**Exhibit4.6.2**

 

**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 andDesignation**.  700,000 sharesof the Preferred Stock of the Corporation shall be designated as SeniorRedeemable Exchangeable Preferred Stock Due 2008 (the “**Senior Preferred Stock**”).

 

2.                                          **Rank**.  The Senior Preferred Stock shall, withrespect to dividend rights, if any, and rights on liquidation, dissolution andwinding up, rank prior to all classes of or series of common stock of theCorporation, including the Corporation’s common stock, par value $0.01 pershare (“**CommonStock**”), and each other future class of capital stock of theCorporation, the terms of which provide that such class shall rank junior tothe Senior Preferred Stock or the terms of which do not specify any rankrelative to the Senior Preferred Stock. All equity securities of the Corporation to which the Senior PreferredStock ranks prior (whether with respect to dividends or upon liquidation,dissolution, winding up or otherwise), including the Common Stock, arecollectively referred to herein as the “**Junior Securities**.”  All equity securities of the Corporationwith which the Senior Preferred Stock ranks on a parity (whether with respectto dividends 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 SeniorPreferred Stock shall accrue from and after July 23, 2004 (the “**AmendmentDate**”), but shall not be payable (except to the extent accrueddividends increase the Liquidation Value (as defined below) payable hereunder),for each period beginning on the day after each Quarterly Date (as definedbelow) (or, in the case of the Quarterly 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 to discharge itsobligation to redeem all outstanding shares of Senior Preferred Stock pursuantto Section 5(b) or 5(c) hereof (including by operation of the proviso toSection 5(b)) (each, a “**Mandatory Redemption Obligation**”), theDividend Rate shall increase by .25 percent per quarter (each, a “**DefaultDividend**”) for each quarter or portion thereof following the date onwhich such redemption was required to be made until cured; *provided* that the aggregateincrease shall not exceed 5%.  Suchdividends, if any, shall accrue in the manner set forth above quarterly fromand 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 “**QuarterlyDate**” and each such quarterly 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 anyQuarterly Date, the ratio of (a) Consolidated Total Debt plus the aggregateLiquidation Value of all outstanding shares of Senior Preferred Stock as ofsuch Quarterly Date to (b) Consolidated Cash Flow (as defined in the Indenturereferenced below) for the four consecutive Quarterly Periods ending on suchQuarterly Date; (ii) “**Consolidated Total Debt**” means, as at anydate of determination, the total amount of Indebtedness (as defined in theIndenture) of the Corporation and its Restricted Subsidiaries (as defined inthe Indenture), determined on a consolidated basis in accordance with generallyaccepted accounting principles; (iii) “**Consolidated Cash Flow**” has the meaning setforth in the Indenture; (iv) “**Indenture**” means the Indenture dated as ofJuly 23, 2004 among the Corporation, as issuer, each of the guarantorsparty thereto and U.S. Bank National Association, as trustee, as in effect onthe Amendment Date); and (v) “**Triggering Event**” means any of thefollowing events:  (i) the Corporationis unable 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 Securities Distribution**”) for anyconsideration (or any moneys be paid to or made available for a sinking fundfor the redemption of any shares of any such stock) by the Corporation,directly or indirectly (except by conversion into or exchange for JuniorSecurities).

 

(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 the Corporation or DeCrane Holdings Co.(“**Holdings**”)held by any member of the Corporation’s or Holdings’ or any of theCorporation’s subsidiaries’ management pursuant to any management equitysubscription agreement or stock option agreement and any dividend to Holdingsto fund any such

 

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repurchase,redemption, acquisition or retirement; *provided* that the aggregate price paid forall such repurchased, redeemed, acquired or retired Equity Interests shall notexceed:

 

(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* that in no event shall the amountpermitted to be paid pursuant to all such agreements and/or arrangements exceedthe amount the Corporation would be required to pay for income taxes were it tofile a consolidated tax return for itself and its consolidated subsidiaries asif it were a corporation that was a parent 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.                                         **LiquidationPreference**.  (a) In the eventof any liquidation, dissolution or winding up of the Corporation, whethervoluntary or involuntary, before any payment or distribution of the assets ofthe Corporation (whether capital or surplus) shall be made to or set apart forthe holders of Junior Securities, each holder of a share of Senior PreferredStock shall be entitled to receive an amount equal to the Liquidation Value ofsuch share.  “**Liquidation Value**” on anydate means, with respect to any share of Senior Preferred Stock, the sum of (1)$189.21 per share and (2) all dividends, if any, accrued but unpaid on suchshare from and after the Amendment Date to such date in accordance withSection 3.  Except as provided inthe preceding sentences, holders of shares of Senior Preferred Stock shall notbe entitled to any distribution in the event of liquidation, dissolution orwinding up of the affairs of the Corporation. If, upon any liquidation, dissolution or winding up of the Corporation,the assets of the Corporation, or proceeds thereof, distributable among theholders of the shares of Senior Preferred Stock shall be insufficient to pay infull the preferential amount 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)                                  *Redemptionat the Option of the Corporation*. At any time, to the extent the Corporation shall have funds legallyavailable for such payment, the Corporation may, at its option, redeem sharesof Senior Preferred Stock, at any time in whole but not in part, at redemptionprices per share in cash set forth in the table below:

 
| **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)                                 *Redemptionin the Event of a Change of Control*.  In the event of a Change of Control, the Corporation shall, tothe extent it shall have funds legally available for such payment, offer toredeem all of the shares of Senior Preferred Stock then outstanding, and shallredeem the shares of Senior Preferred Stock of any holder of such shares thatshall consent to such redemption, upon a date no later that 30 days followingthe Change of Control, at a redemption price per share equal to 101% ofLiquidation Value; *provided* that the Corporation shall notrepurchase any Senior Preferred Stock pursuant to this Section 5(b) to theextent that such repurchase is prohibited by Section 4.07 of the Indentureor Section 4.07 of the Indenture dated as of October 15, 1998 by andamong the Corporation, the guarantors party thereto and State Street Bank andTrust Company, as trustee, as in effect on the date hereof, but notwithstandingsuch prohibition, any such failure to repurchase any Senior Preferred Stockshall constitute a Triggering Event as defined in Section 3 hereof for solong as such failure shall continue.

 

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“**Changeof Control**” means the occurrence of any of the following:  (a) the sale, lease, transfer,conveyance or other disposition (other than by way of merger or consolidation),in one or a series of related transactions, of all or substantially all of theassets of the Corporation and its subsidiaries, taken as a whole, to any“person” or “group” (as such terms are used in Section 13(d) of theSecurities Exchange Act of 1934, as amended (the “**Exchange Act**”)), other thanthe Principals and their Related Parties; (b) the adoption of a plan for theliquidation or dissolution of the Corporation; (c) the consummation of anytransaction (including, without limitation, any merger or consolidation) theresult of which is that any “person” or “group” (as such terms are used inSection 13(d) of the Exchange Act), other than the Principals and theirRelated Parties, becomes the “beneficial owner” (as such term is defined inRule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectlythrough one or more intermediaries, of 50% or more of the voting power of theoutstanding voting stock of the Corporation; or (d) the first day on which amajority of the members of the board of directors of the Corporation are notContinuing Members.

 

“**ContinuingMembers**” means, as of any date of determination, any member of theboard of directors of the Corporation who (a) was a member of such board ofdirectors immediately after consummation of the acquisition of the Corporationby the Principals and their Related Parties in August 1998 or (b) wasnominated for election or elected to such board of directors with the approvalof, or whose election to the board of directors was ratified by, at least amajority of the Continuing Members who were members of such board of directorsat the time of such nomination or election or any successor Continuing Membersappointed by such Continuing Members (or their successors).

 

(c)                                  *MandatoryRedemption*.  To the extentthe Corporation shall have funds legally available for such payment, onDecember 31, 2008, if any shares of the Senior Preferred Stock shall beoutstanding, the Corporation shall redeem all outstanding shares of the SeniorPreferred Stock, at a redemption price equal to the aggregate LiquidationValue, in cash, to the date of redemption, without interest.

 

(d)                                 *Status ofRedeemed Shares*.  Shares ofSenior Preferred Stock which have been issued and reacquired in any manner,including shares purchased or redeemed, shall (upon compliance with anyapplicable provisions of the laws of the State of Delaware) have the status ofauthorized and unissued shares of the Preferred Stock undesignated as to seriesand may be redesignated and reissued as part of any series of the PreferredStock; *provided*that no such issued and reacquired shares of Senior Preferred Stock shall bereissued or sold as Senior Preferred Stock.

 

(e)                                  *Failure toRedeem*.  If the Corporationis unable or shall fail to discharge its Mandatory Redemption Obligation, theCorporation shall use commercially reasonable efforts to obtain financing forsuch purpose and such Mandatory Redemption Obligation shall be discharged assoon as the Corporation is able to discharge such Mandatory RedemptionObligation.  If and so long as anyMandatory 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.                                         **Procedurefor Redemption**.  (a) In theevent the Corporation shall redeem shares of Senior Preferred Stock pursuant toSection 5(a) or 5(c), notice of such redemption shall be given by firstclass mail, postage prepaid, mailed not less than 10 days nor more than 20 daysprior to the redemption date, to each holder of record of the shares to beredeemed at such holder’s address as the same appears on the stock register ofthe 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) the redemption date; (ii) the numberof shares of Senior Preferred Stock to be redeemed; (iii) the redemption price;(iv) the place or places where certificates for such shares are to besurrendered for payment of the redemption price; and (v) that dividends, ifany, on the shares to be redeemed will 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 notice of the certificatesfor any shares so redeemed (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 redeemed by the Corporation at the redemption priceaforesaid.  In case fewer than all theshares 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 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 saidnotice of the certificates for any shares so redeemed (properly endorsed orassigned for transfer, if the Board of Directors of the Corporation shall sorequire and the notice shall so state), such share shall be redeemed by theCorporation at the redemption price aforesaid. In case fewer than all the shares represented by any such certificateare redeemed, a new certificate shall be issued representing the unredeemedshares without cost to the holder thereof.

 

7.                                    **Exchange**.  (a) Subject to the provisions of thisSection 7, the Corporation may, at its option, at any time and from timeto time on any Quarterly Date, exchange, to the extent it is legally permittedto do so, all, but not less than all, outstanding shares (and fractionalshares) of Senior Preferred Stock for Exchange Debentures; *provided* that (i) no eventof default under the indenture (as defined in such indenture) governing theExchange Debentures shall have occurred and be continuing; (ii) no shares ofSenior Preferred Stock are held on such date by the DLJIP Entities (as definedin the Investors’ Agreement), or any of their Affiliates, or any of theirPermitted Transferees and (iii) such exchange is permitted by the terms of alldebt instruments to which the Corporation is subject.  The principal amount of Exchange Debentures deliverable uponexchange of a share of Senior Preferred Stock, adjusted as hereinafterprovided, shall be determined in accordance with the Exchange Ratio (as definedbelow).

 

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 meaning ascribed to such term in the Investors’ Agreement.

 

“**ExchangeDebentures**” means Junior Subordinated Exchange Debentures due 2008of the Corporation, accruing interest at the rates established for dividends asprovided herein but providing that such interest shall not be payable in cashuntil the maturity date on December 31, 2008, to be issued pursuant to anindenture between the Corporation and a trustee, containing customary terms andconditions approved by the Board of Directors (which terms shall besubstantially the same as in the Indenture but shall provide that theCorporation shall not repurchase any Exchange Debentures pursuant to the assetsale or change of control provisions thereof in violation of Section 4.07of the Indenture and which shall be subordinated to all existing indebtednessexcept indebtedness expressly made *pari passu* to the Exchange Debentures).

 

“**Investors’Agreement**” means the Amended and Restated Investors’ Agreement datedas of October 6, 2000 among DeCrane Holdings Co., DeCrane AircraftHoldings, Inc., DLJ Merchant Banking Partners II, L.P., DLJ Merchant BankingPartners II-A, L.P., DLJ Offshore Partners 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., DLJMB FundingII, Inc., UK Investment Plan 1997 Partners, DLJ EAB Partners, L.P., DLJ First ESCL.P., DLJ ESC II L.P., DLJ Investment Partners, L.P., DLJ Investment PartnersII, L.P., DLJ Investment Funding II, Inc. and certain other stockholders namedtherein, as the same may be amended from time to time.

 

“**PermittedTransferees**” shall have the meaning ascribed to such term in theInvestors’ Agreement.

 

(b)                                 *Procedurefor Exchange*.  (i) In theevent the Corporation shall exchange shares of Senior Preferred Stock, noticeof such exchange shall be given by first class mail, postage prepaid, mailed notless than 30 days nor more than 60 days prior to the exchange date, to eachholder of record of the shares to be exchanged at such holder’s address as thesame appears on the stock register of the Corporation; *provided* that neither thefailure to give such notice nor any defect therein shall affect the validity ofthe giving of notice for the exchange of any share of Senior Preferred Stock tobe exchanged 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 for the shares of SeniorPreferred 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 theshares represented by any such certificate are exchanged, a new certificateshall be issued representing the unexchanged shares without cost to the holderthereof.

 

(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 pay any tax which may be payablein respect of any transfer involved in the issue or delivery of ExchangeDebentures in a name other than that of the holder of the Senior PreferredStock to be exchanged and no such issue or delivery shall be made unless anduntil the person requesting such issue or delivery has paid to the Corporationthe amount of any such tax or has established, to the satisfaction of theCorporation, that such tax has been paid.

 

8.                                       **VotingRights**.  (a) The holders ofrecord of shares of Senior Preferred Stock shall not be entitled to any votingrights except as hereinafter provided in this Section 8 or as otherwiseprovided 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 singleclass regardless of series, shall be entitled to elect the two additionaldirectors to serve on the Board of Directors at any annual meeting ofstockholders or special meeting held in place thereof, or at a special meetingof the holders of the Senior Preferred Stock and the Preferred Shares called ashereinafter 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), 8(c), 9, 10, 11 or 12 hereof, as the case may be, then theright of the holders of the Senior Preferred Stock to elect such additional twodirectors shall cease (but subject always to the same provisions for thevesting of such voting rights in the case of any similar future (i) failure tofulfill any Mandatory Redemption Obligation, (ii) failure to fulfill theobligation to provide the notice required by Section 6(c) hereof withinthe time period specified in such section or (iii) failure to comply withSection 3(c), 3(d), 8(c), 9, 10, 11 or 12) and the terms of office of allpersons elected as directors by the holders of the Senior Preferred Stock shallforthwith terminate and the number of the Board of Directors shall be reducedaccordingly.  At any time after suchvoting power shall have been so vested in the holders of shares of SeniorPreferred Stock and the Preferred Shares, the secretary of the Corporation may,and upon the written request of any holder of Senior Preferred Stock (addressedto the secretary at the principal office of the Corporation) shall, call aspecial meeting of the holders of the Senior Preferred Stock and of thePreferred Shares for the election of the two directors to be elected by them asherein provided, such call to be made by notice similar to that provided in theBylaws of the Corporation for a special meeting of the stockholders or asrequired by law.  If any such specialmeeting required to be called as above provided shall not be called by thesecretary within 20 days after receipt of any such request, then any holder ofshares of Senior Preferred Stock may call such meeting, upon the notice aboveprovided, 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 that decreases the dividend payable on, redemption pricesfor or the Liquidation Value of or changes the mandatory redemption date of theSenior Preferred Stock provided in Section 5(b) or 5(c) hereof shallrequire the affirmative vote of holders of each share of Senior Preferred Stockat a meeting of holders of Senior Preferred Stock called for such purpose orwritten consent of the holders of each share of Senior Preferred Stock; or (ii)create, authorize or issue any class of stock ranking prior to, or on a paritywith, the Senior Preferred Stock with respect to dividends or upon liquidation,dissolution, winding up or otherwise, or increase the authorized number ofshares of any such class or series, or reclassify any authorized stock of theCorporation into any such prior or parity shares or create, authorize or issueany obligation or security convertible into or evidencing the right to purchaseany such 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.                                         **Incurrenceof Indebtedness**.  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 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 (as defined in the Indenture) to, directly orindirectly, create, incur, issue, assume, guarantee or otherwise becomedirectly or indirectly liable, contingently or otherwise, with respect to(collectively, “**incur**”) any Indebtedness (including Acquired Indebtedness (asdefined in the Indenture)), (b) the Corporation will not, and will not permitany of its Restricted Subsidiaries to, issue any shares of Disqualified Stock(as defined in the Indenture) and (c) the Corporation will not permit any ofits Restricted Subsidiaries to issue any shares of preferred stock, in eachcase other than Permitted 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 incur such item of Indebtedness (orsuch portion thereof) pursuant to such other clause at such time ofreclassification.  Accrual of interest,accretion or amortization of original issue discount will not be deemed to bean incurrence of Indebtedness for purposes of this 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 orrights; *provided*that the sale, lease, conveyance or other disposition of all or substantiallyall of the assets of the Corporation and its subsidiaries taken as a whole willbe governed 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**”).

 

“**DesignatedNoncash Consideration**” means the fair market value of non-cashconsideration received by the Corporation or one of its subsidiaries inconnection with an Asset Sale that is so designated as Designated NoncashConsideration pursuant to an officers’ certificate delivered to the holders ofSenior Preferred Stock, setting forth the basis of such valuation, executed bythe principal executive officer and the principal financial officer of theCorporation, less the amount of cash or cash equivalents received in connectionwith a sale of such Designated Noncash Consideration.

 

“**PermittedBusiness**” means the avionics manufacturing industry and any businessin which the Corporation and it subsidiaries are engaged on the date hereof orany business reasonably related, incidental or ancillary thereto.

 

“**TotalAssets**” means the total consolidated assets of the Corporation andits subsidiaries, as shown on the most recent balance sheet, excluding thefootnotes of the Corporation, prepared in accordance with generally acceptedaccounting principles, as in effect on December 22, 2003.

 

11.                                   **Merger,Consolidation or Sale of Assets**. 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 may not consolidate ormerge with or into (whether or not the Corporation is the survivingcorporation), or sell, assign, lease, transfer, convey or otherwise dispose ofall or substantially all of its properties or assets in one or more relatedtransactions, 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.                                   **TransactionsWith Affiliates**.  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 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, make any payment to, or sell, lease, transfer orotherwise dispose of any of its properties or assets to, or purchase anyproperty or assets from, or enter into or make or amend any transaction,contract, agreement, understanding, loan, advance or guarantee with, or for thebenefit of, any Affiliate of the Corporation (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 andNotices**.

 

(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.                                   **GeneralProvisions**.  (a) The term “**Person**”as used herein 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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