**Exhibit 4.5**

** **

**CERTIFICATE OF AMENDMENT**

**OF**

**CERTIFICATE OF INCORPORATION**

**OF**

**DECRANE HOLDINGS CO.**

 

DeCrane Holdings Co., a Delaware corporation (the **“Corporation”),** DOES HEREBY CERTIFY:

 

FIRST: That the Board of Directors of the Corporation,in lieu of a meeting, adopted by unanimous written consent the followingresolution:

 

WHEREAS, pursuant to Section 151 of the GeneralCorporation Law of the State of Delaware, the Corporation filed a Certificateof Designations, Preferences and Rights of 14% Senior Redeemable ExchangeablePreferred Stock due 2008 (the **“Certificate ofDesignations”**) with the Secretary of State of Delaware on August 27,1998.

 

RESOLVED, that the Board of Directors has determinedthat it is advisable and in the best interest of the Corporation that theCertificate of Designations be amended to read as follows:

 

Each share of such series of Preferred Stock shallrank equally in all respects and shall be subject to the following provisions:

 

**(1)*Number and Designation.***1,360,000 shares of the Preferred Stock of the Corporation shall be designatedas 14% Senior Redeemable Exchangeable Preferred Stock Due 2009 (the **“Senior Preferred Stock”**).

 

**(2) *Rank.*** The SeniorPreferred Stock shall, with respect to dividend rights and rights onliquidation, dissolution and winding up, rank prior to all classes of or seriesof common stock of the Corporation, including the Corporation’s common stock,par value $0.01 per share (**“Common Stock”**),and each other class of capital stock of the Corporation, the terms of whichprovide that such class shall rank junior to the Senior Preferred Stock or theterms of which do not specify any rank relative to the Senior Preferred Stock.All equity securities of the Corporation to which the Senior Preferred Stockranks prior (whether with respect to dividends or upon liquidation,dissolution, winding up or otherwise), including the Common Stock, arecollectively referred to herein as the **“JuniorSecurities.”** All equity securities of the Corporation with which theSenior Preferred Stock ranks on a parity (whether with respect to dividends orupon liquidation, dissolution or

 

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winding up) are collectively referred to herein as the **“Parity Securities.”** The respectivedefinitions of Junior Securities and Parity Securities shall also include anyrights or options exercisable for or convertible into any of the JuniorSecurities and Parity Securities, as the case may be. The Senior PreferredStock shall be subject to the creation of Junior Securities.

 

**(3) *Dividends.*** (a) (i) Theholders of shares of Senior Preferred Stock shall be entitled to receive, when,as and if declared by the Board of Directors, out of funds legally availablefor the payment of dividends, dividends (subject to Sections 3(a)(ii) and (iii)hereof) at a rate equal to 14% per annum (computed on the basis of a 360 dayyear)(the **“Dividend Rate”**) on theLiquidation Value of each share of Senior Preferred Stock on and as of the mostrecent Dividend Payment Date (as defined below). In the event the Corporationis unable or shall fail to discharge its obligation to redeem all outstandingshares of Senior Preferred Stock pursuant to paragraph 5(c) or 5(d) hereof, theDividend Rate shall increase by .25 percent per quarter (each, a **“Default Dividend”**) for each quarter orportion thereof following the date on which such redemption was required to bemade until cured; *provided* thatthe aggregate increase shall not exceed 5%. Such dividends shall be payable inthe manner set forth below in Sections 3(a)(ii) and (iii) quarterly onMarch 31, June 30, September 30 and December 31 of each year (unless suchday is not a business day, in which event on the next succeeding business day)(each of such dates being a **“Dividend PaymentDate”**and each such quarterly period being a **“Dividend Period”**). Such dividends shall becumulative from the date of issue, whether or not in any Dividend Period orPeriods there shall be funds of the Corporation legally available for thepayment of such dividends.

 

                (ii)           Prior to the fifth anniversary of theissuance of the Senior Preferred Stock (the **“CashPay Date”**), dividends shall not be payable in cash to holders ofshares of Senior Preferred Stock but shall, subject to Section 3(b) hereof,accrete to the Liquidation Value in accordance with Section 4(a) hereof.

 

                (iii)          Following the Cash Pay Date, each suchdividend shall be payable in cash on the Liquidation Value per share of theSenior Preferred Stock, in equal quarterly amounts (to which the Default Dividend,if any, shall be added), to the holders of record of shares of the SeniorPreferred Stock, as they appear on the stock records of the Corporation at theclose of business on such record dates, not more than 60 days or less than 10days preceding the payment dates thereof, as shall be fixed by the Board ofDirectors. Accrued and unpaid dividends for any past Dividend Periods may bedeclared and paid at any time, without reference to any Dividend Payment Date,to holders

 

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of record on such date, not more than 45 dayspreceding the payment date thereof, as may be fixed by the Board of Directors.

 

(b)           Atthe written request of the holders of a majority of the shares of SeniorPreferred Stock, the Corporation shall, commencing on the first DividendPayment Date after such request and ending on the Cash Pay Date, be required topay all dividends on shares of Senior Preferred Stock by the issuance ofadditional shares of Senior Preferred Stock (**“AdditionalShares”**). The Additional Shares shall be identical to all othershares of Senior Preferred Stock, except as set forth in Section 4. For thepurposes of determining the number of Additional Shares to be issued asdividends pursuant to this Paragraph (b), such Additional Shares shall bevalued at their Applicable Liquidation Value as provided in Section 4(c).

 

(c)           Holdersof shares of Senior Preferred Stock shall not be entitled to any dividends,whether payable in cash, property or stock, in excess of the cumulativedividends, as herein provided, on the Senior Preferred Stock. Except asprovided in this Section 3, no interest, or sum of money in lieu of interest,shall be payable in respect of any dividend payment or payments on the SeniorPreferred Stock that may be in arrears.

 

(d)           Solong as any shares of the Senior Preferred Stock are outstanding, no dividends,except as described in the next succeeding sentence, shall be declared or paidor set apart for payment on Parity Securities, for any period unless (to theextent such dividends are payable in cash) full cumulative dividends have beenor contemporaneously are declared and paid or declared and a sum sufficient forthe payment thereof set apart for such payment on the Senior Preferred Stockfor all Dividend Periods terminating on or prior to the date of payment of thedividend on such class or series of Parity Securities. When (to the extent suchdividends are payable in cash) dividends are not paid in full or a sumsufficient for such payment is not set apart, as aforesaid, all dividendsdeclared upon shares of the Senior Preferred Stock and all dividends declaredupon any other class or series of Parity Securities shall (in each case, to theextent payable in cash) be declared ratably in proportion to the respectiveamounts of dividends accumulated and unpaid on the Senior Preferred Stock andaccumulated and unpaid on such Parity Securities.

 

(e)           Solong as any shares of the Senior Preferred Stock are outstanding, no dividends(other than dividends or distributions paid in shares of, or options, warrantsor rights to subscribe for or purchase shares of, Junior Securities) shall bedeclared or paid or set apart for payment or other distribution declared ormade upon Junior Securities, nor shall any Junior Securities be redeemed,purchased or otherwise acquired (other than a redemption, purchase or otheracquisition of shares of Common Stock made 

 

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for purposes of an employee incentive or benefit plan of the Corporationor any subsidiary) (all such dividends, distributions, redemptions or purchasesbeing hereinafter referred to as a **“JuniorSecurities Distribution”**) for any consideration (or any moneys bepaid to or made available for a sinking fund for the redemption of any sharesof any such stock) by the Corporation, directly or indirectly (except byconversion into or exchange for Junior Securities), unless in each case (i) thefull cumulative dividends on all outstanding shares of the Senior Preferred Stockand any other Parity Securities shall (to the extent payable in cash) have beenpaid or set apart for payment for all past Dividend Periods with respect to theSenior Preferred Stock and all past dividend periods with respect to suchParity Securities and (ii) (to the extent payable in cash) sufficient fundsshall have been paid or set apart for the payment of the dividend for thecurrent Dividend Period with respect to the Senior Preferred Stock and thecurrent dividend period with respect to such Parity Securities.

 

**(4) *Liquidation Preference.*** (a) In the event of any liquidation,dissolution or winding up of the Corporation, whether voluntary or involuntary,before any payment or distribution of the assets of the Corporation (whethercapital or surplus) shall be made to or set apart for the holders of JuniorSecurities, the holders of the shares of Senior Preferred Stock shall beentitled to receive an amount equal to the Liquidation Value of such share plusany accrued and unpaid cash dividends to the date of distribution. **“Liquidation Value”** on any date means, withrespect to (x) any share of Senior Preferred Stock other than any AdditionalShares, the sum of (l) $100.00 per share and (2) the aggregate of all dividendsaccreted on such share until the most recent Dividend Payment Date upon whichan accretion to Liquidation Value has occurred (or if such date is a DividendPayment Date upon which an accretion to Liquidation Value has occurred, suchdate); *provided*that in the eventof an actual liquidation, dissolution or winding up of the Corporation or theredemption of any shares of Senior Preferred Stock pursuant to Section 5hereunder, the amount referred to in (2) shall be calculated by includingdividends accreting to the actual date of such liquidation, dissolution orwinding up or the redemption date, as the case may be, rather than the DividendPayment Date referred to above and *providedfurther*that in no event will dividends accrete beyond the earlierof (i) the Cash Pay Date and (ii) the most recent Dividend Payment Date priorto the Dividend Payment Date on which dividends on the Senior Preferred Stockare payable in Additional Shares and (y) any Additional Share, the ApplicableLiquidation Value. All accretions to Liquidation Value will be calculated usingcompounding on a quarterly basis. Except as provided in the precedingsentences, holders of shares of Senior Preferred Stock shall not be entitled toany distribution in the event of liquidation, dissolution or winding up of theaffairs of the Corporation. If, upon any liquidation, dissolution or winding upof the Corporation, the assets of the Corporation, or proceeds thereof,

 

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distributable among the holders of the shares of Senior Preferred Stockshall be insufficient to pay in full the preferential amount aforesaid andliquidating payments on any Parity Securities, then such assets, or theproceeds thereof, shall be distributed among the holders of shares of SeniorPreferred Stock and any such other Parity Securities ratably in accordance withthe respective amounts that would be payable on such shares of Senior PreferredStock and any such other stock if all amounts payable thereon were paid infull. For the purposes of this paragraph (4), (i) a consolidation or merger ofthe Corporation with one or more corporations, or (ii) a sale or transfer ofall or substantially all of the Corporation’s assets, shall not be deemed to bea liquidation, dissolution or winding up, voluntary or involuntary, of theCorporation.

 

(b)           Subjectto the rights of the holders of any Parity Securities, after payment shall havebeen made in full to the holders of the Senior Preferred Stock, as provided inthis paragraph (4), any other series or class or classes of Junior Securitiesshall, subject to the respective terms and provisions (if any) applyingthereto, be entitled to receive any and all assets remaining to be paid ordistributed, and the holders of the Senior Preferred Stock shall not beentitled to share therein.

 

(c)           TheApplicable Liquidation Value of any Additional Shares shall be the LiquidationValue of Senior Preferred Stock outstanding immediately prior to the firstDividend Payment Date occurring after a request for payment in AdditionalShares has been made in accordance with Section 3(b).

 

**(5) *Redemption.*** (a) *Redemption Upon Consummation of Public Offering.*The Corporation may, at its option, to the extent it shall have funds legallyavailable for such payment, redeem, prior to September 30, 2001, in whole butnot in part, shares of Senior Preferred Stock, at a redemption price per shareequal to 114% of the Liquidation Value, in cash, plus accrued and unpaid cashdividends on such shares to the date fixed for redemption, without interest,provided that the Corporation shall not redeem any shares of Senior PreferredStock pursuant to this Paragraph 5(a) unless (i) prior to such redemption aPublic Offering shall have been consummated, and (ii) the aggregate redemptionprice of the shares of Senior Preferred Stock redeemed pursuant to this Section5(a) does not exceed the net proceeds received by the Corporation in suchInitial Public Offering.

 

**“PublicOffering”**shall mean any underwritten public offering ofCommon Stock pursuant to an effective registration statement under theSecurities Act of 1933, as amended, and shall, in addition, for the purposes ofSection 5(a) hereof, include any sale, pursuant to such an underwrittenregistered public offering, following the Closing Date of any common stock

 

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by any affiliate of the Corporation, the net proceeds of which arecontributed or loaned to the Corporation in such a manner that such proceedsmay lawfully be used for the redemption of the Senior Preferred Stock.

 

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

 

**“Investors’Agreement”** means the Investors’ Agreement dated as of theClosing Date by and among DeCrane Holdings Co., DLJ Merchant Banking PartnersII, L.P., DLJ Merchant Banking Partners II-A, L.P., DLJ Offshore Partners II,C. V., DLJ Diversified Partners, L.P., DLJ Diversified Partners-A, L.P., DLJMillennium Partners, L.P., DLJ Millennium Partners-A, L.P., DLJMB Funding II,Inc., DLJ EAB Partners, L.P., DLJ First ESC L.P., UK Investment Plan 1997Partners and DLJ ESC II L.P., (collectively, the **“DLJMB Funds”**), and certain other stockholders listed on thesignature pages thereof, as amended from time to time.

 

(b)           *Redemption At the Option of the Corporation.*On and after September 30, 2003, to the extent the Corporation shall have fundslegally available for such payment, the Corporation may, at its option, redeemshares of Senior Preferred Stock, at any time in whole but not in part, atredemption prices per share in cash set forth in the table below, together withaccrued and unpaid cash dividends thereon to the date fixed for redemption,without interest:

 
| ***Year Beginning September 30*** |   | ***Percentage  of Liquidation Value*** |   |
|-----------------------------------|--------|----------------------------------------|--------|
| 2003                              |   | 107.000                                | %      |
| 2004                              |   | 104.667                                | %      |
| 2005                              |   | 102.333                                | %      |
| 2006 and  thereafter              |   | 100.00                                 | %      |

 

In addition, at any time prior to September 30, 2003,the Corporation may, at its option upon the occurrence of a Change of Control(as defined below), redeem the Preferred Stock, in whole but not in part, upon notless than 30 nor more than 60 days’ prior notice (but in no event may any suchredemption occur more than 60 days after the occurrence of such Change ofControl), in cash at a redemption price equal to the present value of the sumof all the remaining dividends, premium and Liquidation Preference paymentsthat would become due on the Preferred Stock as if the Preferred Stock was toremain outstanding and be redeemed on September 30, 2003, computed using adiscount rate equal to the Treasury Rate plus 50 basis points.

 

(c)           *Redemption In the Event of a Change of Control.*In the event of a Change of Control, the Corporation shall, to the extent itshall have funds legally available for such payment, offer to redeem all of theshares of Senior Preferred Stock then outstanding, and shall redeem the sharesof Senior

 

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Preferred Stock of any holder of such shares that shall consent to suchredemption, upon a date no later than 30 days following the Change in Control,at a redemption price per share equal to 101 % of the Liquidation Value, incash, plus accrued and unpaid cash dividends thereon to the date fixed forredemption, without interest.

 

**“Changeof Control”** means such time as: (a) a “person” or “group” (withinthe meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of1934, as amended), other than any person or group comprised solely of theInitial Investors, has become the beneficial owner, by way of merger,consolidation or otherwise, of 30% or more of the voting power of all classesof voting securities of the Corporation, and such person or group has becomethe beneficial owner of a greater percentage of the voting power of all classesof voting securities of the Corporation than that beneficially owned by theInitial Investors; or (b) a sale or transfer of all or substantially all of theassets of the Corporation to any person or group (other than any groupconsisting solely of the Initial Investors or their affiliates) has been consummated;or (c) during any period of two consecutive years, individuals who at thebeginning of such period constituted the Board of Directors of the Corporation(together with any new directors whose election was approved by a vote of amajority of the directors then still in office, who either were directors atthe beginning of such period or whose election or nomination for the electionwas previously so approved) cease for any reason to constitute a majority ofthe directors of the Corporation, then in office.

 

**“InitialInvestors”** means the Stockholders (determined as of theissuance of the Preferred Stock) and their Permitted Transferees, each asdefined in the Investors’ Agreement.

 

**“TreasuryRate”** means, as of any redemption date, the yield to maturityas of such redemption date of United States Treasury securities with a constantmaturity (as compiled and published in the most recent Federal ReserveStatistical Release H.15 (519) that has become publicly available at least twoBusiness Days prior to the redemption date (or, if such Statistical Release isno longer published, any publicly available source of similar market data))most nearly equal to the period from the redemption date to September 30, 2003;*provided* that if the period fromthe redemption date to September 30, 2003 is less than one year, the weeklyaverage yield on actually traded United States Treasury securities adjusted toa constant maturity of one year shall be used.

 

(d)           *Mandatory Redemption.*  To the extent the Corporation shall havefunds legally available for such payment, on September 30, 2009, if any sharesof the Senior Preferred Stock shall be outstanding, the Corporation shallredeem all outstanding shares of the Senior Preferred Stock, at a 

 

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redemption price equal to the aggregate Liquidation Value, in cash,together with any accrued and unpaid cash dividends thereon to the date fixedfor redemption, without interest.

 

(e)           *Status of Redeemed Shares.*  Shares of Senior Preferred Stock which havebeen issued and reacquired in any manner, including shares purchased orredeemed, shall (upon compliance with any applicable provisions of the laws ofthe State of Delaware) have the status of authorized and unissued shares of theclass of Preferred Stock undesignated as to series and may be redesignated andreissued as part of any series of the Preferred Stock; *provided*that no such issued andreacquired shares of Senior Preferred Stock shall be reissued or sold as SeniorPreferred Stock.

 

(f)            *Failure to Redeem.*  If the Corporation is unable or shall failto discharge its obligation to redeem all outstanding shares of SeniorPreferred Stock pursuant to paragraph (5)(c) or 5(d) (each, a **“Mandatory Redemption Obligation”)**, suchMandatory Redemption Obligation shall be discharged as soon as the Corporationis able to discharge such Mandatory Redemption Obligation. If and so long asany Mandatory Redemption Obligation with respect to the Senior Preferred Stockshall not be fully discharged, the Corporation shall not (i) directly orindirectly, redeem, purchase, or otherwise acquire any Parity Security ordischarge any mandatory or optional redemption, sinking fund or other similarobligation in respect of any Parity Securities (except in connection with aredemption, sinking fund or other similar obligation to be satisfied pro ratawith the Senior Preferred Stock) or (ii) in accordance with paragraph 3(e),declare or make any Junior Securities Distribution, or, directly or indirectly,discharge any mandatory or optional redemption, sinking fund or other similarobligation in respect of the Junior Securities.

 

(g)           *Failure to Pay Dividends.* Notwithstanding the foregoing provisions ofthis paragraph (5), unless full cumulative cash dividends (whether or notdeclared) on all outstanding shares of Senior Preferred Stock shall have beenpaid or contemporaneously are declared and paid or set apart for payment forall dividend periods terminating on or prior to the applicable redemption date,none of the shares of Senior Preferred Stock shall be redeemed, and no sumshall be set aside for such redemption, unless shares of Senior Preferred Stockare redeemed pro rata.

 

**(6) *Procedure for Redemption****.*(a) In the event the Corporation shallredeem shares of Senior Preferred Stock pursuant to Sections 5(a), (b) or (d),notice of such redemption shall be given by first class mail, postage prepaid,mailed not less than 30 days nor more than 60 days prior to the redemptiondate, to each holder of record of the shares to be redeemed at such holder’saddress as the same appears on the stock register of the Corporation; *provided*

 

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that neither the failure to give such notice nor any defect thereinshall affect the validity of the giving of notice for the redemption of anyshare of Senior Preferred Stock to be redeemed except as to the holder to whomthe Corporation has failed to give said notice or except as to the holder whosenotice was defective. Each such notice shall state: (i) the redemption date;(ii) the number of shares of Senior Preferred Stock to be redeemed; (iii) theredemption price; (iv) the place or places where certificates for such sharesare to be surrendered for payment of the redemption price; and (v) thatdividends on the shares to be redeemed will cease to accrue on such redemptiondate.

 

(b)           Inthe case of any redemption pursuant to Sections 5(a), (b) or (d) hereof, noticehaving been mailed as provided in Section 6(b) hereof, from and after theredemption date (unless default shall be made by the Corporation in providingmoney for the payment of the redemption price of the shares called forredemption), dividends on the shares of Senior Preferred Stock so called forredemption shall cease to accrue, and all rights of the holders thereof asstockholders of the Corporation (except the right to receive from theCorporation the redemption price) shall cease. Upon surrender in accordancewith said notice of the certificates for any shares so redeemed (properlyendorsed or assigned for transfer, if the Board of Directors of the Corporationshall so require and the notice shall so state), such share shall be redeemedby the Corporation at the redemption price aforesaid. In case fewer than allthe shares represented by any such certificate are redeemed, a new certificateshall be issued representing the unredeemed shares without cost to the holderthereof.

 

(c)           Inthe case of a redemption pursuant to Section 5(c) hereof, notice of suchredemption shall be given by first class mail, postage prepaid, mailed not morethan 10 days following the occurrence of the Change of Control and not lessthan 20 days prior to the redemption date, to each holder of record of theshares to be redeemed at such holder’s address as the same appears on the stockregister of the Corporation; *provided*thatneither the failure to give such notice nor any defect therein shall affect thevalidity of the giving of notice for the redemption of any share of SeniorPreferred Stock to be redeemed except as to the holder to whom the Corporationhas failed to give said notice or except as to the holder whose notice wasdefective. Each such notice shall state: (i) that a Change of Control hasoccurred; (ii) the redemption date; (iii) the redemption price; (iv) that suchholder may elect to cause the Corporation to redeem all or any of the shares ofSenior Preferred Stock held by such holder; (v) the place or places wherecertificates for such shares are to be surrendered for payment of the redemptionprice; and (vi) that dividends on the shares the holder elects to cause theCorporation to redeem will cease to accrue on such redemption date.

 

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Upon receipt of such notice, the holder shall, within20 days of receipt thereof, return such notice to the Corporation indicatingthe number of shares of Senior Preferred Stock such holder shall elect to causethe Corporation to redeem, if any.

 

(d)           Inthe case of a redemption pursuant to Section 5(c) hereof, notice having beenmailed as provided in Section 6(d) hereof, from and after the redemption date(unless default shall be made by the Corporation in providing money for thepayment of the redemption price of the shares called for redemption), dividendson such shares of Senior Preferred Stock as the holder elects to cause theCorporation to redeem shall cease to accrue, and all rights of the holdersthereof as stockholders of the Corporation (except the right to receive fromthe Corporation the redemption price) shall cease. Upon surrender in accordancewith said notice of the certificates for any shares so redeemed (properlyendorsed or assigned for transfer, if the Board of Directors of the Corporationshall so require and the notice shall so state), such share shall be redeemedby the Corporation at the redemption price aforesaid. In case fewer than allthe shares represented by any such certificate are redeemed, a new certificateshall be issued representing the unredeemed shares without cost to the holderthereof.

 

**(7) *Exchange****.* (a) Subject to the provisions of thisparagraph (7) the Corporation may, at its option, at any time and from time totime on any Dividend Payment Date, exchange, to the extent it is legallypermitted to do so, all, but not less than all, outstanding shares (andfractional shares) of Senior Preferred Stock, for Exchange Debentures; *provided*that (i) on or prior to the dateof exchange the Corporation shall have paid to or declared and set aside forpayment to the holders of outstanding shares of Senior Preferred Stock allaccrued and unpaid cash dividends on shares of Senior Preferred Stock throughthe exchange date in accordance with the next succeeding paragraph; and (ii) noevent of default under the indenture (as defined in such indenture) governingthe Exchange Debentures shall have occurred and be continuing; and (iii) noshares of Senior Preferred Stock are held on such date by the DLJMB Funds orany of their Affiliates, or any of their Permitted Transferees. The principalamount of Exchange Debentures deliverable upon exchange of a share of SeniorPreferred Stock, adjusted as hereinafter provided, shall be determined inaccordance with the Exchange Ratio (as defined below).

 

Cash dividends on any shares of Senior Preferred Stockexchanged for Exchange Debentures which have accrued but have not been paid asof the date of exchange shall be paid in cash. In no event shall theCorporation issue Exchange Debentures in denominations other than $1,000 or inan integral multiple thereof. Cash will be paid in lieu of any such fraction ofan Exchange Debenture which would otherwise have been issued (which shall be

 

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determined with respect to the aggregate principal amount of ExchangeDebentures to be issued to a holder upon any such exchange). Interest willaccrue on the Exchange Debentures from the date of exchange.

 

Prior to effecting any exchange hereunder, theCorporation shall appoint a trustee to serve in the capacity contemplated by anindenture between the Corporation and such trustee, containing customary termsand conditions.

 

The Exchange Ratio shall be, as of any DividendPayment Date, $1.00 (or fraction thereof) of principal amount of ExchangeDebenture for each $1.00 of (i) Liquidation Value plus (ii) accrued and unpaidcash dividends, if any, per share of Senior Preferred Stock held by a holder onthe applicable exchange date.

 

**“Affiliates”**shall have the meaning ascribed such term in the Investors’ Agreement.

 

**“ExchangeDebentures”** means 14% Senior Subordinated Exchange Debenturesdue 2009 of the Corporation, to be issued pursuant to an indenture between theCorporation and a trustee, containing customary terms and conditions approvedby the Board of Directors.

 

**“PermittedTransferees”** shall have the meaning ascribed to such term inthe Investors’ Agreement.

 

(b)           *Procedure for Exchange.* (i) In the eventthe Corporation shall exchange shares of Senior Preferred Stock, notice of suchexchange shall be given by first class mail, postage prepaid, mailed not lessthan 30 days nor more than 60 days prior to the exchange date, to each holderof record of the shares to be exchanged at such holder’s address as the sameappears on the stock register of the Corporation; *provided*that neither the failure to give such notice norany defect therein shall affect the validity of the giving of notice for theexchange of any share of Senior Preferred Stock to be exchanged except as tothe holder to whom the Corporation has failed to give said notice or except asto the holder whose notice was defective. Each such notice shall state: (A) theexchange date; (B) the number of shares of Senior Preferred Stock to beexchanged and, if fewer than all the shares held by such holder are to beexchanged, the number of shares to be exchanged from such holder; (C) theExchange Ratio; (D) the place or places where certificates for such shares areto be exchanged for notes evidencing the Exchange Debentures to be received bythe exchanging holder; and (E) that dividends on the shares to be exchangedwill cease to accrue on such exchange date.

 

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(ii)           Prior to giving notice of intentionto exchange, the Corporation shall execute and deliver with a bank or trustcompany selected by the Corporation an indenture containing customary terms andconditions. The Corporation will cause the Exchange Debentures to beauthenticated on the Dividend Payment Date on which the exchange is effective,and will pay interest on the Exchange Debentures at the rate and on the datesspecified in such indenture from the exchange date.

 

The Corporation will notgive notice of its intention to exchange under paragraph 6(b)(i) hereof unlessit shall file at the place or places (including a place in the Borough ofManhattan, The City of New York) maintained for such purpose an opinion ofcounsel (who may be an employee of the Corporation) to the effect that (i) theindenture has been duly authorized, executed and delivered by the Corporation,has been duly qualified under the Trust Indenture Act of 1939 (or that suchqualification is not necessary) and constitutes a valid and binding instrumentenforceable against the Corporation in accordance with its terms (subject, as toenforcement, to bankruptcy, insolvency, reorganization and other laws ofgeneral applicability relating to or affecting creditors’ rights and to generalequity principles, and subject to such other qualifications as are thencustomarily contained in opinions of counsel experienced in such matters), (ii)the Exchange Debentures have been duly authorized and, when executed andauthenticated in accordance with the provisions of the indenture and deliveredin exchange for the shares of Preferred Stock, will constitute valid andbinding obligations of the Corporation entitled to the benefits of theindenture (subject as aforesaid), (iii) neither the execution nor delivery ofthe indenture or the Exchange Debentures nor compliance with the terms,conditions or provisions of such instruments will result in a breach orviolation of any of the terms or provisions of, or constitute a default under,any indenture, mortgage, deed of trust or agreement or instrument, known tosuch counsel, to which the Corporation or any of its subsidiaries is a party orby which it or any of them is bound, or any decree, judgment, order, rule orregulation, known to such counsel, of any court or governmental agency or bodyhaving jurisdiction over the Corporation and such subsidiaries or any of theirproperties, (iv) the Exchange Debentures have been duly registered for suchexchange with the Securities and Exchange Commission under a registrationstatement that has become effective under the Securities Act of 1933 (the **“Act”**) or that the exchange of the ExchangeDebentures for the shares of Senior Preferred Stock is exempt from registrationunder the Act, and (v) the Corporation has sufficient legally available fundsfor such exchange such that such exchange is permitted under applicable law.

 

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(iii)          Notice having been mailed asaforesaid, from and after the exchange date (unless default shall be made bythe Corporation in issuing Exchange Debentures in exchange for the sharescalled for exchange), dividends on the shares of Senior Preferred Stock socalled for exchange shall cease to accrue, and all rights of the holdersthereof as stockholders of the Corporation (except the right to receive from-the Corporation the Exchange Debentures and any rights such holder, upon theexchange, may have as a holder of the Exchange Debenture) shall cease. Uponsurrender in accordance with said notice of the certificates for any shares soexchanged (properly endorsed or assigned for transfer, if the Board ofDirectors of the Corporation shall so require and the notice shall so state),such share shall be exchanged by the Corporation for the Exchange Debentures atthe Exchange Ratio. In case fewer than all the shares represented by any suchcertificate are exchanged, a new certificate shall be issued representing theunexchanged shares without cost to the holder thereof.

 

(iv)          Each exchange shall be deemed to havebeen effected immediately after the close of business on the relevant DividendPayment Date, and the person in whose name or names any Exchange Debenturesshall be issuable upon such exchange shall be deemed to have become the holderof record of the Exchange Debentures represented thereby at such time on suchDividend Payment Date.

 

(v)           Prior to the delivery of anysecurities which the Corporation shall be obligated to deliver upon exchange ofthe Senior Preferred Stock, the Corporation shall comply with all applicablefederal and state laws and regulations which require action to be taken by theCorporation.

 

(c)           TheCorporation will pay any and all documentary stamp or similar issue or transfertaxes payable in respect of the issue or delivery of notes evidencing ExchangeDebentures on exchange of the Senior Preferred Stock pursuant hereto; *provided* that the Corporation shall not berequired to pay any tax which may be payable in respect of any transferinvolved in the issue or delivery of Exchange Debentures in a name other thanthat of the holder of the Senior Preferred Stock to be exchanged and no suchissue or delivery shall be made unless and until the person requesting suchissue or delivery has paid to the Corporation the amount of any such tax or hasestablished, to the satisfaction of the Corporation, that such tax has beenpaid.

 

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**(8) *Voting Rights****.* (a) The holders of record of shares ofSenior

 

Preferred Stock shall not be entitled to any votingrights except as hereinafter provided in this paragraph (8), as otherwiseprovided by law or as provided in the Investors’ Agreement.

 

(b)           Ifand whenever (i) four consecutive or six quarterly cash dividends payable onthe Senior Preferred Stock have not been paid in full, (ii) for any reason(including the reason that funds are not legally available for a redemption),the Corporation shall have failed to discharge any Mandatory RedemptionObligation (including a redemption in the Event of a Change of Control pursuantto Section 5(c) hereof), (iii) the Corporation shall have failed to provide thenotice required by Section 6(d) hereof within the time period specified in suchsection or (iv) the Corporation shall have failed to comply with Sections 3(d),3(e) or 8(c) hereof, (1) the number of directors then constituting the Board ofDirectors shall be increased by two and the holders of a majority of theoutstanding shares of Senior Preferred Stock, together with the holders ofshares of every other series of preferred stock upon which like rights havebeen conferred and are exercisable (resulting form either the failure to paydividends or the failure to redeem) (any such series is referred to as the **“Preferred Shares”),** voting as a singleclass regardless of series, shall be entitled to elect the two additionaldirectors to serve on the Board of Directors at any annual meeting ofstockholders or special meeting held in place thereof, or at a special meetingof the holders of the Senior Preferred Stock and the Preferred Shares called ashereinafter provided. Whenever (i) all arrears in cash dividends on the SeniorPreferred Stock and the Preferred Shares then outstanding shall have been paidand cash dividends thereon for the current quarterly dividend period shall havebeen paid or declared and set apart for payment, (ii) the Corporation shall havefulfilled its Mandatory Redemption Obligation, (iii) fulfilled its obligationto provide notice as specified in subsection (b)(iii) hereof, or (iv) theCorporation shall have complied with Sections 3(d), 3(e), or 8(c) hereof, asthe case may be, then the right of the holders of the Senior Preferred Stock toelect such additional two directors shall cease (but subject always to the sameprovisions for the vesting of such voting rights in the case of any similarfuture (i) arrearage in six consecutive quarterly cash dividends, (ii) failureto fulfill any Mandatory Redemption Obligation, (iii) failure to fulfill theobligation to provide the notice required by Section 6(d) hereof within thetime period specified in such section or (iv) failure to comply with Sections3(d), 3(e), or 8(c)) and the terms of office of all persons elected asdirectors by the holders of the Senior Preferred Stock shall forthwithterminate and the number of the Board of Directors shall be reducedaccordingly. At any time after such voting power shall have been so vested inthe holders of shares of Senior Preferred Stock and the Preferred Shares, thesecretary of the Corporation may, and upon the 

 

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written request of any holder of Senior Preferred Stock (addressed tothe secretary at the principal office of the Corporation) shall, call a specialmeeting of the holders of the Senior Preferred Stock and of the PreferredShares for the election of the two directors to be elected by them as hereinprovided, such call to be made by notice similar to that provided in the Bylawsof the Corporation for a special meeting of the stockholders or as required bylaw. If any such special meeting required to be called as above provided shall notbe called by the secretary within 20 days after receipt of any such request,then any holder of shares of Senior Preferred Stock may call such meeting, uponthe notice above provided, and for that purpose shall have access to the stockbooks of the Corporation. The directors elected at any such special meetingshall hold office until the next annual meeting of the stockholders or specialmeeting held in lieu thereof if such office shall not have previouslyterminated as above provided. If any vacancy shall occur among the directorselected by the holders of the Senior Preferred Stock and the Preferred Shares,a successor shall be elected by the Board of Directors, upon the nomination ofthe then-remaining director elected by the holders of the Senior PreferredStock and the Preferred Shares or the successor of such remaining director, toserve until the next annual meeting of the stockholders or special meeting heldin place thereof if such office shall not have previously terminated asprovided above.

 

(c)           Withoutthe written consent of a majority of the outstanding shares of Senior PreferredStock or the vote of holders of a majority of the outstanding shares of SeniorPreferred Stock at a meeting of the holders of Senior Preferred Stock calledfor such purpose, the Corporation will not (i) amend, alter or repeal anyprovision of the Certificate of Incorporation (by merger or otherwise) so as toadversely affect the preferences, rights or powers of the Senior PreferredStock; *provided*that any suchamendment that decreases the dividend payable on or the Liquidation Value ofthe Senior Preferred Stock shall require the affirmative vote of holders ofeach share of Senior Preferred Stock at a meeting of holders of SeniorPreferred Stock called for such purpose or written consent of the holder ofeach share of Senior Preferred Stock; or (ii) create, authorize or issue anyclass of stock ranking prior to, or on a parity with, the Senior PreferredStock with respect to dividends or upon liquidation, dissolution, winding up orotherwise, or increase the authorized number of shares of any such class orseries, or reclassify any authorized stock of the Corporation into any suchprior or parity shares or create, authorize or issue any obligation or securityconvertible into or evidencing the right to purchase any such prior or parityshares, except that the Corporation may, without such approval, createauthorize and issue Parity Securities for the purpose of utilizing the proceedsfrom the issuance of such Parity Securities for the redemption or repurchase ofall outstanding shares of Senior Preferred Stock in accordance with the termshereof or of the Investors’ Agreement.

 

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(d)           Inexercising the voting rights set forth in this paragraph (8), each share ofSenior Preferred Stock shall have one vote per share, except that when anyother series of preferred stock shall have the right to vote with the SeniorPreferred Stock as a single class on any matter, then the Senior PreferredStock and such other series shall have with respect to such matters one voteper $100 of Liquidation Value or other liquidation preference. Except asotherwise required by applicable law or as set forth herein, the shares ofSenior Preferred Stock shall not have any relative, participating, optional orother special voting rights and powers and the consent of the holders thereofshall not be required for the taking of any corporate action.

 

**(9) *Reports****.* So long as any of the Senior Preferred Stockis outstanding, the Corporation will furnish the holders thereof with thequarterly and annual financial reports that the Corporation is required to filewith the Securities and Exchange Commission pursuant to Section 13 or Section15(d) of the Securities Exchange Act of 1934 or, in the event the Corporationis not required to file such reports, reports containing the same informationas would be required in such reports.

 

**(10) *General Provisions****.* (a) The term **“Person”** as used herein means any corporation, limitedliability company, partnership, trust, organization, association, other entityor individual.

 

(b)           Theterm **“outstanding”**, when used withreference to shares of stock, shall mean issued shares, excluding shares heldby the Corporation or a subsidiary.

 

(c)           Theheadings of the paragraphs, subparagraphs, clauses and subclauses used hereinare for convenience of reference only and shall not define, limit or affect anyof the provisions hereof.

 

(d)           Eachholder of Senior Preferred Stock, by acceptance thereof, acknowledges andagrees that payments of dividends, interest, premium and principal on, andexchange, redemption and repurchase of, such securities by the Corporation aresubject to restrictions on the Corporation contained in certain credit andfinancing agreements.

 

SECOND: That the aforesaid amendment has beenconsented to and authorized by the holders of all of the issued and outstandingstock of each class of stock entitled to vote by written consent given inaccordance with the provisions of Section 228 of the General Corporation Law ofthe State of Delaware.

 

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THIRD: That the aforesaid amendment was duly adoptedin accordance with the applicable provisions of Sections 242 and 228 of theGeneral Corporation Law of the State of Delaware.

 

IN WITNESS WHEREOF, DeCrane Holdings Co. has causedthis Certificate of Amendment to be signed and attested by the undersigned this2nd day of October, 1998.

 
|    | DECRANE HOLDINGS CO.                |                           |
|---------|-------------------------------------|--------------------------------|
|    |                                |
|    | By:                                 |                           | /s/ Thompson Dean |   |
|    |                                | Name: Thompson Dean            |
|    |                                | Title: President and Treasurer |
|    |                                |                           |
| ATTEST: |                                |                           |
|    |                                |                           |
| By:     |                                | /s/ Timothy White              |   |
|    | Name: Timothy White                 |                           |
|    | Title: Vice President and Secretary |                           |
|         |                                     |                                |  |  |  |  |  |  |  |

 

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