Document:

RESEARCH AND DEVELOPMENT AGREEMENT

	

RESEARCH AND DEVELOPMENT AGREEMENT

This Research And Development Agreement ("Agreement")
is entered into effective as of January 1, 2003, by and between Clean Energy
USA, Inc., a Delaware corporation ("Clean Energy"); and
McSheahan Enterprises Ltd., a British Columbia corporation ("McSheahan"),
with reference to the following facts:

RECITALS:

WHEREAS, Clean Energy and/or its parent
corporation, Clean Energy Combustion Systems, Inc., a Delaware corporation
("CECSI") is the owner or licensee of a suite of proprietary
mid- and high-frequency oscillating valveless combustion technologies including,
without limitation, its pulse blade combustion and vortex technologies
(collectively referred to in this agreement as the "High-Frequency
Combustion Technologies"), which Clean Energy believes to be more
energy-efficient, and to emit significantly lower levels of pollutants, than
conventional steady-state combustion;

WHEREAS, Clean Energy desires McSheahan to
perform on an exclusive basis, and McSheahan desires to provide on an exclusive
basis, continued research on the High-Frequency Combustion Technologies and
product development services with respect to selected commercial applications of
the High-Frequency Combustion Technologies, on a cost-plus basis;

WHEREAS, in performing research and development
services for Clean Energy, McSheahan will become privy to certain confidential
and proprietary information concerning the High-Frequency Combustion
Technologies, as well as other matters pertaining to the business of Clean
Energy; and

WHEREAS, McSheahan desires to set forth in this
Agreement certain covenants for the benefit of the Clean Energy and its
affiliates including, without limitation, covenants by McSheahan and its
affiliates that they will not divulge Confidential Information (as that term is
defined below) of Clean Energy and its affiliates and/or retain or transfer
Proprietary Work Product (as that term is defined below) of the Clean Energy and
its affiliates.

NOW, THEREFORE, in consideration of the mutual
covenants and promises contained herein, and for valuable consideration, the
receipt and sufficiency of which are hereby mutually acknowledged, the parties
to this Agreement (collectively "parties" and individually a
"party") agree as follows:

AGREEMENT:

	
  DEFINITIONS
  
Unless defined in other sections of this
  Agreement, capitalized terms shall have the definitions set forth below in
  this section 1:

  
  "Affiliate" means any person
  controlling, controlled by, or under common control with a party.

  
  "Authorized Person" means:
  (1) the principal investigators of McSheahan in connection with its evaluation
  of the commercial application of the High-Frequency Combustion Technologies,
  including the conduct of tests or studies; (2) the principal negotiators of
  McSheahan in connection with negotiations leading to any business transaction
  relating to the use of the High-Frequency Combustion Technologies by McSheahan,
  including any investment in Clean Energy, and (3) the attorneys, advisors,
  accountants and other professional agents of McSheahan utilized in connection
  with the foregoing.

  
  "Confidential Information" means
  any information, matter or thing of a secret, confidential or private nature,
  whether or not so denominated, and whether disclosed orally or in written or
  electronic medium or by access leading to observation or otherwise, which: (1)
  relates to the High-Frequency Combustion Technologies in general or the
  Proprietary Work Product or High-Frequency Combustion Research And Product
  Engineering Projects in particular, including information connected with the
  business or methods of operation of Clean Energy or its affiliates, including
  CECSI. "Confidential Information" shall be broadly defined and
  includes, by way of example and not limitation, technical, scientific,
  financial, business, personal and other information, including: (i) general
  business information relating to management, finances and accounting,
  products, research, development, manufacturing, marketing, sales,
  distribution, and business plans and strategies; and (ii) scientific and
  technical information including computer programs and systems, methods,
  techniques, formats, operations, know-how, experience, skill, trade secrets,
  formulations, processes, methods, practices, ideas, devices, discoveries,
  inventions, scientific and test data and results, compilations of information
  or data, copyrights, publications, reports, plans, designs, patterns,
  schematics, specifications and drawings. For purposes of the preceding
  sentence, the term "trade secrets" shall mean the broadest and most
  inclusive interpretation of "trade secrets" as defined by applicable
  law.

  
  "Controlled Persons" means:
  (1) the officers, directors, employees, shareholders, partners, joint
  ventures, affiliates, subsidiaries, divisions, successors, assigns, heirs,
  consultants, attorneys, accountants, lenders, insurers and other agents and
  representatives of McSheahan; and (2) any other person to whom McSheahan
  discloses any Confidential Information.

  
  "High-Frequency Combustion Research And
  Product Engineering Projects" is defined in section 2.

  
  "Proprietary Work Product" means
  any written or tangible property relating to the High-Frequency Combustion
  Research And Product Engineering Projects used, developed or acquired by
  McSheahan under this Agreement, whether or not such property also qualifies as
  Confidential Information. Proprietary Work Product shall be broadly defined
  and shall include, by way of example and not limitation, all test-bench,
  prototype and production burner units and parts and components thereof
  relating to the High-Frequency Combustion Research And Product Engineering
  Projects worked on or developed by McSheahan Enterprises under this Agreement,
  all engineering and other designs, drawings, schematics, and patterns relating
  to High-Frequency Combustion Research And Product Engineering Projects, all
  information, data and results of experiments, investigations, tests and trials
  relating to High-Frequency Combustion Research And Product Engineering
  Projects, and all compilations, reports, records, memoranda, notes, notebooks,
  files, lists, literature, correspondence, spread sheets, computer programs and
  software, computer print outs, other written and graphic records, and the
  like, whether originals, copies, duplicates or summaries thereof, affecting or
  relating to the High-Frequency Combustion Research And Product Engineering
  Projects.

	
  EXCLUSIVE PROVISION OF
  RESEARCH AND DEVELOPMENT SERVICES
  
During the term of this Agreement Clean Energy
  shall tender to McSheahan on an exclusive basis, and McSheahan shall perform
  for Clean Energy on an exclusive basis, all research projects relating to the
  High-Frequency Combustion Technologies, and all product development services
  with respect to selected commercial applications of the High-Frequency
  Combustion Technologies (collectively, the "High-Frequency Combustion
  Research And Product Engineering Projects") as may be required by
  Clean Energy or its affiliates, including CECSI. All research and development
  services performed by McSheahan under this Agreement shall be rendered on a
  cost-plus basis as more particularly described below in section 4.
  Unless otherwise consented to by Clean Energy, McSheahan shall prepare project
  budgets and project timetables for each research project, and Clean Energy
  shall approve the foregoing. Notwithstanding the foregoing, research and
  development activities conducted by Clean Energy's joint venture partners or
  licensees shall not be subject to the foregoing exclusivity requirement.
  

	
    NON-DELEGATION
    
The duties and obligations of McSheahan
    under this Agreement are personal to it, and cannot be assigned or delegated
    to any other party without the prior written consent of Clean Energy.
    Notwithstanding the foregoing, McSheahan may assign its rights and delegate
    its obligations under this Agreement to a company either wholly-controlled
    by McSheahan or by Barry A. Sheahan.

	
  BILLINGS AND
  PAYMENTS
  
McSheahan shall invoice Clean Energy from
  time-to-time for services provided calculated on a calendar month basis as
  follows:

  (1) "Base Research and Development
  Expenditures", defined as McSheahan's actual direct costs to perform
  research and development activities for Clean Energy under this Agreement,
  principally wages (other than any amounts payable to Barry A. Sheahan), casual
  labor or contract fees, materials and supplies, fabrication and other approved
  outside services, including research and development consultants;

  (2) "Research and Development Overhead",
  defined as the agreed portion of McSheahan's indirect costs, including prorata
  share of premises, office, administrative and support expenditures, to be
  charged to Clean Energy, which the parties agree shall be an amount equal 20%
  of Base Research and Development Expenditures for the period; and

  (3) "Contract Mark-up", defined
  as the consideration for McSheahan to provide the research and development
  services, which shall be an amount equal to as 10% of the sum of Base Research
  and Development Expenditures.

  All invoices shall be paid by Clean Energy within
  thirty days of presentation.
  

	
    USE OF OFFICE SPACE
    
During the term of this Agreement, Clean
    Energy shall be permitted to share the office portion of McSheahan's
    premises and all furniture and equipment located therein. McSheahan shall
    invoice Clean Energy for its pro-rata share of common expenses for these
    premises, including rent, utilities and maintenance, with such charges being
    added to the Research and Development Overhead charged to Clean Energy
    pursuant to section 4.
  

	
    GRANTS AND TAX CREDITS
    
McSheahan shall have the right and the
    obligation to apply for and make use of any grants or tax credits available
    to support any research and development activities under this Agreement,
    including British Columbia research tax credits. Notwithstanding the
    preceding sentence but subject to the following sentence, McSheahan agrees
    that it shall apply the proceeds of any grants or tax credits received in
    connection with High-Frequency Combustion Research And Product Engineering
    Projects to pay down the net balance of any loans or advances made by Clean
    Energy or its affiliates to McSheahan including, without limitation, the
    loan originally owed to Clean Energy by Clean Energy Technologies (Canada),
    Inc. which loan McSheahan assumed on even date herewith. Notwithstanding the
    preceding sentence, should there be amounts payable by Clean Energy to
    McSheahan at the time of receipt of the grant or tax credit, or prospective
    amounts payable in connection with pending High-Frequency Combustion
    Research And Product Engineering Projects, then the grant or tax credit
    shall be first applied against payment of that amount, as an intervening
    credit against, the loans or advances due Clean Energy.

  By way of illustration, assume that McSheahan
  receives $250 in grant or tax credit proceeds, and at that time McSheahan owes
  Clean Energy $500 in loans and advances, Clean Energy owes McSheahan $100 in
  unpaid invoices, and $50 will become due from Clean Energy to McSheahan with
  respect to pending High-Frequency Combustion Research And Product Engineering
  Projects. In such event, (i) the first $100 of the grant or tax credit
  proceeds shall be deemed to have been paid to Clean Energy as a credit against
  payment of the outstanding balance of the loans and advances and then, in
  turn, forwarded by Clean Energy to McSheahan as a cash payment against the
  $100 in unpaid invoices, (ii) the next $50 of the grant or tax credit proceeds
  shall also be deemed to have been paid to Clean Energy as a credit against
  payment of the outstanding balance of the loans and advances and then, in
  turn, forwarded by Clean Energy to McSheahan as a cash payment (advance)
  against the prospective cost of completing the pending High-Frequency
  Combustion Research And Product Engineering Projects; and (iii) the $100
  balance of the grants or tax credits shall then be paid in cash to Clean
  Energy as a payment against the outstanding balance of loans and advances.
  

	
    TERM
    
This Agreement shall have a term of three
    years, and thereafter will renew automatically for one or more additional
    one year terms unless either party gives at least six (6) months prior
    written notice during a pending term or renewal period of their intent not
    to renew this Agreement. Notwithstanding the immediately preceding sentence,
    upon McSheahan's payment in full of all loans and advances due to Clean
    Energy, either party shall have the right to terminate this Agreement upon
    four (4) months prior written notice during a pending term or renewal
    period. Also notwithstanding the foregoing, either party shall have the
    right to terminate this Agreement for cause, including failure of any party
    to perform its obligations hereunder.
  

	
    USE OF CONFIDENTIAL INFORMATION AND PROPRIETARY
    WORK PRODUCT
  
McSheahan covenants that
  it shall use the Confidential Information and the Proprietary Work Product
  solely for the purposes described in section 2 for the benefit of Clean
  Energy and its affiliates. Nothing contained in this Agreement shall be
  construed as an express or implied license or permission for McSheahan to use
  the Confidential Information or Proprietary Work Product for any purpose other
  than that stated in this section, or as a grant or transfer by Clean Energy to
  McSheahan of any proprietary right or interest in the Confidential Information
  or Proprietary Work Product. McSheahan covenants that it will not contact any
  joint venture partners, consultants, advisors, vendors, suppliers and
  customers of Clean Energy or its affiliates without the prior written
  notification to and approval by Clean Energy.
  

	
    OWNERSHIP OF PROPRIETARY WORK PRODUCT
  
McSheahan agrees that the Proprietary Work
  Product shall be the proprietary to Clean Energy, and that Clean Energy shall
  have full right, title and interest with respect to all of that property.
  

	
  NON-DISCLOSURE
  
McSheahan acknowledges
  that the Confidential Information is not generally known to the public or to
  other persons who are able to obtain economic value from its use, transmission
  or other disclosure, and the Confidential Information derives independent
  economic value thereby. Except as authorized by this Agreement, McSheahan
  agrees for itself and, to the full extent that execution of this Agreement
  renders it legally possible, each and every of its Controlled Persons, that
  they: (1) shall take all efforts reasonably necessary to maintain the
  secrecy and confidentiality of the Confidential Information and to otherwise
  comply with the terms of this Agreement; (2) shall not disclose the
  Confidential Information to any person or entity other than an Authorized
  Person without Clean Energy's prior written consent; (3) shall restrict access
  to the Confidential Information on a "need-to-know" basis to those
  of its Authorized Persons who clearly need such access in order to perform
  McSheahan's obligations under this Agreement, and shall instruct each of those
  Authorized Persons of their obligations under this Agreement; and (4) shall
  not, without the prior written consent of Clean Energy, use for its own
  benefit (except for the sole purpose of performing McSheahan's obligations
  under this Agreement), publish, duplicate, replicate or otherwise disclose to
  or discuss with others, or permit the use by others for their benefit or to
  the detriment of the providing party, any of the Confidential Information.
  McSheahan covenants that each of its Authorized Persons will execute for the
  benefit of Clean Energy a confidentiality agreement containing effectively the
  same provisions and protections contained in this Agreement.

  
  
	
    EXCEPTIONS
  
The obligation of confidentiality set forth above
  in section 10 shall not apply to the extent that McSheahan:

  	
      is required to disclose information under
      applicable law, regulation or order of a governmental agency; provided,
      however, that McSheahan has (i) first given prompt written notice to Clean
      Energy of its obligation to make such disclosure and the particulars of
      the disclosure, (ii) afforded Clean Energy a reasonable and effective
      opportunity to appear and make such application to the applicable
      governmental agency as it may deem necessary and appropriate to prevent or
      limit that disclosure, and (iii) cooperated diligently with Clean Energy
      and in good faith if Clean Energy elects to contest the disclosure sought;
    

	
      is required to disclose information by a
      court of competent jurisdiction by way of subpoena or other process or
      order; provided, however, that McSheahan has: (i) first given prompt
      written notice to Clean Energy of the proceeding in which such disclosure
      is sought and the particulars of the disclosure, (ii) afforded Clean
      Energy a reasonable and effective opportunity to appear and make such
      application to the court as it may deem necessary and appropriate to
      prevent or limit that disclosure, such as an order quashing such
      disclosure or a protective order, and (iii) cooperated diligently with
      Clean Energy and in good faith if E& elects to contest the disclosure
      sought;
    

	
      can demonstrate by clear and convincing
      evidence that the disclosed information was at the time of disclosure
      already in the public domain or has since come into the public domain
      other than as a result of actions or failure to act by McSheahan or any of
      its Controlled Persons;
    

	
      can demonstrate by clear and convincing
      evidence that the disclosed information was rightfully known to McSheahan
      or was otherwise in its possession (as shown by its written records) prior
      to the date of disclosure under this Agreement;
    

	
      can demonstrate by clear and convincing
      evidence that McSheahan independently developed the disclosed information
      (as shown by its written records) without access to Clean Energy or
      reliance upon the Confidential Information or Proprietary Work Product; or
    

	
      can demonstrate by clear and convincing
      evidence that McSheahan received the disclosed information on an
      unrestricted basis from a source other than Clean Energy which source is
      not under a duty of confidentiality to Clean Energy.

  For purposes of this Agreement, specific
  disclosures made to McSheahan (such as, by was of illustration and not
  limitation, "600 to 800 cycles per second" or "$50,000"),
  shall not be deemed to be within the exceptions listed above merely because
  such specific disclosure is embraced by a general disclosure (such as, by was
  of illustration and not limitation, "400 to 800 cycles per second"
  or "$40,000 to $80,000") that is in the public domain or in
  the possession of McSheahan. In addition, any combination of features
  disclosed by Clean Energy shall not be deemed to be within the exceptions
  listed above merely because individual features are separately in the public
  domain or in the possession of McSheahan, but shall be within the exceptions
  only if the combination itself and its principle of operation are in the
  public domain or in the possession of McSheahan as provided in the exceptions
  listed above.

	
  RETURN
  
McSheahan covenants for itself and, to the full
  extent that execution of this Agreement renders it legally possible, each and
  every of its Controlled Persons, that they shall return to Clean Energy
  promptly upon its request, without cost, charge or reimbursement: (1) any and
  all Confidential Information (including Proprietary Work Product) used,
  acquired or developed by McSheahan and its Controlled Persons, including
  copies and duplicates thereof, and (2) any and all notes, summaries,
  compilations, analyses, results and derivations made from or with respect to
  Confidential Information (including Proprietary Work Product), whether in hard
  or electronic form. Notwithstanding the foregoing, McSheahan may rely upon the
  reasonable advice of their legal counsel as to what notes and summaries
  Confidential Information (including Proprietary Work Product) for purposes of
  this section 12.

	
  INDEMNIFICATION
  
McSheahan covenants to indemnify Clean Energy for
  any and all "losses" (as that term is defined below) directly or
  indirectly incurred by Clean Energy, whether foreseeable or
  unforeseeable, and whether meritorious or not meritorious, based upon or
  related to or arising from, whether directly or indirectly, the breach or
  threatened breach by McSheahan of any of its representations, warranties,
  obligations, covenants or agreements under this Agreement. The term "losses"
  means any losses, liabilities, damages, judgments, deficiencies, assessments,
  penalties, settlements, and legal and other costs and/or expenses of any kind
  or nature whatsoever including, without limitation, "fees and costs"
  associated with any "action or proceeding." The term "action
  or proceeding" shall have the same definition as set forth in section
  14(d)(ii) below, and the term "fees and costs" shall
  refer to those items described in section 14(d)(iv) below.
  

	
    MISCELLANEOUS
    
	
      Preparation of
      Agreement; Costs and Expenses. Each party acknowledges that: (1)
      he, she or it had the advice of, or sufficient opportunity to obtain the
      advice of, legal counsel separate and independent of legal counsel for any
      other party hereto; (2) the terms of the transactions contemplated by this
      Agreement are fair and reasonable to such party; and (3) such party has
      voluntarily entered into the transactions contemplated by this Agreement
      without duress or coercion. Each party further acknowledges that such
      party was not represented by the legal counsel of any other party hereto
      in connection with the transactions contemplated by this Agreement, nor
      was he, she or it under any belief or understanding that such legal
      counsel was representing his, her or its interests. Except as expressly
      set forth in this Agreement, each party shall pay all legal and other
      costs and expenses incurred or to be incurred by such party in negotiating
      and preparing this Agreement; in performing due diligence or retaining
      professional advisors; in performing any transactions contemplated by this
      Agreement; or in complying with such party's covenants, agreements and
      conditions contained herein. Each party agrees that no conflict, omission
      or ambiguity in this Agreement, or the interpretation thereof, shall be
      presumed, implied or otherwise construed against any other party to this
      Agreement on the basis that such party was responsible for drafting this
      Agreement.
      

	
        Cooperation. Each party agrees,
      without further consideration, to cooperate and diligently perform any
      further acts, deeds and things, and to execute and deliver any documents
      that may be reasonably necessary or otherwise reasonably required to
      consummate, evidence, confirm and/or carry out the intent and provisions
      of this Agreement, all without undue delay or expense.
    

	
      Interpretation.
      

        
	
          Survival. All representations and
          warranties made by any party in connection with any transaction
          contemplated by this Agreement shall, irrespective of any
          investigation made by or on behalf of any other party hereto, survive
          the execution and delivery of this Agreement, and the performance or
          consummation of any transaction described in this Agreement.
        

	
          Entire Agreement/No Collateral
          Representations. Each party expressly acknowledges and agrees that
          this Agreement, and the agreements and documents referenced herein:
          (1) are the final, complete and exclusive statement of the agreement
          of the parties with respect to the subject matter hereof; (2)
          supersede any prior or contemporaneous agreements, memorandums,
          proposals, commitments, guaranties, assurances, communications,
          discussions, promises, representations, understandings, conduct, acts,
          courses of dealing, warranties, interpretations or terms of any kind,
          whether oral or written (collectively and severally, the "prior
          agreements"), and that any such prior agreements are of no
          force or effect except as expressly set forth herein; and (3) may not
          be varied, supplemented or contradicted by evidence of prior
          agreements, or by evidence of subsequent oral agreements. No prior
          drafts of this Agreement, and no words or phrases from any prior
          drafts, shall be admissible into evidence in any action or suit
          involving this Agreement.
        

	
          Amendment; Waiver; Forbearance.
          Except as expressly provided herein, neither this Agreement nor any of
          the terms, provisions, obligations or rights may be amended, modified,
          supplemented, augmented, rescinded, discharged or terminated (other
          than by performance), except by a written instrument or instruments
          signed by all of the parties to this Agreement. No waiver of any
          breach of any term, provision or agreement, or of the performance of
          any act or obligation under this Agreement, or of any extension of
          time for performance of any such act or obligation, or of any right
          granted under this Agreement, shall be effective and binding unless
          such waiver shall be in a written instrument or instruments signed by
          each party claimed to have given or consented to such waiver. Except
          to the extent that the party or parties claimed to have given or
          consented to a waiver may have otherwise agreed in writing, no such
          waiver shall be deemed a waiver or relinquishment of any other term,
          provision, agreement, act, obligation or right granted under this
          Agreement, or of any preceding or subsequent breach thereof. No
          forbearance by a party in seeking a remedy for any noncompliance or
          breach by another party hereto shall be deemed to be a waiver by such
          forbearing party of its rights and remedies with respect to such
          noncompliance or breach, unless such waiver shall be in a written
          instrument or instruments signed by the forbearing party.
        

	
          Remedies Cumulative. The remedies of
          each party under this Agreement are cumulative and shall not exclude
          any other remedies to which such party may be lawfully entitled.
        

	
          Severability. If any term or
          provision of this Agreement or the application thereof to any person
          or circumstance shall, to any extent, be determined to be invalid,
          illegal or unenforceable under present or future laws, then, and in
          that event: (1) the performance of the offending term or provision
          (but only to the extent its application is invalid, illegal or
          unenforceable) shall be excused as if it had never been incorporated
          into this Agreement, and, in lieu of such excused provision, there
          shall be added a provision as similar in terms and amount to such
          excused provision as may be possible and be legal, valid and
          enforceable; and (2) the remaining part of this Agreement (including
          the application of the offending term or provision to persons or
          circumstances other than those as to which it is held invalid, illegal
          or unenforceable) shall not be affected thereby, and shall continue in
          full force and effect to the fullest legal extent.
        

	
          No Reliance Upon Prior Representation.
          Each party acknowledges that: (1) no other party has made any oral
          representation or promise which would induce them prior to executing
          this Agreement to change their position to their detriment, to
          partially perform, or to part with value in reliance upon such
          representation or promise; and (2) such party has not so changed its
          position, performed or parted with value prior to the time of the
          execution of this Agreement, or such party has taken such action at
          its own risk.
        

	
          Headings; References; Incorporation;
          Gender; Statutory References. The headings used in this Agreement
          are for convenience and reference purposes only, and shall not be used
          in construing or interpreting the scope or intent of this Agreement or
          any provision hereof. References to this Agreement shall include all
          amendments or renewals thereof. All cross-references in this
          Agreement, unless specifically directed to another agreement or
          document, shall be construed only to refer to provisions within this
          Agreement, and shall not be construed to be referenced to the overall
          transaction or to any other agreement or document. Any Exhibit
          referenced in this Agreement shall be construed to be incorporated in
          this Agreement by such reference. As used in this Agreement, each
          gender shall be deemed to include the other gender, including neutral
          genders appropriate for entities, if applicable, and the singular
          shall be deemed to include the plural, and vice versa, as the context
          requires. Any reference to statutes or laws will include all
          amendments, modifications, or replacements of the specific sections
          and provisions concerned.
        

	
          Time is of the Essence.
          It is expressly understood and agreed that time of performance is
          strictly of the essence with respect to each and every term,
          condition, obligation and provision hereof and that the failure to
          timely perform any of the terms, conditions, obligations or provisions
          hereof by any party shall constitute a material breach and a
          noncurable (but waivable) default under this Agreement by the party so
          failing to perform.

        
        
	
          Enforcement.
      

        
	
          Applicable Law. This Agreement and
          the rights and remedies of each party arising out of or relating to
          this Agreement (including, without limitation, equitable remedies)
          shall (with the exception of any applicable securities laws) be solely
          governed by, interpreted under, and construed and enforced in
          accordance with the laws (without regard to the conflicts of law
          principles) of the Province of British Columbia, Canada, as if this
          Agreement were made, and as if its obligations are to be performed,
          wholly within the Province of British Columbia.
        

	
          Consent to
          Jurisdiction; Service of Process. Any "action or
          proceeding" (as such term is defined below) arising out of or
          relating to this Agreement shall be filed in and heard and litigated
          solely before the British Columbia Supreme Court, with venue at the
          Vancouver Registry of the British Columbia Supreme Court; provided,
          however, the foregoing shall not: (1) limit the rights of any
          party to enforce any judgment issued by the British Columbia Supreme
          Court in any other jurisdiction; or (2) limit the rights of any party
          who has otherwise accepted jurisdiction in the Province of British
          Columbia as provided above to enforce this Agreement in any other
          jurisdiction against any other party who has failed or refused to
          answer or to appear in any action or proceeding brought before the
          British Columbia Supreme Court (notwithstanding the terms of this
          section). Each party generally and unconditionally accepts the
          exclusive jurisdiction of such courts and venue therein; consents to
          the service of process in any such action or proceeding by certified
          or registered mailing of the summons and complaint in accordance with
          the notice provisions of this Agreement; and waives any defense or
          right to object to venue in said courts based upon the doctrine of
          "forum non conveniens." The term "action or
          proceeding" is defined as any and all claims, suits, actions,
          hearings, arbitrations or other similar proceedings, including appeals
          and petitions therefrom, whether formal or informal, governmental or
          non-governmental, or civil or criminal.
        

	
          Consent to
          Specific Performance and Injunctive Relief and Waiver of Bond or
          Security. McSheahan acknowledges that Clean Energy may, as a
          result of the breach by McSheahan of its covenants and obligations
          under this Agreement, sustain immediate and long-term substantial and
          irreparable injury and damage which cannot be reasonably or adequately
          compensated by damages at law. Consequently, McSheahan agrees that in
          the event of the breach or threatened breach of its covenants and
          obligations hereunder, Clean Energy shall be entitled to obtain from a
          court of competent equitable relief including, without limitation,
          enforcement of all of the provisions of this Agreement by specific
          performance and/or temporary, preliminary and/or permanent injunctions
          enforcing any of the rights of Clean Energy, requiring performance by
          McSheahan, or enjoining any breach by McSheahan, all without proof of
          any actual damages that have been or may be caused Clean Energy by
          such breach or threatened breach and without the posting of bond or
          other security in connection therewith. McSheahan waives the claim or
          defense therein that the party bringing the action or proceeding has
          an adequate remedy at law and such party shall not allege or otherwise
          assert the legal position that any such remedy at law exists.
          McSheahan acknowledges that: (1) the terms of this subsection (iii)
          are fair, reasonable and necessary to protect the legitimate
          interests of Clean Energy; (2) this waiver is a material inducement to
          Clean Energy to enter into the transaction contemplated hereby; (3)
          Clean Energy has already relied upon this waiver in entering into this
          Agreement; and (4) Clean Energy will continue to rely on this waiver
          in their future dealings with McSheahan. McSheahan warrants and
          represents that it has reviewed this provision with its legal counsel,
          and that it has knowingly and voluntarily waived its rights following
          consultation with legal counsel.
          

	
          Recovery of Fees and Costs. If any
          party institutes or should the parties otherwise become a party to any
          action or proceeding based upon or arising out of this Agreement
          including, without limitation, to enforce or interpret this Agreement
          or any provision hereof, or for damages by reason of any alleged
          breach of this Agreement or any provision hereof, or for a declaration
          of rights in connection herewith, or for any other relief, including
          equitable relief, in connection herewith, the "prevailing
          party" (as such term is defined below) in any such action or
          proceeding, whether or not such action or proceeding proceeds to final
          judgment or determination, shall be entitled to receive from the
          non-prevailing party as a cost of suit, and not as damages, all fees,
          costs and expenses of enforcing any right of the prevailing party
          (collectively, "fees and costs"), including without
          limitation, (1) reasonable attorneys' fees and costs and expenses, (2)
          witness fees (including experts engaged by the parties, but excluding
          shareholders, officers, employees or partners of the parties), (3)
          accountants' fees, (4) fees of other professionals, and (5) any and
          all other similar fees incurred in the prosecution or defense of the
          action or proceeding; including, without limitation, fees incurred in
          the following: (A) postjudgment motions; (B) contempt proceedings; (C)
          garnishment, levy, and debtor and third party examinations; (D)
          discovery; and (E) bankruptcy litigation. All of the aforesaid fees
          and costs shall be deemed to have accrued upon the commencement of
          such action and shall be paid whether or not such action is prosecuted
          to judgment. Any judgment or order entered in such action shall
          contain a specific provision providing for the recovery of the
          aforesaid fees, costs and expenses incurred in enforcing such judgment
          and an award of prejudgment interest from the date of the breach at
          the maximum rate of interest allowed by law. The term "prevailing
          party" is defined as the party who is determined to prevail
          by the court after its consideration of all damages and equities in
          the action or proceeding, whether or not the action or proceeding
          proceeds to final judgment (the court shall retain the discretion to
          determine that no party is the prevailing party in which case no party
          shall be entitled to recover its costs and expenses under this subsection
          (iv).

      
      	
      Successors and Assigns.
      Each and every representation, warranty, covenant, condition and provision
      of this Agreement as it relates to each party hereto shall be binding upon
      and shall inure to the benefit of such party and his, her or its
      respective successors and permitted assigns, spouses, heirs, executors,
      administrators and personal and legal representatives, including without
      limitation any successor (whether direct or indirect, or by merger,
      consolidation, conversion, purchase of assets, purchase of securities or
      otherwise).
    

	
      Counterparts;
      Electronically Transmitted Documents. This Agreement may be
      executed in counterparts, each of which shall be deemed an original, and
      all of which together shall constitute one and the same instrument,
      binding on all parties hereto. Any signature page of this Agreement may be
      detached from any counterpart of this Agreement and reattached to any
      other counterpart of this Agreement identical in form hereto by having
      attached to it one or more additional signature pages. If a copy or
      counterpart of this Agreement is originally executed and such copy or
      counterpart is thereafter transmitted electronically by facsimile or
      similar device, such facsimile document shall for all purposes be treated
      as if manually signed by the party whose facsimile signature appears.
    

	
      Notices.
      Unless otherwise specifically provided in this Agreement, all notices,
      demands, requests, consents, approvals or other communications
      (collectively and severally called "notices")
      required or permitted to be given hereunder, or which are given with
      respect to this Agreement, shall be in writing, and shall be given by: (1)
      personal delivery (which form of notice shall be deemed to have been given
      upon delivery), (2) by telegraph or by private airborne/overnight delivery
      service (which forms of notice shall be deemed to have been given upon
      confirmed delivery by the delivery agency), (3) by electronic or facsimile
      or telephonic transmission, provided the receiving party has a compatible
      device or confirms receipt thereof (which forms of notice shall be deemed
      delivered upon confirmed transmission or confirmation of receipt), or (4)
      by mailing in the official government mails of their applicable local
      jurisdiction by registered or certified mail or the equivalent, return
      receipt requested and postage prepaid (which forms of notice shall be
      deemed to have been given upon the of receipt). Notices shall be addressed
      at the addresses first set forth above, or to such other address as the
      party shall have specified in a writing delivered to the other parties in
      accordance with this paragraph. Any notice given to the estate of a party
      shall be sufficient if addressed to the party as provided in this subsection
      (g).

WHEREFORE, the parties hereto have for purposes
of this Agreement executed this Agreement in the City Burnaby, Province of
British Columbia, Canada, effective as of the date first set forth above.

                            CLEAN ENERGY:

                            Clean Energy USA, Inc.

                            
                            By: /s/ R. Dirk Stinson

                            	R. Dirk Stinson, President and Chief Executive
                              Officer

                            McSHEAHAN:

                            McSheahan Enterprises Ltd..

                            
                            By:  /s/ Barry A. Sheahan

                            Barry A. Sheahan, PresidentExhibit 10.10.6

 

DECRANE AIRCRAFT HOLDINGS, INC.

 

THIRD AMENDMENT

TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

This THIRD AMENDMENT TO THIRD AMENDED AND
RESTATED CREDIT AGREEMENT (this “Amendment”) is dated as of
March 31, 2003 and entered into by and among DeCrane Aircraft Holdings, Inc., a
Delaware corporation (“Company”), the financial institutions
listed on the signature pages hereof (“Lenders”), Credit Suisse First Boston
(successor to DLJ Capital Funding, Inc.), as syndication agent for Lenders (“Syndication
Agent”), and Bank One, NA, as administrative agent for Lenders (“Administrative
Agent”), and is made with reference to that certain Third Amended
and Restated Credit Agreement, dated as of May 11, 2000, as amended by a First
Amendment to Third Amended and Restated Credit Agreement, dated as of
June 30, 2000, and as further amended by an Increased Commitments
Agreement 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 Restated
Credit Agreement dated as of March 19, 2002 (the “Credit Agreement”), by and
among Company, the lenders listed on the signature pages thereof, Syndication
Agent and Administrative Agent. 
Capitalized terms used herein without definition shall have the same
meanings herein as set forth in the Credit Agreement.

 

RECITALS

 

WHEREAS,
Company and Lenders desire to amend the Credit Agreement to (i) consent to
the appointment of a successor administrative agent, (ii) increase the interest
rate margins applicable to the Loans, (iii) reduce the Revolving Loan
Commitments to $40,000,000, (iv) modify the financial covenants in certain
respects, (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 of
Senior Subordinated Notes of up to $20,000,000, and (vii) make certain other
amendments as set forth below:

 

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

 

Section 1.                                          AMENDMENTS
TO THE CREDIT AGREEMENT

 

1.1                               Amendments
to Section 1: Definitions

 

A.                                   Subsection
1.1 of the Credit Agreement is hereby amended by adding thereto the following
definitions, which shall be inserted in proper alphabetical order:

 

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

 

 

“Holders of Permitted Indebtedness” means
the holders from time to time of any Permitted Indebtedness issued by Company
and their representatives.

 

“Intercreditor Agreement” means an
intercreditor agreement among Syndication Agent and the Holders of Permitted
Indebtedness, which shall be satisfactory in form and substance to Syndication
Agent and which shall provide, among other things, that (i) no Holder of
Permitted Indebtedness may take any enforcement action in respect of the
Permitted Indebtedness or the Collateral, or any portion thereof, unless the
Obligations have been paid in full in cash, all Letters of Credit have expired
or been surrendered to Issuing Lender or cash collateralized in a manner satisfactory
to Syndication Agent and the Revolving Loan Commitments have been terminated;
(ii) no payment may be made in respect of such Permitted Indebtedness on and
after the date that the Holders of Permitted Indebtedness have been notified in
writing by Syndication Agent that an Event of Default pursuant to subsection
8.1 hereof has occurred and is continuing; (iii) Syndication Agent and
Requisite Lenders may consent to any sale of assets and to the release of Liens
in respect of the Collateral without consent of the Holders of Permitted
Indebtedness; (iv) Syndication Agent and Requisite Lenders may consent to the
use of cash collateral and provide financing in any voluntary or involuntary
bankruptcy or insolvency proceeding in respect of Company or any Subsidiary on
terms acceptable to them, without consent of the Holders of Permitted
Indebtedness; (v) the Holders of Permitted Indebtedness may not initiate,
prosecute or participate in any claim, action or other proceeding challenging
the enforceability, validity, perfection or priority of the Obligations or any
Liens securing the payment of the Obligations; (vi) the Liens securing the
Permitted Indebtedness shall be subordinated to the Liens securing the
Obligations for all purposes; (vii) proceeds of the sale or other disposition
of the Collateral (pursuant to permitted asset sales, foreclosure or otherwise)
shall be applied in accordance with the terms of this Agreement or as otherwise
consented to by Syndication Agent and Requisite Lenders, without in any case
the consent of, or any accounting to, the Holders of Permitted Indebtedness;
and (viii) no amendments or changes to the documents evidencing the Permitted
Indebtedness shall be effective if the effect of such amendment or change is to
increase the interest rate on such Permitted Indebtedness, change (to earlier
dates) 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 respect
thereto (other than to eliminate any such event of default or increase any
grace period related thereto), change the redemption, prepayment or defeasance
provisions thereof, or change any collateral therefor (other than to release
such collateral) or if the effect of such amendment or change, together with
all other amendments or changes made, is to increase materially the obligations
of the obligor thereunder to the detriment of Lenders or to confer any
additional rights on the Holders of Permitted Indebtedness (or a trustee or
other representative on their behalf) which would be adverse to Lenders,
without the consent of Requisite Lenders.

 

“Permitted
Indebtedness”  means
up to $100,000,000 in aggregate principal amount of Indebtedness, which (a)
shall (i) provide for no scheduled redemptions, prepayments, sinking fund
installment payments or maturities prior to June 30, 2007 and (ii) not bear
cash interest in excess of 12% per annum, (b) may be secured by Liens on all or
a 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 to
Syndication Agent.

 

2

 

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

 

“Refurbishment
Project” means capital expenditures directly related to the
acquisition of facilities, equipment, tooling and startup of a refurbishment
business activity to corporate, VIP and head of state aircraft.

 

 “SAG Stock
Purchase Agreement” means the agreement between Odyssey Investment Partners LLC or its
affiliates and Company dated as of March 14, 2003, pursuant to which
Specialty Avionics Group is to be sold, as amended to the date of effectiveness
of 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 of
all of the assets of such Subsidiaries to Odyssey Investment Partners LLC or
its affiliates pursuant to the SAG Stock Purchase Agreement.

 

“Specialty Avionics Group” means the
specialty avionics business of Company that is conducted by Avtech, Aerospace
Display Systems, LLC and Tri-Star Electronics International, Inc.

 

“Subdebt Reduction Event” means the first
issuance after April 1, 2003 of Permitted Indebtedness in a principal amount
equal to or greater than $50 million.

 

B.                                     Subsection
1.1 of the Credit Agreement is hereby amended by adding an “and” and the
following at the end of the definition of “Permitted Acquisition”:

 

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

 

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

 

3

 

1.2                               Amendments to Section 2: Amounts and
Terms of Commitments and Loans

 

A.                                    Subsection
2.1A(iii) of the Credit Agreement is hereby amended by adding the following at
the end thereof:

 

“Notwithstanding
the foregoing, the aggregate amount of the Revolving Loan Commitments is
$40,000,000; provided that the aggregate amount of the Revolving Loan
Commitments 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 and
substituting the following therefor:

 

“(i)                               (a)                                  Subject
to the provisions of subsection 2.2E, the Tranche A Term Loans and the
Revolving Loans shall bear interest from March 31, 2003 through maturity as
follows:

 

(1)                                                       if
a Base Rate Loan, then at the sum of the Base Rate plus the Base Rate
Margin set forth in the table below opposite the Consolidated Leverage Ratio as
set forth in the most recent Margin Determination Certificate delivered
pursuant to subsection 6.1(iv); or

 

(2)                                                       if
a Eurodollar Rate Loan, then at the sum of the Adjusted Eurodollar Rate for the
Interest Period applicable to such Loan plus the Eurodollar Rate Margin
set forth in the table below opposite the Consolidated Leverage Ratio as set
forth in the most recent Margin Determination Certificate delivered pursuant to
subsection 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

  	
  %

  

 

4

 

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

 

Changes
in the applicable margin for Tranche A Term Loans and Revolving Loans resulting
from a change in the Consolidated Leverage Ratio shall become effective as
provided in subsection 2.3C.

 

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

 

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

 

(1)                                  if
a 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 Subdebt
Reduction Event occurs, such margin shall be decreased by 0.5%; or

 

(2)                                  if
a Eurodollar Rate Loan, then at the sum of the Adjusted Eurodollar Rate for the
Interest 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% per
annum and if the Subdebt Reduction Event occurs, such margin shall be decreased by 0.5%.

 

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

 

(1)                                  if
a 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% per
annum and if the Subdebt Reduction Event occurs, such margin shall be decreased
by 0.5%; or

 

(2)                                  if
a Eurodollar Rate Loan, then at the sum of the Adjusted Eurodollar Rate for the
Interest Period applicable to such 

 

5

 

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

 

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

 

“provided that the
Net Asset Sale Proceeds from the SAG Sale shall be applied to prepay the Loans
as provided in subsection 2.4B(iv)(b) no later than the first Business Day
following the receipt thereof.”

 

D.                                    Subsection 2.4B(iii)(c) of the Credit
Agreement is hereby amended by
adding at the end the following:

 

“provided further
that, notwithstanding the foregoing, 50% of the Net Securities Proceeds from
the issuance of any Permitted Indebtedness shall be applied to prepay the Loans
as provided in subsection 2.4B(iv)(b) no later than the first Business Day
following the receipt thereof.”

 

E.                                      Subsection 2.4B(iv)(b) of the Credit
Agreement 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 to
prepay the Revolving Loans, without a reduction in Revolving Loan Commitments,
and the remaining balance of such Net Asset Sale Proceeds shall be applied to
the prepayment of the Term Loans as provided in subsection 2.4B(iv)(c).”

 

1.3                               Amendment
to Section 6:  Company’s Affirmative
Covenants

 

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

 

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

 

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

 

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

 

“(x)                             Company
may become and remain liable with respect to Permitted Indebtedness; provided
that Company causes an opinion of counsel in form and substance reasonably
satisfactory to Administrative Agent to be delivered to 

 

6

 

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

 

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

 

“(xi)                          Liens
securing Permitted Indebtedness, such Liens to be subject to an Intercreditor
Agreement.”

 

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

 

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

 

“(vii)                     Company may
purchase, redeem, or otherwise acquire or retire Subordinated Indebtedness in
an amount up to but not exceeding $20 million with proceeds from the issuance
of Subordinated Indebtedness permitted by subsection 7.1 or equity Securities
of Company.”

 

E.                                      Subsection 7.6 of
the Credit Agreement is hereby amended by deleting it in its entirety and
substituting the following therefor:

 

“7.6                        Financial
Covenants.

 

“A.                             Minimum
Fixed Charge Coverage Ratio. 
Company shall not permit the Consolidated Fixed Charge Coverage Ratio as
of the last day of any Fiscal Quarter, beginning with the Fiscal Quarter ending
March 31, 2003, occurring during any period set forth below to be less than the
correlative 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.                                    Maximum
Leverage Ratio.  Company shall not
permit the Consolidated Leverage Ratio as of the last day of any Fiscal
Quarter, beginning with the Fiscal Quarter

 

7

 

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

 

	
  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.                                    Minimum
Consolidated EBITDA.  Company shall
not permit Consolidated EBITDA for the consecutive four-Fiscal-Quarter period
ending on the last day of any Fiscal Quarter, beginning with the Fiscal Quarter
ending March 31, 2003, occurring during any period set forth below to be less
than the correlative amount (the “Minimum
EBITDA 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

  	
   

  
					

 

; provided
that

 

(x)                                   the
Minimum EBITDA Amount for the consecutive four-Fiscal-Quarter period ending at
the last day of any Fiscal Quarter during any period set forth above shall be
increased by an amount equal to 80% of the Acquired Business EBITDA of each
Acquired Business whose Acquired Business Date falls during the period from and
including the day following the Third Amended and Restated Credit Agreement
Closing Date to and including the last day of such Fiscal Quarter; and

 

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

 

8

 

certified to
Administrative Agent in the Compliance Certificate delivered for the last
Fiscal Quarter of such consecutive four-Fiscal-Quarter period).

 

For
purposes of this subsection 7.6C, the following terms have the following
meanings:

 

“Acquired
Business” means any business acquired (whether through the purchase
of assets or shares of capital stock) by Company or any of its Subsidiaries
after the Second Amended and Restated Credit Agreement Closing Date.

 

“Acquired Business Date” means, with respect
to any Acquired Business, the date of consummation of the acquisition thereof
by Company or any of its Subsidiaries.

 

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

 

D.                                    Minimum
Interest Coverage Ratio.  Company
shall not permit the Consolidated Interest Coverage Ratio as of the last day of
any Fiscal Quarter, beginning with the Fiscal Quarter ending March 31, 2003,
occurring during any period set forth below to be less than the correlative
ratio 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 Net
Senior Debt Ratio.  Company shall not permit the Net Senior Debt Ratio as of the last day of
any Fiscal Quarter, beginning with the Fiscal Quarter ending March 31, 2003,
occurring during any period set forth below to be more than the correlative
ratio indicated:

 

9

 

	
  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.                                      Subsection
7.8(i) of the Credit Agreement is hereby amended by deleting it in its entirety
and substituting the following therefor:

 

“(i)                               Company
will not, and will not permit any of its Subsidiaries to, make or commit to
make Consolidated Capital Expenditures in any Fiscal Year, except Consolidated
Capital Expenditures which do not aggregate in excess of the corresponding
amount 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 in
any such Fiscal Year shall be less than the limit with respect thereto set
forth above (before giving effect to any increase therein pursuant to this
proviso) (the “Base Amount”), then the amount of such shortfall (up to an
amount equal to 50% of the Base Amount for such Fiscal Year, without giving
effect to this proviso) may be added to the amount of such Consolidated Capital
Expenditures permitted for the immediately succeeding Fiscal Year and any such
amount carried forward to a succeeding Fiscal Year shall be deemed to be used
prior to Company and its Subsidiaries using the amount of capital expenditures
permitted by this section in such succeeding Fiscal Year, without giving effect
to such carryforward and (b) for any Fiscal Year (or portion thereof) following
any acquisition of a business (whether through the purchase of assets or of
shares of capital stock) permitted under subsection 7.7, the Base Amount
for such Fiscal Year (or portion) shall be increased, for each such
acquisition, 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 such
acquisition for the period of four Fiscal Quarters most recently ended on or
prior to the date of such Business Acquisition multiplied by (B) (x) in the
case of any partial Fiscal Year, a 

 

10

 

fraction, the numerator
of which is the number of days remaining in such Fiscal Year after the date of
such Business Acquisition and the denominator of which is 365 (or 366 in a leap
year), and (y) in the case of any full Fiscal Year, 1 and provided further that the Company may make
Consolidated Capital Expenditures in respect of the Refurbishment Project for
Fiscal 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 Credit
Agreement is hereby amended by adding an “or” and the following new subsection
8.14 immediately after subsection 8.13 as follows:

 

“8.14   SAG Sale.

 

(i)
The SAG Stock Purchase Agreement shall have been terminated without
consummation of the SAG Sale; or (ii) Company shall have failed to receive at
least $130,000,000 in proceeds from the SAG Sale and applied such proceeds to
prepayment of the Loans as set forth in subsection 2.4B on or prior to June 30,
2003.”

 

Section 2.                                          CONSENT TO
APPOINTMENT OF SUCCESSOR ADMINISTRATIVE AGENT

 

Bank One, NA has informed
Company and Lenders of its resignation as Administrative Agent.  In accordance with subsection 9.3 of the
Credit Agreement, the undersigned, constituting Requisite Lenders, and Company
hereby consent to the appointment of either U.S. Bancorp or CSFB as successor
Administrative Agent (in such capacity, the “Approved
Successor”), such appointment to become effective immediately upon
the later of the acceptance by an Approved Successor of such appointment and
the Third Amendment Effective Date. 
Such consent by Requisite Lenders and Company shall be effective after
the acceptance of such appointment by either Approved Successor if such
Approved Successor thereafter resigns and the other Approved Successor accepts
such appointment.  Upon such acceptance,
(a) the Approved Successor accepting such appointment shall (i) promptly notify
Lenders and Company of such acceptance and (ii) succeed to and become vested
with all the rights, power, privileges and duties of Administrative Agent as
provided in the Credit Agreement and the other Loan Documents, and (b) Bank One
NA or the other Approved Successor, if such other Approved Successor has
previously succeeded Bank One NA as Administrative Agent, shall be discharged
from its duties and obligations as Administrative Agent.

 

Section 3.                                          CONSENT TO
SALE OF SPECIALTY AVIONICS GROUP

 

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

 

11

 

Asset Sale Proceeds thereof applied to prepay Loans on or before June
30, 2003; (b) the Net Asset Sale Proceeds received by the Company shall be Cash
in an amount not less than $130,000,000; (c) such Net Asset Sale Proceeds shall
be 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 to
Syndication Agent.

 

Section 4.                                          CONDITIONS
TO EFFECTIVENESS

 

Sections 1, 2 and 3 of
this Amendment shall become effective only upon the satisfaction on or prior to
March 31, 2003 of all of the following conditions precedent and the conditions
set forth in Section 7E hereof (the date of satisfaction of such conditions
being referred to herein as the “Third
Amendment Effective Date”):

 

A.                                    On or before the
Third Amendment Effective Date, Company shall deliver to Lenders (or to
Syndication Agent for Lenders with sufficient originally executed copies, where
appropriate, for each Lender and its counsel) the following, each, unless
otherwise noted, dated the Third Amendment Effective Date:

 

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

 

2                                          Signature
and incumbency certificates of its officers executing this Amendment;

 

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

 

4                                          Certified
copy of the SAG Stock Purchase Agreement.

 

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

 

C.                                    All documents
executed or submitted in connection with the transactions contemplated hereby
by or on behalf of Company or any of its Subsidiaries shall be reasonably
satisfactory in form and substance to Agents and their counsel; Agents and
their counsel shall have received all information, approvals, opinions,
documents or instruments that Agents or their counsel shall have reasonably
requested.

 

Section 5.                                          COMPANY’S
REPRESENTATIONS AND WARRANTIES

 

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

 

12

 

Lender that the following
statements are true, correct and complete on and as of the Third Amendment
Effective Date:

 

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

 

B.                                    Authorization
of Agreements.  The execution and
delivery of this Amendment and by the SAG Stock Purchase Agreement and the
performance of the Amended Agreement and by the SAG Stock Purchase Agreement
have been duly authorized by all necessary corporate action on the part of each
of Company and its Subsidiaries.

 

C.                                    No
Conflict.  The execution, delivery
and performance by each of Company and each of its Subsidiaries of this
Amendment and the SAG Stock Purchase Agreement, and the performance by Company
of the Amended Agreement and the SAG Stock Purchase Agreement do not and will
not (i) violate any provision of (x) any law or any governmental rule or
regulation applicable to Company or any of its Subsidiaries where such
violations in the aggregate have had or could reasonably be expected to have a
Material Adverse Effect, (y) the Certificate or the Articles of Incorporation
or 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 on
Company or any of Company’s Subsidiaries where such violations in the aggregate
have had or could reasonably be expected to have a Material Adverse Effect,
(ii) conflict with, result in a breach of or constitute a default under
any Contractual Obligation of Parent, Company or any of its Subsidiaries where
such conflict, breach or default in the aggregate have had or could reasonably
be expected to have a Material Adverse Effect, (iii) result in or require
the creation or imposition of any Lien upon any of the properties or assets of
Company or any of Company’s Subsidiaries (other than Liens created under any of
the Loan Documents in favor of Administrative Agent on behalf of Lenders), or
(iv) require any approval of or consent of any Person under any
Contractual Obligation of Parent, Company or any of Company’s Subsidiaries,
except for this Amendment and such approvals or consents the failure of which
to obtain has not had and could not reasonably be expected to have a Material
Adverse Effect.

 

D.                                    Governmental
Consents.  The execution, delivery
and performance by each of Company and each of its Subsidiaries of this
Amendment and the SAG Stock Purchase Agreement and the performance by Company
of the Amended Agreement and the SAG Stock Purchase Agreement do not and will
not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any federal, state or other governmental authority
or regulatory body other than any such registrations, consents, approvals,
notices or other actions (x) that have been made, obtained or taken on or
prior to the date on which such registrations, consents, approvals, notices or
other actions are required to be made, obtained or taken, as 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 a
Material Adverse Effect.

 

13

 

E.                                      Binding
Obligation.  Each of this Amendment,
the SAG Stock Purchase Agreement and the Amended Agreement has been duly
executed and delivered by each Loan Party that is a party thereto and is the
legally valid and binding obligation of such Loan Party, enforceable against
such Loan Party in accordance with its respective terms, subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.

 

F.                                      Incorporation
of Representations and Warranties From Credit Agreement.  The representations and warranties contained
in Section 5 of the Credit Agreement are and will be true, correct and
complete in all material respects on and as of the Third Amendment Effective
Date to the same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all material
respects on and as of such earlier date.

 

G.                                    Absence of
Default.  No event has occurred and
is continuing or will result from the consummation of the transactions
contemplated by this Amendment that would constitute an Event of Default or a
Potential Event of Default.

 

Section 6.                                          ACKNOWLEDGEMENT
AND CONSENT

 

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

 

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

 

Each Guarantor (a)
acknowledges and agrees that the Guaranty to which it is a party or otherwise
bound shall continue in full force and effect and that all of its obligations
thereunder shall be valid and enforceable and shall not be impaired or limited
by the execution or effectiveness of this Amendment;  (b) represents and warrants that all representations and
warranties contained in the Amended Agreement and in the Guaranty to which it
is a party or otherwise bound are true, correct and complete in all material
respects on and as of the Third Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date; and (c) acknowledges and agrees that (i) notwithstanding the
conditions to effectiveness set forth in this Amendment, such Guarantor is not
required by the terms of the Credit Agreement or any other Loan Document to
consent to the amendments to 

 

14

 

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

 

Section 7.                                          MISCELLANEOUS

 

A.                                    Effect of
Amendment.  Reference to and effect
on the Credit Agreement and the other Loan Documents.

 

(i)                                     On
and after the Third Amendment Effective Date, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like
import referring to the Credit Agreement, and each reference in the other Loan
Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like
import referring to the Credit Agreement shall mean and be a reference to the
Amended Agreement.

 

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

 

(iii)                               Except
as specifically amended by this Amendment, the Credit Agreement and the other
Loan Documents shall remain in full force and effect and are hereby ratified
and confirmed.

 

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

 

B.                                    Fees and
Expenses.  Company acknowledges that
all costs, fees and expenses as described in subsection 10.2 of the Credit
Agreement incurred by Agents and their counsel with respect to this Amendment
and the documents and transactions contemplated hereby shall be for the account
of Company.

 

C.                                    Headings.  Section and subsection headings in this
Amendment are included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose or be given any
substantive effect.

 

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

 

15

 

E.                                      Counterparts;
Effectiveness.  This Amendment may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are 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 become
effective upon the execution of a counterpart hereof by Company, Requisite
Lenders, Lenders holding at least 51% of the Term Loans, Syndication Agent and
the Guarantors and receipt by Company and Agents of written or telephonic
notification of such execution and authorization of delivery thereof.

 

[Remainder of page
intentionally left blank]

 

 

16

 

IN WITNESS WHEREOF,
the parties hereto have caused this Amended Agreement to be duly executed and
delivered by their respective officers thereunto duly authorized as of the date
first 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

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  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

 

	
   

  	
  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

 

	
   

  	
  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

 

	
   

  	
  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.                                       Company
has been duly incorporated, and is validly existing in good standing under the
laws of the State of Delaware with corporate power to own its properties and
assets, to enter into the Amendment and to perform its obligations under the
Amendment.

 

2.                                       The
execution, delivery and performance of the Amendment by Company have been duly
authorized by all necessary corporate action on the part of Company, the
Amendment has been duly executed and delivered by Company, and the Amendment
and the Amended Agreement constitute the legally valid and binding obligations
of Company, enforceable against Company in accordance with their respective
terms 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 general
principles of equity including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance or injunctive relief, regardless of whether considered in
a proceeding in equity or at law.

 

3.                                       Company’s
execution and delivery of the Amendment and the consummation of the
transactions contemplated by the Amendment do not and will not (i) violate
the Certificate of Incorporation or By-laws of Parent or of Company,
(ii) violate, breach or result in a default under any existing obligation
of Parent or of Company under any other agreement, (iii) breach or
otherwise violate any existing obligation of Company under any order, judgment
or decree of any New York, California or federal court or Governmental
Authority binding on Company or (iv) violate any New York, California or
federal statute or regulation.

 

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

 

A-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00050-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00050-of-00352.parquet"}]]