**Exhibit4.5.1**

 

(Face of Note)

 

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

 

CUSIP 243662 AE3

 

17% Senior Discount Notes due 2008

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

 

DECRANE AIRCRAFTHOLDINGS, INC. (THE “ISSUER”)

 

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

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

 

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

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

 

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(Back of Note)

 

17% SeniorDiscount Notes due 2008

 

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

 

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

 

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

 

1.                                       *INTEREST*.  No interest shall accrue on this Note.  Instead, the Accreted Value of the Note willaccrete at a rate of 17% from the date of issuance, compounded semiannually oneach March 30 and September 30 (commencing September 30, 2004),to an aggregate Accreted Value of $127,771,000, the full principal amount atmaturity, on September 30, 2008. The Issuer shall pay interest (including post-petition interest in anyproceeding under any Bankruptcy Law) on overdue principal and premium, if any,from time to time on demand at a rate of 18% per annum.

 

2.                                       *METHOD OFPAYMENT*.  The Notes will be payable as to principal, premiumand interest on overdue principal, if any, at the office of the Paying Agentand Registrar.  Holders of Notes mustsurrender their Notes to the Paying Agent to collect principal payments, andthe Issuer may pay principal, premium and interest on overdue principal, ifany, by check and may mail checks to a Holder’s registered address; *provided*that all payments with respect to Global Notes and Definitive Notes, theHolders of which have given wire transfer instructions to the Issuer, will berequired to be made by wire transfer of immediately available funds to theaccounts specified by the Holders thereof. Such payment shall be in such coin or currency of the United States ofAmerica as at the time of payment is legal tender for payment of public andprivate debts.

 

3.                                       *PAYING AGENTAND REGISTRAR*.  Initially,U.S. Bank National Association, the Trustee under the Indenture, will act asPaying Agent and Registrar.  The Issuermay change any Paying Agent or Registrar without notice to any Holder.  The Issuer or any of its Subsidiaries mayact in any such capacity.

 

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

 

5.                                       *OPTIONALREDEMPTION*.

 

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

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

 

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6.                                       *MANDATORYREDEMPTION*.

 

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

 

7.                                       *REPURCHASEAT OPTION OF HOLDER*.

 

(a)                                  Uponthe occurrence of a Change of Control (such date being the *‘‘Change of Control Payment’’*),each Holder of Notes shall have the right to require the Issuer to purchase allor any part (equal to $1,000 or an integral multiple thereof) of such Holder’sNotes pursuant to an offer at an offer price in cash equal to 101% of theaggregate Accreted Value thereof. Within 60 days following any Change of Control, subject to theprovisions of the Indenture, the Issuer shall mail a notice to each Holder ofNotes at such Holder’s registered address setting forth the proceduresgoverning the offer as required by the Indenture.

 

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

 

8.                                       *NOTICE OFREDEMPTION*.   Notice ofany redemption or offer to purchase will be mailed at least 30 days but notmore than 60 days before the redemption or purchase date to each Holder ofNotes to be redeemed or purchased at such Holder’s registered address.  Notes in denominations larger than $1,000principal amount at maturity may be redeemed in part but only in wholemultiples of $1,000 principal amount at maturity, unless all of the Notes heldby a Holder are to be redeemed.

 

9.                                       *DENOMINATIONS,TRANSFER, EXCHANGE*.  The Notes are in registered form withoutcoupons in denominations of $1,000 principal amount at maturity and integralmultiples thereof.  The transfer of Notes may be registered and Notes maybe exchanged as provided in the Indenture.  The Registrar and the Trusteemay require a Holder, among other things, to furnish appropriate endorsementsand transfer documents and the Issuer may require a Holder to pay any taxes andfees required by law or permitted by the Indenture.  The Issuer need notexchange or register the transfer of any Note or portion of a Note selected forredemption, except for the unredeemed portion of any Note being redeemed inpart.  Also, the Issuer need not exchange or register the transfer of anyNotes for a period of 15 days before a selection of Notes to be redeemed.

 

10.                                 *PERSONSDEEMED OWNERS*.  Theregistered Holder of a Note may be treated as its owner for all purposes.

 

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

 

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

 

12.                                 *DEFAULTS ANDREMEDIES*.

 

(a) Events ofDefault include:(a)default in payment when due of the principal of or premium, if any, on theNotes; (b) failure by the Issuer or any of its Restricted Subsidiaries for 30days after receipt of notice from the Trustee or Holders of at least 25% inprincipal amount at maturity of the Notes then outstanding to comply with theprovisions of Sections 4.07, 4.09, 4.10, 4.14 and Article 5 of theIndenture; (c) failure by the Issuer for 60 days after notice from the Trusteeor the Holders of at least 25% in principal amount at maturity of the Notesthen outstanding to comply with any of their other agreements in the Indentureor the Notes; (d) default under any mortgage, indenture or instrument underwhich there may be issued or by which there may be secured or evidenced anyIndebtedness for money borrowed by the Issuer or any of its RestrictedSubsidiaries (or the payment of which is guaranteed by the Issuer or any of itsRestricted Subsidiaries), whether such Indebtedness or guarantee now exists, oris created after the date of the Indenture, which default (i) is caused by afailure to pay Indebtedness at its stated final maturity (after giving effectto any applicable grace period provided in such Indebtedness) (a “PaymentDefault”) or (ii) results in the acceleration of such Indebtedness prior to itsstated final maturity and, in each case, the principal amount of any suchIndebtedness, together with the principal amount of any other such Indebtednessunder which there has been a Payment Default or the maturity of which has beenso accelerated, aggregates $10.0 million or more; (e) failure by the Issuer orany of its Restricted Subsidiaries to pay final judgments aggregating in excessof $10.0 million (net of any amounts with respect to which a reputable andcreditworthy insurance company has acknowledged liability in writing), whichjudgments are not paid, discharged or stayed for a period of 60 days; (f)except as permitted by the Indenture, any Note Guarantee shall be held in anyjudicial proceeding to be unenforceable or invalid or shall cease for anyreason to be in full force and effect or any Guarantor, or any Person acting onbehalf of any Guarantor, shall deny or disaffirm its obligations under its NoteGuarantee; and (g) certain events of bankruptcy or insolvency with respect tothe Issuer or any of its Restricted Subsidiaries that is a SignificantSubsidiary.  If any Event of Defaultoccurs and is continuing, the Trustee or the Holders of at least 25% inprincipal amount of the then outstanding Notes may declare all the Notes to bedue and payable immediately. Notwithstanding the foregoing, in the case of an Event of Defaultarising from certain events of bankruptcy or insolvency with respect to theIssuer or any of its Restricted Subsidiaries that is a Significant Subsidiary, alloutstanding Notes will become due and payable without further action or notice.

 

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

 

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13.                                 *NOTEGUARANTEES.* The payment of principal of, premium, and interest andLiquidated Damages, if any, on the Notes are unconditionally guaranteed,jointly and severally, by the Guarantors.

 

14.                                 *ADDITIONALRIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES.*  In addition to the rights provided toHolders of Notes under the Indenture, Holders of Restricted Global Notes shallhave the rights set forth in the Registration Rights Agreement dated as ofJuly 23, 2004, among the Issuer, the Guarantors and the parties named onthe signature pages thereof  (the “*RegistrationRights Agreement*”).

 

15.                                 *TRUSTEEDEALINGS WITH ISSUER*.  TheTrustee, in its individual or any other capacity, may make loans to, acceptdeposits from, and perform services for the Issuer or its Affiliates, and mayotherwise deal with Issuer or its Affiliates, as if it were not the Trustee.

 

16.                                 *NO RECOURSEAGAINST OTHERS*.  A director, officer, employee, incorporator orstockholder, of the Issuer, as such, shall not have any liability for anyobligations of the Issuer under the Notes or the Indenture or for any claim basedon, in respect of, or by reason of, such obligations or their creation.  Each Holder by accepting a Note waives andreleases all such liability.  The waiver and release are part of theconsideration for the issuance of the Notes.

 

17.                                 *AUTHENTICATION*. This Note shall not be valid until authenticated by the manual signature of theTrustee or an authenticating agent.

 

18.                                 *ABBREVIATIONS*. Customary abbreviations may be used in the name of a Holder or an assignee,such as:  TEN COM (= tenants in common), TEN ENT (= tenants by theentireties), JT TEN (= joint tenants with right of survivorship and not astenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to MinorsAct).

 

19.                                 *CUSIPNUMBERS*.  Pursuant to arecommendation promulgated by the Committee on Uniform Security IdentificationProcedures, the Issuer has caused CUSIP numbers to be printed on the Notes andthe Trustee may use CUSIP numbers in notices of redemption as a convenience toHolders.  No representation is made asto the accuracy of such numbers either as printed on the Notes or as containedin any notice of redemption and reliance may be placed only on the otheridentification numbers placed thereon.

 

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

 

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

 

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**ASSIGNMENT FORM**

** **

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

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

 

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**OPTION OF HOLDER TO ELECT PURCHASE**

** **

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

 

oSection 4.10                                                           oSection 4.14

 

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

 

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

 

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**SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE**

** **

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

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

 

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