**Exhibit10.12.2**

 

**DECRANE AIRCRAFTHOLDINGS, INC.**

** **

**SECOND AMENDMENT**

**TO CREDIT AGREEMENT**

** **

This **SECOND AMENDMENT TO CREDIT AGREEMENT** (this “**Amendment**”)is dated as of July 16, 2004 and entered into by and among DeCrane AircraftHoldings, Inc., a Delaware corporation (“**Company**”), the financial institutionslisted on the signature pages hereof (“**Lenders**”), Credit Suisse First Boston(successor to DLJ Capital Funding, Inc.), acting through its Cayman IslandsBranch, as syndication agent for Lenders (in such capacity, “**SyndicationAgent**”) and as administrative agent for Lenders (in such capacity, “**AdministrativeAgent**”), and is made with reference to that certain CreditAgreement, dated as of December 22, 2003, as amended by a First Amendment toCredit Agreement dated as of June9, 2004 (the “**Credit Agreement**”), by andamong Company, the lenders listed on the signature pages thereof, SyndicationAgent and Administrative Agent. Capitalized terms used herein without definition shall have the samemeanings herein as set forth in the Credit Agreement.

 

**RECITALS**

 

**WHEREAS**, Company desires to issuethe Senior Notes in connection with the Senior Note Exchange and enter into theSenior Note Indenture as permitted by subsection 6.1(xii) of the CreditAgreement;

 

**WHEREAS**, the proposed form ofSenior Note Indenture permits redemption of the Senior Notes at the option ofCompany;

 

**WHEREAS**, Company and Lenders desireto amend the Credit Agreement to prohibit optional redemption, optionalprepayment or optional purchase of the Senior Notes;

 

**WHEREAS**, Company may issue theSenior Notes only if, among other things, Syndication Agent has determined thatthe terms and conditions of the Senior Notes, the Senior Note Indenture and thedocumentation evidencing the Senior Note Exchange are satisfactory;

 

**WHEREAS**, Syndication Agent hasdecided to make such determination only upon request by Requisite Lenders, asprovided in subsection 8.2B of the Credit Agreement.

 

**NOW,THEREFORE,**in consideration of the premises and the agreements,provisions and covenants herein contained, the parties hereto agree as follows:

 

**Section 1. ****AMENDMENTS TO THE CREDIT AGREEMENT**

 

Section 6 of the Credit Agreement is hereby amended by adding thefollowing as subsection 6.16:

 

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**“**6.16      Prepaymentsof Senior Notes.

** **

**Company shall not, and shall not permit any of its Subsidiaries to,make any optional redemption or optional purchase of, optional prepayment withrespect to, the Senior Notes.”**

** **

**Section 2**.  **CONSENT**

 

Lenders, constituting Requisite Lenders, hereby determine that theterms and conditions of the Senior Notes, the Senior Note Indenture attachedhereto as Exhibit A and the documentation evidencing the Senior NoteExchange attached hereto as Exhibit B are satisfactory in form andsubstance, and request Syndication Agent to indicate its satisfaction with suchterms and conditions to Company.

 

**Section 3. ****CONDITIONS TO EFFECTIVENESS**

 

A.            Section 1 andSection 2 of this Amendment shall become effective only upon the satisfactionof all of the following conditions (the date of satisfaction of such conditionsbeing referred to herein as the “**Second Amendment Effective Date”)**:

 

1.             On or before theSecond Amendment Effective Date, Company shall deliver to Lenders (or toSyndication Agent for Lenders with sufficient originally executed copies, whereappropriate, for each Lender and its counsel) the following, each, unlessotherwise noted, dated the Second Amendment Effective Date:

 

(a)           an amendment to theFirst Lien Credit Agreement to the effect that prepayment of the Senior Notesissued pursuant to the Senior Note Indenture is prohibited pursuant to theterms of such agreement;

 

(b)           Signature andincumbency certificates of its officers executing this Amendment; and

 

(c)           Executed originalsof this Amendment, executed by Parent, Company and each Subsidiary Guarantor.

 

2.             Executed originalsof this Amendment executed by Requisite Lenders.

 

**Section 4. ****COMPANY’S REPRESENTATIONS AND WARRANTIES**

 

In order to induce Lenders to enter into this Amendment and to amendthe Credit Agreement in the manner provided herein, Company represents andwarrants to each Lender that the following statements are true, correct andcomplete on and as of the Second Amendment Effective Date:

 

A.            Corporate Powerand Authority.  Each of Company andits Subsidiaries has all requisite corporate power and authority to enter intothis Amendment to carry out the transactions contemplated by, and perform itsobligations under, the Credit Agreement as amended by this Amendment (the “**AmendedAgreement**”).

 

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B.            Authorization ofAgreement.  The execution anddelivery of this Amendment and the performance of the Amended Agreement havebeen duly authorized by all necessary corporate action on the part of each ofCompany and its Subsidiaries.

 

C.            No Conflict.  The execution, delivery and performance byeach of Company and each of its Subsidiaries of this Amendment, and theperformance by Company of the Amended Agreement do not and will not(i) violate any provision of (x) any law or any governmental rule orregulation applicable to Company or any of its Subsidiaries where suchviolations in the aggregate have had or could reasonably be expected to have aMaterial Adverse Effect, (y) the Certificate or the Articles of Incorporationor Bylaws (or any other organization document) of Parent, Company or any ofCompany’s Subsidiaries or (z) any order, judgment or decree of any court orother agency of government binding on Company or any of Company’s Subsidiarieswhere such violations in the aggregate have had or could reasonably be expectedto have a Material Adverse Effect, (ii) conflict with, result in a breachof or constitute a default under any Contractual Obligation of Parent, Companyor any of its Subsidiaries where such conflict, breach or default in theaggregate have had or could reasonably be expected to have a Material AdverseEffect, (iii) result in or require the creation or imposition of any Lienupon any of the properties or assets of Company or any of Company’sSubsidiaries (other than Liens created under any of the Loan Documents in favorof Administrative Agent on behalf of Lenders), or (iv) require anyapproval of or consent of any Person under any Contractual Obligation ofParent, Company or any of Company’s Subsidiaries, except for this Amendment andsuch approvals or consents the failure of which to obtain has not had and couldnot reasonably be expected to have a Material Adverse Effect.

 

D.            GovernmentalConsents.  The execution, deliveryand performance by each of Company and each of its Subsidiaries of thisAmendment and the performance by Company of the Amended Agreement do not andwill not require any registration with, consent or approval of, or notice to,or other action to, with or by, any federal, state or other governmentalauthority or regulatory body other than any such registrations, consents,approvals, notices or other actions (x) that have been made, obtained ortaken on or prior to the date on which such registrations, consents, approvals,notices or other actions are required to be made, obtained or taken, as thecase may be, and are in full force and effect or (y) the failure of whichto make, obtain or take has not had and could not reasonably be expected tohave a Material Adverse Effect.

 

E.             BindingObligation.  This Amendment has beenduly executed and delivered by each Loan Party that is a party thereto and isthe legally valid and binding obligation of such Loan Party, enforceableagainst such Loan Party in accordance with its respective terms, subject tobankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium andother similar laws relating to or affecting creditors’ rights generally,general equitable principles (whether considered in a proceeding in equity orat law) and an implied covenant of good faith and fair dealing.

 

F.             Incorporation ofRepresentations and Warranties From Credit Agreement.  The representations and warranties containedin Section 4 of the Credit Agreement are and will be true, correct andcomplete in all material respects on and as of the

 

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SecondAmendment Effective Date to the same extent as though made on and as of thatdate, except to the extent such representations and warranties specificallyrelate to an earlier date, in which case they were true, correct and completein all material respects on and as of such earlier date.

 

G.            Absence ofDefault.  No event has occurred andis continuing or will result from the consummation of the transactionscontemplated by this Amendment that would constitute an Event of Default or aPotential Event of Default.

 

**Section 5. ****ACKNOWLEDGEMENT AND CONSENT**

 

Each of Parent and the Subsidiary Guarantors (each a “**Guarantor**”) is a party to a Guaranty andeach such Guarantor has guarantied the Obligations.

 

Each Guarantor hereby acknowledges that it has reviewed the terms andprovisions of the Credit Agreement and this Amendment and consents to theamendment of the Credit Agreement effected pursuant to this Amendment.  Each Guarantor hereby confirms that theGuaranty to which it is a party or otherwise bound will continue to guaranty tothe fullest extent possible the payment and performance of all “GuarantiedObligations” as such term is defined in the applicable Guaranty, includingwithout limitation the payment and performance of all such “GuarantiedObligations” in respect of the Obligations of Company now or hereafter existingunder or in respect of the Amended Agreement.

 

Each Guarantor (a) acknowledges and agrees that the Guaranty to whichit is a party or otherwise bound shall continue in full force and effect andthat all of its obligations thereunder shall be valid and enforceable and shallnot be impaired or limited by the execution or effectiveness of this Amendment;  (b) represents and warrants that allrepresentations and warranties contained in the Amended Agreement and in theGuaranty to which it is a party or otherwise bound are true, correct andcomplete in all material respects on and as of the Second Amendment EffectiveDate to the same extent as though made on and as of that date, except to theextent such representations and warranties specifically relate to an earlierdate, in which case they were true, correct and complete in all materialrespects on and as of such earlier date; and (c) acknowledges and agrees that(i) notwithstanding the conditions to effectiveness set forth in thisAmendment, such Guarantor is not required by the terms of the Credit Agreementor any other Loan Document to consent to the amendments to the Credit Agreementeffected pursuant to this Amendment and (ii) nothing in the CreditAgreement, this Amendment or any other Loan Document shall be deemed to requirethe consent of such Guarantor to any future amendments to the Credit Agreement.

 

**Section 6. MISCELLANEOUS**

 

A.            Effect ofAmendment.

 

(i)            On and after theSecond Amendment Effective Date, each reference in the Credit Agreement to“this Agreement”, “hereunder”, “hereof”, “herein” or words of like importreferring to the Credit Agreement, and each reference in the other LoanDocuments to the “Credit Agreement”, “thereunder”, “thereof” or words of likeimport referring to the Credit Agreement shall mean and be a reference to theAmended Agreements.

 

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(ii)           On and after theSecond Amendment Effective Date, each reference in the other Loan Documents tothe “Lenders,” “Commitments,” or words of like import shall mean and be areference to the Lenders and Commitments as amended by this Agreement.

 

(iii)          Except asspecifically amended by this Amendment, the Credit Agreement and the other LoanDocuments shall remain in full force and effect and are hereby ratified andconfirmed.

 

(iv)          The execution,delivery and performance of this Amendment shall not, except as expresslyprovided herein, constitute a waiver of any provision of, or operate as awaiver of any right, power or remedy of Agents or any Lender under, the CreditAgreement or any of the other Loan Documents.

 

B.            Fees and Expenses.  Company acknowledges that all costs, feesand expenses as described in subsection 9.2 of the Credit Agreement incurred byAgents and their counsel with respect to this Amendment and the documents andtransactions contemplated hereby shall be for the account of Company.

 

C.            Headings.  Section and subsection headings in thisAmendment are included herein for convenience of reference only and shall notconstitute a part of this Amendment for any other purpose or be given anysubstantive effect.

 

D.            Applicable Law.  THIS AMENDMENT AND THE RIGHTS ANDOBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BECONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OFNEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERALOBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWSPRINCIPLES.

 

E.             Counterparts;Effectiveness.  This Amendment maybe executed in any number of counterparts and by different parties hereto inseparate counterparts, each of which when so executed and delivered shall bedeemed an original, but all such counterparts together shall constitute but oneand the same instrument; signature pages may be detached from multiple separatecounterparts and attached to a single counterpart so that all signature pagesare physically attached to the same document. This Amendment shall become effective upon the execution of acounterpart hereof by Company, Requisite Lenders and Guarantors and receipt byCompany and Agents of written or telephonic notification of such execution andauthorization of delivery thereof.

 

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**IN WITNESSWHEREOF,** the parties hereto have caused this Amendment to beduly executed and delivered by their respective officers thereunto dulyauthorized as of the date first written above.

 
|   | **DECRANE AIRCRAFT HOLDINGS, INC.**,    a Delaware corporation                                                                                  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                            |   |
|   |                                                                                                                                            |   |
|   | By:                                                                                                                                             | /s/ R. JACK DECRANE |
|   |                                                                                                                                            | Name: |  R.  Jack DeCrane |
|   |                                                                                                                                            | Title: | Chief  Executive Officer |
|   |                                                                                                                                            |   |
|   |                                                                                                                                            |   |
|   | **AUDIO INTERNATIONAL, INC.**,  an   Arkansas corporation (for purposes of Section 5   only) as a Subsidiary Guarantor                          |
|   |                                                                                                                                            |   |
|   |                                                                                                                                            |   |
|   | By:                                                                                                                                             | /s/ R. JACK DECRANE |
|   |                                                                                                                                            | Name: |  R.  Jack DeCrane |
|   |                                                                                                                                            | Title: | Chief  Executive Officer |
|   |                                                                                                                                            |   |
|   |                                                                                                                                            |   |
|   | **CARL F. BOOTH & CO., LLC**,  a Delaware   limited liability company (for purposes of   Section 5 only) as a Subsidiary Guarantor          |
|   |                                                                                                                                            |   |
|   |                                                                                                                                            |   |
|   | By:                                                                                                                                             | /s/ R. JACK DECRANE |
|   |                                                                                                                                            | Name: |  R.  Jack DeCrane |
|   |                                                                                                                                            | Title: | Chief  Executive Officer |
|   |                                                                                                                                            |   |
|   |                                                                                                                                            |   |
|   | **CUSTOM WOODWORK & PLASTICS,   LLC.**, a Delaware limited liability company (for   purposes of Section 5 only) as a Subsidiary   Guarantor |
|   |                                                                                                                                            |   |
|   |                                                                                                                                            |   |
|   | By:                                                                                                                                             | /s/ R. JACK DECRANE |
|   |                                                                                                                                            | Name: |  R.  Jack DeCrane |
|   |                                                                                                                                            | Title: | Chief  Executive Officer |

 

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|   | **DAH-IP HOLDINGS, INC.**,  a Delaware  corporation (for purposes of Section 5 only) as a  Subsidiary Guarantor                          |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                     |   |
|   |                                                                                                                                     |   |
|   | By:                                                                                                                                      | /s/ R. JACK DECRANE |
|   |                                                                                                                                     | Name: |  R.  Jack DeCrane |
|   |                                                                                                                                     | Title: | Chief  Executive Officer |
|   |                                                                                                                                     |   |
|   |                                                                                                                                     |   |
|   | **DAH-IP INFINITY, INC.**,  a Delaware   corporation (for purposes of Section 5 only) as a   Subsidiary Guarantor                        |
|   |                                                                                                                                     |   |
|   |                                                                                                                                     |   |
|   | By:                                                                                                                                      | /s/ R. JACK DECRANE |
|   |                                                                                                                                     | Name: |  R.  Jack DeCrane |
|   |                                                                                                                                     | Title: | Chief  Executive Officer |
|   |                                                                                                                                     |   |
|   |                                                                                                                                     |   |
|   | **DECRANE AIRCRAFT SEATING   COMPANY, INC.**, a Wisconsin corporation   (for purposes of Section 5 only) as a Subsidiary   Guarantor     |
|   |                                                                                                                                     |   |
|   |                                                                                                                                     |   |
|   | By:                                                                                                                                      |  /s/ R. JACK DECRANE |
|   |                                                                                                                                     | Name: |  R.  Jack DeCrane |
|   |                                                                                                                                     | Title: | Chief  Executive Officer |
|   |                                                                                                                                     |   |
|   |                                                                                                                                     |   |
|   | **DECRANE CABIN INTERIORS, LLC**,  a   Delaware limited liability company (for   purposes of Section 5 only) as a Subsidiary   Guarantor |
|   |                                                                                                                                     |   |
|   |                                                                                                                                     |   |
|   | By:                                                                                                                                      |  /s/ R. JACK DECRANE |
|   |                                                                                                                                     | Name: |  R. Jack  DeCrane |
|   |                                                                                                                                     | Title: | Chief  Executive Officer |

 

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|   | **DECRANE CABIN INTERIORS CANADA,   INC.**, a Delaware corporation (for purposes   of Section 5 only) as a Subsidiary Guarantor |
|--------|---------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                            |   |
|   |                                                                                                                            |   |
|   | By:                                                                                                                             | /s/ R. Jack DeCrane |
|   |                                                                                                                            | Name: |  R.  Jack DeCrane |
|   |                                                                                                                            | Title: | Chief  Executive Officer |
|   |                                                                                                                            |   |
|   | **HOLLINGSEAD INTERNATIONAL, INC.**,  a California corporation (for purposes of Section 5 only) as a Subsidiary  Guarantor      |
|   |                                                                                                                            |   |
|   |                                                                                                                            |   |
|   | By:                                                                                                                             | /s/ R. Jack DeCrane |
|   |                                                                                                                            | Name: |  R.  Jack DeCrane |
|   |                                                                                                                            | Title: | Chief  Executive Officer |
|   |                                                                                                                            |   |
|   |                                                                                                                            |   |
|   | **PATS AIRCRAFT, LLC**,  a Delaware limited liability company (for purposes of Section 5 only) as a  Subsidiary Guarantor       |
|   |                                                                                                                            |   |
|   |                                                                                                                            |   |
|   | By:                                                                                                                             | /s/ R. Jack DeCrane |
|   |                                                                                                                            | Name: |  R.  Jack DeCrane |
|   |                                                                                                                            | Title: | Chief  Executive Officer |
|   |                                                                                                                            |   |
|   |                                                                                                                            |   |
|   | **PCI NEWCO., INC.**, a Kansas corporation (for   purposes of Section 5 only) as a Subsidiary  Guarantor                        |
|   |                                                                                                                            |   |
|   |                                                                                                                            |   |
|   | By:                                                                                                                             | /s/ R. Jack DeCrane |
|   |                                                                                                                            | Name: |  R.  Jack DeCrane |
|   |                                                                                                                            | Title: | Chief  Executive Officer |

 

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|   | **PPI HOLDINGS, INC.**,  a Kansas corporation   (for purposes of Section 5 only) as a   Subsidiary Guarantor                                |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                        |   |
|   |                                                                                                                                        |   |
|   | By:                                                                                                                                         | /s/ R. Jack DeCrane |
|   |                                                                                                                                        | Name: |  R. Jack DeCrane |
|   |                                                                                                                                        | Title: | Chief Executive Officer |
|   |                                                                                                                                        |   |
|   |                                                                                                                                        |   |
|   | **PRECISION PATTERN, INC.**, a Kansas  corporation (for purposes of Section 5 only) as a Subsidiary Guarantor                               |
|   |                                                                                                                                        |   |
|   |                                                                                                                                        |   |
|   | By:                                                                                                                                         | /s/ R. Jack DeCrane |
|   |                                                                                                                                        | Name: |  R. Jack DeCrane |
|   |                                                                                                                                        | Title: | Chief Executive Officer |
|   |                                                                                                                                        |   |
|   |                                                                                                                                        |   |
|   | **THE INFINITY PARTNERS, LTD.**, a Texas limited  partnership                                                                               |
|   |                                                                                                                                        |   |
|   | by: DAH-IP  Holdings, Inc., a Delaware limited partnership, its general partner (for  purposes of Section 5 only) as a Subsidiary Guarantor |
|   |                                                                                                                                        |   |
|   |                                                                                                                                        |   |
|   | By:                                                                                                                                         | /s/ R. Jack decrane |
|   |                                                                                                                                        | Name: |  R. Jack DeCrane |
|   |                                                                                                                                        | Title: | Chief Executive Officer |
|   |                                                                                                                                        |   |
|   |                                                                                                                                        |   |
|   | **DECRANE HOLDINGS CO.**,  a Delaware  corporation (for purposes of Section 5 only) as a  guarantor                                         |
|   |                                                                                                                                        |   |
|   |                                                                                                                                        |   |
|   | By:                                                                                                                                         | /s/ R. Jack decrane |
|   |                                                                                                                                        | Name: |  R. Jack DeCrane |
|   |                                                                                                                                        | Title: | Chief Executive Officer |

 

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|   | **CREDIT SUISSE FIRST BOSTON, acting  through its Cayman Islands Branch**(successor  to DLJ Capital Funding, Inc.), as a  Lender, Syndication Agent and Adminstrative  Agent |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                         |   |
|   |                                                                                                                                                                         |   |
|   | By:                                                                                                                                                                          | /s/ DANA KLEIN |
|   |                                                                                                                                                                         | Name: |  Dana Klein |
|   |                                                                                                                                                                         | Title: | Managing Director |
|   |                                                                                                                                                                         |   |
|   |                                                                                                                                                                         |   |
|   | By:                                                                                                                                                                          | /s/ Richard Carey |
|   |                                                                                                                                                                         | Name: |  Richard Carey |
|   |                                                                                                                                                                         | Title: | Managing Director |

 

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|   |   | , as a  Lender |
|--------|--------|----------------|
|   |   |           |   |
|   | By:    |           |
|   |   | Name:          |   |
|   |   | Title:         |   |
|        |        |                |  |  |  |  |

 

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**ANNEX A**

 

**MATTERS TO BE COVEREDIN OPINION OF COUNSEL TO COMPANY**

 

1.             Company has been duly incorporated, and is validlyexisting in good standing under the laws of the State of Delaware withcorporate power to own its properties and assets, to enter into the Amendmentand to perform its obligations under the Amendment.

 

2.             The execution, delivery and performance of the Amendmentby Company have been duly authorized by all necessary corporate action on thepart of aaaaaaaCompany, the Amendment has been duly executed and delivered byCompany, and the Amendment and the Amended Agreement constitute the legallyvalid and binding obligations of Company, enforceable against Company inaccordance with their respective terms except as may be limited by bankruptcy,insolvency, reorganization, moratorium or similar laws relating to or affectingcreditors’ rights generally (including, without limitation, fraudulentconveyance laws) and by general principles of equity including, withoutlimitation, concepts of materiality, reasonableness, good faith and fairdealing and the possible unavailability of specific performance or injunctiverelief, regardless of whether considered in a proceeding in equity or at law.

 

3.             Company’s execution and delivery of the Amendment andthe consummation of the transactions contemplated by the Amendment do not andwill not (i) violate the Certificate of Incorporation or By-laws of Parentor of Company, (ii) violate, breach or result in a default under SeniorSubordinated Note Indenture or the First Lien Credit Agreement,(iii) breach or otherwise violate any existing obligation of Company underany order, judgment or decree of any New York, California or federal court orGovernmental Authority binding on Company or (iv) violate any New York,California or federal statute or regulation.

 

4.             No governmental consents, approvals, authorizations,registrations, declarations or filings are required by Company in connectionwith the execution and delivery by Company of the Amendment, and theperformance by Company of the Amended Agreement.

 

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