatedNoncash Consideration received by the Corporation or any of its subsidiaries insuch Asset Sale having an aggregate fair market value, taken together with allother Designated Noncash Consideration received pursuant to this clause (3)that is at that time outstanding, not to exceed 15% of Total Assets at the timeof the receipt of such Designated Noncash Consideration, with the fair marketvalue of each item of Designated Noncash Consideration being measured at thetime received and without giving effect to subsequent changes in value.

 

(b)         *Definitions*.  For purposes hereunder:

 

“**Asset Sale**”means:

 

(i)                          the sale, lease, conveyance,disposition or other transfer (a “**disposition**”)of any properties, assets or rights; *provided* thatthe sale, lease, conveyance or other disposition of all or substantially all ofthe assets of the Corporation and its subsidiaries taken as a whole will begoverned by Sections 5(b) and 11 and not by this Section 10;

 

(ii)                       the issuance, sale or transferby the Corporation or any of its subsidiaries of Equity Interests of any of theCorporation’s Restricted Subsidiaries;

 

in either case, whether in a single transaction or a series of relatedtransactions that either have a fair market value in excess of $5.0 million orare for net proceeds in excess of $5.0 million.

 

However, the following items shall not be deemed to be Asset Sales:

 

(i)                          dispositions in the ordinarycourse of business;

 

(ii)                       a disposition of assets by theCorporation to a subsidiary of the Corporation or by a subsidiary to theCorporation or to another subsidiary of the Corporation;

 

(iii)                    a disposition of Equity Interestsby a subsidiary of the Corporation or to another subsidiary of the Corporation;

 

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(iv)                   the sale and leaseback of any assetswithin 90 days of the acquisition thereof;

 

(v)                      foreclosures on assets;

 

(vi)                   any exchange of like propertypursuant to Section 1031 of the Internal Revenue Code of 1986, for use ina Permitted Business;

 

(vii)                a Restricted Payment or PermittedInvestment (as defined in the Indenture) permitted by the Indenture; and

 

(viii)                                                salesof accounts receivable, or participations therein, in connection with anyreceivables financing facility, pursuant to which the Corporation or any of itssubsidiaries sells its accounts receivable to another subsidiary of theCorporation (a “**Receivables Facility**”).

 

“**Designated Noncash Consideration**” meansthe fair market value of non-cash consideration received by the Corporation orone of its subsidiaries in connection with an Asset Sale that is so designatedas Designated Noncash Consideration pursuant to an officers’ certificatedelivered to the holders of Senior Preferred Stock, setting forth the basis ofsuch valuation, executed by the principal executive officer and the principalfinancial officer of the Corporation, less the amount of cash or cashequivalents received in connection with a sale of such Designated NoncashConsideration.

 

“**Permitted Business**” means the avionicsmanufacturing industry and any business in which the Corporation and itsubsidiaries are engaged on the date hereof or any business reasonably related,incidental or ancillary thereto.

 

“**Total Assets**” means the totalconsolidated assets of the Corporation and its subsidiaries, as shown on themost recent balance sheet, excluding the footnotes of the Corporation, preparedin accordance with generally accepted accounting principles, as in effect onDecember 22, 2003.

 

11.                                   **Merger, Consolidation or Sale of Assets**.  Without the written consent of a majority ofthe outstanding shares of Senior Preferred Stock or the vote of holders of amajority of the outstanding shares of Senior Preferred Stock at a meeting ofthe holders of Senior Preferred Stock called for such purpose, the Corporationmay not consolidate or merge with or into (whether or not the Corporation isthe surviving corporation), or sell, assign, lease, transfer, convey orotherwise dispose of all or substantially all of its properties or assets inone or more related transactions, to another person unless:

 

(a)                                  theCorporation is the surviving corporation, or the other person formed by orsurviving any such consolidation or merger (if other than the Corporation) orto which such sale, assignment, transfer, conveyance or other disposition shallhave been made is a corporation organized or existing under the laws of theUnited States, any state thereof or the District of Columbia; and

 

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(b)                                 theperson formed by or surviving any such consolidation or merger (if other thanthe Corporation) or the person to which such sale, assignment, transfer,conveyance or other disposition shall have been made assumes all theobligations of the Corporation under the Senior Preferred Stock and theRegistration Rights Agreement dated June 30, 2000 among the Corporationand the holders of Senior Preferred Stock party thereto, as the same may beamended from time to time; and

 

(c)                                  aftergiving effect to such transaction, the Corporation shall be in compliance withSection 5.01 of the Indenture.

 

12.                                   **Transactions With Affiliates**.  Without the written consent of a majority ofthe outstanding shares of Senior Preferred Stock or the vote of holders of amajority of the outstanding shares of Senior Preferred Stock at a meeting ofthe holders of Senior Preferred Stock called for such purpose, the Corporationwill not, and will not permit any of its Restricted Subsidiaries to, make anypayment to, or sell, lease, transfer or otherwise dispose of any of itsproperties or assets to, or purchase any property or assets from, or enter intoor make or amend any transaction, contract, agreement, understanding, loan,advance or guarantee with, or for the benefit of, any Affiliate of theCorporation (each, an “**Affiliate Transaction**”),unless:

 

(a)                                  suchAffiliate Transaction is on terms that are no less favorable to the Corporationor such Restricted Subsidiary than those that would have been obtained in acomparable transaction by the Corporation or such Restricted Subsidiary of theCorporation with an unrelated person; and

 

(b)                                 theCorporation delivers to the holders of Senior Preferred Stock, with respect toany Affiliate Transaction or series of related Affiliate Transactions involvingaggregate consideration in excess of $7.5 million, either:

 

(i)                                     aresolution of the board of directors set forth in an officers’ certificatecertifying that such Affiliate Transaction complies with clause (a) above andthat such Affiliate Transaction has been approved by a majority of thedisinterested members of the board of directors; or

 

(ii)                                  anopinion as to the fairness to the holders of such Affiliate Transaction from afinancial point of view issued by an accounting, appraisal or investmentbanking firm of national standing.

 

Notwithstanding the foregoing, the following items shall not be deemedto be an Affiliate Transaction:

 

(a)                                  customarydirectors’ fees, indemnification or similar arrangements or any employmentagreement or other compensation plan or arrangement entered into by theCorporation or any of its subsidiaries in the ordinary course of business,including ordinary course loans to employees not to exceed (i) $5.0 millionoutstanding in the

 

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aggregate at any time, and (ii) $2.0 million to any one employee andconsistent with the past practice of the Corporation or such RestrictedSubsidiary of the Corporation;

 

(b)                                 transactionsbetween or among the Corporation and/or its subsidiaries;

 

(c)                                  paymentsof customary fees by the Corporation or any of its subsidiaries to DLJ MerchantBanking II, Inc. and its Affiliates made for any financial advisory, financing,underwriting or placement services or in respect of other investment bankingactivities, including, without limitation, in connection with acquisitions ordivestitures which are approved by a majority of the board of directors in goodfaith;

 

(d)           any agreement as ineffect on the date hereof or any amendment thereto which such amendment is notdisadvantageous to the holders of the Senior Preferred Stock in any materialrespect, or any transaction contemplated thereby;

 

(e)           Restricted Paymentsand Permitted Investments permitted under the Indenture;

 

(f)            payments andtransactions in connection with the Global Technology Investment (as defined inthe Indenture), and the payment of fees and expenses with respect thereto; and

 

(g)           sales of accountsreceivable, or participation therein, in connection with any ReceivablesFacility.

 

13.                                   **Reports and Notices**.

 

(a)           So long as any ofthe Senior Preferred Stock is outstanding, the Corporation will furnish theholders thereof with the quarterly and annual financial reports that theCorporation is required to file with the Securities and Exchange Commissionpursuant to Section 13 or Section 15(d) of the Securities ExchangeAct of 1934 or, in the event the Corporation is not required to file suchreports, reports containing the financial information as would be required insuch reports.

 

(b)           The Corporationshall provide written notice, by first class mail, postage prepaid, to eachholder of record of shares of Senior Preferred Stock at such holder’s addressas the same appears on the stock register of the Corporation, promptlyfollowing its receipt of any written consent or vote of a majority of theoutstanding shares of Senior Preferred Stock obtained pursuant toSection 8(c), 9, 10(a), 11 or 12.

 

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

 

(b)           The term“outstanding”, when used with reference to shares of stock, shall mean issuedshares, excluding shares held by the Corporation or a subsidiary of theCorporation.

 

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(c)           The headings of theSections, subsections, clauses and subclauses used herein are for convenienceof reference only and shall not define, limit or affect any of the provisionshereof.

 

(d)           Each holder ofSenior Preferred Stock, by acceptance thereof, acknowledges and agrees thatpayments of dividends, interest, premium and principal on, and exchange,redemption and repurchase of, such securities by the Corporation are subject torestrictions on the Corporation contained in certain credit and financing agreements;provided, however, that this provision will not apply with respect toindebtedness not outstanding on the Amendment Date.

 

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IN WITNESS WHEREOF, DeCrane Aircraft Holdings, Inc. has caused thisCertificate of Amendment to Certificate of Designations to be signed andattested by the undersigned this 23 day of July, 2004.

 
|   | DECRANE AIRCRAFT HOLDINGS, INC. |
|--------|---------------------------------|
|   |                            |
|   |                            |
|   | By:                             | /S/ R. JACK DECRANE |   |
|   |                            | Name:R. Jack DeCrane |
|   |                            | Title:Chief Executive Officer |

 

 
| ATTEST: |                 |
|---------|----------------------|
|    |                 |
|    |                 |
| By:     | /S/ JAMES E. MANN    |   |   |
|    | Name:James Mann      |   |
|    | Title:Vice President |   |
|         |                      |  |  |

 

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