**Exhibit 10.10.6**

 

**DECRANE AIRCRAFT HOLDINGS, INC.**

 

**THIRD AMENDMENTTO THIRD AMENDED AND RESTATED CREDIT AGREEMENT**

 

This **THIRD AMENDMENT TO THIRD AMENDED ANDRESTATED CREDIT AGREEMENT** (this “**Amendment**”) is dated as ofMarch 31, 2003 and entered into by and among DeCrane Aircraft Holdings, Inc., aDelaware corporation (“**Company**”), the financial institutionslisted on the signature pages hereof (“**Lenders**”), Credit Suisse First Boston(successor to DLJ Capital Funding, Inc.), as syndication agent for Lenders (“**SyndicationAgent**”), and Bank One, NA, as administrative agent for Lenders (“**AdministrativeAgent**”), and is made with reference to that certain Third Amendedand Restated Credit Agreement, dated as of May 11, 2000, as amended by a FirstAmendment to Third Amended and Restated Credit Agreement, dated as ofJune 30, 2000, and as further amended by an Increased CommitmentsAgreement to Third Amended and Restated Credit Agreement, dated as of April 27,2001 and as further amended by a Second Amendment to Third Amended and RestatedCredit Agreement dated as of March 19, 2002 (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 and Lenders desire to amend the Credit Agreement to (i) consent tothe appointment of a successor administrative agent, (ii) increase the interestrate margins applicable to the Loans, (iii) reduce the Revolving LoanCommitments to $40,000,000, (iv) modify the financial covenants in certainrespects, (v) permit the sale of Company’s Specialty Avionics Group, (vi)permit the issuance of Indebtedness of up to $100,000,000 and the repurchase ofSenior Subordinated Notes of up to $20,000,000, and (vii) make certain otheramendments as set forth below:

 

**NOW, THEREFORE,**inconsideration of the premises and the agreements, provisions and covenantsherein contained, the parties hereto agree as follows:

 

**Section 1.****                                          AMENDMENTSTO THE CREDIT AGREEMENT**

 

**1.1****                               Amendmentsto Section 1: Definitions**

 

A.                                   Subsection1.1 of the Credit Agreement is hereby amended by adding thereto the followingdefinitions, which shall be inserted in proper alphabetical order:

 

**“FirstLien Leverage Ratio”** means, as of any date, the ratio of (a)Net Senior Debt minus Permitted Indebtedness as of the last day of aFiscal Quarter to (b) Consolidated EBITDA for the consecutive four FiscalQuarters ending on the last day of such Fiscal Quarter.

 

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“**Holders of Permitted Indebtedness**” meansthe holders from time to time of any Permitted Indebtedness issued by Companyand their representatives.

 

“**Intercreditor Agreement**” means anintercreditor agreement among Syndication Agent and the Holders of PermittedIndebtedness, which shall be satisfactory in form and substance to SyndicationAgent and which shall provide, among other things, that (i) no Holder ofPermitted Indebtedness may take any enforcement action in respect of thePermitted Indebtedness or the Collateral, or any portion thereof, unless theObligations have been paid in full in cash, all Letters of Credit have expiredor been surrendered to Issuing Lender or cash collateralized in a manner satisfactoryto Syndication Agent and the Revolving Loan Commitments have been terminated;(ii) no payment may be made in respect of such Permitted Indebtedness on andafter the date that the Holders of Permitted Indebtedness have been notified inwriting by Syndication Agent that an Event of Default pursuant to subsection8.1 hereof has occurred and is continuing; (iii) Syndication Agent andRequisite Lenders may consent to any sale of assets and to the release of Liensin respect of the Collateral without consent of the Holders of PermittedIndebtedness; (iv) Syndication Agent and Requisite Lenders may consent to theuse of cash collateral and provide financing in any voluntary or involuntarybankruptcy or insolvency proceeding in respect of Company or any Subsidiary onterms acceptable to them, without consent of the Holders of PermittedIndebtedness; (v) the Holders of Permitted Indebtedness may not initiate,prosecute or participate in any claim, action or other proceeding challengingthe enforceability, validity, perfection or priority of the Obligations or anyLiens securing the payment of the Obligations; (vi) the Liens securing thePermitted Indebtedness shall be subordinated to the Liens securing theObligations for all purposes; (vii) proceeds of the sale or other dispositionof the Collateral (pursuant to permitted asset sales, foreclosure or otherwise)shall be applied in accordance with the terms of this Agreement or as otherwiseconsented to by Syndication Agent and Requisite Lenders, without in any casethe consent of, or any accounting to, the Holders of Permitted Indebtedness;and (viii) no amendments or changes to the documents evidencing the PermittedIndebtedness shall be effective if the effect of such amendment or change is toincrease the interest rate on such Permitted Indebtedness, change (to earlierdates) any dates upon which payments of principal or interest are due thereon,change any event of default or condition to an event of default with respectthereto (other than to eliminate any such event of default or increase anygrace period related thereto), change the redemption, prepayment or defeasanceprovisions thereof, or change any collateral therefor (other than to releasesuch collateral) or if the effect of such amendment or change, together withall other amendments or changes made, is to increase materially the obligationsof the obligor thereunder to the detriment of Lenders or to confer anyadditional rights on the Holders of Permitted Indebtedness (or a trustee orother representative on their behalf) which would be adverse to Lenders,without the consent of Requisite Lenders.

 

**“PermittedIndebtedness”** meansup to $100,000,000 in aggregate principal amount of Indebtedness, which (a)shall (i) provide for no scheduled redemptions, prepayments, sinking fundinstallment payments or maturities prior to June 30, 2007 and (ii) not bearcash interest in excess of 12% per annum, (b) may be secured by Liens on all ora portion of the Collateral, as evidenced by an Intercreditor Agreement, and(c) shall be issued pursuant to documentation containing covenants, defaults,remedies and other material terms in form and substance satisfactory toSyndication Agent.

 

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“**Rating Downgrade Period**” means any period during which therating with respect to the Loans established by S&P is “CCC+” or lower, orin which the rating established by Moody’s is “Caa1” or lower, or during whicheither S&P or Moody’s does not provide a rating with respect to the Loans.

 

**“RefurbishmentProject”**means capital expenditures directly related to theacquisition of facilities, equipment, tooling and startup of a refurbishmentbusiness activity to corporate, VIP and head of state aircraft.

 

 “**SAG StockPurchase Agreement**” means the agreement between Odyssey Investment Partners LLC or itsaffiliates and Company dated as of March 14, 2003, pursuant to whichSpecialty Avionics Group is to be sold, as amended to the date of effectivenessof the Third Amendment to this Agreement.

 

**“SAG Sale”**means the sale of all of the capital stock (or other equity interests)of the Subsidiaries constituting the Specialty Avionics Group or the sale ofall of the assets of such Subsidiaries to Odyssey Investment Partners LLC orits affiliates pursuant to the SAG Stock Purchase Agreement.

 

“**Specialty Avionics Group**” means thespecialty avionics business of Company that is conducted by Avtech, AerospaceDisplay Systems, LLC and Tri-Star Electronics International, Inc.

 

“**Subdebt Reduction Event**” means the firstissuance after April 1, 2003 of Permitted Indebtedness in a principal amountequal to or greater than $50 million.

 

B.                                     Subsection1.1 of the Credit Agreement is hereby amended by adding an “and” and thefollowing at the end of the definition of “Permitted Acquisition”:

 

“(iii)equity Securities of Parent issued as consideration with respect to anyacquisition consummated after April 1, 2003 shall be excluded from any suchcalculation on any date.

 

Notwithstanding theforegoing, no acquisition otherwise permitted hereby by Company or a Subsidiaryshall be a Permitted Acquisition if any consideration therefor consists of anyCash, Indebtedness or other assets other than equity securities of Parent orEarn-outs unless, after giving effect to such transaction, (A) the First LienLeverage Ratio is equal to or less than 2.5x for the four Fiscal Quarter periodfor which financial statements have been delivered pursuant to subsection 6.1ending immediately prior to the date of closing of such acquisition, asevidenced by an Officer’s Certificate of Company delivered on such date ofclosing to Syndication Agent showing the calculations therefor and (B) on thedate of closing of such acquisition, the difference between the aggregateRevolving Commitments and the Total Utilization of Revolving Loan Commitmentsis at least $15,000,000.”

 

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**1.2**                               **Amendments to Section 2: Amounts andTerms of Commitments and Loans**

 

**A.**                                    Subsection2.1A(iii) of the Credit Agreement is hereby amended by adding the following atthe end thereof:

 

“Notwithstandingthe foregoing, the aggregate amount of the Revolving Loan Commitments is$40,000,000; provided that the aggregate amount of the Revolving LoanCommitments shall be reduced to $35,000,000 upon the Subdebt Reduction Event.”

 

**B.**                                    Subsection 2.2A(i)of the Credit Agreement is hereby amended by deleting it in its entirety andsubstituting the following therefor:

 

“(i)                               (a)                                  Subjectto the provisions of subsection 2.2E, the Tranche A Term Loans and theRevolving Loans shall bear interest from March 31, 2003 through maturity asfollows:

 

(1)                                                       ifa Base Rate Loan, then at the sum of the Base Rate plus the Base RateMargin set forth in the table below opposite the Consolidated Leverage Ratio asset forth in the most recent Margin Determination Certificate deliveredpursuant to subsection 6.1(iv); or

 

(2)                                                       ifa Eurodollar Rate Loan, then at the sum of the Adjusted Eurodollar Rate for theInterest Period applicable to such Loan plus the Eurodollar Rate Marginset forth in the table below opposite the Consolidated Leverage Ratio as setforth in the most recent Margin Determination Certificate delivered pursuant tosubsection 6.1(iv):

 
| **Consolidated Leverage Ratio**                             |   | **Applicable  Eurodollar Rate  Margin** |   | **Applicable  Base  Rate Margin** |   |
|-------------------------------------------------------------|--------|-----------------------------------------|--------|-----------------------------------|--------|
|                                                        |   |                                    |   |                              |   |
| Greater  than or equal to 5.00:1.00                         |   | 5.25                                    | %      | 4.00                              | %      |
|                                                        |   |                                    |   |                              |   |
| Greater  than or equal to 4.50:1.00 but less than 5.00:1.00 |   | 5.00                                    | %      | 3.75                              | %      |
|                                                        |   |                                    |   |                              |   |
| Greater  than or equal to 4.00:1.00 but less than 4.50:1.00 |   | 4.75                                    | %      | 3.50                              | %      |
|                                                        |   |                                    |   |                              |   |
| Greater  than or equal to 3.50:1.00 but less than 4.00:1.00 |   | 4.25                                    | %      | 3.00                              | %      |
|                                                        |   |                                    |   |                              |   |
| Greater  than or equal to 3.00:1.00 but less than 3.50:1.00 |   | 4.00                                    | %      | 2.75                              | %      |
|                                                        |   |                                    |   |                              |   |
| Less  than 3.00:1.00                                        |   | 3.50                                    | %      | 2.25                              | %      |

 

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*provided* that (i) during a Rating Downgrade Period each of the applicablemargins provided in the above table shall be increased by 0.5% and (ii) uponthe Subdebt Reduction Event each of the applicable margins provided in theabove table shall be decreased by 0.5%;

 

Changesin the applicable margin for Tranche A Term Loans and Revolving Loans resultingfrom a change in the Consolidated Leverage Ratio shall become effective asprovided in subsection 2.3C.

 

If atany time a Margin Determination Certificate is not delivered at the timerequired pursuant to subsection 6.1(iv), from the time such MarginDetermination Certificate was required to be delivered until delivery of suchMargin Determination Certificate, such applicable margins shall be the maximumpercentage amount for the relevant Loan set forth above.

 

(b)                                 Subjectto the provisions of subsection 2.2E, the Tranche B Term Loans shall bearinterest from March 31, 2003 through maturity as follows:

 

(1)                                  ifa Base Rate Loan, then at the sum of the Base Rate plus 4.25% per annum; provided that during a Rating Downgrade Period, such margin shall be increased by 0.5% per annum and if the SubdebtReduction Event occurs, such margin shall be decreased by 0.5%; or

 

(2)                                  ifa Eurodollar Rate Loan, then at the sum of the Adjusted Eurodollar Rate for theInterest Period applicable for such Loan plus 5.50% per annum; provided that during a Rating Downgrade Period, such margin shall be increased by 0.5% perannum and if the Subdebt Reduction Event occurs, such margin shall be decreased by 0.5%.

 

(c)                                  Subjectto the provisions of subsection 2.2E, the Tranche D Term Loans shall bearinterest from March 31, 2003 through maturity as follows:

 

(1)                                  ifa Base Rate Loan, then at the sum of the Base Rate plus 4.75% per annum; provided that during a Rating Downgrade Period, such margin shall be increased by 0.5% perannum and if the Subdebt Reduction Event occurs, such margin shall be decreasedby 0.5%; or

 

(2)                                  ifa Eurodollar Rate Loan, then at the sum of the Adjusted Eurodollar Rate for theInterest Period applicable to such 

 

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Loan plus 6.00%per annum; providedthat during a Rating Downgrade Period, such margin shall be increased by 0.5% per annum and if the SubdebtReduction Event occurs, such margin shall be decreased by 0.5%.”

 

**C.**                                    Subsection 2.4B(iii)(a) of the CreditAgreement is hereby amended by adding at the end the following:

 

“provided that theNet Asset Sale Proceeds from the SAG Sale shall be applied to prepay the Loansas provided in subsection 2.4B(iv)(b) no later than the first Business Dayfollowing the receipt thereof.”

 

**D.**                                    Subsection 2.4B(iii)(c) of the CreditAgreement is hereby amended byadding at the end the following:

 

“provided furtherthat, notwithstanding the foregoing, 50% of the Net Securities Proceeds fromthe issuance of any Permitted Indebtedness shall be applied to prepay the Loansas provided in subsection 2.4B(iv)(b) no later than the first Business Dayfollowing the receipt thereof.”

 

**E.****                                     **Subsection 2.4B(iv)(b) of the CreditAgreement is hereby amended by adding at the end the following:

 

“provided that$4,000,000 of the Net Asset Sale Proceeds from the SAG Sale shall be applied toprepay the Revolving Loans, without a reduction in Revolving Loan Commitments,and the remaining balance of such Net Asset Sale Proceeds shall be applied tothe prepayment of the Term Loans as provided in subsection 2.4B(iv)(c).”

 

**1.3****                               Amendmentto Section 6:  Company’s AffirmativeCovenants**

 

Subsection 6.1 of theCredit Agreement is hereby amended by adding the following at the end ofsubsection 6.1(ii):

 

“provided that the report on Company’sconsolidated financial statements by independent certified public accountantsthat is required to be delivered without Impermissible Qualification pursuantto this subsection 6.1(ii) within 105 days of the end of the Fiscal Year endedDecember 31, 2002 may be delivered by Company at any time on or prior to thethirtieth day following consummation of the SAG Sale;”

 

**1.4**.                            **Amendments to Section 7:  Company’s Negative Covenants**

 

**A.**                                    Subsection 7.1 ofthe Credit Agreement is hereby amended by adding an “and” and the following newclause (x) immediately after subsection 7.1(ix) as follows:

 

“(x)                             Companymay become and remain liable with respect to Permitted Indebtedness; providedthat Company causes an opinion of counsel in form and substance reasonablysatisfactory to Administrative Agent to be delivered to 

 

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Administrative Agent tothe effect that the incurrence and performance of the terms of such PermittedIndebtedness do not conflict with or violate the terms of this Agreement or theSenior Subordinated Note Indenture at or prior to the date such PermittedIndebtedness is incurred.”

 

**B.****                                   **Subsection7.2A of the Credit Agreement is hereby amended by adding an “and” and thefollowing new clause (xi) immediately after subsection 7.2A(x) as follows:

 

“(xi)                          Lienssecuring Permitted Indebtedness, such Liens to be subject to an IntercreditorAgreement.”

 

**C.**                                    Subsection 7.2B ofthe Credit Agreement is hereby amended by adding immediately after thereference to the numeral “(viii)” the phrase “or (x)”.

 

**D.****                                   **Subsection7.5 of the Credit Agreement is hereby amended by adding an “and” and thefollowing new clause (vii) immediately after subsection 7.5(vi) as follows:

 

“(vii)                     Company maypurchase, redeem, or otherwise acquire or retire Subordinated Indebtedness inan amount up to but not exceeding $20 million with proceeds from the issuanceof Subordinated Indebtedness permitted by subsection 7.1 or equity Securitiesof Company.”

 

**E.**                                      Subsection 7.6 ofthe Credit Agreement is hereby amended by deleting it in its entirety andsubstituting the following therefor:

 

**“7.6****                        Financial****Covenants.**

 

**“A.**                             **MinimumFixed Charge Coverage Ratio.** Company shall not permit the Consolidated Fixed Charge Coverage Ratio asof the last day of any Fiscal Quarter, beginning with the Fiscal Quarter endingMarch 31, 2003, occurring during any period set forth below to be less than thecorrelative ratio indicated:

** **
| **Period**                               |   | **Minimum  Fixed Charge  Coverage Ratio** |    |
|------------------------------------------|--------|-------------------------------------------|---------|
| 1st  Fiscal Quarter, 2003                |   | 1.15                                      | x  |
| 2nd  Fiscal Quarter, 2003                |   | 0.75                                      | x  |
| 3rd  Fiscal Quarter, 2003                |   | 0.70                                      | x  |
| 4th  Fiscal Quarter, 2003                |   | 0.70                                      | x  |
| 1st  Fiscal Quarter, 2004                |   | 0.75                                      | x  |
| 2nd  Fiscal Quarter, 2004                |   | 0.75                                      | x  |
| 3rd  Fiscal Quarter, 2004                |   | 0.70                                      | x  |
| 4th  Fiscal Quarter, 2004                |   | 0.70                                      | x  |
| 1st  Fiscal Quarter, 2005 and thereafter |   | 1.20                                      | x  |

 

**B.****                                    MaximumLeverage Ratio.**  Company shall notpermit the Consolidated Leverage Ratio as of the last day of any FiscalQuarter, beginning with the Fiscal Quarter

 

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ending March 31, 2003,occurring during any period set forth below to exceed the correlative ratioindicated:

 
| **Period**                               |   | **Maximum  Consolidated** |    |
|------------------------------------------|--------|---------------------------|---------|
| 1st  Fiscal Quarter, 2003                |   | 6.40                      | x  |
| 2nd  Fiscal Quarter, 2003                |   | 8.25                      | x  |
| 3rd  Fiscal Quarter, 2003                |   | 9.95                      | x  |
| 4th  Fiscal Quarter, 2003                |   | 10.40                     | x  |
| 1st  Fiscal Quarter, 2004                |   | 10.25                     | x  |
| 2nd  Fiscal Quarter, 2004                |   | 9.10                      | x  |
| 3rd  Fiscal Quarter, 2004                |   | 8.65                      | x  |
| 4th  Fiscal Quarter, 2004                |   | 8.00                      | x  |
| 1st  Fiscal Quarter, 2005 and thereafter |   | 3.00                      | x  |

 

**C.****                                    MinimumConsolidated EBITDA.** Company shallnot permit Consolidated EBITDA for the consecutive four-Fiscal-Quarter periodending on the last day of any Fiscal Quarter, beginning with the Fiscal Quarterending March 31, 2003, occurring during any period set forth below to be lessthan the correlative amount (the **“MinimumEBITDA Amount”**) indicated:

 
| **Quarter Ended**                        |   | **Minimum  EBITDA Amount** |       |
|------------------------------------------|--------|----------------------------|------------|
|                                     |   |                       |       |
| 1st  Fiscal Quarter, 2003                |   | $                          | 61,000,000 |   |
| 2nd  Fiscal Quarter, 2003                |   | 31,000,000                 |       |
| 3rd  Fiscal Quarter, 2003                |   | 26,000,000                 |       |
| 4th  Fiscal Quarter, 2003                |   | 23,500,000                 |       |
| 1st  Fiscal Quarter, 2004                |   | 24,500,000                 |       |
| 2nd  Fiscal Quarter, 2004                |   | 27,500,000                 |       |
| 3rd  Fiscal Quarter, 2004                |   | 29,000,000                 |       |
| 4th  Fiscal Quarter, 2004                |   | 30,500,000                 |       |
| 1st  Fiscal Quarter, 2005 and thereafter |   | 82,783,200                 |       |
|                                          |        |                            |            |  |

 

; providedthat

 

(x)                                   theMinimum EBITDA Amount for the consecutive four-Fiscal-Quarter period ending atthe last day of any Fiscal Quarter during any period set forth above shall beincreased by an amount equal to 80% of the Acquired Business EBITDA of eachAcquired Business whose Acquired Business Date falls during the period from andincluding the day following the Third Amended and Restated Credit AgreementClosing Date to and including the last day of such Fiscal Quarter; and

 

(y)                                 tothe extent the amount of Consolidated EBITDA for the immediately precedingconsecutive four-Fiscal-Quarter period exceeds the amount of EBITDA required tobe maintained for such consecutive four-Fiscal-Quarter period pursuant to thissubsection, an amount equal to 50% of such excess amount may be carried forwardto (but only to) the then current Fiscal Quarter (any such amount to be 

 

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certified toAdministrative Agent in the Compliance Certificate delivered for the lastFiscal Quarter of such consecutive four-Fiscal-Quarter period).

 

Forpurposes of this subsection 7.6C, the following terms have the followingmeanings:

 

“**AcquiredBusiness**” means any business acquired (whether through the purchaseof assets or shares of capital stock) by Company or any of its Subsidiariesafter the Second Amended and Restated Credit Agreement Closing Date.

 

“**Acquired Business Date**” means, with respectto any Acquired Business, the date of consummation of the acquisition thereofby Company or any of its Subsidiaries.

 

“**AcquiredBusiness EBITDA**” means, with respect to any Acquired Business, (x)the consolidated net income of such Acquired Business for the consecutivefour-Fiscal-Quarter period ended on or most recently prior to its AcquiredBusiness Date and with respect to which financial statements are available onthe Acquired Business Date plus (y) to the extent deducted in determining suchconsolidated net income for such period, the sum of (i) consolidated interestexpense, (ii) income taxes, (iii) depreciation, (iv) amortization, (v) anyextraordinary or non-recurring losses, and (vi) any non-cash items minus (z) tothe extent included in such consolidated net income, extraordinary gains.

 

**D.****                                    MinimumInterest Coverage Ratio.** Companyshall not permit the Consolidated Interest Coverage Ratio as of the last day ofany Fiscal Quarter, beginning with the Fiscal Quarter ending March 31, 2003,occurring during any period set forth below to be less than the correlativeratio indicated:

 
| **Period**                               |   | **Minimum  Interest  Coverage Ratio** |    |
|------------------------------------------|--------|---------------------------------------|---------|
|                                     |   |                                  |    |
| 1st  Fiscal Quarter, 2003                |   | 1.95                                  | x  |
| 2nd  Fiscal Quarter, 2003                |   | 1.30                                  | x  |
| 3rd  Fiscal Quarter, 2003                |   | 1.05                                  | x  |
| 4th  Fiscal Quarter, 2003                |   | 1.00                                  | x  |
| 1st  Fiscal Quarter, 2004                |   | 1.05                                  | x  |
| 2nd  Fiscal Quarter, 2004                |   | 1.15                                  | x  |
| 3rd  Fiscal Quarter, 2004                |   | 1.20                                  | x  |
| 4th  Fiscal Quarter, 2004                |   | 1.30                                  | x  |
| 1st  Fiscal Quarter, 2005 and thereafter |   | 3.00                                  | x       |

 

**E.****                                     ****Maximum NetSenior Debt Ratio. **Company shall not permit the Net Senior Debt Ratio as of the last day ofany Fiscal Quarter, beginning with the Fiscal Quarter ending March 31, 2003,occurring during any period set forth below to be more than the correlativeratio indicated:

 

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| **Period**                               |   | **Maximum  Net Senior Debt  Ratio** |          |
|------------------------------------------|--------|-------------------------------------|---------------|
|                                     |   |                                |          |
| 1st  Fiscal Quarter, 2003                |   | 4.75                                | x        |
| 2nd  Fiscal Quarter, 2003                |   | 5.05                                | x        |
| 3rd  Fiscal Quarter, 2003                |   | 6.05                                | x        |
| 4th  Fiscal Quarter, 2003                |   | 6.15                                | x        |
| 1st  Fiscal Quarter, 2004                |   | 6.20                                | x        |
| 2nd  Fiscal Quarter, 2004                |   | 5.50                                | x        |
| 3rd  Fiscal Quarter, 2004                |   | 5.20                                | x        |
| 4th  Fiscal Quarter, 2004                |   | 4.75                                | x        |
| 1st  Fiscal Quarter, 2005 and thereafter |   | 3.00                                | x”  |

 

**F.****                                     **Subsection7.8(i) of the Credit Agreement is hereby amended by deleting it in its entiretyand substituting the following therefor:

 

“(i)                               Companywill not, and will not permit any of its Subsidiaries to, make or commit tomake Consolidated Capital Expenditures in any Fiscal Year, except ConsolidatedCapital Expenditures which do not aggregate in excess of the correspondingamount set forth below opposite such Fiscal Year:

 
| **Fiscal Year**                       |   | **Consolidated  Capital Expenditures** |      |
|---------------------------------------|--------|----------------------------------------|-----------|
|                                  |   |                                   |      |
| Fiscal  Year ending December 31, 2003 |   | $                                      | 5,000,000 |   |
| Fiscal  Year ending December 31, 2004 |   | $                                      | 5,000,000 |   |
| Fiscal  Year ending December 31, 2005 |   | $                                      | 7,000,000 |   |

 

*provided* that (a)if the aggregate amount of Consolidated Capital Expenditures actually made inany such Fiscal Year shall be less than the limit with respect thereto setforth above (before giving effect to any increase therein pursuant to thisproviso) (the “**Base Amount**”), then the amount of such shortfall (up to anamount equal to 50% of the Base Amount for such Fiscal Year, without givingeffect to this proviso) may be added to the amount of such Consolidated CapitalExpenditures permitted for the immediately succeeding Fiscal Year and any suchamount carried forward to a succeeding Fiscal Year shall be deemed to be usedprior to Company and its Subsidiaries using the amount of capital expenditurespermitted by this section in such succeeding Fiscal Year, without giving effectto such carryforward and (b) for any Fiscal Year (or portion thereof) followingany acquisition of a business (whether through the purchase of assets or ofshares of capital stock) permitted under subsection 7.7, the Base Amountfor such Fiscal Year (or portion) shall be increased, for each suchacquisition, by an amount equal to the product of (A) the lesser of(x) $5,000,000 and (y) 4% of revenues of the business acquired in suchacquisition for the period of four Fiscal Quarters most recently ended on orprior to the date of such Business Acquisition multiplied by (B) (x) in thecase of any partial Fiscal Year, a 

 

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fraction, the numeratorof which is the number of days remaining in such Fiscal Year after the date ofsuch Business Acquisition and the denominator of which is 365 (or 366 in a leapyear), and (y) in the case of any full Fiscal Year, 1 and *provided*further that the Company may makeConsolidated Capital Expenditures in respect of the Refurbishment Project forFiscal Year 2003 in an additional amount not to exceed $4,000,000.”

 

**1.5**                               **Amendment to Section 8:  Events of Default**

 

Section 8 of the CreditAgreement is hereby amended by adding an “or” and the following new subsection8.14 immediately after subsection 8.13 as follows:

 

“8.14   **SAG Sale.**

 

(i)The SAG Stock Purchase Agreement shall have been terminated withoutconsummation of the SAG Sale; or (ii) Company shall have failed to receive atleast $130,000,000 in proceeds from the SAG Sale and applied such proceeds toprepayment of the Loans as set forth in subsection 2.4B on or prior to June 30,2003.”

 

**Section 2.**                                          **CONSENT TOAPPOINTMENT OF SUCCESSOR ADMINISTRATIVE AGENT**

 

Bank One, NA has informedCompany and Lenders of its resignation as Administrative Agent.  In accordance with subsection 9.3 of theCredit Agreement, the undersigned, constituting Requisite Lenders, and Companyhereby consent to the appointment of either U.S. Bancorp or CSFB as successorAdministrative Agent (in such capacity, the “**ApprovedSuccessor**”), such appointment to become effective immediately uponthe later of the acceptance by an Approved Successor of such appointment andthe Third Amendment Effective Date. Such consent by Requisite Lenders and Company shall be effective afterthe acceptance of such appointment by either Approved Successor if suchApproved Successor thereafter resigns and the other Approved Successor acceptssuch appointment.  Upon such acceptance,(a) the Approved Successor accepting such appointment shall (i) promptly notifyLenders and Company of such acceptance and (ii) succeed to and become vestedwith all the rights, power, privileges and duties of Administrative Agent asprovided in the Credit Agreement and the other Loan Documents, and (b) Bank OneNA or the other Approved Successor, if such other Approved Successor haspreviously succeeded Bank One NA as Administrative Agent, shall be dischargedfrom its duties and obligations as Administrative Agent.

 

**Section 3.**                                          **CONSENT TOSALE OF SPECIALTY AVIONICS GROUP**

 

Subject to the terms andconditions set forth herein and in reliance on the representations andwarranties of Company herein contained, Lenders hereby (i) consent to the SAGSale, (ii) agree to the release of related Liens and Guaranties byAdministrative Agent and (iii) agree that subsection 7.7 of the CreditAgreement is hereby amended to permit the SAG Sale; provided that (a)the SAG Sale shall be consummated and the Net 

 

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Asset Sale Proceeds thereof applied to prepay Loans on or before June30, 2003; (b) the Net Asset Sale Proceeds received by the Company shall be Cashin an amount not less than $130,000,000; (c) such Net Asset Sale Proceeds shallbe applied in accordance with subsection 2.4B of the Credit Agreement; and (d)a certified copy of the executed SAG Stock Purchase Agreement is delivered toSyndication Agent.

 

**Section 4.****                                          CONDITIONSTO EFFECTIVENESS**

 

Sections 1, 2 and 3 ofthis Amendment shall become effective only upon the satisfaction on or prior toMarch 31, 2003 of all of the following conditions precedent and the conditionsset forth in Section 7E hereof (the date of satisfaction of such conditionsbeing referred to herein as the “**ThirdAmendment Effective Date**”):

 

**A.**                                    On or before theThird 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 Third Amendment Effective Date:

 

1                                          Resolutionsof its Board of Directors approving and authorizing the execution, delivery,and performance of this Amendment, certified as of the Third AmendmentEffective Date by its corporate secretary or an assistant secretary as being infull force and effect without modification or amendment;

 

2                                          Signatureand incumbency certificates of its officers executing this Amendment;

 

3                                          Executedoriginals of this Amendment, executed by Company and by each Subsidiary Guarantor;and

 

4                                          Certifiedcopy of the SAG Stock Purchase Agreement.

 

**B.**                                    Lenders shall havereceived originally executed copies of one or more favorable written opinionsof Davis Polk & Wardwell, Spolin Silverman Cohen & Bartlett LLP andother counsel reasonably acceptable to the Agents, each counsel for Company, inform and substance reasonably satisfactory to Syndication Agent and itscounsel, dated as of the Third Amendment Effective Date and setting forth,collectively, substantially the matters in the opinions designated in Annex Ato this Amendment.

 

**C.**                                    All documentsexecuted or submitted in connection with the transactions contemplated herebyby or on behalf of Company or any of its Subsidiaries shall be reasonablysatisfactory in form and substance to Agents and their counsel; Agents andtheir counsel shall have received all information, approvals, opinions,documents or instruments that Agents or their counsel shall have reasonablyrequested.

 

**Section 5.****                                          COMPANY’SREPRESENTATIONS AND WARRANTIES**

 

In order to induceLenders to enter into this Amendment and to amend the Credit Agreement in themanner provided herein, Company represents and warrants to each 

 

12

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Lender that the followingstatements are true, correct and complete on and as of the Third AmendmentEffective Date:

 

**A.**                                    Corporate Powerand Authority.  Each of Company andits Subsidiaries has all requisite corporate power and authority to enter intothis Amendment and the SAG Stock Purchase Agreement and to carry out thetransactions contemplated by, and perform its obligations under, (i) the CreditAgreement as amended by this Amendment (the “**Amended Agreement**”) and (ii)the SAG Stock Purchase Agreement.

 

**B.**                                    Authorizationof Agreements.  The execution anddelivery of this Amendment and by the SAG Stock Purchase Agreement and theperformance of the Amended Agreement and by the SAG Stock Purchase Agreementhave been duly authorized by all necessary corporate action on the part of eachof Company and its Subsidiaries.

 

**C.**                                    NoConflict.  The execution, deliveryand performance by each of Company and each of its Subsidiaries of thisAmendment and the SAG Stock Purchase Agreement, and the performance by Companyof the Amended Agreement and the SAG Stock Purchase Agreement do not and willnot (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 of Parent, Company or any of Company’s Subsidiaries or (z) any order,judgment or decree of any court or other agency of government binding onCompany or any of Company’s Subsidiaries where such violations in the aggregatehave had or could reasonably be expected to have a Material Adverse Effect,(ii) conflict with, result in a breach of or constitute a default underany Contractual Obligation of Parent, Company or any of its Subsidiaries wheresuch conflict, breach or default in the aggregate have had or could reasonablybe expected to have a Material Adverse Effect, (iii) result in or requirethe creation or imposition of any Lien upon any of the properties or assets ofCompany or any of Company’s Subsidiaries (other than Liens created under any ofthe Loan Documents in favor of Administrative Agent on behalf of Lenders), or(iv) require any approval of or consent of any Person under anyContractual Obligation of Parent, Company or any of Company’s Subsidiaries,except for this Amendment and such approvals or consents the failure of whichto obtain has not had and could not reasonably be expected to have a MaterialAdverse Effect.

 

**D.**                                    GovernmentalConsents.  The execution, deliveryand performance by each of Company and each of its Subsidiaries of thisAmendment and the SAG Stock Purchase Agreement and the performance by Companyof the Amended Agreement and the SAG Stock Purchase Agreement do not and willnot require any registration with, consent or approval of, or notice to, orother action to, with or by, any federal, state or other governmental authorityor regulatory body other than any such registrations, consents, approvals,notices or other actions (x) that have been made, obtained or taken on orprior to the date on which such registrations, consents, approvals, notices orother actions are required to be made, obtained or taken, as the case may be,and are in full force and effect or (y) the failure of which to make,obtain or take has not had and could not reasonably be expected to have aMaterial Adverse Effect.

 

13

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**E.**                                      BindingObligation.  Each of this Amendment,the SAG Stock Purchase Agreement and the Amended Agreement has been dulyexecuted and delivered by each Loan Party that is a party thereto and is thelegally valid and binding obligation of such Loan Party, enforceable againstsuch Loan Party in accordance with its respective terms, subject to bankruptcy,insolvency, fraudulent conveyance, reorganization, moratorium and other similarlaws relating to or affecting creditors’ rights generally, general equitableprinciples (whether considered in a proceeding in equity or at law) and animplied covenant of good faith and fair dealing.

 

**F.**                                      Incorporationof Representations and Warranties From Credit Agreement.  The representations and warranties containedin Section 5 of the Credit Agreement are and will be true, correct andcomplete in all material respects on and as of the Third 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.

 

**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 6.****                                          ACKNOWLEDGEMENTAND CONSENT**

 

Each of Parent and theSubsidiary Guarantors (each a “**Guarantor**”)is a party to a Guaranty and each such Guarantor has guarantied theObligations.

 

Each Guarantor herebyacknowledges that it has reviewed the terms and provisions of the CreditAgreement and this Amendment and consents to the amendment of the CreditAgreement effected pursuant to this Amendment. Each Guarantor hereby confirms that the Guaranty to which it is a partyor otherwise bound will continue to guaranty to the fullest extent possible thepayment and performance of all “Guarantied Obligations” as such term is definedin the applicable Guaranty, including without limitation the payment andperformance of all such “Guarantied Obligations” in respect of the Obligationsof Company now or hereafter existing under or in respect of the AmendedAgreement.

 

Each Guarantor (a)acknowledges and agrees that the Guaranty to which it is a party or otherwisebound shall continue in full force and effect and that all of its obligationsthereunder shall be valid and enforceable and shall not be impaired or limitedby the execution or effectiveness of this Amendment;  (b) represents and warrants that all representations andwarranties contained in the Amended Agreement and in the Guaranty to which itis a party or otherwise bound are true, correct and complete in all materialrespects on and as of the Third Amendment Effective Date to the same extent asthough made on and as of that date, except to the extent such representationsand warranties specifically relate to an earlier date, in which case they weretrue, correct and complete in all material respects on and as of such earlierdate; and (c) acknowledges and agrees that (i) notwithstanding theconditions to effectiveness set forth in this Amendment, such Guarantor is notrequired by the terms of the Credit Agreement or any other Loan Document toconsent to the amendments to 

 

14

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the Credit Agreement effected pursuant to this Amendment and(ii) nothing in the Credit Agreement, this Amendment or any other LoanDocument shall be deemed to require the consent of such Guarantor to any futureamendments to the Credit Agreement.

 

**Section 7.****                                          MISCELLANEOUS**

 

**A.**                                    Effect ofAmendment.  Reference to and effecton the Credit Agreement and the other Loan Documents.

 

(i)                                     Onand after the Third Amendment Effective Date, each reference in the CreditAgreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of likeimport referring 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 Agreement.

 

(ii)                                  Onand after the Third Amendment Effective Date, each reference in the other LoanDocuments to the “Lenders,” “Commitments,” or words of like import shall meanand be a reference to the Lenders and Commitments as amended by this Agreement.

 

(iii)                               Exceptas specifically amended by this Amendment, the Credit Agreement and the otherLoan Documents shall remain in full force and effect and are hereby ratifiedand confirmed.

 

(iv)                              Theexecution, delivery and performance of this Amendment shall not, except asexpressly provided herein, constitute a waiver of any provision of, or operateas a waiver of any right, power or remedy of Agents or any Lender under, theCredit Agreement or any of the other Loan Documents.

 

**B.**                                    Fees andExpenses.  Company acknowledges thatall costs, fees and expenses as described in subsection 10.2 of the CreditAgreement incurred by Agents and their counsel with respect to this Amendmentand the documents and transactions contemplated hereby shall be for the accountof 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 GENERAL OBLIGATIONSLAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

 

15

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**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 (other than the provisions of Sections 1, 2 and 3 hereof,the effectiveness of which is governed by Section 4 hereof) shall becomeeffective upon the execution of a counterpart hereof by Company, RequisiteLenders, Lenders holding at least 51% of the Term Loans, Syndication Agent andthe Guarantors and receipt by Company and Agents of written or telephonicnotification of such execution and authorization of delivery thereof.

 

[Remainder of pageintentionally left blank]

 

 

16

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**IN WITNESS WHEREOF,**the parties hereto have caused this Amended Agreement to be duly executed anddelivered by their respective officers thereunto duly authorized as of the datefirst written above.

 
|   | **DECRANE AIRCRAFT HOLDINGS, INC.**,  a Delaware corporation                                                                               |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                       |   |   |
|   |                                                                                                                                       |   |   |
|   | By:                                                                                                                                        |   /s/ Richard  J. Kaplan |
|   |                                                                                                                                       | Name: |  Richard J. Kaplan |
|   |                                                                                                                                       | Title: | Senior Vice President  and Chief   Financial Officer |
|   |                                                                                                                                       |   |   |
|   |                                                                                                                                       |   |   |
|   | **AEROSPACE DISPLAY SYSTEMS, LLC.**, a   Delaware limited liability company (for   purposes of Section 6 only) as a Subsidiary   Guarantor |
|   |                                                                                                                                       |   |   |
|   |                                                                                                                                       |   |   |
|   | By:                                                                                                                                        |   /s/ Richard  J. Kaplan |
|   |                                                                                                                                       | Name: |  Richard J. Kaplan |
|   |                                                                                                                                       | Title: | Senior Vice President  and Chief  Financial Officer |
|   |                                                                                                                                       |   |   |
|   |                                                                                                                                       |   |   |
|   | **AUDIO INTERNATIONAL, INC.**, an   Arkansas corporation (for purposes of Section 6   only) as a Subsidiary Guarantor                      |
|   |                                                                                                                                       |   |   |
|   |                                                                                                                                       |   |   |
|   | By:                                                                                                                                        |   /s/ Richard  J. Kaplan |
|   |                                                                                                                                       | Name: |  Richard J. Kaplan |
|   |                                                                                                                                       | Title: | Senior Vice President  and Chief  Financial Officer |
|   |                                                                                                                                       |   |   |
|   |                                                                                                                                       |   |   |
|   | **AVTECH CORPORATION**, a Washington   corporation (for purposes of Section 6 only) as a   Subsidiary Guarantor                            |
|   |                                                                                                                                       |   |   |
|   |                                                                                                                                       |   |   |
|   | By:                                                                                                                                        |   /s/ Richard  J. Kaplan |
|   |                                                                                                                                       | Name: |  Richard J. Kaplan |
|   |                                                                                                                                       | Title: | Senior Vice President and  Chief  Financial Officer |

 

S-1

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|   |                                                                                                                                             |                               |                                                |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------|-----------------------------------------------------|
|   | **CARL F. BOOTH & CO., LLC**, a Delaware   limited liability company (for purposes of   Section 6 only) as a Subsidiary Guarantor            |
|   |                                                                                                                                             |                               |                                                |
|   |                                                                                                                                             |                               |                                                |
|   | By:                                                                                                                                              |   /s/ Richard  J. Kaplan |
|   |                                                                                                                                             | Name:                              |  Richard J. Kaplan                             |
|   |                                                                                                                                             | Title:                             | Senior Vice President  and Chief  Financial Officer |
|   |                                                                                                                                             |                               |                                                |
|   |                                                                                                                                             |                               |                                                |
|   | **CUSTOM  WOODWORK & PLASTICS,   LLC.**, a Delaware limited liability company (for   purposes of Section 6 only) as a Subsidiary   Guarantor |
|   |                                                                                                                                             |                               |                                                |
|   |                                                                                                                                             |                               |                                                |
|   | By:                                                                                                                                              |   /s/ Richard  J. Kaplan |
|   |                                                                                                                                             | Name:                              |  Richard J. Kaplan                             |
|   |                                                                                                                                             | Title:                             | Senior Vice President  and Chief  Financial Officer |
|   |                                                                                                                                             |                               |                                                |
|   |                                                                                                                                             |                               |                                                |
|   | **DAH-IP HOLDINGS, INC.**, a Delaware   corporation (for purposes of Section 6 only) as a   Subsidiary Guarantor                                 |
|   |                                                                                                                                             |                               |                                                |
|   |                                                                                                                                             |                               |                                                |
|   | By:                                                                                                                                              |   /s/ Richard  J. Kaplan |
|   |                                                                                                                                             | Name:                              |  Richard J. Kaplan                             |
|   |                                                                                                                                             | Title:                             | Senior Vice President  and Chief  Financial Officer |
|   |                                                                                                                                             |                               |                                                |
|   |                                                                                                                                             |                               |                                                |
|   | **DAH-IP INFINITY, INC.**, a Delaware   corporation (for purposes of Section 6 only) as a   Subsidiary Guarantor                                 |
|   |                                                                                                                                             |                               |                                                |
|   |                                                                                                                                             |                               |                                                |
|   | By:                                                                                                                                              |   /s/ Richard  J. Kaplan |
|   |                                                                                                                                             | Name:                              |  Richard J. Kaplan                             |
|   |                                                                                                                                             | Title:                             | Senior Vice President  and Chief  Financial Officer |

 

S-2

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|   | **DECRANE AIRCRAFT FURNITURE CO.,   L.P.**, a Texas limited partnership  By: DAH-IP Holdings, Inc., a Delaware   corporation, its General Partner (for purposes of   Section 6 only) as a Subsidiary Guarantor |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                           |   |   |
|   |                                                                                                                                                                                                           |   |   |
|   | By:                                                                                                                                                                                                            |   /s/ Richard  J. Kaplan |
|   |                                                                                                                                                                                                           | Name: |  Richard J. Kaplan |
|   |                                                                                                                                                                                                           | Title: | Senior Vice President  and Chief  Financial Officer |
|   |                                                                                                                                                                                                           |   |   |
|   |                                                                                                                                                                                                           |   |   |
|   | **DECRANE AIRCRAFT SEATING   COMPANY, INC.**, a Wisconsin corporation   (for purposes of Section 6 only) as a Subsidiary   Guarantor                                                                           |
|   |                                                                                                                                                                                                           |   |   |
|   |                                                                                                                                                                                                           |   |   |
|   | By:                                                                                                                                                                                                            |   /s/ Richard  J. Kaplan |
|   |                                                                                                                                                                                                           | Name: |  Richard J. Kaplan |
|   |                                                                                                                                                                                                           | Title: | Senior Vice President  and Chief  Financial Officer |
|   |                                                                                                                                                                                                           |   |   |
|   |                                                                                                                                                                                                           |   |   |
|   | **DECRANE CABIN INTERIORS, LLC**, a   Delaware limited liability company (for   purposes of Section 6 only) as a Subsidiary   Guarantor                                                                        |
|   |                                                                                                                                                                                                           |   |   |
|   |                                                                                                                                                                                                           |   |   |
|   | By:                                                                                                                                                                                                            |   /s/ Richard  J. Kaplan |
|   |                                                                                                                                                                                                           | Name: |  Richard J. Kaplan |
|   |                                                                                                                                                                                                           | Title: | Senior Vice President  and Chief  Financial Officer |
|   |                                                                                                                                                                                                           |   |   |
|   |                                                                                                                                                                                                           |   |   |
|   | **HOLLINGSEAD INTERNATIONAL, INC.**,   a California corporation (for purposes of Section 6   only) as a Subsidiary Guarantor                                                                                   |
|   |                                                                                                                                                                                                           |   |   |
|   |                                                                                                                                                                                                           |   |   |
|   | By:                                                                                                                                                                                                            |   /s/ Richard  J. Kaplan |
|   |                                                                                                                                                                                                           | Name: |  Richard J. Kaplan |
|   |                                                                                                                                                                                                           | Title: | Senior Vice President  and Chief  Financial Officer |

 

S-3

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|   | **PATS, INC.**, a Maryland corporation (for   purposes of Section 6 only) as a Subsidiary   Guarantor             |
|--------|-------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                              |   |   |
|   |                                                                                                              |   |   |
|   | By:                                                                                                               |   /s/ Richard  J. Kaplan |
|   |                                                                                                              | Name: |  Richard J. Kaplan |
|   |                                                                                                              | Title: | Senior Vice President  and Chief  Financial Officer |
|   |                                                                                                              |   |   |
|   |                                                                                                              |   |   |
|   | **PCI  NEWCO., INC.**, a Kansas corporation (for   purposes of Section 6 only) as a   Subsidiary Guarantor        |
|   |                                                                                                              |   |   |
|   |                                                                                                              |   |   |
|   | By:                                                                                                               |   /s/ Richard  J. Kaplan |
|   |                                                                                                              | Name: |  Richard J. Kaplan |
|   |                                                                                                              | Title: | Senior Vice President  and Chief  Financial Officer |
|   |                                                                                                              |   |   |
|   | **PPI  HOLDINGS, INC.**, a Kansas   corporation(for purposes of Section 6   only) as a Subsidiary Guarantor       |
|   |                                                                                                              |   |   |
|   |                                                                                                              |   |   |
|   | By:                                                                                                               |   /s/ Richard  J. Kaplan |
|   |                                                                                                              | Name: |  Richard J. Kaplan |
|   |                                                                                                              | Title: | Senior Vice President  and Chief  Financial Officer |
|   |                                                                                                              |   |   |
|   |                                                                                                              |   |   |
|   | **PRECISION  PATTERN, INC.**, a Kansas   corporation (for purposes of Section 6 only) as a   Subsidiary Guarantor |
|   |                                                                                                              |   |   |
|   |                                                                                                              |   |   |
|   | By:                                                                                                               |   /s/ Richard  J. Kaplan |
|   |                                                                                                              | Name: |  Richard J. Kaplan |
|   |                                                                                                              | Title: | Senior Vice President  and Chief  Financial Officer |

 

S-4

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|   | **THE  INFINITY PARTNERS, LTD.**, a Texas   limited partnership                                                                                |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------|
|   | by: DAH-IP Holdings,  Inc., a Delaware limited   partnership, its general partner (for purposes of   Section 6 only) as a Subsidiary Guarantor |
|   |                                                                                                                                           |   |   |
|   |                                                                                                                                           |   |   |
|   | By:                                                                                                                                            |   /s/ Richard  J. Kaplan |
|   |                                                                                                                                           | Name: |  Richard J. Kaplan |
|   |                                                                                                                                           | Title: | Senior Vice President  and Chief  Financial Officer |
|   |                                                                                                                                           |   |   |
|   |                                                                                                                                           |   |   |
|   | **TRI-STAR ELECTRONICS   INTERNATIONAL, INC.**, a California   corporation (for purposes of Section 6 only) as a   Subsidiary Guarantor        |
|   |                                                                                                                                           |   |   |
|   |                                                                                                                                           |   |   |
|   | By:                                                                                                                                            |   /s/ Richard  J. Kaplan |
|   |                                                                                                                                           | Name: |  Richard J. Kaplan |
|   |                                                                                                                                           | Title: | Senior Vice President  and Chief  Financial Officer |
|   |                                                                                                                                           |   |   |
|   |                                                                                                                                           |   |   |
|   | **DECRANE HOLDINGS CO.**, a Delaware   corporation (for purposes of Section 6 only) as a   guarantor                                           |
|   |                                                                                                                                           |   |   |
|   |                                                                                                                                           |   |   |
|   | By:                                                                                                                                            |   /s/ Richard  J. Kaplan |
|   |                                                                                                                                           | Name: |  Richard J. Kaplan |
|   |                                                                                                                                           | Title: | Assistant Secretary |

 

S-5

----

 
|   | **CREDIT SUISSE FIRST BOSTON**(successor to   DLJ Capital Funding, Inc.), as a Lender and   as Syndication Agent |
|--------|------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                             |   |   |
|   |                                                                                                             |   |   |
|   | By:                                                                                                              |   |
|   |                                                                                                             | Name: |   |
|   |                                                                                                             | Title: |   |
|   |                                                                                                             |   |   |
|   |                                                                                                             |   |   |
|   | By:                                                                                                              |   |
|   |                                                                                                             | Name: |   |
|   |                                                                                                             | Title: |   |
|   |                                                                                                             |   |   |
|   |                                                                                                             |   |   |
|   | **BANK ONE, NA**, as a Lender                                                                                    |
|   |                                                                                                             |   |   |
|   |                                                                                                             |   |   |
|   | By:                                                                                                              |   |
|   |                                                                                                             | Name: |   |
|   |                                                                                                             | Title: |   |
|   |                                                                                                             |   |   |
|   |                                                                                                             |   |   |
|   | **U.S. BANCORP**, as a Lender                                                                                    |
|   |                                                                                                             |   |   |
|   |                                                                                                             |   |   |
|   | By:                                                                                                              |   |
|   |                                                                                                             | Name: |   |
|   |                                                                                                             | Title:  |   |

 

S-6

----

 

**ANNEX A**

 

**MATTERS TO BE COVERED IN OPINION OF COUNSEL TO COMPANY**

 

1.                                       Companyhas been duly incorporated, and is validly existing in good standing under thelaws of the State of Delaware with corporate power to own its properties andassets, to enter into the Amendment and to perform its obligations under theAmendment.

 

2.                                       Theexecution, delivery and performance of the Amendment by Company have been dulyauthorized by all necessary corporate action on the part of Company, theAmendment has been duly executed and delivered by Company, and the Amendmentand the Amended Agreement constitute the legally valid and binding obligationsof Company, enforceable against Company in accordance with their respectiveterms except as may be limited by bankruptcy, insolvency, reorganization,moratorium or similar laws relating to or affecting creditors’ rights generally(including, without limitation, fraudulent conveyance laws) and by generalprinciples of equity including, without limitation, concepts of materiality,reasonableness, good faith and fair dealing and the possible unavailability ofspecific performance or injunctive relief, regardless of whether considered ina proceeding in equity or at law.

 

3.                                       Company’sexecution and delivery of the Amendment and the consummation of thetransactions contemplated by the Amendment do not and will not (i) violatethe Certificate of Incorporation or By-laws of Parent or of Company,(ii) violate, breach or result in a default under any existing obligationof Parent or of Company under any other agreement, (iii) breach orotherwise violate any existing obligation of Company under any order, judgmentor decree of any New York, California or federal court or GovernmentalAuthority binding on Company or (iv) violate any New York, California orfederal statute or regulation.

 

4.                                       Nogovernmental consents, approvals, authorizations, registrations, declarationsor filings are required by Company in connection with the execution anddelivery by Company of the Amendment, and the performance by Company of theAmended Agreement.

 

A-1

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